Friday, August 11, 2017

A critique of neoconservatism

Here is an extract from my latest EA piece, on U.S. military adventurism.

"In many cases it’s hard to separate idealism from self-interest. In the case of a number of campaigning journalists and intellectuals with whom I am familiar (and their loyal readers and viewers) the real motivating factors are, I think, both personal and ideological. They see the institutions that reflect and support their personal value systems as being threatened from within their home countries (by the “deplorables” and their like) and also indirectly, by shifts in the geopolitical balance of power. As countries like China increase their economic and military clout, they will become more respected in cultural terms – and increasingly effective in projecting and promoting their value systems. Such qualities as loyalty and patriotism and competitiveness, for example, may be put above the sorts of concerns that usually come under the heading of “social justice.” The perception that the Western progressive agenda (which has been spectacularly successful in shaping social, cultural, legal and educational structures and institutions in North America and Western Europe in recent decades) is under threat seems like a fair reading of the current situation. But starting a world war to defend it is a thoroughly bad idea.

Making reasonable concessions to the independence and perceived security interests of countries like China, Russia and Iran, all of which have suffered from disastrous foreign interventions and invasions in the past, is obviously the right thing to do in the circumstances. But Western powers will not willingly give up the control of the framework of international relations that they currently exercise. As I see it, neoconservative writers and intellectuals are – knowingly or unknowingly – providing justificatory narratives for war-mongering politicians and ultimately serving nefarious purposes by promoting a distorted view of the world based half-truths and discredited myths.

The mainstream media’s fixation on Russia – the old Cold War arch-enemy – is both puzzling and concerning. Likewise, there seems to be very little questioning of the official line that Saudi Arabia is an ally whereas Iran is an implacable foe and fomenter of terrorism. How is it that such stories can go (relatively) unchallenged when Saudi Arabia’s track record on the terror front is so bad and so well-known?

There are certainly a lot of bad things happening in countries like Russia, China and Iran, but not all social evils warrant foreign military intervention."

[The case of North Korea is touched on in the essay. It is hard to see how this situation is going to resolve itself. The latest noises from China suggest that they will not stand for American-initiated regime change; though they can't have much love for the current leader.]

Thursday, May 11, 2017

Debt: the endgame approaches

Something unusual, something historically significant is going on.

Epochal shifts do occur in history, but they usually only become clear in retrospect. One of my professors had a large print of Seurat's "A Sunday Afternoon on the Island of La Grande Jatte" hanging in his study. It is emblematic of a period (between 1871 and 1914) which came to be known as la belle époque, a time of prosperity and peace and scientific and technological advancement which preceded the horrors of the Great War. Never again would such naïve, unclouded optimism prevail.

Some would say that the post-World War 2 world was such a period. And, perhaps surprisingly in view of the threat of a world-destroying nuclear conflict, there was during those years both optimism and rising prosperity. This time it was not military conflict which broke the spell, however, but rather deep underlying economic and social problems which have only slowly become evident.

I want to focus on two indicators, one economic and one social: the first quantitative, the second qualitative.

The quantitative indicator I am referring to relates to debt-levels, especially government and household debt; boring, I know, but extremely important and relatively easy to grasp. The qualitative indicator relates to levels of trust between different societal groupings and individuals and their relationship to freedom, morality and social cohesion.

Internationally, sovereign debt is at historically very high, if not unprecedented, levels. In the U.S., the national debt currently stands at 20 trillion dollars, or about 100% of GDP. Household debt is also very high, having returned to the levels which preceded the 2008 crisis. Total U.S. debt (public and private) stands currently at about 350% of GDP.

The situation is quite obviously precarious, not least because a continuance of the status quo is dependent on the very low interest rates which the coordinated activity of central banks has engineered. But central banks don't have complete control of interest rates. Longer dated government bonds (seen as indicators of expected inflation, and also as a bellwether of commercial interest rates) will eventually rise, putting severe pressure on highly indebted governments and other borrowers.

Another way of seeing the problem is in terms of the relationship between economic growth and borrowing. Basically, for the last forty years or so, growth has been dependent on increasing levels of borrowing. For the last nine years, loose monetary policy, which has allowed rapidly increasing debt levels, may have forestalled a worldwide recession, but only anaemic growth rates have been achieved. The consequences should be obvious to anyone who thinks about it. There are limits to what borrowing can achieve, and responsible planners realize that levels of sovereign debt are unsustainably high.

In the case of the United States and many other Western countries, the looming problem of unfunded liabilities – especially relating to pensions and social security programs – dwarfs official national debt figures. These promises can never be delivered on, but admitting this would have a high political cost.

There are only two ways out in the longer term: default, or inflating away the debt/liabilities (by money printing). I don't know what the consequences of default (on sovereign debt, say) would be – not good, obviously – but the inflation road is also a dangerous one. Inflation, once it takes hold, is notoriously difficult to contain. Moreover, the sorts of anti-inflationary policies which have succeeded in the past may not be politically possible today.

Already, Western (and Eastern) economies seem to be stalling. Highly indebted households in the U.S. are cutting back on discretionary spending. The endgame – probably beginning with a deflationary crisis which would lead to widespread defaults – may well be approaching. I hope it is, because the longer this debt-based charade continues, the more serious the consequences will be.

No individual or country has a right to a certain standard of living, even if people living in rich countries all too often assume that they do. But, not only can continuing prosperity not be guaranteed, poverty is already with us – even in the still relatively prosperous West. Look at the youth unemployment levels in many European countries, for example. Or the stresses being faced by middle- and lower-income families in America and elsewhere. Or the bleak prospects facing many (most?) retirees.

The loose monetary policies pursued by central banks has had the (presumably unintended) consequence of enriching the few at the expense of the many, as the prices of financial assets and certain categories of real estate have been disproportionately inflated.

Moreover our collective memory of the two World Wars and the Great Depression is now fading. Such knowledge as we have of these times is based more on reading and films than on actual memories or family stories. Having grown up (in the West) during a time of peace and prosperity we might be tempted to assume that what we have experienced is the norm, to see war and poverty as some kind of aberration. But history teaches us otherwise.

Even the years immediately after World War 2 were very tough, especially in Europe. Many areas – including Britain, France, Germany and Scandinavia – were in dire financial straits. The material standard of living was much lower than it is today.

Who is to say, then, that our present levels of prosperity will persist? Why should they? Debt levels strongly suggest that we are living beyond our collective means and have been for some time.

So perhaps the question should be: how can present levels of prosperity persist, given the fact that we have been increasingly dependent on credit and deficit spending by governments to fund our lifestyles?

I will address the (qualitative) question of trust and social cohesion another time.

Saturday, February 4, 2017

Sephardic Jews in England

A correspondent from Florida writes: "... [M]y ancestry includes English people named Abram (and originally Abraham) from the North Meols area. When I took my DNA test there were no Eastern European genes, but there was Iberian."

The area in question (North Meols, Lancashire) is, on the face of it, not a very likely place to find Jewish families, being rural and having Norse connections. But the name Abram/Abraham is usually Jewish and the Iberian DNA supports this.

One of the main points I have made in previous posts is that I believe that the extent of Jewish immigration into Britain, especially from Spain and Portugal, has been seriously underestimated.

There is arguably little surviving documentary evidence of these migrations, but genetic research is providing new data which will enable us to build a much more accurate historical narrative, one which may well change the way many of us perceive our cultural and ethnic identities.