david cameron

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Thoughtcrime in Britain

A 19-year old man was arrested yesterday for the supposed crime of burning a Remembrance Poppy and posting a picture of the incident on Facebook.

A teenager arrested on Remembrance Sunday on suspicion of posting a picture of a burning poppy on Facebook is being questioned by police.

The 19-year-old was held after the image of a poppy being set ablaze by a lighter was reportedly posted online with the caption: “How about that you squadey cunts”.

Police said the man, from Canterbury, Kent, was detained on suspicion of an offence under the Malicious Communications Act after officers were contacted at about 4pm on Sunday.

This is simply dangerous, absurd and Orwellian.

It is just the latest in a succession of police actions against individuals deemed to have caused offence: mocking a collapsed footballer on Twitter; hoping that British service personnel would “die and go to hell”; wearing a T-shirt that celebrated the death of two police officers; making sick jokes on Facebook about a missing child. Each time the police have arrested people for nothing more than expressing an unpopular, outrageous or offensive opinion.

Britain is setting a precedent for trampling all over free speech in the interest of enforcing public morality. Mussolini would be proud.

The point of free speech is not to protect popular speech. It is to protect us from becoming a society where the expression of unpopular, offensive and distasteful ideas is criminalised. That is the surest guard against totalitarian tendencies.

This new incident is particularly bizarre. Children are taught in school that Britain fought the Second World War to defeat fascism. They are taught that the deaths of British soldiers commemorated on Remembrance Sunday were for the cause of freedom, to defeat fascism, to defeat totalitarianism. And now we arrest people merely for making offensive comments and burning symbols?

Are we turning into the thing that we once fought? 

What has happened to free speech?

What has happened to Britain?

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Are Cameron’s Economic Policies Working?

Britain has returned to growth:

But compared even to the USA — which has huge problems of its own — Britain is still mired in the depths of a depression:

An Olympic bounce does not constitute a recovery. As I noted in March, Britain is under-performing the United States — in GDP and in unemployment. Although Cameron and Osborne keep claiming that they are deficit hawks who want to cut the government deficit, the debt keeps climbing.

Defenders of Cameron’s policies might claim that we are going through a necessary structural adjustment, and that lowered GDP and elevated unemployment is necessary for a time. I agree that a structural adjustment was necessary after the financial crisis of 2008, but I see little evidence of such a thing. The over-leveraged and corrupt financial sector is still dominated by the same large players as it was before. True, many unsustainable high street firms have gone out of business, but the most unsustainable firms that had  to be bailed out — the banks and financial firms who have caused the financial crisis — have avoided liquidation. The real story here is not a structural adjustment but the slow bleeding out of the welfare state via deep and reaching cuts.

Britain has become welfare-dependent. Britain’s welfare expenditure is now over 25% of its total GDP. Multi-billion pound cuts in that figure are going to (and have) hurt GDP.

I believe countries are better with small governments and a larger private sector. The private sector consists of many, many individuals acting out their subjective economic preferences. This dynamic is largely experimental; businesses come and go, survive, thrive and die based upon their ability to stay liquid and retain a market, and this competition for demand forces innovation. The government sector is centrally directed. Governments do not have to behave like a business, they do not have to innovate or compete, as they have the power to tax and compel. (The exception to this is when governments become overrun by the representatives of private industries and corporations, who then leverage the machinations of the state to benefit corporations. When this occurs and markets become rigged in the favour of certain well-connected competitors, it matters little whether we call such industries “private sector” or “public sector”).

So I am sympathetic to the idea that Britain ought to have a smaller welfare state, and fewer transfer payments than it presently does. But the current and historical data shows very clearly that now is not the time to make such an adjustment. The time to reduce the size of the welfare state is when the economy is booming. This is the time that there is work for welfare claimants to go to. Cutting into a depressed economy might create a strong incentive for the jobless to work, but if there is little or no job creation for the jobless to go to, then what use are cuts? To reduce government deficits? If that’s the case, then why are British government deficits rising even though spending is being reduced? (The answer, of course, is falling tax revenues).

An alternative policy that would reduce unemployment and raise GDP without increasing the size of government is to force bailed-out banks sitting on huge hoards of cash to offer loans to the jobless to start their own private businesses. The money would be transferred to those who could be out working and creating wealth, but who cannot get credit through conventional channels, unlike the too-big-to-fail megabanks who are flush with credit but refuse to increase lending to the wider public. Even if the majority of these businesses were to fail, this would ensure a large boost in spending and incomes in the short run, and the few new businesses that succeed would provide employment and tax revenues for years to come. Once there is a real recovery and solid growth in GDP and in unemployment, then the government can act to decrease its size and slash its debt. Indeed, with growing tax revenues it is probable we would find that the deficit would end up decreasing itself.

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Standing Up to Extradition

It took ten years, but finally Theresa May, the British Home Secretary, has denied the United States’ extradition request for Gary McKinnon, the British hacker who broke into the Pentagon and NASA.

This was an absurd case from the start, and it is awful that McKinnon, who essentially did nothing wrong other than exploit incompetence — the systems he entered had blank passwords  — had to live for ten years with the shadow of spending sixty or seventy years in a Federal Supermax.

McKinnon was searching for evidence of exotic energy and flying-saucer technology, and believes he found evidence of the latter, describing seeing images of a cigar-shaped craft:

Recently declassified documents corroborate that the United States Air Force was working on supersonic flying-saucer-type craft in the 1950s:

The aircraft, which had the code name Project 1794, was developed by the USAF and Avro Canada in the 1950s. One declassified memo, which seems to be the conclusion of initial research and prototyping, says that Project 1794 is a flying saucer capable of “between Mach 3 and Mach 4,” (2,300-3,000 mph) a service ceiling of over 100,000 feet (30,500m), and a range of around 1,000 nautical miles (1,150mi, 1850km).

Whatever the truth behind McKinnon’s claims, it is encouraging that Britain has finally stood up for its sovereignty and refused the United States’ extradition request. Britain is — at least in theory — an independent country, and not merely a corner of the America empire and there is absolutely no reason beyond dogged loyalty that the British government should be cowed into complying with American demands. America’s neoconservative policy elite have already dragged Britain into multiple stupid and awful invasions and occupations of the middle east, costing billions of pounds and thousands of lives, jeopardising Britain’s national security, and making Britain into a prime target for international terrorism. Rejecting this extradition request is a good first step toward restoring British integrity.

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Competing For State Contracts is Not Competition

Here in Britain, we hear the word competition a lot. Since Margaret Thatcher, there has been a general trend — in the name of competition — toward the selling-off of utilities such as water, railway, electricity and telecoms providers. More recently, there has been a trend toward government services being provided by private companies, such as the bungled Olympic security arrangements contracted out to multinational security giant G4S, as well as work capability assessments contracted out to French IT consultancy ATOS, and the contracting-out of some medical services.

The way this works is that the government provides the funding for services, which private sector companies then bid to undertake. This is also the way in which defence contractors have historically competed for defence contracts, a sector which is renowned worldwide for its profligacy, waste and inefficiency.

This is a bizarre arrangement. Competing for government contracts is nothing like the free market. In a true market environment businesses compete for the custom of individuals based on their ability to provide the best products and services. Individuals spend their money to satisfy their needs. New businesses can generally enter the marketplace at any time, and take business away from existing competitors. Competition is beautiful, because it allows economies to quickly adjust capital, labour and resource allocation to the preferences of society based on which goods and services people choose to purchase.

Under a model where private contractors compete for government cash, this is impossible because contractors are essentially bidding for a state-backed monopoly. State bureaucrats determining which contractor will get the money is not competition; there is no market mechanism, there are no consumer preferences. Contractors are just bidding for handouts from the taxpayers’ purse based on the preferences of economic planners. Consumers cannot take their custom elsewhere, because the custom is involuntarily coming out of their taxation.

This has also been the reality of privatisation. Although I am no fan of government-controlled industry, the reality of privatisation in the UK has been the transfer of state monopolies into private hands.

One very clear example of this is telecoms infrastructure. BT Openreach, an arm of the privatised BT, has a complete state-enforced monopoly on telephone exchanges. Other telecoms providers have to lease their infrastructure in order to operate.

And the same for railways; rail lines are sold off as monopolies for ten-year periods. For travellers who want to travel by rail from one destination to another, there is no competition; there is only a state-backed monopoly operating for private profit. No competition, only endless fare hikes, delays and a complete lack of market accountability as contractors take the government cash and do whatever they want.

Ultimately, the state-backed-monopoly model seems to manifest the worst of all worlds. Costs for taxpayers remain high, budget deficits continue to grow, and utilities remain inefficient and messy. The only difference appears to be that taxpayers’ money is now being funnelled off into corporate pockets.

A free society cannot be based on economic planners allocating resources based on a bidding process. A free society is based on the state letting society allocate resources based on the market for goods and services that people want and need.

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The European Union is Destroying European Unity

So we know that the pro-bailout parties in Greece have failed to form a coalition, and that this will either mean an anti-bailout, anti-austerity government, or new elections, and that this will probably mean that the Greek default is about to become extremely messy (because let’s face it the chances of the Greek people electing a pro-austerity, pro-bailout government is about as likely as Hillary Clinton quitting her job at the State Department and seeking a job shaking her booty at Spearmint Rhino).

It was said that the E.U.’s existence was justified in the name of preventing the return of nationalism and fascism to European politics.

Well, as a result of the austerity terms imposed upon Greece by their European cousins in Brussels and Frankfurt, Greeks just put a fully-blown fascist party into Parliament.

From the Telegraph:

The ultra nationalist far right party Golden Dawn supporters celebrated on Sunday after exit polls showed them winning between 5 to 7 per cent of the vote, enough for them to gain representation in parliament for the first time in Greek history. Golden Dawn Leader, Nikolaos Michaloliakos shouted “The Europe of the nations returns, Greece is only the beginning” as he walked towards party headquaters and pledged to deal with illegal immigrants first.

For doubters of their intellectual lineage, here’s their logo:

I (among many others) have argued since at least last year that increased nationalism would be a result of the status quo, which is of course deeply ironic.

Winston Churchill famously noted that a new European unity was the path to the people of Europe forgetting the “rivers of blood that have flowed for thousands of years”.

Well it looks like some of the memories of those rivers of blood are about to be unleashed. How was it possible that a regime set up ostensibly to create more and deeper European unity seems to have sown the seeds for division and nationalism? Quite easily, really.

By designing a system that allowed for governments to spend freely in a fiat currency they could not print more of, Brussels effectively set up member states for fiscal crises. But the fiscal crisis hit at the worst possible time, one of global economic contraction. And by enforcing contractionary policies on states that were already in a depression, economies in Europe are getting to Great Depression levels:

The key here is that the Euro system is not giving the public the idea that all peoples are in the same boat. It is giving the impression that some nations are benefiting at the expense of others.

For there can be no doubting the perception on the ground in Europe that Germany (the first nation, lest we forget, to violate the Stability and Growth Pact) is sado-masochistically brutalising the periphery in the name of its own prosperity. And the facts back that up:

Certainly, the steep austerity policies have in Portugal, Spain and Greece only produced bigger deficits as tax revenues have fallen. But what really matters is that Europeans more and more are coming to see the E.U. and the policies it enforces as counter to their interests and harmful.

While Britons have long resented the E.U. and its micro-managerial regulatory regime, it is becoming clear that much of Europe is coming to distrust the E.U. and its institutions:

In the wake of WW2 there was deep and genuine grassroots concern throughout Europe for unity, and Europe should never have to go through another war. Yet the actions of this bureaucratic, centralising, technocratic institution are jeopardising that reality. This is top-down fragility transmitted throughout Europe by the actions of misguided planners.

I don’t believe that many Europeans really want to go down this path again. But as the European economies continue to bleed, as millions of youths remain jobless, those deep scars that thousands of years of war and violence created, culminating in the rise of Nazism and WW2, are rising again to the surface.

Voters become radical when they are denied economic opportunity. That’s the reality I think we should all take from Hitler’s rise to power, and that’s the reality of Europe today.

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Anything the Government Gives You, the Government Can Take Away

From the Guardian:

A majority of doctors support measures to deny treatment to smokers and the obese, according to a survey that has sparked a row over the NHS‘s growing use of “lifestyle rationing”.

Some 54% of doctors who took part said the NHS should have the right to withhold non-emergency treatment from patients who do not lose weight or stop smoking. Some medics believe unhealthy behaviour can make procedures less likely to work, and that the service is not obliged to devote scarce resources to them.

And that’s the trouble with services and institutions run from the taxpayer’s purse, administered by centralists and bureaucrats. It becomes a carrot or a stick for interventionists to intervene in your life. Its delivery depends on your compliance with the diktats and whims of the democracy, or of bureaucrats. Your standard of living becomes a bargaining chip. Don’t conform? You might be deemed unworthy of hospital treatment.

It seems innocuous to promise all manner of services in exchange for taxes. Citizens may welcome the convenience, the lower overheads, the economies of scale. They may welcome a freebie, and the chance to enjoy the fruits of someone else’s labour. They may feel entitled to it.

Many words have been spent on the problems of dependency; that rather than working for an honest living, the poor may be sucked into a vortex of entitlement, to such an extent that they lose the desire to produce. A tax-sucking multi-generational underclass can develop. Individuals can live entirely workless lives, enjoying a semi-comfortable existence on the teat of the taxpayer, enjoying the fruits — financial handouts, free education, free healthcare, a free home — of social engineers who believe that every problem under the sun can be remedied by government largesse and throwing money at problems. And who can blame them? Humans have sought out free lunches for as long as there have been humans.

Welfare dependency is generally assumed to be viewed negatively in the corridors of power. After all, broad welfare programs mean greater spending, and that very often means great debt. And why would a government want to be in debt? Surely governments would prefer it if more of the population was working and productive and paying taxes?

But it is easier to promote behaviour desired by the state when a population lives on state handouts. And for states that might want to influence the behaviour of their citizens — their resource consumption, their carbon footprint, their moral and ethical beliefs, or their attitude toward the state — this could be an attractive proposition. It might cost a lot to run a welfare system, but it brings a lot of power to influence citizens.

And increasingly throughout the Western world, citizens are becoming dependent on the state for their standard of living. In the UK, 92% of people are dependent on the socialist NHS for healthcare. 46 million Americans receive food stamps. That gives states a lot of leverage to influence behaviour. First it may be used in a (relatively sensible) attempt to curtail smoking and obesity. Beyond that, the sky is the limit. Perhaps doctors or bureaucrats may someday suggest withholding treatment or dole money from those who exceed their personal carbon or meat consumption quota? A tyrant could even withhold welfare from those who do not pledge their undying allegiance or military service to a regime or ideology (it happened many times last century). An underclass of rough and hungry welfare recipients is a fertile recruiting ground for military and paramilitary organisations (like the TSA).

With the wide expansion of welfare comes a lot of power, and the potential for the abuse of power. Citizens looking for a free lunch or an easier world should be careful what they wish for. Welfare recipients take note: you depend on government for your standard of living, you open yourself up to losing your liberty.

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More Evidence That Austerity During Depressions Works

Sorry, no. I am being sarcastic.

From Bloomberg:

The U.K. economy shrank in the first quarter as construction output slumped, pushing Britain into its first double-dip recession since the 1970s and raising pressure on officials to salvage the recovery.

Gross domestic product contracted 0.2 percent from the fourth quarter of 2011, when it shrank 0.3 percent, the Office for National Statistics said today in London.

Last month I described Britain’s problems: GDP levels have never recovered to pre-crisis levels, the unemployment rate continues to climb from post-crisis levels, government debt level continue to climb, inflation levels are elevated, and all of these metrics are somehow worse than the situation in America. 

And now Britain is back in recession.

The bottom line here is that trying to conduct an austerity program during the depths of a recession is dangerous. Less government spending and higher taxation translates into falling incomes for many, which often translates into falling tax revenues (as is the case here), which means that “deficit reduction” just produces larger deficits. Greece is the extreme example.

Nations in the Eurozone that have seen the most growth have conducted the least austerity:


So what would a successful conservative economic program look like today?

Well, until the nation is out of the slump and consistently growing, it should begin and end with slashing regulation and barriers to entry so that more unemployed people can become self-employed. It could include some form of program to encourage taxpayer-funded banks to lend to people who want to start businesses, for the same reason.

While not throwing around stimulus slush money (for that tends to end up in the pockets of well-connected corporations) it would maintain spending levels, and look to redirect some spending toward more productive endeavours for instance giving small businesses tax breaks for every job they create, or every factory they open.

The welfare cuts must wait until there is a strong and self-sustaining recovery, for when the economy is creating lots of jobs, for when there is a demand for labour. Slashing welfare when there are no jobs to go to is totally self-defeating.

The deficit reduction must wait until tax revenues are consistently rising due to a strong and self-sustaining recovery.

It frightens me that conservative voices have gotten this so hideously wrong. We had a decade of fiscally reckless government, where governments, consumers and businesses totally forgot the imperative to save in the fat times to spend in the lean, and joined the leverage mania and the derivatives casino. That was dangerous and foolish. And now policymakers have chosen to focus on deficits at precisely the wrong time. It is absolutely the worst of both worlds.

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Britain’s Orwellian Nightmare?

As a British citizen, I find Britain’s recent authoritarian creep to be deeply unsettling. First we greatly diluted our ancient rights of habaeas corpus. Then we created the world’s largest video surveillance network (which of course was completely powerless to prevent last summer’s riots).

Now we have started locking people up for comments on Twitter.

From Brendan O’Neill:

If you thought it was only authoritarian states like China or Iran that imprisoned pesky bloggers and tweeters, think again.

This week, Britain became a fully paid-up member of that clique of illiberal intolerant, tweeter-harassing states.

On Tuesday, at Swansea Magistrates Court in Wales, Liam Stacey, a student, was imprisoned for 56 days for writing offensive tweets.

Fifty-six days. Two months. In an actual jail. For tweeting. It needs to be spelt out like that in order to show how shocking it is that in the 21st century, in a nation that gave us such great warriors for freedom as The Levellers and John Stuart Mill, a young man has now been banged up for expressing his thoughts.

Stacey’s thoughts were far from pleasant ones. In fact they were offensive and repugnant.

On March 17, Fabrice Muamba, a 23-year-old black football player for Bolton Wanderers, collapsed with cardiac arrest during a match against Tottenham Hotspurs. Many people were shocked, and before long a #PrayforMuamba hashtag took off on Twitter.

But Stacey, who claimed he was drunk at the time, didn’t fancy praying for Muamba, and so instead he tweeted:

“LOL. Fuck Muamba. He’s dead.”

(Muamba did not die, though he remains critically ill in a London hospital.)

56 days in prison? For expressing a distasteful opinion? Frankly, I find the notion of convicting someone of such an offense more offensive than Stacey’s words.

Most recently, Parliament is enacting a law to allow for the monitoring and recording — in real time — of all online activity (presumably including my work) by GCHQ.

From the BBC:

The Home Office has said laws allowing the monitoring all emails, texts and web use in the UK will be brought in “as soon as parliamentary time allows”.

Home Secretary Theresa May says “ordinary people” will have nothing to fear- but there is opposition to the idea from all sides of the House of Commons.

All of this is troubling. Throwing people in jail for expressing unpopular opinions? That seems un-British, and seems to not tally with the idea that we should live and let live. I don’t have a problem with criminalising speech that is an incitement to imminent violence (e.g. “kill that man”). But criminalising opinion? Not only is that paternalistic, that’s a sticky slope to thought crime. And why is that a problem? In a society where we are not free to express any opinion we like — even deeply unpopular ones — innovation is surely stifled. Innovators and freethinkers are forced to think tricky questions (“will I be jailed for expressing this opinion?”) before they publicise their ideas.

And why would GCHQ need to monitor the entire internet? If they need to gather evidence to prevent imminent criminality, why not get a warrant, and monitor a suspect? The fact that they are writing a law that acts as a warrant on all of us suggests that contrary to the Home Office’s statements, we are now all suspects.

Britain has a rather unique legal and political system. Nothing is really set in stone other than the supremacy of the sovereign — in other words, the Queen. Right now, sovereignty has been delegated to Parliament, and the Queen retains only a ceremonial role. But because the Parliament is sovereign, it is free to pass any law it wishes. No rights are absolute, no system is set in stone. There is no first amendment guarantee to free speech. And even though Britain is a signatory to the European Convention on Human Rights, that piece of legislation is phrased so that governments can curtail rights for the “greater good”.

Some legal flexibility can be good. British society has been remarkably free and remarkably stable, certainly in contrast to many other nations. But let’s be honest: authoritarianism can blight any nation. We shouldn’t be complacent to that threat.

And the overarching and striking problem with this authoritarian creep is mostly that it is a waste of money. As I wrote last week terrorism and civil disorder and the expression of unpopular opinions (and all of the things that this authoritarianism is supposed to quell) is of minimal threat to the West (and of course the expression of unpopular opinions is largely beneficial). More people are killed by being crushed by furniture than by terrorism. While trillions are spent on homeland security and the “liberation” of foreign lands, domestic infrastructure is neglected, and businesses and workers lose out as they pay in taxes for the expenses of large authoritarian interventionist government. CCTV has little effect on crime.

And certainly, the social effects of authoritarian creep may be huge. How many legitimate criticisms of the government will go unpublished due to fear of censorship or monitoring? How many people will spend time in jail — and face life with a criminal record — just for expressing an opinion? How many innocent people will spend time in jail as a result of monitoring mistakes or misinterpretations? How many good businesses and ideas will not receive funding due to productive capital being redirected to the government coffers to pay for authoritarian interventionism? How many people will waste their productivity working as government snoops when instead they could be deploying their minds and skills in creating valuable products and services that would improve our economy?

But above all, what would George Orwell think? Big brother is watching and recording us all. Every time we go online, we display our thoughts, our interests, our desires, our curiosities, our sexual preferences, our politics. All of these things are recorded by the state — a state which seems to have no problem with locking people up for expressing unpopular opinions.

Orwell understood that that was a peril to everything — our homes, our lives, our rights, our society, our economy and the very fabric of our existence.

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Inflation Around the World

Certainly, inflation rates may be manipulated downward in all countries to hide the inflationary effects of money supply expansion. But comparing nations to one another does give us some idea of which nations have some semblance of price stability.

So, it’s more bad news for Britain and for David Cameron. Not only do we have lower GDP growth than America and higher unemployment, we also have higher inflation. And — if you can believe it — higher than Zimbabwe.

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Britain Isn’t Working

George Osborne claims that spending cuts will produce a recovery.

From the Guardian:

The main test of a budget at this time is what it does for the recovery and growth of the British economy. George Osborne has repeatedly made clear that he wants to be judged by this test. He believes that deficit reduction is a growth policy which will be vindicated by its results. Growth has been postponed but, he insists, it is about to happen. So is he right?

It doesn’t look like it:

UK GDP has ground to a halt, while the United States has ticked slightly upward.

Now here’s unemployment:


Looks painful.

But at least we’re paying off the debt right? Nope:


Readers are of course advised to ignore the nonsensical future projections — particularly those for the United States — and focus instead on the fact that the UK is still amassing debt in spite of austerity.

So what the hell are we doing? Unemployment is ticking up, GDP is stagnant, and debt is still rising? Is this policy supposed to be working? Does the Cameron government not understand that cutting government outlays during a recession to pay down debt leads to falling tax receipts, which leads to bigger deficits (exactly what has happened!)?

The truth is — as Keynes noted — that the time for austerity at the treasury is the boom, not the bust. The only exception to this is if you can give back enough money to the taxpayer in tax breaks to offset the deleterious effects of spending cuts (as Ron Paul recommends), which itself is a form of spending. That way, government outlays remain roughly the same.

Cutting government waste is always a good idea; but using the savings to pay down debt (which very often in the modern world means sending the money overseas) during a recession seems like a very bad one. And it should be noted that the Cameron government isn’t even really cutting back much on what I consider to be waste. Britain spent billions effecting regime change in Libya.