Note on the News

By Gwydion M. Williams

· Britain Blighted by Upper London

· Upper London Fears the Chinese Example

· The Mistrustful USA

· Snippets

· Russia and China

· Why Russia Rallies Round Putin

· Worse Weather

Britain Blighted by Upper London

Well-meaning liberals like William Keegan are baffled that British politicians stay locked into policies that have caused vast suffering.

Right-wing ideas that never did improve Wealth Creation:

“Brexit caps years of Tory failure Starmer fears to oppose…

“Brexit is the last straw after a succession of damaging, mainly Tory, policies: ironically, these were justified as being in the interests of business, investment and productivity. But the Thatcher governments from 1979 onwards inflicted serious damage on the economy… Blessed by the windfall of North Sea oil, the Thatcherites refused to use this bonus to invest for the future. As one minister cynically commented: ‘We used North Sea oil to finance unemployment.’…

“The Blair/Brown governments of 1997-2010 had some success in reviving investment. In opposition, David Cameron and George Osborne approved of their plans. Then, when they took over as prime minister and chancellor in 2010, they presided over a period of austerity which, once again, inhibited the investment that is a fundamental requirement for higher living standards.”^[1]

I take a different view, and am not baffled.

Liberals delude themselves; Britain is not a whole. And liberals ignore how privileges were made, or how they are maintained. Or even expanded.

I see us as being dominated by Upper London. An elite that has kept control.

‘Upper London’ is a convenient name for an elite who are not always physically located in London. Who are much more coherent than the US elites, who have several regional centers of power. And who are very different from a majority of actual Londoners.

People speak of ‘London’ doing various things, when it is actually Upper London, the consensus of the elite. Or speak darkly about a Deep State, as if there were senior state officials independent of the will of the rich.

Starmer is part of Upper London: he wants the privileged to go on gaining. And may well believe the Thatcherite nonsense.

The world’s elites knew they were at risk after World War Two. The Soviet Union was a massive challenge, and there were strong fears of a fascist revival. So they made sure that ordinary people were looked after. Most people got secure jobs, cheap housing, free education, and free health care.

The suggestion that these things were impossibly expensive began at a time when the Soviet Union looked less attractive. Particularly when Khrushchev first said that Stalin had been a criminal lunatic, and then tried to carry on with the system Stalin had built. And went further with the invasion of Hungary, whereas Stalin had wisely decided against invading Yugoslavia when it defied Moscow.

But there was anyway a recovery of confidence by an Upper London that now included more people who had risen from ordinary beginnings. Who felt very superior, and often denied that they had duties to those who had stayed ordinary.

The elite rule through Parliament, which keeps archaic forms. And rejects the Proportional Representation that has become normal for multi-party systems.

Upper London includes most MPs. Most of the newspapers and television news.

One early move was to convince everyone that there was a drastic economic crisis in the 1960s. The economy was healthier than it has ever been in later decades, but this blighted the Wilson governments.

Labour’s elite control the electable left. Tories controlled the right, and let the interests of Upper London override what traditionalist voters actually wanted:

“Radical-right parties’ positions may seem incoherent and inconsistent when viewed through the lens of the traditional left-right division on welfare issues. But in a recent study, I write that this is only because it represents a new form of redistributive logic. Populist radical-right parties are developing a dualistic welfare state. This addresses ‘deserving’ and ‘undeserving’ welfare recipients in very different ways, which go far beyond the notion of welfare chauvinism.

“For the ‘deserving’ (such as nationals with long employment histories, and pensioners), the populist radical right are defending a protectionist welfare-state logic. For these people, they propose a welfare state based on generous and compensatory policies (pension, child benefits and unemployment benefits).

“But the radical right proposes that the ‘undeserving’ (for example, foreigners and nationals seen as not contributing enough to the nation, such as the long-term unemployed) should not have full access to collective resources. Instead, they believe this group should remain subject to state discipline and surveillance. Such people’s access to social benefits should be conditioned by ‘workfare’ policies and the strong policing of welfare abuse. Although not introduced by the populist radical right, this coercive approach to the moral obligation to work fits aptly with its authoritarian rhetoric.”^[2]

With Proportional Representation, both Labour and Tories would have split many times. Probably a Corbynite Labour Party would dominate the left. There would be a Populist Right, but Moderate Tories would not be obliged to pander to them.

But the broad picture is that Upper London flourishes and the rest of us are squeezed. And the media tries to make us see it as unavoidable.

“People need to accept they are poorer, says Bank of England’s Huw Pill.”^[3]

But only some people are poorer. 90% of the population have gained less since the 1980s than would have been expected without Thatcher. The rich somehow managed to grab an increasingly large share after the 2008 crisis.

They are buffered by the ‘Next Nine’ – people not rich enough to be part of Upper London, but often imagining they are, or soon will be.^[4] People in the richest 10% but not the richest 1%; they have kept much the same level of prosperity.

They as individuals are not cheated, so many of them suppose that all is well.

Yet not even Upper London is succeeding in the long run. Brexit is a disaster. We may carry on as a centre for global finance and dirty money: a grander version of Luxembourg and some West Indian islands.

Brexit split the elite. It was an incoherent reaction by ordinary people, but it helped the sectors of Upper London least connected with what remains of British industry.

Notions of commercial honesty declined under Reagan and Thatcher. Both of whom had people among their associates who were caught being dishonest.

Upper London Fears the Chinese Example

Deng Xiaoping dropped Mao’s commitment to strong equality. He allowed an ‘Upper Beijing’ to emerge. But he also never shared the Thatcher / Reagan reverence for capitalism as an ‘unknown ideal’. He looked at what had actually worked – the success of Japan, West Germany, Italy, France under De Gaulle, and the Asian Tigers. Applied the successful model that gets loosely called Keynesianism. And which used to be called the Mixed Economy, but somehow this term has been dropped from most public thinking.^[5]

Deng said ‘some must grow rich first’. He had noticed that Japan and the Asian Tigers had pulled far ahead of China. That China could become a global centre for cheap manufacturing, but might also hope to ascend the ‘value chain’ if given free access to world markets.

Mao’s hard work had broken down the small-property mentality that actual capitalist societies had spent decades rooting out of their own economies.

Deng would have remembered how ineffective China’s home-grown capitalists had been, when it was theoretically open to them to reform the country after the ruling dynasty was overthrown.^[6]

An Upper Beijing emerged. Some were children of the Communist Party leaders: they knew which types of limited commerce would be allowed. But many more came from nowhere. And unlike post-Soviet Russia, almost all were actual wealth-creators rather than tricksters or gangsters.

Being new, Upper Beijing also looked after the entire nation. When corruption was running out of control, they knew that a strong leader was needed. Xi Jinping happened to be the most suitable candidate, with relatives among the new elite. But without him, someone else would probably have done much the same.^[7]

China’s success looks likely to push the rest of the world back towards the Mixed Economy and Generous Welfare. The successful policies we had before Thatcher and Reagan. And the Western elite see this as unacceptable:

“America’s new cold war against Beijing may enjoy bipartisan support in Washington, but it doesn’t enjoy bipartisan support in the United States. According to an April Pew Research Center poll, only 27 percent of Democrats see China as an enemy — roughly half the figure among Republicans. In a December 2021 Chicago Council survey, two-thirds of Republicans — but less than four in 10 Democrats — described limiting China’s global influence as a very important foreign policy goal.

“Grass-roots Democratic voters dislike the government in Beijing. But they oppose a new cold war for two key reasons. First, their top foreign policy priorities — according to an April Morning Consult poll — are combating climate change and preventing another pandemic. Treating China as an enemy undermines both. Second, they oppose higher military spending, which a new cold war makes all but inevitable.”^[8]

There are also business interest seeking compromise:

“It has become a cliché that the one thing that America’s divided democracy can agree on is policy against China. But if the dogs of war are in full cry, what is worth noting is the dog that no longer barks. The ‘peace interest’ anchored in the investment and trading connections of US big business with China has been expelled from centre stage. On the central axis of US strategy, big business has less influence today that at any time since the end of the cold war.

“The idea of a ‘peace interest’ — a transnational social and economic constituency opposed to war — was coined by the economist and social theorist Karl Polanyi, who used it to explain the long era of great power peace in Europe between 1815 and 1914. The make-up of the peace interest can change. After the shock of the French Revolution and Napoleon, it was Europe’s conservative dynasts who opposed war. From the mid-19th century, it was bourgeois advocates of free trade.

“Of course, not all big business is interested in peace. Military spending is an easy source of profit. Through history, business interests have propelled imperial conquest and cemented international alliances. The business interest in peaceful globalisation, if it is to be influential, needs to be organised.”^[9]

It would also need a candidate who might get elected. That must have helped the come-back of Donald Trump.

China meantime has been expecting a confrontation, and is ready:

“For more than a decade, Beijing has been trying to reduce its reliance on the dollar, motivated by risks emerging from the US economy – such as the financial crash of 2008 – and the desire to boost its own sphere of influence…

“But for China’s leaders, a more prominent international role for the yuan needs to be balanced against the party’s grip on domestic financial markets.

“Truly internationalising the yuan would mean loosening the government’s control over capital flows and allowing the market to play a bigger role in the currency’s valuation. That is not a risk that the party is willing to take, either politically or philosophically. A central tenet of its economic philosophy is that the state should have a prominent role in the economy.”^[10]

They must have noticed that the West suffers from weak controls over globalised money. Riches for those who work the flows successfully, but worse for most of us.

Talk of a BRICS currency is hopeful. But making it real may be tough.

The Mistrustful USA

“Collapsing social trust is driving American gun violence…

“Mass shootings and high-powered rifles draw most attention, but the reality of most US firearm deaths lies elsewhere…

“Active shooter incidents were responsible for 103 US firearm deaths in 2021. This is a sickeningly high number, but it looks tiny when you consider the total number of US gun deaths in the same year was 48,830. An astonishing 44 per cent of Americans say they know someone who has been shot, and one in four says someone has used a gun to threaten or intimidate them or their family…

“Canada and Finland, the second and third most armed societies in the developed world, have about three times fewer firearms per head than the US overall, but 10 times fewer handguns. The distinction is key, since most gun deaths are suicides by handgun, and most murders are spontaneous rather than planned.

“It also reflects very different gun cultures. In Finland and Canada — like most developed countries — gun ownership has traditionally centred on hunting, whereas 76 per cent of US handgun owners say their weapon is for personal protection…

“There is a strong positive relationship between a nation’s gross domestic product per head and levels of interpersonal trust, but levels of trust in the US have been eroding for decades and the share of Americans who say they do not trust other people in their neighbourhood is now roughly double what you would expect based on US socio-economic development…

“This toxic combination of handguns and hostility is all too clear in the spate of recent US shootings involving young people shot while playing hide and seek, pulling into the wrong driveway and going to retrieve a basketball from a neighbour’s yard.

“The vast majority of Americans who die by firearm don’t make national and global headlines. They’re not killed by extremists with semi-automatics and slogans, but by suicides that most likely wouldn’t have happened without a gun to hand, arguments that escalated, intimate partner violence and by people who have come to see their neighbours as a threat.^[11]

The New Right encouraged mistrust, as a way of weakening state power and reducing taxes for the rich. A way to undermine Trade Unionism. But they did this with a shallow understanding. They pushed the society in directions that make it unworkable.

US politics since Reagan has had an informal partnership to boost the rich. Republicans cut taxes, mostly for the rich. This leads to a gigantic deficit, leading to calls to cut spending. Then Democrats cut back the dangerously high deficit, but let the rich keep most of their gains.

Here and in the UK, a challenge is made very hard by hanging onto first-past-the-post voting. This also secures the jobs of existing representatives. Aided in the USA by blatant gerrymandering by both sides to give incumbents great security.

Snippets

Russia and China

I’ve mentioned before that The Economist is there to describe economic and political realities to working business people. So they admit things that you’d never find in The Guardian.

“According to the latest instalment of our crony-capitalism index, which first estimated how much plutocrats profit from rent-seeking industries almost a decade ago, crony capitalists’ wealth has risen from $315bn, or 1% of global gdp, 25 years ago to $3trn or nearly 3% of global gdp now..

“Russia is, once again, the most crony-capitalist country in our index…

“Meanwhile Chinese billionaires continue to struggle with the vagaries of their government. Since Xi Jinping launched a crackdown on private capital, crony wealth has fallen sharply, from a peak of 4.4% of gdp in 2018 to 2.5% now. Tycoons of all stripes operate only with the consent of the state. In 1998 there were just eight billionaires in the country (including Hong Kong and Macau) with a total worth of $50bn. Now its 562 billionaires command $2trn. By our measure crony capitalists account for about one-quarter of that total. A recent working paper published by the Stone Centre on Socio-Economic Inequality, part of the City University of New York, finds that between 83% and 91% of corrupt senior officials were in the top 1% of the urban income distribution because of their illegal incomes. Without that money just 6% would be in that bracket.

“Since Mr Xi came to power in 2012 over 1.5m people have been punished in an ongoing anti-corruption drive. High-profile tycoons also face more scrutiny…

“India’s leader, Narendra Modi, has favourites among the country’s corporate captains. Over the past decade, wealth from crony-capitalist sectors has risen from 5% to nearly 8% of its gdp.”^[12]

They confirm what I’d already concluded. President Xi has successfully controlled the rich elite. This has failed to happen elsewhere, with flourishing global plunderers whose abuses go well beyond what The Economist would denounce.

I also notice that Ukraine is omitted from their list of offenders. Notoriously corrupt.

China is doing unusually well, for a fast-growing economy that does not have centuries of Western culture defining what is and is not legitimate. And I see that as a continuing benefits of Leninism, which has remained a successful creed for the real problems of modern society.^[13]

Why Russia Rallies Round Putin

Not one of Russia’s elected representatives at a national level has gone against Putin’s policy on Ukraine. They feel that the West has become their enemy. That any concessions will be followed by new demands.

NATO could have given Security Guarantees to Middle Europe. Suggested they demilitarised. Instead NATO marched eastward, and demonstrated in Iraq that it felt free to be a global aggressor.

Russia, which thought it had negotiated terms to end the Cold War, was treated as if it had surrendered unconditionally.

This was a contrast with how West Germany and Japan were treated after World War Two, even though they had surrendered unconditionally. They soon became trusted partners, and got a lot of economic aid.

Though Putin gets denounced, the Western media cover up the awkward fact that the important Russian opposition parties are almost all more anti-Western than he is.

And International Law is no refuge. It was designed within Western Europe, to regulate the existing behaviour of predatory states. It did not doubt the legality of overseas empires. Nor the hegemony of what was called the White Race.

The Global South felt obliged to condemn Russia’s military support for Democratic Secession in Ukraine. But they do not see Russia as a threat.

Worse Weather

As I said last month, we go from bad to worse:

“Climate Change Made East Africa’s Drought 100 Times as Likely, Study Says.”^[14]

More rain overall, as the atmosphere warms. But far too often, in all the wrong places. As I write, there is disastrous flooding in North Italy.^[15]

And yet another clutch of heat-waves:

“High temperature records have been set from Portugal to Thailand as heat waves fueled by climate change have arrived early this spring…

“A record-breaking heat wave in the western Mediterranean last month would have been nearly impossible without the influence of climate change, new research finds…

“Yet early heat is striking all over the globe this year, not just in the Mediterranean.

“Much of Asia also suffered extreme heat last month, including Thailand, Vietnam, Laos, Myanmar, Bangladesh and parts of China. The city of Dhaka, Bangladesh, recorded its highest temperature in nearly six decades on April 16 at a blistering 105.1 F. And Thailand saw its hottest temperature ever recorded on April 14 when the city of Tak reached an eye-popping 114 F.

“In certain parts of South Asia, April and May are often the hottest times of the year. Even so, this year’s heat wave was one of the most severe in recent history, toppling records across the region.”^[16]

Old newsnotes at the magazine websites. I also write regular blogs – https://www.quora.com/q/mrgwydionmwilliams

^[1] https://www.theguardian.com/business/2023/apr/16/brexit-caps-40-years-of-conservative-failure-that-starmer-fears-to-oppose

^[2] https://www.socialeurope.eu/the-populist-radical-right-impact-on-the-welfare-state

^[3] https://www.telegraph.co.uk/business/2023/04/25/people-accept-poorer-bank-of-england-huw-pill/ – pay site.

^[4] https://www.quora.com/q/pwgwxusqvnzzrlzm/The-Next-Nine-and-the-Damaged-Majority

^[5] https://labouraffairsmagazine.com/problems-magazine-past-issues/the-mixed-economy-won-the-cold-war/

^[6] https://labouraffairsmagazine.com/why-chinas-blue-republic-achived-nothing/

^[7] https://labouraffairsmagazine.com/problems-magazine-past-issues/post-liberalism/chinese-politics-working-well/

^[8] https://www.nytimes.com/2023/05/08/opinion/joe-biden-primary-challenger-foreign-policy.html – pay site.

^[9] https://www.ft.com/content/5e38eec5-8caa-41d1-b4fd-b0ac5e8ca58a – pay site.

^[10] https://www.theguardian.com/world/2023/may/08/chinas-war-chest-how-beijing-is-using-its-currency-to-insulate-against-future-sanctions

^[11] https://www.ft.com/content/3d5a52a8-9180-4e56-92f9-16dfe6d1f397 – pay site.