Friday, 3 April 2020

A haircut for the airlines industries?


It's a sign of the times when I put Malthus into Google just to refresh memory the first dozen  entries were about a contemporary  singer or entertainer.  However, adding Thomas R produced the following summary of his theory:

Populations [have] a tendency to grow until the lower class suffered hardship, want and greater susceptibility to famine and disease, a view that is sometimes referred to as a Malthusian catastrophe.

Doubtless some of the more hard-hearted population pessimists  will take satisfaction in the likelihood that the present pandemic will diminish the world population mainly in the lower part of the triangle of wealth distribution.

Be that as it may, I think Malthusian doctrine has considerable relevance to the airlines industries. 


 Most airlines are begging their governments for financial rescue packages, and it is right that governments should respond - on the condition should be that, post crisis, the airline  industry should be considerably smaller. 

Whether that is achieved by letting some airlines go out of business, or requiring all airlines to take a haircut is a matter for negotiations.

For some time it has been obvious, becasue of the industry's contribution to the the climate crisis, that this outcome is desirable anyway.  Not only do we need a much smaller industry, but there is no case for the expansion of Heathrow, Leeds-Bradford, or any other airport.

The overwhelming bulk of aircraft travel,  certainly from the UK and other developed countries, is for tourism, leisure and pleasure. 

With modern distance communication facilities there is very little need for business travel.  A few people need to travel for work and some to maintain family connections.  But, now we know what we know, there is no justification for  the present vast industry to be maintained at its present size just to facilitate the fancies of we wealthy for sunshine, exotic experiences or sex. 

The second reason that has now emerged is that when the causes of spread of the coronavirus are analysed it is pretty certain that international air travel will be found to have been a major contributor (perhaps along with cruises - that industry will probably need to take a haircut as well)

So in this context Malthus has turned out to be right.  Nature is telling us something, and we should listen.

Monday, 30 March 2020

Tory stupidity in spades


John Stuart Mill, one of the founding fathers of modern liberalism, famously identified the  Conservative Party was the ‘stupid party’,  If that was true of the nineteenth century Tories  than the the Johnson Tory party, dominated by the arch-Brexiteers, is surely the stupid party in spades.

Before the coronavirus crisis dominated the news channels sharp observers noted the following:*


  • the government has decided not to participate in the Unified Patent Court, which is not even an EU body;
  • nor the  Early Warning and Response System (EWRS) , a web-based platform linking the European Commission, ECDC and public health authorities in EU/EEA countries responsible for measures to control serious cross-border threats to health, including communicable diseases;
  • nor the European Arrest Warren system , even though it already has several non EU members, as some Brexiteer campaigners pointed out, giving the impression that we should continue to participate in it;
  • and not  to remain members of the European Aviation Safety Agency, (EASA) but to develop our own national system at a cost of between £30m and £40m.  Our contribution to EASA has been £3m add £4m per year;
  • and to leave REACH , the  European Union regulation concerning the Registration, Evaluation, Authorisation & restriction of chemicals;
  • and to leave the European Medicine Agency.  Not  only that, the EMA has already left us. Its headquarters were in London and provided jobs and thousands of poftitable bed-nights in London hotels;
  • and we're leaving EURATOM,which, among other things, supplies the stuff that makes our X-ray machines in our hospitals work;
  • along with, probably, the Erasmus system which provides students and apprentices with support if they take the opportunity of studying an an EU country other than their own.  (Full disclosure: as a mature (indeed post-mature) student I benefited greatly from this scheme);
   It can be argued, and probably will be by enthusiastic Brexiteers, that some of these are EU instutions and we must make a clean break.  But, as pointed out, they are not all, an even those that are often have non-EU participants. 

 It seems that, if the word European appears in the title, we are out.  Shooting yourself in the foot and cutting off your nose to spite your face just don't describe the half of the stupidity involved.

The implications of some of the above will not become evident until the long run, when maybe we''ll all of us be dead.

But there is one idotic omission which may very easily affect the very soon to be dead.  

That is the decision, or rather non-decision, not to participate in the European initiative for the procurement of ventilators and protective equipment to counteract the effects of the coronavirus.

The EU has made it clear hat the UK, still in the transition period, was perfectly entitled to be part of it.  Our  govermnet's astonishing excuse is that it either didn't know, through a "communications problem," or didn't notice the date.

A letter in yesterday 's Guardian from Martin McKee and two other scientists sates clearly that the initiative had been well publicised, that they themselves had written an article about it in  the British Medial Journal  on the 31st January, and that the EU Commission had announced it  at a press conference on the 17th March, which was widely reported in the continental  press. 

As the scientists  aptly point out, this is an example o placing "Brexit over Breathing."

"Stupid" doesn't describe it

Criminal negligence is more apt.

As fellow humans we must be sypmpathestic to  Mr Johnson, Mr Hancock and any other member of the government who may be suffering fom the virus, but this piece of ideological obstinancy occurred when they were all fully functioning.

This appalling piece of ideological obstinacy over their duty of care to wards the people for whom hey are responsible should not be forgotten or buried under a tsunami of other detail.

They must be held to account. 

I am indebted to my friend John Cole, another former economics teacher, and also for  for 16 years a highly respected Liberal Democrat on Bradford City Council, for compiling much of the following.

Friday, 27 March 2020

UK: Land of low-cost gestures.



Last night thousands. some say millions, of people stood by their doors and windows at 8pm and clapped for the NHS.  

It's hard to believe that only four months ago these self-same people gave an 80 seat majority in parliament to a party that had starved  the NHS of resources for ten years, and aspires to break it it up and flog bits to the highest profit maximising bidder.

To be fair, maybe most of the clappers weren't Tory supporters at all, but enthusiastic  Socialists, Liberals and Scottish National.

And, to be accurate only 44% of those who voted  supported the Conservatives in December last year, and the rest, saving the 2% who voted for Brexit, supported parties more likely to have the preservation of the NHS closer to their hearts. 

But the point is that we find it much easier in this country to make a one-off kindly gesture that we do to grasp the reality  that if we want decent public services we have to be prepared to pay for them, and that means higher taxes for all.

In fact  I think the only party to advocate higher taxes for all in recent years is us Liberal Democrats, and that was just a rather pathetic "penny on income tax."  Labour today  tend to imply that decent public services can be financed by increasing the taxes of only the very rich: the rest of us get off scot free. 

That was not the view of the post-war Attlee government.

Maybe the awfulness of the coronavirus crisis will bring about the change in our public perception of reality  similar to that  of the Second world War, which enabled  post war Labour to build up our welfare state.  

I look forward to the next election when parties are bidding, not to reduce taxes, not just to cut down on tax avoidance, evasion and havens, but for all of us to pay a realistic price for the kind of state that makes life worth living. 

Or will we just go back to the fantasy land of "more with less" supported by weasel words and cost-free gestures.

Tuesday, 24 March 2020

Our flacid upper lip.


I think it was sometime in the 1960s when the electricity in one or more of the the London Underground lines failed and passengers were locked in carriages stranded in tunnels. After an hour or two patience and fortitude cracked, windows were smashed and passengers poured out onto the lines.  Whether this was the result of anger or a dash for freedom is not clear, but some of the press reported it as the end of Britain's reputation as the home of the phlegmatic, "show them we can take it," stiff upper lip Blitz Spirit.

Of course the Blitz Spirit itself was by no means universal.  There was looting, there were spivs, a "black"* market and profiteering.  Nor was there universal deference.  I've read recently that the King and Queen were booed on at least one of their visits tot he East  End.

Events of the last few days have demonstrated that, in spite of universal secondary education and vastly more comfortable living conditions, public behaviour has deteriorated rather than improved.  Shelves of essentials have been stripped in most supermarkets, "self first" people have brushed aside NHS workers and the elderly in a supermarket  that had tried to reserve an hour during which these essential workers and most vulnerable could have priority.  And despite repeated advice to keep at least two meters apart, the weekend saw crowded shops,  beaches and parks,  and second home owners flocking  towards rural areas where medical services are even thinner on the ground than elsewhere.

Prime Minister Johnson looks pained and tells us that we really must learn to do what he tells us.

I suspect one of the reason so may people don't is that he is a proven serial liar who has demonstrated again and again that his only principle is his own advancement.  So why should they believe him now?

But Johnson is not the only culprit: he is just possibly the worst example of a culture of prevarication, half truths, misinformation, exaggeration, smugly-assumed unawareness of previously immovable positions, and now fake news, which has come to dominate our politics in the last fifty years.

Tony Blair and the "dodgy dossier " about WMD in Iraq poised to destroy us in 45 minutes remains probably the most destructive example to date.  Michael Gove, who in 2016 publicly declared that Johnson was not fit  for public office is now  now serving (cheerfully?) in Johnson's cabinet. The lies told in the Brexit referendum are too well known to bother repeating. The "red lines" that were sacrosanct in the early Brexit negotiations  are now ignored and agreements which cross them are hailed as glorious victories.

None of this excuses the decline in standards of public behaviour, but today's politicians bear considerable  responsibility for it.  Too many at the top are clearly not men and women of high principle dedicated to the country's service.

If and when this crisis is over we need to clear  up our act.

*When I taught economics we tried not to use this phrase but rather referred to the "informal" economy.  However, that is what it was called a the time, and for a long time afterwards.

Wednesday, 18 March 2020

Exeunt Buffoon Johnson...


...preferably pursued by a bear.

Mr Johnson is, of course, no buffoon, but a very shrewd man.  He has calculated, sadly correctly, that acting as a P G Wodehouse jackass- type will appeal to the electorate and get him where he wants to be.  So he won the London mayoralty twice in spite of making a mess of the job, and in spite of being being a failure as the buffooning foreign secretary, went to to become prime minister.

Now he realises that the upper-class-twit persona is not appropriate for the coronavirus pandemic, so the buffoon veneer is cast off and more serious facade adopted.

With astonishing chutzpah (possible something you learn at Eton,) he now appears in press conferences  flanked by the Chief Medical Officer  and the Chief Scientific Officer.  Mantras about "following the science" and "expert opinion" are repeated ad nauseam by ministers now permitted to appear on the Today Programme. The Britain that had "had enough of experts" is now airbrushed out of our history.  

How differenly our membership of the EU would have been resolved if Brexiteer Johnson had appeared flanked by the Governor of the Bank of England and the Permanent Secretary to the Treasury.

It is clear that Johnson is carefully covering  his back.  If the effects of the coronavirus are more devastating in the UK than in comparable countries than he can pass the blame onto the experts.

He may well have to do this, because the initial advice appears to have been mistaken.

In an analogy with "market rules OK" economics, the original aproach seems to have been to let the disease run its course.  A minority of vulnerable people, the elderly and those with underlying conditions, would catch it and die, but the overwhelming majority, inducing almost all children, would suffer only mild symptoms, recover, and the population as a whole would achieve "herd immunity."  

Modelling by scientists at the London School of Hygiene and Tropical Medicine** (see below for correction) showed that this approach, even if herd immunity could  be achieved in this way rather than through the normal vaccination process, would lead to a scale of sickness and death which  would be politically unacceptable and overwhelm the NHS.  

As one of the vulnerable (aged 82) who would have been a prime candidate for sacrifice for the common good in this approach, I'm relieved that we have changed tack, even if it does result in my self-isolation for several weeks.

Just as the government expects us to forget its former contempt for experts, we are also expected to have collective amnesia on the effects of 10 years of Tory austerity, not just on our NHS but also on the civil service, local government and other public services.  

The Chancellor of the Exchequer, Rishi Sunak, has located not so much a magic money tree or even an orchard, but a veritable magic money plantation.  £350bn is to be sprayed into the economy to avoid the worst economic effects of the virus.  

Well, that's all to the good; in fact a tenth of that in 2010 would have avoided a lot of misery. 

But even if the economy is propped up by this infusion (and, as is often the case, simply expanding the money supply does not necessarily get the money into the right places) all the money in the world cannot suddenly conjure up extra doctors and nurses, extra hospital beds,more ICU equipment,  more local government health officers, more civil servants, more care homes and qualified carers.  

As a slogan "Whatever it takes," is a worthy successor to "our long- term economic plan," "strong and stable" and "get Brexit done" - an effective piece of PR with which to deceive the public, but of little practical value.

What we need is a sprit of self-sacrifice  and discipline.  Neither  Johnson nor his cabinet are effective role-models for these virtues.

** Sorry,I misremembered.  The research was not from the LSHTM but , according to an article in today's "Guardian"  by Dr Richard Hatton, editor of "The Lancet," by researchers at Imperial College.  The reasoning did not require higher mathematics.  The  laissez faire approach  assumed that 60% of the UK's 6.6m population  would get the disease.  That's just just short of 40m people.  If 1% of them die (the going rate) that's around 400 000 people.  

In China, where the spread of the virus appeasers to have been slowed if not halted , the total number of deaths so far is 3 245. 

Of course there's still some way to go, but thank goodness for the change of tack.

Friday, 13 March 2020

A mea culpa budget.


Well it certainly should be so labelled.

I have been studying economics for over 60 years now, and have throughout that time felt that budgets are grossly overhyped.  There was a time when some MPs wore top hats to celebrate Budget Day, (Rees Mogg prototypes?) and the newspapers, Guardian included, play up to the hysteria with speculation about what might be announced and then follow up with embarrassing tables on how the incomes of  households of different sizes and ages will be affected.

Full disclosure: according to one of this year's tables my income will increase by £4.05 a week, which, as my Australian friends would put it, is "better than a poke in the eye with a burnt stick," but hardly life changing.  However on anther page the table says the budget will make no difference at all to my income. "No worries," (another Australian-ism) it's ample for my needs anyway.

I suppose that these tiny variations can be very helpful to households that are desperately on the breadline, but not for most of us. And, sadly, and as always, those who benefit most from budgets are those whose incomes make them pretty comfortable anyway.

The whole idea that materialism is king and and that tiny variations in our ability to consume are life-enhancing (or not) is a damning comment on the tawdriness of our society.

Given that this budget takes place in Lent it would be far more appropriate  to construct  tables on the extent to which our attitude as a society towards our fellow humans, other  creatures and the environment has changed. Has our ability to "do as we would be done by," particularly  in relation to migrants, asylum seekers and the homeless, improved or deteriorated? Are we more or less resolved to limit our use of the earth's scarce resources so there's plenty  left for of future generations?  Are we still polluting the gifts of nature, or caring for them better?

These calculations, and many similar,  could indeed by life-enhancing.

However, although minor variations in household incomes  make little difference to the quality of our lives, variations in government taxation and expenditure make a massive difference, not just because they are by comparison massive, but also becasue they have a "multiplier effect." (see a text book: there is no time to go into it here.)

So Mr Sunak's expansionary budget (or spraying money round like water) is to be welcomed in the sense that "there is more joy in heaven over one sinner that repenteth than over ninety-and-nine just persons who need no repentance".

This blog, and many other more authoritative commentators, are among the ninety-and-nine just persons becasue we've been hammering the case fro Keynesian expansion for 10 years or so.  Rather than looking so pleased with themselves it would be nice to see the Tory front bench looking a little apologetic for 10 years of damaging and unnecessary austerity, which has caused  such pain  to the weakest in society.

Whilst the over-all effects of the budget will be beneficial, in the sense that Keynes is believed to have said "if you cannot think of anything better to do, pay some men to dig holes and others to fill them up again,"  Sunak's expenditure could have been more usefully directed.  Improvements to the northern rail network will do far more good than HS2: as would any further expenditure on the public transport that ordinary people actually use. The failure to re-enact the tax increases on motor fuel make a nonsense of the government's claims to be giving priority to reducing carbon emissions and pollution. Splashing money at an NHS almost on its knees after ten years underfunding is not going to heal it over night, and needs to be accompanied by other measures to improve staffing and working conditions at all levels.  We need urgent policies to expand the care system and reward properly the people who work in it (rather than the hedge funds that own so much of it.)

The greatest multiplier effect would result from increasing the incomes of those on benefits and the low paid, because they are more likely to spend their money in this economy  rather than salt it way in a tax haven or treat themselves to an extra foreign holiday.  If the Tories are true converts to Keynesianism they should take note.

Tuesday, 25 February 2020

Land of misplaced glory


There have been two announcements over the weekend to boost our fading self-confidence.

The "new" British passport is to be issued from the end of next month. Its cover will revert to the former blue (though I had a good look at my old one and, even in the daylight, it seems to me to be black) and will not mention the EU.  It was, however, designed in France and will be manufactured in Poland.  (The French sounding but British company Thomas de la Rue failed to get the contract.)  Further and better particulars are available here.  I find  it acutely embarrassing that we attach such symbolic importance to such a pathetic gesture.

It has also been announced that on the 8th May, the 75th anniversary of the end of the Second World War in Europe, there are to be commemorative parades, services of thanksgiving (national congratulation?)  in Westminster Abbey and probably elsewhere, and recordings of a speech by Winston Churchill blasted out in various public places.  This year 8th May falls on a Friday, but it will be a public holiday, not an extra one (the Tories aren't that generous) but to replace the normal early May Bank Holiday.

In my view, whilst not wishing to minimise the heroism and noble intentions of the many who fought in the War, the best way of remembering the conflict would be to show newsreels of the thousands  of refugees and displaced persons, the maimed and injured, and reminders of the 24, 000,000 military and civilian deaths suffered in the conflict by the Soviet Union, 20,000,000 Chinese, 6,000 000+ Germans, 5,600 000 Poles, (will their contribution to the success of the Battle of Britain even get a mention?) 2,000,000+ Japanese, 1,500,000 Indians, along with approximately half a million each in France, the UK, Italy and the USA.  Further and better particulars are available here to put things in perspective.

What is needed is not a nostalgic view of an imagined glorious past, but a reminder of why the UN, EU, Bretton Woods institutions, and   various Declarations of Human Rights with supporting courts were created: civilised nations working together to to build a fairer and more peaceful world.