Efficiency, a socialist problem

EFFICIENCY, A SOCIALIST PROBLEM

One of the reasons money came into existence, was due to efficiency, some would call it productivity, whatever the term, a person thinks up a better or easier way of doing something. This usually means more people can enjoy whatever has been produced, this if Socialism was based on reality would be a Socialist ideal, just the opposite it is a socialist problem.

Sharp CS 10a All transistor calculator
This was state of the art office equipment in 1964, an all transistorised calculator, pic courtesy Sharp corporation

Back in 1964, the Sharp Company of Japan produced the first all-electronic calculator. It was sold in USA for around $268, or about three weeks wages, for the average US citizen. Not that the average person could afford $268 for a luxury item like a calculator. However many companies could, and the Sharp CS 10A was a roaring success, it made calculating long lists of numbers so much easier, also it could work out percentages. It paved the way for others to copy. Calculators had been around for centuries, but not in electronic form, and they now started to be a commonplace piece of kit.

a slide rule

In 1964, the human brain aside, probably the most common general purpose calculator, was a slide rule. The Far East used the Abacus quite a lot, but that is less general purpose. Also a common item in the work place was a book of percentages, for working out the interest on various items. A slide rule is very good, however it is not fast, where it scored was on things like long division, or where methods requiring calculus were involved.

Originally mechanical, then electro-mechanical and finally all electronic calculators, made life so much easier and efficient. Sharp were the first to the market place. From then on there was a steady stream of developments and improvements. Here is a good example of where Socialism and its ideas fall flat, they are just fantasy. In the Socialist world there is central planning, this does a way with inefficient duplications and wastage. Well that is the idea, however it is a load of old garbage, that just leads to corruption.

In the free trade model, individuals use their own money, and waste it as they wish. This leads to some person being sat in an office using a Sharp calculator and thinking, well that latest piece of electronics printed circuit I read about, could do everything that is needed here, and they are sure they could sell it at under $200 and still make a fabulous profit. So they do, and also because it is there own money they have invested, they look at ways of reducing overheads. This is efficiency at work, and an example why efficiency, a socialist problem.

Typical desktop office calculator
A modern day calculator, you can buy them in £ or $ shops, a far cry from 1964, and they actually do more.

So pretty Polly Perkins, sets up her factory producing calculators, and selling them at less than $200 each. Initially she just employs three people, basically buying in the parts and assembling the machines, but business being brisk, she has to hire more staff.

electronics called a microchip

In the mean time, there has been some developments in the world of electronics, and some company called Intel has produced a new piece of electronics called a microchip. This is cheaper and does away with lots of the components. Over in USSR where they have everything passed by central planning, to reduce wastage, no one in that department has even a passing interest in desk calculators, so they are not even being developed.

In the meantime Polly Perkins has noticed that she can make an improved toaster using, some of the electronic bits, she buys. This is good because $200 for a calculators in now expensive, and although she has reduced the production costs, she finds she can make more money selling ten times the number of toasters, that lots of people can afford for their homes?

So Billy Brainstorm, elsewhere in the world, decides he can make a calculator for less than $50, and it is so small due to a new chip from Texas Instruments, that you can fit it in your briefcase. Other companies making calculators go out of business, making people redundant, but due to the fact they now have experience in making electrical items, some are taken on at a local factory making alarms systems, which are becoming more common, due to being affordable. They are more affordable because, of the new electronic chips, and the fact that things like calculators in offices means there are less staff needed to run a company.

Another example of why efficiency, is a socialist problem. Why when less people are needed to produce things, is employment going up.

Back with Polly Perkins, she has sold her factory, and could if she wished retire, but that would be boring, plus she always liked the side of business where she wrote the adverts to sell her products. So she gets a job at the local ad agency, as a personal assistant, and before long she has left and started her own company, specialising in making catalogues for distribution companies, and she does this efficiently enough, to take them within reach of small, local outfits.

calculators are now below $20

The efficiency has come from these new micro computers, which are now less than $2,000 for a good office machine. Meanwhile the calculators are now below $20, and they have a memory function.
A further efficiency causing a further socialist problem, how come when manufacturing is in decline, does employment keep going up, and people keep getting paid more?

Simple, when the Luddites in the 18th Century were breaking up the weaving machines, they had no concept, that in the future people would be employed to drive a vehicle to help someone whose car had broken down? How could they?

RAC breakdown assistance
RAC do breakdown cover in UK
Pic courtesy RAC

Efficiency is a socialist problem, because they object to people being made redundant. They then make erroneous comparisons, like the fact that a warehouse has been built on an old coal mining pit, and that the people there are not paid the same as the coal miners were.

Luddite socialists

That a person working at these warehouses, on minimum wage, drive to their place of work, has a disposable income far in excess of a 1980s miner, is lost on these Luddite socialists, and also has nothing to do with trained workers. The equivalent worker in 2017 to a miner in the 1980s, doesn’t expose themselves to the dangers back then. They work in an office, are required to use their imagination, and have a disposable income, that allows holidays in exotic world wide locations.

All because of efficiency, and the ease with which people today in UK can be made redundant.

Commodity and fiat money

COMMODITY AND FIAT MONEY

Pounds sterling
Fiat money, is not quite the same as commodity money, but commodity money can be fiat money?

In my last two blogs I went into the beginnings, and what might be termed the invention of commodity and fiat money. As I pointed out, when the first exchanges would be made, there was probably no concept of the term money, certainly there was no word for it.

this is commodity money

Those first transactions probably came about through convenience of application. The new farmer had a surplus of some good, and exchanged it for another good he required, basically this is commodity money. The point being, that there was a medium used by all, in this case the commodity of food, but also an item that can be adaptable in quantity, so the ox is not viable. The upshot is that one person can receive in exchange, for work or goods an item that can be saved or used to exchange with someone else, and although many call this commodity money, it can also take the more abstract idea of fiat money. It is not beyond the possibility of reason, that arrow heads may have been used, the problem here is we have no way of knowing.

Let’s face it before writing, there is no way of distinguishing archaeological finds used for hunting, deposited in a living area, with those used for exchange of goods? All the evidence is, there were no bartering societies as such, so the concept of commodity and fiat money appears to be grasped, in one way or another.

It is clear that very early on, other more neutral items than grain started to be used for these transactions. The main problem we have is, not knowing what the order of events were, that led to the concept of commodity and fiat money, coming into being. Was there a term for buying or selling, before there was the neutral token? We do know that it wasn’t just metal in the form of copper, silver or gold that was used as commodity and fiat money, famously shells were, along with other novel items.
Also the people on the South Pacific Island of Yap used large stone rings as their commodity and fiat money, that was usually not moved. A blog on the subject of Yap currency.

adoption of abstract numbers

In the Sumerian kingdom where the first written records of commodity and fiat money have been found, it can be seen that there was a gradual adoption of abstract numbers. The first written records were on clay tablets. The Sumerians also kept records of transactions and ownership of goods, for traders who were leaving one City to travel to another, with clay pouches that were sealed so that the contents wouldn’t be tampered with.

tally man
Tally men in Kent hopfields, courtesy Arcturus publishing

The very first counting system was probably tallying, which doesn’t require any counting by numbers. One merely keeps track by having some stones or marks on a stick. With stones you put one in a pile for each of the animals you wish to count, then when you ‘tally’ them you just take a stone away for each animal. If you are left with a stone then you have an animal missing. A tally stick is simple and straight forward, you simply take two equal lengths of wood tied together. Then you make a notch or line across the width to represent each item. So if a herdsman has ten sheep, then there will be ten lines marked across it. Then you untie the sticks, this way two people can keep track of the items. No actual counting is required, you just need to tally the marks with the items.

independent way of keeping track

At some point people started identifying numbers, two, three items and so on. When the Sumerians started using the clay pouches, they worked like this. You were travelling from one city to another, and leaving so many items with a trusted person. The thing is, both sides wanted an independent way of keeping track. This is similar to the pile of tally stones, you put one tiny pebble in the clay pouch for each item, and then sealed it up, and when you returned you just broke open the clay and checked the pebbles against your items.

The reason for going into number history is, that money accounting in Sumer advanced at a similar pace. It wasn’t long before the clay pouches started to have the counting numbers, also symbols for different items, so writing was involved. But the big breakthrough appears to be the idea of abstract numbers and quantities.

The archaeologists found that in less than thirty years through the daily use of these clay pouches, abstraction of quantities, numbers and money becomes a concept. Money as a measure came about through the use of the measure of grain, the shekel. This soon transferred to the grain being equal to so much gold, silver, bronze or goats, oxen and the like. Once there was a measure of metal, this could be held without using any resources.

You didn’t need to feed it

While the exchange was in perishable form, like grain or goats, the medium of exchange used as money would deteriorate. As soon as metal, especially silver, gold, bronze was used, it didn’t deteriorate, you could have piece of silver sat around minding its own business, and it needed no looking after. This was counted as commodity money, but is actually fiat money. You didn’t need to store it away from rats, or in special conditions, like food. You didn’t need to feed it, like animals.

Assyrian Charioteer
This is an Assyrian charioteer, Assyria, Sumer, Babylon were all a similar area, just different times.

The other point about the Sumerians (they may have been the Babylonians by this time) is that because of these clay pouches, they soon became adept at thinking of things as abstract ideas. So number no longer had to tally, they could be divided, multiplied and more to the point, not exist. So why go to the hassle of counting so many of these tiny pebbles, when you were going to mark the outside with a number, in fact a complete invoice. One might as well just mark the outside, with items and the numbers they represented, and forget about tiny pebbles. After all they were just a collection of pebbles. On the outside of the pouch, some of those pebbles represented goats others an amphora of grain. The pebbles all looked alike, it was the inscription marked in the clay pouch that told you what they were.

This then passes from commodity money into fiat money, at this point the currency is unmarked metal that was weighed to find its value. Again, this concept is fairly abstract, but these transactions were happening on a daily basis, and we all have our specialities in work where we know something just by looking. The ancients were no different.

Define Money Pt2

DEFINE MONEY, part 2.

Sumer woman's head dress death pit
From the book, Ur of the Chaldees, by Sir leonard Wolley. A Woman’s head dress, from the death pit

In my last blog I posed the question, Define Money, I am going to fill in a few of the gaps in my theory.

an unlimited number of factors and variants

In the final analysis the money that circulates as cash is just a token. The actual item whether a note, coin, cheque, figure on a computer screen, an intangible figure in a debit card, or a debit on a credit card statement, only exist, because we each have the confidence that another person will accept the value. That value is arrived at, not by any one person deciding its price, but by an unlimited number of factors and variants, that no individual decides, but that a nebulous idea brings about.

Back in the Neolithic period, humans had a revolution in development, it was called farming, this was one element, along with others that led to the ‘Invention’ of money.

On a personal level I am not happy with the term ‘Invention’, as it suggests a single human was responsible for it coming into being. This isn’t really the case, it comes into existence, because of efficiencies, or to give it another term, productivity. Money is a result of a surplus of anything over and above the needs of the being that creates it. The fact that more goods can be moved more efficiently by water, makes boats a contributing factor in money. That flint knapping is more productive than other stone tools, contributes to money coming into being.

together they increase productivity

Farming was probably the spark that started the fire, but the required kindling in the form of other efficiencies, boats, flint knapping are two, keeping livestock is another, together they increase productivity, this all led to the creation of money.

Roses
My roses need dead heading, but even with my part time work on them, they have multiple blossoms. A person working full time in a field can harvest much more than Nature naturally produces.

When the first proto money was being used, there was probably no concept of money, certainly no word for it. All that would be happening was an exchange of goods, they could not define money.

But take note, this in itself, is an increase in efficiency.

Hunter gathers have been studied in the 20th century, and one thing that is striking is, any tribes who have not come into real contact with modern peoples, don’t carry goods from one place to another. This blows out of the water any thinking that, hunter gatherers saved excess food for times when there was a famine or drought.

Mesolithic (Middle Stone Age) people were hunter gatherers, however that is only part of the story. Archaeological evidence from studies carried out in Central Europe, show that Mesolithic people had a base from where they hunted or gathered, but that when the food ran out, they moved to another base.

human digestion system to gain more calories

Some Mesolithic people kept domesticated animals, these would seem to have been moved with the particular tribe. This results in an efficiency, so they had some food, to tied them over until they could gather more food. There is also cooking to be considered, the process of heating food, allows the human digestion system to gain more calories from the same amount of food. This allowed Mesolithic people to support larger families, for the same amount of food.

They also had boats, alright they were simple dugouts or timbers lashed together and caulked to allow them to float, or hides in the form of coracles. No matter they were more efficient than a simple log.

The problem is, Mesolithic people have no universal exchange medium in excess to their needs, such a thing starts to define money.

The upshot is they had no item that can be universally exchanged.

At this point there is no useful item that is both large or small that can be universally exchanged. Gold, silver, bronze, etcetera have not been discovered. Food always has its own value, because it can sustain life, boats have a value to a person wishing to cross some water. Metals on the other hand have no value in themselves, until they can be made into some technological item. So if you see someone chucking an old PC away, just remember, that there is gold in them thar circuits? Until the Neolithic period and farming, there is no excess of food, over and above that needed to support life.

doesn’t need to be fed and watered

The advantage of metal is, that one person can accept it, then save it for a period, knowing they can use it again later, to exchange for a good they may require. It also doesn’t need to be fed and watered to maintain its value, all other things being equal, it is an ideal token.

Everything points to the concept of an intermediary token, being used, before the idea of money came into existence. We cannot at this time even begin to define money.

Sumerian numbers
Sumer in the fertile crescent had a base 60 numbering system.

In the Fertile Crescent, where money is first recorded, it was as a measure of grain. So firstly there was a measure, which just happens to be grain, and is accepted by the peoples of who at the time are called Sumerians. This is the Tigris and Euphrates region of modern Iraq, you may also know it as Babylon and Mesopotamia, although these are slightly different eras.

Everything starts to come together, around these ‘Cities’ that have been established.

They invent writing on clay tablets, which enables records of transactions to be kept, as a consequence of keeping track of goods. Numbers begin to be used and so early mathematics is invented. This allows for measurements to be kept, and the kings establish a measurement for grain, the shekel. Also bookkeeping came into being, and so accounts of different animals belonging to different people were kept.

So when someone in Sumer/Mesopotamia/Babylon died, and their chattels were being calculated, there needed to be a means of estimating how this should be divided amongst the family. So what is a goat in comparison with a sheep, or cow? Here is where we need some means to define the universal value, and in doing so, we define money?

Money is such a slippery thing

But do we? Money is such a slippery thing, the above calculation only pins down what a person had in goods, not their value as a human being. This is where money becomes a cumbersome burden. We can calculate a value or worth in money for each and every person, but only in on one level, their ability to add monetary worth to the world. But people have more than one level to their lives, this leaves the value in love and happiness, incalculable.

There is also the unseen value of what a person brought to the world while they went about their daily life. Yesterday, is a song written by Sir Paul McCartney, it has brought untold joy to many. In 1965 the Beatles were awarded MBEs for services to British industry, many people objected, mainly because they had no concept of the value of music, and the joy it brings, but also that it is a manufactured good, just the same as the Mini car that was being sold at the time. Ask yourself, which was the last you saw or heard. A 1960s car, running around the roads, or a song from the 1960s. I’ll lay money that 90% of you, it was the song from the 1960s?

It is money, but not as you would define it?

Define Money

DEFINE MONEY

UK sterling notes & coins
UK money.

How do we define money?

I have just been reading ~Money~ an unauthorised biography by Felix Martin, according to this book apparently the Greeks invented Money circa 8th to 6th Century BC. Really, so the people of Mesopotamia and the Fertile Crescent, didn’t exchange a measure of grain, the Shekel, for other items? Likewise the transactions recorded on clay tablets, must all be fake? Oh they did, well surely that is money in use?

Here is a crucial philosophical point, define money.

The main problem with trying to define money is, it isn’t what most people think it is. To start with, money can be both abstract and tangible at one and the same time. For example let’s say you dear reader, myself and say an MP (if you are an MP choose another person earning a different salary?) walk into a Pound shop, we each buy an identical tube of toothpaste, and pay the cashier, with a £1 coin. We’ve each spent exactly the same amount, £1, we’ve each handed over, £1, a coin that is quite tangible. And yet it can be easily pointed out, that we have each spent a different amount. Oh yes we have, if you put the purchase alongside our earnings. Suddenly the concrete amount of £1, becomes an abstract amount of worth, of different value to each of the three of us.

here is the slippery-ness of money

Of course as we go about our daily lives the amount we spend relative to another person doesn’t cross our minds. As a side note, if it does give you cause for concern all the time, you will always be unhappy. There are always people wealthier in some way or poorer in other ways compared to oneself. Back to the story, here is the slippery-ness of money, it is both a tactile tool for everyday living on one hand, and a febrile none existent token of worth, on the other?

Lloyds bank branch, wakefield
Lloyds bank one of a number of banks who help to distribute money in the UK.

Many people come unstuck when talking about macroeconomics, two of the biggest myths surrounds Governments and money. Governments do not have any money, if you were led to believe otherwise, you were lied to. Governments cannot directly create money. Yes Governments can mint coins or print banknotes that represent a value, but that value is all relative, and is set against the amount of money in circulation, against what the Country produces, or its wealth in abilities. Yes Governments can introduce legislation that enables private citizens to get on and create wealth, but Governments cannot under any circumstances directly create wealth, or its money equivalent. People working for the Government are not creating wealth, they merely redistribute to a greater or lesser degree, the amount of value in the Country. The money comes from tax receipts, and is then used for either good or bad projects.

life just existed

So let’s have a little history tour to help us define money. Palaeolithic man (Old Stone Age) was a hunter gatherer society, they survived because of some weapons and tools useful for living and surviving. When the number of people exceeded the available food to be picked, they died, the population reduced, and the few remaining went on living again. There was no money and along with no increase in efficiency or as some would say, productivity, life just existed. Palaeolithic people, could no more define money, as fly to the stars.

Along comes Mesolithic people or Middle Stone Age, they have some increases in efficiency, firstly fire, it facilitated a greater release of energy from foods processed through heat, so a higher calorific value could be gained, especially from meat and cooked grain like wheat. The keeping of domesticated animals, goats, sheep etc. started around this time. These feed on different foodstuffs to humans, so there was an increase in the number of calories per person for a similar area, without having to go hunting for it, so more people survived. This also allowed a tribe, to have more leisure time, because along with cooking, they had to spend less time foraging or hunting. But there was still no essence of money, Mesolithic people could not define money.

Palaeolithic man
Palaeolithic drawings

Then came the Neolithic period and the big breakthrough, Farming. It is difficult to over emphasize the significance of the invention of Farming. It revolutionised the human race and its development. As any gardener will know, just tending a garden part time can be productive. Doing so full time gives high returns of food. This resulted in farmers being able to feed their whole family, and have surplus left over, it changed the world.

Then in an area known as the Fertile Crescent, in what is now Iraq, and Syria and south eastern Turkey, the first Cities were built. Ur being one of the Cities, has been extensively chronicled by Archaeologists. Their findings are stupendous, not least, the discovery of the first tax system, the first accounting system, the first written word, the first written mathematics.

the bestest axe head ever made

Now back to define money, and a time just before the Fertile Crescent, imagine our first farmer, Ogg. After a couple of years he has surplus grain. He decides he needs a new Axe head and he also decides he wants the bestest axe head ever made. So he goes to the axe head maker sublime, Ugg and says,
“Look Ugg, I will give you six months grain in exchange for your best axe.”
“Okay it’s a deal I’ll have it ready a week on Tuesday.”

There is no money involved and I will emphasize, there is no concept of what we call money, this is just an exchange?

Sumerian numbers
Sumer in the fertile crescent had a base 60 numbering system.

Now I hear you cry that is just bartering. Hold on, I haven’t finished the story.

Ugg scampers off home and says to Mrs. Ugg,
“I’ve just done this great deal, two months of grain for you, me and little Uggy.” (Note six months divided by three equals two, I haven’t lost the plot)
Then Mrs. Ugg has an idea,
“Look Ugg, we won’t be able to eat all this food, because I’m still going out and foraging, plus it’s been a good season. Also I could do with a new Fur coat, Agg is good at getting quality leather and furs, let’s do a deal with him. We could split half of the grain we get from farmer Ogg, in exchange for some of his hides, and have some brand new clothes, and still eat better.

Here is the crucial bit, there is no word for money, in fact there is no concept of money. However it has just come into existence, you could say invented, but I think this would be overstating the case, it is merely a proto money. The grain will be short lived, that is of no matter it is being used as money.

There is a further point to make, the evidence is mounting that there was no bartering societies as first thought. I not only go along with this, I think it virtually 100%, there was no bartering, in the sense of nothing being used as money.

the rich always have things

Plus Money benefits the poor more than the rich, the rich always have things. In the Neolithic period, many people were valued in Cattle and other such large or expensive items, the poor were obviously dirt poor. Suddenly you have a proto money that can be held for a period of time. Okay grain can’t be held indefinitely, but it is needed by all, in the form of food, and can be exchanged in small quantities. Also this would release the value of other previous efficiencies.

Not least, that boats can transport goods more efficiently than going overland, Agg the person good at getting hides, could now pay for 100 hides to be transported from someone who has too many to use? Flint knapping, this little gem I heard about decades ago. Flint is a Neolithic tool and can be formed into arrow heads much more efficiently than other stones, is sharper and does the job better. Early flint napping sites in England have been found to have an estimate waste from 1,000,000 flint heads? The farmer coming along with this proto money, grain, suddenly makes the best flint knappers wealthy, because they can be paid? If they were being paid, they were receiving money, now define money?

Basically the surplus grain, releases the value of the efficiencies, which have been created in the Mesolithic and Neolithic ages. Efficiency pays wages.

By the time of the Mesopotamians and the City of Ur circa 3,500 bc, metal was being used as an exchange medium. No it wasn’t stamped, no there weren’t coins in the sense we know them, but the written clay tablets show exchanges and accounting not for bartering but buying and selling through a medium of metal by weight. Early on the concept of money was probably unknown. Wittgenstein comes into play here, “Whereof one cannot speak, thereof one must be silent”. Wittgenstein was meaning if we don’t have a concept in words, we cannot have a concept in ideas.

At some point the idea of grain, or more probably metal, being an intermediary ‘token’ which could be held and exchanged for any goods, took hold. At this point someone started using a term, for this token, in other words the concept of money was born. It was probably the measure of wheat, in Mesopotamia, namely the shekel.

But there was no coin worth a shekel.

Which brings us full circle?

Define what we mean by money.

Socialism never works

SOCIALISM NEVER WORKS


 
Socialism never works, it is currently destroying Venezuela, so lots of Britain’s youth cry out for it to be imposed here, why, because they know no better, and lack the wisdom that comes with age.
 
Venezuelan Socialist torture victim
Nicolas Muduro’s Venezuela has no regard for human right’s, these are supposedly written into the Constitution. It is a Socialist Country so they are ignored,

Socialism relies on the fantasy

That Socialism is a disaster and never works, shouldn’t come as any surprise, however Socialism does explain why people like Jeremy Corbyn and John Mcdonnell are so keen on it. Firstly Socialism relies on the fantasy that, people rioting are being Democratic, people who are dim witted believe this is good? Unless like Venezuela, where they are rioting against Socialism, in which case Socialist leader Nicolas Maduro announces the rioters must be backed up with money from the evil Capitalists, why else would ordinary people want to riot against Socialism? Perhaps they want food on the table President Maduro?

Let’s have some definitions. Socialism, it is defined as, a means of organising the Social, Economic, Political and business life of a community, based on the principals that all areas of Society should be run, on Socialist principles.

Joseph Stalin
Joseph Stalin, was responsible for the murder of over 30,000,000 Soviet Citizens. Jeremy Corbyn admires him, and has refused to condemn Stalin for his barbarous regime. & some call Corbyn a decent man?

Capitalism, well first which Capitalism, because there are two, the first was an idea by Karl Marx that there were a number of rich people who held the means of production through their accumulation of Capital (Money) and that they were intent on keeping the Proletariat (all us minor players) exploited by keeping our wages to an absolute minimum.
However there is also a second meaning for Capitalism, which is the one used by many “Capitalists” namely, free trade or Laissez faire means of economics, the two terms of Capitalism are mutually exclusive.

The problem with Socialism and why it is popular, stems from the fact that many people, who are unread, don’t realise, that Marx was writing fiction, this is why Socialism never works. There is no rich cabal of people intent on keeping wages to a minimum, in fact just the opposite, the majority of people who employ others, want the highest production and efficiency. Efficiency pays wages, the higher the efficiency of a company, the higher the wages can be of the employees. After all the higher the efficiency of each person employed, then each employee is producing higher profits, and can be paid more, while still making a higher return on Capital employed, so the owner/stockholder etc can make bigger profits.
 

DAF Trucks lined up
Industry makes the world richer through efficiency.

Marx was writing fiction

Marx was writing fiction, so had no time for the realities of life, so another reason Socialism never works. Like the fact that, if no one person has ownership of any particular piece of machinery, then no one is concerned what the condition of that machinery will be tomorrow, so doesn’t keep it in best order. An owner does, and makes sure their employees look after the machinery. Nor is there any concern for efficiency, so it reduces. And reduced efficiency, results in reduced productivity. Hence places like Venezuela, which has a Socialist Constitution, and floats on a sea of oil, is nearly destitute, after all, none of the oil rigs belong to anyone except the State, a Socialist failure writ large.

You can read the whole 350 articles of the Venezuelan Socialist Constitution in PDF, I suggest article 21 followed by 119 onwards for the best laughs, 21 all people are equal, sounds fair, until you read 119, indigenous people are more equal than everyone else lol. Another reason Socialism never works, it tries to be all things to all people. Article 95, any Union member may commit any crime, but cannot be dismissed from their employment? Article 95 also allows the workers to dismiss any Directors or Company Board officials they do not like? Article 112, everyone can be involved in Economic activity, as long as this is approved by a bunch of people who have no idea how to run that particular activity. Constitution of the Bolivarian Republic of Venezuela
 

they want Britain to be like Venezuela?

The above would be quite laughable, were it not for the fact that the people of Venezuela are currently starving, this is no laughing matter, except for Jeremy Corbyn and his pal John McDonnell, who support the Venezuelan Socialist Government, and they want Britain to be like Venezuela?

Jeremy Corbyn and John McDonnell, are hell bent on promoting Socialism, which is why McDonnell sees riots in the streets as part of Democracy. Rioting by his Socialists, to McDonnell is a legitimate part of the Socialist rise to power. What the dim wit can’t understand is that, many just see it for what it is, Fascism and Nazism. In fact he is so stupid he would be appalled that, it could be seen as Fascist, in his blinkered deluded world, Nazis are the opposite of Socialists. That Nazi was short for National Socialists, and that Hitler’s aims were to have control of the Capitalists and equal distribution of wealth and money, and so is exactly the same as his Socialism, is lost on the poor man.
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Bacon Advancement New Atlantis
Francis Bacon published ‘The New Atlantis’ in 1627 according to this book?

Socialism cannot help but fail, it is based on 16th and 17th century works of fiction. If one reads Francis Bacon’s The New Atlantis, and note how this fantasy world is ordered, it is basically Socialist, but with Christianity as the mover for good, and indeed read it and then read the Communist manifesto, and you will wonder why Marx didn’t just print it and have done. That Francis Bacon did not even allude to how this world would be paid for, speaks volumes on Socialists. Bacon was writing a little Christian flight of fancy.

the rich are not rich enough

The Socialist answer on paying for this fantasy, is to say the rich will pay, well I’ll break this to the Socialists gently, the rich are not rich enough, and it is the poor who always end up paying. Another reason Socialism never works, it takes away ownership, so productivity goes down, leaving the poor poorer, and the rich with no means of creating the wealth, to pay for all the ‘Free stuff’ promised by the Socialists in the first place. When Thomas More wrote Utopia, he had no concept of how money worked, but he didn’t need to, Utopia was a work of fiction, something not based in reality.

Marx wrote fantasy, and then elaborated on it, by inventing an equally fictional economics, namely as the rich become richer the poor become poorer, codswallop of course. After over 150 years we would have a few super rich, and the rest of us would be poorer than our Victorian ancestors, clearly this is not the case.

Socialism impoverishes all, by stopping businesses making healthy profits, starves by reducing people to extreme poverty, tortures those who disagree, and blames the victims for causing the problems, and murders those, who speak out at any injustice caused by Socialism.
 

Minas Tirith Gandalf, Shadowfax, Frodo
Minas Tirith as envisaged in the film, but very close to the description in the book., Return of the King.

noticed something missing

Socialism is doomed to fail, it is just like imposing Tolkien’s Middle Earth, or Rowling’s world of Harry Potter in real life. So there you have Gandalf & Frodo riding into Minas Tirith, have you ever noticed something missing.
No?
Where are all the farms, where are all the neighbouring villages that the farmers live in ,to produce the crops, that a City the size of Minas Tirith would require. Not to say, what work do people do in Minas Tirith, of course the question is irrelevant, Tolkien had invented an imaginary world, the suspension of disbelief is what takes us on our journey to the Mountain of Doom. No economics required.

Meanwhile back in the real world, and the people of Cuba, Vietnam, North Korea, live in abject poverty, and the people of Venezuela are starving, and any protesters, must be extreme right wing and so can be murdered, that is the reality of why Socialism never works, it can’t be any other way, Middle Earth could not exist in the real world, we would all starve?

Savings

SAVINGS

The UK desperately needs to increase its Savings. Running up to the Election, I did some leafleting for the Lib-Dems. My reason for backing them is down to freedoms. They are pro freedom of speech, pro free trade and hence, pro freedom of the individual. However, the way the Liberal-Democrat Election campaign was run, was atrocious.

Park Row Grimshaw
Park Row Leeds, painted by local artist J. Atkinson Grimshaw. Park Row is now the centre of Leeds Banking district

Firstly, suggesting a second Referendum on Brexit, stank of revenge politics. The British public have moved on, revenge politics is not a vote winner.

Brexit politics aside, the main problem that the Lib-Dems have is that there is no clear water, between what their vision of UK is, and what the others are offering. One item, that of de-criminalising Cannabis, hardly set the tone for their manifesto. It was overshadowed by the above proposal for a second Referendum.

help those at the bottom of the earnings table

So where should they start, well start with the Economy, and personal savings, they are far too low. Increasing the personal savings ratio, would help those at the bottom of the earnings table, have a chance to improve their lot, surely a Lib-Dem winner, and help those who are thrifty to increase their disposable wealth. Why didn’t Tim Farron challenge, Philip Hammond on his record of making personal savings more worthwhile, this is a policy to attract a lot of older people who do have savings. Why is the Bank of England keeping Interest rates so low? After the Referendum the Pound devalued, there has been ample opportunity to raise interest rates over the past year.

Lib Dems Greg Mulholland Election
Greg Mulholland Former MP for Leeds North

The problem is, most people do not understand Macro Economics, certainly few Politicians do. Increasing savings, lowers consumer spending, but raises investment in Industry and Commerce, an ideal point for the Lib-Dems to score. When people save they want to see a reasonable return on their cash. Where better than backing a new enterprise? Increasing the Savings ratio, increases investment in higher quality companies, requiring higher skills to give these higher returns.

Lib-Dems manifesto

There was no mention in the Lib-Dems manifesto to increase National Savings, even though this is an excellent way to increase the savings pot. However there does need to be a culture change, in Japan they have had little to no growth for over 25 years, yet they have a highly skilled labour force, which demands premium wages, and as a consequence Japan runs an export surplus.

since WW2 the savings ratio in Japan

Why, because since WW2 the savings ratio in Japan, has been at least three times that of UK, let that sink in. It is a cultural thing, apparently due to language, in English there is a distance between what happens today and what happens tomorrow, in Japanese the future tense is inbuilt into the language, so they have the concept that saving today’s money, saves for tomorrow, there is no difference. They have had negative interest rates, for years, and yet their savings are still much higher than UK.

Suzuki name
Japanese Manufacturing has worldwide exports

Japanese Workers savings since 1971

UK savings ratio since 1956

World Bank source Data

In the UK, no Political party since WW2, has concentrated on savings, the problem is, without higher savings, UK Plc doesn’t have the spare Capital to invest in high tech machinery, surely a clear demarcation line, for the Lib-Dems to exploit. Investing in labour saving machinery, leads to higher output, because fewer people are employed by the one company. This leads to higher productivity, which in turn leads to higher job creation, through lots more efficient companies. You don’t believe me. The number of unemployed in Japan is in percentage terms less than UK, Remember Japan has around twice the UK population.

127,000,000 in Japan compared with 65,140,000 in UK .
The unemployment levels are, about 1,815,00 unemployed in Japan compared with approximately 1,469,000 for UK.

The respective Numbers employed are 64,830,000 in Japan, and 31,400,000 in UK.

There is however a conundrum, the comparative GDP figures in Dollars for UK and Japan are as follows.

1988 UK $14,477 while Japan was $23,325 source Economist Vital World Statistics 1991

1997 UK $22,300 and Japan was $35,906 source Economist World in 1998

2008 UK $39,470 while Japan hits $42,310 Economist World in 2009

2015 UK $44,580 but Japan drops to $32,800 Economist World in 2016

Clearly, I hear you say, my prognosis is wrong and flawed. Well no, because Japan was hit by a catastrophic Earthquake and Tsunami in 2011, and had great disruption to its infrastructure, and power producing facilities. Yet it is still running a trade surplus, this helps to keep the Government attaining the required income, to help pay the enormous National Debt. Why, because Japan still has a large industrial output, and although in the last few years its GDP per head has collapsed, at least for the time being, it is still exporting more than it imports, so running a trade surplus. Plus the Japanese are still buying overseas investments. These pay higher than inflation interest, and so the Japanese remain financially sound.

UK needs to change its savings culture

Few Japanese companies get taken over because of the trade surplus, as opposed to UK where it is a frequent occurrence, due to the trade deficit. The UK needs to change its savings culture, it will be a big task, but none of the other political parties, even have the subject on their radar, surely an opening for the Lib-Dems to exploit.

There has been a suggestion made, that the new City Mayors and Councils, should be given the powers to raise funds through bond issues. I totally agree, if a City needs let’s say a new Tram system, that can be shown to improve efficiency, why not let it issue a bond to raise the finances.

M1 Wakefield
UK Motorway

One person’s debt, can be another person’s savings, this all comes with a caveat, there should be NO Government fall back if the scheme fails, and the City cannot fulfil its commitments, it should be declared Bankrupt, savers need to be, beware and savvy? Another way for the Lib-Dems to put clear water between them and the other parties. But the biggest gainers would be those at the lower end of the earnings bracket.

motorway link with Manchester to Tyne Side

Savings and Bond issues, fall in with Infrastructure spending, another area that the Lib-Dems failed to make a bigger issue of. For example why is there no direct motorway link with Manchester to Tyne Side, large sections exist, the M65 is currently under used, and it would not be too difficult to make better access to the M60 around Manchester and also north along the A59 and onto the A61 joining the A1M, other routes are quite as feasible. Why are there no major underground systems outside London? Or overhead rail systems, the Germans have one as a blue print at Wuppertal, OK it is probably a one off, which pays because of the tourists, but there are lots of ways to increase infrastructure.

Wuppertal overhead rail system

National Savings, can be increased with ease, and these being Government backed can come with a ‘Gilt Edged’ guarantee. All the special National Savings Bonds that have been promoted by the Government, have been oversubscribed, surely a Lib-Dems vote winner.

Another area that would put clear water between the Lib-Dems and other parties is house building.

HS2 is going to rape the open countryside

Currently HS2 is going to rape the open countryside, why, because using existing routes and straightening out any sharp curves, would mean demolishing thousands of houses, in Towns and Cities on the route. Currently because of the outdated Town and Country planning act 1947, no one can build large amounts of houses in Towns and Cities. Why because they are full, and the green belts are seen as precious.

Well all you tom fools who think green belts are a good thing, it is leading to the rape of the open countryside. HS2 is raping the open countryside, it is the green belt supporters who are to blame, no one else. Blinkered thinking or what, but then The Town and Countryside Planning act 1947 was a Socialist idea. In other words a fantasy, just like the World of Harry Potter, sounds good on paper, but doesn’t work in reality, except as a theme park. Hence so many people being unable to afford houses, they just aint being built in the Towns and Cities, in large enough quantities, because house builders can’t get the planning permission, on the edges of Cities.

Sterling money. pounds
For some reason, money doesn’t actually grow on trees?

So promoting high value businesses, by improving savings, results in boosting quality jobs, and reducing unemployment. This twins with reducing the balance of payments deficit, through higher quality products.

A bye product of higher savings, would be less cost to the tax payer for care in old age, which was one thing Mrs. May and the Conservatives, got seriously wrong.

More emphasis by the Lib-Dems to increase house building, should have been made. One proposal is to let local Councils build more houses, but again, the Town and Country planning act would have to go. The ten major Cities in UK all need to expand, it is not currently allowed.

Bunkum of the highest order

Bunkum of the highest order, there are now over 10 million more people in UK than in 1951, housing stock has not risen to keep up with demand. Basically the Town and Country planning act 1947, has in recent years, prevented those on lower earnings, from owning their own houses, and in their later years, being able to live on a lower income, because of no rent, and enjoy the benefits this freedom gives.

Lib-Dems are not Socialists and should distance themselves from these fantasists, but also they are not Tories. Lib-Dems stand for freedom, it should be the objective, higher savings gives freedom, this gives clear distance between themselves and the other parties.

 

Debate

TV Debate
31st May 2017 BBC TV debate

I am just about to watch the live TV debate, with six of the party leaders plus the Home Secretary Amber Rudd, standing in for Teresa May. Labour think they have hit gold, because Jeremy Corbyn has lifted his ratings with his broadcasts. On Twitter Labour supporters are gloating, this might be a tad premature, Tony Blair avoided all live TV debates, and still won? In fact he benefited from it, because he sidestepped major policy questions, which could have caused a major upset. 19:30 Wednesday 31st May 2017

20:30
There have been some slight glimmers of enlightenment amongst a mainly bickering seven poor players, strutting and fretting their hour upon the stage, sound and fury signifying little. I admit they have said more than nothing, but not much more.

GE2017 rolls on, the electioneering is now in full swing, and the surprise so far has been Jeremy Corbyn not making a complete hash of things. His gains have mainly been because, Teresa May has not capitalised enough on the Conservative Party’s strengths, and has been relying on the Tory image of wealth creators. Corbyn has not improved Labour’s persona, he has merely tapped into a fantasy idea that somehow endless n be found to fund Government. How it will play out by next Thursday and polling day remains to be seen.

At the moment there is a swing to Labour, it will take some serious effort not to lose the momentum. There have been some large gaffs made by senior Labour front benchers. Dianne Abbot is a regular car crash, and is unable to do simple sums, her only saving grace is that most of the people interviewing her, are equally useless at Maths and Economics so keep to the safe ground.

John McDonnell, Labour Shadow Chancellor, and the person responsible for producing Labour’s spending plans, has no idea about Economics, except that under labour they would have a magic money tree?

Sterling money. pounds
For some reason, money doesn’t actually grow on trees?

This has meant that Labour has been careful about what it says, and has kept to broad brush policies, this is good, because it allows the freedom of generalising, something the Conservatives as the sitting Government doesn’t have.

The Conservatives are stuck with #Brexit, which isn’t as high on peoples list of worries, as many Political pundits figured it would be. Changing policy over care for the elderly, just after the manifesto was published, made the Conservatives look amateur, and tarnished the impression of consistency. Also Teresa May’s status as a potential #Brexit negotiator, is being worn away on a daily basis, nothing serious at any one time, just little knocks and chips, but they are starting to tell in the polls.

The Lib Dems have put themselves at a disadvantage, by aiming their manifesto guns at staying in EU, and suggesting a second referendum on #Brexit, this is a policy out of touch with the majority of voters on the streets. Most people in UK accept the result of a vote, even when they voted the opposite to the result, it’s called Democracy, and the Lib Dems are ignoring this at their peril.

The Lib Dems do have a manifesto built on strong Economic foundations, and will gain quite a lot of votes in the areas where the #Remain vote was strong. It will get those votes, because it has economic policies that make sense, and play to its strengths. Also, because when push comes to shove, the voter in some of these constituencies, will vote tactically. When all said and done, if you voted #Remain, then voting for a party that will at least fight your corner, and looks on paper to be able to handle the economy without nay major disasters built in, is worth a punt against either the Conservatives, who are hell bent on getting us out, or Labour who are hell bent on saying one thing and doing another?

The next week will of course be crucial, the final days of candidates out rallying support on the stump, always is. The main gains and losses will result from what people ~perceive~ to be leadership, gained from following the various media.

Wee Jimmy Krankie and Nicola Sturgeon
Actress Janette Tough on the right in her role as Little Jimmy Krankie, it winds up Nicola Sturgeon leader of the SNP that her image is often shown along side Ms. Tough.

At the current time, Ms. May looks has stumbled, now is the time for any of her opponents to grab the initiative. It is worth noting Nicola Sturgeon the SNP leader was also absent from the TV debate, in her case she had too much to lose by appearing, and although she has one game to play, namely Scottish Independence, she is an astute political animal, her absence was part of playing this game.

Jeremy Corbyn has some decent advisors, whether he is up to taking their advice, we shall see, Tim Farron suffers from a lack of presence, it is not something that is gained in a couple of weeks, in fact some people just don’t have it, but he could gain just by being a little vague on some topics, and not pin himself down.

At the beginning of the campaign, the Conservatives, in the form of PM Teresa may said she thought it unlikely that the outcome would be what the polls were suggesting at the time and that it would be a closer race than many were thinking. She is being proved correct, the Conservatives will romp home to victory, but with only a slightly increased margin. Jeremy Corbyn will hang on as leader because he will not lose by the numbers first predicted, and the Lib Dems will limp in with an increase in MP’s but not the breakthrough it should be.

We now await June 8th for the outcome.

manifestos

MANIFESTOS GE2017

So the Labour and Lib Dems have published their GE2017 manifestos.

Labour have gone for quantity, and covering all base points, however the major flaw the Labour party suffers is, costing, or lack of it. Typically it is unashamedly Socialist, so has no basis in reality. It is high on ideals, and unfortunately the ideals, are basically fantasy that leads to disorder. Anyone doubting this only has to look at events in Venezuela, where there are currently riots. Venezuela has a Socialist constitution, all 350 articles, some of which contradict each other, so average Socialist nonsense. The Labour party in the UK has elected an out and out Socialist, this was done in the belief, and I’m using the word belief in its religious sense, of not based in an Earthly reality, that a truly Socialist party has a real chance of winning a British election. Even the Biased Broadcasting Corporation, hasn’t gone for that one.

There is a ~grass roots~ Socialist movement called Momentum, who backed the extremist MP Jeremy Corbyn, for the party leadership. There is however a joke hidden here, before the election of a new leader, the Labour party had changed the rules for joining, and being able to vote for a leader. The intention of this rule change, was to encourage a younger, fresher membership, but the trouble was, it was numpty Socialists dreamt it up, and naïve half-wit Socialists implemented it, result an own goal.

So let’s put you in this position, you are a Conservative party member or long time Conservative party follower, and suddenly the main opposition party to yours, namely the Labour party, gives you a chance of voting for the worst possible candidate to represent them as leader, are you going to take it, you bet your little cotton socks you are. The changes in the Labour leadership voting rules, allowed anyone who registered as a Labour Member in January 2016, to vote in the next leadership election, the cost £3.92 (about $5.57 at the time) in fact if you were a student you could vote for £1 (or $1.42), and thousands did, all intent on voting the un-electable Jeremy Corbyn as Labour party Leader. The biggest joke is, that the Socialist pressure group Momentum are so stupid, they still they voted @jeremycorbynmp in as leader, well many did, but equally as many Conservative voters did, Jeremy Corbyn is un-electable. Momentum believe the only reason the current polls are not showing Jermy Corbyn higher in the ratings, is the BBC and all the media show their leader in a poor light.

No one needs to show the wretched man in a bad light, he is quite capable of doing that himself. Equally, the Labour policies in the manifesto are based on a magic money tree, the Labour shadow chancellor is so ignorant of Economic basics, he truly believes the fantasy of the rich getting richer as the poor become poorer, which is obviously untrue, because we are all richer than previous generations. A cornerstone of the Labour manifesto is re-nationalising the Railways, Water and other utilities, along with investing more in the NHS, a total oxymoron.

The Pre natilised railways produced the finest example of steam locomotives in the world, this is the Class A4

Steam Locomotive Sir Nigel Gresley A4
Class A4 LNER Sir Nigel Gresley the Locomotive named after its designer

The 1st time the Railways were nationalised, they were starved of funding, because the money was ALWAYS spent on the NHS, John McDonnell, is obviously as ignorant of basic Economic as he is of basic Politics, look after health and education and have a strong military. We’ll gloss over Labour’s spending plans on defence, to save them embarrassment, they boil down to being crap, and would leave UK in a more parlous state than it already is.

Meanwhile the Lib Dems have at least admitted they won’t win the next General Election, that’s a good part of the Manifesto, de-criminalising marijuana, is nearly in the right direction, but it is a faint bleat in what could have been the start of something decent.

After that it is unfortunately either barking up the wrong tree, or simply chasing phantoms that are already dead. Barking up the wrong tree, is subsidising loans for first time home buyers. Nearly, but not quite hitting a bullseye, is ensuring 300,000 homes are built by having local Councils build them. Where does the money come from? Money aside, it is a good point in the Lib Dems manifesto 300,000 homes, is a step in the right direction, and having local Councils build them might just work. But this doesn’t address a fundamental, of getting rid of the Town and Country planning Act 1947, to enable these homes to be built in Towns and Cities. One is left to presume the Lib Dems are going to rape the open Countryside further, by either building new towns. Or just expanding all the Villages and Towns throughout the Country. There are certainly no where near enough brown field sites, to build 50,000 homes, let alone 300,000. This policy would still leave a housing shortage of between 1,500,000 to 2,500,000 houses. Although it is better than no policy at all.

The Lib Dems are also going out on a limb, by suggesting an extra penny on income tax, will be enough to fund its promises, and that people won’t mind, a single penny. It doesn’t work like that, a single penny does raise a lot of money, however, it is counter productive, and this is where the Lib Dems come across as being a bit tired, if not outright lame. There are no major ideas, on how to boost trade post #Brexit, especially outside the EU as well as within. This is due to the Lib Dems absolute faith in EU, a faith that has always resulted in failure.

Another good point badly done is having a multi billion Pound increase in infrastructure spending. This is one of a number of good ideas, which should have more prominence, and the promise of more money. Forget another referendum, look at boosting industry and commerce, a Government can do this by increasing efficiency, and efficiency pays wages. Higher efficiency pays higher wages, so spending on infrastructure projects increases employment, and with it higher wages, this is only a half hearted idea from the Lib Dems, it should be being given a higher profile.

The main plank of the Liberal Democrat GE2017 Manifesto is another vote on leaving the EU, this is a plain embarrassment, we have already voted to leave, we are leaving, suggesting a further vote is un-Democratic, the people have voted, the results are in, we are leaving.

Brexit jubilation
The Democratic Revolution is here. Socialists were given a metaphorical kick in the teeth, when Britain voted #Brexit

Here though we have a failure of the Lib Dems leader Tim Farron, he has missed a trick, big time. Namely admitting we are leaving, but then suggesting better Economic tactics in dealing with EU. Here is the problem, Tim Farron is convinced the majority of British people are aggrieved with the #Brexit result. Well they ain’t. I have had various chats and listened to lots of people, those still aggrieved are so far and few apart as to not worth bothering about. My wife voted #Remain, and her view is, the people voted, we are leaving, let’s get on do it and get the best deal possible when dealing with the duplicitous un-elected EU Eurocrats. She voted #Remain purely on Economic factors, in that we were doing most of our trade within the EU, leaving would be disruptive. She was not impressed when informed by the BBC, that a second referendum was in the Lib Dem Manifesto.

Even I am surprised that the #Brexit vote is proving more beneficial in the short term than I predicted. I didn’t expect any melt down, I did expect exports to increase due to the lower Pound, I didn’t expect that the Stock market would reach new heights, this far down the line.

But the Lib Dem manifesto by saying we should have another vote, is the wrong side of History, and although it will gain some marginal votes, the losses of people who are looking to move on from the Referendum will be a lot greater. The gains will be by the Conservatives, whose Manifesto is released later today.

Negotiations

NEGOTIATIONS

Mannekin pis
All dressed up and doing the same to other Europeans, as they do to Brits, piss on us all.

There are lots of people getting their knickers in a twist over the opening shots, in the negotiations for Brexit, with Brussels meddling in the UK General Election 2017 (GE17).

Theresa May is, quite rightly, being given a hard time, the problem is, most of the brickbats thrown at her, are over her telling Brussels to sod off. Now were this merely that she was making a hash of the handling of the Brexit negotiations, it would be fair comment. The trouble is, the negotiations proper haven’t started, and already Brussels is as leaky as a sieve. Making things worse for EU was the fact, the first leak was via Frankfurter Allgemeine Zeitung (or FAZ) newspaper, which as the name suggests is a rag produced in Frankfurt am Main. The City that, via its bankers, controls the Euro.

The News story in FAZ was about a meeting between Jean-Claude Juncker EU President, and Theresa May UK Prime Minister held at 10 Downing Street.

Juncker climbed the EU greasy pole

Oddly neither of the two participants in this reported exchange, is directly elected to their respective posts. Juncker climbed the EU greasy pole and was voted through EU Parliament, so hadn’t been elected by any system that allowed the citizens of EU to have a say, making his position as President of European Commission, not very Democratic.

The 5 Candidates for Conservative Leadership election. May, Fox, Gove, Crabb, Leadsom courtesy Guardian Newspapers

Theresa May became Prime Minister of UK, was elected into her position, by the Ruling Conservative party. This post became vacant, due to David Cameron standing down, because of the result of the Referendum last year. The position is not directly voted for by the Electorate, it is usually held by the person who can command the largest backing in Westminster, after a General Election has been called. In Theresa May’s case, there had been the Referendum deciding Britain should Exit from EU, Cameron was sure Britain would vote to stay in the Union, he made the wrong call, and Theresa May was then voted in by her fellow Conservative MPs.

There was no Constitutional reason

In my blogs back then I suggested she would go to the Country in October or November last year. My reasoning was simple, Theresa May MP really needed the backing of the Country, to help in her negotiations with Brussels. There was no Constitutional reason she needed an election. As it turned out, she chose not to bother, however in many ways her hand was eventually going to be forced. From a Political point of view it is better to call an election earlier, rather than when she was trapped by events.

This she has done, with the intention of winning the Election and so getting a clear Democratic mandate from the British people, over the Brexit negotiations.

A remarkably sober looking President of the EU Commission.

Which brings us back to the Champagne swilling Jean-Claude Juncker, and the alleged fissure that opened up during meeting with Theresa May in Downing Street. Initially Jean-Claude Juncker had said the talks were friendly and constructive, the usual diplomatic speak, for uneventful but worth having, and none of his negotiating team present, made any suggestions that differed from this.

Then the bombshell from FAZ, that the talks were far from friendly. The meeting was initially seen by all, as part of the humdrum ongoing talks. So when FAZ prints a report that the chat in Downing street didn’t go well, it gets into all the world’s media. But here is a rather curious thing, FAZ didn’t publish the whole account online, only edited highlights of the worst bits, which were likely to negatively effect the £? That sounds a lot like Frankfurt bankers at work, perhaps I should have swapped a w for a b there, because Sterling going down, is good for British Trade, and helps strengthen the balance of payments, having the opposite effect of strengthening Britain’s trade, oops.

Byzantine way EU is set up

What becomes clear from the FAZ article is that Brussels Eurocrats are determined to have reams of detailed rules concerning the UK break with EU,. However UK doesn’t need them, Brussels needs lots of rules laid out in detail, because of the Byzantine way EU is set up.

One of the so called stumbling blocks in these negotiations is about EU Citizens living in Britain, and ensuring their rights are protected, and here is highlighted the gaping chasm between EU Law and English Law. Let’s just pretend it is the day after UK officially splits from EU, there are a few millions Poles, Czechs, Slovaks, Baltic States etc living in UK, what is their legal position. Well here is what few on either side of the argument seem to have got their heads around, the legal position of all these foreign nationals hasn’t changed, they have the same status before the break as after the break, their health care cover is the same, they are entitled to the same welfare, they pay the same taxes.

A Looky Looky girl selling her wares in Marbella. Spain has serious economic problems due to the Euro. Unemployment is high and imported from Germany, due to the Euro. Hence why Frankfurt has vested interest in UK doing badly.

The problems start to kick in, only when or if, these Foreign nationals choose to travel abroad and return to UK. Even here it is unclear that they would ~not~ have a right to return to a job. Certainly the Courts would defend any EU National who had gained a job legally, return to that job. It is how English Law works, once it enters the Law Courts, if there is no Law banning something, then it is allowed. Try telling that to Brussels Eurocrats, but hey they are so used to inferior European Laws it would possibly short circuit their brains?

the Labour party can be ignored

Jeremy Corbyn is being less than useless, and the Labour party can be ignored, even though under the UK voting system, they will return as Her Majesty’s Official Opposition.

Tim Farron the Liberal Democrat leader is shooting himself in the foot. His stance has been fairly clear, Lib Dems wanted to #Remain in European Union. That’s fair enough, however, once the people have spoken, trying to get the genie back in the bottle ain’t going to be possible. So Farron should be concentrating on trying to stay friends with Brussels, so that UK gets the best deal in the talks.

Farron is throwing his chances away

Tim Farron isn’t doing this, he is continually siding with Brussels, and then saying we shouldn’t be leaving. Political suicide, especially as Lib Dems have the best chance of regaining lost seats, Farron is throwing his chances away. He needs to change his strategy to one of, let’s get the best deal for UK, by staying friends with Brussels. Friends have a quiet word in someone’s ear, when they cock up, and attempt to pour oil on troubled waters. Often this will mean keeping dialogue with both sides. In Farron’s case, he should be saying that Brussels is being less than satisfactory in its leaking stories to the press. And Theresa May should be attempting to keep the dialogue as open as is possible without disclosing all the cards in their hand. May’s megaphone diplomacy is only palying to the #Brexit camp, not to both sides. Farron probably isn’t up to it, but he should try.

The talks will be complex. This is the continuous cry from Brussels, why? Yes there will be complexities, especially with regards to trade, but they don’t need to be needlessly complex, the devil is in the detail, only where people decide there needs to be exact detail, again look at how English Law works. Parliament sets out a Law, but then the Courts decide much of the detail, and if the Law doesn’t work, it is changed, at a later date, but most Laws are basic outlines, it is then for the Judiciary to battle over the detail. In Europe, the un-elected Eurocrats attempt to work out the detail in advance.

It isn’t how Democracies work, it is a prime reason UK voted Brexit.

Wealth Creation Pt2

WEALTH CREATION PT2

How wealth creation came into being.

In part 2 I am developing the ideas from part 1.

11th Century English Agriculture
Agriculture in the 11th Century

A point to keep in mind is that those very first farmers, had no idea they had money. To them it would have been just a surplus product, there is no evidence they would have had any concept of money as we perceive it, merely they would have extra food with which to exchange goods or services.

With no real concept of money, there would be no word for it, nor to start with any ideas of worth.
In historical terms, farming is what predominantly marks out the Neolithic period, yes there are also improved designs to stone tools, but these also occur in the Mesolithic period, and are not in economic terms revolutionary, farming most definitely is.

You only have to look at Australia

Until this first farmer, any drought, or increase in population above what the land could support, led immediately to starvation. You only have to look at Australia, it was occupied for 30,000 years when the British first set up their colony at Botany Bay. Britain had been occupied continuously only since the last Ice age had ended, about 8,000 BC. The Australian Aborigine population was between 250,000 and 400,000, it was Palaeolithic or old stone age, and strictly hunter gatherer. The population in Britain was 14.1 million, and had already past the Agricultural stage and was into the Industrial era.

This highlights the difference, pre farming people starved when the food ran out, whether through a rise in population, or a shortage of food through a natural downturn ii the weather or perhaps even a disease in the staple food of the area in which a community lived.

Stonehenge
Stonehenge

Palaeolithic peoples didn’t even have domesticated animals, like cows, goats, sheep or the like, by the time of the Mesolithic period domestication had started, however, the animals were still dependent, like their human companions, on what the land could provide.

this leads to ownership

Farming changed everything. That it came into being is no real surprise, people lived so close to the land, it is easy for some bright spark to see that there were some areas that had better food supplies than others, the leap of imagination was realising that if one planted the grain, it grew.
The first farmer has found some suitable area of land, cleared the existing plants, and sowed his seed. He has tended his crops, and this leads to ownership, it also leads to wealth creation. After all, he is the one who has done the work. So along comes Ug who asks if he can help, and reap some of the rewards.

This immediately leads to challenging questions, is Ug given a share of the food, does Ug have his own piece of land, if not what is his relationship to the first farmer, is he a worker and paid or a slave and becomes part of the famer’s tools. Remember there is no word for money, no concept of money, and the idea of ownership may well have come into being, before these other concepts have words.

Indeed, it is money in the form of tokens, that dislocates commodity money from fiat currency. Once the idea of abstract value becomes grasped, then there is value of things. Until this point, people, products, services have no value, not because they are valueless, but because there is nothing that acts as an independent token with which to measure the value.

It is the independent token (=Money) being dislocated from actual services or goods, that makes money such a vital measure, so no money, means or equates to, no value.

he can give value to items or services

It is advancing technology that has given items and services value. Once the farmer has surplus product, he can give value to items or services he wishes to acquire.

Whilst the axe head maker was making ‘things’ of value. Those axe heads had no value, until there was the money there, with which to exchange a good or service.

This idea also has great consequences for modern Economies. During the ninth and tenth centuries in England, there was particularly in the reign of Eathelraed the Unready, a draining of fiat currency from England abroad, in the form of what was called the Danegeld. These were extortion payments made to the raiding ‘Vikings’ or ‘Danes’ in an attempt to keep the peace.

But here is a conundrum, while the last payment was so huge it took two years taxes to raise, this left the Vikings super rich. But had it made the people of England have any less value, no. OK they had less money and less disposable wealth, but all the knowledge and ability to create wealth through technology was still in place, so they were only poorer in what they could purchase with cash. If there was no famine, they were still as rich as the years before.

Note to confuse the issue there were a couple of famines, but this only meant the Danes or Vikings choose your own name, stayed away from the coast of England, until they had the spare food, so as to travel, and to raid the English again?

a modest three or four fold increase would bring astounding benefits

In the mean-time let us return to the idea of the first farmer. The result of just clearing an area of land, probably just unwooded land, and digging with perhaps an antler horn, or a sharpened length of wood, to plough a rough furrow, plant and weed the area would increase the crop yield anything between five and ten fold. Even a modest three or four fold increase would bring astounding benefits, however such a low figure is unlikely. Once you have proved that the idea works, the first thing would be to ensure you had enough for the next year plus some, and a natural eye to security would mean, that the maximum amount of land was cultivated, the amount of grain needed to grow from it would be kept.

In other words, the farmer’s own self-interest and that of his family or community would ensure there was excess food to that which was essential.

All the evidence of Mesolithic people in what is now eastern Europe, down turkey Iraq and out towards India, shows that the movement of tribes of hunter gatherers was not extensive, they tended to build a shelter and use it as a base for the surrounding area, only once the resources were used up di the tribe relocate, they would then return or do a circular tour, but all the time having a dwelling place to work from.

This is vital to understanding what happens next. Initially the extra food would be probably saved, a society that is forever on the brink of starvation could be expected to be cautious over how it used a resource.

Now comes the next step, at some point goods were exchanged, for what reason can only be guessed at, and the actual need is not important, it is the transaction that is. Perhaps the farmer needs an axe head, or some useful animal skin or extra spearheads.

thus increasing the amount of land he can farm

Wealth creation stems from both efficiency, the farmer realising, he can get cattle to pull the plough, thus increasing the amount of land he can farm, or technological advance, adding a wheel to the plough or indeed having two wheels on a cart and moving more goods, which is both a technological advance and efficiency gains.

Once you have a farmer, they are going to stop anyone from stealing their goods, this is a concept that is alien to hunter gatherers. Here language intervenes, and the concept of ownership, and with it land ownership, and with that comes the Laws relating to ownership.

With Laws come Lawyers, or at least people who understand the Law, or ensure the Law is enforced, this usually is some kind of rulers, whether head of the family, King, elected representative, or other person in charge. This has just increased the number of jobs.

But just stop a moment, let’s go over to the Economic correspondent of the ‘Neolithic Times’ and ask his opinion of the effect of farming.

Empty shop Closing down
Things are always changing, as jobs are lost more jobs are created.

Neolithic expert on Economics, “well in the future, now farming has arrived you will see hunters going out of business, as their jobs will no longer be needed, that will put the axe head makers and spear makers, out of work. In the future I see a lot of people with no work, and mass redundancies”
And if you think that sounds familiar, next time you see some person banging on about Robots taking our jobs, and making mass unemployment, ask who is paying this idiot. The Luddites, could not foresee you getting a flat tyre and calling out a breakdown company.

The future is bright the future is technologically driven, and wealth creation through efficiency will only increase.