Brexit Britain and free trade: a "bargain basement" economy and a "whore to the world"?

The true meaning of what Brexit means for Britain's global standing is starkly illustrated in this piece.
It was a few years ago when Cameron was still Prime Minister that this author was discussing how the government had already debased Britain's dignity in its desperation to seek investment from foreign powers.

Brexit simply amplifies this strategy to the nth degree. In its desperation to get free trade deals with countries outside the EU, the government would pay almost any price, would have to do any deal possible; because the alternative, like with the EU, is "no deal", and falling back on to WTO rules.
This is the natural result of the government putting itself in a "diplomatic no-man's-land", by refusing to follow any other existing arrangement between the EU and other countries. As someone else once said, "Hard Brexit" is Britain telling the EU: do what I say or I will shoot myself!

The situation would be laughable were it not so serious. The government's post-Brexit global strategy appears to be to do deals with rogue regimes and dodgy dictators, and when not doing that, its ministers are proposing Brexit Britain as some kind of unilateral free trade area to attract foreign attention.

As pointed out, the idea of effectively turning Britain into a worldwide "bargain basement" would be catastrophic for many sectors of industry and manufacturing. The author elsewhere has made the point that some of the Brexiteers' ideas seem to cross over into the realm of anarchic fantasy. Because these people in government see that trade with the EU is so seamless, they have not the faintest comprehension of the deep complexity involved behind the scenes that makes this seamless world possible. Without creating the complex infrastructure necessary to get through the plethora of EU systems, once Britain left the EU that "deep complexity" would be an almost insurmountable barrier to easily trading with them, as this complexity would confront almost every aspect of the modern economy. It is a pipedream (or dangerous fantasy) to think that Britain would be able to trade freely and easily with the EU while simultaneously wishing to be separate from its systems. The recent example of Catalonia's brief quixotic escapade into "independence" demonstrated how legislators with no idea of the practicalities of their ideas quickly become tragic figures of mockery.

Meanwhile, we have the speeches of the "three stooges" - Boris, David Davis and Liam Fox - to look forward to. What's already clear is that they see Brexit as, at the very least, an instrument to turn Britain into a low-regulation, low-tax economy and potential free trade zone. Put in these terms, it sets up Britain as a "whore to the world": with Britannia's legs metaphorically spread open, inviting all and sundry around the globe to her take advantage of her flaunted assets.

What this feels like is not Britain ran for the benefit of its citizens, but for the benefit of its amoral elite, who are happy to exploit its native population, with rich foreigners invited to a "bargain basement" economy to make the most of the opportunity. In this sense, the Conservative Party seems to treat its governance of Britain as though they were an occupying power rather than fellow natives. When the Normans first took over England, they faced years of opposition and insurgency in the North, resulting in the so-called "harrowing" that left a landscape across that part of England called simply "waste". The Thatcherite agenda of de-industrialisation left a similar, post-modern sort of economic "wasteland" across many towns in the North of England and South Wales, which has never really recovered ever since. All that was left was insecure, poorly-paid employment and a local population in the depths of poverty and the inevitable social malaise of crime, drug and alcohol dependency brought on by a feeling of abandonment. The vision that the Brexiteers offer here is even more apocalyptic to those areas already feeling abandoned after decades of neglect. Either by ignorance or by design, this vision is one that yet further punishes the areas that traditionally voted Labour, with a similar heartless mentality as that of the Normans towards the Anglo-Saxon miscreants of yesteryear.

The completion of Britain's "de-industrialisation" agenda seems to be being pursued by some sections of the Brexiteers, so that when "hard Brexit" is achieved, Britain's final state will be an economy ran on banking, retail and services alone, with manufacturing, industry and farming decimated, and everything else being imported. It is almost as though some advocates of "hard Brexit" wish to take Britain back to an pre-industrial economy, like that of the middle of the 18th century, albeit with cosmetic modern structures. The author is reminded of how the modern Gulf States are an example of medieval societies ran with 21st century technology. Is this the kind of vision the Brexiteers have for Britain in the near future?
The only parts of the economy that the rich elite are interested in are the ones where they can make a quick profit. After all, this is how the property bubble has expanded in London. As they see it, there is no future in manufacturing, as this is all done in China. The government is only useful in the short-term sense that it has assets that they can sell off to foreign investors. The "skilled economy" is only useful in the narrow sense that they see from their own background. This explains why there is so little time spent on investment or training in large parts of business and government. If it's cheaper to get a foreign company to do it, then why bother with the time spent training up a native? This is why the growth in employment is largely in the unskilled sectors, and will continue in this trend as long as the economy continues down the same self-destructive path. The end result of this would be a native British population that is treated as an uneducated rabble, lorded over by a profiteering elite and their "foreign investor" friends. Britain would be ruled like a third world country.

The "Brexit Agenda" is no more than the logical conclusion of wanting to turn Britain into the bargain basement of the developed world, where its assets are sold off to foreign buyers without a moment's thought for its effects on the population. Brexit Britain's ruling elite seem to relate their interests far more with the other rich elites of the world, such as the Middle East, China or Russia. It is these people who pay for their children to go to Britain's best universities, buy up luxury property as a way to hide their dodgy assets, spend their money shopping in London's high class stores, make use of Britain's tax havens, and so on. The Brexiteers relate to these people and their motivations far more than the "ordinary people" of Britain, who by contrast are as distant to their own lives as peasants are to landowners. The "little people" are of no consequence.
This explains why the Brexiteer elite are in hock with so many profiteering interest groups; because they think like they do, and only are interested in ways to make money for themselves. Lazily, they might assume that if they are making money then it must be good for everyone else lower down in the economic food chain too; all those who are worse off from this would then only have themselves to blame.

This is the morality of the sociopath, who has little understanding or empathy for the problems of others, and only assumes that other people's problems are brought on by themselves. As he sees it, his success was by his own actions alone, and any good fortune that came his way was nothing more than "karma".
Corruption and exploitation are the inevitable result of this mentality, and we can see this is the kind of economic model that Brexiteers seem to be championing.

Ayn Rand versus Julius Evola: The troubling overlap of Libertarians and Fascism

A couple of weeks ago I wrote a post talking about the influence of Julius Evola on Fascist thought, and his influence on contemporary culture, especially in the lens of the political situation in the UK and the USA.
Sometimes politics brings together strange bedfellows, which is usually due to an unusual or turbulent set of circumstances. In the 20th century, for example, the unlikely (and short-lived) alliance of the Bolsheviks and the Liberals brought down the Tsar's regime in Russia in early 1917, with the Bolsheviks as the ultimate victors through their own "revolution" (more like a coup) in October the same year. By 1932, Germany was in the middle of a political upheaval that saw the Communists and the Nazis in a kind of joint campaign of chaos and terror against the political mainstream in the middle of an economic meltdown, which saw the Nazis as the victors.
The "postwar consensus" that was established following the turbulence of the Second World War lasted for around thirty years, until a combination of economic factors like "stagflation" brought an opportunity for right-wing economic extremists to take control of the situation.


"Strange bedfellows": Libertarians and Conservatives?

The "economic extremists" were Libertarians, whose ideas of a shrunk-back state and a "pure" form of Capitalism with unfettered market forces had been widely espoused by their icon, Ayn Rand.
In Margaret Thatcher and Ronald Reagan, these ideas were being promoted in the UK and USA respectively by two enthusiastic leaders, with the aim of first winning over their own (Conservative and Republican) parties, and then the country.
The ideas of the Libertarians were not popular initially within their own party, as some of their philosophical ideas seemed directly counter to those of traditional conservatives. Firstly, the "postwar consensus" was still considered an established fact not to be challenged, both with the Heath government in the UK and the contemporary Nixon administration in Washington. It was only the discrediting of both these administrations under different circumstances that gave "outsiders" like Thatcher and Reagan a chance of a hearing. By the mid-70s, Thatcher was leader of her party and Reagan was the "poster boy" of the conservative right. Both would soon be leaders of their country, and "de facto" leaders of the Libertarian movement.
Libertarian thought, as espoused by Ayn Rand, is fundamentally against traditional conservative tenets that emphasize the importance of faith, family and country. Rand's sense of Libertarianism is atheistic, materialistic, and individualistic: it sees the world through the eyes of the free-spirited entrepreneur, detached from the fuzzy, old-fashioned values of orthodoxy. Traditional Conservatism is about community, culture and social hierarchy; ideas that would be anathema to an ideological Libertarian. So how did these two sides reach an understanding?
Apart from the changing dynamics of the economy being on the side of the Libertarian narrative, as mentioned above, the "strange bedfellows" of the Libertarian and the Conservative found out that they did have a few things in common, and enough for an understanding of a common goal.

At its core, one of the central tenets of Libertarian thought is that while the state should do as little as possible, it must provide law and order and security. What this means in practice is that it is the defender of property rights, free choice and the rights of people to earn their own money. In other words, the state is in reality the instrument of the wealthy, as the defender of the rights of the status quo. By definition, it will do nothing to change circumstances to benefit those who are doing badly under the current system, as this would, in its eyes, undermine the impartiality of the legal system.
While Libertarian thought is ideologically meritocratic, in practice their absolute adherence to respecting the rights of the status quo mean that they are really defenders of the social hierarchy; the same social hierarchy supported by traditional conservatism. In theory, traditional conservatism is about creating a culture that unfairly protects its interests through a patriarchal system, while Libertarianism is about getting rid of such artificial constructs that prevent a level playing field. In practice, their absolute adherence to the respect of property rights and free choice means that even under any meaningful changes to the system (say, for instance, the abolition of beneficial subsidies), those at the top of the hierarchy would be guaranteed an in-built advantage.

One example would suffice. The existence of private schools gives an in-built advantage to the richest in society to get the highest quality education for their children. While I'm not here to argue exactly one way or the other (although the author has made his view clear before), it's clear that this could never be called a "level playing field" in children's education. On this subject, Ayn Rand was always consistent in being in favour of the right to private schooling as being a) a matter of parental choice, and b) that private education is no guarantee of a child's intelligence or success, so is therefore "fair".
It is easy to point out that while this may be, technically, true, in practice having a private education gives even the most dim-witted child an in-built advantage over any more intelligent, but impoverished, peer. In short, being born into a wealthy family is like playing a computer game called life in the "easy" setting.

As Libertarians are the strongest advocates of not wanting to tell people how to live their lives or what people should do with their money, this allows traditional conservatives a lot of slack, at least on the second point (if not the first).
Social policy is one area of contention between Libertarians and traditionalists (as any momentary look at how David Cameron's ideas on social policy compare to Theresa May's will tell you). But this is a minor issue when looking at the overlap that they share on their mutual economic interests: they both want to get rich and stay rich. And Libertarians showed the traditionally Conservative establishment how it could get even richer.


A marriage of convenience

For the last thirty-five years, Libertarian ideology on both sides of the pond has created a boon for the richest in society, while on the other hand (especially since the financial crisis) created a period of unprecedented uncertainty and hardship for those at the wrong end. The marriage of interests between (Libertarian-supporting) big business and the (traditionally conservative) establishment was thus based on a trade-off: the Libertarian right made the establishment even richer and more empowered, while the establishment turned a blind eye to liberalizing some areas of social and economic policy.
Issues like gay marriage and the relaxing of drug laws caused traditionalists to make a fuss, but these are cosmetic changes that simply reflect social reality. Meanwhile, the state's real changes to society - such as how the establishment now has unparalleled access to an individual's privacy -go unchecked. This may be another part of "marriage of convenience". Traditionalists turn a blind eye to social policy, but gain powers over other issues like state surveillance; Libertarians gain on social policy, but "lose" on issues like state surveillance. Then again, both traditionalists and Libertarians can also see the longer-term benefit to both these policies to their shared agenda: relaxing social policy feeds the illusion that government has become more "liberal", which masks the fact that it has become much more intrusive in other ways. Meanwhile, the gap between the richest and the poorest grows to their mutual advantage.

In this sense, "Conservatism" has always been a tent of varying interests and (sometimes conflicting) ideas. The Libertarians of today share more in common ideologically with the Whigs of yesteryear in the UK and the USA. The politics of Donald Trump and Steve Bannon seem unlikely bedfellows to people like the TEA Party and Evangelical Christians, but their differences seem to have been (temporarily) overcome in the pursuit of power and mutual self-interest. Across in the UK, the same is true with the most zealous supporters of "Hard Brexit": many of them are ardent Libertarians, while others follow an agenda that seems to pursue an nostalgic form of neo-colonialism and nativism. Like the conflict between Bolsheviks and Liberals in 1917 Russia, or the Nazis and the Communists in 1932 Germany, they all see opportunities in the chaos.

While having very separate visions of their own, Fascists and Libertarians are extremists that thrive on seeing opportunism in social collapse. As said earlier, Libertarianism only found a receptive audience in the mainstream right in the 1970s due to specific economic factors; prior to then, it was the obsession of fringe movements and think tanks. And now, in the economic malaise that has struck segments of society since the financial crisis, we have seen Brexit in the UK and Donald Trump in the USA marrying elements of both Libertarian and Fascist thought into an idiosyncratic melange.
Like with traditional conservatism and Libertarianism, the natural links between the latter and Fascism seem tenuous. More seems to contradict them that unite them. But the same could have been said of traditional conservatives in the 1920s in Italy, and those in the 1930s in Germany: they both united behind Fascists due to their mutual self-interest.
Looking at the Fascist thinking of Julius Evola in particular (especially as he has allegedly been a subject of fascination to Steve Bannon), in spite of their many differences, there are still a number shared aspects of thought between the Libertarianism of Ayn Rand and the Fascism of Julius Evola. These include:

• A hierarchical, Social Darwinian, view of society. Julius Evola's Fascism was one that human society progressed through the strong over the weak, where the poor were seen as the lowest "caste" of society. In this light, democracy was the immoral antithesis to this "natural" order of things, as it gave power to the weak (i.e. the uneducated masses) over the strong (the educated elite). Libertarians are likewise "social Darwinists" at heart, and oppose altruism and government involvement in society; they believe that humans can only progress through self-advancement, and that the poor are therefore to blame for their own circumstances. Rand seemed to have a similarly skeptical - even hostile - view of modern "social democracies", seeing them as being a vehicle of altruistic indulgence, and thus against the rights of the individual and morality of society as a whole. While Rand was a critic of dictatorship as a rule, it is also implied in Libertarian thought that if government exists only to defend the property rights of the rich against the poor, it is also in favour of the elite against the masses. Thus, by definition, Rand was an elitist like Evola, albeit in a different manner. The manner of the method they were advocating may have been different, but the result is essentially the same.
• Ardent anti-Communism. Although Rand was an atheist and an arch Capitalist, and Evola was a neo-pagan and against "materialistic" ideologies like Capitalism and Communism, they both saw Communism as the worst threat to society. Would Rand ever have worked with a Fascist to destroy Communism? Probably not directly, but many of her later acolytes certainly did, especially in places like South and Central America (e.g. Pinochet in Chile, the Contras in Nicaragua). The Cold War saw Libertarians and repressive "neo-Fascist" dictatorships work together to prevent what they saw as "Communism", regardless of what that meant for ethics or the rule of law. And these days, this fear of "Communism" has evolved to an unspoken understanding that seems to operate between these two groups in their battle against "Socialism" in all its forms, regardless of how moderate, from the welfare state to equal rights. In the modern USA, many Republicans acquiesce to the unstable behaviour of Donald Trump out of fear of losing control of Capitol Hill, while in Britain, moderate Conservatives are silenced by extreme Brexiteers, out of fear of the "Socialist" agenda of Jeremy Corbyn.
•  Use of violence and oppression to achieve their aims. While Rand saw war as against humanity's self-interest, and Evola was a strong advocate of violence as a means to an end (as well as a natural result of Social Darwinism), both ideologies would be unattainable without violence and oppression being some part of the equation. Both these extreme ideologies can only be achieved in times of social and economic upheaval. Whereas Fascism sees violence as a necessary means to achieve its objective, and Libertarians do not, a Libertarian society (like a Communist society) would only be possible after the previous social structure collapsed, or became discredited. Like with the advocates of "Hard Brexit" in the UK, by implication their objective could only be reached after the previous order had disintegrated completely. Thus, for a Libertarian to achieve his goal, he must be indifferent to the necessary social disorder and chaos as a "means to an end", which puts him in the same moral plane as a Fascist. It is only a question of the means of the chaos. Lastly, a Libertarian's love of "freedom" only extends as far as his ideology is unchallenged; when challenged, a Libertarian will abuse their position of power like any tyrant, twisting the law and corruptly using the state apparatus to achieve their goal, while dishonestly claiming that their opponents threaten "stability" in the same manner.

Put in this light, Libertarians and Fascists could be argued to operate in much the same moral plane, as well as much the same ideological universe; the only difference is how they seek to get there.

A market without regulations is like a legal system without laws

The free market liberals, of both the Tea Party-types in the USA, and the Conservative ideologues in the UK, love the idea of markets ruling everything.

They see markets as being the best way of dealing with goods and services. They see government as getting in the way of the private sector, who should be best to be left alone (where the phrase "laissez-faire" comes from).
Their rationale is very simple: markets are the best way of dealing with goods and services because markets are "self-regulating": in other words, prices are controlled by demand (i.e. customers) and supply (i.e. how much of something there is). so a high supply product (like bread) would be cheap, whereas a low supply product (like caviar) would be expensive. Also, there is naturally more demand for bread than caviar.

The same logic works for salaries: commonplace jobs with a large pool of labour offer lower wages than those with a high skills requirement and this have a far small potential employee pool.

Enough of the economics primer. What happens when you put this into practise?

There are plenty of real-life examples of how this unregulated "free-market" works in real life. In the main, though, it doesn't. Here's why.

Look at the property market in the UK. There are those properties that people can mortgage or rent. This all depends on supply and demand. According to the theory, if  customers alter their behaviour (by wanting more of a product), a supplier should naturally react to customer desire: that's how the market works, by suppliers naturally reacting to customers' demand. Does this happen in the UK property market? No.

The housing stock in the UK has remained far below consumer demand for years, decades. It didn't help when the last Conservative government, under Thatcher, sold off thousands of council houses to the private market, without building any sufficient replacement government housing. But that's a separate matter. The question is WHY does the private sector (the market), fail to react to consumers' demands for a large increase in the housing stock? The answer is because of one of the fundamental flaws in the principle of the "free market": short-termism.

The private sector is often terrible at strategic, long-term thinking and looking at wider economic concerns. As businesses are driven by profit, they find it difficult to set aside money for "investments" which take a long time to set up, can be risky, and the financial benefits cannot be seen until some time in the future. Simply, the incentive for businesses to think long-term is too small. As a result, industries that have been privatised see a gradual decline in things like infrastructure and trying to look ahead to future trends.

This is why housing and construction in the UK has shrunk significantly, especially since the onset of the recession: businesses see too much risk and too little potential gain. Even though it's obvious that consumers need more housing, the "free market" is too fearful of risking money on long-term projects. The same thinking is true of the banking sector where it comes to giving out loans to help small businesses and individual entrepreneurs. Even though it can be rationally explained that any risk would be worth it considering the potential wider gain to the economy for encouraging business and wealth generation, banks, like the "free market" in general, are weighed-down by short termism.
George Osborne, the Conservative government's supposed economic heavyweight, has set his reputation on believing that the private sector will create the recovery. But everything tells us the opposite.

Continuing with the housing market, the rise in the cost of rents can be easily explained. Banks are reluctant to give out mortgages, forcing customers onto the rental market. As a result, although the cost of mortgages overall has gone down slightly, the cost of rent has rocketed. This may well result, for the first time in decades, with many younger people being unable to buy a mortgage and stuck in a high rent property. Again, because the private sector is unable plan strategically, this has meant the rental housing stock has remained static while demand has increased. So here is where the market doesn't work: landlords simply see an opportunity to make more money, and with the customer held hostage by the limited number of rental properties (and likely to remain so for the foreseeable future), everyday people are getting shafted. And will continue to do so for years if things stay as they are.


If the private sector is meant to be so risk-averse, why was there a construction boom in Spain? Because they saw no risk. There was a housing boom in the UK too, but not a construction boom on the same scale. What the housing booms in Spain and the UK had in common was the over-valued inflation of prices; but the reasons behind were slightly different.
 In the UK, the boom was fuelled by mortgage lenders losing their previous aversion to risk and giving mortgages to people who were not financially reliable. They forgot one of the basic rules of the market: not to invest in high-risk ventures.
In Spain, the boom was fuelled by construction firms losing their previous understanding of the demand for housing, and creating a huge over-supply. They forgot another basic rule of the market: that as supply increases, price goes down (and will, eventually).


The property market is just one example that quickly comes to my mind. Another one is education.

The introduction of competition was meant to improve secondary educational standards. But how are those educational "standards" measured? By exam results, because that's the easiest way for the "free market" to measure education. The government therefore supported this method when competition was introduced into secondary education.

The result? Schools have turned into exam-preparation centres, concentrating on the exam results the students get at the end of their education, rather than actually how useful or effective that "education" will be in the real world. Students know a great deal about how to pass exams, but not a lot about how to transfer their education into real-world skills useful to the economy.
Another side-effect of this "results" obsession is that schools focus on encouraging subjects that are easier for  students to excel in, in order to improve the schools ranking (and thus attract further revenue). This is a further reason why you have students leaving school with qualifications that may well be of little use. The "free market" has the opposite effect of that intended, because everything becomes a race to reach the lowest common denominator: to maximise results in order to minimise risk.
One last point is the government's introduction of a free market even in examination boards: schools can choose which "testing centre" they think is the best. That was the theory, anyway. The reality has been the opposite: schools, in order to maximise results and minimise risk, have often chosen the exam board that offers the "easiest" set of exams, to give students the best chance of getting a good result, therefore boosting the school's published results.

So what happens when the "free market" is let loose? You usually get a maximisation of profit at the minimisation of risk. If the government wants the private sector to act in a rational, strategic, open-minded way, then they need to read basic economics again.

To trust that the "free market" is the best way of dealing with economy, is to hand over running your economy to people with the mental age of five-year-olds. Unregulated markets, by definition, are, as a general rule, incapable of thinking long-term or strategically. Yes, the market has an important role to play, but it can only be a sane instrument if it is regulated by government.

The "free market", by definition, is an example of anarchy, because no-one is in control of it; it "controls" itself.  It's like having a legal system without anybody to enforce the laws. The "free market" is a system based on blind optimism.

Any government that supports the "free market" is also blind.