The Queen's Nazi salute: what it tells us about the establishment

The leaking of private royal footage from the early 1930s has shown the then seven-year-old Elizabeth Windsor prompted to give a Nazi salute with her mother and the future King Edward, her uncle.
Criticism of the actions of a seven-year-old girl seems silly and nonsensical. What the footage does show however, is the private behaviour of the elders of the royal family. It was well-known at the time that a wide number of people in the royal family and the establishment in general, were sympathetic to the Nazi regime and its ideas. The future King Edward was the most high-profile member of the royal family to be openly supportive of the Nazi regime, even during the war and afterwards. For this reason, if he had remained as the monarch at the outbreak of war, the UK would surely have faced a constitutional crisis unlike anything it had ever seen; the actual "abdication crisis" would have felt like a walk in the park by comparison.

Further revelations have revealed (or more exactly, been re-told) that not only were many of the future Queens' relatives sympathetic to the Nazis, but her future husband's family were, in anything, even more interlinked with Hitler's party. Due to his family's German roots, Prince Philip's sisters were married to Nazi officers at the time. So while there may be the view that the UK had "dodged a bullet" by the abdication of King Edward, Philip's Nazi links through his family simply looked to have swapped one imbroglio for another.
In reality, the onset of war changed everything, and the vast majority of those in the royal family (on both Elizabeth's and Philip's sides) distanced themselves very quickly from anything to do with the Nazis. Philip's sisters, of course, could do nothing about being married to Nazis. This was something they had to live with for the rest of their lives. But the pre-war links to the Nazis and the British establishment are something that now look like very uncomfortable reminders of a different time.

Britain and Germany: "best frenemies"?

Large parts of the British establishment became fascinated by the Nazis during their rise to power. Like the higher echelons of the then British Empire, the Nazis were fiercely anti-Communist, saw strikers as a Third Column for Stalin, and were instinctively anti-Semitic. What's often forgotten is that many of the Bolshevik elite were themselves Jews, and the "internationalist" nature of communism was partially what drew some Jewish intellectuals to the Bolshevik cause. For some Jews who did not have a real nation to call their own, Communism fitted the bill.  For the same reason, this was why this was seen by some as a mortal threat to the "established order" around the world at the time: "Godless" Communism was therefore a "Jewish conspiracy" at world domination. At the time of Hitler's rise to power, plenty of the great and the good in the UK and the USA saw the Nazis as, at least, a "necessary evil"; others, as we have seen with the future King Edward, actively supported their ideas.

This "moral support" with the British establishment may not only have come about through the "shared goal" of aggressively fighting Communism, but also through a sense of injustice inflicted on the "sister country". Britain's royal family is of German origin, with many of its members married to members of the (former) German royal family in the years after the First World War.
The schism that occurred between Britain and German relations in the year immediately prior to the First World war was down to a variety of reasons. Up to the early 1890s, relations were very friendly, not least because of the extremely close family ties (Kaiser Wilhelm was Queen Victoria's nephew - more on his personality here). It was the poor choices that the Kaiser and his advisers made in foreign policy after this point that led to the collapse in good relations with the British government; in that sense, Germany and Britain became "best frenemies" in those last, fateful years before the war.
In the aftermath of the war and the punishing terms of the Treaty of Versailles, there were probably many in the British establishment that must have felt pity for what went wrong with Germany. So by the time of the Nazi's rise to power, those same people would have felt relief that the country was back on the road to recovery that it should never have been forced to take. Whatever misgivings they might have had about the Nazi's methods of this "recovery" would probably have either been put at the back of their minds or dismissed as Communist propaganda.
Seen in this way, the royal family's distancing from the Nazis as the march to war got ever louder by the end of the 1930s would probably have re-ignited the same sense of disillusionment that the British royal family must have felt at the outbreak of the First World War. Germany and Britain had become "best frenemies" once again. The "love-in" that Germany and Britain's establishment once shared had turned into a "mutual loathing" - for a second time.

Controlling "assets"

Apart from the historical context, the establishment's reaction to the publishing of these "revelations" is perhaps more telling than the revelations themselves. The palace has become highly-defensive about the nature of the footage revealed, and is highly-protective of the royal's privacy, for their past private behavior and actions as much as currently.
As the adage goes "information is power". The author recently discussed how technological advances have allowed government the "control of information" in ways never before possible. These days, the "establishment", in the guise of the security services, has the capability to know almost everything that is happening. At the very least, this allows them to have a very good idea about where "threats" may come from.

The phrase "national security" is used a lot by the government to justify its mass surveillance: they cite the now "unpredictability" of the world and the "new techniques" that dangerous groups and individuals pose.
But "security" has a double meaning in reality: officially, it means the security of the nation-state (and by extension, its citizens); unofficially, it also means the security of the government (and its assets).

The reaction that Buckingham Palace has had to the release of the "damaging" footage is the same the reaction that the British government had when Edward Snowden revealed the way that GCHQ work with the NSA to make mass collection of people's communications. The palace sought to punish the leaker of the "damaging" footage, discredit the implications of the footage, and to strongly defend the head of state's right to "privacy" (this last point is an odd stance to take, which we'll look at more in a moment).
When the government discovered "The Guardaan" newspaper had information disclosing how it used mass surveillance, its reaction was to have the newspaper destroy it - which it did under government supervision, even after being told there were other copies outside the UK the government could do nothing about. Later, it used anti-terror laws to arrest the Brazilian partner of a "Guardian" freelancer who was in transit at Heathrow airport, and confiscated his laptop to try and find out what information the "Guardian" had on them. Meanwhile, it strongly discouraged other newspapers from writing any negative coverage about the whole issue.

There's the old saying that you only really know someone when they're really tested. The same can be said of governments and institutions. When tested (using the examples above of Buckingham Palace and the UK government), the establishment's instinct has been shown to be authoritarian and secretive. It behaves so even when it is probably against its longer-term interests. While on the surface the establishment makes a show of respecting "democracy", "oversight" and "freedom of speech", when the chips are down, these ideas are swiftly disregarded.
As seen earlier, the British government gave itself some awful press for the sake of pointlessly destroying a newspaper's computers, and pointlessly (and almost certainly illegally) arresting and detaining a foreigner because they wanted to see what was in his computer and flash drives. Buckingham Palace protects the royal families "privacy" and longer-term legacy with fearsome possessiveness. Some royal experts even argue that it would be better for the royals if more private correspondence was made public, to show that the royal family is, indeed, just a fairly average family in many ways. There have been some good people and bad people in it; people make mistakes and do foolish and horrible things from time to time. This is normal. But by their instinct of wanting to keep many things private, it simply feeds the conspiracy theorists that the royals have a host of "skeletons in the cupboard"

Information is an "asset" for governments; outside information is precious to obtain; inside information is even more precious to keep hold of. Unfortunately, this is also the same thinking used by authoritarian regimes around the world. The establishment, by following this nature, has done itself no favours over the years. It is due to this climate of secrecy that the child abuse scandal has been so damaging. Bad people swarm to a "climate of secrecy" like moths to a flame, for they know they will be protected at all costs, no matter what they do. This is innate, corrupting power of "the establishment": it is corrupt because there is no accountability. If one card falls, they all fall: this is the self-justifying logic of the establishment.

It explains by the infamous MP Cyril Smith was never prosecuted (because of who he knew), and also why Jimmy Savile got away with his behaviour for decades (because of who he was).

The Greek Crisis: Europe's Game Of Thrones (aka "A Game Of Debts")

The author wrote about the last "Greek Crisis" three years ago, when it was (last) having to submit to long-term economic decline in order to pay off its debts. Having toppled the governments in Greece and Italy and replaced them with obedient technocrats, in order to enforce the countries' debt obligations, it left few at the time in doubt about who was really in charge: Angela Merkel. It was clear what the ultimate price of losing the "Game Of Debts" would be.

This time around, the list of characters in Europe's ongoing saga is somewhat different. Angela Merkel of Germany, still rules the roost as the effective matriarch of the Eurozone, with her deputy, Wolfgang Schauble, sterner and meaner-looking than ever. The French had replaced Nicolas Sarkozy with the Francois Hollande. Meanwhile, in Greece itself, the unpopular, pro-austerity leader Antonis Samaras, who had been the beneficiary of the events of 2012, was ousted in late January 2015 by the Alexis Tzipras, leader of the radical leftists. The leaders of various other nations of the Eurozone would also have a part to play, one way or the other (and depending on what side they took). Then there were the other fringe - but at times, extremely key - players that represented the other byzantine layers of Europe's bureaucracy: the European Parliament, the Commission, and, last but not least, the ECB. Oh, and there's also the IMF, who aren't European at all, but were somehow roped into getting involved in the Greek debt crisis. Go figure.

"Game Of Thrones" meets Game Theory

Alexis Tzipras, as leader of the radical leftists in Greece, was elected for one key reason: to abolish the onerous terms of its debt obligations, and bring the country out of crippling, humiliating, austerity.
His followers were an odd bunch; an alliance of radical leftists, Greens, and Feminists. However, in order to have a majority, he needed the support of another party. He opted for the Independent Greeks, mostly comprised as an anti-austerity off-shoot of the former governing party of Antonias Samaras. This is a little like trying to imagine a British government that was a coalition between the Greens and UKIP.
Among the characters that comprised the government, the finance minister Yanis Varoufakis, was the most loquacious and outspoken. An academic and economist, he was also a proponent and apparent expert in "Game Theory": very roughly speaking, a confection of economics, mathematics and psychology. Varoufakis was set to be the bane of Wolfgang Schauble's life.

In the first weeks of the new Greek government, Varoufakis, as finance minister, was happy to go on a "charm offensive". However, this quickly came to a grinding halt with the first sets of talks between the other governments later in February, which then dragged on and on over the following weeks and months like a never-ending, interminable soap opera. It got the point where, in June, the Greeks told the IMF (the other major player in this saga) that they would be the first developed country to miss its loan repayments.

By this point, it became abundantly clear to others in the Eurozone that Tzipras and Varoufakis' "Game Theory" was taking the rest of the Eurozone for a bunch of fools. The final insult - in Merkel's eyes - was when Tzipras suddenly walked out of talks at the end of the month and announced a referendum to take place the following weekend, where he would recommend a big Greek "NO" to the bailout terms. This then leads to the "double whammy" at the end of June of Greece missing its IMF payments, and then the ECB decided that enough was enough. For some weeks and months, Greece's banks had been effectively living on ECB life support, as Frankfurt had kept on allowing Greece greater and greater lines of credit. At the end of June, this limit was frozen.
 
The next two weeks were the "endgame" of the saga, as it currently stands. The Greek government were forced to close the banks and implement capital controls to preserve its fast dwindling supplies of capital. During the week of "campaigning" for the bailout referendum, Tzipras made attempts to restart talks with Merkel, only to be rebuffed: they could talk again only after the referendum made things clearer. It seemed his "gambit" was failing. Then, to general shock all-round, the referendum came out as a decisive "NO"; Tzipras was in the position where his bluff had been called, not only by Merkel, but by his own people. What was the plan now?
The final week of the saga sees two major changes in Greece itself following the referendum: Varoufakis - having offended just about everyone in Europe with his undiplomatic manner - is eased out of his role as finance minister, seemingly as a sop by Tzipras to ease talks with the rest of the Eurozone; meanwhile, Antonias Samaras, leader of the former governing party, steps down after so clearly being on the losing side of the referendum campaign.

So talks resumed again. The situation continued from tragedy to farce as the new Greek finance minster arrived at talks the next day - but with no new plans. Finally, Tzipras gets the message, that time really is running out. Given an ultimatum to have a "real" plan by Friday or prepare for Greece to be out of the Eurozone and effectively insolvent on Monday. By now Tzipras' "Game Theory" was shown to be truly wanting against the raw power play in Merkel's version of "Game Of Thrones". Tzipras' "gambit" - that Greece ultimately wouldn't be allowed to leave the Eurozone, at any price - rested on a fatally-flawed assumption. In the end - as we shall see shortly - Merkel would take Tzipras' false assumptions and throw them back in his face. Tzipras would be hoist by his own petard.

It is at this point that the French, for their own reasons, decide to send some of their senior people to Athens. The French, so it seems, have had enough of Germany's high-handed strategy, and seek their own "moment of glory", by trying to hold the Eurozone together. So the Greeks - with French assistance - at last put forward something approaching a "real" plan, that looks a lot like the one that was rejected in the referendum only a few days earlier.
Except that by now, Germany, Schauble, Merkel and their Northern and East European allies seemed to squeeze the thumbscrews even tighter in their negotiation strategy. By Saturday, citing fundamental issues of "trust", Germany was making demands that were almost off the charts, beyond anything that a reasonable person could possibly agree to. If Greece were to remain in the Eurozone, it would have to pay for it - dearly.

But this was the point: Merkel's "gambit" was that she wanted Greece out of the Eurozone, and would offer conditions that would make it extremely difficult for Tzipras to agree to. Either way, it was a win-win scenario. She would have Tzipras over a barrel regardless.

What followed over the weekend was a marathon session of negotiations: two sets of inconclusive negotiations, followed by a sixteen-hour session between the leaders. Around dawn on Monday, it has been said, Merkel and Tzipras were about to walk their separate ways, only to be brought back together by Donald Tusk. In the end, seemingly a broken man, Tzipras agreed to the conditions. He had got a few cosmetic amendments, and some vague sounds about debt relief in the future, but the deal he signed was far, far worse than anything that had been proposed - and rejected - before.

Tzipras had played Europe's Game Of Thrones and had lost, big time. The question is: what happens now?

Margaret And The Monetarists: The 1970s, and How To Destroy A Decade

The 1970s as a decade has become forever associated with economic stagnation ("stagflation") and unruly unions. It is this association, continually repeated, that helped the Conservatives stay in power for eighteen years; and it is the almost faith-like acceptance of this perception by the likes of Tony Blair that has helped to  maintain the same economic system that led to the financial crisis in 2008.

Is this perception accurate? When we look at the evidence, the picture tells us a very different, and much more complex picture. What is most important to remember is in whose interests is it that the commonly-accepted perception of "The Seventies" not be questioned. 

The 1970s was not a decade of continual decline and paralysis by the unions. There were two real bouts of crisis, true, but there were various factors for these, which I'll go into later.
It is true that in general the UK had been in overall decline since the end of the Second World War, and that by the start of the 1970s the industries that had supported the economy during the British Empire - trade through manufactured exports, coal production and shipbuilding - were declining by worrying levels due to cheaper and more productive competitors abroad. Put simply, Britain was no longer as useful to the rest of the world now that it no longer had an Empire that depended on it.
But the position was not totally hopeless, and the leading politicians of the day still believed that the "post-war consensus" (i.e. following a basically Keynesian-style of economics) was the best formula. Both leaders of the two main parties, Wilson and Heath, believed in some form of government-led action to maintain the economic health of the country.

Things only really started getting ugly after the Yom Kippur War in late 1973. Before that, the British economy was generally doing fine. There had been the scare of the Miners' strike in early 1972, where Arthur Scargill became a household name through his action at the Saltley picket and had forced the government to make concessions, but this was more of a blip in Heath's first few years as PM. The first few years of The Seventies were not too bad economically. House prices were going up, but that was due to the trend to buy property that was fast catching on (and a clear indicator of perceived wealth). The Heath government had brought the UK into the (then) EEC.
In other ways, the Heath government had some very progressive ideas from both the left and right. There was the (very Keynesian) idea to build a new airport on the Essex coast (Maplin Sands), which was to be the impetus for an adjecent new city like Milton Keynes; therefore promoting growth through massive investment projects. On the other hand, there were some progressive right-wing ideas around reforming (i.e. privatising) how public services were ran, though the ideas were cautiously-envisaged compared to Thatcher's later reforms.

It was the Oil Shock after the Yom Kippur War, that was felt all across the West, that sent the economy into a death-dive. And this is the important thing to remember: every country in the West was affected badly by the Oil Shock. Then the miners' union, the NUM, had an idea: if the government can pay through the roof for oil, then why can they not do the same for Britain's coal? As a result of the government's stubbornness towards the NUM's demands, coal supplies quickly began to fall. So after the New Year of 1974, the government introduced the "three-day week", where power would only be supplied three days out of seven in order to conserve coal supplies. Shortly after, Edward Heath called a general election. The result was a hung parliament, when he tried to make some kind of agreement with the Liberals. He failed, and Harold Wilson returned as PM.

The experience of Edward Heath as Prime Minister had a schizophrenic effect on the Conservative party. Margaret Thatcher had been his Education Minister, but generally she was thought of as something of an aberration.
Unlike her contemporaries as Prime Minister, Heath, Wilson and Callaghan, Thatcher's politics as a young person had not been deeply affected by the Depression. These three one-time Prime Ministers were more-or-less Keynesians of one type or another because they had seen the desperate poverty the Depression had caused at first hand. Margaret Thatcher had not. She had grown up in Grantham, a provincial town in Lincolnshire, her father a family grocer who had made a comfortable success out of his life, and was a longstanding member of the council and mayor later on. She was able to take advantage of this stable background to get herself an education at Oxford, and met her rich future husband, Denis. From then on, her life in politics went from success to success. In short, Margaret Thatcher was a woman not familiar with failure.
Heath stood down after losing the election, and Thatcher put her name forward, though she was not expecting to win it herself. She was the kind recipient of the nebulous dealings of the Conservative party, however, and when she became the surprise choice for leader, her peers didn't give her much of a chance in the long-term.
One of these reasons was her personality, which did not seem very natural or humane. She appeared to struggle to relate to the public, and she had gained the notorious epithet "Milk-snatcher" while as Education Minister. Then there were the types of people she had become associated with.
The "Monetarists" was a term for economists and political thinkers who were attracted to the idea of freeing-up the economy from Keynesian "consensus", allowing "market forces" to run the economy and the government do much less in general . They had created a number of think-tanks where like-minded Conservatives and right-wing economists could discuss and plan a strategy for expanding their philosophy to a wider audience. But in 1974, these ideas seemed too outlandish for many Conservatives, let alone the wider public. Besides, they were theories, that had never been really put into practice.

The second Wilson government had to face the continued worsening of the economy from the after-effects of the Oil Shock. What was worse, neither Wilson, his peers, or even the civil service, had much of an idea about how to deal with it. Because something like the Oil Shock had never happened before in living memory (at least, not since the Depression), a collective torpor seemed to gather over government in general. Inflation and unemployment soared. This forced the then-chancellor Denis Healey began to take a more pragmatic line with the Keynesian "consensus" by cutting public spending from spring 1975 onwards, so that the economy began to pick up. However, a cut in interest rates in spring 1976 (by the Bank Of England or the Treasury, no-one seems quite sure) started a domino effect on the stock markets, causing a calamitous drop in the value of the pound. It was this crisis that prompted Wilson's resignation and Callaghan to take over.

The drop in the pound continued for months. A loan in the summer of 1976 from other rich countries helped to reverse the damage, but the loan needed to be paid back quickly, and this is where the infamous IMF loan came from. By the end of that horrible year, Britain had been made to look a laughing stock on the money markets, and great damage had been done to the economy. What was worse, this was all entirely avoidable if the Bank Of England and the Treasury had got its act together; worse, when explaining the scale of the problem to the IMF, they had exaggerated the damage. In the end, barely half of the IMF loan money was needed by the government, so a crisis had been created almost out of nothing, and Britain's reputation destroyed needlessly.
This, and the "three-day week" were the low points for Britain in The Seventies. Callaghan as PM turned out to much more like Heath than many in the Labour party would have liked to admit at the time. His approach to dealing with the state of the economy was very pragmatic. After the IMF loan debacle, Britain's economy began to improve once more, and union action had reduced significantly compared to the first half of the decade, and at a time when union membership was growing ever more.
It was Callaghan's approach to the unions that was his signature piece, and also, counter-intuitively, his downfall. Callaghan had wanted to make the British economy and working life much more like Germany, as he believed it was Britain's best approach to a more progressive society and sustainable economy. And in many ways, posterity has proven him right. His approach with the unions involved a compromise called the "social contract", whereby unions accepted pay rises lower than than inflation.

By the summer of 1978, with the economy still on the right track, there was gossip of an autumn election. The polls were close, indicating another hung parliament like in early 1974 (another election later on in '74 gave Labour a small majority, but this has been eroded to a minority by losing successive by-elections, so that Callaghan was in government by an informal pact in parliament with the Liberals). Like Gordon Brown in 2007, Callaghan weighed up the options and thought, with the economy on track to improve further, he should wait till the spring of 1979. This decision proved to be fatal.
The longstanding union leader, Jack Jones, was a virtual power-broker with the government. As a fellow supporter of Callaghan's compromise and "social contract", his retirement in 1978 coincided with Callaghan's bold (or arrogant) decision to restrict union pay increases even further than what had been previously agreed, which was also around the same time as the gossip surrounding an autumn election. The result was that Jones' successor took a much stronger line with the government. Once Callaghan had made the decision to opt for a spring '79 election, the dice had been rolled and it didn't take long for the opportunistic element of the unions to strike. The result was the "Winter Of Discontent", which saw the widest organised strike action seen since the 1920s.

The "Winter Of Discontent" was not really as fully organised as the General Strike in the 1920s; it was much more about mass opportunism by workers tired of a decade of wages kept below inflation, and those workers in unions around the country simply began following suit with everyone else. The "Winter Of Discontent" was less a strike than a spontaneous social uprising, unprecedented in modern British history. Since the crisis of the "three day week" of early 1974, unions had been relatively disciplined. But Callaghan's step to restrain wage increases further was the straw that broke the camel's back. In one sense it was as though the spirit of '74 had returned, but the crucial difference was the spontaneous and almost hysterical nature of the events of the winter of '78-'79. Although there were many who did not strike, the sheer random nature of how previously quiet unions (such as those representing grave-diggers, refuse collectors, traffic wardens and lorry drivers) suddenly became militant, was a shock to the establishment, the Labour government included. There was a period during that winter when Hull had become effectively a union-ran city, where employers had to queue like supplicants at the local union office to ask for permission to transport goods. For a number of weeks, it was like the "Paris Commune" had taken over Hull; Leningrad-on-the-Humber.

Such a "social revolution" was bound to terrify some parts of the establishment, and in such an emotive atmosphere, the reckoning was not long in coming. When the election finally came after the government lost a vote of confidence, Callaghan was punished and lost the election.
Thanks to a series of fortuitous events, Thatcher and "The Monetarists" had finally won their place in government.

It is one of politics' "what ifs". If Callaghan had gone for an autumn 1978 election, a hung parliament or small Labour majority was the most likely result. Thatcher would likely have been forced out by her party, and the more moderate "Heathite" side of the party would have likely been able to select a new leader. So "Thatcherism" and "Monetarism" may well have never had the chance to see the light of day at all. And a second term Callaghan, with the backing of the growing revenues from North Sea Oil, may have been able to make Britain's economy more sustainable like Germany's.

Instead, Thatcher was given the chance to implement her theories on the giant laboratory of Britain. But it did not happen right away; in fact Thatcher's first term in many ways resembled a sort of "Heath II": it was unsure of what to do, and her government gave in to a miners strike in early 1981 just like Heath in 1972. Often forgotten now, Thatcher's first term presided over a far worse economy and unemployment levels far worse than even in the 1970s; the economy stagnated for three years, not showing real signs of improvement until after the 1983 election. The Conservatives in the 1983 election didn't even do very well; what saved them was the civil war on the left that split the opposition vote three ways. That, and the "Falklands effect".
It was only after the '83 election that Thatcher felt confident enough to implement her "Monetarist" agenda.
The opening-up of the banking sector led to the free-for-all in the stock market and the practices that led to the financial crisis in the UK. What remained of British manufacturing and heavy industry (i.e. the key industries outside of the South Of England) was allowed to stagnate. Union power was crushed, at the expense of employees' rights. The "right to buy" council houses led to a massive shortfall in the number of affordable houses in the UK in the long term, and was a key factor that led to the dysfunctional housing market we now face. Public sector industries were sold off to the private sector; now we know the result of that in the ever-rising cost of our bills.

And all this because Margaret Thatcher and "The Monetarists" thought that The Seventies was a horrible time for Britain. In reality, the peak of British egalitarianism, where the gap between the rich and the poor was at its smallest, was in the later seventies, during Callaghan's government. The poor generally did well in the 1970s, in spite of inflation. So clearly there is something wrong with the "consensus" formed since that it was a time of economic hardship and poverty. It was not, for the vast majority. The people who "suffered" (in the technical sense) the most in the 1970s were the rich; in particular, the mega-rich, as they were forced to contribute more to the state in taxes, and saw the loss in value of their savings in real terms.

But do we want a more egalitarian and meritocratic society, or one that is designed to benefit those who are already rich?

The state of the British economy and its post-Imperial future

As I wrote in an earlier post here, "The Future Of Britain" is written by its past. Any national economy has to have a valid and sustainable model to grow.

Britain had been struggling to adapt its economy in relation to the world and its own population since the end of the Second World War; by the end of the seventies, the new Conservative government followed the economic thinking of the Monetarist school. An inefficient manufacturing and public sector was seen to blame for many of the problems that existed; the private sector was seen as the most efficient sector, therefore this was promoted by the Thatcher government, while at the same time killing the power of the unions to control employees pay rights.
The Conservatives, due to their background, were naturally more minded to trust the opinion of The City, which up to this point had played a minor role in the British economy. Influenced by the Monetarist, laissez-faire approach, the complacent arrogance and ignorance of the Conservative government led them to believe that the British economy did not need a strongly-supported manufacturing base to the economy. In fact, many of them associated factories and manufacturing with backwardness, union militancy and inefficiency. It was the government's belief that an expansion of a booming financial sector was Britain's way forward in the post-modern age: with a strong financial sector, everything else would fall into place and grow along with it. It would be a sign of progress, therefore, that Britain would no longer need a real manufacturing base.

Up to the end of the seventies, Britain had a large manufacturing base that produced exports. Although it had its inefficiencies, the modest income of these industries was allowed to wither by the government and an ignorant private sector; rather than invest to regain their competitive edge, they were cut down, slice by slice, to maximise profits through minimising costs (i.e. laying-off the workforce and relocating premises). The manufacturing base became an early casualty to "globalisation", as companies moved their factories abroad. As was already said, the government turned a blind eye to this as it saw the financial sector as the future of Britain. The incoming Labour government in 1997 continued with this willful ignorance and complacency, continuing to massage the ego of the financial sector further. By the start of the 21st century, resting the hopes on the financial sector was the only hope to keep Britain's economy going, as there was very little else left to support it. Manufacturing was minimal, as "service industries" had replaced manufacturing. Even the agricultural sector had become unprofitable due to the lop-sided effect on the price of imports from the strong pound (courtesy of The City). All was good, as long as the economy kept booming.

The results of this thinking are clear to see now. Believing themselves to be infallible, the financial sector quickly began to forget the most basic rules of economics (let alone ethics) in order to make the most profit possible. The City and the government encouraged an expansion in credit lending, as well as making people see their own homes as an investment rather than a roof over their heads. By 2007, the whole system in Britain that was creating the financial-backed boom was shown to be the complete fraud that it had been all along. Ireland used an almost identical model, to the same sorry result.

This explains why Britain in 2013 has a completely dysfunctional and lop-sided economy, unsustainable in any real sense of the word. The best way to explain this, apart from in layman's terms, is to compare the British model to other economies and their models around the world.
In order for a nation to grow, it needs growth supported by exports. A few countries can get around this by being financial centres, such as Singapore, Hong Kong (although not technically an independent state) and Switzerland. This is the model that the British Conservatives aimed (and still aim) to imitate. But, by nature, such countries have a generally small, highly-skilled and educated workforce, which fits in well with the financial sector. Britain has none of these, except for London and the South-east (I'll come back to this point later in a moment).
For a country to have exports, there are generally two paths to success: either produce demanded products (such as Germany, the Far East and the USA); or have a demanded resource, such as oil (The Gulf States, Central Asia, the USA, Russia, etc.), precious metals (Africa, Mongolia etc.), coffee beans, whatever. Without either of these paths, the chances of economic growth are limited.

The Conservatives still believe that Britain can be ran like Singapore, but this thinking merely displays their blinkered London-centric mentality and economic ignorance of the rest of the country, never mind their complete ignorance of economics.

I said that only London and the South-east compare economically to places like Singapore; the rest of Britain in 2013 feels more like a neglected colonial appendage to a London city-state - the "Kaliningrad" of London, to use a Russian metaphor. Economically, there is London and the South-east; and then there is everywhere else. Greater London's economy is still flourishing based on the financial sector and related services. Meanwhile, the other regions of the UK are an a different economic country, dependent on the success of London somehow trickling through to them. If nothing changes, the future of Britain will be this: to be the "Empire Of London" in all but name; a wealthy London supporting its neglected and dysfunctional regional "colonies", made economic dependencies of the Imperial Capital.
Fifty years ago, the economy of the UK was far more balanced, as the manufacturing sectors of the North and the Midlands actually contributed much more to the economy. But no longer. Sold a lie by the government thirty years ago, it is Britain as a country overall that is suffering the results of that complacent idiocy.

Germany thrives still because its economy is balanced; its manufacturing sector was continually nurtured by government. Turkey is an up-and-coming power due to the investment thrown into its manufacturing; with a similar-sized population and dynamic approach like Germany, Turkey has a great opportunity to match Germany as a regional power in the medium and long-term.

Britain, sadly, has little future under the economic orthodoxy of its establishment. If you imagine rich Singapore controlling a economically run-down South-East Asia, you might be close to the truth to what future "Britain" as an economic power holds, as a wealthy and ignorant London establishment neglects the unfashionable and depressed corners of its "British Islands Empire".
And some of the establishment have the gall to question why rich London should support its poor regions.
Because you made them poor, that's why!

The Future Of Britain

Realistically, what is Britain's future as a nation-state and power in the world in the coming decades?

In truth, it is not that hard to make some educated guesses based on what is happening in Britain now, where the direction of global politics is going, and what the predicted trends will be.

As I've said in my earlier post here, Britain in 2012 is a nation-state in stagnation, and socio-economic dysfunction in many of the regions outside of the South-Eastern England. The stagnation is due to the financial crisis, while the dysfunction is a combination of longstanding structural failings in long-term strategic thinking by government and the private sector, exacerbated since 2008.

The British economy since the decline of the manufacturing sector thirty years ago (accelerated by Monetarist/Thatcherite economic policy) has been increasingly dependent on the financial sector as the main driving force behind economic growth. This strategy, backed by the financial sector and followed trustingly by the government ever since, was meant to ensure a stable future for Britain in the 21st century. It has produced the opposite.

Looking at it objectively, this is obvious: it is reckless and naive to rest the hopes of nearly sixty million people on the success of the banking sector. But this is what has happened to British economic policy in the last thirty years.
Britain likes to compare itself economically to Germany, as a comparable economic power. But this is unfair: Germany does indeed have a strong economy, one that these days effectively keeps the Eurozone working and itself from feeling the effects of the economic crisis. But Germany's economy is based on two prongs - its financial sector, yes, but also its vigorous, efficient and dynamic manufacturing sector, that provides a healthy flow of exports.
The British government, under the supervision of the shortsighted financial barons, allowed its manufacturing sector to atrophy and wither. Furthermore, unlike Germany, the British government's attitude to unions has been aggressive, with catastrophic results on union membership and wage stability.
It is often forgotten in Britain that Germany's unions have a seat on the corporate board. This is not seen as an aggressive move on the part of the unions; it is seen as a co-operative approach between employee rights and employer rights. It means that companies make decisions together with their employees, rather than resembling a war-zone. The difference between Britain's workplace and the German workplace could not be greater.

 The arrogance of the banking sector and right-wing economists explains how this happened. This combination of arrogance and what I call "post-Imperial complacency", is why Britain:

1.  imports the majority of its foodstuffs (because it is cheaper for the huge private behemoths like "Tesco" etc.), forcing the home agricultural sector into penury.
2. has an ever-growing "North-South" divide (because the private sector sees Britain outside of the London metropolitan area as an economic inconvenience, forcing an ever-growing "brain drain" from the regions) 
3. has a dysfunctional housing market from lack of private and public sector planning and motivation. The  "North-South" divide means that while house prices in the depressed regions stagnate and some areas become depopulated, the London area becomes massively overcrowded, with an ever-increasing cost of living. It makes Britain an increasingly economically-polarised nation: the regions trapped in a cycle of lower and lower incomes and economic prospects; the capital trapped in a cycle of higher and higher costs. Over time, it means that the two parts of the country may become impossible to reconcile economically, with those in the regions unable to relocate, while those in London unwilling to move to the economically stagnant regions.
4. has a mountain of debt, some government-incurred due to bailing-out the banks, some due to government overspending, and the rest due to personal debt brought about through irresponsibility. 
5. has a fast-growing population, much of it from the families and direct descendants of immigrants. But due to lack of government strategy and planning, there are fewer and fewer places in schools for them, resulting in overcrowding or family relocation simply to find a suitable school.
6. Has a generation (or two) of graduates who are to have a mill-stone of debt around their necks for much of their adult life, but without any suitable employment. In other words, Britain is becoming a nation-state of the highly-educated under-employed.
7. Has an increasingly dysfunctional employment market, as a result of the combination of points 1,2 and 6, as well as the over-dependence on the financial and (fluctuating) service sector. The number of long-term unemployed is reaching levels not seen for decades, and looks like a "new normal" is emerging of a permanently-unemployable underclass. Furthermore, the proportion of part-time and temporary jobs is increasing, so it appears that Britain will have an increasing portion of the population without stable career prospects.

These issues are all a direct result, in one way or another, of the government's economic strategy of the last thirty years. When you put all your eggs in one basket, as the UK government has done with the financial sector, the result is always predictable. It's simply a matter of time.

So that is the domestic state of affairs in Britain. From that we can make some educated guesses about what will happen to Britain's role in the world.

Britain's future in Europe is the most pressing foreign policy issue these days, and looks likely to dominate until the matter is decided one way or another in a referendum. The weak and directionless leadership of David Cameron, exploited by UKIP's Nigel Farage, is adding to the sense of drift and swift decline of Britain's reputation in Europe. It appears all-but-certain there will be a referendum on the Europe question in the next few years, either before the next election or shortly after. But any UK government is deluding themselves if they think they would be able to "re-negotiate" Britain's terms in the EU. For one thing, it would represent a dangerous precedent to what is a highly-centralised organisation. The EU leadership could not risk the contagion of other nations also wanting to "re-negotiate", leading to a chaotic and unruly clutch of European squabbles.

No, any referendum would be either "in or out"; "out" most likely meaning some kind of "free trade association" similar to that which Norway has with the EU. Judging how things stand, that vote is most likely to be "out", leaving Britain semi-detached from the centralised EU bureaucracy by the end of the decade.

That decided, it would leave Britain more reliant on its non-EU economic partners. In the next five years, we are likely to see the influence of three powers becoming more obviously apparent: China, Brazil, and Turkey. 

China is obvious. It's influence in Africa, South America and Europe is bound to increase further, and as the Chinese middle class gradually increases, we can expect to see the effect of the stronger yuan (renminbi). Brazil is becoming an increasing rival to China in Sub-Saharan Africa, taking advantage of Brazil's more benign influence in Africa compared to China's more naked neo-Imperialism. This rivalry is likely to be the next "scramble for Africa", soon to appear in the news.  Much of South America looks to be already in the pocket of China, but the Far East is where most experts in geopolitics think any future Chinese conflict may occur. While Japan is not likely to lose its status as the most advanced economy in the world for a fair while yet, a conflict between these two cannot be ruled out, though it may not occur until China itself feels either threatened (by Japanese paranoia towards China) or over-confident (about asserting its claims to disputed naval territories). This all depends on the balance between hawks and doves in the Chinese leadership, and by impression is that, for the time being, the Chinese are happy to be the world's mercantile power, if not its military one.

Having already mentioned Brazil's growing influence in Africa, this will put Europe (and Britain) in a dilemma.  Who to support? Brazil is obviously closer to Europe culturally, as well as sharing an apparently benign interest in expanding its trade links to Africa. But the sheer size of China's influence on Europe as well as in Africa, may result in some difficult choices in the coming decade for Europe and Britain. The USA also may face some awkward choices in the coming decade regarding China and Japan.

I mention Turkey because of the Middle East. It already looks like Turkey has had an early advantage in gaining access to the Egyptian economy, due to the "good neighbour" policy of its Islamist government. As well as already gaining an increasing share of trade in the Balkans, Turkey looks likely to do the best out of the legacy of the "Arab Spring". In Egypt, Turkey has already gained friendship with a market of equal population size to itself. Then there is also Syria, which looks likely to become a strong economic partner to Turkey when the civil war finally is resolved one way or another. Turkey already has a strong economic hold on Iraqi Kurdistan. Furthermore, other EU countries may look to Turkey as a more convenient and agreeable trading partner than China for some of its imports. So Turkey's future economic prosperity looks to be secured in the region for the long-term, with its policy of "New Ottomanism".

Where does this leave "post-Imperial" Britain, set to be semi-detached from Europe, and with a dysfunctional economy? Looking at the situation with realism, and looking again at the common links that the USA and the UK share with their shared view of globalisation, it would not surprise me if Britain, in a new period of post-EU uncertainty, turned to its greater Anglophone cousin across the water by the end of the decade, for the warm embrace of combined "Anglophone Neo-Imperialism". 

As I'm sure some would be bound to say at that time, "there's more that unites us than divides us".

Greece's collective nervous breakdown

Greece is a country and civilisation with a long history, the longest in Europe. But in its four thousand years of history, what it is going through now must rank as being one of the most humiliating episodes in its national history.

We'll forget about some of the ancient past for the sake of brevity; the 300 Spartans, the wars with the Persians, and so on. We'll forget Greece's occupation by the Romans for four hundred years. Moving on, we'll forget (for the moment) about the Fourth Crusade; that moment when Constantinople, Christendom's richest and most populous city at the time, as well as it's intellectual heart, was looted bare and half burned to the ground by fellow Christians. We'll forget about the Byzantine's long and painful decline after the Fourth Crusade until its eventual overthrow by the Ottoman Turks. We'll forget about Greece's occupation by the Turks for nearly four hundred years. We'll forget about Greece's occupation by the Nazis during the Second World War, and the bloody civil war afterwards. And we'll forget about the time when Greece was ruled by a brutal military junta, backed by the CIA during the middle of the Cold War.

We'll forget all that for now. It's worth remembering that words like "trauma"and "psyche", as well as pretty much most words to describe government, such as "democracy", "tyranny"

and "anarchy", are Greek. These could all be applied to describe in different ways the state of Greece today.

Greece as a nation-state is in collective meltdown. It just hasn't realised it yet. For decades (since the fall of the military junta, but moreso in recent decades), successive governments gave generous salaries and benefits to their population, in order to satisfy their wants and to garner popularity. At the same time, Greeks, from politicians down to hairdressers, were doing what they could to defraud the system, subsequently draining the government's revenue while at the same time the government was doing what it could to spend even more of it.

So it's no surprise that Greece would eventually find itself in a state of virtual bankruptcy. The question was what to do when the government eventually was forced to admit the truth to itself and to the public.

What it did do, considering that Greece was in the Euro, along with sixteen other countries, was ask for help. And because of the collective nature of the Euro (that when one country is screwed, the rest may well follow) the European Central Bank (mostly bankrolled by Germany, the Eurozone's strongest country) was obliged to provide it.

But Germany and the ECB were not in a sympathetic frame of mind, and in order to give Greece the money it needed to keep functioning, it asked for a lot in return, and (as the Greeks did not have trustworthy history of keeping to commitments) in a fairly short space of time. The result of that? The Greek government is forced to tear the guts out of its own institutions: government assets sold off to (foreign) privatisation; massive government lay-offs, salaries and pensions cut and cut again; meanwhile taxes are increased again and again. The consequence? Fury on the streets; 100,000 homeless in Athens; middle-class workers forced to queue for church handouts - a population and a country of modern Europeans, reduced to virtual poverty to pay off a loan.

Greece, in other words, is no longer in control of its own fate. The government, paralysed by the fear of being kicked out of the Eurozone and having to fend for itself under its own currency on one hand, and a fury at being a virtual hostage to a foreign power on the other, is stuck in a death-spiral trajectory. But this death-spiral of poverty is due to last for several more years at least, if Greece is to pay back its debts to the ECB/Germany. Meanwhile, in the real Greece, outside the parliament, it is clear the people cannot tolerate this forever. Already there has been looting and burning of buildings.

Greeks have been here before, though a long time ago. The Fourth Crusade of 1204 occurred when Crusaders were sent to Constantinople, then the capital of the Byzantine (Greek) Empire, in order to replace one emperor with his nephew on the throne. The nephew had promised a large financial reward to the Crusaders for this service. However, the empire at this time was practically bankrupt due to governmental mismanagement. The Crusaders forced the nephew, once installed on the throne, to raise taxes and loot the churches of gold and valuables. Riots were not long in coming, and within a matter of months the nephew was forced from the throne and replaced by a Greek who was not a pawn of the Crusaders. As a result of this, the Crusaders attacked the city a second time; this time, when they entered the city, it was looted bare of valuables and partially burned to the ground.

Greece these days is in a similar bind of its own making; only now, instead of being held hostage to Crusaders, it is held hostage to bankers in Frankfurt.

It's not Germany's or the ECB's fault that Greece is a financial colony. Greece could have decided that the best thing to do, given the kind of strict conditions that the ECB offered, was to choose to leave the Euro and fend for itself, using its own strategy. Some German politicians, secretly would prefer that; it would make it easier for them, and easier on the stability of the Eurozone.

There is to be an election in Greece in a couple of months, and I guess the question that most Greeks will be asking when the make their vote will be "Who runs Greece?". It is up to them to decide.

The Reluctant Empress and The Fallen Eagle

As the contemporary Eurozone appears as a neo-Holy Roman Empire, it is only fair to draw comment on the conduct of its "Emperor" (or "Empress"), Angela Merkel of Germany.
The current state of the Eurozone puts Germany in a morally awkward position. Having long recovered its status since the Second World War as the economic centre of Europe, its status as the home of the ECB and Europe's economic sentinel puts it in a position of unrivalled power compared to its Eurozone co-partners.
The awkwardness comes from the fact that since the fall of Hitler, Germans have been psychologically hard-wired to resist any temptation to use its strategic and economic muscle beyond its boundaries. The idea of a potential (Eurozone) "Fourth Reich" no doubt brings out most Germans in a cold sweat; their instinct is for pacifist non-intervention and stepping out of the spotlight at the earliest opportunity, as though they are terrified that somehow a jack-booted storm-trooper lies just under their skins, ready to burst out.
This thinking can be seen in the words and actions of the neo-Holy Roman Empress, Angela Merkel. As the governments of the Mediterranean collapse one after another, they are replaced by (non-elected) administrations that happen to fit the wishes of the Holy Roman Empress; she wishes exactly what the markets wish for: a return to fiscal sanity in the regimes south of the Alps. And while those new (imposed) regimes are there to sort out their respective financial mess, they still ask for further help from the Empress.
And the Empress Angela, partly for reasons of financial principle, and partly (it appears) out of fear of appearing too dictatorial, shies away from any thought of doing more for her southern clients. The mere thought of her being able to have such power over the fate of other nations, and using it, brings her, like her compatriots, out in a metaphorical cold sweat.

There are some odd comparisons to the attitude that Emperor Angela has to her new, financially-dependent, Southern European clients, and that which the USA had to the rest of the world prior to the First World War.
By the start of the 20th century, the USA was an empire in all but name, in that it possessed colonial dependencies (recently won from Spain), and was a world power of increasing influence. In spite of that, many Americans were (and still are) in denial about their imperial status. They were loathe to interfere in affairs beyond their immediate vicinity, notwithstanding what the first President of the American Empire, Theodore Roosevelt, called "policing" in the Western Hemisphere - such as the creation of the Panama canal (by supporting Panama's independence from Mexico), amongst others. It took the First World War, and the European Powers' mass suicide of the First World War, to get the American Empire to take an interest in what happened beyond its shores.
Likewise, it may well take the even more drastic financial collapse of Italy, Greece or Spain, for the Empress Angela to realise that Germany may well eventually have to grasp the nettle of financial responsibility for the rest of the Eurozone, come what may. Like it or not, Germany may eventually have to realise the reality of it's own financial "White Man's Burden" - The Reluctant Empress may have to accept her imperial financial obligations, and rule the fiscal roost over Italy and Greece, regardless of her feelings on the matter.

There is one more take on this issue: that the financial perspective that Angela Merkel takes on the bailouts of Italy and Greece is remarkably similar to that of the Republicans' view of how to deal with the American economy. Merkel believes that the way of dealing with Italy and Greece's economic mismanagement is not to help them (through an injection of foreign funds), but to force them to deal with the issue by themselves (through cutting government expenditure); likewise, the Republicans' believe that the way of dealing with the American economy is not to help it (through a federal injection of funds), but to force the government to deal with the issue on its own (through cutting government expenditure).
This issue of financial responsibility brings into sharp light the reality of America and Europe in the 21st century; that, from a financial point of view, they are run in more or less a similar manner, with similar issues of sovereignty over fiscal responsibility.

In other words, the EU/Eurozone and the USA are both post-modern empires built on some kind of federal structure.
The former is ran in a similar way to the medieval Holy Roman Empire: a loose, semi-autonomous network of minor states and princelings, held together by an imperial figurehead, whose power is more important within the Empire than without.
The latter is ran more like the Roman Empire of ancient times; divided into clearly-marked provinces ("states") with their own governor, but ultimately held accountable to an imperial centre ("Washington DC"), ruled by a Emperor who, counter-intuitively, has more say, and usually more interest, in foreign affairs than those within the confines of the Empire.
In that sense, like the Holy Roman Emperor of medival times, Empress Angela has more clout within the Eurozone that she does compared to the influence she has on other imperial world leaders. Conversely, like the Roman Emperor of ancient times, Emperor Barack has more influence on world affairs than he does in his own squabbling Senate.
This makes these two major Western powers of the 21st century, facing each other on opposite sides of the Atlantic, political giants but also political deadweights, in some ways, compared to the likes of China or Russia.
The European Empire of Empress Angela is too concerned about its own parochial intricacies to allow its figurehead be taken seriously by the rest of the world; at the same time, the American Empire of Emperor Barack may well be taken seriously by the rest of the world, but the relentless machinations of his fractious political elite prevent him from fully taking advantage of it.
Thus Western civilisation is represented on the world stage by a Reluctant Empress and a Fallen Eagle.

The Decline And Fall of The Roman Empire, And The Rise Of The New Holy Roman Empire

History is full of dejavu.
The politics of Europe of the early 21st century is really not so much different from that of Europe in the 11th century.

The recent histories of the modern states of Italy and Greece, and that of France and Germany, contrast oddly with their more medieval counterparts; the Holy Roman Empire, the Papacy (and Italian city-states), and the Byzantine Empire.

The Treaty of Rome, signed in the 1950s, created the prototype for the EU, beginning with the core members, France and Germany. After the moral and economic wreckage of the Second World War, hitherto mortal enemies France and Germany vowed to a future of economic alliance. Italy, amongst others, joined this association some years later, followed by Greece.

This suited all parties well, and then this association became a formal economic union with one currency. And this is where it became much more complicated. While Germany and France were the two strongest powers on Continental Europe - a contemporary "Holy Roman Empire", economically joined at the hip - Italy and Greece, the two ancient imperial powers, had been economic basket cases since the Second World War.

Both Italy and Greece had been through a succession of elected governments since the war. Greece even had a period of miliary rule. But both countries' governments, especially in the last forty years upto the 2008-11 financial crisis, utterly failed to manage their countries responsibly. In stark contrast to Germany, whose economy was destroyed after the Second World War, yet had gone from strength to strength, the ancien regimes of the Med, Italy and Greece, had gone from modest growth to profligate insanity.
Both Greece and Italy's problems were essentially the same, albeit that Italy's were much worse as their economy was much bigger than Greece's. Their governments, until very recently, had run their countries as a weak parent appeases and spoils an errant and tantrum-throwing child: the state provided generous subsidies and pensions, because they didn't want pensioners and unions marching on the street; the state turned a blind eye to rampant tax evasion and corruption because they didn't want the middle-classes and shopkeepers on the streets.
In other words, the Greek and Italian governments were repeating the same mistakes that all failing empires in history made - through governmental weakness, allowing their country to live beyond its means and avoiding the uncomfortable (but inevitable) truth.

So, it came to last week, as the New "Holy Roman Empire" of Europe (the Franco-German economic duopoly) ultimately calls the shots on the Eurozone, called time to Italy and Greece's governments.
Italy's premier, Emperor Silvio (whose title can be sybolically conferred as being the longest ruler of Italy since the time of Mussolini, and since his moral exemplar sometimes seemed to be Caligula), after ruling his state for much of the previous twenty years through corruption, mismanagement, and moral indifference, was forced to symbolically relinquish his crown to Italy's ceremonial President. Then the President, acting in the role once held by the Pope a thousand years ago, shortly after bestowed the title of Italian premier (once called by the name "Emperor of the Romans" in the days of the Papacy) to an Italian bureaucrat experienced in the politics of the Eurozone. In other words, a person far more suitable to the New "Holy Roman Empire" for the sake of European stability.
The same story can be said of Greece: after months of indecision and instability, the Greek premier bowed to the inevitable and resigned, to be replaced by a Greek bureaucrat experienced in the politics of the Eurozone, friendly to the interests of the New "Holy Roman Empire".

It could be argued, then, that what has happened in the ancient imperial territories of Greece and Italy is a kind of New "Holy Roman Empire" economic regime change. That may be so, but niether is that something that should surprise anyone who understands the modern world.

Or, for that matter, the medieval world. The Papacy had been a plaything of the Imperial Powers of Europe, such as the Holy Roman Empire, for centuries, especially around a thousand years ago, when there were Popes and anti-Popes for much of the time. Italy and its city-states were a plaything of Popes, Holy Roman Emperors and Byzantine Emperors (all three of whom, by the way, claimed the title of ruler of the Romans); not long afterwards, the same became true of what is now Greece and the Balkans.

So, who runs Europe these days? The answer is, basically, the same as the answer was a thousand years ago: Germany. A thousand years ago, England was peripheral to the fate of Europe; France was still figuring out where its loyalties lay; Spain was a mess; Eastern Europe was in transition, while Constantinople/Istanbul was maintaining its position economically, and had made diplomatic in-roads in the Middle East.

So what's new? At least Germans these days are pacifists.

Reading The Runes: the times, they are a changin'

Recently read an article from "The Economist" talking about the changing face of politics in much of the West: the main point was the gradual disintigration of traditional, mass political parties as people turned away from them. Either they turned to fringe parties (as in Europe), or have become more disconnected from the political establishment than ever (as in the USA).

The evidence is all there:

In the USA the number of people who call themselves "Independents" (as recorded in a recent Gallup Survey) is higher than those who call themselves Democrats or Republicans; this has never been the case before. In other words, a two party system exists where one-third of the population no longer supports either main party. The result of this? The growth of the Tea Party, although it attracts the wilder element of the Republicans, also attracts a fair number of Independents who see them as seperate from the mainstream establishment, especially when Tea Partiers talk (rightly or wrongly) of going back to the purity of the Constitution and see governmenet bureaucracy as the source of America's malaise.

In the UK, with the rise to shared power of the third party, the Liberal Democrats (happening due to the deadlock of the other two main parties) sees a possibly permanent shift away from the old FPTP system with a referendum of voting reform chalked in for next May. That said, this is complicated by the fact that since "going to bed" with the Conservatives, the Lib Dems were cajoled (tricked?) into making painful (for the party members, infuriating) compromises and policy shifts that has badly damaged their legitimacy as a "third force" in UK politics. For this reason, the former governing Labour party has quickly benefitted from this, though all three parties now face different kinds of credibility issues with the economy and other issues. This puts the state of UK politics in an uncertain time; like in the USA, a portion of the population may feel that the established parties no longer reflect, and deal with, their concerns.

In Europe, the trends here are towards (usually right-wing) fringe parties. In Holland the nationalist racist Geert Wilders now shares power in a coalition; in Hungary, the same can be said of the racist "Jobbik" party; Belgium, due to the unsolvable linguistic political divides, hasn't had an effective national government for years. Of the larger countries, Italy's Berlusconi is already well-known for his increasingly anti-immigrant rhetoric, and shares power with the racist Northern League (who want the Italian north seperated). France's Sarkozy has been trying to shore up his increasing unpopularity by turning Gypsies into an easy target.

Only Germany bucks this trend slightly, in that the Greens are quickly becoming the voice of the left (due to the German system, they have a lot of say in state politics, and were in the former SDP coalition government) and may well even eventually overtake the SDP as the rival to Chancellor Merkel's conservative CDU coalition with the more economically-conservative FDP.

Why is all this happening? Short answer: the fallout from the financial crisis. People in all the USA and Europe see a failure of the political establishment in reacting to (and predicting) the meltdown of the financial industry. Everywhere, there are stronger and stronger shades of anger, unemployment and general financial hardship. People blame the politicians and the banks in equal measure, then see the collusion over how the crisis was dealt with by the same politicians and bankers.
No wonder then, that people are either turning to the extremes (as in Europe) or becoming more and more disillusioned (as in the UK and USA); though this disillusionment can easily turn to extremism also, given time.

This is all nothing new, of course. It happened after the last global financial crisis happened; the Great Depression. And right now, many people in the industrialised West are feeling there own kind of great depression, turning on the streets to great frustration and great anger. Where (and when) can it all end? Well, we all know where it ended last time. The economic and political circumstances are not so much different now. Of course, things never repeat themselves exactly. But a real danger is that the USA and Europe could become immersed in their own difficulties, creating a geo-political vacuum that other powers and rising powers can easily exploit. Although, perhaps this was inevitable anyway.
China is rising unstoppably (though historically this was always just a matter of time); Brazil is fast learning how to apply her increasingly useful position in the world; Russia has always been there; India may be in the future (given a decade or two). Then there are other forces to be reckoned with or respected: the Gulf States, though small in terms of population, possess great economic power with their oil and strategic location. Nations like Turkey, which hold a great strategic position, are bound to have even more influence as deal-brokers between the larger powers, and to their own benefit.
This leaves other regions, frankly, to be fought over for influence by the Great Powers: Africa is resource rich (although, tragically, dirt-poor); Central Asia is also rich in fossil fuels. These are the two main areas of contention geographically stuck between various larger powers. That leaves the seas and oceans (and the Artic is already being carved up in advance for future oil exploration).

If this all seems depressing, it shouldn't be. Not because what I'm describing is good, but it all seems inevitable as part of humanity's great game. It's an inevitable part of humanity's progress to the next stage. Where we are all heading after these issues have all been resolved depends on us.