'Costed' Manifestos

The opinion polls show a narrowing gap between the Labour and Conservative parties, with just a week to go until the actual election.

Mrs May, who famously called the Conservatives the 'nasty party', has descended to the very nasty technique of attacking the Labour leader personally: and her close supporters appear to be indicating that this will be the main focus of her speeches from now on. This is a stupid decision: Mr Corbyn does enough to re-emphasise his own shortcomings and inadequacies every day, so for Mrs May to hammer on that theme will almost certainly elicit increasing irritation from the electorate.

It also shows up Mrs May's own inadequacy. In government, she has been an assiduous implementer of Osbornian cuts to public services and a total failure in reducing net immigration to the UK. Simply to assert that she will be more competent than Corbyn in a negotiation with Brussels is mere rhetoric: especially as it is obvious that 99% of the negotiating will have to be done by diplomats and sectoral experts.

Voters are increasingly willing to consider what Labour has on offer. Commuters into London are open to the suggestion that railways could not be less concerned for them under nationalisation than they are as corporate franchises. The chance of having lower water bills and power charges is not to be spurned. The possibility that the health service and social services might be improved is to be welcomed. Even the recent tendency of George Osborne's Evening Standard to attack Mrs May can have no impact in the north-east or on Merseyside, but it could be damaging to the Tory vote in London.

Yesterday Corbyn's conspicuous failure to remember how many millions of pounds his childcare policies would cost made a one-day wonder, to which came the riposte: well, nobody can remember everything all the time. It is not news any more.

More importantly, Labour does have several expansionary ideas. Like Donald Trump, they are prepared to borrow billions of pounds to unleash economic activity; which compares very favourably with the continual attrition of all public and social services that the Conservatives promise. It is not at all clear that Mrs May has any clear idea of the economic policy that her government has been following, or will follow after the election, if [as is still likely] she is the narrow winner. She certainly has no grand plan for investment in any sector of the economy. When she talks of 'more money' for schools or the NHS, the sums involved are always less that the perceived real-terms need as the population grows and ages.

Tories warn that Corbyn and his close team have no serious or senior government experience: but they cannot demonstrate a significant record of achievement for their own side. All governments overspend: even the Cameron-Osborne-Clegg regime did not eradicate the deficit, though some of the methods they chose to reduce it, notably student fees, effectively destroyed the Liberal party in parliament.

Mrs May chose to have the current election, and could be on track to loose it. That will be a blunder bigger than Cameron's gamble on the Brexit Referendum and open to way to a bizarre coalition government that might just manage to govern.

'Rational Markets'?

The New York Stock Market will open today, after the Memorial Day holiday, at a record high. London will also open at or close to a record high, following the Bank Holiday.

There is no obvious reason for these phenomena.

The US has a demonstrably erratic president. His business-friendly approach is offset by his commitment to restore basic industries to middle America; but the strong businessmen whom he has put in his cabinet, combined with the broad spectrum of views among Republicans in both houses of the Congress, will ensure that nothing wildly irrational becomes more substantial than a presidential tweet.

The general view of commentators is that the 'strength' of the stock market arises principally from the predominance of the 'technology' giants: Google, Apple, Facebook etc, whose popularity ensures that the prices of their shares rise almost continuously, The biggest companies in this area now have larger total share valuations than do the major real-world companies in fields like oil, mining, motors, transport and the construction of computer hardware. The valuation of such businesses depends on the number of people who use them: the more users they have, the more valuable it is for firms in the 'real world' to advertise food, drink, holidays etc alongside other IT experiences. As increasing numbers of older people wean themselves from addiction to the new media, and younger people are attracted to newer competitors of the big networkers, the market dominance - even of Facebook and Google - will crack. The bubble in the valuations of the big boys will be deflated: how many firms and individuals will be devastated by that collapse will depend on how rapid the deflation is.

The 'strength' of the London stock market is very largely due to the large proportion of companies whose shares are listed in that exchange, but their main activities take place in the rest of the world. For them, the fall in the value of the pound means that they are able to declare rising profits [in terms of pounds in which their shares are priced] and thus their 'value' increases. Given the political circumstances in the UK, the pound is unlikely to harden against other world currencies: so the phenomenon of a rising stock market within a weakening domestic economy will continue. The result of the coming General Election is impossible to call, but the balance of probabilities is that the Conservatives will win: but by a much narrower majority of Commons seats than seemed likely when Mrs May called the election.

Mrs May talks of 'strong and stable' leadership, in what is virtually a one-woman campaign. As was clear again in the non-debate on TV last evening, she has no idea what her policy will be in the Bexit negotiations. She had no notion what is a 'good' or a 'bad' deal for the UK. She does not even consider any option to the inherited policy of austerity which is undermining the cohesion of society, the defence of the nation, the education of the young, social care [about which the Tories' "policy" becomes vaguer and more contradictory every every day] and the health service. She is a desperately bad leader: but she still comes over as probably more acceptable than Jeremy Corbyn.

Corbyn is an idealist. He would 'campaign for a nuclear-free world' if he were prime minister. Would not everybody, if they thought it even marginally feasible? We would all like a disease-free world, a pain-free world, a poverty-free world. At the same time, he would abandon the million Ulster protestants to the vengeance of the militant republicans, washing his hands of responsibility by saying that he believes in peaceful discussion. Corbyn is Labour's problem: he is a major reason why millions who are totally unconvinced of Mrs May's fitness to lead the country will either decline to vote, or reluctantly vote Conservative.

In my book on BREXIT I conclude that disenchantment with politics, politicians and the Economists who advise them was the principal reason for the decision that people made [against Mrs May's advice] in the Referendum last year. That mood of deep despondency will be much magnified in the coming months; and neither party leader has an inkling of it.

Putin Near Paris

President Putin is today due to visit France, where he will open an exhibition on Franco-Russian relations over three centuries and have lunch with President Macron in a house once lent to Peter the Great of Russia during his study-tour of western Europe.

Macron will go into the meeting with a list of conversational objectives, all of which will be to some extent constrained by his commitment to the European Union. The French president's smirk during last week's Trump tirade against those members of NATO who under-provide for their defence spending will have been copied into Putin's file; together with a reminder that France [unlike the UK] has a truly independent capability to deliver nuclear weapons. Britain's nuclear missiles are under joint American-UK control; France's are entirely at the disposal of M Macron. This alone makes France a 'power', and the commitment that Macron has expressed to a closer EU must be set alongside that independent capability. France is also one of the permanent members of the UN Security Council, which alone will justify the two presidents comparing their positions on the major global issues that have recently been on the Council's agenda, and those that might appear there soon.

France was, in effect, the colonial power over Syria from 1919 to the nineteen-fifties, under the Franco-British carve-up of the Arab lands that were separated from the Ottoman Empire as a result of the First World War. More recently, France has played little active part in the awful war in Syria, as the Russian commitment to the Assad regime has been increasing. France has huge background knowledge and understanding of the country, and the opinion of the French establishment [of which Macron is a selected product] may be helpful to Putin as he looks through the murk that is deepening in Syria as Trump appears to be more willing to take more military action against Assad. France's role in helping to keep the EU states [and NATO, as such] out of that conflict can be useful to Putin; and reinforcing the pressure for a benign neutrality of 'Europe' towards Russia will be well worth the visit.

Closer to home, for Putin, are the questions of Ukraine and Crimea. France has supported the NATO and EU policies of utter opposition to the recent Russian seizure of the Crimea, including the imposition of sanctions. The French economy has suffered slightly from the loss of trade with Russia that has resulted from the sanctions; and gained no benefit from them. There may be time in the two presidents' wide-ranging discussion to exchange hints on how that standoff could be resolved.

Russia regards Ukraine as an integral part of a single homeland. Kiev, now the Ukrainian capital, was the centre of the first city-state that grew into Russia. Moscow [the Grand Duchy of Muscovy] is a much more recent development; and deep in Russian history and sentiment are the sense that Moscow and Kiev belong together in a single state. The fact that the people who speak Ukrainian were abominably brutalised during Stalin's collectivisation of agriculture made many of them willing, at first, to welcome the German invaders in 1942 as liberators. Within a year most people recognised their mistake: the racist brutality of the Nazis exceeded  even what Stalin's police had imposed, and thus the eventual Soviet victory was welcomed; at first. Then the Communist regime imported ethnic Russians who had been made homeless by the war to rebuild the shattered industrial cities, especially in the Donbas, adding linguistic complexity to the situation within the Soviet Republic of Ukraine [which, along with Belarussia was a given a separate seat in the UN, alongside Russia, as an inducement for Stalin to join the organisation]. The separate soviet republics had no independent power anyway, until the Union of Soviet Socialist Republics simply fell apart when Gorbachev lost his grip. Then the former soviet republics gained international recognition as sovereign states, as that term was generally understood in international law. Colonel Putin and his colleagues in the KGB watched, aghast, as the Baltic states, the Balkan states, Poland, Czechoslovakia, Hungary and even Putin's former workplace East Germany joined NATO and applied to be admitted to the EU.

While Belarus was consolidated as a puppet state to Russia, Ukraine made attempts to establish itself as a significant, independent European power; but fell prey to corruption, faction and alien interference. Russia would like the Ukraine to form a close federating with Russia, accepting Russian foreign and defence policy. France has joined with its allies in opposing Russian attempts to push that situation along. There is every reason to expect that Putin will push Macron to take a more pragmatic view of the Ukrainian [and thus the Crimean] situation than have his predecessors; and it would be interesting to know what quid-pro-quo Putin is able to offer France on that delicate topic.

Bank Holiday Reflections

Britain's two May Bank Holidays are relatively recent introductions. One, brought in by a Labour government, was an indulgence to the left wingers who wanted the May Day tradition of Marxist parades and speeches to become part of the British way of life: no chance! The other, that is taking place tomorrow, is an expression of the secularisation of the United Kingdom and the inadequacy of the contemporary church establishment: it replaces 'Whit Monday' which, certainly in the north-west of England where I grew up was the greatest show of religious adhesion [and of the disparity between Roman Catholics and Protestants].

Whit Sunday was when Jesus' Apostles realised that they had received extraordinary powers of communication, and the self-confidence to become preachers of the faith even though Jesus himself no longer existed in human form. It comes seven weeks after Easter, when Christians believe Jesus rose from the dead and appeared to various of his followers until his Ascension into heaven, which is remembered ten days before Whitsunday. The seven week gap between Easter [a movable feast] and Whitsun allows the weather a good chance to get much better, so out-of-doors celebrations were more likely to be able to be staged. Women and children got new clothes to celebrate the day, which could then be worn through the summer. On Whit Monday every church had a procession through the local streets, with banners and scout bands; and it was a matter of pride for the clergy to get the biggest possible turnout of adherents, however little those people were involved with the church through the rest of the year

As people drifted away from the churches, and the churches became wishy-washy shadows of their former selves, so the state captured the Whit Bank Holiday and moved it away from the religious commemoration. As people have become more affluent, the idea that they would buy their summer clothes for a specific date then use them through the year is increasingly remote from their memory [if they are old] and the whole concept seems incredible for the younger generations to take in. It would be impossible for a revivified church - if such a thing were imaginable - to put the clock back to the relatively poor and simple way of life that made such a big thing of a second-rank Feast of the Church.

In the nineteenth century Karl Marx has written that religious observance was the 'opium of the people'. The masses could not afford opiate drugs, and there was a huge prejudice against anyone who made himself or herself unfit for work by ingesting or inhaling such substances. But the churches tried to provide a total framework for living. Besides Sunday services and Sunday Schools [for men, women and children] there were weekday 'classes' for women and for men, men's social institutes with billiard tables and smoking facilities, 'field days' when the whole church congregation would go to a field and enjoy games, races, and a substantial high tea [no alcohol allowed to Methodists]. Just as drugs are fashionable now, so participation in the whole range of church activities was fashionable until the affluence of the nineteen sixties gave people more choices: they could go out in their cars, join golf clubs and generally participate in a new consumerist world. Marx's comment was truer than he knew: and when time-consuming church activities were no longer needed to alleviate the misery of life in a small terraced house with minimum furniture, a large family and a very restricted diet, the whole thing died.

It is not a matter of regret: it is simply a socio-economic phenomenon that has occurred. The only sad aspect to it, is that few people now remember about it, and it is not an aspect of social history  that it has ever been fashionable to write about.

Economics and the Election

Economic issues are, as usual, of vital importance in the current UK election campaign. Both leading political parties have been lambasted by a major independent think-tank for their very evident failure to provide clear costings for their policies, and vagueness about how they would pay for them. This has been particularly shameful in the shoddy manner in which Mrs May's personal office - apparently transcendent in its power over the party machine - has mishandled the question of how much of the 'value' of a person's home can fairly be put into the pool of deferred resources that would notionally fund social care for the elderly. The question of how such a pool would be managed, over the generations to come, has not even been addressed. Yet the Tories are still slated to win, though at present the polls indicate a narrowing of their once-dramatic lead over other parties.

Behind this very worrying issue - of how the policies presented by the politicians stack up economically - lies the more fundamental question of what economic advice would be acceptable to the electorate, as representing a sound assessment based on serious data. The Brexit vote showed that the electorate was unconvinced by the Economists, who almost-unanimously promised that Brexit would be an unmitigated disaster. The vote can, indeed, be seen as an expression of no confidence in the 'Economics Profession' and in politicians [quintessentially George Osborne] who deploy their arguments.

This is in total contrast the the situation in the early nineteen-sixties, when a few economic think-tanks - notably the National Instititute for Economic and Social Research - and the Treasury produced closely convergent and highly detailed forecasts, on the basis of which Chancellors of the Exchequer purported to 'fine tune'  the economy so that it kept to a stable growth-path. That heyday of neo-Keynesianism collapsed in the disaster of inflation in the late 'sixties and 'seventies; such that in the 'eighties all forms of Keynesianism were set aside. The sorry story is told in my book: NO CONFIDENCE: the Brexit Vote and Economics, as advertised alongside this blog.

The point I want to make this morning is the simple one: that the over-confidence of an alliance of Economists and politicians in the nineteen-fifties and early 'sixties led to the chaos of the nineteen-seventies, which led to the repudiation of the purported Keynesians. They were replaced by a school of Economists known as Monetarists, who then mutated into the free-market advocates of the Econocracy who claim that the models that they have cribbed from physics [and grotesquesly misapplied to economic data] contain deep truths. On the basis of those claims, the present British policy of austerity is based: and that is now close to the point where it will be destructive of social cohesion: despite which, if the Tories win the election, the austerity policy will be continued. This is not emphasised in the Conservatives' propaganda, but it is their policy [though it is probable that Mrs May has no comprehension of its implications]. Labour do not like austerity, and promise to overset it; but they leave it clear that they have no idea how this would work, and what would be its long-term effects.

An over-mighty Economics Profession allied with politicians to plunge the country into the inflation of the nineteen-seventies. Now the eclipse of a disbelieved Econocracy leaves the electorate with no neo-scientific means of judging between two completely incredible manifestos. What prospect does that offer the youth of the soon-to-be adrift United Kingdom?

Trump and Stalin

President Donald J Trump believes, with a measure of justification, that he has a mandate from the US Electoral College [though not by a majority of the popular vote] to pursue a very different economic policy from that adopted by successive Administrations since the Second World War. He is determined to use political power to 'return' jobs to the USA. Various commentators have pointed out that there is no possibility of firms investing in the coalmines, blast furnaces and smokestack industries whose extinction has caused the 'rustbelt' that disfigures areas of the central continental USA; so it is literally impossible to recreate the self-same pattern of employment and thus return the former skilled men to their former situation and lifestyle.

Trump's intention is to impel US-based firms, and to encourage foreign-based firms, to open up their new generation plant, laboratories and other facilities in the US rather than in emergent countries where wages and welfare standards are lower. This is an opportune time for such a policy to be rolled out. Labour in China is becoming much more costly, as living standards there increase with mounting prosperity; and while China has now ahead of most other emerging economies in this direction others are close behind. Thus the advantage in cost of labour that newly-emergent countries have offered over recent decades has diminished dramatically. By offering tax concessions to installations in the USA, and threatening tariffs on imports to the US, Trump's Administration will be able to bring jobs into the US: and several announcements to that effect have been made already. If the already-huge US public sector sticks more rigorously to a policy of 'buy American', and if massive infrastructure schemes are authorised also with a 'buy American' tag on the inputs, government spending will also help to make firms that invest in the USA more profitable.

This whole policy thrust runs contrary to the dogma that is taught in the universities by the Econocracy. They argue that the maximisation of production and trade right across the world, with the minimum of government interference, will produce an optimisation of wealth: which they take as equivalent to overall human welfare: this is the essential theory that underlies globalisation and the professors are aghast to find that there is now a huge tide of public opinion opposed to the idea and its effects. If firms are able to maximise their profits from global activity, investing in new plant on virgin land with cheap labour and moving on at will, leaving rustbelts and unemployment [and often industrial diseases] behind them, they can be hugely successful in terms of making profits and paying their owners and executives well. Such firms make great contributions to net global product and to recorded economic growth: but the social and environmental cost can be massive: and it often falls to local communities and their governments to address the damage.

Trump's emphasis on employment and infrastructure can well be successful, if he is able to retain the presidency. If he does not remain in post, he has already in his brief tenure set changes in motion that are likely to adopted [probably with adaptations] under the next president: who would also retain most of the Trump team. He has changed the global economy.

How is this comparable with Stalin? When he consolidated his power over the Soviet union in the nineteen twenties, following the disability and death of Lenin, his principal appeal was to the concept of building ''socialism in one country'. During and after the Russian revolution, Lenin believed [and relied on] Marx's prediction that the advanced industrial countries would be the first to go through a revolution and adopt communism. Through the First World War Lenin believed that the masses would rise up against the rulers who had led them into the disastrous carnage [and waste of material resources], so in 1917 he just thought it was a historical accident that primitive Russia was the first domino to fall: Germany, France, Britain and Italy would follow soon. After the war, though there were attempts at revolution, especially in the defeated countries, they did not fall to communism. Thus Lenin and his gang, soon to be led by Stalin, had to invent a completely new script for their sort of socialism. Its limitations were obvious from the start, and the human price that it extracted quickly became apparent; but it seemed to those who were inclined to want it to succeed that it was succeeding. 'Fellow travelers' emerged in most countries, and some remained pro-soviet until 1990.

Some people will want Trump to succeed because he cuts across the grain of economic dogma. He might have very considerable success: whatever the consensus of the Econocracy may say against him.

Campaigning to Resume: The State of the Parties

Today UKIP will launch its manifesto for the upcoming general election, and the party's implausible leader will have considerable media coverage: much of it unfavourable. Then UKIP will sink to a low rating in the opinion polls, with no prospect of being represented in the House of Commons.

The other parties will re-start their campaigns tomorrow, though local leafleting will resume in some areas today.

In the limited time on the media that has been allocated to Jeremy Corbyn in the past two days, he has spoken sensitively and sensibly about the Manchester tragedy. Labour has certainly not lost ground during the shut-down of the campaign.

Mrs May has had a big opportunity to appear to be 'prime ministerial', and has not overplayed her part. However, her campaign was faltering before the suicide bomber shut down partisan discussion, and the Prime Minister can have had little time to review the mess that she had made for herself, particularly on the costing of social care and how that bill is to be met. Like all Conservatives, Mrs May has the dilemma that the policies pursued by her party - in power for the best part of seven years - has largely stifled real economic growth. A government that is hemmed in by obsessions with austerity and the [probably notional] elimination of the deficit on state spending can only contemplate shifting some fragment of the already-existing national wealth into the state budget to meet the cost. Thus people are being asked to accept that the inflated 'value' of their homes can be raided to meet the costs of their personal care, at need.

One significant aspect of the situation is that the management of social care lies with local authorities. Therefore local authorities, whose budgets have been squeezed very hard by the Osborne-Hammond policy of cuts, are to be expected to create mechanisms for valuing property, and further mechanisms for funding the care of property-owners [whether in care homes or at home] over periods of several years until the supposed 'value' of the property is realised in a sale. To maintain the 'value' of the property, it has to be maintained properly: which is a further element of cost that the local authority will have to meet. The implication is that local authorities will have to become massive borrowers: if anyone will lend them the money.

The segment of the massive complex of financial markets that led to the crisis of 2007-8 was the exposure of 'sub-prime mortgages' in the USA. Financial institutions were bullied by the Clinton regime into allowing people with no successful record of paying their bills, often with no secure employment, to buy houses on mortgage. When economic conditions tightened, in 2005-6, thousands of people simply handed the keys to their properties to the lenders and drove away. The 'value' of those houses in the books of the lenders - who had now become, will-nilly the owners - were the prices at which they had been bought. They could not be sold on for the same prices, as thousands of such houses were dumped on the market at once.

Thus one can expect lending institutions to be very cautious of advancing large sums against properties whose 'value' will be incalculable on the unforeseeable future dates when they will be available to be sold. If the government becomes the lender, or the guarantor, of the loans that local authorities will need to fund the care that has to be given to the owners of the properties that will be drawn into the scheme on the death of the owners - or of their partners [who may, obviously, also need years of care in the further future] - that guarantee must be added to the national debt: which obviously blows away any hope of reducing or eliminating the the deficit. The more this question is emphasised in the last fortnight of the election campaign, it will be clear that the Tories' plans are no more 'affordable' than are Labour's.

At the least, Labour is claiming that their plan, especially borrowing to fund infrastructure investment, will stimulate growth of the material economy. Mrs May offers no such prospect.

The Nation's Knickers

In these days of Primark, I am impressed by the survival of market stalls [all over the UK and beyond] whose owners seem to thrive on selling clothes, especially underwear and nightwear for women and children. Compared to Primark the range is limited and the prices are relatively high, but these stalls [particularly in market halls] provide full-time employment for their managers.

Virtually everybody uses underwear, therefore they need to buy it somewhere. It can come by home delivery after being bought online, in plain packaging, however 'exotic' or bizarre it may be; but most people buy it in person.

For three generations, the predominant supplier of underwear to the British nations was Marx &Spencer, M&S, which was an essential component of every high street and shopping mall in the land. They set the pace in design; but they were never the cheapest option. They increased the range of outwear that they sold, especially after the second world war, and through the age of austerity that was followed by the 'mixed economy'. Then, in the nineteen-sixties, new sorts of rivals emerged. M&S had itself originated as a market stall and as long as the founding families were in control it retained something of the open-market approach to stock purchases. The new chains of shops emphasised that they were 'fashion' outlets; while M&S - whatever its image-makers tried to present - was seen as essentially a utilitarian source of supply focused on the lower middle classes. Thus the market changed around the old staple: which then - in the 'seventies - had a serendipitous moment. M&S started supplying food for the busy housewives who had jobs, and quickly developed a positive reputation for ready-made or part-prepared meals.

Fast-forward to today. There are still M&S shops on all high streets, but the balance of trade in them has changed dramatically. After decades of redesign and restructuring [and financial losses, and changes of chief executive] the firm still has not caught up with the customers' behaviour. hence this morning they have announced a 64% drop in profits for the past year. This is ascribed to the need to spend ever-more money on shutting down acreages of clothes hangers and sock-and-knicker-stalls, and to open or adapt more smaller sales floors for food.

The dilemma that the firm has faced - and still faces - is that they are locked into property contracts [including the ownership of large buildings] which were ideal for extensive departmental stores, but which are not much wanted by their rivals and are vastly greater than their own requirements. To sell or lease whole or part of buildings to rival clothing suppliers would anyhow accelerate the decline of M&S as clothiers, by assisting the competitors to gain high-street prominence. Yet M&S need physical shops where the families can buy their part-prepared meals. There is mounting competition from the fast-food delivery firms, which chip away at the ready-food market as fast as M&S can adapt their estate to supply it: and it is probably too late for M&S to enter the market with a fleet of motorbikes, unless they are able to merge with [or take over] a market leader in that field.

Thus we are likely to see continuing phases in the decline and fall of a predominant name in British retailing: while the market stalls serenely carry on.

More on Universities: Fees and Cost

Within the past 24 hours, Labour has 'upped the ante' by declaring that their cessation of university tuition fees would apply to existing students and new entrants from the start of the next academic year. The Tories' riposte, that the Labour scheme is 'uncosted' has absolutely no merit, because it is quite clear that the prime minister and her 'scullery cabinet' have no idea of the costs of any version of their confused 'policy' on social care, either: and it is agonisingly obvious that the Tories do not want to know how much a revitalised National Health service would cost.

I refer to a 'scullery cabinet', rather than a 'kitchen cabinet', because it is obvious that the Prime Minister's close claque of chosen minions should not allowed near hot pans or ovens. Once a party has been unsettled as much as the Tories have been by the thought of loosing the 'grey vote', there is no chance for them to recover poise and confidence in a couple of weeks: especially if the Prime Minister doggedly sticks to her decision that some pensioner benefits will become means tested. Meanwhile, thousands - perhaps millions - of pensioners have for the first time considered not voting Conservative: and once the thought creeps into their minds it will recur. I know nobody who thinks that the IRA-supporting Corbyn is fit to be the Prime Minister: but millions now want his party to drive the government to a narrow majority in the next House of Commons. A mass student
vote for Labour, plus a couple of million hesitant pensioners, could achieve that target.

The question that I was considering yesterday was that of what is the use of a higher education system, and how much should such a system cost when the price is set alongside the demands of the Health Service, Defence, Social Services, support for rural communities, schools, lifelong learning and housing? Several days ago, I referred to Cardinal Newman's nineteenth-century book on The Idea of the University in which he advanced the totally non-utilitarian view that the purpose of higher education was simply and solely the development of the intellectual and moral capabilities of the individual scholar. In Newman's day, there was no state funding of the few universities that existed: he was himself involved in developing an essentially catholic university College in Ireland, and capitalists in Bristol, Birmingham, Manchester, Sheffield, Leeds and Liverpool were funding higher colleges to teach the skills that local businesses needed in their future employees.

The First World War revealed that Germany was ahead of Britain in many areas of production: and in some fields - such as optical glass for telescopes, binoculars and periscopes [used both in the trenches and in submarines] - the UK had no facilities comparable with the Germans'. The exigencies of war demanded that those gaps had to be closed, regardless of cost: and for more than half a century thereafter the Department of Glass Technology in Sheffield University, with the associated British Glass Industry Research Association, was fostered by the state to provide a national focus for developing the higher technologies in glass and related materials.

Throughout the twentieth century the utilitarian approach to funding universities was constantly challenged by graduates in the liberal subjects - history, classics, modern languages, music and philosophy - that had been funded by benefactors [ancient and modern] in the older universities, who now argued that to be 'civilised' any modern university had to offer those 'soft' subjects alongside science and technology. Once that became part of the received wisdom, applications from students to study the arts and 'social sciences' swamped science applications. The benefits for an individual holding an indifferent degree in arts or social sciences are exiguous: recent research shows that such graduates do not command higher salaries - or even more comfortable jobs - than people who have not been to university. It has also been revealed that mathematics graduates who do [idealistically] take up schoolteaching in the hope of raising the national skills base in science and engineering resign after a very short period, as in most schools the pupils have no wish to learn 'difficult' subjects and disrupt the lessons.

Mrs May would not do it, but the country deserves a full and fearless assessment of what the nation needs in terms of higher education. The size of such a system should be postulated, the cost estimated, and the optimum means of paying for it identified. During World War II Sir William Beveridge and a small team devised a model for the 'welfare state'; and the Minister for Education, R A Butler, himself co-ordinated the workstreams that led to the definitive 1944 Education Act. In the absence of such seminal template models, policy is lost in a drift that the economy can no longer support.

Tuition Fees

Due largely to the naivete and inflexibility of Mrs May's thinking, combined with the hegemony that her clique of advisers has achieved, the Conservatives are losing ground to Labour significantly as the election campaign continues. Two obvious areas where the Tory vote could crumble quickly are a consequence of the threat to the incomes and assets of older people - most of whom have worked all their lives, in the belief that they had a social contract with the state [pay national insurance and receive benefits in health care and pensions] - and the opportunity offered to students, their parents and their younger siblings to be emancipated from tuition fees.

Within my personal memory are the facts that in 1960 only about 5% of eighteen-year-olds could go to university: they paid no fees, and were eligible for means-tested maintenance grants that were sufficient to maintain a young person in modest comfort during termtime. There were plenty of casual jobs to be taken up in the vacations, also; but the majority of students were from the middle class who were happy to support their children to the extent of topping-up their maintenance grants and keeping them in the vacation.

In the late nineteen fifties Harold MacMillan's Conservative government became concerned as to whether the UK was preparing enough graduates in science and engineering, and eventually they appointed a Committee of the 'great and good', chaired by Lionel Robbins the dominant Economist at the London School of Economics. The government welcomed their report, which recommended a massive expansion of the university system to cover both the expansion of the existing universities [and colleges of advanced technology] and the foundation of several new universities. The government accepted the report: hence we have the universities of Warwick, Sussex, Lancaster, York etc. There was also a parallel expansion of city technical colleges into polytechnics, which later merged with local teacher-training colleges to become nascent universities [to be 'legitimated' as universities in the early 1990s].

The system grew; but it grew awry. Far from producing an abundant supply of scientists and engineers, the universities struggled to fill their spanking new laboratories with adequately prepared students. Even when they offered introductory programmes for students whose maths and physics were shaky, the science faculties were under-employed with teaching: so the staff spent more time and resources on research, which benefited the economy in general and attracted overseas students to take up some of the vacant places. For half a century the British schools system has failed to inspire young people in sufficient numbers to take the preparatory subjects they would need to study science or engineering; while the universities have prepared tens of thousands of engineering graduates from Asia. Asiatic countries have continued to send their students to the UK as fees for 'international students' have increased massively; maintaining some [but not all] of the engineering facilities envisaged by the Robbins committee.

Higher education was made a 'right' for all qualified eighteen-year-olds and 'mature students'; but maintenance grants were reduced and fees were imposed as the numbers rose to more than 40% of the age cohort and most of them opted to take non-scientific subjects. University became a growing-up experience for the millions: as Oxbridge had been for hundreds of the most privileged youths before 1850. Tuition fees have risen to £9,000 a year, loaned to the individual on apparently-manageable terms. Labour has promised to abolish the fees, that have never been imposed in Scotland.

The question of whether university is worthwhile for the nation would loom large, if Labour won the election and implemented its promise to end the fees. Billions of state funds would be spent on young people to study 'useless subjects' for a few hours a week, as the economy continued to go down the pan.

More on this issue tomorrow...

Trump Triumphs?

President Donald Trump is having a great time in the Arab world. His hosts, led by Saudi Arabia, expect that he will reverse President Obama's raprochement with Iran [which will cause problems for the newly re-elected President of that country] and open up trade and other relations - including access to US territory - to some of those who would have been excluded from the US if Trump's attempted decree to 'ban Muslims' from the US had not been stymied by the lawful authorities.

The upside from all of this, besides The Donald getting a 'very heavy' gong from the King of Saudi Arabia, is that the Gulf States will buy advanced American weapons [some of which Obama refused to let them have], thereby increasing the profitability of the arms industry - including its British contractors; and the Arab states promise to invest heavily in the next generation of US technology and production. President Trump, of course, is claiming that this is a very quick response to his campaign promises to regenerate the rustbelt: which was a major factor in delivering him the election victory last year. But it is clear that the Arab managers of sovereign wealth funds, who have decades of shrewd investment behind them, are not going to invest in steelworks and metal fabricating factories in the midwest that will not have a chance of profitability in competition with low-wage output from emergent economies. The Arabs will select the knowledge industries and high technology projects that will have a very high probability of being doubly productive: they will have high productivity which means a high turnover per employee; and great productiveness which means that they will generate large profits for the firms that own them, that can be allocated to further projects and to high shareholder payouts and to rising wages for employees [which will raise the general level of demand in the US economy]. Trump and his colleagues may be able to offer incentives [such as have existed through the Obama presidency] for some of the investments to be located in the midwest, rather than on the Atlantic or Pacific coasts; but the plant will not offer mass redeployment of the horny-handed sons and daughters of toil who voted so enthusiastically for Trump. There will be a few posts for janitors, car park attendants, caterers and cleaners: but the tragedy of middle-age uemployment will not be removed by the direct outcome from the President's trip.

Other outcomes from the middle-east leg of this tour will be irritation in Iran, an escalation of the conflicts in Yemen, in Syria and possibly in Iraq, and deeper disillusion on both sides in the Palestine conflict and among the US Jewish population that has hitherto backed Trump enthusiastically. The tour goes on to the Vatican [a photo call], to Belgium [ a meeting of NATO which Trump appears to be learning to love: in contrast to his rhetoric on the campaign trail], and to a high-finance gathering at which he will be, at best, a passenger.

The pot of dissent from his actions as President is bubbling on in the US, and may overboil at any time.

I read that US Psychiatrists maintain strict patient confidentiality, and there is a rule against any doctor with specialist skills publishing any speculative piece about the mental state of a currently-serving officer of state. On the other hand, there are just the beginnings of breaches in that rule as the antics of a very non-standard head of state cause more embarrassment. I am sure that the top women and men in the profession will hold to its highest standards; but as international incredulity expands, there will be more speculation on every level.

The deals that the Donald has done this week are between the US and other governments: they will stand; and that should benefit some few of the American long-term unemployed, as well as the rising sectors of the US economy.

Difficult to Believe - But True

I am not often astonished by politicians, but this week has been the exception. While Mrs May has hit out hard at those who should be her most secure voters, Jeremy Corbyn has subscribed to a manifesto that just has a chance of mitigating his own negative impact on the majority of voters.

The reason why the Tories have struck at pensioners' benefits and capped what they will put into the National Health Service arises from the Treasury obsession with eradicating the deficit on government spending; though this is now deferred [again] until after 2025. The Conservatives' assumptions are that economic growth will be sluggish over the period of the next parliament, that productivity will not improve significantly, and that the recent dependence of the economy on citizens borrowing more to finance continuing consumption will weaken as real incomes decline. Hence they make 'cautious' assumptions about the government's ability to increase taxation, which force them to a very limited vision for government spending. Implicit in the data are that defence spending will not increase, that the police will continue to be starved of necessary resources, and that some 'savings' can be made when we are no longer chipping-in to the European Union budget. Behind the personal campaign being fronted by Mrs May there is a void in policy and absence of realistic hope.

Labour, by contrast, are proposing massive spending on the economic infrastructure and on science and technology: which is the only way in which the productiveness of the economy can be enhanced. Gordon Brown greatly abused the word 'investment' when he was piling up the government's deficit in his last years as Chancellor of the Exchequer: he categorised a lot of government's ordinary spending as 'investment', while he also supported the external financing of school and hospital building that is so much of a burden on the institutions that now occupy those premises. This inherited Labour legacy is unfortunate, because the shadow chancellor [who has the reputation of a dangerous 'leftie'] has imposed on the manifesto - and on Mr Corbyn - the crucial understanding that real investment is the only way to achieve substantial economic growth that can fund both greater real wages and higher standards of social and health services. The public is rightly cynical as to whether Messers Corbyn and McDonnell are the people who can deliver what they offer: but their offer is based on good common sense: which has not much been visible during Corbyn's long political career.

It is a depressing prospect that millions of pensioners will vote for their own disbenefit, rather than take a risk of supporting Labour. By contrast, millions of younger people with nothing to lose might as well plump for Labour, and the hope that tuition fees will be abolished, more homes built, the NHS protected and the police reinforced. The last fortnight of this election campaign will be one of the most interesting periods in which to be alive and active.

I'm going to buy a lottery ticket with my newspaper today, in the hope of being able to buy some publicity for the proposition: "don't vote for Mrs May unless you really want to experience what she is offering".

May's Happy Hour in Halifax

No doubt, Mrs May's claque had reasons for setting her on the platform in Halifax yesterday, to deliver a speech of almost grandiloquent pompousity; and of equal vacuity. It would appear that they [and she] are so confident of victory in the coming election that the detail of the speech - other than the quaintly anachronistic phraseology - was unimportant.

Inevitably, she reiterated her target of reducing 'net immigration' to a maximum of 999,999 souls by a date to be announced. Later in the day her Defence Secretary admitted that there might be an 'economic cost' imposed on the nation; but it would not reduce national income immediately because there is no target date from when the policy is expected to take effect. Thus the prime minister's obsession can be tossed into the long grass, at least temporarily and rhetorically.

More significantly, the squalid face of the government has been revealed in the rumour that the government is trying to suppress data on the extent of aggregate overspending by NHS trusts until after the election. The politicos know that the state of the NHS is a very weak spot in the Tories' case, and showing how bad the situation is cannot help them. If the Conservatives win the election and stick to their present policies, people will die: who, in an ideal world, would be saved [at least temporarily] by an adequate health system. That is a material consideration, especially for the elderly who are being freed from the triple lock on their pensions and released from the bus queue by the withdrawal of the service.

The prospect that the Tories are creating is as unwelcome to the most reliable cohort of voters as that set out in the Labour manifesto.

Elections should not be this interesting!

Dangerous Politics

In a superficial sense, the current UK General Election seems quite dull. The press is overwhelmingly taking the view that Labour's manifesto is so ridiculous that it confirms their general argument that Mr Corbyn, therefore his party, is unelectable. Mr Farron, the LibDem leader, looks and sounds like an untutored novice: some members of his party may gain [or recover] seats in the House; but not enough to change the situation overall. The Conservatives do not need to seem to try: they just push the image of a 'strong and stable' Mrs May leading an almost-invisible but allegedly competent team to a certain victory.

But yet: the Labour manifesto stirs up a lot of issues that have given rise to much digruntlement over several years. The opposing parties' machines can say that Labour's plans are unaffordable, and produce tables of numbers to show this in terms of statistics from the Osborne era, but against that are two potentially significant demographic appeals. Labour can attract the young, with their promises on tuition fees and on the health service; and they can attract the old by reference to their proposals for the health service, pensions and allowances: and now by reference to the Tories' 'mean' policies on pensioner benefits, pensions and the seizure of the properties owned by deceased former recipients of care in old age. These factors may not succeed in overcoming the image of Corbyn as a bumbling Marxist antique, but they could make the election a lot closer than was thought even last weekend.

The real disappointment is in the Conservative manifesto. They have absolutely no positive policy for the regeneration of the country. While Labour talk of spending billions on the infrastructure of the economy [that would then support growth: as promised in the USA by Mr Trump], the Tories are entirely confined within the constraints of Osborne's austerity.The dull, dull Chancellor of the Exchequer acts as if he were a puppet of the Cameron-Osborne regime. While government spokesmen still talk hopelessly about putting billions into 'education' and mitigating the chronic inadequacy of the NHS, the real and present crisis of funding in the Health Service is apparent to all. The Southern Railway is facing another strike; but their franchise seems secure. The do-nothing regime is neither strong nor stable: it is weak and impotent, like a rabbit caught in the headlights of Osborne's ongoing juggernaut, conveying the economy to national impoverishment.

Britain's economy urgently needs billions of pounds of investment: and not in silly schemes like HS2 or unproved foreign nuclear power sources. As stressed in this blog yesterday, the key to a successful economy is to reach out for higher productiveness: if an economy achieves that, the productivity of workers and investment will grow [and even economists can measure that].

As the details of the Conservatives' manifesto are released, the grey vote may be thrown away. Young people may be attracted to Labour, while they will see nothing in a second referendum on the Brexit issue.

The central proposition of my book: NO CONFIDENCE: The Brexit Vote and Economics was that the British people used the referendum to reject the Cameron-Osborne regime and the political class from which they came. Mrs May is currently turning this election campaign into a defence of what was defeated in June last year. The time for voters to realise this may be too short to determine their votes, and they may rightly be afraid of the uncosted aspects of Labour's programme. But the lady and her close team of minders seem at present to be turned dramatically against the national mood: and that can turn the election against her.

Productiveness, Science and Politics

In the book that is promoted in the strapline of this blog, I emphasise the difference that several great nineteenth-century political economists made between productivity and productiveness. Millicent Fawcett, whose statue will soon be unveiled at Parliament Square [the first woman to so be honoured] was an advocate of the distinction, though it is not for her achievements in economic science that she is to become a permanent feature of Westminster.

Productivity means the measured output achieved in a set time from a defined economic activity, set against the cost of the measured inputs: for example, the cost of one hour of one worker's time, plus all the resources required to enable that worker to be effective, set against the estimated 'value' of the output achieved in that hour. I have often pointed out, that a high level of productivity can be achieved by workers who unpack and sell cheap imported clothing: but their work serves to increase the balance of payments deficit and, insofar as the shop's customers borrow money to buy the clothes it increase net personal debt. The turnover of the business that employs these people is included in the national income statistics, and if that turnover increases year after year this shows 'growth' of the business [and is a potential contributor to claimed overall 'economic growth'] while its long-term detriment to the economy is obvious.

Many modern Economists argue that it is not detrimental to an economy if the country buys cheap clothes from other countries, provided it sells them high-tech exports: and that can be true, provided the overall balance of trade is favourable. When the balance of payments is adverse to a country, however, as is the case of the UK, every extension of the deficit is potentially painful [and eventually some trivial import could trigger a catastrophic recognition by global commentators - perhaps in a rating agency - that the country's situation is irrecoverable under the present regime].

Hence comes the importance of productiveness, the business outcome that meets all the costs actual production, plus providing a significant surplus to fund expansion of the factories that produce the surplus, and/or t fund research to devise even better and more innovative products by the firm, and/or to pay high returns to banks and other investors in the firm who can allocate their enhanced income flow to investments in other firms that can have innovative new products and techniques to offer, and/or some of the surplus can be paid as higher workers' wages and increased shareholders' dividends, giving individuals the power to buy the new and improved products. The more money consumers can use at their discretion to buy the products that they most prefer, that will help to steer the next generation of investment into the most lucrative channels, leading to the most successful firms in the market to have the highest level of productiveness.

Most innovation requires scientific input: new applications of proven techniques, modification of techniques, new computer applications, and new materials. A country must have a sufficient output of science graduates and high-level technical experts to serve these activities; and that must be backed up by the highest level of research.

In the current UK election, some lip-service is paid in passing to a perceived need to maintain the science base on which much of Britain's surviving material export industry depends [and which could be threatened by massive tax increases on both firms and on key employees]; but there is a tendency by politicians of all parties to put in the 'too difficult' tray the whole issue of how badly the scientific community can be harmed by a crass approach to Brexit. This key aspect of achieving greater productiveness is not at all understood, anywhere in the political class. Oh dear!

Fundamental Economic Principles and Politics

British and Northern Irish voters are about to be assailed by a wave of propaganda and comment on the major political parties' manifestos for the election next month. The idea of basing a party's electioneering on a printed document is generally understood to have originated with an open letter from Sir Robert Peel to his constituents in Tamworth, which became known as the 'Tamworth Manifesto'. Far from uniting his party - the old Tories of the eighteenth century, plus the new capitalist class - Peel's partial espousal of the popular free trade movement led eventually to the formation of the new Conservative and Liberal parties that dominated politics in the UK until the First World War; after which Labour emerged as the 'left-wing' opponents of the Conservatives, to replace the Liberals.

Now, in the second decade of the twenty-first century, we are left with the Conservative and Labour parties as the only perceived contenders to form a government; and on the basis of opinion polling it is clear that the Conservatives are most unlikely to need to ally with a minority party to have a clear Commons majority until 2022. Cynics are pointing out that parties with massive majorities - especially in highly contentious circumstances, such as the Brexit negotiations - are likely to split into factions. Chancers are hopefully suggesting that a defeat for the Labour party - if it is sufficiently overwhelming - will lead 'moderate' Labour politicians to seek to establish a new party of the 'centre left', possibly in combination with what remains of the Liberal Democrats.

The two major parties have a very clear ideological differentiation between them, which is being emphasised in the Labour manifesto and in the speeches of the Labour leader and his closet associates. A majority of Labour candidates in the election are equivocal in their support for the policies that the leader is advocating; but their futures depend on them campaigning as Labour standard-bearers: so they are stuck with the leader's rhetoric. The leader and his claque are also determined that Mr Corbyn is the elected leader of the party, and he will remain leader however disastrously the electorate rejects the party in the election. The last defeated leader, Ed Milliband, led changes to the party's rules that enabled a new cohort of members to join on very modest fees and have a vote for who was party leader. An unknown number of the new members wish the defeat of Labour and have joined as agents of disaster; and another unknown number are from the 'hard left' who have voted Mr Corbyn into his position because of his impeccably left-wing, neo-Marixt record.

The parties have made it relatively easy to explain the difference between Mrs May's Conservatives and Mr Corbyn's Labourites in terms of ideological stereotypes.

Conservative ideologues cite the eighteenth-century Scots Philosophy professor, Adam Smith, who argued that it is impossible for a government to control and economy perfectly, in the general interest; so the politicians should not try to do that. They should leave the field clear for people to follow their natural instincts in their dealings with other. Smith reckoned that there was a fundamental force in the economy: human self-interest - that provided unity and balance to the entire economy; and that politicians should just let that self-correcting mechanism work.

Mr Corbyn's critics [much more than Corbyn himself] ascribe his ideas to Karl Marx, a mid-nineteenth-century opponent of Smith's doctrine, who argued that under a semblance of free trade the system of capitalism - in which fewer and fewer people control the economy, effectively enslaving the majority of the population, whose living standards are pushed downwards - had become dominant in the world. Marx argued for the revolutionary overthrow of the capitalist
 system, and the governments that fostered it.

Nobody suggests that Mr Corbyn is a revolutionary Marxist, though he has been open to neo-Marxist opinions all his life. Nor does anybody suggest that Mrs May is an ideological devotee of the 'rational markets' nonsense that has captured the hierarchy of academic Economics. But generalised references to Smith's and Marx's arguments can be deployed to differentiate between the two major parties; and such references will be a welcome relief from the intensive propagandisation of the next three weeks.

Probability and Political Certainty

Today the Chartered Institute of Personnel and Development [of which I am a Fellow] has produced its latest forecast on living standards in the United Kingdom. Their survey of many thousands of employers predicts that earned incomes over the whole economy will rise by one per cent over the next year: the same amount as is promised to nurses, to their great distress: as revealed in their Conference over the weekend. The Institute notes that published forecasts of retail price inflation are running at around 2.6% for the year: so living standards are set to fall.

The relative strength of consumer demand over recent years - and during the months since the Brexit referendum - has been ascribed to some people being willing to spend some of their savings, and to many people increasing the amount they owe: mostly on credit cards. In the face of rising prices [largely due to the decline in the value of the pound against other currencies] it is generally expected that consumer demand will decline in the coming months. Since some of the most successful retail chains have already experienced falling demand [exemplified by Next] and it is expected that the coming winter will see even lower demand, that will quickly result in a fall in demand for shop workers. The Conservatives rely on assumptions of such slackening in the economy to assert with great confidence that Labour's proposals could not be afforded: even where they can be costed.

The Conservatives are being careful to make promises that will seem to cost the state nothing, beyond minor expenditure on bureaucracy and publicity. Thus they are promising massive benefits for workers, in the form of 'rights' such as the opportunity to take unpaid leave for up to a year to care for a relative, during which time their jobs must notionally be kept open for them. Mrs May is also promising that local authorities will be able to buy derelict sites more easily, on which to build homes for rent: but no money is being made available for such a programme. Various other desiderata have been identified that can be accomplished 'within existing budgets', and the government's spin machine will be emphasising the great benefits that the public will derive from such tinkering if the Tories get the expected 'mandate' from the people.

Mrs May's team are presenting her as the focus of a 'strong and stable' government, contrasted with the 'chaos' that they perceive in the Labour party hierarchy. The primary assumption is that a Conservative government, backed by a large Commons majority and with a set of ministers handpicked by Mrs May, can focus on the Brexit negotiations. This is a massive delusion.

There is every sign that the economy is on the edge of a precipice, with falling demand and a huge potential for disruption of firms and public institutions - not least, hospitals - by staff who will feel that they are goaded into drastic action after years of austerity. Brexit will be shoved further and further down the agenda as the economic crisis matures; and that will make it more essential for the government to accept the best terms that the continentals will offer them for a close trading relationship with the European Union. On the first full day of his Presidency of France, young M Macron is flying to Berlin, supposedly to tell Frau Merkel how he wants Europe to change: it is odds-on that he will return to Paris having been told firmly to learn a lot before he tells the continent's power-lady anything. But France and Germany will stay closely aligned on Brexit, and Mrs May will have to lump it.

As Noel Coward sung: "Bad times are just around the corner".

'Robin Hood' Taxes and Bitcoin

Yesterday, the Labour Party added to their repertoire for the coming election the concept of a 'Robin Hood' tax; so-called because it can be represented as a tax on 'the rich' [financial institutions] to aid 'the poor' [HM Treasury]. It was explained by the BBC as a tax on bonds and on complex financial instruments, such as those called 'derivatives', and it was projected that at the outset it would raise over £20 billion for the national budget.

If any such tax were to be introduced, we can be certain that it would regularly be increased both in its rate and in its extent; as has happened with Insurance Premium Tax. During this election campaign, some Labour figures have suggested that Insurance Premium Tax should be increased on private health insurance premiums, to provide funds either for the NHS or for social care. The direction of travel is obvious, when any new tax is dreamed up.

The original concept that gave rise to the idea of 'Robin Hood' taxes came from the American Economist James Tobin, who proposed that there should be a tax [perhaps of 1%] on 'spot' trades in currencies. Thus if a trader went into the market and swapped dollars for yen, either the seller or the buyer would have to pay the 1% tax: and thereby disclose the transaction formally to the authorities and accept the liability for the tax to be paid. The spot trade in currencies was seen as potentially disruptive to business generally; and potentially disastrous to a government's management of its economy. The reality of this threat was made clear when Britain was forced out of the ERM [the European Monetary Regime, which was the precursor to the Euro] by the weight of speculation against the pound in international money-markets. Thus it was shown that the market could be more powerful than the government that supposedly controlled the world's most sophisticated financial system.

The speculative international monetary system has never been brought under control; and it almost overwhelmed the global economy in the 'crash' of 2007-8. To prevent that collapse from becoming fatal, the US, UK and other major governments whose banking systems were closest to bankruptcy in effect nationalised the banks' debts, putting an indefinitely great taxpayer guarantee behind all the banks' contracts with each other and with their customers - except in the cases of Bear Stearns, which the US authorities steered into the arms of a much bigger bank that was rich enough to absorb its liabilities [and, eventually, to cash in on them], and Lehman Brothers which was allowed to fail but which over the next decade was revealed to have had enough assets to meet all its liabilities [when they were unscrambled slowly over the next ten years; though they could not meet their immediate obligations on the day before they were declared to have failed].

Since 2008 there have been recurrent proposals, especially within European Union institutions, for a sort of Tobin Tax to be imposed on various types of transaction. Often these have been mooted by continental interests that are envious of the London market in finance.

I have several times advocated that the Tobin concept be developed along a different route, to mark out clearly the difference between banking [the essential function of conserving customers' money, and lending it judiciously to worthy borrowers] and betting [which everyone understands, in essentials; it is always a voluntary action in which a person or a firm stakes money in the hope of making more money: while accepting the downside risk that the stake - at least - may be forfeit if the bet fails].

Despite the near-meltdown of the entire legitimate banking system in 2008, regulators have continually backed off making this distinction, between banking and betting; which I believe is fundamental to understanding and controlling high finance. Real bankers accept savings into their safe [state-guaranteed] institutions and lend a permitted proportion of the deposits to worthy borrowers. That has been the essential mechanism for funding trade and industry for millennia, and it remains so today.

But betting is mere speculation, and the daily global turnover of that business now greatly exceeds legitimate banking. The most advanced and incomprehensible class of bets, as far as the general public is concerned, is called 'derivatives': they are simply bets: however complex may be the data on which the bet is formed and the contract in which it is expressed. Other forms of bets are many kinds of 'swaps', most 'futures' and 'spread bets' and 'options'. Very clever men and women have devised an impressive range of bets, and some of them can be dressed up as means by which the risks facing a real-world business [such as the basic rate of interest changing unexpectedly or a sudden and dramatic change in the price of some essential commodity like oil or iron] can be compensated to a greater or lesser extent. Sensible regulation can be framed to distinguish genuinely prudential purchases of options or futures by firms that function in the material economy from merely-financial bets. Both are classes of bets, but it would be possible to classify them such that different rates of betting-tax would be applied.

The segment of the financial market that Tobin would target first with his tax is the trade in currencies. Now, in a world context that the good professor could not have envisaged, computers responding to highly sophisticated algorithms trade billions of dollarsworth of imaginary currencies every minute; and even a 1% tax on those transactions [if it could be levied] would fund all the national budgets in the world. But if any national authority demanded 1% of the notional transactions, to be paid on a specific date in a specific currency, that would kill the business stone dead; because collecting 'real' money that features in a state's banking statistics in respect of fanciful transactions in the cybersphere would require a link to be opened up between two universes that cannot be conjoined. The real world remains under threat for so long as the megabetting industry masquerades as part of 'finance' [or even, in some cases, as 'banking']. The financial establishment would act quickly and effectively to see off any proposal for a UK Robin Hood tax, however big a parliamentary majority Corbyn's people could round up from their flying pigs.

Meanwhile, a global attack of 'malware' [aka ransomware'] that locks up computer files against a demand for ransom, has affected over 100 countries, including much of the NHS in this country. The ransom demands ask for payment in bitcoin. Bitcoin is a wholly pernicious invention of unnamed computing geniuses, which purports to be a form of money that can exist without the sanction of any government and without control by any central bank [or an international agency such as the International Monetary Fund]. From the day it was established, it has been agonisingly obvious that it is perfect for many sorts of criminal settlements. Nevertheless, some licensed bankers and traders have seen themselves being able to add to their business portfolios by trading in bitcoin; and hitherto they have been able to persuade their regulators and the central banks to let bitcoin payments develop. The catastrophic criminality that has been evident in the past 24 hours must, surely, set the thing in true perspective. All use of bitcoin - or of any clone or derivative of bitcoin - must be criminalised

Electioneering into Depression

The current General Election campaigns seem to have been running for a long time. "Strong and stable" has become a national joke; and the more earnest Mr Corbyn shows himself to be, the less convincing he is as a possible national leader. UKIP shows no capability to recover from the terminal condition in which the Brexit decision plunged them; and the LibDems have absolutely nothing to offer.

The Tories' over-emphasis on Mrs May is a very high risk strategy, and if their chances of loosing the election were at all significant it could be ruinous. She has utterly failed to show her hand on the vital questions that must be negotiated with the European Union, to an extent that causes millions to doubt that she has any ideas at all. We can expect that very shortly after the new government takes office the inevitable leaks from the negotiations will display the weakness of the government's intellectual grasp of the task in hand.

Meanwhile, the extreme economic weakness of the United Kingdom is openly to be seen: even during the election campaign. The current government dos not even try to pretend that the NHS is adequately funded, relative to the demands falling upon it and the capabilities of modern medicine. Even more bizarre, according to some government researchers, most schools are 'overfunded', and the May campaign does not offer any increase in the education budget. It is clear that the Conservatives, when elected by a surprisingly small plurality of votes, will press on with austerity; and that there will thus be no significant attempt to lift the economy into a new era of growth supported by state spending.

Labour's plans are dismissed as 'unaffordable' both by the rabid press and by relatively balanced commentators: the implementation of any significant proportion of them would massively strain the national finances to an extent that would deter investment in industry and commerce and would thus reduce the capability of the system to bear increasing taxation.

Donald Trump is daily proving the lack of maturity that will blight his entire  presidency; but there can be no doubt that he was sound in expressing his gut feeling that a chauvinistic, mercantilist economic policy would bring jobs and growth into the US economy. This is happening as a result of companies making their own decisions, in the context of Federal government policy. Whether Trump stays or goes, his impact is unstoppable.  Britain needs a similar mindset shift. The country that made the first, most significant industrial revolution; the country that pulled itself together after Dunkirk well enough to share with the Americans in the invasion and occupation of western Europe - while supplying the Russian war machine on a mighty scale - can change the world again: and it must do so.  To become a moldering  museum off the shore of the EU is not acceptable and is certainly not affordable.

May, Corbyn and the others do not have a scrap of understanding of the big issue between them. That is why the election will be a depressing experience for all of them: and for all of us.

Perspective

I am lucky to have two homes in England; one a flat in Wapping with outlook to the Thames just east of Tower Bridge, and the other in the middle of Bakewell, which is one of the nicest little towns in the country.

I moved job, from Sheffield to London - and from academic life to a professional institute - in 1989, and have been in Wapping ever since. In 1986 I acquired a home in the Peak District, just outside Bakewell, and have retained my connection with the area ever since, Both homes are fully equipped, so I travel between the two with only a briefcase.

Both communities, Wapping and Bakewell, have experienced significant demographic change over the past three decades; and I have been privileged to live through the changes in both places. Both have seen a significant breakdown of multi-generational  indigenous British families. In Wapping, as the former warehouses became expensive flats and as more new-build luxury apartments were constructed, so the prices of former council flats that had been sold to private buyers also rose dramatically. The construction of the Canary Wharf complex to the east of Wapping meant that the former London Docks area became a highly desirable base for living [at least on weekdays] equidistant from the City and Canary Wharf. Old dockers [and their wives] who had not moved east to Dagenham or Buckhurst Hill have mostly died. Almost all their children and grandchildren live outside London, even though a very large proportion of them still work in London. In the 'eighties and early 'nineties, an incomer to Wapping [still a relatively rare beast], who used the local shops, pubs and church was quickly accepted into conversations; and I was astonished within a few weeks to encounter people in the street [whom I did not recognise] greeting me with a cheery "'allo, Dave!"
The survivors from among those 'old Wappiners' still greet me, and I able to return the salutation to them, but it is an increasingly rare phenomenon: though it still happens on a daily basis.

While it was possible, before the millennium, to predict with considerable accuracy who would be in each pub  in Wapping, and thus what the conversation would be; and often to look forward to it; that entire scene has changed, One pub has opened - the Captain Kidd, with a wonderful riverside beer garden - and four have closed: the Scots Arms,the China Ship, 'Bullins' aka the Three Swedish Crowns and the Jolly Sailor. Only in two of the surviving pubs is there anything like a traditional bar-room conversation, and that only occasionally. The excellent butchers and bakers shops are at least as busy as ever, but with a new clientele, Most of the pubs thrive on catering and on Wapping becoming something of a 'destination' thanks to the excellent upgrade of the Overground East London Line and to events at Tobacco Dock. Wapping is wealthier and more orderly than at any time in its history: but the docklands character that I was privileged to see [albeit two decades after the docks closed] has entirely gone.

Bakewell has undergone similar changes in the same period. It is much more intensively a residential town, with a large population of reasonably affluent pensioners. Almost all the pupils from the outstanding Lady Manners school who go into further and higher education make their careers outside the Peak. Employment opportunity for other under twenty-fives is limited to the council, the cattle market, the shops and the pubs. Shops and pubs are focused on the millions of visits to the town that are made by the millions of people who live within a day-visit distance of Bakewell in greater Manchester, Sheffield, Chesterfield, Nottinghamshire, Leicester, Derby and Staffordshire. Local residents can use the facilities, at the prices that are set for the tourist market - and many do, within budgetary limits -but they also travel to Chesterfield, Sheffield or Derby for competitive prices. Most of the pubs are now good quality restaurants: though a couple of them still welcome conversing local non-diners. Like Wapping, Bakewell is more affluent and orderly than ever in its past.

Wapping without the docks is a purposeless place where it is good to live; and so is Bakewell. Most of the locals who are to be seen about Bakewell are not farmers or engineers [which were the trades on which the town thrived in past centuries] but employees in the service sector. The place is prettier than ever, but the spirit is infinitely weaker.

University Free For All?

The leaked Labour Party Manifesto that the BBC [among others] is brandishing this morning aims clearly at 'old Labour' voters and at first-time voters, in particular.

The promise to abolish tuition fees in UK higher education in England will be hugely popular with students; and also with the millions of working people who are struggling to cope with their own student debt repayments and would love to avoid their children becoming trapped in the same debt tangle in their adult years.

However, there are many consequential issues that need to be considered. The question of how 'free' higher education would be funded needs realistic answers, rather than platitudes. This immediately knocks-on to the question of "how much higher education should be funded by taxpayers?" To which a respondent must ask further questions, of which the first and most fundamental is that which was addressed by Cardinal Newman in the nineteenth century; since when, the opposite of his argument has been the basis on which governments have funded universities. Newman argued unequivocally that the purpose of universities is, and should only be, the humane education of the individual: no utilitarian objective should be allowed to intrude into the process of self-fulfillment.

Meanwhile, in the last third of the nineteenth century, the masters of industry and commerce in Manchester, Sheffield, Birmingham, Leeds, Liverpool and Bristol were collecting funds from each other to establish university colleges that would teach the young men of the area [by full- and part-time study] the essentials of textile technology, metallurgy, engineering and other applied sciences; with the necessary underpinning of mathematics, physics and chemistry. Into the twentieth century, especially in the light of deficiencies in British technological capability revealed by the First World War [which exposed areas of shameful technical dependence on imports from Germany], government funding for universities - especially in applied sciences - was increased. But technology is hard to learn, and has never had the high prestige that the literate classes have given to music and literature. History is popular relaxation reading: higher mathematics has a very small appeal to the mass market. So it has proved with student preferences: especially in the 'Robbins expansion' of the higher education system in the nineteen sixties [which saw the doubling of the older civic universities, and the establishment of several completely new universities] the arts were allowed to take in many more students, while the science capability of the universities was expanded beyond the level that could be filled by capable and willing UK students. Hence by the nineteen eighties, when the Thatcher governments welcomed university expansion to absorb otherwise-unemployed twenty-year-olds, a pattern was set whereby the arts, social studies and 'media' grew in response to demand; and science labs were stripped out to make more lecture space that could be crammed with people doing 'useless' degrees.

Although teaching media studies requires only a fraction of the unit cost of teaching mechanical engineering [which involves high expenditure on machinery, workshop space, materials, technical support etc], the aggregate cost of allowing hundreds of thousands of people to undertake materially non-productive courses every year was seen as excessive: so tuition fees were brought in; and the 'arts side'of institutions, at least, became virtually self-funding. The residual capacity for teaching and research in applied science was increasingly filled by overseas students, who took their knowledge back to support competition with British industry, while the UK schools system encouraged their pupils to take the cheaper and more popular arts options in which nice children from nice homes got goods grades and so got their schools good gradings. The consequential mega-disaster for the British economy needs no elucidation in this blog today; though it is a subject that must recur frequently in future.

Having opened up the subject, Mr Corbyn and his little friends need to explain how - and why - the universities should be funded. Is there any national interest in maintaining over a hundred and thirty such institutions, many of which have no functioning applied science capabilities? Are the taxpayers really willing to fund a million Newmans a year? Now that the issue has been raised, it needs to be addressed clearly and in full.

Mrs May's Caps

Theresa May has been a lifelong fashionista who asked [on Desert Island Disks] for a lifetime subscription to Vogue: which makes it odd that she has chosen to wear for much of this election campaign tweedy jackets that hang oddly around her distinctive anatomy. She looks to me like a chargehand beater on some minor grouse moor; in which case a cloth cap would complete her ensemble perfectly.

Her election campaign has featured two very un-Tory caps: one on energy prices to households and the other on immigration to the post-Brexit UK.

Critics and commentators from the whole political spectrum have pointed out - as nauseam - that a cap on energy bills was one of the policies that vanished with the 'Ed stone' when Labour lost the last General Election. Mrs May has decided that it is an election winner. As I have mentioned in previous blogs, any change to the model of privatisation brings into question the rationality of the whole concept. To cap a major segment of the pricing structure is a fundamental move away from the Economists' model of privatisation: in the direction of arbitrary government interference that smacks more of a dictatorship than of a free market; or even a balanced mixed economy such as the UK enjoyed in the period 1950-70.

Electricity bills, in particular, are increased by the huge subsidies and tax reliefs that are given to windmills, solar panels and other forms of 'renewable' energy: at the expense of the customers. It is a result of government policy that these charges are loaded on the consumers, threatening household budgets and the future of energy-intensive industries, notably iron and steel. In these circumstances, it is simply silly to make another intervention and hand over the implementation of the idea to an 'economic regulator' that is meant to apply the nonsensical models that were fashionable in the 'eighties. No doubt Mrs May will win the election, and will have her way on electricity bills: and there will be plenty of time to rue the decision before the next General Election. Eventually, the whole idea of economic regulation of utilities will have to be stripped back to first principles and replaced.

Mrs May's other cap - on net immigration to the UK - has attracted a lot of comment on the assumption that there is almost certainly a deep psychological need for her to persist in this policy, which has featured in the last two Tory manifestos and fallen to her, as Home Secretary, to 'fail' to implement. I have been told by British-Asian friends that some of their communities voted for Brexit on the assumption that if European immigration was restricted there would be more room for greater Asian migration into the UK. The statistics of the last several years show that net migration from outside the European Economic Area into the UK exceeds EU citizens' immigration to the UK very significantly. So even an extremely 'hard' Brexit will not reduce immigration to anywhere near the level [less than 100,000 net per year] that Mrs May is proposing as the maximum. Her refusal to exclude international students from the tally is simply silly: damaging to university finances and to the balance of payments generally, and significantly weakening the talent pool within the country [if she can pull it off].

Industry and commerce are struggling to explain to this purblind person that the country unconditionally needs to call upon a wider pool of skills and talents than the UK itself is generating. As long as the austerity regime continues - especially if resources are being misdirected to harebrained schemes such as grammar schools - the British educational system will not produce the skills that are needed. Fake apprenticeships are an expensive travesty: they do not produce skilled workers, but young people who are even more sure that the system has cheated them. The immigration cap, if Mrs May actually tries to implement it, will poison the whole Brexit negotiation and cause deep anger among immigrant communities: as well as real detriment to the economy [not least, the creative industries]. There is a real peril in this crazy concept.

The Inevitable Collapse of the Thatcher Legacy

Margaret Thatcher was a forceful woman; but I have heard or read no suggestion that she was an especially intelligent person. She gained an Oxford degree, in Chemistry, when most men in her age-group were on active service; so there were plenty of places for girls from provincial grammar schools to read for degrees. Margaret Roberts - as she then was - was guided to her modest achievement in the examinations by a postgraduate tutor whose war-work was the important search for inert gasses that could be used to fill fuel tanks on aircraft after the fuel was used, thus reducing the very high risk of the tanks catching fire and taking the 'plane down. Forty years on, Margaret Thatcher rewarded him with a peerage. He was a man of the highest non-religious integrity, and I was privileged to know him modestly well.

I begin with that reminiscence because I think it important to recognise that the concepts that Thatcher espoused in her mature political career were not hers. The came from others who were prepared to share her political agenda: and, indeed, to push it further than she would naturally have been inclined to take it. Prominent among these were the several economic advisers who progressively led her into the set of ideas that are still characterised as 'Thatcherism'. The core of all the thinking that she accepted was the idea that markets are 'rational': the notion that the economy is a natural system that operates according to its own natural laws [just like the material universe is subject to Newton's laws - except where it is not]. Those who advocated this principle, of whom the first in Mrs Thatcher's environment was Keith Joseph, argued that the manifest weaknesses that had engulfed the British economy in the nineteen seventies were the inevitable outcome of decades of the 'mixed economy' in which both Labour and Conservative governments had been prepared to over-rule market forces in order to achieve social and political priority objectives. Thus when Mrs T became the Prime Minister the economy was completely disoriented from what would be achieved if it was working 'properly'.

It was inconceivable that half a century of state direction could all be removed at once, so a progressive pattern of removal of the state from the economy was initiated. A major component of this project was privatisation of the major utilities. Water, gas, electricity, airlines, railways, telecommunications, radio and TV and a huge range of other supplies and services were predominantly controlled [and owned] by the state. The clever new idea was that they should be sold to the people, who would become active shareholders who would hold the boards of the privatised companies to account, thus ensuring that they competed openly and fairly in an efficient market. That didn't happen; large swathes of the shares were bought by financial institutions when they were first offered for sale; and the hundreds of thousands of citizens who did buy such shares happily sold them on to institutions at prices higher than they had paid for them: so in a short time institutions owned virtually all the shares. In many cases the utilities were then sold on to foreign investors.

Later, particularly under the Cameron governments, it became clear that the supposed 'markets' were not functioning at all well. Customers of the gas and electricity retailers did not spend many hours every year deciding which company to use for the coming period, as the Economists' market model demanded. Very recently, the May government has indicated that it will 'cap' prices - because competition has failed to keep retail prices 'competitive' or affordable.

Behind this retail market failure is an even more fundamental failure of the market in supplying 'wholesale' electricity. In total defiance of market Economics, successive governments have opted to subsidise 'green' energy, notably windmills, in order to meet arbitrarily assessed targets for the reduction of emissions of the gasses that are said to cause global warming. In principle, that can only be a 'good thing'; but when the cost of it is laden on the customers' bills, the pretence of creating a 'market' in energy is exposed as mere rhetoric. When customers are additionally laden with the forward costs of the 'most expensive structure in the world' - the Hinckley Point nuclear power station [that may never work] - the whole myth of rational markets is destroyed.

Point-by-point, the Thatcher legacy has unwound; and as relief  from the current election rhetoric, I will extend the point of today's message over other sectors of the economy.

Good for France? Maybe. Bad for Britain? Definitely!

Today is VE Day: the celebration of victory in 1945. One of the most amazing aspects of that victory is that deGaulle's France was counted as one of the winning allies. It was awarded a permanent seat on the UN Security Council, a small slice of the occupation of Germany and of Austria, a sector of Berlin and an honoured place in the conferences where post-war Europe was carved up between the USSR and the 'western allies'.

Yet from August 1940 to the middle of 1944 France was effectively occupied by the Germans: though a small sector of the country called Vichy France [after its capital] was run as a Nazi puppet state. Most of the French nation acquiesced in the situation; a great hero of the First World War served as Head of the Vichy State and a leading politician acted as his first minister. Many more French men and women than has ever been admitted collaborated actively with the Germans. Nevertheless, Churchill was able to persuade Roosevelt to accept deGaulle as a junior partner in the alliance, and for his own reasons Stalin went along with that. deGaulle and his 'Free French' set about purging the most conspicuous collaborators. They executed Laval and imprisoned the extremely aged Petain. But they allowed most of the old establishment to reinvent themselves as democrats in a 'Fourth Republic' that eventually collapsed in its own corruption, to make way for the current Fifth Republic.

It was commonly said, in Britain as I was growing up, that "The French will never forgive us for saving them in two World Wars" and that has proved to be tragically true.

Today France has a new President-Elect, who was not born when the Fifth Republic was established. He has a great reputation as a pianist, an Economist, a banker and a chancer. Like Donald Trump, he owes his elevation to no party, though in the coming days we will see a coalition of the longstanding parties forming to give him a comfortable majority in both houses of parliament. He has said - in English, in Downing Street - that he will do all that a President of France can do to encourage financial services firms, especially banks, to move from London to Paris; and he will act vigorously and knowledgeably to frame both EU regulations and the negotiators' brief in the Brexit talks to the maximum extent possible to impede the continuance of London's lead in world finance. Fortunately, the French legal system and the capacities of French nationals cannot be changed enough, fast enough to enable Paris to take over London's role; but he may be able to engineer things so that New York is a net gainer from Brexit, rather than Paris or Frankfort.

Everything that Macron has said in the election campaign marks him out as a fresh face fronting a typical, traditional member of the French elite. As an Economist who is surrounded by Economists, his promises to 'restore' the social structure and the economy will prove nugatory. There is very little that he can do to reduce the alienation of the largest Muslim population in Europe, or to eradicate terrorism. He will court President Tusk and Chancellor Merkel, be polite to Donald Trump and woo the Chinese for French trade, especially in finance. Having worked in international banking he can not be unaware of his huge disadvantage: the world is not going to learn French to trade with him: he knows that he must use English as Mrs Merkel uses Russian, and this will always emphasise the limitations of aliens trading with and within France.

In summary, he may be able to do a few good things for ordinary French people, as a new front for the French establishment; but he will be a damned nuisance to Brexit Britain.

It's No Secret!

Throughout human history, inventors have had to borrow money to make their machines; then have to borrow more to scale up their innovation to the point where profitable production can begin.

In the era of the industrial revolution the infrastructure of better roads, then canals, then railways was provided by raising money from shareholders in Turnpike Trusts, then in Canal and Railway Companies. In case you had not noticed, selling shares in a company is a form of borrowing: the directors of a company ask their investors to make their money available to the company, under the promise of long-term partial ownership of the company and the hope of recurrent profits. Usually investors have come forward if there is a reasonable prospect that the returns to shareholders over a ten-year timescale will put more money at their disposal than they would get in interest if they had just kept the money in the bank.

Richard Arkwright had to borrow the money to build his first spinning machine; then he established patents on all the technologies involved, including the work supplied by a clockmaker who cut and assembled the gears that were indispensable for the project. Other people who wanted to open spinning factories had to pay Arkwright royalties on the technology until, many years later, the extent of his patent coverage of the device was reduced. James Watt developed his concept of a steam engine in the university laboratory at Glasgow, where he was a technician to Professor Black. Eventually the good professor moved on in his research, and to make the engine a commercial proposition Watt had to find an investor with deep pockets. Matthew Boulton was a successful serial entrepreneur based in Birmingham; so to Birmingham Watt had to go, and Boulton's name came before Watt's in the name of the firm that successfully patented and sold the first steam powered devices that were ready for the mass market. The first engines were for pumping, and their principal customers were mines, breweries, dye works and other consumer-goods suppliers: the steam engine that could provide motive power to road and rail vehicles and to vessels came later - which ties in with the fact that roads, canals and railways needed to be built first, at vast capital cost.

The essential problem of the British economy, certainly since the swathe of industrial destruction that is the strongest characteristic of the Thatcher era, is the lack of big industrial development. That picture of failure is reinforced by the poverty and antiquity of the infrastructure on which the UK economy depends. The shining exceptions of Sir James Dyson and of the Bamfords' JCB stand alongside the massive pharmacological companies as rare exceptions to the general picture that the remaining British-owned large firms are either dependent on their overseas operations or on the popularity of long-ago registered trade marks and copyrights. There are many wonderfully innovative small firms; most of whom find it difficult to impossible to secure funding for their expansion, to the extent that many of them sell their technology [and thus the potential for future profit] to aliens.

In the current election campaign, it is clear that the Tories are content to continue the stagnation, and [as the economy is contracting, in real terms, with a huge balance-of-payments deficit] they will continue with their socially destructive austerity programme. Labour is suggesting that investment is needed: and the Tories assert that this would create a great 'black hole' in the national finances. Labour is not bold enough in its investment programme, which doesn't matter anyway, because they can't win. Every time you see Mrs May in a 'factory' context, you will see that she is in a clean, small-scale workshop: because that is pretty well all that her minders can find to indicate 'industry'.

It is not at all secret, that nothing happens without investment: and Britain's investment drought is exacerbated by virtually every action of the present government.