Graham Lovell, Author at Democratic Capitalism

A Trade War? Pull the other one!

Imposing a moderate level of tariffs, even on ALL goods entering a country, will not result in a trade war.

Trade War – a Phony argument

I recently heard a respected (and paid) Australian economic commentator saying that if Donald Trump continues with his “Protectionism” agenda it could bring about a trade war, such as the world had in the 1930s.

Surely we should be beyond such childish commentary on trade policy. The world had quite high levels of tariffs in the 1950s. There was no trade war. They continued in the 1960s. Still no talk of a trade war, with the same applying the 1970s. There is no reason that a moderate and well applied tariff regime should lead to a trade war in the 21st century. It is more likely that not invoking protectionism will lead to an increasing level of discontent.

Tariffs

Since the 1980s tariffs have been progressively coming down, with significant benefits in regard to lower prices being available for many goods. At the same time, jobs in the industrial sector have also declined from two causes. The first is that competitive pressure has made business much more concerned about costs, leading to efficiency improvement, mostly via more automation. Union leaders also realized that pushing for relatively outrageous wage and conditions was impacting on their members’ future prospects, so they led a movement to change their members’ expectations. The second reason is that jobs were exported as the replacement goods were imported. Not every part of this was a bad outcome.

Tariffs can be considered to have been previously introduced to offset an inherent competitive advantage in the exporting nation. This still continues to be the case. Yet now we realize that tariffs are not a one-way street to success. If they are set too high, this can embed business inefficiency, lead to noncompetitive wage rates, and unnecessarily result in paying higher prices for all goods and services.

Contrary to current economic thinking, tariffs are not a “curse word.” Indeed, the clear rationale for tariffs in the 21st century is to attempt to achieve a rational trade-off between lower prices and “full employment.”

A truly rational trade policy would set a moderate level of tariffs for those sectors of the economy that the government of the nation decides it wants to keep and is in danger of losing. Such a policy would not create a trade war, especially since no nation in the post-Trump world will be able to resist its compelling logic.

Not a Trade War – A Healthier World Economy

Who really thinks that a sick West helps the East? We all know that China’s exports are declining. Why is that? It is simply because the EU is not buying as many goods from China. This is because the EU is being run by ideologues who have no idea about the benefits of ensuring that all parts of the European economy are running on full-steam.

I suggest that EU economists, and those elsewhere, like the Australian economic commentator mentioned above, read George Cooper’s book, Fixing Economics (2016), to gain an understanding of the importance of a wide-spread of a nation’s wealth as a means of increasing national prosperity.

Who really can argue that impoverishing farmers in Mexico, via NAFTA, is in the long-term interests of that nation? Is Mexico a happier and more cohesive society after NAFTA? I doubt it. Reforming NAFTA is very much in Mexico’s interests, just as it is in the interests of the workers in the industrial cities of America.

We can also look at Australia as a case in point. Sure, we are still ideologically committed to Free Trade (a world-leader in this phony ideology in fact), yet those who really understand the economy, like the former Reserve Bank governor, knew that the $A had to fall in order to improve Australia’s competitiveness after the resources boom. This much vaunted period of prosperity was actually disastrous for Australia manufacturing industry, with much viable manufacturing being lost (probably forever). “Fortunately” the Australian terms of trade took a catastrophic fall, thus saving us (as far as can be done) from our own folly. Tariffs were an impossible concept for us, but a falling $A did not offend the ideologues running economic policy here.

Maintain cohesion in the nation should be a government’s #1 aim in peace time. Policies that achieve this are in everyone’s long-term interests, even if the “winners” have to take 10% off their spoils from economic success.

Go Donald Trump!

TPP – A Way to Preserve First-Mover-Advantage

The TPP is presented as opening up trade between the Pacific nations, but the sub-text is preserving first-mover-advantage.

TPP – Staying at the Top

The main thrust of the TPP is intended to extend the rule of law to cover intellectual property. A secondary purpose is to stop nations from passing laws that hurt an already established advantage in the market place. In other words, to preserve whatever first-mover-advantage has already been earned (or achieved by whatever means).

It may not have been the clearly thought through intention of the legislators, but the outcome is to ensure that nations that are already poor remain relatively poorer than the richer nations.

In Australia, we have the naive dream that we will be a supplier of intellectual goods to Asia. If this dream is realized, what is the result for Asia? Are all Asian supposed to be satisfied with supplying cheap consumer goods to Australia, while the Australians supply the more expensive and more profitable intellectual goods to Asia? At least, if the TPP deal is agreed in the USA, then Australians will be able to hang onto whatever first-mover advantage it has, and the Asians will be the poorer as a result.

The USA is beginning to feel the first winds of change resulting from the availability of cheap Asian goods. Its leaders also have a dream of hanging onto their hard-won first-mover advantage, which they hope will ensure that alternative jobs will become available from those that are lost. This, of course, is a forlorn hope, as current experience with structural unemployment in the USA has already shown.

Nevertheless, despite the weakness of the case for even more free trade, the intention of the TPP is to ensure that the developing and emerging nations will remain on the teat of the West for intellectual property for as long as this can be sustained, thus keeping them relatively poorer than the West.

First Mover Advantage

Any newly emerging nation would know that an existing first-mover-advantage is very difficult to overcome. It was an issue faced in the USA during the 19th century, when the cloth and clothing manufacturers on the US east coast found that they could not compete on a “level playing field” with the British manufacturers. Those politicians in the US who wanted to build up a US manufacturing industry argued for the imposition of tariffs. Eventually the advocates of the so-called American System, which involved introducing tariffs, won the political argument, and the USA went on to become a manufacturing power-house. As a consequence, UK manufacturing dominance came to an end. It was a hard-fought fight, even though it is obvious to us now that the advocates of the American System were in the right.

China has its own strategies for overcoming first-mover-advantage. This involves a combination of tariffs, subsidies and other protective measures to support its developing and established industries. It is also claimed that the Chinese use industrial espionage and the blatant stealing of secrets to leap-frog the hurdles standing in the way of developing high-tech industries. The TPP is designed to counter both of these, at least within the developing nations that are signatories to this deal.

So, if tariffs and cheating are not open as a means of overcoming first-mover-advantage what are the options for developing nations? If anyone knows what they are, please comment on this post.

Fraudulent Arguments for Free Trade

Advocates for Free Trade often argue that it lifts poor nations out of poverty. This is only partially true; and has a very limited impact. The wages in Bangladesh for textile workers have increased from $1 day to $2 day as a result of increased exports of finished garments. Yet any attempt to push wages higher, towards Western standards, is met the fierce resistance from the textile manufacturers. They probably use the argument that an increase in pay like that will make them noncompetitive. So unless Bangladesh can come up with new industries in which they can compete, so that there are other opportunities for the Bangladeshi people to gain work at higher pay, it looks like the future for wages in Bangladesh is likely to stop at a maximum of $5 day.

Also, the advocates of Free Trade are unlikely to be the workers who will be the first to be displaced in Western nations. If Western nations can claim to be virtuous by opening their industries to fierce competition from Asia (and from Mexico and South America), it is not the advocates of this policy that will bear the cost: it is the ordinary workers on those nations. These are the workers who are unlikely to get jobs in the “winner-takes-all” high tech jobs, such as in Apple and Google.

Another fraudulent argument for Free Trade is to cite China as a shining beacon. Certainly it has benefited from the opening of trade in Western nations. But it has made the most of this situation by protecting its own industries at the same time. With this protectionism (and possibly cheating as well), it is unlikely that China would have been able to move hundreds of millions of workers from farms to the cities. It is not Free Trade on its own that has helped China to develop. It also required the Chinese government to look after the interests of its own people.

TPP is a Moral Fraud

The TPP is advocated on the basis that it will help developing nations to develop. In fact, what it is designed to do is to entrench privilege. This is not the privilege of entire nations, but rather the privilege of corporations. It is not privilege of all corporations that is being protected: it is the privilege of those corporations that have an edge that makes them the best in the world.

I don’t want my world to be come a place in which only the “very best” or most successful have a reasonable share in its abundance. I want a world in which everyone has a fair chance of success, and a reasonable opportunity for each to share in the success of his or her own nation. That is why agreements like TPP are an anathema to me, along with anything that reduces the power of democratic governments to shape their societies according the needs and aspirations of their own peoples.

Do you agree?

Climate Sensitivity – it is not Science

The IPCC has published estimates of climate sensitivity of between 1.5 °C and 4.5 °C, but are unable to provide guidance on the likely actual level, whether it is in the middle of this range, or at either extreme. This is not science!

How can it be refuted (i.e. tested) if the premier organization does not dare make a prediction? Therefore, it is not science, since there is not an explicit statement that can be tested, and if necessary, refuted.

Climate Sensitivity

The expression “climate sensitivity” represents the warming theoretically expected if CO2 doubled from pre-industrial levels.

The use of this expression might have been an attempt to make an indirect proposition more understandable to lay-people. If so, one can say that has been fairly unsuccessful, and I believe it has stifled understanding and debate, rather than encouraged it.

In scientific circles, the effect of GHGs on the atmosphere is expressed more directly as “forcing” calculated as watts per square metre (W/m2). Scientists have calculated that the additional forcing for a doubling of CO2 will be 3.982 W/m2. (At least this part of the argument is reasonably treated as “settled science.”) So, expressing it another way, the IPCC are saying that additional forcing of 3.982 W/m2 is likely to result in an increase in global average temperature somewhere between 1.5 °C and 4.5 °C.

Complicating the use of this expression of “climate sensitivity” is the fact that CO2 is not the only greenhouse gas (GHG). What they actually mean is that any increase of GHGs resulting in a total increase in forcing of 3.982 W/m2 is likely to result in an increase in global average temperature somewhere between 1.5 °C and 4.5 °C.

One might be entitled to say that the definition and implementation of the expression “climate sensitivity” is too complicated to be useful in public debate. I prefer to use a new way of expressing this, referring instead to a “forcing multiplier,” even though it may superficially seem to be more complicated,

Converting the IPCC’s range of climate sensitivity into this new measure, we can say that the IPCC’s imputed estimate of this forcing multiplier would be from 0.38 to 1.13.

Forcing multiplier

Using the “forcing multiplier” we can directly compare forcing and warming.

We know that the additional forcing (since industrialization) from all GHGs has been 3.05 W/m2. Over that period the global average temperature has increased by 0.94 °C (from -0.44 °C to +0.5 °C). This means that the observed forcing multiplier can be simplistically calculated as 0.94 / 3.05 = 0.31. Alternatively, using a more sophisticated calculation, taking into account a number of different variables, and every annual value from 1850 to 2014, we can say that the actual observed forcing multiplier is 0.37.

We can see that the actual observed values for the forcing multiplier are slightly below the bottom end of the IPCC’s imputed range.

Alternatively, we can just say that the observed climate sensitivity is slightly below the bottom end of IPCC’s range for climate sensitivity.

This is a fact, but it is not something you are likely to find in a peer reviewed “climate change” journal.

Scientific difficulties

The major difficulty faced by most climate scientists is that their models predict a forcing multiplier much higher than the actual observed forcing multiplier. Indeed, the empirical data does not confirm their scientific analysis, so their proposition remains in limbo, and effectively “not proven.”

On the other hand, scientific propositions that are supported by the observed data are not being widely canvassed in the scientific literature. (Such propositions do exist, but they quickly disappear from view. Why?)

Currently there are no (accepted) scientific propositions to establish the forcing multiplier where both science and observations meet. We are in limbo on this subject.

We can present this problem graphically. Here we show just how far the IPCC upper range estimate of climate sensitivity (or forcing multiplier) is from the actuals. From direct communications I know that some climate scientists are expecting ocean temperatures to gradually increase, with the equilibrium (higher) temperatures of the ocean taking centuries to be achieved. While temperatures in the ocean are probably lagging the land temperature increases, there is no observable indication in the following chart that such a “catch up” has had any effect so far.

IPCC Climate Sensitivity fallacy — IPCC Forecasts cannot be trusted

On the other hand, those who try to reproduce temperature data without taking into account GHGs will continue to struggle to win the argument. As can be seen, the other variables included here, like the 11 year sun-spot cycle, volcanoes, and El Nino, are not sufficient to explain the long-term trend of an increase in temperatures.

Conclusion

If the forcing multiplier remains around the level of 0.38 per W/m2, the long-term strategy dealing with the likely continuing increase in global average temperature is clear. A steady reduction in CO2 emissions in developed nations (plus China) of about 2% per year is necessary.

If, on the other hand, if the forcing multiplier rises to 1.13 per W/m2, as the IPCC seem to either expect or are not willing to dismiss, more radical action on CO2 will be required.

Yet 165 years of evidence weighs against the wildest of the IPCC estimates. Accepting and acting upon an extreme estimate is likely to lead to extreme political difficulties right across the whole planet. The precautionary principle suggests we should wait for more definite evidence before acting on such unsupported claims.

EU Tariffs on UK goods are not scary

After BrExit, the EU and UK could impose complementary tariffs on each other’s exports at a non-discriminatory level, say 10%. EU tariffs, and balancing UK tariffs would help, not hurt, the macro-economics of both.

EU Tariffs in UK Trade

Both the EU and the UK economies are unbalanced. Some parts of these economies are going very well, but other parts are struggling. Trade is the main cause of this imbalance. Reducing trade makes it more likely that a national government could regain control of its own economy.

The continuing pressure to reduce comparative costs means that there is a growing trend for more concentration of manufacturing activity. This results in some parts of the each region booming, but other parts are left destitute. Yet “Cheaper prices for everything” is a mantra, not a complete policy. This is because it results in widespread and irreparable unemployment. It is only half a policy. A complete policy would attempt to balance employment and prices over time. 100 years of unemployment, as happened as a result of the Enclosure Movement, is not acceptable in a democracy, nor is it acceptable to most clear thinking adults.

Agricultural Subsidies cause hurt

The EU is infamous for its agricultural subsidies. These reduce the prices of agricultural goods, but make farmers dependent upon government handouts, and therefore on the tax contributions of other taxpayers. It also is in flagrant breach of the spirit of the WTO rules on trade.

If the UK did not grant its own agricultural producers EU-style subsidies, the UK could help its own farmers by introducing tariffs on all imported agricultural goods from every other nation.

In addition, if the EU continues with their agricultural subsidies, the UK would be entitled to invoke anti-dumping penalties. With that prospect hanging over their heads, the EU may be prepared to consider allowing discriminatory tariffs to be imposed on EU exports of agricultural goods into the UK, over-and-above the tariff on agricultural goods from other nations.

Tariffs are better than Quotas

Quotas can have a place in food production since it is natural objective of every nation to maintain a large measure of self-sufficiency in food for cultural and defence reasons. Yet tariffs are more economically efficient than quotas. This is because they allow the market to establish a close-to-optimal division of labour between economic sectors.

Quotas are not economically efficient. They can result in much higher prices of now-scarce goods, even leading to a doubling of prices. They can also result in super-profits for importers who have a licence to import up to the quota level, since they are now dealing in scarce goods.

Pumped-Hydro the way forward

South Australia, more than almost anywhere else in the world, is ripe for a Pumped-Hydro solution to its electricity supply problem.

South Australia looks to other states to rescue it from its foolish over-investment in wind-farms. Half-baked solutions won’t fix climate change! Pumped-Hydro will fix both.

SA’s experiment in Wind-power

A 2011 study by Australian electrical engineering scientists, Nicholas Cutler, et al., “High penetration wind generation impacts on spot prices in the Australian national electricity market,” provided a useful snapshot of impact of wind power on the dynamics of electricity dispatch (supply) to the grid.

Highlights identified by the publisher from their study were:

In South Australia (SA), wind generation has an influence on market prices.
Little or no correlation is found between wind generation and demand.
Wind farms in SA are receiving a lower average price than in other States.
The results highlight the importance of appropriate electricity market design.

From this study, one can conclude that not everything in the SA electricity market is satisfactory. The problems in the system also have the effect of limiting the ability of the system overall to take advantage of the wind power being generated in SA.

As I argued in 2012, the already extensive investment in Wind-power in SA meant that the electricity supply in that state was out of balance. I also argued for an upgrade to the inter-connector with Victoria was needed to fix that problem. Indeed, this was the solution adopted by SA and the national regulator. Yet it has led to even more wind-farms being built in SA, and now the larger inter-connector cannot cope.

A few months prior to the latest electricity generation disaster in SA, the SA Treasurer replied to me that he and his government were proud of their record on approving more wind-farms.

Ridiculous tweet. Very proud of our record of renewable energy. Making things up does this debate no justice @GrahamDLovell

— Tom Koutsantonis (@TKoutsantonisMP) July 17, 2016

With an electrical storm hitting the towers carrying the wind-generated power from the north of the state, and a lightning strike on the primary facility for balancing the load in SA a few days ago, the whole state was blacked-out. Yet we can see that the SA government and the advocates of more renewable energy will not accept any blame for this situation. Instead they change the subject and talk about the higher temperatures leading to the storm. While this is likely to be the case, it has nothing to do with the viability of the particular solution adopted in South Australia, where more wind-farms have been built than the electricity infrastructure can handle.

Pumped-Hydro

A primary problem with wind energy is that electricity generated during times of low demand is effectively squandered, being sold for around $10 MWh. In SA, this “surplus electricity” problem has even caused the Pt Augusta electricity generators to be prematurely retired thus building in more instability into the electricity supply system. This has meant that, during the storm, there was not enough capacity in the system to balance the load, and the Torrens Island generators had to be switched off, creating an outage of the whole state, because of “the outage of the state!” (Of course, this explanation, offered by AGL or the State government, does not make sense.)

Inevitably, electricity is generated by wind at times when it is not needed, mainly during the night, while wind generators have no capacity to increase output during times of peak demand. This means that the electricity generated during these off-peak times is effectively wasted, and in fact adds to instability in the grid, as other generators have to be shut down to accommodate the additional power being produced. It also raises the problem that back-up generators have to be provided “just in case” the wind fails at a critical time.

The conventional solution to both of these problems is to store the electrical generated during the off-peak times using hydro. For example, Denmark do this with their wind energy, selling it to Norway and Sweden, who store it in their hydro systems, using this system “as a battery,” by pumping water uphill, and then releasing it later. These countries then sell the electricity back into the European grid at a higher cost than they bought it, thus providing themselves with a nice little earner, provided the capital cost is not too high.

Also, Pumped-Hydro is used in Australia to store electricity generated by more conventional means during off-peak times, for example in the water storage facility on the Shoalhaven River in New South Wales (NSW). Here there is a hydro-electric power scheme operated as this kind of “electricity storage” at the Fitzroy Falls Reservoir.

The idea of storing electricity via Pumped-Hydro should be a popular concept in Australia: it appeals to our natural sense of maintaining a proper balance, and using everything most efficiently. Proposals of this kind can be found on the internet. It is not possible to assess the viability of such Pumped-Hydro proposals without carrying out detailed investigations. Nevertheless, the simple proposition is that, if the pumping cost plus the cost of the off-peak electricity, plus a return on the capital cost, was less than the final sale of peak electricity then we would have a viable proposition. For example, the following rough figures help us to put the concept into context:

Electricity stored: 6 hours a day at 500 MW = 1000 GWh per annum.
Cost of electricity purchased = $15 MWh = $A15m
Electricity sold at $150 MWh = $A150m
Gross Margin of $A135m
Other costs of $A10m
Net Margin of $A125m
This could support an investment of at least $A1 billion in infrastructure.

One does not normally associate hydro electricity with SA – the driest state in the driest continent. Nevertheless, if the Pumped-Hydro concept did prove to be economically viable, one could build such a facility in SA just off the River Murray, with one end of the system being adjacent to Nildottie, where the elevation is 43 metres, and the other being just north of Sedan Flats, where the elevation is greater than 300 metres, giving a very healthy 260 metre drop, in two steps. A rough map of this location (with apologies to the owners of this land) follows:

With the UK having recently approved the development of a new uranium nuclear facility, with a guaranteed cost of £92.50/MWh, one could say that pumped-hydro is becoming a more viable concept by the day. The costs of wind + Pumped-Hydro are likely to be less than half the cost of current generation nuclear power, and has none of the very large downsides that can be attributed to nuclear.

It should be surprising that those most concerned about climate change are not pushing this concept, but it isn’t. They are obsessed with solar, and nothing but solar will meet the objective of a de-industrialized world.

It should be surprising that the advocates of nuclear, on the basis of the unreliability of wind for generating electricity, do not endorse this approach. But true believers cannot be shifted.

It looks like the burden of coming up with a viable way forward for electricity generation will be left to the politicians, but even these are so blind that they cannot see the “writing on the wall,” preferring to pursue more “sexy” alternatives.

Partition – a missed opportunity

The region of Syria and Iraq needed a political solution, namely partition. This would have saved lives as well as simplifying the military task. This means that the political map should have been redrawn to reflect political realities, rather than sticking to the arbitrary post WW I boundaries.

If the major powers had been willing to accept that partition was the only solution to the sectarian divisions of these two countries the pain on the last six years could have avoided.

War is brutal and harsh

History has shown that war is difficult to avoid when the political borders join together people groups are not willing to accept each other and to work together for the common good.

Serbian discontent, matched by Austria-Hungary determination to maintain power, can be consider to the primary trigger for WW 1.

The Syrian and Iraqi conflict show a similar pattern.

Partition – a New Political Map

Drawing a new political map for Syria and Iraq would not have been difficult. This is because there was already a defacto Kurdish regime in northern Syria, and another one in northern Iraq. Apart from the Kurdish-Arab divide, the other natural division is between Sunni Arabs and non-Sunni Arabs. A new political arrangement of this region could have provided four stable governments that could have been expected to provide security for their own people, and would not have needed or wanted to turn to either the West or Russia:

Syria – the southern and western part of the current nation.
Iraq – the Arab-Shiite dominated region in the south of the country.
Kurdistan – the Kurdish dominated parts of northern regions of Iraq and Syria.
Northern Euphrates – the Arab-Sunni dominated regions of Iraq and Syria.

In an interview recently given by President Assad, the interviewer raised the prospect of partition. Assad firmly and confidently rejected this. He now expects to win, with most of Aleppo under the government’s control.

President Obama, Commander-in-Chief for the last 7 years, missed a great opportunity for peace by refusing to countenance partition. I just hope that he has not laid the groundwork for another 50 years of strife in that region by trying to maintain old and inappropriate borders.

History

An earlier version of this article was published 12 months ago. It can found here.

Hillary Clinton Can Win Presidential Election

If Hillary Clinton moves away from free trade advocacy she is more likely to win US Presidential election.

Free Trade – an imaginary construct

We cannot escape the fact that nations are in competition with each other. Whoever does not acknowledge this is living in an imaginary world. Indeed, no-one lives in a world that can be realistically governed as if national borders do not exist. In addition, most people value many of the unique aspects of their own national culture and situation. Free trade theory assumes that national borders are of no account. Try winning an election with that 100 kg weight around your neck!

Ending un-restrained free trade will NOT end globalization, or world trade. It will regulate that process and restore economic control to the US congress. It will mean that the Congress no longer has to sit on the sidelines while jobs are lost up and down the country.

Tariffs for Developed Nations

The economies of all western nations are out of balance, with currently unresolved structural imbalances and difficult to resolve unemployment issues. Free trade theory has meant that the word “tariffs” has become a curse-word for economists and the US Congress. Yet tariffs should be in first line of defenses for the US Congress in seeking to advance the economic interests of its own people, particularly when faced with chronic unemployment. Hillary Clinton, tell your own economists to do a bit of thinking outside of the circle.

Tariffs for Emerging and Developing Nations

Any emerging nation that wants to build a diverse economy will use tariffs to help its new industries to develop. China is doing it with great success, and so did Japan, Taiwan and South Korea.

Any developing nation that avoids implementing tariffs, so that its elite can buy imported luxury goods for cheaper prices, will remain the workhouse for the West.

It is impossible for emerging and developing nations to overcome the inherent “first mover advantage” of the western nations without tariffs and other means of assistance.

What Hillary Clinton can do

Acknowledge that current trade policies have hurt many of the poorer people in the USA.
Accept that only a change to trade policies, so that they are not constructed primarily to help the already successful, will remedy the problems caused by the current trade policies.
Argue that every nation needs some measure of protection against cheap imported goods, including USA.
Undertake to discuss current trade policies with the nation’s trading partners, seeking to find a way to change them so that they work better for all nations, and not seeking only sectional advantages for one nation over another.

Jeremy Corbyn – Labour leadership

Jeremy Corbyn resoundingly won the vote of party members, holding onto parliamentary leadership of the Labour Party.

Most Labour MPs are unhappy with the decision, believing that it will be electoral poison. Some are looking for support via the unions to change the way the parliamentary leader is elected. For them, Corbyn’s re-election was a disaster; for those who like Corbyn’s socialism it was a great victory.

How can a party so fundamentally divided really work. On the one side, British Labour is dominated by members who hate profit and want to socialize everything, led by Jeremy Corbyn. On the other side, most British Labour MPs recognize that we live in a capitalist economy, with this concept being accepted by the majority of voters.

It is time for a new party in the UK that overtly recognizes the role of capitalism in generating new wealth, and also recognizes that only democratic forces will result in this new wealth being more equitably distributed. This is the true central position, and the argument for an “equitable distribution” a basis for a full-throated contest with the Conservatives.

Democratic Capitalism, not socialism, is the way forward for the UK. It is not the “Free Trade Capitalism” of the Conservatives.

Democratic Capitalism

The economic model of Democratic Capitalism recognizes that capitalism is the engine for economic development. It will deliver economic benefits that neither socialism (of the Sanders and Corbyn type) nor communism (of the Venezuelan and Cuban type) is able to deliver. Yet the 21st century has shown that capitalism needs controls, exercised via democratic processes, to ensure that it serves everyone, not just those in control of capital.

It is time that we clearly recognized the two most important economic drivers in a modern economy, Democracy and Capitalism, and stopped toying with dysfunctional alternative models, like that one presented by Jeremy Corbyn and supported by a majority of Labour members. It is quite unlikely that Corbyn’s model will be supported by a majority of UK voters, unless Theresa May badly drops the ball (which seems unlikely).

Muslim Immigration – Australian perspective

An Essential Vision survey of 1000 of its 100,000 selected “eligible” Australians showed 49% would ban Muslim immigration.

This was a shock to most commentators. While it is fair to question the methodology used, it also could be an indication of just how far elite thinking has moved from what ordinary people think. Only a survey of all voters, randomly selected, would really address the reasonable methodological doubts. Nevertheless, this survey and the vote in Australia for One Nation does indicate that there could be a real issue with Muslim Immigration in Australia at the moment.

Ban on Muslim Immigration – Reasons

Surprisingly, the #1 reason cited for supporting a ban is not “Terrorism,” but “They do not integrate into Australian society.”

The perceived lack of integration has been a typical Australian comment on large numbers of new arrivals from a particular country. It has been said about 19th century Chinese immigration. It was probably said about Greek and Italian immigrants. More recently it has been said about Vietnamese immigrants and Koreans, and now about Muslims.

It is natural for people moving to a new country to live and work in places where there are many others of the same ethnic background. As confidence grows, many new arrivals find it easy to locate themselves in the wider community. This is currently the case with Chinese and Indian immigrants, who are widely dispersed in Australian cities, with sociological factors such as education and social standing playing a much larger role than ethnic identity.

While it is possible that Muslims will prove to be a different case, since Islam traditionally has had no concept of a “secular state,” secular states have more recently operated in Muslim-majority nations, such as Lebanon, Egypt, Iraq, Syria and Indonesia. (Turkey is not a good example, as in modern times it has been a Muslim-only nation except in Istanbul.) Also the rise of sectarian conflict in Syria and Iraq, primarily Sunni uprisings against non-Sunni governments, raises questions about the willingness of Muslims to integrate into a secular society and to accept diversity of opinions.

Muslim Response is required

While “elite thinkers” can fulminate against the lack of liberal ideas among the “non-elite,” there is little that can be done to change the community perception of a lack of willingness of Muslims to integrate, unless Muslims themselves demonstrate a willingness to integrate.

Changing perception of Muslims can be led by the diverse Muslim leadership, the Imams, mosque leaders, and so on. It could begin with discouraging the use of full-face covering clothing by Muslim women. This is a cultural conditioning that does not translate well in Australia.

Overt suppression of the place of women in our society does not only apply to those who adhere to Islam. In the religious, but not in the secular spheres, it also applies to some denominations of the Christian religion. However, it appears to be more obvious in the case of Muslims, with reports of genital mutilation, polygamy, and the “bans” on Muslim women relating directly with men who are outside of the family.

Treating women in a way that appears to relegate their role to complete subservience to men will never be accepted in Australian society. Addressing this question is something that only Muslim leadership can address. Laws can prohibit the more obvious cases. For example, a ban on burqas in public buildings and events could be introduced. Laws on genital mutilation and polygamy could be vigorously enforced. But it would be far better if Muslim leadership changed the perception of Muslims by making the case that such things are not an inherent part of Islam.

What is taught in the Mosque?

I have no idea what is taught in a mosque, although we sometimes see a glimpse of a radical speaker sowing hate, either here or overseas. Such images do not build confidence in the willingness of Muslims to integrate.

Surely Muslim preachers in an Australian context are emphasizing the need for individual Muslims to earn and income and pay taxes in order to contribute to society, and not do what Mark Latham has observed, milking the welfare system of Australia at the expense of every other taxpayer. Or are they? I would love to know. On a parallel theme, one could also expect that Muslim preachers in Australia would also be teaching worshippers to pay tax according to Australian law and not blatantly defy it, as I have personally observed.

Integration not defiance

Negative perception of Muslims in Australia can be fixed by Muslims. The Essential Research poll, even if biased, shows that they have a long way to go.

COP21 and Binding Targets

COP21 chose aspirational targets, rather than binding targets. It was a good outcome for the Paris Climate Conference.

An attempt to implement binding emission reduction targets at the Paris Climate Conference, COP21, would not have achieved as much. Under that scenario, only leaders who were being pushed by an ideological agenda would have made substantial commitments. As it turned out, only China held back from making a reasonable commitment, while actually working behind the scenes to take more drastic action (or at least that is what we currently think).

COP21 – not the IPCC

The IPCC has been ideologically blinded by its 1990 ambition to model the climate out to the future. This has proven to be “too difficult.” In response the “true believers” in this strategy have committed themselves to outrageous advocacy of a “climate disaster” position.

This is well illustrated in an article by Glen P. Peters, Robbie M. Andrew, Tom Boden, Josep G. Canadell, Philippe Ciais, Corinne Le Quéré, Gregg Marland, Michael R. Raupach and Charlie Wilson, “The challenge to keep global warming below 2?°C,” NATURE CLIMATE CHANGE | VOL 3 | JANUARY 2013. In this article, it was claimed that the world was on a trajectory of totally out-of-control climate change (represented on the chart below as RCP 8.5).

The authors constructed a chart to demonstrate their point, and made a prediction of 2012 CO2 emissions that was more like a guess that supported their proposition. The Australian CSIRO even cited this article to me in 2015, even though evidence from 2011, 2012, 2013 and 2014 CO2 atmospheric levels showed that emissions were likely to have fallen below the estimates in this graph.

It is now clear that Peters, et al. were wrong. Despite this, the orthodox position is that the collective known as the IPCC can do no wrong. Yet the politicians at COP21 do not appear to have believed them. They came up with plan that would actually work, which was not based on a “climate disaster” scenario, such as presented by Peters, et al.

We can compare the outrageous predictions of IPCC-linked climate scientists with the actual likely outcome, at least as indicated by hard evidence of the actual known CO2 atmospheric levels up to the end of 2015.

CO2: COP21 outcomes vs IPCC — Likely CO2 vs. IPCC “representative concentration pathways”

A caveat has to be raised for 2016, since the atmospheric levels of CO2 have risen much more than expected. Most of this increase can be attributed to the El-Nino effect, with a higher temperature resulting in more CO2 being released from the ocean. However, this does not entirely explain the increase, and we have to wait until June 2017, when the El-Nino effect has been fully purged from the data to be really sure about this. (Earlier I had written that the extra atmospheric CO2 was possibly due to emissions from the Middle-East war. While the war did increase atmospheric CO2, I am willing to concede that it is both temporary and was dwarfed by the El-Nino effect. I have now a more robust explanation, but publication of that explanation, even in this form, will have to wait until after June.)

CO2

A close to ideal strategy would be something like a 2% reduction in CO2 emissions per year per nation for the next 10 years from a 2013 base. COP21 did not adopt this target, but it headed in this direction.

Such a target is only fairly applied to those nations above the world average per person of CO2 emissions of around 5 tonnes per person. Using 2010 data, the following are the most important countries in regard to CO2 emissions:

China – 8 billion tonnes per year – 6 tonnes per person – 2% target applies
USA – 5 billion tonnes per year – 17 tonnes per person – 2% target applies
India – 2 billion tonnes per year – 1.6 tonnes per person – no reduction target
Russia – 2 billion tonnes per year – 12 tonnes per person – 2% target applies
Japan – 1 billion tonnes per year – 9 tonnes per person – 2% target applies
Germany – 750 million tonnes per year – 9 tonnes per person – 2% target applies
Iran – 570 million tonnes per year – 7 tonnes per person – 2% target applies
South Korea – 560 million tonnes per year – 11 tonnes per person – 2% target applies
Canada – 500 million tonnes per year – 13 tonnes per person – 2% target applies
UK – 500 million tonnes per year – 8 tonnes per person – 2% target applies
Saudi Arabia – 460 million tonnes per year – 16 tonnes per person – 2% target applies
South Africa – 460 million tonnes per year – 9 tonnes per person – 2% target applies
Mexico – 440 million tonnes per year – 4 tonnes per person – no reduction target
Indonesia – 430 million tonnes per year – 2 tonnes per person – no reduction target
Brazil – 420 million tonnes per year – 2 tonnes per person – no reduction target
Italy – 410 million tonnes per year – 7 tonnes per person – 2% target applies
Australia – 370 million tonnes per year – 16 tonnes per person – 2% target applies
France – 360 million tonnes per year – 5.5 tonnes per person – down to 5 tonnes
Poland – 320 million tonnes per year – 8 tonnes per person – 2% target applies
Ukraine – 300 million tonnes per year – 7 tonnes per person – 2% target applies
Turkey – 300 million tonnes per year – 4 tonnes per person – no reduction target
Thailand – 300 million tonnes per year – 4.5 tonnes per person – no reduction target
Spain – 300 million tonnes per year – 5.5 tonnes per person – down to 5 tonnes
Kazakhstan – 250 million tonnes per year – 14 tonnes per person – 2% target applies
Malaysia – 220 million tonnes per year – 7 tonnes per person – 2% target applies
Egypt – 200 million tonnes per year – 2.5 tonnes per person – no reduction target
Venezuela – 200 million tonnes per year – 7 tonnes per person – 2% target applies
Netherlands – 180 million tonnes per year – 11 tonnes per person – 2% target applies
Argentina – 180 million tonnes per year – 4 tonnes per person – no reduction target
UAE – 170 million tonnes per year – 18 tonnes per person – 2% target applies
Taiwan should also be included, but is not listed in the UN data.

Methane

It is interesting that Methane is not the problem that IPCC predicted it would be. However, holding Methane emissions levels constant could be a good aspirational target.

Nitrous Oxide

Nitrous Oxide, particularly from transportation, is not open to easy attack. A solution to the growth in nitrous oxide emissions will probably depend upon the development of electric cars as a viable alternative to petrol and diesel vehicles. That is likely to be 10 years away. The target here could be to develop alternatives to current vehicle engines in that period.

HCFCs

Similarly, while atmospheric levels of CFCs are declining, atmospheric levels of HCFCs are growing. The target here could be to develop alternatives to HCFCs over the next 10 years.

History of this discussion

An earlier version of this article was published before COP21. It can found here.