Sunday, May 29, 2016

The difference between "left" and "right"


There are an awful lot of poorly considered political arguments out there, but one of the absolute worst is the claim that there is no difference between left-wing and right-wing.

In this article I'm going to explain the difference, take a look at how such confused claims that there is no difference come about, and then take a quick look at why the simplistic left vs right paradigm (although meaningful) is still far too simplistic.



The difference between left and right

The main difference between left-wing and right-wing politics is about economic organisation.

Economically left-wing

Left-wing politics focuses on the public ownership and operation of essential infrastructure and services such as the health service, public transport networks, schools, the police & army, the land registry, mail service, energy infrastructure, social housing. The further towards the far-left you go, the more things are classified as public property and the fewer things are allowed to remain under private ownership.


Economically right-wing

Right-wing politics focuses on the private (and often unaccountable) ownership and operation of essential infrastructure and services such as the health service, public transport networks, schools, the police & army, the roads, the land registry, the mail service, energy infrastructure, social housing (while the public still pays the cost of building/maintaining these things through their taxes). The further towards the far-right you go, the more things are classified as private property and the fewer things are allowed to remain under public ownership.

Other differences

Aside from the core economic difference between left and right there are some other differences too. One of the important common distinctions is that left-wing politics often has a focus on directly combating poverty and inequality, while right-wing politics tends to work on the (ridiculous) assumption that deregulated markets and increased private ownership will tend to reduce poverty and inequality.



Another difference is that left-wing politics has more often been associated with liberal social values than right-wing politics. This traditional association between left-wing political groups and liberal social values sprung up because of the obvious difficulty in reconciling the left-wing desire for greater equality with the practices of overt social discrimination (against women, ethnic minorities, homosexuals, disabled people ...) that existed in the past. 

It's important to remember that although the political left has been in retreat for the last four decades or so, liberal social values have been in the ascendancy. In modern Britain we have anti-discrimination laws and gay equality, yet only a few decades ago homosexuality was considered a "crime" worthy of punishment by chemical castration and racial discrimination was all too common (see the openly racist Tory election leaflet from Smethwick in 1964).


The left is more often associated with social liberalism and the right with social conservatism, however liberal social values are clearly not a necessary condition of left-wing politics, and social conservatism is not a necessary condition of right-wing politics. It's perfectly possible to be an economically left-wing bigot, just as it's possible to be economically right-wing and oppose social discrimination.

How the confusion arises

The increasingly common confusion between left-wing and right-wing politics has arisen as a result of a number of factors. In this section I'll detail a few of the important ones.

Political propaganda

One of the main reasons that people struggle to grasp the difference between left-wing and right-wing politics is the way that modern political discourse is framed by the mainstream media.

The UK has the most right-wing biased press in Europe. This means that political coverage is more often than not skewed with an extreme right-wing bias. It's almost impossible to find anything resembling accurate definitions of left-wing and right-wing politics in the mainstream media. The situation has got so bad that social democrats like Jeremy Corbyn (who believe in finding a balance between state socialism and regulated capitalism) are routinely derided as being "dangerous", "radical" "extremists" from the far-left, while the radically right-wing "privatise absolutely everything we can get away with" Conservatives are treated as if their hard-right policies are centre-ground, moderate, common sense and fundamentally beyond question (this refusal to question is particularly noticeable with the widespread acceptance of the macroeconomically illiterate policy of austerity in the mainstream media).

As result of the extreme bias of the right-wing press we've found ourselves in the extraordinary position where the traditional social democratic centre ground is routinely derided as the extreme-left, while the ideologically driven austerity and mass privatisation policies of the most fanatically right-wing UK government in living memory are treated as they are essentially beyond question by the vast majority of journalists.


"Third way" politics

One of the other main causes of confusion between left-wing and right-wing politics is the way that so many nominally left-wing political parties abandoned left-wing politics in order to embrace right-wing economic policies like privatisation, financial market deregulation, globalisation and free-trade. Bill Clinton and Tony Blair were two of the first to convert traditional left-wing political parties to pushers of right-wing economics, but they were far from the only ones. PASOK in Greece and PSOE in Spain are two other high profile examples of supposedly socialist political parties that were guilty of embracing hard-right economic policies.

This rightward shift in mainstream politics contributed to the confusion between left and right because swathes of the mainstream media continued to refer to parties like New Labour as "the left" and "socialists" even though they were blatantly pushing right-wing economic policies like the privatisation of public property, PFI, financial deregulation and de-industrialisation. No wonder people began to get confused when the supposedly "left-wing" political party was busy pushing exactly the same kind of right-wing policies as their conservative predecessors.


The immigration debate


The tabloid framing of the immigration debate is another contributor to the confusion between left-wing and right-wing politics. The tabloid press in the UK love to blame "the left" for mass immigration even though the open borders policy in the EU is clearly a right-wing free market economic policy.

The tendency to blame "the left" for mass immigration is inaccurate for a number of reasons. It's a right-wing free market policy that favours employers over employees; the New Labour government that oversaw a big increase in net migration was an economically right-wing  one; the Tory government that followed them has overseen the biggest spikes in net migration in recorded history and it's the most right-wing government in living memory.

When the tabloid press are intent on blaming the consequences of right-wing economic policies imposed by right-wing governments on "the left" (which hasn't been in power since 1979), it's no wonder so many people get confused.


It's more complicated than "left vs right"

The difference between left-wing and right-wing politics is undeniable, but it's simply not sufficient to rely on this one-dimensional distinction alone. I've already addressed the fact that social liberalism and social conservatism are distinct from left and right wing economic policies, then there's the distinction between libertarian and authoritarian style governance to add into the mix too.

Instead of viewing the political spectrum as a simplistic one dimensional line between left-wing and right-wing, it's possible to add other parameters to create more detailed political spectra like the political compass.

The fact that the majority of modern mainstream political parties have occupied the upper right quadrant of the political compass makes it clear where a lot of the confusion is coming from. If the distinction between right and left in mainstream politics has been measured by the difference between a radically right-wing authoritarian party (the Tories) and a slightly less right-wing authoritarian political party (New Labour), then it's no wonder people begun to believe that left and right are essentially the same.

The problem isn't that there's no difference between left and right, it's that mainstream politics has become increasingly confined within the right-wing authoritarian quadrant of the political compass, while other areas of political discourse like left-libertarianism (my kind of politics) and right-libertarianism have been left almost completely unrepresented within the political establishment.


Conclusion 

If you believe that pretty much everything should be public property (either run directly by the state or through more anarchist methods like local syndicalism) then you're very left-wing.

If you believe that pretty much everything should be private property (including essential infrastructure and services like the health service, education system, road networks, the police, public transport ...) then (like the Tory government) you're on the extreme-right.

If you believe in some kind of compromise where some essential infrastructure and services (the police, the roads, the education system, the health service ...) are best off run as not-for-profit public services, while other things (non monopoly businesses, private dwellings, personal property) can be privately owned, then, like Jeremy Corbyn, you occupy the traditional centre-ground.


Just because, for whatever reason, people are incapable of recognising the distinction between left-wing and right-wing politics, doesn't mean that the distinction doesn't exist.


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Saturday, May 28, 2016

Tony Blair's attacks on Jeremy Corbyn


Tony Blair's latest attack on Jeremy Corbyn once again proves the validity of the "red Tory" accusations that are leveled at Tony Blair and the right-wing fringe of the Labour Party.

It's no surprise that Blair can't stop himself from publicly attacking Corbyn, because Corbyn was one of the most troublesome Labour MPs during Blair's years as Prime Minister. Corbyn opposed all kinds of right-wing Blairite policies like the reliance on rip-off PFI deals to load the cost of public infrastructure projects onto future generations and various other privatisation scams, as well as opposing Blair's invasion and occupation of Iraq (which created an appalling power vacuum that gave rise to a devastating wave of sectarian violence culminating in the rise of ISIS). Nobody would expect Blair to be delighted that the Labour Party is being led by one of his most defiant MPs. However, if Blair had any affinity for the Labour Party whatever, it would be far from unreasonable to expect him to accept the will of the Labour Party membership and avoid helping the Tories by launching one public attack after another against the current leader of the Labour Party.

The problem of course is that this kind of expectation relies on the assumption that a former leader of the Labour Party would actually give a damn about the Labour Party. Blair clearly doesn't. If it wasn't already completely clear that Blair simply used the Labour Party as a vehicle to fulfill his own personal ambitions, the string of vitriolic attacks against Jeremy Corbyn (and the Labour Party members who voted for him) are clear demonstrations that Blair has no affinity for the labour movement whatever. Now that the Labour Party has served its purpose to him, he's perfectly happy to help the Tories by constantly attacking the Labour leader instead of focusing on what the Tory government are up to.

In consideration of some of the fanatical and corrupt stuff that the current Tory government have been doing, it's utterly extraordinary that Tony Blair has decided to claim that the election of a Jeremy Corbyn led Labour government would be "a very dangerous experiment".

Here are just a few of the appalling things the Tories have been doing that Blair has been too busy attacking Jeremy Corbyn to bother speaking out against.

The austeirty con: It's extraordinary that so many people are gullible enough to fall for the Tory austerity narrative. Austerity has absolutely nothing to do with "living within our means" or "paying down the debt" (the debt grew by £76 billion in 2015-16 despite Osborne promising in 2010 that we'd actually be paying it back by now!). Tory austerity and debt fearmongering is the smokescreen behind which they have been distributing public assets to their private mates at an unprecedented rate and deliberately transferring wealth from the majority to the super-rich minority.
Blair never speaks out against austerity because he agrees with the objectives of privatising the state and the transference of wealth from the ordinary public to the super-wealthy minority. Ed Miliband screwed up the 2015 election because he listened to Blairites like Ed Balls' who advised him to run an austerity-lite campaign instead of attacking the Tory austerity con head on. Jeremy Corbyn absolutely stormed the Labour Party leadership contest because he was the only one of the four candidates who dared to point out that austerity is a con that needs to be actually opposed by the main opposition party.
Mass privatisation: George Osborne is currently distributing public assets to the private sector (often at massive losses to the taxpayer or completely for free) at a faster rate than any other Chancellor in history.
Tony Blair never speaks out against the unprecedented scale of Tory privatisation because he doesn't actually see any problem with it. In fact Blair's ministers actually assisted the Tories in kicking down the barriers to mass privatisation of pretty much the entire UK state by passing legislation to allow privatisation in the NHS and introducing privately operated (but publicly funded) academy schools.
Tax Credit Cuts: Despite their pre-election promises that they wouldn't be slashing Tax Credits (social security that provides support for the working poor whose bosses don't pay them enough to even live on), the Tories pretty much immediately set about trying to slash them.
Tony Blair didn't take the opportunity to criticise the Tories for breaking their election promises, or for impoverishing the working poor. Jeremy Corbyn did, and after a stinging House of Lords rebellion the Tories were forced to think of a different way of impoverishing the working poor in order to fund tax cuts for the rich.
Misreatement of the disabled: After the Tories voted to force through a £1,500 per year cut in the incomes of people who are too sick/disabled to work, George Osborne's 2016 budget included measures to further impoverish disabled people by slashing £4.4billion in Personal Independence Payments, whilst simultaneously handing a string of tax cuts to corporations and the super-rich.
Tony Blair didn't complain about this Tory policy of funding tax cuts for corporations and the super-rich by impoverishing disabled people. Jeremy Corbyn opposed it strongly and George Osborne was soon forced to drop his latest economic assault on disabled people after a large public backlash.
Privatisation of the English education system: Another feature of George Osborne's 2016 budget was the announcement of a Tory plan to force privatise every single school in England by 2022.
Tony Blair didn't bother speaking out against the forced privatisation of every single school in England, but Jeremy Corbyn did. Since the announcement in March 2016 the Tories have backtracked a little bit, saying that the best performing Local Authority schools will be exempt from forced privatisation, but thousands of other schools remain at risk of being given, for free, to corrupt and unaccountable private sector pseudo-charities like Perry Beeches.
Human rights:  The utter Tory contempt for human rights is absolutely clear. They've already managed to abolish the concept of open justice with their 2013 "Secret Courts" act and hastily rushed through legislation to allow the secret services to carry on with the mass trawling of public data that the Snowden leaks revealed that they had been doing unlawfully. Now they're intent on tearing up the right to free speech and the presumption of innocence. In order to destroy these long-established British rights, they're intent on tearing up the Human Rights Act and withdrawing the UK from the European Convention on Human Rights.
Since it was Blair's first government that introduced the Human Rights Act, one might have thought that he'd be a little more vocal in defending it. However he's been far too busy slinging muck at Jeremy Corbyn to bother much about speaking up in defence of our human rights that are under such threat from the Tories.
Tory Election fraud: The majority of the mainstream media has been extremely reluctant to cover the story, but the fact remains that the Tories stand accused of cheating their way to a majority in the 2015 General Election by breaking election rules in order to financially dope a large number of marginal constituencies. There are numerous ongoing police investigations into the Tory policy of misdeclaring electoral expenses in order to give themselves an unfair advantage.
Instead of using his influence to draw attention to the fact that the current government are under investigation for electoral fraud, Tony Blair decided that his time would be better spent attacking the current leader of the Labour Party!
Conclusion


In this article I've limited myself to just six subjects where Tony Blair could have actually helped the Labour Party by criticising the Tory government, instead of launching yet another bitter attack on Jeremy Corbyn. There are plenty of other things that Blair could criticise the Tories for too (immigration, divisions over the EU, fracking, foreign policy, attacks on labour rights, the Land Registry sell-off, the ridiculous energy price-fixing deal with France ...) but he continues to repeatedly focus his criticism on Jeremy Corbyn.

Blairites tend to get extremely irate if you accuse them of being "red Tories". But when their ideologue keeps persistently assisting the Tories by attacking Jeremy Corbyn, and has even openly admitted that he'd rather see the Tories in power than a Labour Party led by Jeremy Corbyn, their anger seems to totally unjustifiable. Those within the Labour Party who still worship at the altar of Blairism should admit to themselves that their leader is clearly much more closely aligned with the interests of a Tory Party that is being run by a fanatically right-wing bunch of zealots, than he is with the interests of the Labour Party.


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Thursday, May 26, 2016

How we talk about the problem of online abuse is important

 
Identity politics is a controversial subject. I've been shouted down and had an awful lot of criticism and insults hurled at me for expressing my opinions in the past, but I'm going to have another go at it regardless.

On May 26th The Guardian ran a piece entitled "Research reveals huge scale of online misogyny" illustrated with a crudely doctored picture of a group of shouting men saying "Look out!" and "A woman's about to have her say" captioned with details of a study showing that over 80,000 women on Twitter had been called "slut" or "whore" in a three week period.

The article went on to detail cross-party collaboration between the Blairite Labour MP Yvette Cooper, the disgraced expenses scamming former Tory minister Maria Miller, the new Labour MP Jess Phillips and the former Lib-Dem MP Jo Swinson (who lost her Dumbarton seat in the 2015 SNP landslide).

What the headline, subheading, image and image caption and introductory paragraphs completely left out was the fact (grudgingly admitted in the fifth paragraph) that the majority of people abusing women by hurling online insults like "slut" and "whore" at them were actually other women!
 
Repeated use of the word misogyny by Demos and the Guardian to describe an appalling tide of online abuse that is mainly perpetrated by women against other women is clearly misleading. It shows an unwillingness to break out of the identity politics driven narrative that online abuse is mainly nasty men hurling gender specific insults at women in order to shut them up. They clearly continued this charade even when their very own evidence showed that the majority of gender specific insults hurled at women are hurled at them by other women.
 
Instead of simply labelling all of these insults by women against other women as misogyny, surely it would be more useful to actually ask why so many tens of thousands of women across the world consider it acceptable to call other women "sluts" and "whores"?
 
To illustrate how ludicrous the Guardian/Demos stance is; if all gender specific insults hurled at women by other women are categorised as misogyny, then surely it stands to reason that all gender specific insults by men against other men ("dick head", "wanker" "creep" ...) should be categorised as misandry? Is a guy a misandrist man-hater if he calls me a "dick head" because he hates my political opinions? Of course he isn't. He's just too inarticulate to argue against what I say which makes him so angry and frustrated that he bashes some insulting words into his keyboard.

There is no excuse for online abuse. It doesn't matter if it's men abusing women, women abusing women, women abusing men, men abusing eachother, or abuse towards or by transgender folk, it's all unacceptable.

Efforts to compartmentalise all abusive comments against women as misogyny are not helpful at all, especially if the majority of cases actually appear to be perpetrated by women against other women.

Misogynistic abuse is a real and very serious problem and more needs to be done to combat it, but making the numbers look more damning by lumping in every instance of a teenage girl calling a female rap star a "slut" because the rapper had a big Twitter spat with some ex-boyband singer doesn't make the case against online misogyny more compelling, it makes it significantly weaker.

The teenage girl isn't tweeting abuse at the female rapstar because she hates women and wishes to see successful women like the rapstar intimidated and repressed, she's doing it because she's too inarticulate to express her anger coherently, and because she thinks she can get away with it.

The root of the problem isn't the fact that most of the people who receive the worst online abuse are generally women (the evidence indicates that this is definitely the case). The fact that high profile women tend to get the worst of the abuse is one of the symptoms of the problem, and it's a lot more complicated than the misleading Guardian/Demos "misogyny" narrative. The actual root of the problem is twofold.

The first problem is that there are an awful lot of people who are so bad at debating that they consider insults, abusive comments and threats to be legitimate tactics, rather than open displays of their weak debating skills and childlike propensity to snap into tantrum-like rages. This problem is exascerbated by celebrities who resort to insults, abuse and threats at the slightest provocation.
The LBC pundit Iain Dale calling Paul Mason a "twat" on Twitter (after Mason dared to question the neoliberal orthodoxy a bit on Question Time - which is normally a closed neoliberal talking shop) is a great example. Not only did Iain Dale resort to blatant abuse at hearing political opinions he didn't like, he then actually had the utter lack of self-awareness to start whinging about the "abuse" he was getting as a consequence of writing an abusive comment. When celebrities feel free to behave like this on social media, it's absolutely no wonder that ordinary social media users feel entitled to behave in similar ways.
 
The second problem is that people will continue slinging abuse as long as they feel that they can get away with it. It doesn't matter if it's horrible misogynistic blokes hurling abuse and threats at successful women, women slinging gender specific insults at other women, orchestrated online bullying campaigns by teenagers against their peers, people abusing the mentally ill and using mental health terminology as insults, homophobic or transphobic abuse, racism, or whatever. The perpetrators feel they can behave in these appalling ways because they don't suffer any negative consequences for it. In traditional community environments people who flip into slinging insults, appalling abuse, and threats of rape or other physical violence at the slightest provocation (or simply because they hate women, ethnic minorities, homosexuals, the neuro-atypical ...) would soon be ostracised by the community, but on the Internet they roam free, with only a tiny minority of the worst offenders ever being held to account for their disgusting behaviour.

There is no denying that online abuse is a big problem, however compartmentalising it into different strata of abuse so that gender specific insults against women are "misogyny" (even if most of this abuse is actually perpetrated by other women), and making it somehow a distinct and more concerning problem than other forms of online abuse is a really misleading and counter-productive approach.

Reducing the problem of online abuse to crude men vs women stereotyes in some appalling identity politics parade is a distraction that sidesteps the main problems, which are that a lot of people (both men and women) are so inarticulate and emotionally unstable that they flip straight into slinging insults, abuse and threats at the slightest provocation, and that these people feel empowered to continue behaving in this appalling manner because they suffer no negative consequences when they do it.

Until the root causes of the problem are addressed, it won't matter which way the abuse is compartmentalised (misleadingly or not), because the problem won't be going away.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.




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Wednesday, May 25, 2016

QE for the bankers failed, time for something else

 
 
After the 2007-08 global financial sector insolvency crisis the Bank of England began creating money via a process called quantitative easing (QE) in an attempt to prop up the UK economy. This 'new money' was distributed to the private banks that caused the financial sector meltdown in the first place. If the purpose of this exercise was to stimulate an economic recovery it was an abject failure (the UK suffered the slowest post-crisis recovery in economic history), but if the process was intended to further enrich the wealthiest people in society it was a roaring success.

How QE for the bankers failed

It's absolutely clear that the original £375 billion tranche of quantitative easing cash from the Bank of England benefited the wealthy minority. This isn't just my opinion, the Bank of England openly admitted that at least 40% of the benefit of their quantitative easing programmes went to the wealthiest 5% of households.

Anyone who understands basic macroeconomics will know why the accumulation of the majority of 'new money' by the wealthiest minority is a poor economic outcome. The super-rich are very much more likely to hoard any additional wealth they receive than the poor and ordinary. Ordinary people are much more likely to create economic demand by going out and spending it.
 
If monetary policy results in a ten figure windfall for the super-rich minority then the majority of it is likely to end up re-inflating the property market, re-inflating the stock market or getting stuffed in secretive offshore tax-havens.

If further enriching the wealthiest minority and re-establishing the economic conditions that existed before the 2007-08 meltdown were the objective then QE for the bankers was highly successful. If the objective was to stimulate any kind of economic recovery QE for the bankers was an  absolutely appalling waste of £375 billion.
 
Alternative forms of QE

 
If the benefits of 'new money' are distributed in different ways then the economic benefits could be much better. There are two main ways in which quantitative easing can be used differently in order to avoid the situation where the majority of the 'new money' ends up inflating unsustainable asset bubbles or stuffed into tax-havens.
 
Direct Quantitative Easing
 
Instead of creating 'new money' and distributing it to the private banks to do whatever they like with it, Direct QE cuts out the middle man and directs the 'new money' towards economically beneficial projects.

There are plenty ways a government intent on creating prosperity could use Direct QE cash to stimulate the economy and make the UK an attractive place to do business. High speed broadband for every home and business in the UK, improvements to our dilapidated public transport infrastructure, investment in the education system, science and R&D, pro-active health policies to keep the UK workforce in better condition, investment in renewable energy projects and energy-saving technologies ...
 
This quote from the respected economics professor Robert Skidelsky makes the case for Direct QE.
"The only way to ensure that 'new money' is put into circulation is to have the government spend it. The government would borrow the money directly from the central bank and use it to build houses, renew transport systems, invest in energy-saving technologies, and so forth. Sadly, any such monetary financing of public deficits is for the moment taboo. It is contrary to European Union regulations – and is opposed by all who regard post-crash governments' fiscal difficulties as an opportunity to shrink the role of the state." [source]
Skidelsky is making the case that if the central bank is going to magic money out of nowhere via quantitative easing, it would be better given to the government to invest in infrastructure projects and services (creating jobs and economic demand in the process).
 
'Helicopter money'
 
The other form of QE that would likely be far better for the economy than simply handing out 'new money' to the bankers who caused the economic crisis in the first place is nicknamed 'helicopter money'.

The idea of 'helicopter money' QE is that the central bank should distribute an equal share of the 'new money' that they create to each citizen. For example, if the Bank of England creates £65 billion in quantitative easing money, then each citizen in the UK should get a citizen's dividend of around £1,000 each.

Some people might try to argue that giving an equal share of 'new money' to every person is some kind of communist lunacy, however a citizen's divedend form of QE is actually quite a free market policy in comparison to QE for the bankers (handing control over the distribution of 'new money' to an elite group of establishment insiders). In fact the nickname 'helicopter money' was popularised by the right-wing ideologue Milton Friedman.

Reforming EU policy
 
As Skidelsky pointed out in the quote above the current policy of the EU blocks the European Central Bank or the central banks of other member states (like the Bank of England) from using Direct QE to fund infrastructure projects and stimulate economic demand. As far as the EU is concerned it's only acceptable to create 'new money' if it is distributed to the banks so that it can be used to benefit the wealthy minority at the expense of everyone else.

The solution to this problem would be for the UK government to demand that EU law be changed to allow quantitative easing money to be used in ways that benefit the whole economy, rather than exclusively benefiting the wealthiest minority. However the obvious problem is that the UK government is a Tory one with no interest in doing anything but serving the interests of the wealthiest minority, (serving the interests of their wealthy backers is the central ideology of the Tory party). It's obviously an utterly ludicrous fantasy to imagine a Conservative government lobbying the EU for them to overturn a monetary policy that exclusively benefits the rich at the expense of wider society and the economy as a whole.

Tory slash-the-state fanaticism
 
Another point that Skidelsky raised in the above quote is the way that many (including the Tory government) "regard post-crash governments' fiscal difficulties as an opportunity to shrink the role of the state". It's refreshing to see an economist admit that this is what the Tories are up to.

There's no way that the Tories would ever adopt a policy of Direct QE because using the state to administer an economic recovery where the private sector banks had manifestly failed would be a massive refutation of their core ideology that (despite all of the evidence to the contrary) the private sector is always more efficient than the state.

It's astonishing that such a huge number of people fell for the Tory austerity con. Even when they first started with their absurd "we must cut our way to growth" propaganda campaign it was obviously complete gibberish, but after six years of it, it's now absolutely clear that the austerity narrative is nothing more than a smokescreen to cover up the same old Tory policies of distributing as many state assets as possible to the private sector and the transference of wealth from the majority to the wealthiest minority.

As long as the UK is governed by a bunch of ideologically driven right-wing fanatics we'll be stuck with their economically toxic austerity dogma and the idea of the UK government administering a direct stimulus led recovery will remain a complete fantasy.

Corbynomics
 
The mainstream press have done such a consistent job of attacking and belttling Jeremy Corbyn that very few people actually understand what his economic policies are. For every column inch written about Corbyn's plans for the economy there's doubtless been hundreds of inches of absolute drivel written about how he's scruffy, too old, too left-wing, didn't sing the national anthem, didn't bow deeply enough at the Cenotaph ...

One of the most absurd and oft-repeated criticism is that Corbyn would take us back to the 1970s when what he is actually proposing is the use of Direct QE to fund infrastructure projects, which is clearly a modern progressive policy, albeit one that is based on a wealth of evidence from economic history rather than pure ideology like Tory austerity.

The Skidelsky quote above is actually a glowing commendation of Labour Party economic policy and a blatant swipe at Tory ideological austerity. Of course right-wing austerity fetishists will resort to the age old tactic of trying to smear their critics as lunatics, however with Skidelsky it's a bit of a problem given that he's is a former House of Lords Treasury spokesman for the Tory party! It's  obviously a little bit difficult for Tory tribalists to smear someone as just a "loony leftie" when they're a respected economics professor and former Tory party treasury spokesperson.

Blairite Shills

One of the most dispiriting things of all when Jeremy Corbyn announced his Direct QE policy was the way that a number of Blairites in the Labour Party joined in with the Tory chorus of disapproval, even going as far as calling Direct QE "economically illiterate".

Some of the worst offenders were Yvette Cooper (wife of Ed Balls, the architect of Labour's disastrous 2015 austerity-lite election campaign) and Chris Leslie (Ed Balls replacement as shadow chancellor).

It was utterly bizarre to see so-called Labour Party politicians furiously attacking Direct QE (a policy of stimulating the economy by improving infrastructure and creating jobs) and defending the failed policy of QE for the bankers (a strategy that resulted in a massive bonanza for the super-rich minority and pretty much nothing good for anyone else).

It just goes to show how much work Jeremy Corbyn has got to do to turn the Labour Party into a genuinely progressive party when so many Labour MPs so clearly favour the interests of the extremely rich over traditional Labour values like social justice, jobs and prosperity for all.

Conclusion

On the positive side it's great to see Skidelsky talking a bit of economic sense. After six years of economically toxic austerity gibberish it's about time more economists stood up and proposed alternatives like Direct QE.

If the Bank of England is going to use quantitative easing to create more 'new money' then it will need influential economists like Skidelsky arguing against a repetition of the failed QE for the bankers experiment.

On the negative side the UK political establishment looks to be stuck with a bunch of ideologically driven right-wing fanatics for the forseeable future, and as long as economic policy is dictated by hard-right economic ideology, the concept of the UK benefiting from any kind investment led recovery is a complete pipe dream.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

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Tuesday, May 24, 2016

The fracking = lower energy bills myth


In the wake of the decision by Tory dominated North Yorkshire County Council to approve a fracking licence just a few miles south of the North York Moors national park, the fracking apologists have been out in force to try to defend the decision to completely ignore the massive 131:1 scale of opposition to the plans.

One of the favourite tactics of the fracking apologist is to pretend that there is some kind of correlation between fracking and lower domestic energy bills. In this article I'm going to explain how this argument is not only wrong, but actually completely backwards.

Evidence-free assertions

The claims that the introduction of fracking rigs in the English countryside would bring down domestic energy bills is a classic evidence-free assertion. Fracking enthusiasts just seem to take it as an article of faith that fracking would reduce domestic energy bills in the UK. It's like some kind of unquestionable religious to these people.

If you see anyone making these claims it's a good tactic to ask them to direct you to a peer reviewed scientific study detailing a link between fracking and low energy prices in the UK domestic energy market. They won't be able to do so because no such study exists. They'll just continue repeating the claim on the basis that it's true because they want it to be true.

The UK is not the US
 
Evidence of devastating environmental damage in the US and "cut and run" tactics from unscrupulous US fracking companies who abandon their fracking rigs for the taxpayer to clean up is shrugged off by fracking enthusiasts with the excuse that those things happened in the US and it will all somehow all be different in the UK. However, when it comes to their stories about fracking leading to lower energy prices, they immediately point to the fall in domestic gas prices in the US as if it represents compelling and unquestionable evidence.

It would be easy to dismiss such tactics as "wanting to have their cake and eat it" because it is about as clear an example as possible, but there are some specific reasons that direct comparisons between the US and UK dometic gas markets are desperately misleading.

The early 21st Century fracking boom in the US did lead to a fall in domestic gas prices in the US, but their gas industry was not set up for the mass export/import of gas, so the majority of additional supplies remained within the US market, which created a glut which drove down the price of gas. Not only is the US gas market not set up for mass exportation, there are also
laws to disincentivise US firms from exporting energy.

The UK gas industry is very different. The UK gas market is much more interconnected with other countries. If gas production rose in the UK, then domestic prices would be unlikely to fall far because the UK gas market is nowhere near as closed as the US market. In order to significantly reduce domestic gas prices, the UK would need to begin extracting a vast enough quantity of shale gas to impact the entire European gas market. Anyone who thinks that is likely to happen any time soon clearly has no idea whatever about the scale of Russian gas exports to the European market.
In 2015 Gazprom (the Russian state gas monopoly) exported 159.4 billion cubic metres of gas to the European market. Third Energy are reluctant to disclose their projections for how much gas they are planning to extract from the KM8 fracking zone, but it's fair to asume that it's going to be an absolutely tiny drop in the ocean compared to the production of the North Sea gas industry, let alone the scale of Russian gas exports to the European market.

Anyone who tries to point to the fall in gas prices in the US as evidence that UK gas prices would also fall is doing nothing but displaying their ignorance of the structural differences between the US and UK energy markets.

 
Ignoring externalities
 
Even if we allow the entirely unproven assertion that fracking will produce lower UK domestic energy bills to stand, there's still the issue of externalities to consider.

If fracking does shave a few pennies off our domestic energy bills, what will be the hidden/unconsidered costs? 

One of the most obvious potential costs that is excluded from the "lower energy bills" claims is the potential cost to the taxpayer of attempting to repair fracking related environmental degridation (in 2013 the Tories exempted the fracking industry from liability insurance). If fracking causes environmental degridation it will either be permanent (an environmental externality), or the taxpayer will have to foot the bill (a taxpayer subsidy that is excluded from the calculation).

Then there's the cost of George Osborne handing the fracking industry a vast tax break in order to make the industry seem even remotely viable. If lower energy prices come at the cost of the taxpayer propping up an unviable industry with huge tax breaks (lost tax revenues), that's clearly an example of giving with one hand and taking away with the other.

Another potential cost is the environmental harm from continued reliance on the burning of fossil fuels to meet our domestic energy demands. Instead of handing vast tax breaks to the fracking industry, surely a more environmentally sustainable strategy would to invest more in things like renewable energy, increased energy efficiency and research into technology like clean fusion reactors?

Another set of costs that has been excluded from the optimistic and unsubstantiated "lower energy bills" claims of the pro-fracking brigade are the costs to the local community. If roads need to be widened to cope with increased traffic, local taxpayers will pay the cost. If property prices fall because of the gigantic fracking rigs in the area, the local community will pay the cost. If the fracking process ends up damaging or destroying the land, the local community will pay the cost.

One of the classic ways of making a bad deal look like a good deal is to cut out all of the extrnalities such as social harms, environmental degredation and economic costs borne by the taxpayer. If these costs are taken into consideration, an even bigger heap of salt needs to be piled on top of unsubstantiated claims that fracking will cause domestic energy bills to fall.

Fracking depends on high energy prices
  
It's already established that claims that fracking will cause UK energy bills to fall are not based on anything remotely resembling peer reviewed scientific studies. It's also clear that such claims are worthless if they involve the exclusion of externalities like social and environmental costs, and economic costs that are carried by the taxpayer. However the most damning criticism of all is that the whole claim is completely backwards. There's no evidence to prove that fracking in the UK would cause energy bills to fall, but if energy bills do fall significantly, then fracking becomes an economically unviable method of energy extraction.

Fracking won't cause lower energy bills because the whole industry is relient upon high energy prices to survive.

The reason fracking relies on high energy prices is that it generates very low rates of Energy Returned on Energy Invested (EROEI) meaning that the margins are an awful lot slimmer tan traditional forms of fossil fuel extraction like oil and natural gas.

The ever improving EROEI ratings for renewable technologies such as solar, wind and wave power also point to difficult times ahead for the fracking industry (unless the Tory government decide to prop fracking up with even more tax breaks and subsidies whilst directly attacking the renewable energy sector).

A look at the way fracking companies across the US "cut and run" when energy prices fell leaving a trail of envirnmental degridation in their wake is direct evidence that the fracking industry is highly dependent upon high energy prices. If falling energy prices caused such chaos in the US fracking business that left Exxon's Chief Executive complaining that they were "losing our shirts" and Total's boss decying extraordinary losses in Texas with claims that Fracking "doesn't work" and that there's "no point in investing where there is no profitability" - then what on earth makes fracking enthusiasts think that the UK fracking business would be exempt from the consequences of the low energy prices they claim that it would cause?
 
Tory energy market price-fixing

Fracking enthusiasts need not be too worried that falling energy prices will derail their beloved industry though, because the Tories have signed up to a vast energy price-fixing deal to bribe the French state into building a nuclear reactor at Hinkley Point C by paying them double the market rate for electricity for 35 years. A crackpot scam to artificially inflate energy prices like the Tory price-fixing deal with the French is a surefire way of making the horribly inefficient shale gas fracking industry look financially viable.
 
Conclusions
 
Environmental destruction in Wyoming after fracking
companies "cut and run" leaving the US taxpayer to
pick up the bill.
Even after the US propped up the shale gas fracking industry with vast tax breaks and woefully inadequate liability insurance rates, the fracking business in the US has imploded due to falling energy prices, leaving an environmental catastrophe in its wake.

The Tories are utterly determined not to learn any lessons from this debacle in the US, deciding to throw vast subsidies and tax breaks around in order to promote fracking in the UK. It's absolutely clear that a large number of Tory politicians have investments in the fracking business, so it's no wonder they're doing everything in their power to promote an industry that is only viable if energy prices remain high.

If deliberately puncturing the growth of the UK sustainable energy sector; signing completely unjustifiable 35 year price-fixing deals with the French to keep UK domestic energy prices as high as posible; giving fracking companies vast tax advantages over other fossil fuel sourcesbribing local councils into allowing fracking to go ahead in their areas;
 exempting fracking companies from covering their own clean-up costs; riding roughshod over the concerns of local communites where fracking is going to be imposed; and spreading completely back-to-front myths about fracking lowering energy prices - is what it takes for the Tories to support the fracking industry, then so be it. David Cameron and his Tory chums have made it absolutely clear that they're "going  all out for shale".

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