Ruling class Ignorance

To say that greed is a good thing is a denial of the social nature of the human being. Greed necessarily implies selfishness, a refusal to consider the circumstances of other human beings. Human beings are indeed capable of selfishness, of great selfishness, but selfishness is destructive of human society and cohesion. As a result, human beings generally resist the selfish impulse as they intuitively understand that it is both damaging to the self, and to the social. The idea that selfishness is an important driver in economic activity is supposed to come from the writings of Adam Smith. The most successful academic economist is Paul Samuelson whose book, 'Economics' has sold millions and has been read by millions of students throughout the years. My edition is the 15th edition, published in 1995. I don't know how many editions have been published at this time, but even 15 is a very impressive pedigree. In my 15th edition, Samuelson writes

The orderliness of the market system was first recognised by Adam Smith….Smith proclaimed the principle of the invisible hand. This principle holds that, in selfishly pursuing only his or her personal good, every individual is led, as if by an invisible hand, to achieve the best good for all….Smith’s insight about the functioning of the market mechanism has inspired modern economists….

The problem here is that Smith said no such thing, what Smith said was that in pursuing our own interest every individual is led, as if by an invisible hand...etc. and, as I showed yesterday, Smith argues that it is in all of our interests that workers are well paid and enjoy good conditions of employment. In Book 4 ch 2 of the Wealth of Nations, Smith writes

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it.

Our own interest, our self-interest, is a quite different thing from selfishness, in other words, Samuelson got it wrong and was responsible for sending modern economic theory down a blind alley. He was not alone in this, but he was very influential. Samuelson did not do this deliberately as he is not a neoliberal, but what it suggests is that Samuelson did not actually read Smith and was only repeating what he himself was told when he was a student. As Smith continually stresses, our self-interest is often the promotion and the happiness of others, even when there is no immediate benefit for us. Indeed Smith condemns the attitudes displayed by the Boris Johnsons of the world as corrupt and used to sustain a divisive class system. In the 'Theory of Moral Sentiments' he writes

This disposition to admire—and almost to worship—the rich and the powerful, and to despise or at least neglect persons of poor and mean condition, is (on one hand) necessary to establish and maintain the distinction of ranks and the order of society, and (on the other) the great and most universal cause of the corruption of our moral sentiments. Moralists all down the centuries have complained that wealth and greatness are often given the respect and admiration that only wisdom and virtue should receive, and that poverty and weakness are quite wrongly treated with the contempt that should be reserved for vice and folly.

 

As I said yesterday, we should be very sceptical of the pronouncements of anyone who boasts an Eton and Oxbridge education, Smith himself certainly was. What the Boris Johnsons of the world deal in is propaganda, not academia, and in doing so display both their ignorance and their arrogance. I ask you to contemplate this person as a future Prime Minister. You have been warned.

 

Your Servant

Doktor Kommirat

Boris the Bampot

If any one person symbolises the bankruptcy of politics in modern Britain, of the tragedy that poses as leadership in this sorry country, it is the mayor of London Boris Johnson. I am inclined to label this man as an imbecile, but he is not as intelligent as that. Johnson is a product of the Eton, Oxbridge set who deeply believe that they are born to rule, and the genuinely scary part is that this creature is a real candidate for a future Prime Minister.

When Adam Smith went to Oxford he left after 6 months because he considered it totally useless and was convinced that the professorial clique that taught at it were incompetent. When Bertrand Russell attended Cambridge he wrote that the Cambridge dons served no useful purpose whatsoever, that he learned absolutely nothing from his teachers. Thus, we must not assume that attendance at the two most celebrated universities in the world means anything at all. For example, how can a buffoon like Johnson graduate from such an elite university? Well, you simply don't fail the offspring of the rich and great whom you rely on for finance and patronage, do you?

Johnson is credited with having studied the classics. which means that he would have no introduction to political economy. However, despite what is supposed to be the study of Mediterranean Roman and Greek history and philosophy, it is quite obvious that he was never introduced to the Sophist Thrasymachus, who tells us that justice is the interests of the strongest, in other words, that the law serves the elite and punishes the weak and the poor, although I suspect that if Johnson was to read that, he would argue that this was exactly as it should be in a well-ordered society. Johnson's latest foray into the wisdom of modern Britain is to declare that inequality is essential to fostering "the spirit of envy" and hailed greed as a "valuable spur to economic activity". Thus, for the Johnson's of the world, the fundamentals of economic growth and prosperity are founded on envy and greed. This is a brilliant metaphor for neoliberalism, and, as I have noted in recent posts, has no basis in economic theory, but is an essential element in the psychopathic philosophy of Objectivism as outlined by Ayn Rand.

Inequality is inevitable in human society as people all have different talents and attributes, but what Johnson is speaking of is economic inequality, an artificial as opposed to a natural inequality. So, let us look at what Adam Smith says is the valuable spur to economic activity in The Wealth of Nations Book 1 ch8.

Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part, can never be regarded as any inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged....
The liberal reward of labour, as it encourages the propagation, so it increases the industry of the common people. The wages of labour are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives. A plentiful subsistence increases the bodily strength of the labourer, and the comfortable hope of bettering his condition, and of ending his days, perhaps, in ease and plenty, animates him to exert that strength to the utmost. Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious, than where they are low Bk1 ch8

Thus, what we find in the father of modern economic theory is that it is not inequality that is necessary, but equity. Now, equity is not equality, it is fairness. Smith does not advocate minimum wages, but 'a plentiful subsistence.' It is high wages 'the liberal reward of labour' that will drive economic activity and growth, not the promotion of greed. This brings us to the subject of greed which I will deal with in another post as this one is getting to its maximum length. Britain is entering a dangerous phase in its history because it is being increasingly led by economic illiterates and quasi-fascists. You have been warned.

Your Servant
Doktor Kommirat

The Myth of the Market

Following on from my post on the subject of free schools, what is clear to me is that the discipline of economics as we know it in this country is a fraud, and that economists do not actually know much about their own discipline. We are in the financial and economic crisis that we are in because of economists, and the economic models used by bankers and those in the financial system. What this tells me is that the models and assumptions that economists and financiers operate by are deeply flawed and in many ways simply wrong. So, how does this come about? Well, this is a huge topic that could well take a textbook to explain, but if I may offer some insights.

One of the great mantras of modern economics is that markets, when left to their own devices with no external interference are self-regulating. This is demonstrably wrong. As we continually witness in our modern world, any market, when left to its own devices will develop into a monopoly situation. For example, the rise of the supermarket has witnessed the death of high street suppliers in bakeries, fishmongers, butchers, greengrocers, drapers etc. All such activities now take place predominantly within supermarkets that are ruled by four multinational conglomerates and genuine competition and choice has been deliberately killed off. Now there is nothing inherently wrong with this as it is a result of technology as much as anything. What is wrong is that we are still being peddled the myth that we live in a market economy, when what we live in is a capitalist economy that has systematically destroyed markets and competition.

We are constantly still being peddled the lie that market self-regulation will flourish because of the stimulus of free dynamic competition, and if you believe that you must live on a different planet. Where is the competition in energy, retail distribution, fuel, transport, housing etc. etc.? It doesn't exist. What we are faced with in modern Britain is a choice between a few licensed gangsters. In fact I cannot think of one product or service in our society that offers genuine competition.

Constant propaganda has demonised the state and public services whilst promoting the benefits of a market system in health education, care etc. etc. that does not, and cannot exist. What is wrong is that just when we need a healthy active state, intervening and regulating such activities, we are governed by criminals who are removing such state activities in the cause of exploitation and profiteering. All of the great private companies being employed by the British State to provide us with the wondrous benefits of the private sector are all revealed as criminal organisations who are not only incompetent, but are defrauding the taxpayer of millions each day. ATOS, Serco, G4s are all exposed as fraudulent. There is an unanswerable case for the immediate nationalisation of energy and the railways for example. The recent sale of Royal Mail is a classic example of the type of activity Al Capone would have been proud of.

As I have alluded to previously, modern economics operates from some quite fundamental mistaken premises. For example the concept of Adam Smith's invisible hand is not at all what modern economists tell us that it is. The biggest selling economist in the world, Paul Samuelson, tells us that the invisible hand is perfect competition. That is simply wrong. Indeed, Samuelson goes on to tell us how perfect competition is an impossibility, so, if he is correct, and I agree that he is, then Adam Smith must have been an ignoramus, and I can assure you that Smith was anything but. Another myth is that Smith ever describes or uses the term selfishness with respect to the human being. Nor does he ever use the term laissez faire. I shall attempt to explain these in understandable terms to show you that our rulers simply do not know what they are talking about when they start to pontificate on 'markets.' In the meantime, the only light in sight is the prospect of independence for Scotland that will allow us to start to redress the balance and to hold some of these gangsters to account. It is your choice, but you have been warned.

Your Servant
Doktor Kommirat

Book Event

Christmas Event at Hillhead Library, byres rd

At 6 pm on Thursday 5th December (in the main hall, first floor)

Dress code: vagabond (i.e. anything you like)

Four local authors, one actor and one pianist = a little piano music and very brief recitals of the authors' works

Wine and food provided, informal atmosphere and any seating will not be in rows

Peter Kerr's Human Rights in a Big Yellow Taxi was published last September. It's a superb analysis of how our human rights are being eroded, and how they will be difficult to defend if we let this erosion go much further.
Chris Dolan's Redlegs was published last year, got excellent reviews and a French edition will be coming out in 2014. "It is an engrossing and compelling novel. The picture of island life is vivid, the characterisation of the principal personages convincing, the elaboration of the narrative moving. As in many really good novels, there are small scenes which stick in the memory, ..." - The Scotsman

Peter Gilmour's The Convalescent was also published last September and was reviewed in the Herald: "There's a refreshingly unromantic and level-headed tone to The Convalescent. Taking control of your life and becoming a healthier and stronger individual is always promoted in sunny, positive terms, but Gilmour highlights the uncertainty and anxiety that accompanies such a struggle, accentuating the shadows as well as the light."

          Allan Cameron's In Praise of the Garrulous was reissued in a new edition last September and was reviewed in the Guardian: "On the whole, there is so much here that is important ... and his humanity is so winning."

Stewart Ennis will be reading passages from all four books.       

          Silviya Mihaylova is a concert pianist and music teacher, and will provide some interesting music as a counterpoint.

Free Schools

I apologise for not posting for a few days, but I was engaged in other activities. Someone kindly told me how they liked my blog and asked me for my opinion on the policy of free schools, and I will address that if you will indulge me. However, when thinking about the subject of free schools, I thought how a topic like this goes to the heart of the deep seated problems that bedevil our nation. As a result, this will lead me on to what may be a series of posts on an on-going train of thought. Should anyone find this tedious or wishes me to take up other topics, then please tell me. Also, as I keep saying, if you feel I am talking rubbish then please contact me and tell me why. I genuinely welcome such input.

Free schools are another example of neoliberal free market thinking that have a superficial attraction but turn to dust with even a passing examination. The point about free schools is that they are not free, they are funded by the taxpayer and give guaranteed priority to the offspring of the people who run them. Thus, there is a big element of exclusivity about them. In true neoliberal fashion the free part of these schools is that they are free from local authority control. They are thus fundamentally undemocratic, as education is a local authority function and the neoliberals wish to completely bypass local authorities so that they can withdraw as much local authority finance as possible. They wish to take schools out of local authority control altogether as they did with further education colleges, and look at what they have become. They are run by neoliberal managers who remove all full time permanent staff and replace them with part-time, temporary staff on zero-hour contracts and remove as much education as possible and replace it with training that makes them a profit.

The point about free schools is that they are largely unregulated. Oh they are still subject to inspection and are obliged to offer a general curriculum, but they are free to employ unqualified and untrained teachers, set their own wage rates and conditions of service and teach a very ideological syllabus that, at times, resembles a form of brainwashing. In addition, they are selective. Anyone is theoretically free to attend a free school, but the school is equally free to refuse them.

The whole point of the matter is that you must never allow for a market in education. In any market there are winners and losers, and, if you don't have money then you cannot enter the market. This has nothing to do with equality as the neoliberal accuses, but is all about equity. A free market allows for privilege, for queue jumping, for exclusion. It allows the wealthy to make benefits at the expense of the less well off. Paradoxically, one of the earliest advocates of public education for all children, paid for out of general taxation, was Adam Smith, the so-called father of the free market, which of course he was no such thing.

Free schools are a manifestation of the free market neoliberal's hatred of the state, of their hatred of all things collective and their dedication to the concept of the individual consumer who must be free to make their own choices to spend their money as they see fit. The problem with the neoliberal concept of individualism is that not only does it not exist, but it cannot exist. If there is one thing that Adam Smith was definitive about it was the social nature of the human being, not their individualism. This is why I continually stress that the free market is a fraud because its fundamental assumptions are all wrong. I will expand on these themes if you allow.

Your Servant
Doktor Kommirat

Scotland after Independence, according to the economic geniuses in London.

The press and media have been salivating triumphantly all day today over the report by the Institute of Fiscal Studies that an Independent Scotland would have financial difficulties and would have to seriously increase tax revenues in order to make the books balance. This Institute has been trumpeted as being independent of political bias, but, as I have continually stressed in this blog, what does that prove, when all our political parties are committed to the same ideology?

The Institute of Fiscal Studies was founded by four men, a Conservative Party politician who was also a banker, a stockbroker, an investment trust manager and a tax consultant. In 2008, shortly after the banking crisis, this Institute's ideas for recovery included a plan to abolish corporation tax and replace it with a higher rate of VAT. Corporation tax is levied on company profits, so, these unbiased geniuses were advocating allowing companies to keep all of their profits, whilst raising VAT which impacts most heavily on the poorer sections of society. How does it do that? Because VAT is a tax on consumption, and poor people spend all of their income on consumption, they have to to stay alive and keep a roof over their heads. In 2008 corporation tax raised £52billion, thus, in order to compensate for that VAT would have needed to be increased from 17.5% to 28.3%. Thus, companies would have gained a nice increase in their income, whilst working people, the unemployed, the disabled etc. would have witnessed their expenditure rising by 10.8%

The Institute for Fiscal Studies may not be politically biased, but they most certainly are neoliberals to the core. Their analyses certainly start from the Thatcherite mantra that there is no alternative, and they therefore base all their calculations on the existing dominant economic ideology.  Further proof of that is that the same report argued that VAT should be extended to include food, children's clothes and books. Such changes will impact very heavily on the less well off, but affect the wealthy only marginally. Another report by the Institute recommends abolishing inheritance tax, whilst another advocates removing tax on interest on personal savings. So, how many of you out there pay corporation tax? How many spend the bulk of your income on consumption however? How many of you gain large sums from your bank on interest payments on your savings? How many of you have had to pay tax on an inheritance? But of course all of these recommendations are all unbiased and value free and it is a pure coincidence that they all benefit the wealthy and penalise the less well off.

You see, the findings of the Institute of Fiscal Studies are only relevant if, after independence, Scotland stays the same and does not seek alternatives methods of governance and economic prioritising. However, should Scotland ditch the dominant neoliberal poison and seek more equitable forms of policy-making, then the Institute's Report is about as much worth as a chocolate cigarette lighter. There are alternatives, there are other ways, the people who live and work in Scotland are an intelligent people and indeed are a more caring and humane people. After independence, the Scottish electorate may just be daft enough to vote for a Labour government, but they most certainly will never be daft enough to vote Tory or Lib Dem. However, even the Scottish Labour Party will surely understand that they will have to be different from the Westminster mafia. Whatever the case, do not fret about the findings of the Institute of Fiscal Studies, and please, do not take too much notice of what they say. As I continually warn you, the state of economics in this country is on a similar scale as its democracy, decidedly dodgy. We are ruled by political and economic illiterates!!!

Your Servant
Doktor Kommirat

Can Westminster get any more useless?

The present state of British politics genuinely beggars belief and rational understanding. We are supposed to be a democratic society and we have a whole Parliamentary system that simply refuses to be held accountable or to give the electorate any form of respect or recognition. I remind you, all politicians, including the government, are put into office by us. They are not there because they are qualified, or because they are the best people for the job, they are there simply because they won an election. In office we pay their wages, their pensions, their expenses and provide their standard of living and that of their families. If it transpires that they are competent and/or honest, then that is entirely by chance.

The biggest decision any politician can make is the decision to commit the nation to war. This decision is therefore the most important area for which they must be held accountable and must justify to the people of the nation. The last government set up the Chilcot Enquiry to try to determine the justification for this country waging war against Iraq. This was set up because there is no doubt that the fundamental reasons given to the nation for going to war by the then government led by Tony Blair were a farrago of lies. In addition, under the government's duties in law, the war was illegal. As a result, we devastated a sovereign nation, killed hundreds of thousands of its citizens, brought terror onto our own streets and spent billions of pounds illegally and untruthfully. None of that is in dispute.

However, we now have the spectacle of an unelected civil servant, Sir Jeremy Heywood, who was, incidentally, Tony Blair's private secretary at the time of the Iraq war, refusing to release crucial documents to an enquiry set up by Parliament that may shed light on the reasons behind the biggest foreign policy disaster in the nation's history. The Chilcot Enquiry has been refused access to 25 notes sent from Blair to George Bush, plus 130 documents discussing the war and dozens of records of British Cabinet meetings by this man, on the grounds that Blair's negotiations with Bush were private. I mean, you simply could not make this stuff up. Who on earth does this Heywood think he is? He should be immediately arrested, placed in handcuffs, thrown in a cell and be forbidden to hold any form of public office for the rest of his life. So, why hasn't he? This situation defies rational understanding. There is no possible argument for considering that such discussions can be regarded as private. These people are elected, they don't fight the war once they have declared it, they get other people to fight it for them.They don't finance the war, we do. This is the most public decision any politician can take, and, incidentally, is coming from people who claim that they have a right to monitor every conversation, every text, every email that the population of this country make. As far as this government is concerned, you have no private life, and, they inherited such attitudes from Labour.

This is a genuine national scandal. Remember, Blair and his toadies didn't just wage illegal war, they have also indulged in widespread torture, large scale international kidnapping, and widespread criminality. That this situation has arisen tells you everything you want to know about modern British government and the overweening arrogance of the Westminster Parliament and its unelected civil officials. It also serves to highlight the utter uselessness of Westminster. Any decent MP with a scintilla of intelligence, or understanding of their roles and functions would be demanding this information immediately and would have called in the police to have Heywood arrested. The British people have no hope for any form of just and equitable society under present structural conditions. It requires a radical change, and all the evidence we have shows us that this just will not happen. It can happen for Scotland however, if the Scots just have the bottle to believe that they are intelligent enough to rule themselves. You have been warned.

Your Servant
Doktor Kommirat

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