Author: Tim Glover

The human body is an amazing machine, built from dozens of components organised into different interacting systems, which work together to support life. One of it’s most remarkable qualities is it’s capacity for regeneration and self repair. However, sometimes damage to one component can cause unexpected knock-on effects that can eventually bring the whole system down.

My wife recently went in to hospital for a routine operation after recovering from chemotherapy. She expected to be out the following day, but unfortunately a vein was accidentally left unsealed and she suffered severe internal bleeding. By the time the problem was discovered her blood pressure and oxygen levels were dangerously low; she was rushed back to theatre, but in their hurry the surgeon damaged the tube between one kidney and the bladder. What happened next was an interesting lesson in systems engineering.

The first problem was that her digestion stopped, and filled with bile. This meant she could not eat or drink without bringing up a litre of green fluid. To get the digestion working she needed to walk round and move, but the stomach was so full she could not move without tearing her stitches, and anyway, loss of blood had left her too weak. Unable to move, she developed a thrombosis, for which she needed blood thinners, but this would reopen the internal bleeding. Meanwhile, pressure was building up in her kidney, but they could not operate because of her low blood pressure. The blood that had filled her abdominal cavity was beginning to go septic, and without food her body did not have the resources to fight infection. Finally, the malfunctioning kidney and lack of drinking water affected the electrolytes in the blood, leading to concerns about her heart.

It must have been difficult to navigate a path through the delicate balance of the different sub-systems, but the staff at the hospital came up with a plan. In one nostril a tube was inserted to supply oxygen and a second tube was fed down the other nostril to drain her stomach; she also had a catheter to drain her bladder. A fourth tube was inserted into her kidney under local anaesthetic to relieve the pressure on the ureter, and a fifth tube was inserted into abdomen to drain the decomposing blood. She was supplied nutrients from a sixth tube in her elbow, and a seventh tube inserted in her wrist was used for intravenous antibiotics. A suppository was used to stimulate the bowel and finally she was given a series of injections of warfarin in the tummy to thin the blood. Of course, she also had morphine by mouth to ease the pain.

The engine sputtered for a couple of weeks, but eventually the doctors got the system back on its feet, and hopefully it is now ready to roar back into life. Considering what she has been through she is looking pretty good, don’t you think?

Dear —–

I heard in the news today that 1000 members of the Syrian civil defence organisation known as the White Helmets are to be taken out of Syria and relocated to Canada and countries in Europe, including the UK, in order to protect them from reprisals now that the Syrian Army have retaken most of Syria.

On the face of it, this seems very strange. Why should civilian volunteers face reprisals? A recent example of their work helps to explain the anomaly. You may remember that recently there were claims that the Syrian Army had launched a nerve gas attack on Ghouta, near Damascus. The source of these claims was the white Helmets, and they backed up their accusations with video footage of chaotic scenes in which they soused alleged victims with water. It was alleged that there were dozens of casualties. However, this story was a complete fabrication. Journalists such as Robert Fisk, who visited the scene soon afterwards reported that there were no signs of an attack, and that people who he spoke to seemed puzzled about his questions and new nothing about it. Other respected journalists reported the same thing. The OPCW inspectors who were invited by the Syrian Government could find no trace of any nerve agent, and found no evidence that any Syrian facility had been used for chemical weapons. They also reported that chlorine could not have produced the alleged symptoms.

Eventually, people who were pictured in the White Helmets video were traced. 15 of them testified to the OPCW that they had been attending the hospital for various ailments when the White Helmets rushed in, screamed “Gas Attack!”, threw water everywhere and started a panic, which they captured on camera. This was a propaganda exercise, to try to manipulate Western countries into attacking the Syrian Army, who were on the point of retaking Ghouta.

You see, the white helmets are not a civilian defence organisation. They claim on their website to be a neutral organisation of ordinary unarmed civilian volunteers rushing to rescue civilians, but this is a pack of lies. In fact the White Helmets was formed in Turkey by a British military officer to assist in our policy of overthrowing the Syrian government. They have so far received 80 millions dollars from the UK and over 200 million form the US, as well as funds from Turkey, Saudi and Israel, and are consequently some of the best paid people in Syria. Far from being neutral they have very loudly and frequently called for Damascus to be bombed by the US and UK – rather odd for a neutral civil defence group rescuing people from bombing don’t you think? On their website they are currently advertising for well paid positions as media directors and agents, based in Turkey. Far from being unarmed, they have provided ample footage of themselves brandishing Kalashnikovs.

However, there are much more serious allegations. Several independent videos have shown senior members smiling an laughing with members of ISIS and Al Quaeda, and they have been filmed assisting at the execution of civilians by these groups. In Aleppo, their headquarters was in the same building as ISIS, and many murals show their logo alongside those of terrorist organisations. The actual Syrian defence organisation in Aleppo which has existed since the 50’s testified that the White Helmets broke into their compound, shot their staff and stole their equipment. It seems that the British handlers were fooled, and have actually been funding the very terrorist organisations we were supposed to be fighting.

One might expect that this being the case the White Helmets could expect reprisals from the Syrian Army. But in fact, Russia and Syria have shown extraordinary vision and rationality. In order to restore Syria to the peaceful, multicultural society it once was, they have offered all combatants the choice of amnesty and a return to civilian life, or relocation to Idlib Province, which is occupied by various opposition forces. Many thousands of combatants have taken thee opportunities, and Syria and Russia have kept good faith in order to encourage more surrenders. So the White Helmets do not face a threat from the government. Instead they are afraid of the civilian population who they terrorised, and who will kill them if they have a chance. They are in desperate need of protection from the people they attacked and murdered, and who are thirsty for revenge.

Are these people that we want living alongside genuine Syrian refugees in the UK?

Here is a thought experiment. What if Jeremy Corbyn had been elected Prime Minister by a landslide?

What if he had fully funded the NHS, expelling private companies and refusing to pay any more for the PPI projects that cost the NHS so much? What if he had renationalised the railways – and nationalised BT, power companies, and the banks while he was at it? What if he had called a halt to “free schools” and faith schools, stopped charitable status for public schools and fully funded our education system?

What if he had paid for this by scrapping Trident, exiting NATO and cutting military support for US operations overseas? What if he had taxed US corporations like Google, introduced a tax on financial speculation and closed tax loopholes for the very rich? What if he had made peace with Russia and Syria, and offered compensation to Iraq? What if he voted against war and sanctions at the UN? What if he drastically cut consumption of oil and moved to self sufficiency with renewable energy? What if he stopped the import of GM food, introduced strict regulations of animal welfare? What if he had called a halt to fracking in the North of England, and insisted on an environmental audit of all companies operating in Britain?

The billionaire masters of the US military empire would not like this. It is anathema to corporate America. But what could they do?

Here’s a thought.

What if they gave funding and support to extreme right-wing groups like the BNP? They could supply advisors to direct the campaign. They could even send secret agents for infiltrate the group. That’s not so far fetched – after all we know the British police infiltrated environmental groups to act as agents saboteurs.

The newly energised BNP could stage loud demonstrations (without permission from the authorities). With a bit of alcohol, the infiltrators could encourage torching of cars and smashing shop fronts (remember the London riots?) The US billionaires own the media so it could get huge publicity. It would look as if Corbyn faced a bitter opposition, and was unable to control the situation. There would be international calls for his resignation.

What if the police went in with horses and batons, and, God forbid, killed someone (remember Ian Tomlinson?) The corporate owned media could storm about Corbyn’s violent oppression of democracy and demand his resignation. The international pressure would be irresistible.

What if the police did not go in? The protestors could set up barricades in the streets and camp there for weeks disrupting traffic (remember Trafalgar Square?). Still no reaction? Smash property, burn tyres, scream slogans, for the benefit of the corporate media. Still no good? Then it gets nasty. Send in snipers to shoot at both the police and the protesters, with casualties on both sides, to give the impression of violence and chaos. If the Dictator Corbyn still refuses to budge, the US can demand sanctions in the UN, enforce a “no fly zone” over Britain, and ultimately start a bombing campaign in support of democracy against the violent fascist Corbyn dictatorship.

Far fetched?

Why was the head of the CIA in the Ukrainian Maiden, handing out cookies to neo-Nazi protesters against the democratically elected government? Why did the US organise a bombing campaign in support of violent protestors in Libya? Why are there violent riots organised by right wing elements against the popular democratic Venezuelan President Maduro? What really happened in Syria? and Sudan? And Brazil? And Haiti? And…and…and…

Hello!

I recently had some correspondence with the Foreign and Commonwealth Office about our involvement in Syria. My mail was this:

Dear Mr Johnson,

I am writing about the strong support you offered to the United States on their recent missile strike on Syria, following a chemical weapons incident. It seems very unlikely that the chemical weapons attack was initiated by Assad, who had neither the means, nor the motive for the attack. His enemies have both. Regardless, the missile strike was clearly a flagrant and egregious violation of international law, which forbids individual countries taking unilateral action in this way whether Syria used chemical weapons or not, and I wonder if you could answer the following questions for me.

1. Do you uphold International Law?

2. You put a proposal to the UN that the chemical attack be investigated. If you have proof it was Assad, why is an investigation necessary? If you do not have proof it was Assad, why did you support a missile strike?

3. The US admit to having blown up over 100 tons of high level radioactive waste (depleted uranium) over urban areas such as Fallujah, resulting in appalling cancers and deformities in uncounted civilians, clearly a far worse crime than the Syrian attack. Would should be done about this in your opinion?

And this was their reply:

Dear Mr Glover,

Thank you for your email of 17 April to the Foreign Secretary about Syria. The Near East Department of the Foreign and Commonwealth Office has been asked to reply.

The situation in Syria is a humanitarian catastrophe caused by the Syrian regime and those who support it. The conflict has tragically cost over 400,000 lives. The use of chemical weapons is appalling. In the attack on Khan Sheikhoun on 4 April over 70 people were killed, many of them children. The Foreign Secretary made a statement in the House of Commons Syria on 18 April 2017 giving an update on the situation in Syria, informing the house what we know about the Khan Sheikhoun attack.

UK scientists at Defence Science and Technology Laboratory Porton Down have analysed environmental samples obtained from Khan Sheikhoun. These have tested positive for the nerve agent sarin. The results clearly identify chemical signatures specific to sarin manufactured by the Syrian regime and consistent with UN samples from the sarin attack in Ghouta on 21 August 2013. We are now almost certain that the Syrian regime carried out a chemical attack using the nerve agent sarin in Khan Sheikhoun on 4 April 2017.

The UK Government fully supported the US military action against Shayrat airbase from which we believe the Syrian regime launched chemical weapons attacks, which we believe was an appropriate response to the use of chemical weapons. We hope this action will deter further chemical weapons attacks. It’s for US to set out their legal basis for taking this action, in the same way that we determine our own legal basis for our actions. We strongly support the independent, impartial and expert investigation by the Organisation for the Prohibition of Chemical Weapons (OPCW) into this atrocity. At the UN Security Council on 12 April we put forward with our close partners a Security Council Resolution to express condemnation of the use of chemical weapons and to give full support to this existing, established international investigation of the Khan Sheikhoun incident. This was an important resolution designed to underline the international community’s rejection of any use of chemical weapons and support the existing investigation. The Resolution had broad international support and received 10 votes in favour on the Security Council. We are dismayed that Russia has once again blocked the UN Security Council from taking action by using its veto. We will continue to support action to ensure accountability for those responsible for this crime.

We remain convinced that long-term peace in Syria requires transition away from the Asad regime, and a political settlement which allows Syria to become a stable, peaceful state with an inclusive government with which we can work to tackle Daesh and other extremists. We support fully the Syrian peace talks taking place under the auspices of UN Special Envoy Staffan de Mistura in Geneva. The Syrian Opposition High Negotiations Committee have demonstrated their commitment to the political process by adopting a positive approach, agreeing an inclusive delegation and setting out moderate and pragmatic proposals. The regime and its backers must now show the same commitment to achieving a negotiated solution that can bring a sustainable end to this dreadful conflict.

On the issue of Depleted Uranium (DU) ammunition, we are conscious that there is some concern about a possible link between the use of DU munitions and medical problems such as cancers and birth defects. Environmental monitoring in areas where DU munitions have been used has confirmed the presence of DU at levels far too low to have any detectable health impact. These observations are consistent with the findings of many agencies and with the recent World Health Organisation statement, that, “for the general population, neither civilian nor military use of DU is likely to produce radiation doses significantly above normal background levels”.

The UK will continue to do all that we can to ensure that a long-term, lasting solution is found to resolve the current crisis in Syria. And in the meantime, we will maintain all efforts to help those people affected by it.

It was a good reply, but I have a few comments.

Firstly, they made no attempt to address my main point which is that any military action in Syria is a war crime under international law. The implication is that they intend to continue to commit war crimes. Some of you may think it is odd that I defend Assad against attack, but the law is what it is for a reason. Consider this; when I was younger there was a violent uprising against the British government in part of the UK. The UK government acted with extra judicial force, and thousands died in the Northern Ireland “troubles”. What if China had decided that the UK government was oppressing free expression, and bombed London to rubble, murdering the Prime Minister with a dagger up the rear end, as happened to Gadaffi? You would argue that even if the UK government behaved badly, slaughtering millions of innocent bystanders was not an acceptable response. So it is in Syria.

Many people are unaware of the scale of the holocaust that has been unleashed by Western military intervention in the middle east. It is estimated that perhaps 4 million people have been killed; certainly tens of millions have had their lives utterly destroyed, as a direct result of our action; we are guilty of crimes comparable to the Nazi Holocaust. And who cares?

Secondly the Foreign office claim to have obtained samples of Sarin from the recent incident (How? No-one has been there, the area is occupied by ISIS, and Sarin is incredibly poisonous). They say it has the same “fingerprint” as Sarin used some years ago in Ghouta. But UN weapons inspectors established beyond doubt that the Ghouta incident was carried out by ISIS in an attempt to bring the US into the war. If this sarin has the same fingerprint it is presumably from the same source. The FCO claim to be certain that Assad was responsible in spite of the obvious implausibility, and the only evidence they provide suggests the opposite.

The FCO say they support an independent investigation and that this was blocked by Russia. What they don’t say is that Russia is very keen to have an investigation, and put their own resolution forward. The Russians objected to the British proposal only on the grounds that it was actually to be run by the British, who had by their own admission already decided guilt, and so are clearly not independent.

On the subject of depleted uranium, the FCO deliberately misquote the WHO report, which directly contradicts the claims of the FCO. In fact the WHO report says that military use of DU can present a serious hazard to civilians, and that areas affected should be cordoned off and cleared before civilians can enter the area.

Finally, Syria was a peaceful secular state until a few years ago. Many British tourists visited and testified that it was very friendly. I recently spoke to a student from Aleppo; she told me that although she opposed the Syrian government and protested for change (remember the battles between the police and the coal miners under Thatcher?), Aleppo was a happy place until it was attacked by outside forces including Turkey, Saudi Arabia, Isrel, the UK, the United States and a mercenary army of Jihadists from Libya to Chechnya. Now Syria, like Iraq lies in ruins, with hundreds of thousands (millions?) dead. But it seems very unlikely that those responsible will ever be held to account for their crimes.

Hello!

In this post I will sketch out my thoughts on the inauguration of Trump as the 45th President of the United States.

In every democracy there are necessarily powerful people behind the scenes, who influence the decisions made by government. “Yes Minister” was a dig at the influence of the civil service, said to be shockingly accurate by those in the know. Other influencers include media moguls, the owners of strategically important industries, and the simply very rich. This influence is unavoidable and inevitable, and in a well run democracy it is open and transparent and regulated.

In no country is this influence more pervasive that the United States, which some wag quipped is “the best democracy money can buy”. President Woodrow Wilson was the first to hint at this, saying that “… there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above whispers when talking of it..”. Eisenhower warned of the power of the Military-Industrial complex, and similar power has always been suspected in the hands of the Investment banks, as documented in “The Creature from Jekyll Island”; Goldman Sachs and JP Morgan in particular have an extraordinarily close connection with government and the Federal Reserve. Agribusiness Big Oil, Big Pharma are also extremely influential. David Rockefeller famously thanked his friends in the Media for their help in supporting his program for world government at the 1991 Bilderberg meeting, and these enormously rich and powerful corporations have recently been joined by the giant corporates of Silicon Valley. It has reached the point where democracy in the US is more or less openly corrupt, and it is not going too far to suggest that US policy is effectively decided by an affiliation of the leaders and owners of private enterprises and other key organisations. These “powers behind the throne” have sometimes been called the “shadow government” or “deep state” (see Wikipedia for more details and links). A key component in the mix is the CIA, a more or less openly criminal organisation funded by drugs trafficking, which for decades has been engaged in bringing down any country that holds out against US corporate power.

It is said that new scientific ideas do not persuade their opponents; they outlive them. Similarly, world political movements move on a 25 year cycle, the span of a human generation. In the 1930’s and ’40’s the world was swept by a tide of nationalism and fascism, in Europe, North America, South America and Japan. The post war generation reacted against this, and the 60’s and 70’s were a period of socialism in Europe, Africa and South America, an age of hope and optimism when governments actively tried to create equal societies. In the 80’s and 90’s, the new generation adopted neoliberalism, the religious belief that unregulated exploitation leads inevitably to the greatest happiness for the greatest number. In each case, the American deep state has reflected the prevailing zeitgeist.

In 2001, the destruction of the Twin Towers presaged the arrival of the next generation of American princelings, and for the last 17 years, a holocaust has been visited on those countries which stood out against American coporatocracy. In the preceding decades, any government in South America that dared to place the interests of its own population above those of the States was overthrown by more or less covert means, and this program was now rolled out quite openly across North Africa and the Middle East. The view seems to have been that American military superiority had reached the point where the US had nothing to hide and nothing to fear in simply bombing any country that resisted its power, and uncounted tens of millions have died in the aftermath of the destruction of Iraq, Afghanistan, Libya, Yemen, Somalia, Sudan and Syria among others. The formula is simple; foment protest and unrest against the government; ensure that the protests become violent (in the case of Ukraine by sending in snipers to shoot at both sides), and use this as an excuse to bomb the country and replace the leadership.

After 17 years, and trillions of dollars spent, the program has failed. Iraq has put up enormous resistance; a war that was supposed to be won in weeks is still raging 14 years later, and the policy of fomenting civil war by funding and arming religious fanatics has created ISIS, a mad dog only partially under US control. Libya was successfully destroyed, but is not under US command, and the project has finally ground to a halt in Syria, where Russian technical and tactical superiority has brought the program of destruction by proxy to an end.

No-one can be elected president of the United States without the support of powerful sections of corporate America. The influence of money and the media is enormous, and both the Bush Junior elections were characterised by flagrant electoral fraud. If Trump was elected president it is because he was allowed to be president. What can we conclude from this?

All the leadership of the US are agreed that the US has a manifest destiny to be the worlds only superpower, but there are disagreements about how this is to be achieved. Ever since the program of destruction began in 2001 there have been deep divisions between the proponents of violent world conquest and free trade (led by Oil, Defence and the CIA), and those who advocate protectionism and America First (led by agriculture, pharma and the FBI?). The investment banks that hold the casting vote. It seems that the leadership of the deep state has concluded that the policy of war has failed, and that the new focus should be on rebuilding the broken infrastructure and economy of the United States itself.

Trump is openly hostile to the CIA and their friends the Clintons, and the hostility is mutual. There is a struggle between two factions of the Deep State, but the consensus among the most powerful factions is that it is time to try something different. The CIA and their affiliates are sore losers, and have stirred up big protests but Trump is here to stay. And surely, given a choice between holocaust and mere bullying thuggery, Trump is the lesser of two evils.

Hello!

The “iron law of supply and demand” is often described by means of a diagram which shows price being set at the intersection of supply and
demand curves. The picture below is copied from here.

Actually, I have always been rather confused about this, and I am in good company – the description at the “Investopedia” link above is muddled to say the least. In this post I would like to follow Steve Keens excellent analysis in his book “Debunking Economics”. The conclusions may come as something of a suprise!

Let us start by giving the usual explanation of this diagram. The story goes like this. The “demand” for a commodity is the number of units that are bought. In the diagram, the DEMAND curve shows the number of items of a commodity (say, pizza) that customers are willing to buy at
a particular price (in the schematic picture above, the ‘curve’ is a shown as a straight line, but this is an unimportant detail). The
demand curve falls from left to right – the thinking is that people will buy more of something if it is cheaper, so as price falls, demand
rises and as price rises, demand falls. This is the “Law of Demand”. The SUPPLY curve shows the amount of commodity that firms will supply
at a given price in order to maximise their profits, given their costs. The supply curve rises from left to right. The assumption is that
the 1000th pizza costs more to produce than the first – perhaps you have to pay overtime. At the point where the supply curve and the demand
curve intersect, firms can sell all their product, and at the price that maximises their profit at that level of demand, and since this
suits everybody, the price will settle at this point.

I have skimmed over the details because – it is all bunk.

Some critics point out that the “Law of Demand” is not a law at all. In many cases, people will buy LESS of something if the price falls.
For example, suppose you like coffee, but can only afford a small amount of ground coffee – most of the coffee you buy is instant. Now
suppose the price of instant coffee falls. You go in to the shop, buy your usual proportion of instant and ground coffee – and have some
change left over! So you decide to go back into the shop and swap some of your instant coffee for the more expensive ground coffee that you
prefer. The result is that when the price of instant coffee falls – you buy less of it. Instant coffee is a GIFFEN good. Now, as your income
gets bigger and bigger, you stop buying instant completely, and start occasionally buying even more expensive ready made coffee in a coffee
shop. As the price of ground coffee falls, you buy less ground coffee just as before, you bought less instant coffee. Depending on your
income level, any good can be a Giffen good.

Other critics point out that economists assume that consumers and producers are different, whereas in fact they are the same people. If the
price of instant coffee falls, the people who make instant coffee will have a wage cut – so they will buy less instant coffee. Still others
point out that different consumers have different levels of income, and this will affect the choices they make, which has serious
inmplications for the demand curve, touched on below. Amusingly, early theorists got around this problem by supposing that a benevolent
authority continually redistributes income in an optimal way, leading to the result that capitalist theory only applies under a communist
dictatorship.

To get around these objections, economists assume that GIFFEN goods are rare; that all consumers have exactly the sames tastes; and that everyone spends the same proportion of their income on Pizza, so that if someone with an income of £10,000 a year eats one pizza a week, someone with an income of £10,000,000 p.a. will eat 10,000 pizzas a week. This amounts to the claim that there is in effect only one giant consumer, who has a huge income, and who spends it in exactly the same proportion as all their identical component consumers. Without all these assumptions, for a real polulation the aggregate demand curve for all consumers does not fall smoothly, but wriggles around all over the place – like a snake in a hurry, as Keene puts it – so there may be may different prices that intersect the supply curve, and the argument that price is set by supply and demand makes no sense.

Finally, reputable sources point out that the diagram only applies under assumptions that economists call “perfect competition”, described
in Wikipedia . The reader is invited to follow this link to check the plausibility of the necessary conditions.

The assumptions under which the diagram above can be drawn at all are sufficiently counterintuitive as to justify a raised eyebrow. But
Keene points out that there is a further assumption implicit in this diagram which is not just far fetched but impossible because it
amounts to the claim that 0 + 0 = 1. The best way to understand this is to start by considering the case of a monopoly.

In the diagram below, the demand curve is the same as before. But the supply curve has been replaced by two different lines, labelled
“marginal cost” and “marginal revenue”. Don’t be put off by the jargon – the idea is simple. Marginal cost is the extra money the company
must spend to make one more pizza. This includes the flour and mozzerella, as well as labour costs and rental costs. Marginal revenue is the extra money the company gets by selling one more pizza. Here is the thing – this is NOT simply the price they are paid for the pizza,
because to sell the extra pizza they have to drop the price of ALL pizzas. For example suppose they can sell 100 pizzas for £5 pounds, and
they can sell 101 pizzas for £4.99. The extra money they make from selling the extra pizza is (101 * 4.99) – (100 * 5) = £3.99. So by selling an extra pizza and dropping the price they make an extra £3.99, and not £4.99, the price of the pizza. This means that the marginal revenue curve is always below the demand curve, because the new price is applied to all the pizzas, not just the last one.

It is easy to see that to maximise profits, the firm should keep make pizzas until the marginal cost = marginal revenue (the point where
these lines intersect). Below this point they can make more money by selling extra pizzas; above this point, they will make less money each
time they make another pizza, because extra costs outweigh extra income. Having decided how many pizzas to make, the price they can fetch
for each pizza is given by point A on the demand curve. We can see that the monopoly makes fewer pizzas and sells them for a higher price
than suggested by the first diagram, represented here by point B.

So why the difference? The first diagram assumes “perfect competition” in which lots of different pizza companies compete in the same
market. What difference does this make? Well intuitively, if a second company enters the market everything changes. Each company has half
the market; the fixed costs will be increased, so fewer pizzas can be made at a profit; then one company tries to take market share by
dropping the price and selling more pizza into the same demand curve. I have not got the time or the mathematical sophistication to follow
this argument and I don’t know where it leads – but thats OK, because that is not the way the argument goes! Instead, economists make a
bizarre and nonsensical argument. First they say that because each firm is small, it cannot affect the market price, so a company can make
at extra pizza without dropping the cost. In the example above, our company sells the extra pizza for £5 and the extra money they make is –
£5. In this case, the “marginal revenue” is exactly the price they get for the new pizza, and the “marginal cost” curve and the “demand
curve” coincide, which brings us back to the original diagram.

But here is the thing; they say that a single company making an extra pizza makes no difference to the price, but at the same time, they say that if the market as a whole makes an extra pizza, the price drops, as shown by the demand curve. This is just flat nonsense. Keene shows that if this error is corrected, the most profitable thing for each firm to do is produce pizzas in such a way that the whole market is exactly the same as it would be for a monopoly. Of course the whole argument is false; to know how breaking the monopoly affects price and demand, you would have to do the analysis I chickened out of earlier.

To summarise, the supply and demand diagram does not exist as shown, and if it did, the price would not be as claimed. Price is not determined by the instersection of supply and demand curves; the story of supply and demand is bunk.

———————————————–

The interesting question here is, why has a generation of economists expended so much effort on a mistaken picture of supply and demand? I
think the reason is simple; the current generation of economists did not look at the world and seek theories to explain it; instead, they
decided a theoretical result that they wished to prove, and then found conditions under which this proof could be made, regardless of their
truth in the real world. Initially the conditions were fanciful; then absurd; and ultimately flatly impossible. The search for this proof
is reminiscent of the quest to turn lead into gold, or the quest for the holy grail, and is equally chimerical.

What is the result that they wished to prove? They wished to prove that the free market, without any constraints, would naturally lead to a
situation in which everyones welfare was maximised. The motivation for this is to try to prove the claim made ever since the days of Adam Smith that individual greed and selfishness lead inevitably to the greatest public good. The result is similar to the religious claim that because God all all powerful and all good, this must be the best possible wold, despite appearance. Economists believe that because the Market is all powerful and all good, the resulting economy must be the best possible economy regardless of the poverty and suffering that it produces. The quest is foolish; it is completely obvious that selfishness cannot possibly lead to the greatest good; if proof is needed, the Tragedy Of the Commons is sufficient. More on this next time.

Hello!

The terrible attacks in Paris last weekend have shocked the whole of Europe. The responsibility has been placed on ISIS, and there is a renewed determination to defeat them by any means, especially among the French. Most dramatically, Francois Hollande has openly defied the US refusal to cooperate with Russia, and has joined forces with President Putin and President Assad in their campaign against ISIS in Syria, calling upon the US to do the same.

Syria cannot boast of great natural resources. But through an accident of geography, it is has the bad luck to be located in a strategically critical location, on the crossroads of the great trade routes between China and Europe, and between Africa and Asia. Consequently, many disparate groups have taken a keen interest in its future.

It is complicated. The near neighbors of Syria include the rival regional powers of Saudi Arabia, Iran and Turkey, all of whom vie for influence in the region. Other neighbors include the warring factions of Israel and Palestine, the wreckage of Iraq, and the lesser states of Lebanon and Jordan. On a wider scale, these different countries are more or less aligned with the great rival powers of Russia and the USA. As a result, there are now militant brigades funded by Saudi from as far afield as Morocco in the West, and Chechnya in the East, Ukraine in the North and Yemen in the South, claiming to belong variously to the loose federations of ISIS, Al Qaeda or the Free Syrian Army. These groups are clashing across the country with the Iranian Revolutionary Guard, Hezbollah and the Iraqi army. The skies are patrolled by Russian jets, and the US drops weapons more or less at random to any group claiming to fight the government, whilst Turkey wrestles with the Kurds on the northern borders. At this point, it would hardly be surprising to find a brigade of Kalahari Bushmen fighting the Inuit in the suburbs of Damascus.

Amid this chaos and turmoil, should the UK join in? And if so – on whose side?

There is one more group which I haven’t mentioned which has an interest in the country’s future – the Syrians themselves. What do they think? I know a few Syrians, students and doctors currently living in this country. They oppose the President, Assad, and would like to see him go – but they are even more bitter about the USA who, like most Syrians, they blame for the rise of ISIS. Above all, they want a ceasefire, and a peaceful settlement. Other more bloodthirsty Syrians in this country try to disrupt Stop The War meetings, and seek to persuade Cameron to bomb the Syrian government. But these are ex-patriots. What do we know of Syrians on the ground?

It turns out – quite a lot. For many years, before and during the war, international polling organisations based in the UK, Germany, Canada and other places have conducted opinion polls in the country. The results will probably come as a surprise to those who have swallowed the pro-war propaganda. Before the war, Assad had the support of around 50% of the population. (To put this into context, Cameron’s rating is currently 41%, Obama is at 45% and Vladimir Putin at 89%, all according to Western based polling organisations). When the war started his approval ratings increased to 70% – because although many Syrians greatly dislike Assad, they feared that violent revolution would lead to destruction and chaos. The latest poll, back in July, puts Assad at 47%, across the country as a whole, and support for the Free Syrian Army (the “moderate” Syrian opposition) at around 30%. In other words, Syrians back Assad against the “Moderate rebels” by a clear majority. In a free and fair election, Assad would win a handsome victory.

I am constantly shocked and astonished at people I know who passionately oppose Assad, and believe that his violent overthrow is a step towards peace and democracy. This belief is completely irrational, because we have tried this experiment several times. We were told that Saddam was a monster and that he must be overthrown to save his people – the once prosperous, secular Iraq is now a smoldering radioactive ruin overrun by terrorists. Not convinced, we tried the same thing in Libya – with the same result. The same thing happened in Haiti, Somalia, Kosovo, Sudan, and others.

Many liberals appear to sincerely believe that if only we bomb a country hard enough for long enough, peace and democracy are sure to follow. But however attractive this may sound as a theory, observation has repeatedly proven that in fact the outcome is invariably wholesale slaughter and ruin. It is often said that “we must do something”. But clearly if all we can do is wreak death and destruction, doing nothing is the better option. This experience is enshrined in law. It is a war crime to support the violent overthrow of a government, however much you may dislike them, regardless of whether it is a democracy. And people who think the law is an ass should look at Iraq, and Libya, and… and think again. To support the Free Syrian Army in their attempt to overthrow the government of Syria is to support a criminal policy, against the wishes of the clear majority of the population, whose most probable outcome is millions of deaths and total destruction and ruin. It is deeply ironic that many people who think of themselves as liberals, and who passionately and sincerely wish to see peace and democracy prevail, support policies that are in fact criminal, antidemocratic, murderous and destructive.

There is clear evidence that the US and it’s allies have been arming, funding training and supporting ISIS in the hope that they will succeed in toppling Assad, who they have branded a monster. Over 80% of Syrians blame the US for the rise of ISIS. The Iraqi government have repeatedly complained that the US has been giving airdrops of weapons to ISIS in Iraq; the ISIS controlled areas in Syria have all got routes directly back to NATO member Turkey, whose president has repeatedly called for the overthrow of Assad; US bombing raids which pretend to target ISIS have in fact destroyed the Syrian civilian infrastructure and enabled ISIS to transport oil from Syria back to Turkey to fund the war.

Russia by contrast has deployed serious weaponry against ISIS including multiple cruise missiles, which have destroyed thousands of ISIS military assets, and turned the tide of the war. ISIS are now on the run from areas they once controlled, and their only hope is to take refuge in the “safe zone” that the US are attempting to create on the border of Turkey. The Free Syrian Army have joined the Russian forces, sharing intelligence to guide bombing raids and defeat ISIS, who they see as a greater enemy than Assad. And the French, who have been following US policy to their enormous cost have now decided to join the Russian anti-ISIS coalition too.

So where does the UK Government stand in this? Do we really need more bombs? Is that the best way to improve the situation of millions of ordinary civilians? To me it is clear that more bombs are not going to help this situation. Ordinary people do not support religious fanatics; in Syria, Christians, Jews and Muslims have peacefully coexisted for centuries. And anyway, we are far beyond the point where the the most urgent need of the civilian population is more bombs. Surely it is obvious that the best use of our resources would be to provide food, shelter and medical supplies to the victims of the war, whilst engaging all our diplomatic skills at negotiating a ceasefire and all our influence in cutting off support from their western backers. ISIS thrives on war; in a climate of peace and financial security they will wither and die.

Hello!

This week has seen two events that threaten to shatter the carefully constructed narative about regime change in the Middle East and Africa. Firstly, the US lost a city, and bombed a hospital in Afghanistan, a country which it has occupied for over a decade. The same week, Russia destroyed the command centres and weapons depots of ISIS, centres that ISIS had built in areas of Syria that have been controlled by the US and its allies for the last year.

The bombing of the hospital is not unusual; the US have bombed dozens of hospitals in Iraq and other places. But the contrast with the bombing of ISIS puts it in stark relief. It is no longer possible to believe that the US have been fighting ISIS; with half a dozen jets Russia destroyed in 1 day what the US had failed to destroy in a year. It is no longer possible to believe that the US avoids civilian targets; the hospital bombing was not an accident. The hospital is in a war zone, and made sure that its coordinates were known. The US claimed there were rebels in the grounds; but every precision missile hit the main block. Calls to the NATO hotline were ignored. Medecins Sans Frontieres, the charity running the hospital do not believe this was stupidity; they have called the bombing a war crime, and have called for an international enquiry.

What are the US trying to achieve? Who knows? One can only guess.

In 2000, a group called “Project for the New American Century” published a report recommending the use of military force to achieve its strategic and economic objectives. Its members included Dick Cheney (vice president under George Bush), Donald Rumsfeld (Defense Secretary), and Paul Wolfowitz Under Secretary of State. Five countries were mentioned in the report as “deeply hostile”. General Wesley Clarke (Supreme Allied Commander, NATO Europe) has said the talk at the time was of destroying 7 countries in 5 years. The countries were Iraq, Syria, Libya, Somalia, Sudan, Lebanon and Iran. But the report lamented that without a “Pearl Harbour”, the opportunity for action would be lost.

One year later, in 2001, the Twin Towers were destroyed, and the US launched a tidal wave of destruction across North Africa and the Middle East. In the last 5 years, the US and its allies have bombed Afghanistan, Iraq, Yemen, Libya, Somalia, Syria, Pakistan and Sudan (they also threatened Iran with attack, even nuclear attack, although that threat has receded). In each case, there has been enormous destruction of civilian infrastructure, and the total death toll is in the millions. Several of these countries have been completely destroyed, and all are reduced to anarchy and chaos. The destruction and death toll is comparable to the Nazi holocaust. And all that seems to have been achieved is the restoration of the Afghan opium crop. It is very difficult to understand what benefit the US has gained from this expense.

Regardless of US motives and intentions, that facts are clear. For 14 years they have actively engaged in the military overthrow of foreign governments, resulting in the destruction of civil society and enormous loss of life. And it has cost the US trillions of dollars (yes, trillions), when their own road, rail, power and water infrastructure is crumbling. The details of the “Colour Revolutions” that the US uses to overthrow governments vary, but there are common patterns. The process is most clearly seen in Ukraine.

First, the US sets up “pro democracy” groups in the target country, to spread anti government propaganda at home and abroad. The budget for Ukraine was reported to be 11 billion dollars, a very large sum for any country. Next, a marginalised group is identified who can be encouraged to protest. In Iraq it was the marsh arabs; in Libya, the Benghazis; in Syria the middle class Sunnis; in Ukraine it was the historically powerful right wing nationalists (a.k.a. Nazis). A protest is arranged in the main square of the capital, and US agents go undercover to ensure that it makes trouble (in Iraq, MI5 agents were caught dressed as Arabs, driving a battered car full of improvised explosives). After the protest ends, and the moderates go home, the hard core are encouraged to stay behind.

If the National Front were to occupy Trafalgar Sqare, they would be cleared by the police with horses, tear gas and water cannon in short order. But the Ukraine government knew that any use of force would be used as an excuse to sanction the country, so the main square of Kiev was occupied by fascists for weeks, smashing buildings, looting shops and lighting fires, whilst the security forces stood by. Eventually, the US got bored and decided to act. Secretary of State Victoria Nuland was taped discussing who they would install as president with the head of the CIA. When the CIA chief suggested that the EU might have an opinion, Nuland famously said “Fuck the EU”. Snipers were sent in to the square to shoot at both protesters and security services, in order to cause havoc (as testified by the Estonian foreign minister to the UK representative to the UN). The shootings were blamed on the government; the parliament was stormed, the president fled, and the fascists took control.

Their first act was to ban Russian as a second language in Ukraine. Now large areas of Ukraine, including Crimea, are historically Russian, and the inhabitants do not speak Ukrainian. Naturally these areas protested, and response, they were bombed. It was as if the National Front had stormed Westminster, and bombed Edinburg when the Scots asked for independence. There has been civil war in Ukraine ever since.

For the last 4 years the US have been attempting to do the same in Syria. But against all odds, Assad clung on, (with some help from his friends), perhaps due to his popular support as confirmed by Western polls. And finally, perhaps, the wave has exhausted its strength and the tide has turned. It is a cliche, but true, that like Napoléon, Hitler, and others before them, the US have awoken a giant, and the gansters in charge have met their match.

Putin is a ganster too, and Putin’s Russia is not somewhere I want to live, but he is a Grand Master at the game of international chess, and he has played a masterly game. He has nothing like the resources of the US at his disposal; he could not hope to win a straight fight. For over a decade he has patiently waited whilst his allies were bombed, his friendly neighbours overthrown with “Colour Revolutions”, his economy ruined; he has shrugged off a personal hate campaign, threats of regime change and personal threats to his life. He has ignored every provocation, one imagines to the fury and chagrin of his enemies- and now the time is ripe. Quietly, in the background, he has forged alliances with Iran and China. Iran has been enormously strengthened by the destruction of Iraq, and is the regional superpower now that the Saudi economy has collapsed. China is a world economic superpower, and Russia a military superpower. I hope and believe that Russia’s intervention signals the begining of the end of war in Syria and Iraq; the US mercenary armies are on the run, and finally, I hope, those regions will be able to start to rebuild. And I hope too, that the US will come to its senses and start to contribute to global cooperation as one among equals.

Hello!

Jeremy Corbyn’s new chancellor John McDonell wants nationalisation – of railways, health, and other sectors. This is a good topic for discussion, but there is one special case which I want to talk about first – should we nationalise the banks? To help answer that, let’s recap how banks work.

Suppose you go to a bank and agree a loan of £100,000. The money is entered into your account and you can start spending – on a house, a car, whatever. The bank will charge you interest, at, say 4%. Now, where did the money come from? And do the banks deserve the interest?

Some people might think that the money belongs to the bank, and they are charging you for its use, but this is wrong. Unlike money lenders, banks do not loan their own money.

Other people imagine that the money has been placed in the bank by depositors who allow the money to be lent out, and that the bank gets its money from the difference between what it charges on loans, and what it pays for deposits. But this is also wrong. Unlike building societies, banks do not loan out deposits made by other customers.

Many knowledgeable people believe that the bank uses a “fractional reserve” system (this is a bit complicated. You can skip this paragraph). If 100 people deposit 100 pounds each, the bank has 10,000 pounds in hand. The bank can safely lend out 9000 pounds, keeping back 1000 pounds knowing that it will not have to pay all 100 depositors back at once. This 9000 is used by the borrowers to buy cars, and the car saleswomen – deposit the money back in their own accounts in the bank! The bank now has 9000 pounds in hand in deposits, and lends out 8000… and so on. In this way, the 10,000 pound deposit is loaned out several times to different people – totalling about 100,000 altogether. The bank has a limited amount of money and so it lends the money to people who will pay the best rate according to market forces.

This is an interesting story, and merits further discussion. But it is also wrong.

The truth is this. When the bank makes a loan, it simply enters “100000” into your account. This is new money, and you can now go and spend it on whatever you like. No other account is affected in any way. The bank creates the money fresh, on the spot. It takes about 5 seconds. There is no limit on how much can be created. It costs the bank nothing. There is no risk, because banks are backstopped by the government. And for that 5 seconds work, the bank will charge you 4000 pounds a year, until you pay back the “loan”. (I have put “loan” in quotes because this is clearly not a “loan”, since the bank did not have anything to loan you in the first place.)

In fact all the money in our economy, all the money we use every day, was created out of nothing by the banks at zero cost and zero risk. And they charge interest on every penny, at rates up to 30%. This is why they are so fabulously rich.

When I first discovered this I found it shocking. I told other people – and they got quite angry. They thought I was a mad conspiracy theorist. But it is true. The Bank of England recently wrote a report which explains it very clearly. You can find the report here;

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Now, the interesting question is – what about Government borrowing? Who does the Government borrow from? The Bank of England is much less clear on this point, and talks about bonds and money markets, and market makers… but as far as I can tell, if you follow the trail the answer is the same. When the government borrows 10,000,000,000, the money is created by commercial banks, at zero cost and zero risk – and we taxpayers pay the banks 100,000,000 pounds a year for it.

This is simply outrageous!

But it does not mean we have to nationalise the banks.

The solution to all the countries financial problems can be solved at a stroke by a single, simple change to the rules. Instead of the banks creating money and lending it to the Government for interest – the government could create the money and lend it to the (private) BANKS for interest. The right of banks to create money would be revoked; if they wanted to lend money to a customer, they would have to borrow it from the government first – and pay interest. VAT could be completely scrapped. And the government would never be short of money, since it could create however much it needed for nothing. Rules could ensure that the money was collected back in taxes and destroyed, so as to avoid inflation. And the bankers would be reduced to the status of mortals.

Why does no-one do this? Because it is illegal under the Maastricht Treaty. Which was written by the banks.

I would welcome discussion on this – but I get so much spam here it is ridiculous. If you have a comment – please send a mail and I will post it here.

Have a nice day!

Tim.

Hello!

There is a popular belief that so-called “benefit scroungers” are a scourge, sapping the strength of the economy by choosing to live on state hand-outs forcibly taken from the tax payer. Of course we cannot simply leave helpless people to die, but many people would argue that benefits should be cut in order to force everyone who can work to earn their living like decent citizens, instead of gorging on the wealth generated by the honest and productive working population.

When we talk about benefit scroungers we need to be clear about exactly who we mean. We are not talking about benefit fraud – that is simply illegal, like any other fraud and obviously cannot be condoned by anyone. Nor are we talking about people who have a job, but who do not get paid a living wage – the “deserving poor”. You could argue that they should get a better job – but somebody has to do the jobs which do not pay a living wage – unless you force ALL employers to pay a living wage – which we can come back to another time.

We are obviously not talking about people who are sick or disabled – it would be a savage and barbaric society that let them starve. Nor can we be talking about children. We cannot mean the unpaid carers of toddlers or the old or the otherwise infirm, because without the carer, those people would have to be supported by the state at greater expense. We shouldn’t penalise people who are genuinely looking for a job – nor should we force people who are finishing a higher degree to abandon their studies. Finally, it would be a serious injustice to cut off people who have been paying national insurance and find themselves unemployed through no fault of their own – they have paid into the system and are entitled to take something out.

Is there anyone left? Is there a mass of people who have consciously chosen to live in poverty, rather than enjoy the wealth they could gain by picking fruit and cleaning toilets? I don’t know. But just suppose there is. What is to be done about them?

Firstly, I must point out that with power comes responsibility; if you want people to work, you have to provide jobs that pay a living wage. It is surely wrong to insist that people work when there is no work for them to do. There is fashionable belief that the Free Market Will Provide, but this has to be set against the observation that actually, it doesn’t. And there is after all no shortage of useful work to be done; within the next few years we will have to transform our energy and transport systems away from fossil fuels, a task that has been compared to a war effort, that could employ millions of people with every possible skill. It is a paradox that has often puzzled me, how there there can be so much work to do, and so many people to do it, yet no way of getting the work done. I realise now that the key to the paradox is our system of money.

Followers of this blog will know that I am in favour of restoring the power to create money as debt to the Government (that is, us, we the people). Many people do not understand that money is debt. Money is not a constant quantity. Our economy is constant seething foam of money being created as debt, and disappearing when the debt is paid. At present this debt is created by banks, for vast profits – but it could be created by the government for nothing. Today, money can be seen as an accounting tool that can be used to mobilise the effort of rebuilding our infrastructure. It can be created by the government, used, and then destroyed again (if this seems crazy, please read my first three posts for more details!). Indeed, as I write, even the IMF has suggested that Greece should create it’s own currency for internal use, in parallel with the Euro. The popular idea that “there is no money” to facilitate our own citizens to build our own projects with our own materials is simply not true. Money can be created for this purpose – and taken out of circulation when its purpose is served.

However, there is second, powerful idea that can eliminate benefit scroungers at a stroke. The Green Party suggest that all citizens should receive a basic “citizens income” simply because they are members of the population. This seems a very radical idea until you realize that most useful work is done by machines with little human input. A farm of a thousand acres can be run by a handful of people; electricity can be generated by unmanned turbines and solar cells; freight trains have a single driver; modern factories rely on robots with little intervention. Certainly machines do enough work to give everybody a basic standard of living with very little input, so why should we not all be entitled to benefit from that? If some people choose to live on that basic income, earned by machines, there is no rational reason why they shouldn’t only our puritanical work ethic insists that they should work anyway.

Keynes suggested that in extremis the government could pay people to dig holes and fill them in again. This seems like a crazy idea – until you realise, on consideration, that a a great part of our economy is exactly such a giant make-work scheme. The primary purpose of jobs in our economy is not to produce goods and services, but to redistribute the wealth created by machines – and to redistribute it in a capricious way, rewarding the selfish and strong at the expense of the selfless and weak. To start with, in my view (and in the view of Lord Adair Turner, former banker and now regulator) almost all the “city” is redundant, and simply extracts the wealth created by others by various devious schemes – but it goes further than that. We live in a consumer society of “built in obsolescence”. Almost every “durable good” we buy is in fact not made to be durable but to be ephemeral, so that we constantly have to dispose of old items and make new ones. The fashion and electronics industries are prime examples. In my previous description of a thneed factory I explained how, by producing genuinely durable goods, and working shorter hours, everybody could be materially and socially better off.

So to stamp out “benefit scroungers, I suggest a two-pronged approach – firstly guarantee a good job for everybody by starting the urgent effort of rebuilding our energy infrastructure, paid for by government created, interest-free debt. And secondly pay everybody a “citizens income” in recognition of the fact that most work is done by machines, and most human effort is unnecessary anyway. And incidentally, stop wrecking the planet by pursuing this mad policy of increasing activity (read GDP), by making stuff and throwing it away at ever increasing rates.

There. That’s enough for one evening!