ECONOMIC PERSPECTIVES – 108 [NOVEMBER 2021]

EMILE WOOLF

With prices increasing rapidly across a wide range of materials, goods and products, especially basics like foodstuffs and energy, it is astonishing that what citizens now encounter every day is so persistently, and perversely, denied by political and institutional leaders who clearly inhabit a parallel universe. They may reluctantly acknowledge the evidence of pervasive inflationary pressure but refuse to accept either its scale or their own role in causing it.

rampant inflation? just a passing phase….

 

In the Treasury and Bank of England the wave of gathering inflation is dismissively referred to as a passing phase, a “transitory” phenomenon caused by post-pandemic supply chain disruption, delivery-driver shortages, port congestion and, of course, profiteering instincts of manufacturers and traders – coupled with the profligacy of newly-monied consumers determined to spend, spend and spend!

 

Exonerating the fools in charge

 

So, according to statist cognoscenti, blame for all this lies with the market participants themselves – not a whit with those at the controls.

The unprecedented expansion of the money supply conducted by every major central bank – whether in the form of job-saving furloughs, cheap loans and subsidies to save zombie businesses, schemes like “eat-out-to-help-out”, “build back better” – these and the other hundred quasi-humanitarian schemes monetised into existence courtesy of the infinite largesse of the “magic-money-tree” – are perversely blameless.

the overarching fraud called quantitative easing

 

 

Yet they are all subsets of the overarching fraud called “quantitative easing”. Any assertion that the central banks’ money-printing frenzy might itself have contributed to rampant price-inflation is dismissed in official circles as ignorant alarmism – notwithstanding the record that every single inflationary episode in economic history involved expansion of the money supply.

 

Creative dreaming

 

My last essay referred to Boris Johnson’s ’s wishful determination that Britain under his direction will prosper as a “high-wage economy”, despite his obvious problem of having no idea what his aspirational target actually means, still less how to get there.

 

But he is not the only leader suffering from the ailment of “dream-based policy”: I see in this morning’s paper that no less a pillar of economic sagacity than President Joe Biden “demands action to combat soaring prices after US inflation surged to its highest rate in more than 30 years.” At the same time Biden directed the National Economic Council “to find a way of reducing soaring energy costs”. Wow! No sooner said than done – or as the late, great Tommy Cooper might have put it, “Jus’ like that!”

 

One does indeed wonder about Biden’s competence to govern, which his tendency to drift into somnolence during meetings must present a challenge. It reminds us of President Calvin Coolidge, who slept 11 hours per night and snatched 2 or 3 naps by day. When he died Dorothy Parker said “How can they tell?”

Johnson and Biden – fellow travellers

 

 

As they hurtle towards their predictable nemeses Johnson and Biden are saddled with like-minded fellow-travellers. Neither the heads of their Central Banks nor Treasuries have any better idea how to a reverse the shredding of their currencies’ purchasing power. None of these holders of high office can see that “whatever you’re doing, just stop it!” would be good advice for a start.

 

Ignorance of the deepest dye

 

It’s not as if knowledge is absent – but sadly, we are re-living the dark ages. It was beautifully expressed by the Chinese sage Lao Tsu: “You cannot speak of oceans to the well-frog, the creature of a narrower sphere; you cannot speak of ice to the summer insect, a creature of the season”.

 

Nor is this miasma confined to economics. Ignorance and double-standards prevail wherever you care to look. Consider the behaviour of the Brussels mafia towards alleged constitutional transgressions in Poland and Hungary. While the German Constitutional Court is able to tell the European Court of Justice to kindly get lost, and Spain rebels over its right to appoint judges, all we hear from EU officials is how Hungarians and Poles are “dismantling democracy”!

the plague of cancel-culture

 

 

The plague of “cancel-culture” is another example of institutional blindness widening its scope to sweep up any unpalatable historical facts. Our Prime Minister sounded truly apologetic in Glasgow last week when, in the context of our need to expand efforts to counter climate change, he referred apologetically to Britain as “the birthplace of the Industrial Revolution”.

 

Why the compulsion to apologise?

 

He’s really good at apologising in order to make a point – and then wimpishly missing the real point! What is the matter with him? Why did he not, as historian Robert Tombs has suggested, accept a plaudit for Britain’s part in creating modern civilisation by lifting the human race, with an average life-expectancy of 35, out of abject poverty in the most significant development in human history since the Bronze Age?

 

Why must “British Empire” evoke only invasion, capture and plunder? Must the current generation of New Zealanders, Australians and Canadians be admonished for establishing societies founded on invasion, dispossession and genocide as if that were the beginning and end of the story?

 

In any case, it is the height of presumption to imagine that our leaders are in position to apologise to the present generation for ancestral developments now classified as malign by reference to the narrow prism of contemporary mores, as if context doesn’t matter at all.

 

No wonder the habitual protesters can sweep any figure tenuously connected to the slave trade into the “sin bin”, regardless of circumstance or motivation. Yet the Nigerian, Egyptian and Turkish overlords who enriched themselves by selling their own countrymen – and women – into slavery are rarely mentioned in the rites of castigation. Moreover, you would be hard-pressed to name a nation that has never practised slavery – which is why it’s far more rational to honour the citizens of this country who fought against.

 

De Klerk and Mandela

 

What a contrast to hear former South African President FW de Klerk, who personally engineered the release of Nelson Mandela from his 27-year incarceration some 30 years ago, choosing to declare in his death-bed message this week: “Let me today, in this last message to the people, say I, without qualification, apologise for the pain and the hurt and the indignity and the damage that apartheid has done to black, brown and Indians in South Africa.”

A proper apology – note the difference

 

Now that’s a proper apology, derived from the direct experience of a man who personally contributed to the damage he was apologising for – not a hollow gesture staged by a gang of callow halfwits seeking faux-absolution by toppling a statue.

 

I am confident that this insanity will run its course. The wider public is growing wise to obsessive, politically motivated, messaging – and are able to contextualise, say, a Churchill utterance that may now be considered “racist”, without overlooking his crucial role in saving the world from genocidal totalitarianism, as Tombs puts it, also noting the ridiculous selectivity of always choosing British targets. When railing against “racism”, why revile Thomas Huxley but not Karl Marx? Or President Xi?

 

 

[EMILE WOOLF/NOVEMBER 2021]

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