2 May 2016

THE “UNREPEATABLE” MISTAKES OF THE 1930s According to the IMF (and pretty much everyone else, I believe) the Great Depression of the 1930s was made worse by protectionism. After the financial crisis that blew up in 2008, leaders of the Group of 20 (G-20) economies pledged to “refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO inconsistent measures to stimulate exports.” They all agreed that a return to protectionism would be a disaster. The World Trade Organisation (WTO) is not a promotor of liberal free-for-all trade. It is an organisation of 162 countries based in Geneva (where else?) that employs 640 Secretariat staff. It particularly promotes the interests of developing nations and negotiates and monitors international trading rules. As we shall see in a moment, developed nations are showing an increasing wish to do their own thing. In its own words: “WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions.” Agreements are negotiated and then ratified by member countries one by one. Many of them ratify with qualifications that they individually require. The phrase “bureaucratic nightmare” comes to mind. The Doha development agenda has been under discussion since 2001. It is easy to suspect that these negotiations will occupy entire (probably highly agreeable) working lives. Consider this sinister undertaking: “Virtually every item of the negotiation is part of a whole and indivisible package and cannot be agreed separately. This is known as the “single undertaking”: “Nothing is agreed until everything is agreed”.” Nothing is agreed until everything is agreed. Wow. IS INTERNATIONAL TRADE REALLY CONDUCTED BETWEEN NATION STATES? The WTO was founded in 1995 on the premise that international trade is an activity that takes place between nations. As far as this applies to undemocratic nations it is at least partly true. North Korea, for example, exports a fair amount to China. I’m guessing that the nations involved monitor this pretty closely. Yet much of what passes for political debate seems to assume that we all function in this way. Don’t take my word for it. Listen to Donald J Trump on...

15 May 2014

Boswell attributed to Dr Johnson these well-known words: “Patriotism is the last refuge of a scoundrel.” I suppose there is some merit in this view if you accept that the great tyrants of history have tended to claim to be patriots (though “scoundrel” seems a mild word to apply to the men responsible for the Holocaust, Collectivisation and The Great Leap Forward). Johnson actually wrote at length on the subject of patriotism, specifically in opposition to American independence. “He that wishes to see his country robbed of its rights cannot be a patriot. That man, therefore, is no patriot, who justifies the ridiculous claims of American usurpation; who endeavours to deprive the nation of its natural and lawful authority over its own colonies; those colonies, which were settled under English protection; were constituted by an English charter; and have been defended by English arms.” I think the key sentence here is the first. It raises the interesting but complicated notion that a nation can have rights, beyond the aggregated individual rights of its citizens. It is a potentially dangerous idea and has been the cause of many international disputes, some farcical, others calamitous. After a couple of world wars and a widespread if not ubiquitous international consensus in favour of eliminating racial discrimination, patriotism is a trickier position to hold than it once was. Patriots use their support for sport as a way of expressing themselves. I found the chauvinism during the 2012 London Olympics somewhat distasteful (being of the opinion that hosts have the obligation to put the interests of their guests first) but certainly not dangerous or harmful. If crowd behaviour limits itself to sport, we should be thankful. In 2014, financial patriotism has started to feature in political debates. We have become accustomed to being told that e.g. Romanian families will travel 2000 kilometres in order to claim state benefits in the UK. (I find this hard to believe. How many Britons would emigrate to Romania on the promise of living in poverty for free?) Now, somewhat bizarrely, some people object to foreigners bringing too much wealth to the UK. They are supposedly buying our trophy assets, aided by the fact...