#91: SEEDS goes live!

MAKING DATA ACCESSIBLE

Those of us who see the economy primarily as an energy system rather than a financial one are very much in the minority. Most policymakers and commentators cling to conventional interpretations, even as real events refuse to conform to their world-view. We’re not going to argue our case successfully on theoretical grounds alone, but need evidence to back up our interpretations.

This is what SEEDS – the Surplus Energy Economics Data System – is all about.

The development of SEEDS has been a very big project, almost dauntingly so at times. Now, though, it has reached the point where its output can be made generally available. The aim has been to provide those interested with sufficient data in free-to-download form, whilst not handing comprehensive data free-of-charge to commercial organisations.

Accordingly, SEEDS data has been divided into two products. SEEDS Snapshots are freely available in PDF format, whilst a modest charge will be made for the more comprehensive SEEDS Pro datasets.

I am delighted to inform readers that twenty (out of 22) SEEDS Snapshots are now available for download. You can find them on the resources page newly added for this purpose. This means that you can now access data for Australia, Brazil, Canada, China, France, Germany, Greece, India, Italy, Japan, Mexico, the Netherlands, Norway, Poland, Portugal, Russia, South Africa, Spain, the United Kingdom and the United States. The sets remaining to be added are Saudi Arabia, and the world overview.

After summaries in local currencies and US dollars, the data sheets look first at the energy “mix” for each country – primary energy consumption is broken out into fossil fuels, renewables and an “other” category comprising nuclear and hydroelectricity, whilst production of energy is stated in aggregate.

Next comes a summary of energy economics, including the estimated trend ECoE (energy cost of energy) and EROEI (energy return on energy invested).

Economic output is divided into three categories. The first of these is GDP, stated at constant values. The second, “underlying output”, adjusts GDP for the estimated extent to which borrowed consumption has inflated the headline number. The “real” economy further adjusts the latter for the economic rent exacted by the energy cost of energy. Each of these numbers is then expressed in per capita terms, and rates of growth are stated both in aggregate and at the per capita level.

Further financial data is set out in the remaining tables. Debt at current values is broken out, where possible, into government, household and PNFC (private non-financial corporate) sectors, and the total is also stated in constant, inflation-adjusted terms. Debt is then expressed as a percentage both of GDP and of the borrowing-adjusted underlying equivalent.

Annual growth and borrowing are then compared, in constant terms. Thus, Australian GDP increased by A$39bn in 2015, of which it is estimated that A$30bn was debt-fuelled consumption. Also in 2015, Australia borrowed a net A$284bn, using A$254bn for purposes other than boosting consumption. Over the ten years from 2005 to 2015, each A$1 addition to GDP was accompanied by A$4.35 in net new debt.

The penultimate table summarises government finances in both current and constant values. This is broken out into government revenue, interest paid on government debt, and all other public expenditures, resulting in a surplus or deficit. All of this is set out in current, constant and percentage terms. Thus, Australia’s government deficit in 1995 was A$18bn, equivalent to A$30bn in constant 2015 values, and also equivalent to 3.4% of GDP.

Finally, a similar summary is provided for the external sector. This shows net exports, and the aggregate of current income, which notably includes returns on investments and interest paid on debt. These sum to the current account, a critical indicator of a country’s financial relationship with the rest of the world.

In future articles, we can explore the methods and conclusions of the SEEDS system in depth. For now, though, do download some of these data sheets, and explore what you can get from them.

 

39 thoughts on “#91: SEEDS goes live!

  1. Congratulations Tim!!

    I hope to see you talking about it on Newsnight soon!

    Or maybe with a few economic youtubers first?

    • Thank you, much appreciated!

      I doubt if Newsnight will get to this any time soon, and I’m not a fan of you-tube – still, one can live in hope…..

  2. Many congratulations for this and all the work you are doing. I have followed you for several years now and you continue to be essential reading for me. As for your latest release, I anticipate the reaction from the establishment will be – “look away now, nothing to see here”. Any meaningful reform will only take place when it is forced upon them.

    • Thank you very much. Yes, I do think they’ll be dismissive.

      This said, I note some glimmers of reality in Britain (!) with today’s bank stress tests unveiled by the BoE. The tests involve interest raises rising to 4% over four years – a massive shock, given the scale of debt, especially mortgage debt. Also, the tests look at what would happen if foreign investors’ lost their appetite for UK assets – which again would be dramatic, given how the UK depends on foreign capital inflows to balance the current account deficit.

      I wonder if the results will be published?

  3. Thank you Dr. Tim!!!
    Great work……for humanity at large.

    One would have thought that at this point you will be invited to all kinds of places for all kinds of talks.
    The fact that this is not happening………explains more than one needs to know……about the times we are living in.

    THANK YOU.

    • You are very kind, Peter. I must confess that I really enjoy doing this, I find it fascinating, and learn a lot from feedback. I must also admit that I’m not that interested in meeting decision-makers for those kind of talks (and haven’t been invited to any for a long time). These people never listen anyway, in my experience.

      The times we are living in are a bit depressing – it’s rather like living in France a year or two before 1789, knowing that the regime is crumbling, but not knowing either how long it will last, or what will replace it…..

  4. Thank you Tim for all your efforts on this and giving us a new perspective on economics.

    • Thank you. The methodology (or, at least, the principles), were set out in “Perfect Storm”, a report published when I was head of research at Tullett Prebon; and in my book “Life After Growth”.

      A few years ago, I also issued “A brief guide to surplus energy economics”. I’m in the process of producing a new version of this, as well as starting work on a new book.

  5. Never ever unreliable and always essential. Thank you I am much looking forward to your next book.

  6. Hello Tim. I’ve just come across your blog and I must say it’s the most interesting economics blog i’ve come across, enlightening I could say.

    I fear this may be a very selfish comment which may not contribute much to the discussion, but I would still like to get your opinion. From your research you imply that the long term prosperity for the UK is on a negative trend due to energy policies taken by our government. Your analysis coupled with my own experience of how ridiculously overvalued UK property prices and living is becoming has got me thinking, is it worth jumping ship and immigrating to a country with better long term prospects? (I’m a degree educated 24 year old for reference)

    I ask this in a purely economic sense rather than for any particular changes in cultural or personal preferences. From your SEEDS snapshots it would seem that Norway would be a good choice as they have strong long term growth potential, probably driven by their high adoption of Hydro-electric power. I know obviously that individual circumstances differ massively in each economy, but would moving to a country like Norway offer a better opportunity for long term prosperity?

    • Andrew:

      Something like this really is a purely personal choice and, as someone once said, “a country is more an idea than a place”. Before moving overseas, issues like family, friends and one’s own sense of identity are arguably even more important than economics.

      Objectively, the conduct of the Norwegian economy has been admirable, whilst that of the UK has been lamentable. Norway is not a country I’ve visited, though I’ve had conversations with many Norwegians. They have a reputation for being worthy but rather dour, and Norway has a climate colder than I, personally, would find comfortable. Then, of course, you would have to learn Norwegian.

      All too often, British people moving to another country don’t bother to integrate, but think of themselves as “ex pats” rather than “immigrants”.. That attitude is mistaken, in my opinion. If you do move to another country, you should (a) commit, learn the language and embrace the country, and (b) not try to change it.

      If I were 24 again, and without family and other ties, I would emigrate. That would be not only because the UK economy is falling apart, but also because neoliberalism has induced a selfishness that I find unpleasant. One would have to think seriously about Australia, in my opinion, or New Zealand.

    • Tim,

      Thanks for your comment, obviously I was well aware that it is a very personal choice, hence why I asked about the economics of the matter. I totally agree that the lack of integration by Brits often means emigration doesn’t work, and the language barrier would probably make Norway too difficult for me personally.

      It’s ironic that you bring up Australia and New Zealand as I have put some serious thought into moving to both of these locations. Maybe it’s the fact I feel British societies identity is drifting away from what I remember as a child, recently made worse by the increasing intensity of hatred from Brexit ‘sides’.

      You mention that the performance of the Norwegian economy has been admirable compared to the poor performance of the UK. But how do the economic outlooks for Australia and New Zealand compare to that of the UK? From my understand both countries are going through a similar housing bubbles, both have high debt issues and both are going through similar ‘unemployment’ problems to the UK. (Self employed and gig economy ‘fake’ employment)

      However, even if they are all sinking ships, beaches and BBQ’s beats drizzle and reality TV, my new perception of UK society, any day of the week.

    • Understood.

      New Zealand isn’t covered by SEEDS, but I can give you a steer on the UK, Australia and Norway.

      First, prosperity – this is per capita GDP, adjusted for (i) borrowed consumption, and (ii) trend ECoE.

      Per capita prosperity in USD (PPP conversion):

      Norway $69,300 (big energy component – otherwise about $55,000)
      Australia $38,100
      UK $29,300

      Next, trend in prosperity:

      Annual rate of change in prosperity:

      Norway +0.6%
      Australia -0.7%
      UK -1.5%

      Finally, dependency on credit:

      Annual borrowing as % of GDP:

      Norway 4.6%
      UK 5.5%
      Australia 6.0%

  7. Hi Dr T. On a similar basis, where would you recommend in the European Mediterranean & why? I have considered NZ & Oz very hard but while they have so much to recommend them, I’m still put off by the isolation & the fact that it’s hard to see their future not as being increasingly pulled into the Asian orbit, controlled by China. (thus defeating the object of gravitating away from insecurity)

    • So much depends on your own circumstances – family, skills, work, tastes, lifestyle – that it is very hard to comment.

      In a phrase, “Spain, but nowhere near expats or the Costas”.

      Personally, I opted for Menorca and have never regretted it. My decision was accidental – I came here when a girlfriend wanted sun and I wanted the Nelsonian history. I was bowled over by the lifestyle, the opposite of the neoliberal/consumerist hustle and aggression that I was so getting sick of.

      If you like cities, Barcelona is my favourite by a long margin – sophisticated, “Spanish but different”, culture, architecture, and a Parisian “cafe society” atmosphere with much better weather. If considering Spain, I’d advise not the Costas, and not expat communities. Learn Spanish and enter into the life, get to know the locals.

      By all accounts, Galicia (north west) is said to be exquisite, though wet, and I hear nothing but good of the Vasco (Basque) country, and San Sebastian as a centre – both are on my “must visit” list for this year. The foothills of the Pyrenees probably offer a lot. I woudn’t go within many, many miles of Alicante or Marbella. Sevilla is said to be great, but I couldn’t hack months of 40+ temperatures. But west of Gibraltar – the Costa de la Luz – is said to be lovely, and not over-developed like the Med side from Gib. This is the eastwards (Spanish) extension of the Algarve, but much less well-known.

      Italy, of course, is fun, and I hear great reports of the Biscay coast of France.

    • Savant, in a failing multi trillion currency environment, your culture, your TRIBE, is not about miles. Its about trust. And skills.

      Keep both passports.

  8. @Houtskool, I see your point, but quality of life has become noticeably poorer in the UK recently when the effects of brexit (whatever they will be) have barely begun; which yes, at worst, would only exacerbate the existing parlous financial situation. So it’s hard to see a good future here.

    Added to that, as Dr T. says, it’s more the nasty atmosphere that’s very offputting – my extended family comprise of ~10 nationalities, most European and have been feeling very persecuted for months. They keep a low profile, even I don’t speak ‘foreign’ languages on the street/anywhere in public. It’s disconcerting to say the least when almost any news outlet is screaming incitement against EU citizens on a daily basis, this is not a life.

    As the economic pain begins to really bite, the public will look for scapegoats as mobs always do, and rather than deal with their own sellout leaders, they will take the easy option of attacking anyone who seems different enough from them. Some of us left countries in a hurry before, (unexpected coups in the 3rd world) so know that it’s better to laugh later about having panicked needlessly, than wonder why you didn’t do anything to help yourself after having suffered losses.

    • Hi Savant, imho, a third world country is not the place to be. They will be offered on the altar. Get your tribe in order. Neighbors, friends, family. I live in the Netherlands, crowded as you might know. The impact of the energy situation on living standards, after fiat currencies blow up, will be severe, there’s no place on earth to avoid the consequences, so i won’t move.

      You don’t step into your car when the hurricane approaches. You hide in the cellar with your loved ones.

      My two cents. Get out of big cities. Fiat currencies provided for the lack of cheap energy, for 30 years, and counting. You can always be a hunter/gatherer after the dust has settled.

    • Savant

      Your comments are astute, if disturbing. It is a mystery to me why so many cannot distinguish between legitimate patriotism and nasty and irrational xenophobia. One factor may be that legitimate, calm debate over immigration was prevented, resulting in an explosion of bottled-up frustration. This does not justify racism or sheer nastiness, of course – things which nothing can justify.

      We do need to prepare for economic pain. This surely calls for constructive debate, and burden-sharing. I fear it may call for them in vain.

    • Houstkool:

      Good points, especially about cities. This said, I’m an oddity perhaps – when my next career move was New York, I opted for a converted boat-house in East Anglia instead. So I agree about not living in cities – though that’s personal preference, of course.

      It’s not just about the economics of the country you are in, but also about how people are likely to respond to hardship. Will it be co-operation, or conflict – and will it be pursuing the greater good, or simply self-interest?

      Countries with a strong sense of community, with respect for individuals, are best equipped to cope with a down-turn. Those with the neoliberal penchant for selfishness and consumerism will suffer much more.

  9. Tim, I would like to once again congratulate you on your book ‘Life After Growth’ (which I read shortly after publication) and the truly excellent pieces on SEE. The publication of the SEEDs figures are a revelation.
    If you don’t mind my saying you are something of a rarity among economists in as much as you present your ideas using methodology that is clear and defendable, the discussion you offer is without embellishment and grandiosity, you have due awareness of limitations, due caution about approximations, and generally offer thoughts and arguments with a degree of humility which is refreshing; and I would add sorely lacking among many mainstream thinkers and national commentators.
    I would like to make a couple of points, if I may. I think the UK has very serious economic and political problems. The economic problems are laid bare in the SEEDS figures. Looking back it is now clear that the way in which we dealt with the one-off gift of North Sea Oil has been little short of tragic and catastrophic. Moreover, the mass privatisation of public utilities, many of which are now in foreign ownership, can now be seen to have been a wrong turning. We have, for want of a better phrase, quite literally squandered our inheritance. Meanwhile we continue with the charade of passing off debt-based growth as our route to the ‘promised land’.
    The political problems are both broad and deep, but there are two aspects I’d like to draw out. The first is the reduction in our capacity nationally for mature, intelligent, well-reasoned, considered and measured debate about the real issues facing the nation. The widespread adoption of the internet, constant connection and instant messaging has, I fear, resulted in complex problems and issues being reduced to simplistic almost nonsensical narratives, and more to the point the generation of sound-bite ‘solutions’. The second point is my contention that neo-liberalism and hyper-consumerism has created a type of consumerised-democracy in which the individual is supreme – rather like the customer is king – and no other views matter, and the very idea of respecting others, finding common ground and moving forward are notions that no longer figure in the equation.
    It is my belief that we’re in very deep trouble, and when one looks around for statesmen or women to help the nation relocate its footings and anchor to some durable bearings every stage in the land seems to be empty.

    • Kevin

      Thank you. Your comments are very kind, and I thank you, particularly, because you note things that are important principles about how debates should take place.

      Those of us with a view to promote should explain, not bamboozle, and should accept that, if our view is not understood, it is because we have failed to explain it clearly enough. My principles are (a) reason, (b) honesty (notably about what we “know” and what we merely “suppose”), (c) calmness, (d) respect for the opinions of others, and (e) courtesy. I cannot see how a debate conducted on the opposite principles advances knowledge – and would cite the “Brexit” debate as an example of (a) irrationality, (b) dishonesty, (c) extremism and anger, (d) aggression and disrespect of different opinions, and (e) outright nastiness.

      I agree with your comments about the UK. Self-interest and short-termism can be identified as weaknesses. North Sea revenues could have been used to transform the economy – instead, they were squandered on tax-cuts and financing high unemployment.

      Britain has adopted neoliberal cynicism and myopia, and the price is now becoming apparent. It is evident in (a) debt and deteriorating living standards (“know” category) and (b) nastiness, aggression and selfishness (“suppose” category).

    • @Kevin, I am reading your comments and you have eloquently put into words, things which I myself have been trying to express. For my tuppenceworth, I would add that the UK also has serious Social problems, ( on top of Economic and Political ones ).
      I know I am treading on very thin ice when I say this, but I put a lot of the blame for this on the rise of Feminism and from institutionalised “anti- antisemitism”, which has led to and established a culture of Political Correctness.
      I know I am on thin ice with this !
      We will never have rational debate, when many topics of discussion are banned from the being talked about. This form of censorship is at the very core of the problem. To illustrate this, I recall how after the Brexit vote, polls showed that the majority of “Leave” voters did so because of their concerns over immigration from the EU. There choice was not swayed my economics or jobs. They were venting their frustration at Polish plumbers and Romanian farm workers. Yet EU migrants are only 25% of all immigrants to the UK, ( according to Nick Clegg on the BBC’s QT last week ). The “problem” with immigration in the UK is that it has already happened. We already live in a multicultural country, so get used to it. However, that is the hard part, because many of us don’t want to “get used to it” ! It all happened creepingly and surrupticiously, without an open debate about whether we wanted it or not. Multiculturalism was thrust upon an unsuspecting population.
      Political Correctness has stiffled the debate on immigration for years, to question immigration was seen to be an ouvert Racist act. Indigenous British had to put up with it, and shut up about it.
      So, in the course of a few years, along come a few ethnically white, and Roman Catholic Polish plumbers, looking for a job, and low and behold, there is open hunting season ! They are ethnic White, so to abuse them is not racist ! They are Christian, so to abuse them is not anti-semitic or anti-muslim ! .. and many of them are men, so it’s not sexist either !
      At last !
      A free vent for our anger and our frustrations !
      Mix that with a Media which is not reporting the news, but is pursuing an Agenda of its own, a dumbed down population resulting from a feminist education system, and Voila !
      Your daily dose of 2mins of Hate !
      How can there be any rational debate under such circumstances !
      Your last sentence sums it up perfectly, ” we are in very deep trouble, and there is not a capable statesman/woman in sight !”
      Not surprisingly many readers of Dr. Tim’s blog here are not only openly talking about getting out of the UK, but are actively preparing to do so.
      The conclusions that we are all drawing are as follows:
      UK’s Economic problems: – No Solution
      UK’s Social problems : – No Solution
      UK’s Political problems: – No Solution

    • Though you are replying to Kevin, who I hope will reply too, here are my thoughts on this.

      First, I detest racism and anti-semitism. Both cause me concern at the moment. There seems to be a creeping increase in anti-semitism, often thinly disguised as opposition to zionism (a distinction that should fool no-one). There seems to have been an increase in racism, too, and in its violent expression. Anti-semitism should surely have been stopped forever by the holocaust, but seemingly not. Racism is simply stupid, and racists are frightening, not for their opinions alone, but because of the brute stupidity behind them.

      At the same time, stifling free expression is both undesirable and counter-productive. In Austria and Germany, “holocaust denial” is a crime. Since I think denying the holocaust is totally idiotic – indeed, insane, given the evidence – I’d rather we laughed at these people than locked them up, though admittedly that’s a moot point.

      I think we’re on more dangerous ground when we criminalise the expression of opinions more generally, however vile they may be – I prefer education to coercion, and agree with Voltaire when he reportedly said something like “I detest what you say, but would defend with my life your right to say it”. The dangers here are, first, the state is seen as repressive, and, second, that these people go underground and think of themselves as martyrs for freedom of expression (which they’re not, by the way).

      We certainly need debate, for example on immigration. Things might be less rancorous now if debate had been more open, which at the very least would have been a safety-valve.

      In short, I think we need more humility, more tolerance and less aggression. We British, I’m afraid, and for all our strengths, have the bad habits of puritanism and sanctimoniousness, of trying to feel morally superior to others. This is the country that inflicted chemical castration on a war hero, Alan Turing, simply because of his homosexuality. The spirit of nastiness which once banned folk-dancing, theatres and pubs still lurks. Priggishness of this sort is almost inevitably tinged with hypocrisy.

      The UK strikes me as a very angry and bitter place. My best guess is that neoliberalism, as well as doing grave economic damage, has somehow validated selfishness. People seem fearful that others are trying to “put one over on them”, and this standpoint of distrust actually encourages cheating and dishonesty. Personally, I’d like more care and respect for others, and less commercialism and materialism.

      One of the things I like most about Spain is that people enjoy themselves – without forever wondering what others are thinking of them, or needing to resort to alcohol to have a good time.

      Finally, the chances of a turnaround in the UK are pretty remote – and, unless the neoliberals are ousted, are next to nil.

    • Dr.Morgan, thank you very much for your reply and your thoughts on this. As I said I am treading on very thin ice here, and I hope I made it clear that I am not supporting either racist, sexism or anti-semitism. As you point out, in my home in Germany, holocaust denial is a crime, it is a Law which I disagree with, simply because it sets a precident on what can or cannot be discussed. Please do not interpret that statement as Holocaust denial, it is not. Your quote from Voltaire is very pertinant here, but the mere fact that I need to tip-toe around such issues in the very point that I am trying to make.
      Again, my post above was not in support of racism or anti-religion in any form, it is simply my interpretation of what I see and hear in the UK.
      I am still of the opinion that the decision to Brexit was taken emotionally and that it was taken for all the wrong reasons. Of course, as the EU itself is a shambolic institution, it may well be that the decision to leave the EU will show some unintended and accidental positive aspects at some later date.
      Anyway, much of the absence of open and intellectual discussion is the result of this self-censorship, and we will not move forward until we can overcome this hurdle. I am often in Scotland, and I can honestly say that the Scots genuinely seem to like their migrants, from both Europe and Asia. I do not feel or notice the anger and bitterness that you say you feel within the UK populus. I suspect the reason for that it that migration to Scotland has been very low by comparison.
      As for intelligent and well-reasoned debate on these issues, I really don’t know where that is taking place in the UK, or in Germany for that matter. The press are not encouraging it, and neither is television.
      Thankfully, I can still read your blog here.

    • That’s understood, Johan, and I feel we are getting rather off-topic anyway.

      What really unites Europeans should be the values of the Enlightenment. The heritage we get from these moral and intellectual giants is particularly importance at a time when most our leaders are midgets.

    • Hi Tim

      I see in your reply to Johan that you see no distinction between anti antisemitism and zionism (you actually say one is a thinly disguised version of the other).

      Now I do not regard myself as antisemitic, in fact even now I simply do not understand the basis for antisemitism, it has always baffled me. However, I do question Zionism, not in theory but as it has turned out. I don’t believe that the Palestinians have ever received, and will not receive, any justice under the Israeli governments and indeed that Israel has carried out numerous human rights abuses over the years. My views changed many years ago when I saw an interview on TV by Christopher Mayhew and Nasser and were further affected when I came across many Palestinians when working in the Middle East in the 1970s.

      I perceive that part of the issue here is that the Holocaust, which I regard as the most evil act in human history, frankly almost unimaginable, has a grip on attitudes towards Israel that it has led us to avert our eyes from the various abuses that have taken place.

      One other thing that has coloured the situation for most of the time since 1948 was the leadership of Yasser Arafat. Natan Sharansky, the Russian dissident, has written very perceptively about Arafat and saw him as a huge obstacle to reaching any sort of just settlement with the Israelis, Although Arafat has been dead now for some years it seems that the legacy on both sides endures.

      Having said the above I agree with your point that there is creeping antisemitism here and that is something which I not only deplore (as I do racism) but, as I said, simply do not understand but I suppose that you are either tolerant of others or you are not.

    • Bob:

      These are complex issues. My point was that many who, in reality, are anti-semitic try to hide that fact between professions of anti-zionism.

      I would not for a moment underestimate the plight of the Palestinians, and have no time for the Netanyahu-type tendency to aggression. It is deeply regrettable, especially as Israel has produced some fine peacemakers, as well as the Begin/Sharon/Netanyahu types.

      But part of the issue here is surely fear – perhaps even paranoia. Israel is surrounded by countries, some much larger and much richer, who seek its destruction – Iran, I recall, once wanted to “wipe Israel off the map”. It is hardly surprising that this has produced a reaction, not a commendable one of course – but, quite apart from Hitler’s “final solution”, there have been numerous wars, such as 1967 and 1973, and in these cases, an Israeli victory leaves both sides to carry on, but one defeat for Israel could be curtains.

      Israel has behaved in an expansionary way, but even here it can be argued, plausibly, that the West Bank and the Golan heights are natural defensive borders. If her enemies are on the east of the Jordan, or can look down on Israel from the Golan, Israelis can feel that their security is weakened.

      None of this is intended to condone some of the actions of Israeli hardliners, or to diminish the justifiable complaints of Palestinians. But there are those in Israel who fear that compromise equals weakness, and weakness could invite destruction. I don’t agree with them – but Israel has an understandable burden of anxiety.

  10. @Houtskool, Ah, I couldn’t tell if you were Dutch or Afrikaans. I actually wasn’t suggesting moving to a 3rd-world country, (my recommendation based on serious experience would be the opposite in fact) just that the UK is now an example of a former power that is degenerating badly down the scale. I agree with you that the best way to defend ourselves is to strengthen community and social bonds, humans only survived as a species through cooperation, modernity will not change that.

    @ Dr T., re: ‘It is a mystery to me why so many cannot distinguish between legitimate patriotism and nasty and irrational xenophobia’ – they were inculated with this mentality since birth so as to be all the easier to politically manipulate. (Anti-social grooming) You know that jingoism here has a long history, the masses are effectively conditioned into not thinking things out, so that they can be reliably roused to act against their own best interests even. (if need be) Also ignorance is a lot easier to exercise than enlightened civilisation.

    • This is a bit tricky for me, especially with so many reatives in the armed forces, as well as all the time I’ve spent with the Royal Navy – great and dedicated people, I can assure you. I’m sure those who fought in WW1 and WW2 were doing the right thing, and a bit more backbone in the 1930s might have stopped the Nazis at a lesser cost in lives lost. I also believed (and believe) that the UK was “right” in the Falklands (protecting the islanders’ right to self-determination) and in Gulf War I (liberating Kuwait).

      I had a Jewish friend at Cambridge whose grandparents perished in the Nazi camps, his father, then a toddler, being the sole survivor thanks to being packed off to Britain. In the 1800s, the RN maintained a “preventive squadron” offshore West Africa, which captured “blackbirders” (slave ships) of all nationalities, freed the slaves and burnt the ships – places like the Bight of Benin were exceptionally unhealthy, and many sailors gave their lives for this work. It is surely right to fight such evils.

      But the Iraq War shocked me – it seemed so obviously both wrong and idiotic. So the division between good and evil seems to be a burden which is the price of political leadership. Some of the RN people gave me a good test of validity: put yourself in the position of a CO who has to write a letter to the parents of someone killed in action. That’s never easy, but “your son died defending Britain from the Nazis” is a lot less difficult than “died bombing civilians in xxxx”.

      I must say that the UK today is baffling in some ways. You see the British at their best rallying round to help the less fortunate, but at their worst when indulging in hysterical xenophobia, often fuelled by alcohol. Why Brits have fallen for neoliberalism is baffling.

      Be that as it may, SEEDS gives impartial readings which show the UK economy falling apart. This isn’t going to be a happy chapter, I suspect.

  11. My first comment on this blog.

    Most money that is in circulation is created as debt. Therefore the money is there in the system to pay the debt back. Money taken out as loans is held in other people’s savings accounts and pension funds. etc. Basically is a zero sum game.

    When the time comes when the debt super cycle ends, savings and pension funds will be raided to pay off the debt.

    States will be forced do this eventually and will do it via higher than target inflation, currency debasement or negative interest rates etc.

    Some say our debt super cycle can continue for ever. I very much doubt this. Something that I will post about in future.

    • Ed, welcome, and thanks for contributing your thoughts.

      I agree with your fundamental point, and have indeed written about this along the same lines. If A is in credit and B is in debt, A will be raided (so to speak) to bail out B. What I’ve said about this is that it is bound to happen, wherever B simply cannot repay what he owes. In this situation, no alternative exits. It really is an instance of “can’t pay, [so] won’t pay”.

      Another way to look at this is as default. Systemically, default can take one of two forms. “Hard” default is where the debtor does not repay – but “soft” default, almost invariably preferred by governments, is where inflation takes off, so the creditor is “repaid”, but in money that has lost its value.

      The credit binge cannot continue indefinitely. It isn’t the scale of debt at any given time that’s the problem. Rather, it’s the dependency of growth on continuous borrowing. That makes it a Ponzi scheme.

      What those in credit need to do is to put themselves beyond the reach of the bail-out/bail-in process – much easier said than done, and a subject for another time.

  12. Tim,

    Well said

    The RN’s role in supressing slavery & the British Sailors who died doing it is sadly forgotten.

    But turning to the here & now, do you think that the UK will split up & what do you think the economic impacts will be?

    • I mentioned the Preventive Squadron because it is all too often forgotten that Britain did prohibit slavery, exempting only the Portuguese “south of the line”. Wilberforce, Romilly and Macaulay did carry the day, and that’s something to be proud of.

      Here and now, the situation of the UK is depressing. The economy is a mess, largely (in my opinion) because the “right” has adopted neoliberalism whilst the “left” has copped out. Many Scots probably don’t want independence as such, but despair of what is happening in Britain. The worst aspect of neoliberalism, I believe, is the attitudes it engenders, by promoting greed and selfishness. The debate over Brexit has been not just divisive (inevitably), but downright nasty.

      So long as neoliberalism rules the roost, the economy will go on deteriorating, quite possibly to a point of no return. Scots and others can hardly be blamed if they want to take to the lifeboats before the neoliberals pile the ship onto the rocks.

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