Thursday, 21 July 2011

The future of the eurozone is Belgium

... one way or the other.

A couple of well written articles by the BBC's business editor,  Stephanie Flanders,  have got me once again thinking about the future of Europe's common currency,  and the more I do the more I come to the conclusion that Belgium pretty much holds all the answers.

When this crisis first began,  way back at the end of 2009 when it first became clear that Greece would need a bailout,  I became rapidly convinced that the euro would not survive this challenge.  I'm still convinced of that,  and my conclusions are being reinforced ever more by the comments of people like Ms Flanders.

Yesterday,  commenting on a report by the IMF condemning the indecision of Europe's leaders, she wrote the following:

At the end of last year,  Chancellor Merkel and President Sarkozy said emphatically that they would hold it together.  But in practice they have continued the previous strategy of attempting to muddle through.
What has happened in the past week or so is that it has become clear  -  to the IMF,  to the Obama administration,  and to many other interested parties  -  that the muddle-through option is not viable.  Worse that that, it is counterproductive.
Why?  Because in the process of muddling through you create so much uncertainty you actively cause the contagion you're trying to prevent.

The IMF has now stated clearly what has long been clear to many: there are only two ways out of this,  either much greater integration  (fiscal and political),  or the breakup of the eurozone.

Flanders  (the person,  not the region,  more about which in a moment)  still holds out the optimistic possibility that the path of integration could be chosen:

The leaders who will meet in Brussels on Thursday still have the power to decide whether this crisis is going to end with much greater integration and burden-sharing between the governments of the eurozone  -  or a dramatic break-up.  But they are increasingly losing control of the timing.

I would love to believe that the positive option is possible.  But that would require joint European bonds,  administered by a joint European treasury,  which would necessitate tight integration of fiscal policy,  which would in turn also require something like a loose federal government for the entire eurozone. And what would that ultimately look like?  Well, it would look pretty much like modern-day Belgium:  regions governing themselves with as much autonomy as you can have without actually being completely separate countries,  with the thinnest possible layer of federal government over the top.

And anyone looking at modern-day Belgium can see instantly why this is not going to happen.  The people of Flanders  (the region)  are currently agitating with increasing impatience for full independence and the demise of the Belgian federation because they are sick of having to subsidise the poorer other half of the country.  And their attitude,  characterised as it is by petty-minded nationalism,  selfishness,  short memories into the past and short-sightedness into the future,  is depressingly close to the attitude displayed by the Germans,  the Austrians,  the Dutch and the Finns when it comes to these bailouts of struggling eurozone countries.  It seems that anyone who is a little bit richer than the average is dead against the idea of even a cent of their money going to those who are poorer than the average,  for whatever reason and under whatever circumstances,  regardless of the consequences for all in the long term.

So yes,  it would be ideal if the eurozone could end up with a structure like Belgium's.  But what's actually happening to Belgium these days pretty much rules out the chance of it becoming a reality in this Europe.

Friday, 6 May 2011

Doom and gloom Part II; or, why it's a pity we aren't all Chinese

(Continued from previous post)

One of the biggest problems is the basic core dynamic of our civilisation.  Some people are inclined to blame democracy,  but the problem goes much deeper than that.  Even if every country in the world today were a dictatorship,  they would still be struggling against one another for the biggest possible piece of the pie.  Because the core dynamic of this civilisation is competition:  competition between individuals,  between groups,  between nations,  all striving continuously for as much prosperity and/or power as possible;  all intent on bolstering and protecting their own position,  at the expense of others if necessary.  This dynamic has powered our civilisation ever since it first emerged in the cut-throat world of the dying Roman Empire,  and it is what has taken it to the height and breadth we see today.  It is also what makes our civilisation quite unable to deal with the challenges it now faces.

Contrast this with Chinese civilisation,  in which one central authority commanded near-total obedience across more or less the entire civilisation.  If it had been China's civilisation and not Europe's which had spread to encompass the entire world,  the challenges of global warming and an unsustainable economic system would surely be easier to deal with:  a competent emperor,  advised by even more competent mandarins,  would issue a series of decrees to remedy the situation,  and those decrees would be by and large obeyed,  even if the result was increased hardship for most.  Even today,  China preserves much of this culture;  the people of China still demonstrate a willing obedience to and faith in their government which must surely be the envy of rulers everywhere else.  If the Chinese government seriously wanted to reduce its country's greenhouse emissions,  I dare say it could do so very effectively and with relatively little difficulty.  Unfortunately,  China is now well and truly part of our global civilisation and is consequently just another part of the problem,  not the solution.  China is not likely to try to reduce its emissions with anything like the speed or effectiveness of which it is capable,  because that would put it at a disastrous disadvantage against the rest of the world.

Of course,  if Chinese civilisation had been the one to swallow up the rest of the world,  we wouldn't be in this situation anyway,  because we would probably never have reached the stage of industrialisation...  but that's another story.

Wednesday, 4 May 2011

You know, the end really does seem to be somewhat nigh

An American religious wacko has recently predicted that the world will end on 21 May at about 6 pm.  He's wrong,  of course.  It will not be nearly so sudden.  In fact,  there's every sign that the ending of  "our world"  began some time ago and will continue for at least several decades to come.

The problem with humans is that we aren't very good at focusing our attention on events that take more than about a week to happen.  Hell,  we've even stopped thinking about Fukushima,  even though nothing much there has changed from the time when our media was full of daily updates on it.  And this is one reason why our world is ending,  and why we aren't going to be capable of stopping it:  we just aren't very good at being alarmed by disasters that take decades to unfold.  We find it far too easy to delude ourselves that it isn't really happening.  And that's even easier when the disaster in question is highly amorphous and its causes manifold and complex.  It becomes impossible to generate any sense of urgency,  at least not on the level of society as a whole.

Back in 1993,  I was watching some documentary on TV about ancient civilisations and what happened to them,  and I started wondering why we should bother studying such civilisations in such detail.  Why is this useful to us?  And I decided that the most useful aspect of it is learning about why such civilisations collapsed,  because that might help us avoid the collapse of our own.  Excepting those that were conquered by others,  ancient civilisations seem to have collapsed because of what one might call a fatal flaw:  some essential aspect of their structure which became incompatible with the civilisation's survival.  In other words,  the civilisation in question could not have survived without removing some element of itself without which it could not exist anyway,  or which it was otherwise simply incapable of removing.  Therefore collapse was inevitable.

So I got to wondering:  what is our civilisation's fatal flaw?  Greenhouse gas emissions seemed the most obvious one,  but I was also thinking about land degradation,  pollution,  and the exhaustion of non-renewable resources.  Nearly eighteen years later,  it seems even more likely that these  (interrelated)  factors are indeed precisely those that will bring about the decline and fall of our civilisation.

Not only that,  it's increasingly clear that this decline and fall is already underway.  We're already experiencing more natural disasters than we used to,  apparently because of global warming.  And we've already reached  "peak oil".  The response of our civilisation to the latter has been primarily to turn to alternative fossil fuel sources,  such as shale oil.  This is typical:  as one resource dries up,  we exploit another,  equally unsustainable resource until that too is gone,  and so on.  This even extends to nominally renewable resources like plants and animals:  we are already driving some fish species extinct through overfishing,  for example.  When things get really bad,  there's every likelihood that we will eventually cut down every last tree.

One of the key problems is that as things get worse,  people become more selfish,  more  "grabby",  less concerned about conserving what little resources there are left,  and thereby accelerating the decline.  It may just be the crankiness of old age,  but I'm inclined to think people are already showing signs of increased selfishness today.  People want their governments to fix the climate change problem,  but they refuse to contemplate tax increases to do it;  they also refuse to accept nuclear power stations in their neighbourhoods,  high-voltage power lines near their houses,  and protest vigorously against wind farms ruining their landscapes.

Be that as it may,  it's certainly true that when our economy is in recession,  governments go slow on anti-climate-change measures.  As George Monbiot argued in a recent column,  it seems that we need to feel fairly prosperous and secure before we can voluntarily act to reduce our consumption or accept even quite small restrictions in our personal budgets.  And even if stable,  long-term prosperity were to return to the world,  the sort of action necessary to combat climate change and make our civilisation sustainable would ultimately impair that prosperity;  it would inevitably mean giving up our current standard of living.  Which is why I am convinced that this is indeed our fatal flaw:  we need stable,  comfortable prosperity to take any significant action at all,  but the action we need to take involves the removal of that very prosperity and comfort.

This is why our governments have so far failed to do what is necessary,  and it is why they will continue to fail in the future as well.  Indeed,  as the problems get worse,  it's quite likely that we will take even less action to redress the fundamental causes than we doing at the moment,  because we will be too busy trying to preserve our standard of living and desperately secure as big a share as possible of the planet's dwindling resources.

So,  when pondering the possible collapse of our civilisation,  the only question that really remains is how much longer it's going to take.  It's certainly not going to be over in an instant on the evening of 21 May.  But one day we may well wish that it was.

Sunday, 6 March 2011

But it could be worse

There is at least one country that needs the  "alternative vote"  system even more urgently than the UK:  its near neighbour,  recent ally and ancient enemy France.

Back in 2002,  Jacques Chirac was re-elected as president there despite getting just 19.88%  of the vote in the first round of the election.  In other words,  more than 80%  of voters wanted someone other than their incompetent incumbent.  Just under 46%  voted for a left-wing candidate  –  ahead of 43%  for the right and just under 11%  for centrist parties  -  but the left-wing vote was splintered between 10 different candidates.  Under the two-round voting system used in France,  only the top two candidates from the first round advance to the second,  and because there were only four right-wing candidates,  two of them managed to take those spots.  Since the other one was the appalling far-right leader Jean-Marie Le Pen,  Chirac romped home with a massive 82%  of the votes  –  even though most of those were from people who loathed him.

The French two-round system is like many French innovations:  a novel but actually quite impractical version of some idea that someone has developed  (or will develop)  much better somewhere else.  In this case,  it's like the  "alternative vote"  because it too eliminates the low-scoring candidates and gets voters to choose between the highest-scoring ones;  but incredibly it does so in such a way as to lose the key benefit of the alternative vote system,  namely to get a winner who is the candidate most favoured by the electorate.  The French system continues to allow situations where someone can end up winning despite being very nearly the last preference of the vast majority of voters  –  exactly the same problem as the first-past-the-post system.

And in a way,  the French situation is even worse than that in the UK,  because here we're not just talking about a few individual members of a parliament containing more than six hundred seats,  we're talking about an extremely powerful elected monarch,  the president of France.  You'd really think they would have learned their lesson after 2002 and would have introduced the alternative vote quick smart.  But no,  they stuck with their own benighted process.  Now it looks like yet another miscarriage of democracy could be looming,  with a recent opinion poll indicating that the current frontrunners for the presidential election in one year's time are Le Pen's daughter and successor on 23%,  the unpopular incumbent president Nicolas Sarkozy on 21%,  and the leader of the main left-wing party also on 21%.  And sadly,  there seems virtually no likelihood of the French using the remaining year to change their godawful system while they still have the chance.  You really wonder how many times this is going to have to happen before they draw the blindingly obvious conclusion.

Monday, 28 February 2011

The alternatives are clear

Looking at the debate brewing in Britain right now over the  "Alternative Vote",  I don't know whether to laugh or cry.  It's utterly astonishing how much confusion they are generating over what seems an incredibly simple issue.  Okay,  I have the benefit of having lived most of my life in a country that uses this system and am therefore not beset by any of that fear of the unknown that evidently plagues so many Brits when faced with it,  but it still seems to be causing them far more trouble than it warrants.

Basically the proposed reform is to replace their current,  dreadfully undemocratic first-past-the-post voting system with one allowing people to vote for the candidates in order of preference,  voting  "1"  for the candidate they like most,  "2"  for their next favourite,  and so forth.  Candidates with the fewest votes are eliminated and their voters'  next preferences are counted until one candidate gets 50% of the total votes cast.  All fairly straightforward,  surely.

The pro and contra sides of the debate,  however,  have managed to befuddle things magnificently,  partly through deliberate misinformation and distortion of the truth,  but perhaps partly through a sheer inability to communicate clearly.

Essentially,  it all boils down to this:

Currently,  British voters mostly vote for either the Conservative Party,  which gets about 30-40%  of all votes across the country,  the Labour Party,  which also gets about 30-40%  of all votes,  or the Liberal Democrats,  who usually get about 15-20%  of all votes.  Under the first-past-the-post system,  it is entirely possible for either the Conservatives or Labour to win a comfortable majority of seats in the House of Commons on these figures,  while the Liberal Democrats struggle to win a handful.  The winner of each seat is elected by a geographically defined  "constituency"  of voters,  with these three major parties all fielding candidates in most of the them.

The other important fact to know when assessing the potential impact of the  "Alternative Vote"  is that opinion polls have fairly consistently indicated that people who vote Liberal Democrat prefer the Labour Party to the Conservatives by a ratio of at least 2 to 1.

What that means is that when the Conservative candidate and the Labour candidate come first and second in the race for a constituency,  causing the Liberal Democrat candidate to be eliminated,  the next preferences of the Liberal Democrat voters would favour the Labour candidate heavily.  Labour should end up with at least two thirds of the Lib Dems's 15-20%  of the vote. Labour should also pick up preferences from Green voters and voters for various other small left-wing parties,  totalling a further 2%  or so of the vote.  As for the Conservatives,  all they can really rely on,  apart from the remaining third from the Lib Dems,  is the preferences of UKIP and BNP voters  -  about 5%  nationwide.  This will give Labour a major advantage in many seats and should cut heavily into the Conservative representation in parliament.

In constituencies where Liberal Democrat candidates currently comes first or second,  they will probably be the greatest beneficiary,  as they will presumably pick up preferences from both Labour and Conservative voters.  So the Lib Dems will win seats from both the other major parties.  At this point it's important to remember that there are not in fact very many seats  (relatively speaking)  where the Liberal Democrats come first or second,  which will seriously limit their potential gain from the Alternative Vote system.

Result:  number of Conservative seats falls a lot  (as they will lose them to both Labour and the Lib Dems);  number of Lib Dems seats rises but by a much smaller amount,  and the Labour Party probably stays at about the same level it is at now.  And that means,  in turn,  that Labour could still find itself with an outright majority in the House of Commons,  but the Conservatives will quite possibly never enjoy that position again  -  unless and until they shift their politics towards the centre,  i.e.  towards the left.

This is the simple,  sufficient and only reason why nearly all of the Conservative Party is against the proposed reform,  while most of the Labour politicians,  and all of the Liberal Democrats,  are in favour.

A lot of the distortion of the truth coming from both sides in the debate is,  I am certain,  the result of their attempts to avoid saying how the reform will affect them personally.  Neither the Conservatives nor the Liberal Democrats nor even Labour can admit that their main concern is what it will do to their numbers in parliament,  so they come out with whatever other spurious arguments they can dream up.  I really wish they could just come clean and tell people straight up:  "If you like the Conservatives,  vote against it.  If you hate them and/or like Labour or the Liberal Democrats,  vote for it.  That's all there is to it,  folks."