China and the world

I am involved in an on line debate about the post-COVID world. This is my first post in response to some comments by another participant about the need to confront and contain China:-

As a European, I feel very uncomfortable with Trump’s USA as the sole hegemon in the world, and see China as a useful and necessary countervailing power. There are many aspects of Chinese society that are deplorable, particularly the treatment of minority communities, but they have not threatened peace and security of foreign nations in anything like the continuous and aggressive way that the USA has since at least the end of WW2.

In economic policy too, it is the US which is basing it’s trade policy on an ignorant mercantilism that risks impoverishing us all. In contrast, the rapid growth of the Chinese economy pre-COVID 19 has been the major engine of continuing improvements in world GDP. Although aspects of the statist approach are uncongenial, dealing with threats such as global warming and CO|VID 19 will certainly require a bigger state role than we are accustomed to in the West, and we are more likely to find solutions in Chinese experience than in the capitalist economies that have yet to find any organisational models for harnessing private enterprise to pursue societal goals. On the contrary, the state has been suborned to create perpetual war to boost the profits of the arms industry, while privatised health suppliers and big pharma have produced the most expensive, unequal, and therefore ineffective health services in any developed country.

It seems to me that China isn’t really a threat to the West, though it is a competitor. China as a unified state has a history going back thousands of years, throughout which it has shown no interest in geographical expansion. It pursues what it perceives to be it’s own interests, as do we all, but has usually done so through peaceful means where that is feasible, particularly in the post-Mao era. The economic policies it pursues do pose some problems to those wishing to develop trade and investment relationships, but the way to resolve those differences is through the rules based international system that the USA seems so intent on tearing up. The US under Trump is a bigger threat to mutually beneficial economic relationships, relying on naked power to bully it’s partners in ways that impoverish both sides.

Throughout most of it’s history, the UN respected the useful principle of not interfering in the internal affairs of other states. That attracted criticism for not confronting gross human rights abuses committed by states against their own citizens. However, the terrible consequences of attempts at regime change in the Middle East and Latin America might lead us to conclude that non-interference was a wise policy -with exceptions perhaps in extreme cases such as the Rwanda genocide. Our current set of alliances make it clear that there is no moral or ethical principle governing which countries we befriend and which we characterise as terrorist states – I find the US use of non-judicial murder by drone, and the  actions of our allies in Yemen and the Gaza strip just as repugnant as anything that China or Iran are accused of.

This leads me to the view that we should try again to revive the use of rule-based systems to address international disputes, which is more likely to suggest cooperating with China to restrain the US through non-military action. We need to deal with the world as it is. By all means speak out against injustice wherever it occurs, and seek to promote and protect human rights by exposing abuses, but we need to accept that external actors rarely improve the situation by using lethal force. Trade, investment, diplomacy, and cultural and sporting exchange are the strongest weapons we have. An overly aggressive approach to China (or to other states perceived as problematic) is more likely to reinforce the position of those within those states who oppose cooperation. 

UK Approach to COVID 19: high costs for dubious benefit, while cheaper options are ignored

This post makes two points:-

  1. The current approach to the pandemic in the UK (and in most other countries) involves costs that are disproportionate to any benefits from deaths averted.  It fails the UK Government’s own criteria for cost effective health interventions by a wide margin. The extreme measures being taken have been introduced without any of the evidence that has been required before medical interventions can be used.
  2. Meanwhile, HMG has banned the use of what may be an effective treatment that is low cost and low risk, using drugs that have long been in use. The reason given is that we are awaiting the results of clinical trials – meanwhile people may be dying needlessly when the risk of approving the treatment now for general use seems to be minimal.

Costs of Social Distancing Measures versus Benefits

It is unclear what level of damage we are inflicting on our economy, but a conservative estimate would be that it probably exceeds 10% of our GDP- the Government has already committed more than that amount in grants and loan Guarantees, and there are additionally long term economic costs of lost businesses and lost growth.

We don’t actually know how many deaths might be averted as a result, because even countries like Germany have only tested a small share of the population, and hence the infection rate is unknown and so is the overall fatality rate. The death rate of confirmed cases in Germany is about 1.3%, the death rate of all those infected including those without symptoms who have not been tested is presumably much lower. If we assume in the UK that, left unchecked, the epidemic might infect 80% of the population with a mortality rate of 1%, then we would have about 480,000 excess deaths. Allowing for the deaths that will occur even with the measures, and for some excess deaths that will occur in a ‘do nothing’ scenario due to the capacity of the NHS being exceeded, we might guess that, at most, a social distancing strategy might reduce COVID 19 deaths by up to 500,000. The great majority of the deaths that are averted would be patients who are elderly and/or with other significant underlying health problems. Moreover, as yet we do not know how to exit from the virus without a resurgence. The reduction in mortality may just turn out to be a deferment that enables the NHS to flatten the peak in deaths, but does not prevent a second peak.

How much is it worth spending to achieve this reduction in mortality? Most people are uncomfortable with the idea of putting a price on a death averted, but it is essential to do so if we are to decide how big the health budget should be and how it should be prioritised.

The National Institute for Clinical Excellence (NICE) uses ‘Quality Adjusted Life Years’ (QALYs) when assessing the cost effectiveness of treatment. This is a measure of how many extra years of life a patient might expect to have with a health intervention, compared with what would have happened without the intervention. It adjusts for the quality of life, recognising that an extra year spent in pain or with serious disability is worth less to the patient than a year in good health.

The figure used by NICE for evaluating whether a treatment is cost effective or not is that it should cost not more than £20,000 per QALY saved, though it will consider the case for treatments costing up to £30,000 taking into account other factors. These figures are from NICE QUALY guidelines that were in use in 2017. I am not aware if they have been updated, but the numbers are unlikely to have changed significantly.(Source: Joy Ogden, QALYs and their role in NICE decision-making process, prescriber.co.uk, April 2017).

If we make what now seems a relatively conservative estimate that the social distancing measures will cost us 10% of national GDP, then the total cost would be £252 billion pounds. At the maximum acceptable cost per QALY saved of £30,000, then simple division will tell us that these measures would need to save 8.4 million disability adjusted life years if the cost per QALY saved is to be kept within the NICE ceiling. This means that, if a total of 500,000 people do not die of COVID 19, they would have to enjoy on average another 16 QALYs in good health for this level of costs to be worth incurring. It seems far more likely that an average patient who does not die from COVID 19   will enjoy only a relatively short extension to their life expectancy, certainly a lot less than 16 years. Moreover, any benefit to those who don’t die from COVID 19 needs to be offset by those who die from other causes related to increased poverty and hardship caused by the economic shutdown.

To summarise, even taking a high estimate of the deaths that might be prevented or delayed, and a low estimate of the economic damage we are incurring, the costs of the extreme measures being taken are not justifiable in terms of the Government’s own test of cost-effectiveness.

Treatment with Hydroxychloroquine

I am not medically qualified, but I am struck that public health scientists have been happy to encourage ruinously costly measures that will do severe and permanent damage to our economy, way of life, and health based on no clear evidence of their effectiveness, whereas the approach to medical intervention has been extremely cautious.

There is some evidence that hydroxychloroquine given early enough can prevent the progression of the illness to the point where it causes severe breathing difficulties. It is a cheap drug, has been in use for decades to treat malaria and a range of other conditions, and has few and manageable side effects when used for a short period of time. The evidence so far is limited to promising results in the laboratory, and two small clinical studies that have been criticised. However, given the lack of alternative treatments, it is not clear to me that anything will be lost by making it available. Malaysia has been using it from the start; Italy has started to use it in Rome and the wider region of Lazio, and is already reporting some promising results. At the ICU in Marseilles, it has been reported that over 1500 patients have been treated, with only one death, a staggeringly low fatality rate. (Sources, for a variety of materials on this see COVEXIT- Towards Hydroxychloroquine and other treatments, public group on Facebook.)  

The UK Government has prohibited health professionals from using hydroxychloroquine to treat the disease except in clinical trials (gov.uk/government/news/chloroquine-and-hydroxychloroquine-not-licensed-for-coronavirus-covid-19-treatment, published 25 March 2020,accessedn30 March). In normal times, that would be a reasonable response, but we are in an emergency situation. When the epidemic is killing patients at an accelerating rate, hospitals are being overwhelmed, and we have no alternative treatment to offer that can prevent the progression of the disease to the second stage where breathing is impeded, it seems reasonable to try a treatment that is cheap, has few significant side effects, and has some promising if incomplete evidence of being effective.

There may be some good reasons for caution that I don’t understand, but it does seem that different levels of proof are being required for drug treatments compared to drastic economic measures.. We should obviously be undertaking urgent clinical trials, but in the current emergency it is not evident to me why we should not meanwhile authorise the use of the drug, as an increasing number of health administrations have already begun to do.  The worst that will happen from using it now on a large scale is that it might not work, or might not work as well as we hope, but there seems little reason to believe that it will make matters worse.

Consequences of the Coronavirus Pandemic

The negative impact of the measures being taken to control the Corona virus look likely to be very severe, and will themselves have profound consequences for public health. While all reasonable measures to save lives should be taken, there is a point beyond which the costs may be judged to be worse than the effects of the virus itself.
The Health Impact of the Virus
Impact of doing nothing
The Government response is largely based on the findings of the Imperial College study . The mathematical modelling suggests that, in a ‘do nothing’ scenario, an estimated 81% of the population would become infected, there would be an additional 510,000 deaths, and the capacity of the health system would be overwhelmed. For comparison, total deaths in 2018 were 616,000 and the increase would represent an increase of more than 80% on the normally expected death toll.
Benefits of a mitigation strategy
The initial HMG strategy focused on mitigation measures: – isolation of suspected cases and home quarantine of those living in the same household, social distancing by the over 70s and others in the high-risk categories.
This approach would reduce the additional mortality to about 258,000, but the capacity of the health system would still be completely overwhelmed. Because the majority of the population would still contract the virus, immunity would build up relatively quickly, and the deaths would be concentrated over a matter of a few months.
The net increase in total mortality might be somewhat lower than this gross estimate to the extent that some of the very vulnerable population would have died in the current year of other causes if they had not contracted the virus, and the public health measures such as frequent hand washing will have a beneficial impact in reducing deaths from other infections.
Impact of measures to Suppress the virus
The unacceptably high death toll even with mitigation measures in place has led HMG to move to more drastic measures aimed at suppressing the virus. The additional measures encompass social distancing for the entire population (not just vulnerable groups) plus school and University closures. These measures have the potential to reduce the total number of deaths to a much lower level, estimates vary according to when the measures are triggered, but the total mortality in most scenarios is expected to be contained below 50,000 deaths.
The further reduction in mortality only occurs if the measures are kept in place until an effective vaccine can be made available. Universal social distancing means that herd immunity has not been built, and the modelling predicts that the epidemic will experience a second peak as soon as the measures are lifted. There may be some options for partially lifting restrictions in some areas, aided by expanded testing and isolation of contacts. However, for suppression to work, the Government assumption in an announcement made on 20th March is that the measures will need to stay in place for at least a year.
Economic Impact of Measures to Suppress the Virus
Reduction in output and incomes, and increase in firm failures
The economic consequences of the epidemic take the form of a severe interruption to the capacity of the global economy to supply goods and services. Some of this is directly the result of the epidemic with workers off sick, but most of it is the consequence of the unprecedented measures being taken to reduce travel and all kinds of social interaction.
Massive Government spending commitments
The reduction in social interaction has profound consequences for output, for incomes, and for the ability of firms of all sizes to survive. Governments around the world are therefore planning to massively increase their expenditure in order to limit the impact on household incomes and prevent the collapse of firms that suddenly find themselves without customers, or unable to produce without breaking the social distancing guidance.
In the UK, measures already announced include £30bn of support in the budget, a further £330bn of loan guarantees announced on 17th March, with further support promised. The loan guarantees alone are equivalent to 15% of GDP. With more to come and with GDP shrinking, the final percentage will be even higher, and is without precedent.
The dangers of ‘Stagflation’
We have become used to very low levels of inflation and of interest rates, but that is about to come to a dramatic end. Stagflation – the combination of a stagnant economy and high inflation – classically takes place when a reduction in supply is not matched by a reduction in demand, resulting in too much money chasing too few goods and services. We last saw it in the 1970s, when OPEC related interruptions to the supply of oil were accompanied by relatively loose monetary policy. What is about to happen globally will be on a rather larger scale.
If the Chinese precedent is any guide, Western economies may face supply reductions of up to 20% of GDP while increasing Government spending by an equivalent amount.
How will Governments finance this increased spending, when their tax revenues are eroded by declining GDP, while their existing spending programmes are already facing increased demands from the health sector, from benefit claims, and from rising costs due to supply interruptions? The Government will have to borrow more.
If it was concerned about inflation targets, the Bank of England would need to make room for the increased Government borrowing by tightening monetary policy in order to reduce the excess demand by squeezing out corporations and households from credit. This would completely defeat the object of the Government spending, by tightening the squeeze on households and firms rather than alleviating it.
If the Bank of England accommodates the excess demand, as it has said that it will, then inflation will be the inevitable result. This will have profound implications for the distribution of wealth and of income. Firms and workers who are able to increase their prices and wages will benefit. Those with less bargaining power will lose, including many of the poorest and most vulnerable.
The most worrying aspect of the situation is that inflation can easily spiral out of control. Government will find that the costs of everything it is trying to do continue to increase as excess demand enables firms and workers to increase their prices and wages. Excess demand will also spill over into an increased balance of payments deficit as Government spending not matched by demand sucks in imports. Loose monetary policy may keep interest rates low in sterling but the excess demand will contribute to pressures on the exchange rate which will further intensify the cost pressures by reducing the sterling value of our exports while raising the cost of imports.
We do not know how much of the money that Government has committed will result in extra spending, nor do we know how severe the impact on the economy will be. However, we can make some assumptions to give an indication of the possible scale of what lies ahead. It is not implausible to envisage that: –
– Additional COVID 19 spending adds £350bn to the Government deficit;
– Government revenue falls by about 10%, adding a further £80bn to the gap
– GDP falls by about 10%

This would result in a sharp increase in the Government deficit to £490bn, or about 24% of GDP, with Government debt increasing in a single year from 80% to over 100% of GDP. This level of deficit clearly could not be sustained for long.

The nightmare scenario would be hyperinflation, of the sort experienced by Germany in the 1920s and more recently by Zimbabwe. Hyperinflation destroys savings and causes untold misery as the currency becomes worthless. I am not saying that this is likely to happen, but it would be reassuring to know that policymakers are alert to the potential risks of such a massive increase in spending beyond our production capacity. I have seen nothing to suggest that they are.
The only way out of a process of accelerating inflation is to end the excess demand, either by the supply of goods and services increasing to close the gap, or by austerity measures to raise revenue and cut spending.
There will be a significant supply bounce back once the epidemic is defeated. We do not yet know when that will be, and it may not be enough. Despite the Government efforts to sustain demand, many firms will be financially a lot weaker, and will be poorly placed to invest in increased output, especially as consumption will also be depressed by the legacy of lost livelihoods and increased indebtedness. The Guardian on 19th March was already reporting that motor industry firms that have closed due to the Coronavirus may not re-open, the virus representing a major additional burden on companies that were already considering their position in the light of BREXIT.
A significant part of the adjustment will therefore need to take the form of harsh cuts in public spending and increases in taxation. That will be politically very difficult, and the risk is that Governments will instead resort to trying to inflate their way out of their difficulties. A prolonged period of recession or slow growth looks probable, possibly accompanied by high and unstable inflation..
Is the cure worse than the disease?
This discussion inevitably prompts the question, is the cure actually worse than the disease? The most severe economic costs are not the result of the disease itself, but of the measures being taken to suppress it.
It is worth contrasting the Coronavirus death toll with estimates of the health consequences of a prolonged recession and associated cuts in health spending. Two studies of the excess mortality experienced by the UK during the years of austerity have estimated the number of excess deaths . The study by UCL estimated an additional 120,000 deaths over the period 2010-2017; a study by IPPR estimated 130,000 preventable deaths over the same period compared to the pre-austerity trend.
Both studies are at pains to point out that causality cannot be proved. However, it is important to also recognise that the likely death toll from Coronavirus under alternative mitigation and suppression strategies is also highly uncertain.
It seems reasonable to assume that UK recovery from the severe recession and budget financing crisis associated with the measures taken to suppress the virus will be both slow and painful. There are ample examples of developing countries facing a decade or more of lost growth as they tried to stabilise their economies after debt and deficit problems of similar magnitude. It seems plausible to assume that such a prolonged period of economic difficulty will be associated with some increase in mortality, both as a consequence of increased poverty and economic distress, and as a result of constrained post-virus spending on health and social welfare.
Conclusions
The Coronavirus induced recession is likely to be deeper than that following the 2008 financial crisis, and is likely to be more prolonged given the scale of the shock to output, the already weaker state of many economies, and the fact that it is global.
The initial UK response of mitigation would have limited the economic damage caused by the virus. We have subsequently joined the rest of the world in taking severe measures to supress the virus, measures that will cause much deeper damage to our economy and the fabric of our society (will the village pubs we will lose ever come back?)
Nobody sane would argue against trying to reduce the health impact of the virus.
If the modelling is correct then we face the prospect of 250,000 additional deaths if we mitigate rather than perhaps 50,000 with measures to suppress the virus. The problem is that the costs of the additional measures now being taken to try to achieve this further reduction are staggering. The health benefits are likely to be offset by further deaths as a result of the prolonged period of austerity that will then be needed to stabilise the economy. The damage to every aspect of our way of life is incalculable.
We have never contemplated similar measures for any previous health emergency, yet have implemented them now with little or no discussion. There needs to be a debate on whether they are disproportionate to the uncertain benefits.

‘Hamlet’s Bastard’

I am quite excited that my first novel is now out on Kindle, go to amazon.com./author/mickfoster to find out more.  I now need to sell enough of them to feel that I haven’t just wasted several months of my life. Apologies to friends, family and casual acquaintances that they are likely to be bombarded with my attempts to bully them into buying it, sharing it, reviewing it.  You may as well give in now – especially as it costs less than a pint.

DWJQ

On Dec 14th at 8 p.m., the Dave Warren Jazz Quartet are back at the Three Elms https://www.facebook.com/pages/The-Three-Elms-Chignal-St-James/640784632746021?fref=tson .

We are also playing in a jazz festival on December 10th at the Morden Arms in Greenwich  https://www.facebook.com/morden.arms. We have an  hour slot at 3.30 and I am really pleased that a couple of old friends have promised to drop in to see our set. It should be a good day, with about a dozen bands playing from mid-day onwards, reflecting a variety of jazz styles.

You can here us at http://www.guitar-ukulele.co.uk/jazzquartet/     though we have evolved quite a lot since that recording was done. We still play some tunes from the great American Songbook, but mixed in with some Latin tunes and a lot of groove-driven material from the likes of Gabor Szabo, Roy Budd, Ernest Ranglin, Hugh Masekela and John Scofield.

 

How Labour Can Win

How Labour Can Return to Power

There is a possible route back to power for Labour, based on three strong policy platforms:-

 

i. Remain in the EU

Be the party for the 48% who wish to remain in the EU, and for the many more who are coming to that view as the lies of the leave campaign and the shambles of the negotiation become increasingly obvious.

ii. Reduce Inequality

But also be the party for those who have been left behind by globalisation, many of whom voted Brexit because they had so little to lose. Labour was always the party of redistribution, taxing those who can afford it in order to help those who need support. We need to focus on the hardships faced by so many and tackle head on the inevitable Daily Mail critique that Labour wants to tax ‘hard working families’ to provide handouts to the workshy. The approach cant be just about taxation and benefits, it also concerns investment in infrastructure to support a more balanced distribution of economic growth, less biased towards the South East. But we also need to say explicitly that economic growth is not the only goal, we have to concern ourselves with how the benefits are shared.

 

iii. Invest in public services – including a commitment to adequately fund health and social care.

We spend far less on health than other richer countries including our European neighbours. Comparison with others suggests we already have the most cost effective health system in the world. Meeting rising demand effectively is only possible with more money, something we should be willing to pay for.

 

There are several good answers to the question ‘how do we pay for all this?’:-

Relax Austerity: As argued in a previous blog (’public expenditure cuts:not needed, but very damaging’, https://mickfoster.wordpress.com/) , there is no pressing case for further austerity, and a higher share of public expenditure in GDP is prudent in current circumstances where debt service remains low by historic standards, and is likely to remain so. Without making the further cuts proposed by the Tories, the debt will fall as a share of GDP simply through economic growth at historic rates, and there is also scope for higher taxes, ending our participation in a race to the bottom.

 Better In than Out: If we do not leave the EU, we will save ourselves considerable costs of adjustment and will benefit from rather higher economic growth. This theoretical result from modelling is already being confirmed by the plunge in the value of the pound at the prospect of a hard Brexit.

Stop Tory Vanity Projects: We could liberate some funds for worthwhile public expenditure by changing our priorities – scrap the dubious Hinkley and HS2 projects, and (ideally) the entirely pointless expenditure on Trident.

 

Can this bring Labour back together?

With the exception of the possibly contentious issue of Trident (though I have never understood why such lunacy has support in the party), I would imagine that a platform based on these three pillars could be attractive to most Labour MPs. There will need to be debate based on research to help forge evidence-based compromises on how far to push issues such as redistribution and a more expansionary fiscal policy. The prospect of a reasonable shot at forming a Government should focus minds.

 

What is the alternative?

I doubt if there is one in the short term. I suspect that there will be an opportunity for a no-confidence vote that might prompt a new general election at some stage in the run up to triggering Article 50. The only hope for Labour to be a relevant political actor in that process –or indeed in 2020 – is if it has something distinct and clear to say on the case for remaining in Europe. That is the only issue where there is a real possibility of attracting enough new voters to evict the Conservatives. When the Tory Government seem set on inflicting enormous and irreversible damage to our economy, our society, and our Union, there is a once in a lifetime opportunity to be the party of the sane alternative, attracting voters who would not perhaps normally vote Labour. We must seize that opportunity.

Some thoughts on why we need to vote Labour in coming local elections in Essex

The Essex County Council election is important to YOU if you:

 

Have elderly relatives in need of support to maintain their dignity and independence

 

Have children in State schools

 

Use the roads and highways that cross our county, and that the ECC is responsible for maintaining

 

Are concerned about the services available to support vulnerable children and adults

 

Use and enjoy the library services and the opportunities for further and adult education

 

All of these services are under threat.

 

In 2016-17:-

 

-The Tory Government is cutting the amount of money it provides to ECC by a third – some £50mn.

 

– But a bigger population and the cost of paying the National Living Wage mean it will cost the council an extra £40mn just to deliver the same services.

 

– Together, this means ECC needs an extra £90mn in 2016-17 just to stand still. It has increased Council Tax by 4% – the maximum it can increase it without calling a referendum – but this will bring in only an extra £22mn.

 

– The council plans to fill the remaining gap in 2016-17 by drawing down reserves to dangerously low levels (just 23 days of expenditure), and by continuing to cut overall expenditure despite the severe pressures from rising demand and increasing costs.

 

– On it’s own website, the Tory run Council admits it does not know how the increasing shortfall can be met after 2017-18.

 

This is happening across the country –indeed, relatively wealthy and fast-growing Essex is better off than most councils.

 

The Tory Government is not putting public finances on a sound footing – it is transferring the problems to local authorities and to health Service Trusts, and building up problems that are becoming increasingly apparent and will be expensive to solve.

 

What difference would a Labour Council make?

We will need a Labour Government to solve the underfunding of the services on which those of us who are not Eton educated millionaires depend.

 

But There are four key reasons to vote Labour in the ECC elections:-

 

To send a message to the Government that you are not happy to see money wasted on tax cuts for the rich while our roads are full of potholes and basic services on which we and our loved ones depend are in risk of collapse.

 

To elect a council that you can trust to prioritise the things that ordinary people want and value.

 

To fight back at local level against extreme Tory policies that undermine your public services, and for which they have no mandate – including the forced academisation of primary schools, and the creeping privatisation of almost every public service.

Vote against Private affluence for the few – but Public Squalor endured by all of us.

 Vote Labour

What is racist, and what is not? A contribution to the debate in the Labour Party

What does anti-semitism mean?

 

We would all agree that hatred or dislike based on something fundamental that individuals are unable to change is always unacceptable – whether it be skin colour or some form of disability or any other characteristic outside their control. None of the allegations about anti-Semitism in the labour party fall into this category.

 

The problem with religious discrimination is that it involves criticism not of what someone is, but of what they believe – and in the interests of free speech, we need to stress that the right to criticise the beliefs of others is legitimate and should be protected. The alleged cases of anti-Semitism do not take this form either.

 

We are instead dealing with Labour party members expressing views about the policy and conduct of the state of Israel, both within it’s own borders and, more particularly, within the territories that it has illegally occupied since 1967. We are all presumably in agreement that the policies and practices of the Government of Israel must be a legitimate field of debate within a national political party that has to articulate policy positions on all current international and national questions.

 

The accusation of anti-Semitism thus derives from the fact that Israel is the only majority jewish state, and that for many jews the state of Israel as a homeland for jewish people is a core component of their jewish identity. This dual identity inevitably leads to the potential for confusion when the behaviour of the state attracts criticism.

 

The issue then comes down to questions about how individual party members have chosen to prosecute the discussion. There is a spectrum:-

i. Open and civilised debate of the issues is presumably acceptable to all of us, using facts and analysis that are open to challenge.

ii. Deliberate lies and mis-representation are clearly not acceptable, though they are all too typical of the current level of political discourse in the UK. Where facts are contested of course it can be difficult to distinguish case i from case ii.

iii. Social intimidation of those holding different views should never be acceptable. We may dislike what others have to say, but should protect their right to say it.

iv.The more extreme ends of the spectrum of discrimination, involving physical assault or worse have not been alleged, although it could perhaps be argued that a discriminatory environment dangerously lowers the taboos and barriers that protect individuals from the risk of assault.

 

If we apply this framework to the three cases that have recently attracted most attention, they seem to fall into the category of legitimate discussion of the policies of the Israeli state.

 

In the case of Naz Shah, there are two separate facebook allegations, neither of them in my view straying outside the bounds of legitimate political debate.

 

The post which was the proximate cause of her resignation showed a picture of Israel superimposed over the United States, with the comment: “Problem solved and save you bank charges for the £3bn you transfer yearly.” In comments below, Shah said she would tweet Barack Obama and David Cameron with the suggestion and said it would “save them some pocket money”.

It is obvious that this was not intended as a serious political suggestion. It was a satirical comment on the close US-Israel relationship, and the financial support that enables Israel to continue to be militarily dominant in the region. Critics of Israel would argue that it is US financial support that has enabled Israel to ignore all pressure to negotiate a settlement. It is not necessary to agree with this view to accept that it is legitimate to hold it. The original post that Shah was re-tweeting did not come from some jew hating extremist site, but from Professor Norman Finkelstein. He is described in Wikipedia as “an American political scientist, activist, professor, and author. His primary fields of research are the Israeli–Palestinian conflict and the politics of the Holocaust, an interest motivated by the experiences of his parents who were Jewish Holocaust survivors.”

 

It may be a poor joke, but it is hardly anti-semitic, and nobody was harmed by her comments. Had it been a serious suggestion to forcibly transport the inhabitants of Israel to the US it would of course have been offensive, but it was clearly no such thing.

 

Other re-posts and comments by Naz Shah make the following points:-

 

  1. “The reality is that through its historical and current colonial project the Zionist apparatus in Tel Aviv and globally continues to enact policies and practices that are deeply inhumane, that are unequal and have created physical realities that have left the mantra of Tony Blair precisely what it was meant to be an ‘(un)viable two state solution’.”
  2. During the Gaza conflict, Ms Shah posted a link on Facebook to a newspaper poll asking whether Israel had committed war crimes. She wrote: “The Jews are rallying to the poll.” And then called on people to vote “yes”.

iii. Naz Shah claimed that no Israeli children had been killed by stone throwing Palestinians.

 

The first point is certainly well within the realms of legitimate political debate. There is widespread agreement in the academic literature that the continuing expansion of Israeli settlements has resulted in a reality on the ground that makes a two state solution now unviable.

 

The argument that Israel committed war crimes is also hardly controversial. During the Second Intifada, the UN Commission on Human Rights reported “widespread, systematic and gross violations of human rights perpetrated by the Israeli occupying power, in particular mass killings and collective punishments, such as demolition of houses and closure of the Palestinian territories, measures which constitute war crimes, flagrant violations of international humanitarian law and crimes against humanity.”[138] In 2014 Amnesty released a report with similar findings, criticizing Israel for excessive and reckless use of force for which Israeli soldiers are not held accountable. Amnesty said characteristics of the violence suggested it was employed as a matter of policy, and that there was evidence some killings amounted to war crimes.[171]

 

The third point could be argued to be a case of mis-representation by Ms Shah, as there does appear to have been one such case. However, even if true, the critical point (as Ken Livingstone pointed out) is the enormous disparity in the body count with far more Palestinians killed than Israelis.

 

Were any of her tweets or comments anti-semitic?

 

I would say they are not. It was perhaps careless to refer to ‘the jews’ voting in support of Israel rather than more precisely suggesting that Israeli supporters were highly motivated to vote. However, all of the comments are concerned with the conduct of the Israeli state, and have nothing to do with personal hatred of jews. If anyone is guilty of deliberate mis-representation it is those who are making the accusations of anti-semitism.

 

The deliberate identification of an opposition to the Zionist project with anti-semitism is made explicit in comments by Joan Ryan, Labour Friends of Israel chair, who said: “This incident underlines yet again the need for the Labour Party to take urgent action to combat antisemitism and anti-Zionism in all its forms.” The two are however clearly quite different things. Zionism was a political movement to establish a homeland for the jewish people. It was a legitimate aim, but aspects of the way in which it was in practice carried out, with expulsions of Arabs without compensation or right of return, continue to be problematic, as does the continued expansion of illegal settlements.

 

The second case relates to Oxford University Labour Club. A decision by the club to support Israeli Apartheid Week, which seeks to highlight Israel’s “ongoing settler-colonial project and apartheid policies over the Palestinian people”, has angered some Labour MPs, who have called for the party to dissociate itself from OULC. Louise Ellman, vice-chair of Labour Friends of Israel, said: “I am deeply disturbed by the news that Oxford University Labour Club has decided to support Israeli Apartheid Week and by the revelations from Alex Chalmers about the troubling tone of the discourse in which this debate appears to have been conducted.” She said comparisons between Israel and apartheid-era South Africa were “a grotesque smear and the Labour party should dissociate itself from them”.

 

The allegedly ‘grotesque smear’ has a prestigious pedigree.Israeli treatment of non-Israelis in territories occupied by Israel for nearly fifty years, has been compared to South Africa’s treatment of non-whites during the apartheid era by the Congress of South African Trade Unions,[148], by former US President Jimmy Carter,[149], by archbishop Desmond Tutu and by Michael Ben-Yair, attorney-general of Israel.[150] In 2009, South Africa’s Human Sciences Research Council released a 300-page study that concluded that Israel practiced colonialism and apartheid in the Occupied Palestinian Territories.[151]The accusation of anti-semitism appears to be unfounded unless all of these prestigious individuals and bodies are also guilty of it.

 

The final case is that of Ken Livingstone. The most annoying thing about his intervention is that it kept a damaging debate going and escalated it at a time when efforts should have been focused on the coming elections. However, for what it is worth, he appears to be factually largely correct in what he says, and again it is difficult to see how his comments can be taken as evidence of anti-semitism. He said that Hitler initially wanted to expel the jews because he hated them and that his officials held discussions with the Zionists to that end. He did not suggest that the Zionists supported Hitler, nor did he suggest that Hitler was anything but repugnant in his attitude to the jews. His comments were in answer to a question, and were largely irrelevant to the debate on anti-semitism.

 

His other points were to draw attention to Israeli brutality towards Palestinians including the gross disparity in the body count, and the tendency of the pro-Israel lobby to label anyone criticising Israel as anti semitic. All of which is fair comment.

 

My conclusion is that there may have been some unguarded language used at times, but the cases that have received such publicity and had dire consequences for the individuals were of startling triviality and were not evidence of anti-semitism. They are explained perhaps by common cause among those wishing to damage Jeremy Corbyn, and those wishing to deflect all criticism of Israel.

 

The startling thing is that the ‘Labour Friends of Israel’ receive so little criticism for their support of a regime that has been repeatedly accused of war crimes and of imposing unacceptable levels of suffering on the inhabitants of the occupied territories. As a labour party member, I am hurt and offended by labour party members appearing to defend the indefensible, and bringing my party into disrepute by associating it with a regime that has a long history of oppressing the rights of the Palestinian people. That is the real issue. A little mild upset or irritation experienced by some party members because of strongly worded criticism of the conduct of a foreign power seems utterly trivial in comparison with the lethal and discriminatory behaviour by Israel that her critics seek to highlight.. The accusations of anti-Semitism seem to be contrived in my view to stifle a debate that needs to be brought into the open. There are indeed examples of unacceptable bullying within the labour party, but they are not coming from those now accused of anti-Semitism, but from those who are making the accusations to silence necessary debate.

Who is better at managing the UK economy, Labour or the Tories?

Economic Growth under Labour and under the Tories

Looking at the long term economic growth rate under both Tory and Labour Governments since 1950, there is no significant difference between them – it averages 2.6% p.a. during periods of Tory rule, 2.5% per annum under Labour[1].

 

Both parties performed poorly until the 1980s

Comparing the performance of the UK to France, the USA, and the average of high-income OECD countries, the UK economy performed poorly compared to our competitors under both Tory and Labour Governments until the end of the 1970s[2].

 

The conservatives under Thatcher initially presided over a deep recession that caused mass unemployment and extreme misery, but later years did see the UK outperform our competitors on economic growth. Over the 1979-97 period of Tory Government as a whole, however, the GDP increase of 52% under the conservatives was higher than France’s 44% but lagged a long way behind the 63% average of the OECD countries let alone the 70% increase in the USA.

 

The only post-war Government to achieve faster economic growth than the average of all rich countries is the labour Government of 1997-2010[3]. Under labour the economy grew by nearly 30%, whereas the high income countries as a group achieved growth of about 28%. From 1997-2008, Labour consistently achieved high GDP growth with low inflation. During the period, the cumulative increase in national output per head in the UK was greater in percentage terms than in either the US or France. The major and important difference from the Conservatives is that labour achieved this good performance while also distributing the benefits more equitably, achieving major reductions in poverty, especially child poverty.

 

The period of growth came to an end with the global financial crisis. During the global recession from 2008, the cumulative decline in national GDP in the UK was about 4.7% compared to an OECD average of about 3.5%, and about 3% in the US and France. The UK was hit harder because of the far greater relative importance of banking and finance in the UK economy. The recession was not caused by labour economic mismanagement.

 

What is less well recognised in the UK (though acknowledged in other countries) is that the UK performed a really significant role in brokering the necessary international action to save the world financial system from collapse[4]. It is ironic that labour ended up with a reputation for economic incompetence when most international observers would give the UK much of the credit for preventing the global recession being a whole lot worse.

 

Under the Tory led coalition since 2010, recovery in the UK was slow, and (unlike the US) the UK had still not recovered the pre-slump peak level of output per head by 2014. The IMF and other commentators have argued that unnecessarily severe austerity policies have damaged economic growth since 2010[5].France performed even more poorly during the recovery because of the problems of the Euro zone – the decision to keep us out of the Eurozone was another example of sound Labour economic judgement.

Economic Management

Growth is only one aspect of economic management. Another indicator of the skill in economic management is the control of inflation, with both parties accepting that a target of about 2% per annum is appropriate. Although direct responsibility is given to the Bank of England (a significant reform introduced by Labour), Government can make their task much more difficult if it fails to retain good control of its own spending.

 

Recent economic history suggests that Labour has performed better than the Conservatives.

 

Both Labour and Tory Governments struggled to control inflation in the 1970s in the face of multiple oil shocks abroad and industrial relations problems at home. Despite the severity of the recession that it induced through over-tight monetary policy in the early 1980s, the Thatcher Government still struggled with inflation rates above 5% as late as 1991.

 

Under Labour from 1997, the UK consistently enjoyed a benign combination of moderate inflation and economic growth. Only the global financial crisis brought this to an end. As argued elsewhere, this was not caused by labour, nor was the labour Government especially profligate in its spending decisions. It was appropriate to allow some expansion in the budget deficit to avoid a still deeper recession. The debt never approached unmanageable levels. The debt has been far higher than the current level of about 80% of GDP for much of our history, it is easily financed with current low global interest rates, and will come down in relative terms as economic growth is restored-  even without the planned deep cuts in public spending.

Did Labour ‘Tax and Spend’ Excessively?

Another frequent allegation is that Labour Governments tax and spend excessively. Judge for yourself:-

I. The labour Government of 1997-2010 generally spent less than the 38% of GDP level reached in the final years of the previous Conservative administration. There was a brief (and rapidly reversed) expenditure blip to 38.8% in 2005, but the eve of the global economic crisis saw the Government spending the same share of GDP as their predecessors. Tax revenue was a little higher, which could be argued to reflect a prudent policy of avoiding excessive deficit spending in good times.

2. During the global crisis, which required extra expenditure to avoid a deep recession, expenditure peaked in 2009 at 43.6% of GDP. This is higher than the average of the rich OECD countries, but is lower than France (47%) and comparable to Denmark (43%) Italy (42%) and the Netherlands (42%). Those who have suggested that Labour economic policies would lead to disaster might want to contemplate these figures – and the fact that high spending Denmark and the Netherlands score 3rd and 6th in the global rankings of the World Happiness Report.

Conclusion

The conclusion to draw from this analysis is that there is little difference between the two parties in terms of the quality of economic management. If anything, Labour has performed better since 1997, enjoying greater consistency with less ‘boom and bust.’

 

The big difference between the two parties is in how the fruits of economic growth have been distributed. That will be the subject of a future briefing note.

[1] Calculated by the author from Office of National Statistics GDP data.

[2] Based on World Bank World Development Indicators. Re-unification makes a comparison with Germany difficult.

[3] World Bank, world development indicators, analysis by the author

[4] For quotes and analysis see William Keegan, Saving the World”? Gordon Brown Reconsidered , October 2012, ISBN 978-1-907720-56-7

[5] For IMF quotes see, http://www.theguardian.com/business/2013/may/22/imf-uk-economy-verdict-eurozone-osborne