Are there political prisoners in Spain?

I seem to keep having to blog about populism, in an effort, I guess mostly ill fated, to try to defend truth on the face of unashamed, relentless and unscrupulous attacks. I started this blog because of some of the claims around Brexit. I could have written many blogs, but wrote very few, due to lack of time and, frankly, sometimes energy. Then it was Trump. And now, Catalonia. These are not the only three big examples of populism and demagogy in current politics, but as a Spaniard living in UK, they are certainly the most relevant.

One of the many attacks on truth and democracy currently underway in Catalonia are those based on the message that Jordi Sanchez, head of ANC, and Jordi Cuixart, head of Omnium, both pro-independence organisations, are political prisoners, incarcerated in Spain because of their political opinions.

This, if true, would of course be very serious. Modern democracies don’t imprison citizens because of their political views, right? So how can this be happening in Spain? Is it? In the face of all the confusion and mixed messages, the best approach in my view is to state, and stick to, the facts. Those that put their opinion ahead of facts will still not listen, but those who are trying to understand reality, rather than to fit reality to their World view, can maybe find this approach useful in these kind of situations.

So, in the next few paragraphs, I will tackle the question: Are the 2 Jordis political prisoners?

First we should probably define what a political prisoner is. We can use several different definitions. In the Cambridge Dictionary, a political prisoner is: someone who is put in prison for expressing disapproval of their own government, or for belonging to an organization, race, or social group not approved of by that government.

In 2012 the Parliamentary Assembly of the Council of Europe (PACE) outlined a set of conditions for someone to be considered a political prisoner. These are:

• Their detention violates any of the protections of the European Human Rights Convention
• Their detention is imposed purely for political reasons
• The time or conditions of their detention are not proportional to the crime committed
• Their detention is discriminatory when compared to other people
• Their detention is the result of a judicial process which is clearly unjust and politically motivated

Any of these criteria suffice. Catalan nationalism would have us believe that Sanchez and Cuixart have been jailed by the Spanish government for defending their independentist ideology.

This sounds shocking, and, were it true, it would represent a serious repression of civil liberties. But, is it true?

So, let’s start with the first part of the sentence. They have been jailed by the Spanish government. This is outright incorrect. The Spanish government does not have the power to jail in Spain. It is the judiciary, who judges, sentences and jails. And they have been placed in preventive prison by a judge, not by the government (you can download the whole sentence here, and you should if you are keen to have a well founded opinion, it is well argued, although it is in Spanish).

Why have they been jailed? Is it because of pacifically defending their independentist ideology? In this case, the best thing is to check what Sanchez and Cuixart are actually accused of, and compare that to the law of the land, in this case, the Spanish penal code. The public accusation is claiming that the 2 Jordis headed an organised group which, on 20^th and 21^st of December, surrounded the Economy Catalan Ministry and prevented the Spanish Civil Guard and a judge of the National Court from exiting the premises after arresting some politicians following a court order. The impasse lasted 5 hours, during which the Spanish Civil Guard could not exit the building and were retained against their will. In order to exit, they would have had to resort to violence, which they did not. The judge of the National Court had to eventually leave the building through the roof. In addition, during the incident, 3 cars of the Spanish Civil Guard were burnt, although there is no evidence or claim that the cars were burnt directly by Sanchez and Cuixart.

What does the Spanish Penal Code say? Article 554 translates as: ‘Persons are guilty of sedition when, without being guilty of rebellion (which would be more serious – my comment) rise publicly and tumultuously to prevent, by force and outside the law, the application of the laws or to any authority, official corporation or public servant, the legitimate exercise of their functions or the fulfilment of their obligations or of judicial or administrative resolutions’  

Let’s break this apart and analyse it:

• Are the Jordis persons? Yes.
• Did they rise publicly? Yes, this event did not happen in their private property, but outside the Catalan Economy Ministry, and therefore, in a public area.
• Did they rise tumultuously? Tumultuously means in a multitude, therefore, in a large gathering. There is no specific number at which a multitude starts which I have been able to find, but ANC and Omnium claim themselves that there were 40,000 protesters concentrated and, even though there may be exaggerating for political reasons, photos of the event clearly show there were several thousands of people. Therefore, it is a multitude, and they rose tumultuously.
• Was the multitude preventing the application of the laws? The Civil Guard and the judge were there to arrest several individuals accused of breaking the law. Therefore, that is a yes.
• Was the multitude preventing an authority, an official corporation or a public servant? The judge is an authority and a public servant, the Civil Guard is an official corporation and an authority. Therefore, yes.
• Finally, were they preventing by force and outside the law? This may be the most contentious points, since all the others are clearly undeniable, and different people will have different opinions of what ‘by force’ means. Does forming a cordon and telling the Civil Guard that they cannot leave the building unless they leave those arrested, and keeping them there for 5 hours, constitute force? People may have different opinions on this. But, to answer it, I would replace the Civil Guard with a group of women or children. If their liberty was curtailed in the same way by a mass of several thousand people, would that be considered by force? I would think probably yes.

The above list seems to show there is significant evidence that Sanchez and Cuixart may have violated article 544 of the Spanish Penal Code.

And this is another important point. Sanchez and Cuixart have not been condemned. So far, they have been accused. The decision the judge has to take, at this point, is: Is there sufficient evidence of a crime being committed that justifies the court judging it? Now, please look at the list of points above compared to the article 544 text. Different people, depending on their political slant, may have different opinions as to whether a crime was really committed, but based on the information available, can anyone really reasonably claim that this accusation should be thrown out before going in front of the court? There seems to be very little justification for a trial not being conducted, in this case. Given the evidence available, i think it is clear that we can safely say that a trial is at least in order, and therefore, there is no discrimination in this case, and no indication of political motivation and judicial corruption on this accusation going to court.

This brings us to the next and final question. If the Jordis have not been tried yet, why are they in jail? This, again, takes us back to the judicial system, and, in this specific case, to jurisprudence, or judicial precedent. The 2 Jordis are detained awaiting trial, in a situation of Provisional Detention Without Bail. In most crimes, while the accused are awaiting trial, they are freed under certain conditions, sometimes posting bail, and sometimes with some additional restrictions. However, freedom is not granted, and accused are detained in Provisional Detention Without Bail, when one of the following circumstances arise (for the best background I have found on this, read page 17 of this PDF, which is in Spanish), in the opinion of the court:

• The accused may escape and not attend the trial
• The accused may use their freedom to alter, hide or destroy evidence
• The accused may attack the victim
• The accused may continue to commit crimes

Given the fact that the 2 Jordis have declared publicly that they do not recognise the authority of Spain, the Spanish Law or its courts, the first risk is definitely there, as well as the fourth one, since they themselves have indicated that, if freed, they will continue to act in the same way that has taken them to this detention in the first place. In fact, their defence tried to bring politics into the court threatening the judge with further alterations of the peace should the 2 Jordis not be freed. (This is undemocratic mafia-like and a lot more serious than it looks at first sight, but I will leave that for another post). Therefore, again, it is difficult to claim that the actions of the judge are disproportionate or discriminatory.

In this case, it is also helpful to remember that other high profile cases in Spain have, in the last few years, seen people detained provisionally without bail. I have not researched this, other than to find that 100,000 people are detained without bail in Europe annually, but 2 very recent high profile cases are those of Barcenas, the treasurer of the PP, the Spanish government party, who spent 2 years and 3 months in Provisional Detention Without Bail, between 2013-2015, accused of corruption, and justified by risk of escape and of destruction of evidence, and of Jose Maria Villar, president of the football federation, again accused of corruption and in Provisional Detention Without Bail for the same reasons as Barcenas. It is also worth remembering that, in the same hearing, Josep Lluis Trapero, another accused, was freed on bail, which seems sensible as it appears clear that he will not escape and he has no opportunity to commit crimes again, since he is at the moment suspended from his post.

I therefore cannot find any arguments against the line of legal reasoning that has taken Sanchez and Cuixart to this situation. Those claiming injustice and calling them political prisoners should remember that political prisoners are not those people detained that you politically agree with. There is a legal process and a set of circumstances that defines a political prisoner, which we have analysed above. I would encourage anyone who wants to continue to make these claims and to attack the democratic reputation of Spain to comment with a line of argument that highlights any weaknesses in this reasoning, as, if found, I am completely open to changing this analysis. This is something I missed in the case of Brexit, with Trump, and now with Catalonia., so it would be great to get some debate.

Thanks for reading!

Is Spain a democracy?

I never thought I would have to write anything to answer this question. However, after a long time quiet on this blog, once again because of regrettable absolute lack of time to write, I have found myself today having to drop everything I was doing to write this article, with the aim to set the record straight on a few things which I think most people are missing when evaluating or commenting on the situation in Catalonia today, 1^st of October.

Firstly, let me start by declaring that I deem the situation as extremely sad and regrettable. Let me also say that, as a Spanish citizen, I fully support a democratic process which allows Catalonia to vote on its independence. This article is not about the Catalonian independence process, but ONLY about 1st October. Let me also say that I know full well that, by writing on this issue, I will make many enemies and no friends.

However, I feel compelled to do it, after reading my twitter feed and seeing the reaction of people I normally regard as clear progressive thinkers when confronted with images from Catalonia. Vince Cable, the LibDem leader, calling police behaviour unacceptable and asking for the Spanish ambassador to be summoned by the Foreign Secretary to explain. J.K. Rowling calling police actions repugnant and unjustifiable, and people like Peter Frankopan, a historian I admire, and writers like Simon Worrall, enthusiastically retweeting some of these ill advised declarations. I have also had conversations with Catalan people and been surprised by their lack of understanding of what living in a democracy actually means.

The sentiment behind the manifestations of these commentators seems to be that the actions of the police are repressive and unwarrantedly violent, and that the Spanish government must be brought to task and asked to respond for this undemocratic behaviour. In the next few paragraphs I will try to deal with these three accusations, repressive, unwarrantedly violent and undemocratic.

Firstly, these commentators, in their (I still want to think) well intentioned progressiveness, are immediately antipathetic to images of police confronting citizens in any way. I am too. However, before an accusation of repressiveness can be levelled, one must at least do some basic analysis. Spain is a democratic country, which enshrines in its Constitution and derivative legislation the right of its citizens to pacifically demonstrate, protest and voice their opinion. The Spanish police would not seek to repress any of these rights (I would not have so confidently said this 25 years ago, but we have come a long way) and, should it, then its actions could be rightfully called repressive. The citizens in the images we receive from Catalonia have full rights to protest and demonstrate, and an overwhelming majority of Spanish citizens would recognise them those, as they would to any other Spanish citizen. In fact, until today, they have freely demonstrated and protested as many times as they have seen fit. But these citizens in the images, confronting the police in a way that makes most of us lefties remember the good old days of student and popular uprisings, are not demonstrating. They are breaking the law. And this point seems to have been missed. They are breaking the law, and obstructing and resisting policing. Any modern democracy sets its foundations on the rule of law, and the security forces are there to protect it. And, when the law is broken, we expect the police to act. We may, at a personal level, be more sympathetic to some law breaking than to other, but, you see, the problem with democracy is that us individual citizens cannot decide what laws can be broken and which cannot. And how do we know that these citizens are breaking the law? Again, democracy has a guide to this. We know, because it is not the executive power (the government) that says so, but the judiciary. In democracy, separation of powers ensures that the executive cannot abuse its remit, and this is a well established principle in Spain. The Spanish and Catalan judiciary have both, on the basis of the legal framework with jurisdiction over this dispute, ruled that the proposed referendum is illegal. Therefore, when the police act to prevent the voting, they are not doing so as the strong arm of a repressive state, but rather acting on behalf of democracy, as it is their duty. Were these citizens legally protesting or demonstrating, as it is their right to do, any actions by the police to prevent them from doing so would be repressive and in contravention of the law of the land. But, when these citizens vote in an illegal election, and try to prevent the police from policing, they are committing a crime, or accomplices of a crime. This may sound hard, but the rulings of the Spanish and Catalan judiciary have left us in no doubt that these activities are illegal, and therefore, the police have no choice but to enforce the law. If they don’t, then that would be undemocratic, as the police would be abrogating unto itself the power to choose which laws should and should not be enforced (which, in fact, is what the Mossos d'Esquadra seem to have done, choosing not to enforce the law or the orders of the judiciary, and as a result placing themselves outside legality and as a downright undemocratic agent in these unfortunate events).

I find it difficult to believe that Mr. Cable, Ms Rowling or Mr Frankopan would be supportive of illicit activities in fellow modern democracies, which seek to subvert the rule of law.  I can therefore only surmise that, should they give proper consideration to the fact that the police are acting on a judiciary ruling, they would agree that the actions of the police are not repressive.

Let’s move on, therefore, to the question of whether the police are acting with excessive and, to quote Ms Rowling, unjustifiable violence. In modern democracies, police are entrusted with policing with minimum necessary force. They must keep force to a minimum, but they must police, first and foremost. A tenet of policing is that if force is necessary, police will not walk away, they will exercise it, in a measured manner. And this throws a different light in what is going on in Catalonia with policing. We must evaluate the use of force by police from the perspective that they are fighting what, in law, is a crime. If a bank robbery was taking place and some citizens were confronting the police and preventing them from entering the bank to stop it, how would we expect the police to act? Is there a difference in this case? If we realise, as we have to, that a crime is being committed (and please remember that I am commenting strictly from a legal viewpoint and not getting into the morals of the matter), then we must expect the police to not stand down.

Of course, in some cases, the force used by the police may be excessive. I am not saying that it is not, I have not seen most of the incidents and, in any case, I am prudent and democratic enough to realise that it is not up to me to unilaterally be judge of that (I wish Mr. Cable or Ms. Rowling were capable of similar restraint before throwing themselves onto Twitter), since our society already has a judiciary body entrusted with this task. The citizens in the images have full access to the judiciary and democratic protection Spain affords all its citizens. I can assure all readers that all police actions will be investigated (in fact, the process is already underway if you, once again, listen to the judiciary) and further, any aggrieved citizens have the right to report any police malpractice. Once again, this is the advantage of democracy. We don’t need Twitter judges, we have real ones.

In conclusion, before judging what is going on in Catalonia, we need to remember that the law is being broken in a democratic country. It may be an unjust law in the eyes of many, but that does not give citizens the right to unilaterally break it. I am sure that most of those citizens are well intentioned, believe in what they are doing and are not well informed about the exact workings of democratic institutions. It is their political leaders that have failed them, by leading them into an illegal course of action.

As for the Twitter commentators that got me back to blogging (and I do at least thank them for that), a word of caution. We live in dangerous times when progressive opinion leaders are happy to support the breaking of the rule of law in modern democracies, on a whim and without due consideration for the consequences of their actions. Being a public figure brings responsibility in a democracy. 

In the particular case of Mr. Cable, this is of course more serious, as his role is in political leadership, in a democratic country which would handle an attack on its law and security exactly in the same way as Spain is doing. I would just remind him that I do not remember Spain summoning any British ambassadors to Madrid when the British police dealt with mining strikes or the London riots. Mr. Cable, you should know better. Let the Spanish democratic process run its course, we don’t need, or want, your undemocratic moralising. We need to find a way to bring about a negotiated solution that resolves this issue pacifically and within the rule of law, and you are not helping. Once you decide to support the subversion of the rule of law, you place yourself in very unsavoury company.

The future is coming. Not to a galaxy near you, to your own - and it is a lot more exciting than you may think

I will start this article with a warning. Contrary to my usual aim, this is not a facts analysis article, designed to use facts to unravel usually held misconceptions. It is rather opinion and vision. I sent it to some mainstream media last year, but it was not published, so I have now decided to publish it here.

Last year brought us some political events which shook our understanding of the World in such a way that it was hard to pay attention to anything else. But many other things, more relevant in the long term, happened, and were missed. For example, news that a driverless truck operated by Otto, a technology start up owned by Uber, had made the first driverless delivery of cargo in human history. The truck drove 100 miles unassisted in the State of Colorado, from an Anheuser Busch brewery to its final destination. It is true that a human was in the cab and drove the last few miles in traffic, and a patrol car followed the truck throughout its journey. However, it is now surely not long before the technology is trusted enough to avoid these then superfluous precautions. The writing is on the wall.

The first reaction to these news is probably: Cool that we can have a truck drive itself. After a bit more thought, this is a lot cooler than it first appears, but it also has complex implications. Firstly, it is easy to see a not distant future in which driverless trucks, powered by electricity, move all goods at times and through routes with lowest impact to traffic, unencumbered by current needs to organise trip times and routes around the inflexible, prone to tiredness, obsolete human drivers. A World without trucks on motorways when humans are driving and without diesel fumes from HGVs? Sign me up!

However, there is a flip side to this coin. It does not need to be negative, but it will be, unless we start planning for it right now. What are all those delivery and long distance drivers going to do for a living? This immediate thought is closely followed by much wider ranging ones: And what about taxi drivers, Uber drivers, airplane pilots, train drivers, air crew, air traffic controllers? Our transportation system will soon and inevitably be replaced by automation. And the same will happen to many manufacturing jobs. A little later, to many other jobs, such as diagnosers (doctors), treaters (doctors) and surgeons. Postmen. Retail employees. Soldiers. Bankers. The more you think about it, the longer the list gets, the question for each one of these professions being when, not whether.

This, believe it or not, is good news for the working people of the future. But only if our education system does not let them down by preparing them to do jobs which will no longer exist. A major rethink of how we educate is urgently needed. And not only of how we educate. Also of how we conceive work and working careers.  Our thinking about all these issues is currently constrained by experience. A backward looking understanding of education and work would lead to the conclusion that unemployment will soar with the advent of automation, bringing about all the social problems we expect from low occupation figures. That conclusion, however, would be a result of framing our vision of the future on our learning from the past, rather than on a detailed understanding of the new opportunities afforded by technology.

A major change in paradigm is needed, which can deliver much happier and well off humans. Automation can only contribute to a better society, and that means a better life for you and me, if we use it in the right way.

So, how can it do this? For example, automation enables a model where a general, significant guaranteed income is possible for all citizens of the World. The need to work as a means to survive could disappear. Sufficient goods could be available to cater for all. The biggest question this leaves is: What is everyone going to do and how are we going to distribute? And this is where the future really gets exciting.

Imagine a World, 20 years from now, where a group of individuals decide to drive an initiative to solve a human problem. For example, energy. These individuals crowd source, not only for funding, but also for skills and labour. A mission statement could read something like: ‘We are going to solve nuclear fusion in the next 20 years and deliver free energy to all, and for that, we need as many physicists, hardware, electronic and software engineers as we can get’. Based on this initiative, humans interested in this project could train themselves, unimpeded by the need to work for a living, to fill those roles and contribute to that effort, drawing huge rewards, both pecuniary and in self-realisation, when it succeeds. Education material would be readily available (MIT and many other educational institutions are already making their teaching available online, allowing millions to potentially qualify in anything that interests them). 10 million ex taxi drivers, delivery drivers, doctors and soldiers, even bankers, could train as physicists and join the effort. Solutions would be arrived at much faster than with current economic and research models, and every human problem solvable by human endeavour could be tackled simultaneously. When a solution is achieved, we all benefit. Cancer, poverty, heart disease, fundamentalism, conservation, biodiversity, climate change and many other problems could cease to be intractable.

Utopia, I hear you say. But it is not. This picture is very close to being possible. Some of the key elements needed to make such a model work are:

• Significant guaranteed income for all. Possible? With better distribution and the new work force of automation, yes. Tick.
• Communication platforms which allow humans anywhere to become aware of collaborative projects and join them. Tick.
• Data repositories and project management tools which support this massive size collaborations. Tick.
• High quality educational resources freely available to all those who want them. Tick.
• The will of humankind to change the way we understand and address the World around us and believe that such a future is possible. This is most likely the biggest obstacle. Change is never easy, and typically those who stand to lose in the short term will oppose it, whilst most of those who stand to gain in the long term do not realise it, or wait and see.

What does this mean for individuals and for education? Individuals will be able to work in different projects, even changing discipline, and to re-educate whenever desired to change fields and join new efforts. Challenging? Yes. But would you rather spend 40 years behind the wheel of a taxi, or behind a desk in your own groundhog day, or solving the World’s real problems and continuously learning in the process. The satisfaction derived from the latter alternative is immeasurably higher. For our education system, this means we need to equip our young people to be able to learn, retool and switch disciplines continuously. Emphasis and effort should move from delivering and teaching content and information, which will in future be available in external media, easily interfaceable with humans (wearable clothing, accessories, tablets and other devices), to teaching how to quickly and effectively use available information to create solutions. Current educational focus on memory, information retention and structured thinking, all of which computers can do better than humans, needs to shift to efficient usage of technology, synthesis capacity, puzzle solving and creativity. A population with these skills will be in a position to benefit hugely from the great opportunity afforded by the impending obsolescence of most of today’s occupations. Work will be something you do anywhere, at any time, in any field, with whatever approach and within whatever structure you choose at any given time. Training choices will not determine the next 40 years of your working life, trapping you in a monotonous profession, but equip you with flexibility and the power to derive satisfaction from any endeavour you choose to undertake. A new security would be found in freedom, flexibility and adaptability.

We need to commit to this vision, and we need to do it now. Automation is coming. Our societies need to develop humanistic ways of life and distribution models which ensure that automation is not used to increase corporate profits, by reducing costs whilst keeping benefits away from the workforce. We need to collectively choose to use technological advancement for the betterment of all our lives.

Current events such as Brexit, the rise of populism, the American election, nationalism and fundamentalism are the result of large swathes of the global working population seeing the writing on the wall and no longer understanding what their place in the World is. They can see their jobs and skills becoming obsolete, and they cannot see how they may replace them. Technology and globalisation are overwhelming for Neolithic Man. The time has come to evolve. To understand what our technological prowess can offer us, and to adapt to it. As part of the process, we will need to address many other social constructs which are no longer relevant, such as office environments, large educational establishments, pension systems, traditional marriage, country borders, etc. But this will be part of the process. The start is the change in the conception, by the majority of the global population, of the opportunities the future offers and the shedding of all limiting assumptions rendered irrelevant by our newly acquired technology. Lose the fear. Embrace hope.

So, are UKIP dead, or are they playing dead?

I have been disappeared for too long, completely failing to deliver on my intention or commitment to publish once a week. I will not be able to make good, but hopefully I can at least pick that intention up and carry it on from here.

Today I want to write about UKIP. It is something I have debated long and hard whether to do. 

Should I even acknowledge UKIP by writing about them? Do they deserve that exposure? As much as I despise most of their views, they have the support of a significant percentage of the UK population, were instrumental in engineering the Brexit referendum and are therefore a force to be reckoned with in UK politics. As a UK immigrant, I guess continuing to ignore them, although good for my mental health in the short term, is not sensible in the midterm.

Common wisdom is that UKIP have had their day, have served their purpose and will now disappear from UK politics. However, I am not so sure. I think that Mrs. Nuttal and Farage, although they are in my view certainly Nuts and a Farce, are a lot more dangerous than they look at first sight.

It is clear that there is a lot of anti EU sentiment in the UK, I could argue and prove that in another post, but I think most people, after the referendum, are probably prepared to accept that, so long as I limit the statement to:  ‘A significant percentage of the UK population are anti British membership of the EU’. UKIP preaches to this constituency. If you listen to their new mantra (now that the £350Mn a week for the NHS, etc. have banished), they continuously repeat the following, which I paraphrase in the interest of brevity: ‘We are here to ensure that Theresa May delivers the Brexit deal the UK want. She may not, and if she does not, we will be back’. So, a failure by Theresa May to deliver the deal UKIP and many Brexit voters believe they should get, would see UKIP come back stronger than ever. Can Theresa May deliver that deal? Basically, is the UK in a position to get all they want from the Brexit negotiation?

Again, if you listen to Paul Nuttal, yes, definitely. The argument, repeated again in the election radio debate today, goes like this: ‘The UK has a big trade deficit with the EU. The EU sells more to the UK than the UK sells to the EU. Therefore, the EU needs the UK more than the UK needs the EU. Therefore, Theresa May has a strong negotiating position and should deliver the deal Brexit voters expect’. This all seems logical at first sight. If the first statement is true, the others may well seem to logically follow… The EU is making money out of its relationship with the UK, so how could they not want to make a deal?

As often, however, first sight appearances can be deceiving. Populism prays on lack of analysis. So, what does analysis tell us? What are the facts? (I am at least returning to my commitment of writing about facts, and yes, I admit the first part of this article is too opinionated, but, from here on, we are going to deal in facts and allow you to make your own mind up).

Firstly, what is the real trade situation between UK and non-UK EU? The numbers from the Office of National Statistics (https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/mar2017) are as follows: UK exports to the EU for goods and services were £242bn , whilst imports were £302bn in 2016. A £60bn deficit. So, Paul Nuttal’s first statement is right. The EU is making money out of trading with the UK. Is his conclusion right, does this fact put the UK in a strong negotiating position with the EU? To understand this, we need some more numbers. This is what is commonly known as context, something most politicians (some more than others) and many voters (idem) often ignore.

Visits and research in a number of sources (IMF, Eurostat, Office of National Statistics, https://tradingeconomics.com/united-kingdom/gdp, (http://www.nationaldebtclock.co.uk/),  (http://data.worldbank.org/region/european-union and (http://www.eudebtclock.org provide the following information about the 2 economies (all in Billions of GBP per annum, 2016 numbers).

UK and EU macroeconomic numbers in billions of  GBP

For a lot of people, these large macroeconomic numbers don’t mean a lot, so things are easier to understand if you turn them into smaller numbers, such as those used by a family or a small company.

Let’s take the UK first, and imagine it is a small company, UK Company Ltd, which has total annual revenues of £100,000 from sales (that would be the total export). If we translate the rest of the numbers to the same base, UK Company Ltd is buying in £110,182 in total, and therefore losing £10,182 per year from trading. UK Company Ltd is selling £44,000 per year to EU Company Ltd, its biggest customer. Imagine a situation in which the contract with EU Company Ltd was cancelled (the equivalent to a super hard Brexit). Now, suddenly, UK Company Ltd is selling £56,000, whilst spending £110,182. The loss has gone up to £54,182, nearly the same amount as the total revenue. To break even, UK Company Ltd, would ,have to increase its sales to other customers by 96.7%.

Now let’s look at EU Company Ltd, also with revenues of £100,000. It is buying in £94,830, therefore making a small profit of £5,170. Its biggest customer is UK Company Ltd, to which it sells £16,787. Imagine a situation in which the contract with UK Company Ltd was cancelled (the equivalent to a super hard Brexit). EU Company Ltd is now selling £83,213, whilst spending £94,830. The loss has gone up to £11,618. To break even, EU Company Ltd would have to increase its sales to other customers by 14%.

The question you have to answer is, which party stands to lose more from a cancellation of the contract? Which company needs the other more?

Now let’s look at imports and what a lack of a trade agreement may do, by introducing tariffs. For this example, I can use a family. The UK family has 2 working parents with total budget for the year of £50,000, to use a number familiar to many (its GDP). It spends £5,278 per year with its electricity supplier (EU PLC). Suddenly, due to an oil crisis (Brexit and introduction of tariffs), there is a 25% increase to its electricity cost. The family now has to find an extra £1,319 per year to pay for electricity, but wages are constant.

Down the street lives the EU family, which also has 2 working parents with total budget for the year of £50,000. It spends £749 per year with its electricity supplier (UK PLC). Suddenly, due to an oil crisis (Brexit and introduction of tariffs), there is a 25% increase to its electricity cost. The family now has to find an extra £187 per year to pay for electricity. The parents get an annual wage increase of 2.5%, or £1,250.

The question you have to answer is, which family stands to lose more from a tariff increase by its electricity supplier? Which will struggle more? Which family is therefore in a better position when going to the negotiating table and risking the introduction of such a tariff?

The point is that, whilst exports from EU to UK are bigger than the other way in absolute terms (if we forget the billions, £302 and £242 respectively), as a percentage of the UK and EU economies, both exports and imports from the EU are much bigger for UK, than the other way, because the EU economy is so much bigger.  To drive the point home, £242 (the UK exports to EU) mean a lot more to a guy who earns £2,861 per month, or £17.88 per hour (the UK GDP) than £302 (the EU exports to the UK) mean to a guy who earns £16,152 per month, or £100.95 per hour (the EU GDP). In a poker game where the player who earns £17.88 per hour in his day job has £242 on the table, and the player who earns £100.95 per hour in his day job has £302 on the table, the second player is going to be a lot more relaxed, £302 makes no real difference to him. This, of course, is not a poker game. It is a serious negotiation between 2 political entities which have a lot at stake, but it seems that the strong negotiating position is with the EU, and that Theresa May will bring back the deal that the EU want, which may well not be bad for UK, but which will most definitely not be the one Brexiters want, since they want it all in exchange for nothing.

The final question, which you also have to answer yourself is: Does Paul Nuttal really not understand this? Or are UKIP deliberately massaging the truth to set up Theresa May for failure, in the expectation that such failure would bring hordes (I choose the word carefully) of angry, disappointed voters, back to the UKIP ranks?

The Empire is falling

The last few months have seen two electoral events which have shocked the political establishment. In both cases, the political class, intellectuals and polling organisations got it completely wrong, predicting electoral victories for the status quo, and being shocked by the victory of the anti-establishment options.

There has been a lot of analysis about what this means, why it has happened, and why it was missed. Most of this analysis, however, is wrong. The reasons for those votes are also completely wrong and, in many cases, will achieve completely the opposite outcome that the voters intended.

The elites are scratching their heads. Particularly, the progressive intellectual elites. How is it possible that large numbers of voters, in protest against the inequality and lack of opportunity they perceive in society, have voted for quintessential paragons of inequality? How can Donald Trump, a multibillionaire who has amassed massive wealth gained from the work of others, be seen as a better chance for the working class than more progressive political propositions? How can the British voters vote for an option which will clearly make their country, and particularly its working class, poorer, by destroying jobs and pushing the UK into a low corporate taxation model where workers share more of the burden? This seems to make no sense, but the fact is that it makes perfect sense.

These voters are angry and scared. The World is changing very fast, and it is becoming something completely different to the World they grew up in. Globalisation is going at breakneck speed, and has created huge wealth. However, it has also created huge inequality, which has been exacerbated by the 2008 recession, which brought about a huge, obscene even, transfer of wealth from the taxpayer to financial institutions and their shareholders. New millionaires are created every day in places like Silicon Valley. But, to a large percentage of the population, what these people do to become millionaires is incomprehensible. The thought that you can create technological tools, trade globally without barriers and be hugely successful very fast is an insult to the people who have not learnt the skills (and I use this sentence carefully because I think 99% of people have the capability) to take advantage of these opportunities. This is logical. The way of life of this section of society is under siege. They can see their jobs becoming extinct or irrelevant, they can see themselves being replaced, and they cannot see what the alternative is. Automation, as well as foreign competition, will render most of their occupations obsolete. And when this happens, how are they going to survive?

The inhabitants of Western economies have grown in an environment in which they were the privileged few. Despite the fact that global output and wealth was much lower 30 years ago than today, 30 years ago the great majority of it was shared between a few hundred million, in the West. Everyone else was brutally poor, and that was not our problem. What has happened in the last few decades is that we are suddenly having to share our wealth with many others. With billions of Asians and South Americans joining the global economy, manufacturing goods and providing services. These guys are training themselves and building their competitiveness, and they want a share of the global output. We, used to keeping the great majority of the output to ourselves, don’t like that.

The huge miscalculation is to think we can stop it. US and UK have extremely self centered views of the World economy. These views hail back to a time, not long ago, in fact less than a generation, when their markets, together with a few countries in Europe, were the only ones that mattered. They had the consumers and the spending power, and they therefore called the shots. They could choose who to trade with and in what terms. But this has changed. So now, Americans want to stop the effects of globalisation by building walls and isolating, and they think that will protect their jobs and their economy. But the World economy is going on outside America. Manufacturing, technical development, and services are produced everywhere and, more and more, consumed everywhere. By 2100, 9 Bn of the planet’s 11Bn population will be in Asia, Africa and South America. These markets don’t need the US and the UK. The World economy can continue to develop without them. By building walls, the Americans and the Brits will be keeping themselves outside of the World economy, not keeping others outside of theirs. China famously did just this in the XIV century. They were the World’s most powerful trading economy, the most advanced technological society. They were a long way ahead, technically and economically, of everyone else. And they had built that position through relentless trading over the silk roads and by sea. But, at some point in that century, the emperor decided that trading with outsiders was sharing Chinese wealth, and he reasoned that Chinese wealth, most of the known World’s wealth, should be for the Chinese people. As a result, China closed its borders. This allowed Europe and the Middle East to thrive without competition. Rather than sharing their wealth and leading global progress, China stepped out and conceded global leadership to incipient economies in Damascus, Baghdad, Cordoba, Spain, Venice and Genoa. Development continued, global trading accelerated, but China did not participate. They thought the global economy would not continue without them, that by closing the gates they were keeping wealth within, but they were actually keeping themselves away from the newly created wealth. It has taken China 650 years to regain their position in the global economy.

Now US and UK are doing the same. They are closing the gates to 6Bn consumers, to protect their markets of a few hundred million. They think they are losing their jobs to immigrants, when they are losing them to workers that compete from a distance and never need to visit their countries. Instead of taking advantage of their head start to provide higher end services and products to those growing economies, they stop trading and accelerate the change in the World Order. It has happened in Egypt in 700BC, in Greece in II C BC, in Rome in 476, in China in the XIV century, in the Middle East in the XVI Century and in Spain in the XVII Century. Now, it is the turn of the US and the UK. Old empires that prefer to ostracise themselves than to participate in more equitable development. Used to always winning, we don’t like competition.  

And this approach is not only doomed to failure and sure to accelerate our demise. It is also morally wrong. It is based on the premise that keeping others poor is justifiable to keep our wealth, on the concept that our life and that of our compatriots is more deserving than that of people from other nations. Why should this be the case? We are all human beings, with the same rights, the same aspirations. We should be leading the World in finding economic models which benefit all by improving wealth distribution and accelerating wealth generation. Not stepping out of the game and letting others take our wealth. Because they will. Globalisation will not stop, it will continue. Geopolitical wealth redistribution is beneficial to 6Bn people, even if a few hundred million backward thinking individuals in the West see it as negative. And 6Bn people will, in this modern age, prevail. We can join them, or we can watch from outside. That is the choice we have. And we are choosing the second option., at least in UK and US.

When does telling the truth become lying? (you could even ask the BBC)

This article is a bit of a detour from my usual themes, as it does not directly relate to international politics, although the underlying theme has had, in my opinion, a huge effect on political decisions we have seen electorates take in the last few months.

The article is prompted by the main story run by BBC Radio 5 Live, in the UK, in the news items during the breakfast program on Wednesday 8^th of February. The headline was:

UK Police forces have spent £22Mn paying informants over the last 5 years. During the same period, police budgets have been cut by 18%. This was followed by the question, by the presenter, of ‘Is this good use of public money?’.

The first statement is a news item, as the information has become available through the publication of a Freedom Of Information Request appertaining to the financial years 2011-2015 (for an example of what these look like, you can read the FOI reply by the Met Police, the biggest spender, here. An internet search will give you access to the replies of the other police forces, if you have the time and energy to combe through them).  The second statement is not news, and it is completely irrelevant to the news in the first statement. It is clearly designed to generate an emotional response in listeners. A lot of money is being paid out to informants by the police while their total budget is being reduced. The program anchors seemed quite outraged by this use of public money.

The news item offered very little further detail, other than the biggest spender was the Met, with around £5Mn, with the Northern Ireland Police force in second, with £2Mn.

All the statements in this news item are correct, or close to correct (I have found different figures for the reduction of police budgets, but all between 18% and 21%, so let us accept that the data are primarily correct).

So, the message seems to be police are giving a lot of money to informants, money they don’t have. The second statement, about the 18% reduction, must be there to elicit a feeling in the audience that police don’t have that money to pay out. Some may argue that it is there to provide context, but it is not, it is there to take out of context. It cannot provide context because it is in no way comparable or related to the figure in the first statement, absolute monetary values cannot be compared to percentages in the absence of any other information.

Let’s now look at what may have been appropriate context and an appropriate framing of the reporting of the results of the Freedom Of Information Request, had the aim of the BBC been to inform the public:

First question is, is the money being spent on paying informants a large sum? There are 45 Police Forces in the UK, of which 43 replied to the FOIR. The period is 5 years. Therefore, £4.4Mn are being paid to informants per year, an average of £102,326 per police force (£8,527 per month per police force). The number looks a lot smaller when presented like this.

To put it further into context, we could look at total police budgets, and whether the money paid to informants is significant within those budgets. The budget for police forces in the UK for 2015 was (you can find these numbers in many places, this PDF is a police funding report to the UK Parliament):

• England: £7.4Bn
• Scotland: £1,064Mn
• Wales: £743Mn
• Northern Ireland: £661.5Mn
• Total: £9,868Bn per year.

We can now get some understanding of what the number actually means. The money paid out to informants is 0.0446% of the total police budget. To translate that to numbers most people can understand, for every £1,000 the police spend, 44pence are paid out to informants. It is now starting to be difficult to understand how this item makes it into the major headline of a mainstream news program. The equivalent in household terms would be a member of a couple sending repeated emails, every half hour, to their partner to explain that they are going to spend £1.20 of their £3,000 monthly salary on something necessary but unpopular. Or the headteacher of a small rural school convening an urgent meeting of the governors to inform them that he intends to spend £22 of the £50,000 budget in extracurricular education, and the governors starting a consultation to see whether that expense is sensible.

Another way to look at this is, if the police did not spend this money in informants, what could the police do with it. Could they police better? Let’s look at this, and for this, we can focus on the commonly used metric of number of policemen on the street. The UK has just over 202,868 personnel measured in Full Time Equivalents (basically, this means that two part-time people working half time count as one Full Time Equivalent). The average cost per FTE, dividing the total budget by the number of FTEs is £48,494.59 per annum (don’t jump at this number, this is not the salary, is the full cost of providing policing, per head).

So, let’s imagine that police stopped paying informants and added more policemen to do the policing. The money saved on informant payments would allow to pay for 90 more policemen across the country, taking the total number from 202,868 to 202,958 (it is not only you who has to look twice at the number to tell the difference, in practical terms, there is no difference).

Now that we have established that the police are paying a very small and irrelevant amount of money to informants, let us look at the naming and shaming. The biggest spender is the Met, over £5Mn over 5 years. Northern Ireland Police £2Mn. No more information was given out, the numbers get small, so not worth reporting. Let me tell you, for example, that West Midlands has paid £974,953 over 4 years. So, the Met is paying 5 times more than West Midlands. The Met, as the information is presented by the BBC, is paying 2.5 times more than the second biggest spender! How profligate!

Now let us try to put that into context, which is actually very easy. It is obvious that the amount of policing relates to the size of the police force and to the population policed. Every item of policing would be expected to be more or less proportional in amount to these context metrics. If we work on the basis that population is the key metric, it turns out that the Met is not the highest spending, Northern Ireland spends a lot more (to be expected I think in light of the previous troubles in the territory and the fact that some of these remain under the surface).

Finally, let us look at the claim that these amounts have been spent while budgets for policing were reduced by 18%. Putting these two facts in the same headline generates the impression that police are throwing money at informants even when they have less. But, how is the money paid to informants evolving? If we look at the numbers, once again in the FOIRs, we find:

• Met Police have reduced the money paid to informants by 15% since 2012, and by 49.5% since 2009.
• Northern Ireland Police have reduced the money paid to informants by 31.5% since 2011.
• West Midlands Police reduced the money paid to informants by 46% between 2011 and 2014.

The police force are actually reducing the amount paid to informants faster than their budgets are reducing.

It turns out that the BBC could have reported: ‘The Freedom Of Information Requests from UK Police Forces have been received. 43 out of 45 forces replied, which is fantastic. The figures show that the police are spending very little amounts in paying informants, and that they are successfully reducing these amounts faster than their overall budget is reducing. However, since the BBC asked the wrong question in the FOIR, we still don’t know how the value of the results produced by those informants actually relates to the money spent’ (that, by the way, is the question I would really have liked to be able to answer, it is the only one that matters, although looking at the figures I am quite happy to assume that probably the value generated by the informants is bigger than the money spent, who better than the police to evaluate that?).

This is as far as I feel it is worth carrying on with this analysis of BBC reporting style. The question is: why does the BBC present this information in the way they do, and not in the suggested alternative way. And this is not a problem on this specific issue. The way this news was reported is consistent with the way most news are reported. Every day, there are several examples of so call reporting that I could take to task in a similar way. There are extensive studies about the reason for this. The statement is ‘Good news doesn’t sell’, in several variations (if you want to read some research on this, you can look at this Columbian Journalistic Review of a Pew Research Center Study for People and the Press, on this subject, and that is just one example, there is a lot of academic research on this subject).

I am not going to go now into the consequences of the systematic misrepresentation of information by mainstream media. In fact, when you look at the messages behind Brexit and the Donald Trump campaign (of course I had to bring these 2 into this article!), they are anchored on misperceptions generated by these systematic bad news. Neither of them would have happened without them. This blog will aim to illustrate that, amongst other many things, but this is enough for today.

I leave you with the scary thought that the BBC has a very good reputation for neutral news reporting and, due to its funding model, has no real need to sell or prove audience figures. If the BBC is systematically doing this, what can we expect from its commercial counterparts?

Are Trump and Brexit voters trying to solve the wrong problem?

Over the last few months, political commentators and the so-called establishment have been shocked by the results of the electoral processes in the UK, voting for Brexit, and the US election, electing an unproven, unpredictable Donald Trump to the presidency.

How could this happen? A lot of analysis has gone on trying to explain it, most of it, in my opinion, misguided. Most analysts are focusing on how these results are the wrong solution to the problem. However, I think that the fact is that voters are addressing the wrong problem.

Both the UK and US electorates have voted in protest to what they perceive as being a worsening of their living conditions. Jobs are being lost to global competition and immigrants, life is highly pressured and unaffordable, there is lack of opportunity in our societies, etc. The problem, from voters’ perspective, is a lack of success in the UK and US economy. The economy is doing badly, this is impacting standards of living, and therefore the solution is to vote for political programs which promise (and sadly, that is all they do) success.

Common wisdom, and the narrative of the winning sides in both elections, goes something like this:

In the US, the Obama administration has failed at leading the recovery of the economy from the 2008 recession. Things are bad, and third party countries and foreigners are taking what is rightfully American. Trump is coming to the rescue, promising to make America great again.

In the UK, the EU has acted as a brake to the UK economy, preventing it from growing and succeeding as it otherwise might. The EU is slowing the UK down, with unwieldly red tape, curtailing the UK’s freedom to trade and flooding the country with uncontrolled immigration. The obvious solution is Brexit, which will make the UK great again.

I will look at whether Trump and Brexit are the right solutions to these problems in another post (in fact, they aren’t, but I don’t want too much of a spoiler here). But even before I do that, the first thing we should be looking at is whether these problems are real. And here is where facts come in. Facts used to be the way that reality was evaluated prior to decision making. Although they seem to have lost importance and to have been replaced by the loudest noise, I still believe they are the only logical basis to the decisions we take.

A few facts about the American economy you may or may not know:

The starting point is the financial crisis of 2008 and 2009, which coincides with the beginning of the Obama administration (although its causes are to be found, at least in good part, in the financial sector de-regulation presided over by the Bush and, to a lesser extent, Clinton administrations). In 2009, when Obama took the presidency, the US economy in real GDP terms fell a massive 5.4%, with unemployment at its highest level in 70 years, around 10%.

What has happened since?

• In the third quarter of 2016, the US economy, in nominal GDP terms, has grown 3.5% (this is above the average growth in the US economy since 1940, no mean feat http://www.tradingeconomics.com/united-states/gdp-growth).  
• The growth for 2016 is estimated at 3.1%. This is the highest in any ‘first World’ sizeable economy, with most other around the 1.5% GDP growth rate (https://www.gfmag.com/global-data/economic-data/countries-highest-gdp-growth).  
• 12 million jobs have been created since 2009, with unemployment at an all time low of 4.7% (https://www.bls.gov/news.release/empsit.nr0.htm). In fact, unemployment levels of below 5% are considered full employment, as this accounts for the percentage of people between jobs or willingly out of work at any given time in an economy.
• Budget deficit has been reduced by 60% since the trauma of 2009 (http://www.usgovernmentspending.com/federal_deficit_chart.html).
• 20 million Americans have health insurance for the first time, as a result of Obamacare.
• On the downside, public debt has increased by 90% since 2008, so that is the big issue for the US economy (the average debt per capita is still looking good compared to many developed countries such as the UK for example, see https://en.wikipedia.org/wiki/List_of_countries_by_external_debt).

This is, in anyone’s terms, an incredible recovery in a short period of time. The US economy is succeeding. Big time. So how can it be that Americans think they are doing so badly that they are choosing a candidate whose main promise is to take down the system? There are several reasons for this. I cannot enumerate them all here, but these are some of my favourite explanations:

• Negative news. The fact is, bad news sells better than good news. Fear sells better than hope. Human nature aims to protect what it has before aspiring to grow. Fear of loss is a much more powerful motivator than hope of improvement. This was discovered by psychologists in the 70s and has been the basis of sales and marketing theory ever since. As a result, the media, financed by advertising, publish majorly bad news. The growth in national debt in the US, and anecdotal stories about illegal immigration, get a lot more airtime than the economic recovery.
• Inequality. The distribution of wealth in the US has deteriorated in the last 8 years, worsening the prospects of those at the bottom of the economy. This is not by design of a socially progressive (at least by US standards) Obama administration, it is a global consequence of the dynamics of capitalism. By definition, it fosters inequality by ‘redistributing’ wealth (this is an euphemism for concentrating wealth in the hands of the owners of the means of production). This is classical economic theory, well studied by Adam Smith, Karl Marx, Milton Keynes et al.
• Envy and comparison with others. This was pointed out to me by a friend the other day. When humans compare themselves to others, that influences their perception of how they are doing. Success and failure, wealth and poverty, are relative terms, at least once you get over a basic line. There may be some truth in this. I don’t have any facts to back this up, only anecdotal evidence, which can be hugely misleading. If there is some truth in it, though, that would make some sense. Nowadays, we are bombarded by a culture of celebrity. The people we see in TV and in the media are wildly successful, earn unprecedented amounts of money and accumulate wealth and plaudits. If we compare ourselves with them, we may feel we are doing a lot worse than we really are.

And here comes the really interesting part. If we leave aside the rejection of immigrants, racism, and a few other, unedifying feelings which may have caused some pro-Trump votes but which Trump supporters are at pains to tell us are only a minority, we are left, when trying to explain the vote for Trump, and considering that he practically run with no program or plan, with two main explanations:

• A reaction against an establishment that is failing the American public, ignoring it and presiding over a significant deterioration of its standard of living,
• and the concept that Trump’s success in private life may equip him to show America the way to economic success.

Those arguments may stand in a situation where the economy is failing and the government is forgetting the working people. But, as we saw at the beginning of the article, the facts tell us that this is not the case. All the opposite.

And now comes the big question: In a reality in which the economy is succeeding, the recovery is well underway and Americans are getting access to universal services they never enjoyed before, but where they still have the problems of national debt and inequality, is the solution a president:

• who is a multibillionaire (multibillionaire status is typically a result of lack of equality, since most people are not multibillionaires),
• whose most clear policy is undoing most of what the previous administration has based the very successful recovery on,
• who is running on a ticket of greatly increased public spending and reduced taxation, hardly the recipes to reduce public debt.

That seems a real stretch. It seems that Americans may be voting to solve the wrong problem. 

Unfortunately, that has consequences and, in this case, some of them may be very serious, and contribute to very significantly aggravating the real problems, whilst undoing the real successes. I promised to blog on the Chinese and US relationship, but this post has got very long, so I will have to leave that for one of the next posts.

Before that, we should look at the vote for Brexit in the light of the real UK situation. My next post will be looking at some quite incredible facts about the misconceptions and fallacies that led to the Brexit vote.

Is Donald Trump a mermaid?

This title may be a bit disturbing at first, but you should be ok as long as you don’t conjure up any mental images which mess with your sleeping patterns.

Let me explain what I mean with that question.

Many people, when hearing the word mermaid, will think about Daryl Hannah in Splash, or about the 1989 Disney movie about a Little Mermaid. You could, in fact, probably gather something about people’s age just by which of those two images first comes to their mind. In both cases, mermaids were pretty cool (I have to say I go more for Daryl Hannah).

However, mermaids did not start out that way. Odysseus’ sailors, on their tortuous return voyage to Ithaca after the surrender of Troy (The Odyssey, by Homer, 8^th Century BC), were exposed to the dangers of Bronze Age mermaids, then called sirens. The deal was that the mermaids attracted sailors with their enchanting songs, the sailors followed the songs and they shipwrecked on the rocks of the mermaid island (the location of this island has not been clearly identified, although I now think it may be in Manhattan, soon to move to Washington DC).

Donald Trump has stated in an interview in the last couple of days that a trade deal with the UK would be a priority for him. This has been received with glee (or maybe just relief) by Brexiters, who I imagine cannot help to be a bit concerned by the UK’s impending abandonment of the EU. I guess people find comfort in thinking that you can get to be a multibillionaire by doing what you like to do, not what is in your best interest. However, my experience is that, if you want to accumulate billions, you need to have your interest at heart in any process you are involved in. So, if we are to accept, which I think most reasonable people would, that whatever Trump is saying is because he sees it to be in his best interest, then we should ask ourselves, why is Trump saying that at this point?

One explanation, probably widely spread amongst Brexiters, is that Trump can clearly see that trading with the UK is greatly advantageous to US, and he sees this as being highly significant. Throw in a bit of special relationship, this locker room (a Trump speciality) concept which is supposed to make US presidents put UK interest in front of their own, and you have your justification. Trump is keen to get to a trade deal with UK because trading with the UK is the key to US’s success in the New World order.

Is this true? What are the facts we need to know to evaluate this?

• US annual trade with UK (2015 figures) is $56Bn exports, $58Bn imports. (https://www.census.gov/foreign-trade/balance/c4120.html)
• US annual trade with EU (2015 figures) is $272Bn exports, $427Bn imports. (https://www.census.gov/foreign-trade/balance/c0003.html)
• US annual trade with China (2015 figures) is $116Bn exports, $483Bn imports (https://www.census.gov/foreign-trade/balance/c5700.html)
• US total annual international trade is $1,505Bn exports, $2,241Bn imports (https://www.statista.com/statistics/218255/total-value-of-us-trade-in-goods-worldwide-since-2004/)

I actually cannot resist the temptation to plot this for effect. You can see the figures below.

So, no wonder Trump thinks it cannot be without a trade deal with the UK. 3.7% of US exports and 2.6% of US imports are to UK. A trade deal with UK has to be his first priority! Keep telling yourself that, but, as I already wrote in previous posts, the repetition of clearly unfounded arguments does not make them true. Real causes are based on real facts.

I am now introducing a new saying. If it does not make sense, it is probably not true.

So, what could be an alternative explanation to what Trump is doing and the timing of it? I am now going to attempt an incredibly dangerous stunt: put myself in the head of Donald Trump. Exercise extreme caution if trying this at home.

Trump is promising to make the US great again. In American minds, that means leading the World economy. Being the World’s biggest economy. How are they doing on this? If you take a look at the United Nations 2015 list of countries by Nominal GDP (https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)), the ranking is:

• 1^st: EU, $18,518,430 Mn
• 2^nd US, $18,036,648 Mn
• 3^rd China, $11,158,457 Mn

There is a caveat here, which is that nominal GDP is affected by exchange rates. Since China are artificially holding down the value of their currency, the RMB, if we were to use the more ‘truthful’ measure of GDP by Purchasing Power Parity (adjusting exchange rate anomalies) the US would be third, as China already overtook both US and EU in either 2015 or 2016 depending on who you listen to (see https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)). But this is for another post, another day. In any case, US is, at best, second.

So, to make America great again, Number One, Man!, Trump can do 2 things:

OPTION A: Grow the US economy significantly (not that easy, especially at a time when many more countries are joining global competition, which is, by the way, a good thing in my book, as it spreads wealth to places which have had none until now, and to people who are prepared to work hard for a reward, as we are in the West, countries, for example, like Laos, Vietnam, Indonesia, etc.)

Or…

OPTION B: Make the EU smaller! Let’s do some Trump magic and take the UK figures away from the EU’s. Look at the ranking above again now:

• 1^st US, $18,036,648 Mn
• 2^nd EU, $15,660,427 Mn
• 3^rd China, $11,158,457 Mn (with the same caveat)

So, as if by magic, all Trump has to do to deliver on his promise is encourage the UK to abandon the EU, changing course and sailing to a potential shipwreck. Julius Caesar already coined this strategy with his famous ‘divide et impera’, or ‘Divide and conquer’, although Sun Tzu would probably claim he wrote it first in ‘The Art of War’, nearly 3,000 years ago.

The metaphor is completed by the fact that (and I have not checked this, so I am going from memory, don’t hold me to it) the mermaids in Homer’s poem (if you have not read it, you really should, essential reading in my view) wanted the ships to shipwreck as they would then eat the sailors. Now, just imagine Donald Trump, not exactly the first person that would come to your mind when hearing the word Win-Win, negotiating a trade deal with the UK at a time when the UK are desperate to strike trade deals quickly and are trying to replace 50% of their international trade, talking to someone who only has 3% of their international trade on the table, and 4 to 8 years to do the deal. I think many in the UK trade mission may find being eaten by traditional, better looking (á la Daryl Hannah) mermaids preferable.

Worryingly, if you look at the more relevant PPP table, once Trump overtakes the EU by helping the UK separate and fall into its jaws, the next thing he needs to do is slow down the Chinese economy. That would explain what is starting to go on in the South China Sea, what may happen with the Strait of Malacca and why the Thucydides Trap, another ancient idea, may still stand. I will blog on that next if I don’t get distracted, but, if you cannot wait and you really have the time, you should read ‘Easternisation’, by Gideon Rachman, and ‘Prisoners of Geography’, by Tim Marshall. Two outstanding analyses of current geopolitics.

The truth about the UK trade deals argument from Brexiters

There are many Leave arguments that one could dismantle at ease. One of the most infuriating and damaging for the prospects of the British nation is the statement that Brexit will finally enable the UK to negotiate trade deals with third parties. The Prime Minister is again reminding us this week of the great benefit that UK will derive from this ability to finally negotiate trade deals with other economies. The lunatic asylum that parts of the Conservative party and the whole of UKIP have become are calling for a hard Brexit, and for the UK to start on these trade deals immediately, so that the outlook of British people’s lives can be changed for the better with immediate effect.

This is, at best, disingenuous. It ignores the fact that the UK, as a EU member, already has trade deals with most trading blocks and third party countries in the World. These deals have been negotiated, over long periods of time, by large international teams which include a significant contribution from the UK.

One must therefore surmise from that continuously repeated Leave mantra, one of the following conclusions:

• Leave are just lying, because that is what they do, and because informing the public is of no concern to them, or because they are so scared about what the future will bring after Brexit that their brains have jumped into full defence mode and are making them ignore the impending reality.
• Leave are so arrogant, that they really think that a British team will be able to extract much better deals from third parties than a European team.

So, what are the facts critical to this issue?

The first one is that negotiation outcomes between well prepared, professional teams depend on the negotiation tools each party has. For trade deals, your negotiating position is the strength, health and potential of your economy.

Some facts about the EU, which you can find at http://ec.europa.eu/trade/policy/eu-position-in-world-trade/:

• The EU is the largest economy in the World, exporting and importing more than any other economy, and it is the World’s largest trading block.
• The EU is the top trading partner for 80 countries or trading blocks (compared to the US, who is top trading partner for 20 countries)
• The EU ranks first in inbound and outbound investment
• In nominal GDP terms the EU is the largest global economy, with over $18 trillion annually.
• Demographically, the EU is the 3^rd largest market, with 500 Mn plus consumers, after China and India
• The EU exports are 31% of global exports in 2015, compared to China (11.6%) and US (10.8%) (http://www.imf.org/external/pubs/ft/weo/2016/02/pdf/statapp.pdf)

Now, some facts about the UK economy:

• The UK is the top trading partner for no countries or trading blocks.
• In GDP terms, the UK is the 6^th global economy by size if we exclude trading blocks, with $2.8 trillion annually.
• Demographically, the UK is the 22^nd largest market, with 65 Mn consumers.
• UK exports are 3.7% of global exports.

You can clearly see that the EU enters any negotiation from a position of strength, boasting the largest economy and the largest import, export and investment markets. The UK will enter negotiations with major trading partners (the top 5 global economies, EU, US, China, Japan, India) as the junior trading party, with an economy which is 3-6 times smaller than the other party’s.

So, what exactly will the ability of the UK negotiators to extract better deals than the ones currently available be based on? There are 2 possible answers in light of the facts above, I guess, although I am already really struggling with even trying to work out what Brexiters are thinking on trade deals:

The first answer, if you are to believe Brexiters, must the supreme talent and charm of the British when it comes to negotiating, compared to the idiocy and incompetence of their EU counterparts, and the fact that the British people are globally loved. The Brits will clearly walk into any room and get a better deal, just because they are British. You can choose to believe that. If you really want to think that this is the case, and that the best negotiators in EU civil service are distinctly inferior beings to the best negotiators in UK civil service, inferior enough to waste such a much better negotiating position to extract a worse deal, then you may find the Brexit argument on trade deals believable. But wait. Not even then… It turns out that over 25% of EU trade mission personnel are British, and that 25% of EU Trade Commissioners have been British (Christopher Soames, Peter Mandelson, Leon Brittan, Catherine Ashton). So, you have to believe that the British are not only superior, but that contact with their EU colleagues destroys that superiority and turns them into village idiots, sorry, Europeans.

The second answer would be that the other parties have become less adept at negotiating. Therefore, although EU teams are ok, they had the misfortune of negotiating with other economies at a time when these other economies had tough, strong and professional negotiating teams. These teams have now left countries like China, india and the US, who have gone backwards, and they have been replaced by a bunch of incompetent negotiators who will roll out the red carpet and give the UK what it wants. The fact that the negotiating position of those other economies has improved (China was twice the size of the UK economy 10 years ago, it is now 4 times the size) will be compensated by the brain drain in the other parties negotiating teams.

Frankly, both arguments are so preposterous and clearly false that, if you are going to believe either, you might as well believe both at the same time and feel even happier in the certainty that, if you are British, your future is about to take a distinct turn for the better.

In the light of all the above, things don't look that great. But it is worse. There is one final nail in the coffin. The average duration of the negotiations for major multilateral trade deals over the last 30 years has been a bit over 8 years. For single country deals, if we take the US as an example, the average for their last 20 trade deals, from kick off to implementation, is 63 months.

UK negotiators, therefore, will not only have to get all other parties to roll over and concede on everything the UK wants, but they will have to get them to do so 3-5 times faster than any other negotiating process has taken. It sounds as a tall order. Particularly if you think the UK would be entering these processes from a junior position, as explained above, but also from the position of a party that needs a quick deal to survive, whilst the deal is fairly irrelevant to the other party. The Leave argument, I guess, is that now that UK will be small and desperate it will finally achieve from negotiations what it could not get when it was part of something strong, big and powerful.

So, look at the facts and make your own mind up. But look at the facts. The repetition of unrealistic, clearly false, arguments does not make them true. Reality is based on fact, and real outcomes are based on real situations.

Finally, if you are getting worried, you may be heartened by the noises from Whitehall about the planned visit by Liam Fox to New Zealand. Some positive noises from over there. There may be a deal to be done, and then it will all be OK. The UK will be able to trade with the 54^th economy in the World, 12 times smaller than the British economy, and less than 12,000 miles away! Life is good. 

On discussing this with a Brexiter friend the other day (yes, I do have some of those), he said to me: 'But it seems that the US are keen to negotiate with UK! That surely means they respect us and will be a good trading partner'. You may be thinking the same thing. My answer is obvious, but I will write it anyway: 'Do you think the US would rather negotiate with a united trading block bigger than itself, or with a series of smaller economies desperate to reach a deal? It is obvious why the US and any other third party which have to negotiate trade deals with the EU would encourage the UK, and any other members, to exit. EU scissions are highly beneficial to the negotiating position of any EU counterpart.'