Earth to Earth

When I was a child my parents, in lieu of a television, used to listen to Radio 4, especially at meal times. My mother hailed from Sidmouth and so took interest in a radio series that concerned a remote farming family in mid-Devon who one day blew their own heads off with a shotgun. Chez Newman was a barrel of laughs, I can tell you. I remembered the series, which was called Earth to Earth, and the book of the same name that someone gave my mother shortly afterwards. For no particular reason I tracked it down on Amazon and bought a secondhand copy (it’s now out of print).

The Luxton family had been farming in Devon for around 600 years, and by the 19th century the various branches pretty much owned everything within a day’s ride of Winkleigh, the village around which the events took place. The author of the book, John Cornwell, noted that marrying between cousins was common among the Luxtons simply because the family was so large it was pretty much impossible to cast one’s net beyond their geographical spread in the days when people’s worlds were very much smaller than they are today. Things looked good for Robert George Luxton, born in 1818: he inherited six farms and plenty of assets in the form of stock, dwellings, furniture, and paintings and was the undisputed head of the local aristocracy. Being a rich chap, he indulged in foxhunting, gambling, womanising, and drinking along with his pal the Fifth Earl of Portsmouth, who was even richer and built himself an extravagant mansion in 1854 to which he would invite hundreds of his friends to engage in hunting and pissing it up.

At the same time, Robert George embarked on a large program of upgrades to his farms, investing heavily in new machinery, rebuilding barns, acquiring better breeds of livestock, and adopting more intensive farming techniques requiring large outlays on seeds and fertilisers. A lot of this was financed through loans, which the banks were only too pleased to extend at seven percent interest. His sons and daughters were given expensive educations and preferred to play sport or idle rather than work the land, and soon he began to lose control of his workforce. But what happened next was worse:

The catastrophe, when it came, was more widespread and appalling and permanent than any could have guessed. The background to the agricultural depression of the latter half of the nineteenth century was the influx of cheap food from the United States, Russia, Argentina, Australia and New Zealand. Steam navigation and the relentlessly spreading tentacles of the railways in every part of the world brought speedier, cheaper transport. The Americans had pioneered the mechanization of crop farming on an unparalleled scale to open up and exploit the vast and fertile prairies. Inevitably the food markets of the world were transformed. It was an era of aggressive free trade and British farming was brought to the edge of collapse. Throughout the 1870s North American grain pushed prices down to levels unknown since before the year 1700. The populations of the manufacturing towns were being fed on Argentine beef, Australian mutton and bread made with American wheat. In the 1880s the cost of a loaf fell to half its previous price. Denmark counteracted the changing market forces by rapidly switching to dairy produce. The Danish farmer fed cheap imported grain to dairy cattle and pigs, and exported high-quality standardized bacon to England.

Many British crop farmers converted their farms to grass­land, hoping to redeem their fortunes by investing in milk production. As a result there were huge milk surpluses and plummeting prices meant they failed to cover their invest­ments. Their attempts to break into the cheese markets were frustrated as they watched American cheese drop to twopence a pound. No British farmer could produce good cheese for less than fourpence a pound.

Compounding the misery of British farmers was the appalling weather I described in this post. The upshot was that many farms went bankrupt, sending thousands of farmers and agricultural workers to all four corners of the globe to seek better fortunes – including many who bore the Luxton name. Robert George was forced to sell land and other assets to pay his debts, before breaking his neck in a hunting accident in 1902 aged 84 and penniless. His pal, the Earl of Portsmouth, killed himself in 1906.

Observing all this, and taking careful notes, was a cousin of Robert George’s by the name of Lawrence Luxton of West Chapple farm. Although the two had grown up together, he was highly critical of Robert George’s extravagant ways, himself eschewing modernisation and spending almost nothing. When the crash happened, Lawrence Luxton was determined to survive with his farm intact. Believing the real danger to a farm lay in outside forces such as markets and money-lenders, and understanding that a farm can be almost entirely self-sufficient, Lawrence Luxton simply shut the farm gate and rode out the storm. Their main contact with the outside world was to barter produce in exchange for items they couldn’t make themselves, such as clothes and boots. What is astonishing is that the family carried on like this for two more generations.

A hundred years later, in the 1970s, West Chapple farm was owned and occupied by the last remaining members of the once-enormous Luxton clan: brothers Robbie and Alan, and their sister Frances, Lawrence Luxton’s grandchildren. Their father, Robert John, had been raised by Lawrence to run the farm and view the outside world much as he did, and Robert John in turn passed this outlook onto his own offspring. As such, the Luxton’s farming practices remained unchanged from those of a hundred years before: everything was done by hand, there was almost no machinery, they used draft horses in place of tractors, and there was no mains water or electricity (at least, according to Cornwell’s book: this is disputed). By all accounts they were excellent farmers, producing good animals and taking tremendous care of their land, and they didn’t spend a penny more than was absolutely necessary. When WWII arrived, and brought with it thousands of American and Canadian soldiers, the world opened up a little for Alan, the youngest of the three siblings. He joined the Young Farmers club and, after long days in the fields, would scrub down, head into Winkleigh, and go drinking in the pub.

When the war ended Alan tried to persuade his elder brother to modernise the farm but Robbie, wedded completely to his father and grandfather’s methods, refused. He allowed the lane leading to the farm to grow over, claiming he wanted it for grazing, and erected gates at either end. Anyone driving by on the public road would just see a meadow on the other side and never guess there was a farm in the valley beyond, hidden completely from view. The family fortunes changed dramatically when Alan met a local woman and became engaged. He approached Robbie and said he wanted to sell his share of West Chapple so he could buy a small property of his own and raise a family, but again Robbie refused: he couldn’t afford to buy Alan out of his share, and to split the farm up was unthinkable. Furious rows ensued and even physical violence, with Frances – who was older than them both – caught in the middle but sympathising with Alan. Eventually, unable to win his brother over, Alan called off his engagement and returned to the farm. He then suffered a complete mental breakdown, locking himself in his room and hurling abuse at everything and nothing, roaming the farmyard dressed only in sacks and incapable of doing any real farm work. He was to remain that way until his death years later.

Frances had a few romantic liaisons but none developed into anything serious, probably because her brothers were so dependent on her staying at the farm. Once it was clear Alan’s condition wouldn’t improve, her fate on the farm was sealed. Robbie, for his part, was uninterested in women believing his sister was all he’d ever want or need. As the siblings grew older the farmwork grew more difficult. They began to think about succession but had nobody to pass the farm onto. Deeply aware they were the last remnants of a great Devon farming family, Frances took to researching their ancestry in the hope of finding a suitable heir. But as time passed and none was forthcoming, the weight of family history bore more heavily upon them. By the time Robert and Frances were in their sixties, and the erratic Alan in his mid-fifties, the farm had become too much for them and they agreed to sell it. Then they changed their minds, then they found a purchaser and agreed to a sale, but immediately regretted it. Witnesses say Frances spent her final days in a sort of delirium over the sale of the farm, repeating over and over that they should stay and die in West Chapple.

One morning, in the autumn of 1975, a grocer’s delivery man approached West Chapple and found Robbie, Frances, and Alan lying dead in the yard with massive shotgun wounds to their heads. The police quickly ruled out the involvement of a fourth person and concluded that Alan had probably committed suicide first, with Robbie following suit an hour or so later having first dispatched Frances who didn’t appear to offer any resistance.

Suicide rates among farmers still remain high everywhere, including in the UK, France, and USA. While most observers focus on economics and isolation, there is often also a great weight of family history pressing down on the shoulders of farmers whose forebears have worked the same land for sometimes hundreds of years before. As the case of the Luxton’s shows, this can exert an enormous psychological pressure on farmers faced with no choice but to sell up. If they have nobody in the family to hand over to, this pressure can become unbearable. Having grown up in a rural area and known several farmers who died early from heart attacks (although thankfully, none through suicide), I can relate to the pressures they are under even if none is exerted on me. Back when I was a kid listening to Earth to Earth on Radio 4, I thought the story immeasurably sad. Now I’ve read the book as an adult I still do, particularly the Luxton’s despair in a world which had passed them by, leaving them stranded on an island able only to look backwards. There is nothing as relentless as the passage of time, and nothing so unforgiving as the march of progress.

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Who benefits from cheap labour?

One of the points Tim Harford makes in his excellent book The Undercover Economist is that the person who benefits the most from a busy cafe is the landlord of the premises in the form of rent. I think he used a coffee shop in one of the London railway stations as an example, but he made the point that if the outlet is in a very busy place full of wealthy customers, the business itself isn’t the goldmine you’d think it is. Sure, the business owner will put the prices up to reflect market rates but the increased revenue will be passed straight to the landlord in higher rent. This is why coffee shops everywhere run on slim but broadly similar margins, even if some are located in busier and more prosperous spots than others. No matter what the business owner does, the bulk of any additional monies will end up in the landlord’s pocket one way or another.

I was reminded of this when I turned on some news channel this morning and caught a man grumbling about how it was becoming difficult to recruit staff in London’s cafes, bars, and restaurants with Brexit looming. He ran some sort of posh cafe in a building I’m sure he doesn’t own, and was saying 85% of his staff come from overseas and applications for new positions are already down. He wailed that there wouldn’t be time to train up an entire new army of baristas and waiters within 5 years. He was also complaining that businesses aren’t having expensive breakfast meetings in his cafe any more, because Brexit is raising prices everywhere. The chap in question had a Scandinavian name and an accent, and if I’d been holding the microphone I’d have asked him why he’s not busy running overpriced cafes in his own country.

Okay, firstly he’s talking nonsense and is simply rent-seeking: if people aren’t applying for advertised jobs then he needs to improve the terms and conditions until they do. Secondly, businesses being unable to have trendy, overpriced breakfast meetings while being waited on by foreign hipsters is hardly a hill on which to fight Brexit. But more importantly, who is benefiting from these low-wage foreign employees? It’s not the customers: they will be charged what the market can bear. And Tim Harford’s case would suggest it’s not the business owner, but the landlord. Now I suspect in the short term business owners will have to take the hit of higher costs – which is why one of them is on TV complaining – but eventually the rents on the premises will have to come down if the businesses cannot maintain their minimum acceptable margin. In other words, the people who will suffer the impact of waiting staff becoming more expensive as a result of Brexit are landlords renting commercial property in London. I’ve just checked my heart and it isn’t bleeding.

There’s another point I want to make here, too. I’m no communist and I believe property owners should be free to do whatever they like with their property and charge what they like for people to use it, but there is something seriously out of whack in modern Britain (and in many other places, I suspect). If the way to make serious money – indeed, the only way – is to simply own property and rent it to those who are actually producing something, and those doing the producing see the fruits of their efforts siphoned off to the property-owning classes, things will eventually get ugly. For a start, the incentive to actually produce something will be severely diminished: why bother trying to run a business providing a service if the landlord will take the lion’s share of the proceeds? Better just to do something else – like work for the government. Another effect is that everyone pours money into property, causing inflation, which is exactly what’s happened in Britain’s housing market. If property is the only realistic investment option, what are people supposed to do? Thirdly, the situation will eventually become politically unacceptable and people will vote against the property-owners.

Now I know that the owners of city centre commercial properties are most probably large public corporations with shareholders, many of whom will hold stock in their pensions, but in politics perceptions matter. One of the issues on which I agree with Corbyn’s supporters is that the older generation have inflated and captured the wealth inherent in property for themselves and ring-fenced it to ensure its value will never fall. The younger generations have been priced out of owning property indefinitely, and with the massive levels of public spending and debt their meagre salaries are now paying for, it’s not surprising they’re quoting Marx and voting for Corbyn. Not that Marx didn’t write drivel and Corbyn won’t be a disaster – he’s not a solution to anything – but that doesn’t really matter in politics. What does matter is that a lot of people have a genuine grievance, and they will vote for whoever listens and pretends to do something about it. It’s easy to dismiss Corbynistas as batshit insane, mainly because most of them are, but deep within their grievances there are a few nuggets of truth, and they are important ones that highlight colossal failings of Cameron, Brown, and Blair.

I don’t know what the overall solution is, but if British youngsters now have an opportunity to work in London’s bars and cafes without being undercut by cheap labour imported for the benefit of wealthy landlords, I don’t think it’s a bad thing.

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Poor Man’s Goose

I found this tweet interesting:

When I was growing up my mother, whose recipes dated from 1920-60, would cook a dish called Poor Man’s Goose. Given it was made from pork I always thought this was rather odd; now I’m an adult I can see the dish derives its name from the disparity in price between pork and goose.

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Do we get our Empire back, then?

This is from a Lib Dem MP:

Wasn’t the supremacy of sovereignty and self-government over economics and political stability the entire basis of the anti-colonial movement?

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The Myth of the Petrodollar

In the comments beneath this post, Bardon remarks:

But there is another complexity here the Kissinger instigated Petrodollar.

The US economy would collapse overnight if this mechanism stopped, hence they need the Saudis and they need that Aramco IPO on Wall Street. BRICS are anti petrodollar and are working very hard to undermine and replace it, its the kind of stuff that starts wars.

The systems is such that non oil producing countries that want to buy oil must buy it in US$. So lets say Greece wants to buy Kuwaiti oil, it will do this in US $ which is neither the currency of the seller nor the buyer, meaning that it has to have US$ in the first place.

If the petrodollar system collapsed and remember the US could not even touch the sides with supplying oil to meet market demand, and no one buys it in US$ anymore then the demand for US$ would stop and it would absolutely tank overnight. Iran can’t wait to sell it in anything other than US$ and it looks like the BRICS nations are a likely taker, so they had better be quick in stopping Iran making any trades.

This theory is frequently brought forward to explain geopolitical developments involving the United States, and while others (Mr Worstall, for example) has dealt with it in the past, I might as well do so again.

The reasoning goes something like this. The US needs to ensure a demand for its currency, and therefore insists all oil around the world is sold in USD. If a country were to switch to selling oil in euros or another currency, the USD would nose-dive and destroy the US economy. The reason the US deposed of Saddam Hussein and Muammar Gaddafi was because each were about to start selling their oil in euros or gold. This theory even beats “wars for pipelines” into second place as an explanation for American foreign policy, and it is a persistent one. Sadly it’s not just the preserve of cranks on Zerohedge, I’ve actually had an MBA graduate insist that a country trading oil in euros presents a serious threat to US financial hegemony. And here’s a recent article in The Huffington Post telling us:

Non-Dollar Trading Is Killing the Petrodollar — And the Foundation of U.S.-Saudi Policy in the Middle East

It’s nonsense of course, and here’s why. According to this site, the value of oil traded is $1.7 trillion dollars per year. Looked at another way, oil production was about 97m barrels per day in 2015; let’s call it 100m making 36.5bn barrels a year. Assuming a sale price of $100 per barrel, annual production is worth $3.65 trillion dollars. Assuming $60 per barrel, it’s worth $2.19 trillion dollars. The exact number doesn’t matter, we’re just after an order of magnitude here.

Now according to this site, total foreign exchange (FX) transactions are valued at $5.1 trillion dollars per day. Trade in USD accounts for a whopping 88% of that, i.e. $4.49 trillion per day. According to another site, total FX was $5.3 trillion per day in 2013 of which USD trades accounted for 87%, i.e. $4.6 trillion per day. Again, we only need orders of magnitude here.

So, the demand for dollars driven by oil sales equals around $2-3 trillion dollars per year. Meanwhile, the overall demand for dollars equals around $4.5 trillion dollars per day. From these figures alone one can conclude that the currency in which oil is traded makes no difference whatsoever to the value of the USD. Reasons for going to war and bringing about regime change vary, but it is unlikely anyone would do so to protect one-three-hundredth of its currency demand.

So what would happen if a country switched to selling oil in yuan or euros? Well, those who hold USD would go to the FX market and buy yuan or euros at the prevailing rate and then use them to buy the oil. No need for any wars when you have a large and functioning FX market. You’ll notice that those peddling the myth of petrodollars driving American foreign policy never go into details of how all it is all supposed to work. There are good reasons for this.

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The Grenfell Tower and Sprinklers

From the BBC:

London’s fire commissioner says the Grenfell Tower blaze must be a “turning point”, calling for sprinklers in all high-rise council flats.

Dany Cotton, commissioner of the London Fire Brigade, said: “I think Grenfell should be a turning point.

“I support retrofitting – for me where you can save one life then it’s worth doing.

“This can’t be optional, it can’t be a nice to have, this is something that must happen.

“If that isn’t one of the recommendations (of the Grenfell Tower inquiry) then I will be so very disappointed.”

Firstly a little on the background of Dany Cotton:

Since 2017, she has served as the Commissioner of the London Fire Brigade and is the first woman to hold this position. She had previously been the Director of Safety and Assurance at the London Fire Brigade. In 2004 Cotton became the first woman to be awarded the Queen’s Fire Service Medal. She is the National Chair of Networking Women in the Fire Service.

Aged 19, she had been a full fire-fighter for just three months when she attended the Clapham Junction rail crash. In 2007, she was assigned the post of Area Commander, becoming the highest-ranking woman in the British Fire Service.

Her professional biography seems to be a lot more about being a woman than a firefighter. But let’s look at her remarks.

Retrofitting sprinklers into an existing building will be extortionately expensive:

Croydon Council, in south London, has taken the decision to retrofit sprinklers in its 25 high-rise blocks at a cost of £10m.

I bet that figure will triple. Of course, somebody who has only every worked for a taxpayer-funded organisation like Cotton wouldn’t care too much about what things cost. Look at this statement again:

for me where you can save one life then it’s worth doing.

For a public servant in charge of safety to come out with this is rather illuminating, as it appears she has no idea about how resources are applied to minimise risk. When it comes to safety, you want to spend the money in the areas where it will have the most impact. For example, do you spend £10m on sprinkler systems if the same money spent on networked fire alarms and better fire doors would save more lives? This is something a risk assessment and cost benefit analysis would tell us, and this is what should have been done. The fact that we have the head of the London Fire Brigade saying sprinklers should be retrofitted regardless of cost and their effectiveness suggests that it hasn’t. Then again, nobody seems even in the slightest bit interested in what caused the initial fire, so perhaps we ought not be surprised.

The money from these sprinklers has to come from somewhere, and this will mean cuts to other services or an increase in rents. If the latter, it will push those at the margins into cheaper, less safe accommodation. The video here is not an outtake from The Lord of the Rings but an interview with a spectacularly smug and idiotic Welsh MP talking about Wales being the first country ever to make sprinklers mandatory in all new homes:

I hope they will just look and listen, and I think this idea about over-burdening and over-regulating has proved that we do have to have those regulations. You know, sprinklers have been around since 1886 and the building industry haven’t used them successfully so, you know, if you’re not going to use them in goodwill, then as we have done in Wales, we’ll mandate for you to use them to keep people safe.

Aside from the first sentence being gibberish, at no point does it occur to her that there are good reasons why not a single country in the world has insisted sprinklers are installed in ordinary homes since their alleged invention in 1886. But apparently the Welsh know better and have made it compulsory, and now want to foist this idiocy on the rest of the country.

All this will do is push up the cost of housing, which in the UK is the last thing you want to do. Again, this will simply push those at the margins into cheaper, less safe accommodation. And presumably all homeowners and tenants will know exactly how these systems work and are maintained. I know I wouldn’t.

There’s also the issue of how effective sprinklers are in houses and flats. My understanding, at least from how they’re deployed on oil and gas installations, is they exist to keep surfaces cool and stop fires spreading as opposed to putting fires out. From what I can work out, the fire protection philosophy in buildings is to contain the fire using fire doors, use sprinklers to stop it spreading and keep the escape ways clear, giving you time to evacuate. The fire brigade then come in and put the fire out. In other words, they make sense in places with a proper evacuation plan but not so much in stand-alone private residences.

Interestingly, I’m sat in a 40-storey tower built between 1982-85 which has no sprinkler system. They have fire hoses on each floor but (and I’ve just checked) no sprinklers in the offices, corridors, or stairwells. Is the building unsafe? Probably not. Every door is a fire door, they have a decent alarm system and in the event it goes off everyone evacuates. I suspect a more modern tower would have a sprinkler system in, but I am reasonably sure its purpose would not be to put out an actual fire.

Would sprinkler systems help in a tower like Grenfell? Probably. Would they make much difference in the absence of fire doors and an evacuation procedure? Probably not. They might keep the stairwell clear, but if they’re installed in the apartments themselves you can expect a lot of spurious discharges as people set them off by mistake or maliciously, which would upset those in the flats below. Are they worth the money? In a new-build block, probably. But to insist they’re retrofitted regardless of cost or the lives they’ll save is madness, as is mandating their installation in new-build houses. The money would be far better spent on other fire-safety measures.

I think people have seized upon sprinklers as the solution of the day without really knowing what they’re for or how they work, let alone what they cost. That the head of the London Fire Brigade doesn’t seem to know any better ought to shock, but actually it doesn’t, not at all. This is the new normal. At least she’s got a few medals.

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Let’s not delude ourselves about today’s youngsters

I confess, I am still reluctant to label all those youngsters who voted for Corbyn as IRA-loving Communist anti-semites. The American left like to portray anyone who voted for Donald Trump as an ignorant racist who must clearly hate women because this is easier than trying to understand who voted for him and why. Plenty of decent, ordinary Americans voted for Trump, as they did for Clinton: let’s not pretend that every Hillary vote came from a deranged, blue-haired feminist living in a 20sqm apartment in Brooklyn with seven cats for company.

I am too old, out of touch, and bone idle to actually do any research on this, but I can think of a few reasons why a half-decent twenty-three year old might vote for Corbyn’s Labour. I’m not saying they are right, mind. I’m just saying what they might think.

I believe economics, and the way economics has shaped society in the past 15-20 years, plays a major role. Sure the young Corbyn supporter doesn’t understand economics, but point me towards a demographic that does. Every government in every western country is staring down the barrel of ballooning deficits, a debt which will take millenia to pay off, and not a single major party anywhere wants to even talk about it, let alone do anything about it. A simple reduction in planned expenditure increase is dressed up as a savage cut by damned near everyone: the Tories’ supposed austerity isn’t some fringe issue on the left, it is a widely accepted truth across the whole electorate. The people pointing out that these cuts are anything but are basically a handful of cranks on the internet. Like, erm, me. If any government program is threatened with a cut taking expenditure levels back to what they were in, say, 2010 half the country screams that medieval times are making a comeback and the other half believe them. The knowledge of economics among electorates is woeful, and almost all of them have signed up fully to the belief that all government expenditure is necessary, good, and wise and any cuts are bad. Nobody wants to even think about the size of the deficit and the national debt, it just keeps racking up. So if we’re going to criticise the young Corbynistas for not understanding the consequences of unsustainable economics demanded by ignorant voters, we might perhaps want to first ask where they got such ideas from. It’s too easy to blame Marxist indoctrination in schools when supposedly conservative governments, backed fully by the supposedly conservative middle classes, have been so irresponsible with public finances for several generations. Conservative governments might not be quite as reckless as Corbyn would be, but we’re talking about the difference between disaster and a catastrophe here.

So our youthful Corbynista looks to the generations above him and what does he see? Well, mainly a bunch of people who have gotten moderately rich by not doing very much. I’m going to be honest here: I am no great example of somebody who has done quite well by working very hard. Sure, I did what was necessary and sometimes went beyond that. I dragged myself through a mechanical engineering degree that was bloody difficult, and then I made some decisions (i.e. moving abroad and living in shitholes) which took some effort but I went largely for the adventure. And yes, I’ve laboured on farms and building sites and worked in shitty retail jobs to make some spare cash so I knew how to work when I was younger.

But on the measures by which a youngster will think I’ve “done well”, i.e. career path and wealth accumulation I have done so mainly because somebody has paid me to sit in an office, send emails, shift paper about, take part in meetings, and do what my boss says. This is what everyone in a modern business or public sector job does, even in something as supposedly “real” as oil and gas engineering. Sure, people might do some programming or calculations or some other task with genuine added value, I’m not denying that. But please, could my generation and that above it stop kidding ourselves that we are some kind of Lewis and Clarke pioneers who built log cabins with our hands while fighting off savages and created something to which future generations can aspire? We didn’t strike out for distant shores, risking all and having only our wits to rely on. I know people – mainly first-generation immigrants who are now retired – who really did this. People who moved from Greece to the USA with two toddlers and nothing else, worked like hell in restaurants until they could buy their own – and continued to work like hell because that’s all they knew. Teenagers who fled the Salazar regime in Portugal on foot, came to France and worked as taxi drivers, hospital porters, and the like and never got above that station yet still managed to buy a house and raise a family.

Sorry, but my generation of Brits didn’t do that, nor the one before it. Perhaps my father’s generation did, I don’t know. But what we have now is a system which rewards dithering, compliance, following procedures, arse-licking, and arse-covering. Do you see anyone making bold decisions that bring about radical improvements and taking responsibility if it all goes wrong? No, me neither. It is possible, nay easy, to make yourself rather wealthy in this day and age by sitting in a comfy, air-conditioned office shifting paper and saying “yes sir” when required in the fulfillment of a bureaucratic task that didn’t exist a decade ago. In fact, if you strip down what middle class professionals actually do these days, this accounts for well over half of it. And this applies to both the private and public sectors.

So what impression do you think this makes on the young Corbyn fans? Do they look at their older peers and marvel at what they have created, in the way tourists marvel at the Hoover dam? No, they see people – their parents, for instance – take twenty minutes to describe what they actually do all day and still leave them none the wiser, yet notice they always have the latest iPhone and seem to be doing all right. They see them living a lifestyle largely funded by government debt – free healthcare, free schooling, (often) entitled to an unfunded state pension, endless sops and subsidies which keeps them voting for more of the same instead of dipping their hands in their own pockets – and think why the hell can I not do that? And why not indeed? If it’s unsustainable and provides all the wrong incentives, it’s up to the middle classes to surrender it first, not expect the young to simultaneously pay for it and exclude themselves from the party.

When I think about it, I think it’s probably a good thing that the young don’t understand economics. If they did, heads would roll. It is they, and future generations, who are on the hook for unfunded pension liabilities, interest payments on government borrowing used to bribe the older generations and provide them with cushy jobs, and who are (as I wrote in my previous post) locked out of the housing market by the very same people who have demonstrated all the financial responsibility of a sailor on shore leave. And then they get called selfish because they “want it all” and “don’t know the meaning of work”, this coming from a generation that shoves paper around in an office and voted for more government largesse every time it was offered. I could stomach somebody who dodged machine-gun fire at seventeen saying “you don’t know you were born”, or someone who lived through perestroika and the period that followed. But somebody born in the UK after 1970? Please.

If I were a young person today I’d be voting a lot worse than Corbyn. I’d read the opinions of the metropolitan elite and look at how the middle classes are living and the system they’ve built for themselves and say “fuck that” and vote for whoever will pull the whole rotten system down so that I benefit. Selfish? Yeah, just like everybody else. It seems that today’s young aren’t as keen on Attila the Hun as I am and so they’ve voted for somebody who appears to be promising more of what everyone else has enjoyed for years. What do we expect them to do? Vote for “conservatives” who have proven interested only in feathering their own nests albeit using slightly different language than Labour?

Sorry, but if the middle-aged middle-classes wanted the young to vote responsibly, maybe they ought to have done so themselves. It’s time they stopped kidding themselves that they are something to aspire to, instead of the root cause of the whole fucking mess.

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Poverty as described by Australian students

This article on the appalling poverty suffered by Australian students found its way into my Twitter timeline:

Molly Willmott, 19, has been going to job interviews fruitlessly for a year and a half now.

Retail. Hospitality. Spends her time trawling employment websites. She went for one job as a telemarketer. Another as a warehouse assistant.

She’s in Melbourne. Most of these jobs are held by people whose names are hard to pronounce, brought in under policies favoured by Australian progressives.

“It’s rough,” says the politics and sociology major at the University of Melbourne.

Progressives like those studying politics and sociology, for example. But at least, in trawling employment websites for menial jobs, Molly is getting valuable experience on what she’ll be doing once she graduates.

“There’s that stereotype of a student surviving on two-minute noodles and it’s very true. I know a lot of people who’ve had to sacrifice food to be able to pay rent and bills. It’s more common than you think.

Property prices and rents in Melbourne are absolutely extortionate, mainly thanks to government policies favoured by the middle classes whose sons and daughters go to university.

Willmott, who lives with her mother and two siblings in a rented house in Melbourne’s south-east, acknowledges she is one of the lucky ones.

“I am in a very privileged position to be able to go home and have my family there just in case. I don’t like asking them for money but if push came to shove I can do that.”

The UK is somewhat unusual in that it is normal for people to go to another city to study; in a lot of countries people simply go to the university in their town. Because of this, there is usually plenty of cheap(ish) student accommodation in British university towns. I don’t know how things work in Australia, but it seems to me there is a scarcity of student accommodation in Melbourne.

But the luxury of living at home in the suburbs means it’s more than a three-hour round trip to trek to campus in inner-city Parkville, via three different modes of public transport.

“I take bus, train, tram and something’s always late. Travel alone takes a third of what money I have. It just drains away throughout the week.”

Rents are cheaper the further you go from a city centre, but you spend more on transport. This is not a trade-off unique to students.

She’s looking to move out within the next six months, partly because jobs have proven hard to come by where she lives, but she’s not sure how she’ll afford to move.

Jobs are hard to come by in a city where the minimum wage is around $15 per hour for a 19 year old part-timer with no experience. I can’t think why.

Her fortnightly budget has a lot of holes. There’s nothing allocated for clothing, and Centrelink loans for textbooks have been used to buy warm clothes for winter.

“Centrelink has an optional $1,300 loan to buy textbooks every semester. I’ve used that to buy clothes so I can be warm through winter and given rest to my mum. There’ve been times I haven’t been able to buy textbooks and readers.

Hang on. I’ve lived through a Melbourne winter and it’s not that bad. And she’s from Melbourne: it’s not like she’s moved down from Brisbane and had to buy a raincoat for the first time in her life. What was she wearing before she went to university? Do you really need to spend $1,300 on winter clothes in your hometown?

I’ve got so much anger about the treatment of students by the Government at the moment. The welfare system is incredibly underfunded and understaffed. When I got my Youth Allowance I needed to get it urgently. I needed to start uni and buy textbooks and it took four months for that to go through.

A 19 year old is living in one of the world’s most expensive cities and having to borrow money to buy politics and sociology textbooks. Somebody is being fleeced here all right, but unless she’s angry at the government over job-destroying labour laws, insane housing policies, and unnecessary credentialism I think she might have picked the wrong target. Go and ask your tutors why, in the age of electronic publishing and the internet, you need to spend a grand on politics textbooks.

The Minister for Human Services, Alan Tudge, says waiting times will be cut by the 250 additional Centrelink call centre staff announced in the federal budget. He says massive investment in technology has halved wait times for Youth Allowance and Abstudy claims.

Government creates an unsatisfactory solution to address a problem largely of said government’s own making; affected persons nevertheless demand more government.

Education and Training Minister Simon Birmingham, said his message to students was clear: “Taxpayers, including those who have never been to university, will continue to pay the majority of your fees for going to university.”

“And taxpayers will pay all of the cost of your student loan up front and not expect you to repay it until you’re actually firmly in the workforce, on track hopefully in your career. If we’re to preserve all of those opportunities for the future we need to ensure the higher education system is financially sustainable.”

Blimey! I didn’t expect that: well said, sir!

Three or four hours’ work a week at the local McDonald’s doesn’t help much.

“It really is borderline impossible to find a decent job. Most places want younger people. McDonald’s — even cafes and stuff — they want to pay junior wages. Or they hire lots of people but then they only give you one shift a week.

Minimum wage laws allow firms to pay 19 year olds less than 21 year olds, thus pricing 21 year olds out of the market. If only there were a branch of academia that could explain all this.

Or they hire lots of people but then they only give you one shift a week.

“It’s that whole underemployment figure. If you earn under a certain amount they don’t have to put in for your super.”

Employers look at the total cost of employing somebody and set shift patterns accordingly? Whoever would have thought?

Colee once had savings from a $9-an-hour traineeship at her local council during a gap year, but that’s gone.

She had a gap year? Why didn’t she get a full-time job?

Right now there is $23 in the bank. Her pay won’t deposit for another couple of days. Rent is due in three.

Here is a picture of her stood in her kitchen. Tell me, does this look like a student hovel to you?

Okay, I’ll not pretend I didn’t live in a very nice flat when I was a student, thanks to a generous father (cheers Dad!) and a flatmate who came from money. But that kitchen above is bigger and smarter than any I’ve seen in Paris and looks as though it belongs to a detached 2 or 3 bedroom house. There looks to be a stainless steel dishwasher in there, FFS! My guess is the “student” accommodation in Australian cities has been snapped up by people from China and the Indian sub-continent who are working full-time, and Australian students don’t even know such lodgings exist. I’m thinking back to the student kitchens I saw at university, and they didn’t look much like the one above. There are no slug trails across the surfaces, to start with.

There is no allowance in Colee’s budget for social activities.

“If I want to go to the pub, I’ll buy a pint of cider which is $9 and drink that all night.

So there’s no money for social activities except for drinking cider at $9 per pint. Back in 1996 I used to buy beer for a quid a pint; I know that was a long time ago and it was in Manchester, but where are all the cheapo student bars in Australia? Or has the nanny state banned them?

“It’s meant to be the best time of your life. You’re constantly told you should go to university while you’re young. You’re told at school it’s everything, that you can do this if you study hard. Then you get there and realise you have to basically buy your way into university because you can’t afford to live without help.

“It’s really hard to struggle in this sort of way and then be told by the Government that I chose this because I wanted to get an education.”

An education in International Studies.

[Welfare advisor Stuart Martin] says government policy on the issue was too often “hollow rhetoric from politicians who are not held accountable for their statements”.

“We have far too many people in Parliament who have sucked for free at the teat of the state and still trot out this mantra about self reliance.

Quite. When do the hangings take place, and do I bring my own knitting or will it be handed out free?

“Things are even harder if you happen to come from a disadvantaged background or have other struggles in your life.

“If you have a mental health condition or family obligations that make it difficult to keep a part-time job, then your grip on study is extremely shaky.

If you have mental health problems that prevent you holding down a part-time job, should you really be going to university?

“Education is seen as the thing that breaks the poverty barrier,” says the 21-year-old, who is studying history and sociology at La Trobe University’s Bendigo campus.

Another useful subject.

“You have parents making sacrifices to give their children an education, only for students to find once they enter the system it’s just gradual entrenchment of poverty.”

One would have thought there would be a lot more attention paid to what was being studied under such circumstances, but apparently not.

He makes sure to shop at a low budget supermarket, spending $10–20 once or twice a week.

Surplice is lucky enough to have a car. A second-hand Mazda he bought from his aunt. “It gets me from point A to B,” he says. “It’s got fuel in the tank.”

A poverty-stricken student with a car.

However, he’s sometimes had to go without insurance or rely on the charity of family to pay his registration.

Oh marvellous! So if he maims somebody or deprives them of their only vehicle when he’s driving about uninsured, that’s their tough shit!

“It’s everyday student culture for people to be saying, you know, ‘I’m so broke this week’. You’ll hear it from 10 different people in one walk through the student union.”

Have any of them been t-boned by an uninsured driver?

There’s a lot of time spent in his bedroom at home, or between different volunteer positions on and off campus. Active in the labour and union movements, every Monday is set aside for campaigning. There are also volunteer shifts as a tour guide at a Buddhist temple. The odd bit of cash-in-hand work.

A labour and union activist who engages in cash-in-hand work to supplement his own income. Principled.

“You have to put extra effort into extracurricular stuff to get noticed by employers. I’m the president of two university clubs, which means my ability to look for work is restricted to non-existent.”

Try studying a proper subject. And note there is enough time to be a labour and union activist, but not enough time to look for a job.

It’s not just the financial cost, Surplice says, but the psychological effect.

“I cannot envision my future. Don’t get me wrong — I’d like to one day be settled down in a house with a partner, but the actual practicality of even a simple existence like that? I have nothing but anxiety.”

I once worked with a guy who was sent to fight in Vietnam when he was 18. A lot of his friends didn’t come back. This chap is 21.

National Union of Students president Sophie Johnston says it’s time to “acknowledge the failures from successive governments that have left today’s young people far worse off than generations before us”.

“This generation will be the first priced out of the housing market, our penalty rates are being cut, underemployment is rife and we’ve seen drastically low wage growth for decades.

She is complaining that penalty rates – legally mandated pay levels – are being cut while complaining of unemployment in the same sentence. Hurray for university education!

“Today’s young people are not asking for a free ride, we are merely asking to be afforded the same opportunities as generations before us.”

Ask Grandad which university he went to, what his weekly wage was, and what his house was like.

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More Psychology than Economics

Years ago I worked as a banqueting steward in Manchester’s Victoria & Albert Hotel, which at the time was a Meridian (it’s now a Marriott).  A large part of my job was to wait the tables in the massive function room, which people would hire for weddings, conferences, balls, etc.  We didn’t do a lot of silver service thankfully – most of it was plated, meaning the chef and his team would prepare a hundred or more dishes on plates and half a dozen of us stewards would distribute them among the tables.  I never learned to carry more than four plates at once, but some people could carry six or eight.

When times were quiet and there weren’t many functions on I used to take the occasional shift in the restaurant behind the bar.  I can’t give you exact figures because I can’t remember them and inflation will apply, but the place was extortionately expensive.  In fact, everything in that hotel was one giant rip-off, and I expect – as I learned recently from a discussion on wi-fi prices in hotels over at Mr Worstall’s – the higher-end hotels rip people off because they assume it will all be submitted as a business expense.

Anyway, between the banquets and the restaurants I noticed there were a lot of complaints and food was being sent back, or we’d be collecting plates with uneaten food.  Chefs being chefs, they generally dismissed all this as the customers being heathens who simply wouldn’t know vegetables are, apparently, best served near-raw.  I was young then and still had a long way to go towards finding my place in the world, but nevertheless I was able to see what the problem was: it wasn’t that the food was bad, it was that we were charging too much for it.

We were charging a lot of money for the supposed privilege of eating in our fine establishment and enjoying food prepared by our top chef, and so customers’ expectations were sky-high from the beginning.  If the slightest thing was wrong they’d complain, and rightly so.  But if the same thing had been served up at a lower cost they’d have eaten it gladly.  I learned during my time in that hotel that when customers complain it is not so much about quality or price but of unmet expectations.

I experienced this myself when I checked into the Pullman hotel in Cologne some years back and found they charged for parking and wifi on top of the 250 Euros per night room rate (I was paying in Accor club points).  Now I know they are just ripping off businessmen but at the time I didn’t and I was incensed.  I could understand the Ibis in Heidelberg charging for wifi and parking because their room rate was about 70 Euro per night, but I thought the Pullman in Cologne was ripping me off.  I complained and to their credit they waived the charges in pretty short order.

This weekend I am going to Lille, just for the hell of it.  I have found a hotel which charges 200 Euros per night, and an additional 20 Euros per night for parking.  Reading the reviews, I see that a few people are quite pissed off by this extra charge.  Sure it reflects the market rate for parking in Lille city centre, but as a guest of a 200 Euro per night four star hotel, having to pay extra for parking grates a bit.  Again, it’s not so much the price but the feeling that you’re being fleeced; it makes you feel that you’re dealing with an outfit more akin to Ryanair than a luxury hotel.  I suppose these outfits must run the numbers and find the additional revenue compensates for the complaints and negative comments, but often I wonder how closely the management pay attention to these things.

It appears that British Airways does.  Via the ever-traveling Michael Jennings who posted this link on his Facebook page:

In the annual Investor Presentation to the City back in November, British Airways revealed plans to re-introduce Club Europe on UK domestic flights.

This is almost certainly linked to the introduction of ‘buy on board’ catering from next Wednesday.  BA’s biggest nightmare is that someone paying £7,670 for a fully flexible Club World ticket from Edinburgh to Tokyo decides to switch to a Middle East carrier or KLM because they are insulted at paying £2.30 for a cup of coffee on the connection.

And that’s exactly what would happen: if you’ve shelled out all that money and then somebody asks you to pay £2.30 for a cup of coffee between Edinburgh and London, you’d never fly with them again.  It’s not about the money, but the principle: people don’t mind spending money, but they don’t like being ripped off.  It’s more psychology than economics, in fact.

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Revealed Preferences

It was via Tim Worstall that I first learned of the concept of what economists call Revealed Preferences:

Revealed preference theory … is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. These models assume that the preferences of consumers can be revealed by their purchasing habits.

Things get especially interesting when revealed consumer behaviour differs from what they have previously said.  In other words, don’t listen to what people say but instead watch what they actually do.  It is fun to spot such examples in the wild, as Adam has done over at Pushing Rubber Downhill:

It turns out, shock horror, that while people might be very outwardly positive and vocal about bringing those “poor refugees” to Australia, when it comes to sending their own kids to school with them it seems that they’re not quite as keen.

The local council, City of Yarra, says the district has been a proud “Refugee Welcome Zone since 2002”. Yet in Fitzroy, Carlton and surrounding suburbs, progressive, middle-class families have been accused of shunning public schools with high refugee populations.

“They are fleeing!” African community leader and former refugee Abeselom Nega says of white, inner-city families who apparently are rejecting diverse schools. This year, in a Melbourne newspaper, Nega accused families who avoided inner-Melbourne schools with large African-­Australian student cohorts of ­racism.

The yawning chasm that stands between middle-class virtue signalling and how they actually behave makes the Grand Canyon look like a drainage ditch.

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