Regional inequality

There’s been a lot of attention given to income and wealth inequality in politics recently. In particular, left wing populists like Jeremy Corbyn and Bernie Sanders blame income inequality for the rise of authoritarian populism. The political establishment has pursued ‘neoliberal’ economic policies, which have only enriched the wealthiest at the expense of the wider population. They also blame income inequality for the relative lack of social mobility in the English speaking world. Moreover, income inequality leads to inequalities in other areas: educational attainment, health, children’s welbeing, etc.

But perhaps the left wing populists of today are misguided in their prognosis. Rather than income and wealth inequality between classes, I believe it is inequality between regions that is the primary cause of discontent in the developed world. Every significant political upset in recent years has been disproportionately supported in particular regions.

Consider first, the 2016 presidential election in the US. There wasn’t much of a correlation between income and voting intention, particularly after accounting for racial differences in average incomes. But there was a gulf between the regions, and especially between urban and rural areas. New York, a vastly unequal city, voted for Clinton by a thumping margin- she even won wealthy areas like the Upper East Side. But rural regions voted overwhelmingly for Trump, almost regardless of their wealth. It was where you lived, not how much you earned, that primarily determined how you voted.

A similar phenomenon has occurred twice in the UK. In the EU referendum, London, much of its commuter belt, Scotland and a few major northern cities voted Remain- these places were a mix of wealthy (Westminster, Elmbridge), and poor (Liverpool, Newham.) Most other rural areas, and virtually all of the Midlands, voted Leave, whether wealthy (Sevenoaks, South Bucks) or poor (Boston, Great Yarmouth.) Similarly in the 2017 General Election, a lot of wealthy, urban places voted Labour (Edinburgh South, Hampstead), while poor rural areas largely voted Conservative (Clacton, all of rural Lincolnshire.) If income inequality and poverty were the primary cause of dissatisfaction with the establishment, this shouldn’t have happened.

I could give examples from other countries. Poor areas in urban France voted for Macron, some middle class rural areas voted for Le Pen. In the Austrian election this year, the social democrats drew hardly any support from rural areas, whereas the populist right ‘Freedom Party’ drew hardly any support from the cities. Progressives either struggle to explain this, or in worse cases, dismiss rural voters as racist, ignorant and parochial. But I believe there are good reasons for rural voters to be particularly disillusioned.

Firstly, the rural United States. Its residents have been suffering from a decline in agricultural employment, deindustrialisation, increasing drug use, obesity and stagnating life expectancy. Meanwhile, the more snobby elements of the progressive movement view so-called ‘flyover country’ as culturally inferior and full of gun-loving religious zealots. It doesn’t help that Hollywood and much of American TV sings the praises of coastal conurbations like New York or urban California, while positive images of the Midwest and Deep South are hard to come by. Understandably, rural America felt as if the country’s economic and cultural elites resented them, and so voted for a man who offended their politically correct sensibilities. Never mind the fact that Trump himself is a New Yorker, he spoke the language of the country man.

Nowhere in the developed world is regional inequality greater than Britain (https://pileusblog.wordpress.com/2011/03/14/regional-inequality/.) This is mostly because London is so much more wealthy and successful than the rest of the country. London dominates politics, not only because it is the capital, but because politicians give it a disproportionate amount of attention. London is lavished with expensive railway projects (Crossrail, Thameslink upgrades), while much of the rest of the nation still uses diesel trains. It is also home to most of the media outlets, and so a huge number of fictional TV shows are set there. Also, London’s social liberalism and ethnic diversity couldn’t be a greater contrast to what is still largely an insular and ethnically homogeneous nation. Politically correct phrases and diversity quotas are not viewed as annoying, they are seen as products of London-centric thinking. To make matters worse, low interest rates and quantitive easing have encouraged investors to put their money in ever-valuable London housing, while much of the rest of the country is starved of capital.

As far as I can tell, neither Jeremy Corbyn nor Bernie Sanders have addressed the plight of their respective rural communities. They talk in vague terms about reducing income inequality, without acknowledging the role regional inequality in both economic growth and social attitudes has shaped recent events. This is partly because of personal circumstance. Corbyn represents a London constituency, as do all of the most senior Labour shadow ministers (John McDonnell, Emily Thornberry, Diane Abbott.) Sanders may represent Vermont, but he grew up in Brooklyn, and Vermont is hardly representative of most of rural America. In contrast, right wing populists have put regional inequality at the forefront of their campaigns. In the Britain, UKIP has campaign against London-centric politics for being too liberal and pro-European. It has also attacked Scotland for getting too much public money (something which I personally agree with.) In France, Le Pen railed against the Parisian political establishment for ignoring la france peripherique- the economically depressed parts of rural France. Trump deliberately campaigned in rural, working class areas, realising that there was a gulf in attitudes between them and urban Democrat strongholds on issues like immigration and gun control.

Overall, I believe it’s vital we reduce the gap between our regions. Turning around economically deprived areas will require years of concerted attention and investment. But there are a few things we can do in the short term. An obvious first would be to stop patronising and dismissing rural voters. Rather, we should take their concerns seriously. In the US, the places with the worst levels of opioid addiction voted for Trump, so Democrats should stop treating Trump voters as either stuck-up billionaires or racists. TV shows and films should represent all regions equally, not just focusing on the glamorous or multicultural ones. Another good step would be to devolve political power to the regions themselves. Rural and urban voters often have very different attitudes, so why not let local people decide what is best for them? In America this means that Democrats need to support devolving healthcare and social security. In Britain this means allowing local areas more control over education; even if rural areas want more grammar and faith schools (I personally don’t), a future Labour government would only fuel discontent if they obstruct them.

The Kaiser and Donald Trump

Stephen M. Walt, in the October 12, 2017 edition of Foreign Policy, (http://foreignpolicy.com/author/stephen-m-walt/) comments on the the parallels between Trump and the last Hohenzollern emperor: Kaiser Wilhelm II. The common features go beyond their individual characteristics. Not only do Trump and the kaiser share some unfortunate personality traits, but there are also striking similarities between conditions in Wilhelmine Germany and the situation in the United States today. There are also some important differences, but they are not entirely reassuring.

Consider first the personalities of these two leaders. Wilhelm II was by all accounts a pretty smart guy, but he frequently acted like a spoiled teenager and was prone to rash and bellicose remarks that undermined Germany’s image and international position. In a notorious 1908 interview with the London Daily Telegraph, for example, he declared, “You English are mad, mad, mad, as March hares.” One wonders what he would have said on Twitter. Wilhelm also had little patience for domestic opposition, saying, “I regard every Social Democrat as an enemy of the Empire and Fatherland.” Not to be outdone, Trump has called the U.S. media the “enemy of the American people.”

Historian Thomas Nipperdey once described Wilhelm as “superficial, hasty, restless, unable to relax, without any deeper level of seriousness, without any desire for hard work or drive to see things through to the end, without any sense of sobriety, for balance and boundaries, or even for reality and real problems, uncontrollable and scarcely capable of learning from experience, desperate for applause and success — as Bismarck said early on in his life, he wanted every day to be his birthday.”

The late historian, Gordon Craig of Stanford, offered a similar appraisal, writing that “[Wilhelm] had as much intelligence as any European sovereign and more than most, but his lack of discipline, self-indulgence, his overdeveloped sense of theatre, and his fundamental misreading of history prevented him from putting it to effective use.”

Craig also describes Wilhelm as “never having learned anything thoroughly” and “constantly on the move,” and German Army Chief of Staff Alfred von Waldersee described Wilhelm in the 1890s as having “a certain understanding of parade-ground movements, not, however, of real troop-leading.… He is extraordinarily restless, dashes back and forth, … intervenes in the leadership of the generals, gives countless and often contradictory orders, and scarcely listens to his advisers. He always wants to win and when the decision … is against him, takes it ill.”

Sound familiar? The similarities don’t end there. Both men led lives of privilege from birth: Wilhelm was heir to the German throne and Trump inherited a sizable fortune from his father. Wilhelm was understandably sensitive about his withered left arm; Trump seems defensive about his “small hands.” Wilhelm loved military displays and said he had “found his family” while serving in the Potsdam Guards; Trump attended military school and admires generals despite his ignorance of military affairs and his own efforts to evade military service. And, like Trump, Wilhelm was fond of traveling with a large and expensive entourage (at public expense, of course), while neglecting his public duties. (Stephen Walt, Foreign Policy – an exited version)

Comment: Rather than go to all the bother of impeachment – long-winded and possibly a damp squib in the end – wouldn‘t it be both neat and appropriate to exile Trump to the same country as the Kaiser, that is, The Netherlands, where he would be unable to speak the language and be deprived of access to Twitter? A North-facing house on the edge of the rising seas off Friesland would be ideal.

Tomorrow: The similarities between Wilhelmine Germany and contemporary United States.

China is way ahead of us on clean energy

“The war on coal is over.” So declared Environmental Protection Agency administrator Scott Pruitt, as he announced plans to repeal the Obama-era law limiting greenhouse gas emissions from power plants. China, meanwhile, is moving in completely the opposite direction. That country, which suffers more than a million deaths a year because of poor air quality, is putting all its efforts into developing clean alternatives to coal. It invested $78.3bn in renewable energy last year, according to a recent UN report – almost twice as much as the US. China is home to one of the world’s top wind turbine-makers and the top two solar panel manufacturers, and is now making a big push into electric cars. It’s already in a strong position: it sold more than twice as many electric cars as the US last year – “an astonishing catch-up for a country that had almost no such technologies ten years ago”. There are now no fewer than 3.6 million people working in the renewable sector in China, compared with 777,000 in the US. Beijing is out to dominate the industries of the future; the US, under Trump, is engaged in a “quixotic quest” to revive the flagging industries of the past. “Who do you think will win?”. (Fareed Zakaria, The Washington Post)

I am personally very suspicious of China and the Party, and everything they stand for. They are obviously going to be the super-power of the 21st Century, and the United States has had its day – a self-inflicted injury in my opinion. However, despite the Chinese power play and the preposterous idea that only the Party can know best, one has to give them credit for renewable energy and actually doing something, not just for themselves, but for the planet.
Ten out of ten, Xi, for that one! I wish we had something in America better than the bunch of hokey backwoodsmen, corruptly raising millions of dollars and denying science, all in the name of re-election. That is something else Xi does seem to be addressing – corruption. I wish we could start by even discussing it, but thanks to the Supreme Court corruption is now built into the whole political system.

The anatomy of a typical British CEO

Background
55% of FTSE 100 chiefs have a background in finance or accounting, (which helps explain why they slip down the international ranks relentlessly). Only 15% come from marketing; 14% technology. The best industries for working through the ranks are retail and hospitality, where around 21% of bosses started out in lowly roles.
Education
The majority of CEOs have at least one university degree; more than a quarter have an MBA or PhD. The number of Oxbridge graduates has fallen from 21% in 2012 to 18%.
Age and sex
The average age is 55. The oldest FTSE 100 CEO today is 71; the youngest is 40. Just six out of 100 of Britain’s top bosses are women.
Tenure
Promoting from within is out of style: some 70% of CEOs moved to their role from another organisation. Once at the top, the average tenure is five years and three months.
Nationality
More than 20 nationalities are represented, but 60% of bosses are British.
(Stats by recruiter Robert Half, written up by Emma Haslett in City AM.)

What concerns me about this profile, aside from the very small numbers of women, are the number of accountants and financiers who run big companies. I have nothing against accountants. They are without exception personable, clever, amusing people with good mathematics, one hopes. What is there to dislike about them? Some of my best friends are, or were, accountants until they took up cooking or flower arranging.

The problem comes if they have no expertise or experience (or particular interest in) customers or sales, because the natural tendency in times of company stress is to look at the figures and trim. Instead, what is needed are clever ideas to boost sales and profits, charismatic leadership, bucking the trend, getting the sales force re-motivated, genuine interest in the welfare of the staff. There are too many bureaucratised, systematised, boring to work for, and out of touch people running corporations. And the accountant bosses have been to business schools which are hopeless on sales and not too bright, I discovered, on man management. But he with the key to the safe and the balance sheet will have his way.

The death penalty

When I first started reading this blog, I was staunchly in favour of the death penalty. Since then, my views have changed somewhat, and I wanted to briefly explain why.

Firstly, I have a lot of sympathy for the death penalty’s proponents, especially if they, or their loved ones, have been victims of a horrific crime. A desire for justice is a perfectly natural human trait. In some cases, people have a visceral conviction that some people deserve to die. For instance, I don’t criticise Israel for the execution of Adolf Eichmann- a man personally responsible for the deaths of thousands of Jews. Faced with insurmountable evidence of war crimes, the death penalty felt like the only appropriate response. I don’t believe advocates of the death penalty are bloodthirsty lovers of violence, unlike how they are often portrayed in progressive media outlets.

Nor do I have a moral problem with the death penalty. Its opponents say that an execution is a violation of human rights, on the basis that everyone has a right to life. While it’s true everyone has a right to life, everyone also has a right to live a free life- to choose their own job, their own house, to largely do as they please. But obviously all of those rights are violated when someone is imprisoned. Does imprisonment therefore constitute a violation of human rights? Of course not, because it is a punishment. So I don’t believe opposition to the death penalty on the basis of rights is tenable, because punishments are specifically intended to violate rights as retribution for a committed crime.

Rather, my opposition to the death penalty is simply on the basis of the possibility of executing an innocent person. Now its true that this is far less likely in the era of forensics, DNA tests and CCTV footage. But it’s still possible. In a country as large as the United States, the implementation of the death penalty will result in the execution of an innocent person sooner or later. So it’s best to stay on the safe side and not have it at all. In the case of the UK, the death penalty would make EU membership impossible and a close trading relationship with them harder, so it’s best we don’t implement it either.

In some very rare instances, it’s possible for people convicted of horrendously evil crimes to genuinely change. Imprisonment allows the justice system to observe such changes and give a person early release if they are no longer a threat to society. Part of the death penalty’s brutality is the underlying assumption that people are largely incapable of changing.

I’d add that many countries that have the death penalty have a highly flawed implementation of it. China, Iran and Saudi Arabia use it as a form of social and political oppression. In the United States, the use of certain chemicals has made executions more painful than they need be. The death penalty in America is actually very expensive due to the cost of death row and the inevitable cost of dealing with appeal cases. There are racial disparities in who gets executed. In Japan, executions are occasionally a result of confessions after the prisoner has been harshly interrogated. There isn’t a country which implements the death penalty without considerable controversy. If we invest in decent prisons, a sophisticated rehabilitation system, and accept the fallibility of our own judgement, the case for the death penalty looks rather weak in the modern age.