• What Brexit Is Really About

     

    The current turmoil in British politics, with leading Cabinet members resigning over the progress, or lack of it, in the talks over Brexit, will have left many readers in this part of the world confused as to what it is all about. Any attempt to clarify the issues will, of course, be greatly influenced by the views and prejudices of the person making the attempt, but what follows is my explanation – based on my close involvement in the unfolding saga over many decades.

     

    The modern story must begin, of course, with the unexpected result of the referendum conducted in Britain in 2016, when the British people – asked if they wanted to remain in the European Union – replied with a narrow but clear majority for leaving. That verdict on over 40 years of membership no doubt owes much to the fact that, as I and many others had argued at the time, the original deal offered to Britain was a very bad one.

    The Common Market, as it was then known, had been formed on the basis of a Franco-German deal, which offered the French the huge advantage of the Common Agricultural Policy in return for free trade in manufactured goods which was of great benefit to German manufacturing. The deal was so advantageous to those two original members that General de Gaulle was determined to make it stick and therefore vetoed Britain’s belated application to join until it had been concreted into place.

    The result was always going to be a disaster for Britain (as I could see by virtue of a birds-eye view from my role, first, in the Foreign Office and then from my desk in the British Embassy in Brussels); instead of a rational trading pattern in which they imported efficiently produced food and raw materials from countries that offered them in return preferential treatment for British manufactures, the British taxpayer was required to subsidise inefficient French agriculture and then to pay again as a consumer by way of higher food prices – thereby negating Britain’s one major cost advantage as a manufacturing economy – while British manufacturers lost their preferential markets and had to compete in the same market as powerful and efficient German producers.

    The outcomes were inevitable (although ignored by those enthusiasts for whom “Europe” had become the promised land). The British “trade gap” widened alarmingly, British manufacturing was decimated, the British taxpayer continued to pay large sums into the EU coffers, and Britain’s links with its traditional trading partners were weakened. These burdens bore most heavily on working people who found, in addition, that their employment prospects, available housing, and public services were greatly reduced and weakened by the influx of migrants from eastern Europe who were keen to exercise their right as EU citizens to settle in the UK.

    The outcome of the referendum should not really, therefore, have come as a surprise – but it did. The bien-pensants – those who “know best” – were greatly attached to the notion of a Europe that carried with it a kind of cultural cachet, and they were remarkably insouciant about the price that was being paid. They were reluctant to accept the result of the referendum which they attributed to the “ignorance” and “racism” of those who “didn’t really understand” what a wonderful ideal “Europe” (which they conflated with the particular arrangement known as the European Union) really was.

    They therefore set about doing all they could to reverse the result, through a sustained campaign (particularly in the pages of The Guardian, which gave up all pretence of impartiality on the issue) to hold a second referendum in which the “mistake” could be rectified. In doing so, they gave of course great comfort to the EU bureaucracy which was encouraged to believe that Brexit wouldn’t really happen.

    That bureaucracy of course had its own agenda. They were terrified that other countries – like Greece and Spain, even now Italy – that had suffered terribly as a result of the undemocratic and banker-driven intransigence of EU rules and institutions might also want to leave. They determined therefore to show other backsliders that exit was not an easy option.

    The result? The “Europe” held up as the key to a wonderful future proved to be remarkably impervious to the ideal of unity and more concerned with protecting its own structures and institutions than with building a cooperative arrangement with a departing Britain. The combination of a misguided rearguard action at home and a determination in Brussels to punish the British for their temerity in leaving has made the negotiation of a sensible arrangement almost impossible.

    If these problems are to be overcome, the answers are to be found at least as much in Brussels as in Westminster and Whitehall. Those with hearts and minds that are big enough could take the Brexit talks as an opportunity to build a new “Europe” that could fix its many current failings by becoming more democratic and less wedded to the neo-liberal prescriptions of its central banks and bureaucracies. But, on the evidence so far, sadly, that seems unlikely and a goal that had seemed so inspiring looks certain to become mired in its own short-sightedness.

    Bryan Gould
    11 July 2018

     

  • Skilled Diplomacy is the Answer

    Many years ago, as I completed my studies at Oxford, I had to decide what to do next.  I was interested in the diplomatic service (since there was still a lot of world to see)) but should it be the New Zealand service – (I had been offered a job by External Affairs) – or the British?

    I decided to make an approach to the Foreign Office to see what they would say and – having sat the entrance exam – I was offered a job.  After a stint at the Foreign Office in London and then a posting to the British Embassy in Brussels, I had begun to get a feel for diplomacy.  I was therefore a little surprised when I was approached by someone with whom I worked, and asked if I would be interested in joining MI6.  I decided to stick to what I knew.

    I had already realised that it was part of the natural order that a significant proportion of the staff at most embassies (of most nationalities) were not what they seemed and worked on “the dark side”. In the British service, they were referred to as “friends”.

    That is why, when diplomatic relations become strained between two countries, the usual response to some alleged misdeed is to expel a number of embassy diplomats, on the reasonable assumption that they are likely to be spies – precisely what Britain has done following the apparently Putin-authorised attempted murder in Britain of a former Russian spy and his daughter using the Russian-made nerve agent Novichok.  Putin’s involvement was found to be “overwhelmingly likely” because Novichok can be safely handled only by those who made it and therefore understand it, and Russia, as witness the Litvinenko case, has form in such matters.

    Twenty-three Russian diplomats were sent packing by the British as a protest.  They were described as “spies” and probably were – the British were no doubt very well aware of who was doing what at the Russian embassy.  The Russian tit-for–tat response is par for the course.

    The world-wide diplomatic reaction to the episode shows that Britain is not alone in condemning such an outrageous assault by one state on another (albeit that the prime victims are individuals). Vladimir Putin must understand that what may well be standard practice for a former KGB official within Russia has no place in other countries, even if the advantages to a President wanting to encourage a large turnout in the fake election he is currently fighting are all too evident.

    President Putin’s intervention in the 2016 US presidential election is already the subject of considerable contention and it seems increasingly likely that he is intent on throwing his weight around as part of a campaign to restore Russia’s position as a “great power”.

    What “the West” (to revive a Cold War term) should now do is a matter for the most skilled response that can be brought to bear.  Sadly, while I have every confidence that the British Foreign Office and the French Quai d’Orsay remain in skilled professional hands, we cannot be equally sanguine about the American State Department.

    Donald Trump’s first choice as Secretary of State, the now departed (not to say, fired) Rex Tillerson, had no diplomatic experience and under his watch the State Department was run down in terms of expertise, numbers and morale.  His successor, former CIA head Mike Pompeo, has a record that does not inspire confidence – which may make obviously dangerous pressure points like Iran and North Korea more difficult to resolve.

    While the weakness of the State Department may be one of the gains sought by Putin when he tried to engineer Trump’s election, such an outcome does not necessarily depend on foreign intervention.  We should not forget that our own Murray McCully, when he was Minister for External Affairs here, set out to appoint businessmen and political hacks rather than experienced diplomats to head up our posts abroad – thereby pre-dating by half a decade the practice now adopted to predictably problematic effect by Donald Trump.

    In the murky world of espionage and state-sponsored criminality, skilled diplomacy remains by far the best means of resolving international crises.  James Bond may be entertaining in the cinema, but the world is a dangerous enough place without making it more so.

    Bryan Gould

    17 March 2018

     

     

  • A Period of Silence Would Now Be Welcome

    In the aftermath of England’s loss to Scotland at Murrayfield last week, a British rugby writer said of Eddie Jones that “a period of quiet reflection, with an emphasis on the ‘quiet’ is now required” – shades of Clement Attlee’s famous rebuke to Harold Laski in the postwar British Parliament when he said, “a period of silence from you would now be welcome”.

    It might certainly be hoped that the observation by former England hooker, Steve Thompson, that the Scotland defeat showed that “England are not as good as they think they are” (or, at least, as Eddie Jones says they are) will be taken on board.  And it might also be an opportune moment to re-assess Eddie Jones’ credentials as a coach.

    It should first be conceded that Eddie Jones inherited an England team at a low ebb, following their disastrous dismissal in 2015 from the World Cup tournament of which they were hosts.  The comparative success they have since enjoyed has no doubt been seen in greater relief than might otherwise have been the case, given what went before – and might partly explain why Eddie Jones has been welcomed as a saviour or demi-god whose every word is treated as gospel and repeated ad nauseam (literally) by an adoring media.

    If we are to make a proper assessment, we should start by taking into account the huge resources, both financially and in terms of player numbers he has had to play with.  Even an average coach should have been able to turn these to account.

    Has he, however, done better than an “average” coach might have done?  Let us first recognise those things he has done well.  Almost all commentators (and his players as well) accept that he has worked hard to make his players fitter (some would even say that he has, on occasions, worked his players too hard, so that they are exhausted by match day).  But England are certainly now up to international standard in terms of fitness (as they may not have been before), though it is doubtful if they now have any advantage in that respect over other top teams.

    As a selector, he has a somewhat spotty record.  He has been loyal to those he likes – Dylan Hartley and James Haskell example – and that is a plus, but he has been slow at times to recognise limitations in those he selects – as in the case of Chris Robshaw – and he has sometimes resisted making more adventurous selections.

    He has clearly succeeded in building the confidence and self-belief of his team, which were sadly lacking when he took over.  But there is a downside to his constant assertion that England are destined for World Cup glory and world number one ranking.  It has certainly helped to build his own image with the English rugby public, but unrealistic expectations can be just as oppressive for the team as downplaying its chances.

    A fitter and more confident England are undoubtedly achievements, but more should be expected of a top coach.  England may be training harder, but are they training to better effect?  Are they building their skills and techniques?  Are they better able to change tactics and strategies mid-game?

    Eddie Jones has shown little aptitude in these respects.  As confident prospects of a Grand Slam and a Six Nations title crumbled in the Scotland game, England’s defensive weaknesses and apparently complete absence of any attacking ideas were clearly shown up.  It may be beginning to dawn on the English rugby public that these deficiencies have to be remedied (and if not by the coach, then by whom?) if England are to compete for top honours.

    The former England loose forward, Neil Back, has warned that, if Jones does not remedy them, England could well lose the remaining two games – against France and Ireland – of the Six Nations Championship.

    We should never forget that Eddie Jones’ stint as Wallaby coach came to an unsuccessful end, which may explain why he so much enjoys the adulation heaped upon him by British media who are unduly grateful for small mercies.  It will come as a welcome relief to the international rugby public if he now refrains from making extravagant and unsupported claims about England’s future international standing and prospects and if the English rugby media treat those claims with a little more scepticism.

    England may yet overcome their current problems and confound us all by soaring to new heights.  If and when that happens, that will be the time to celebrate.  In the meantime, a less garrulous Eddie Jones would be welcome. When it comes to boasting, less is usually more – and timing is everything.  It always works better if it comes after, and not before, actual achievement.

    Bryan Gould

    27 February 2018

     

     

  • How to Make the Regional Development Fund An Even Better Idea

    Our new government will have surprised some people with its confident start, and not least with one of its better ideas – the establishment of a Regional Development Fund.  We now know enough about this proposal to recognise just how valuable it will be, not just to the regions but to the whole country.

    That it will deliver a boost to those parts of the country whose economy has been languishing cannot be doubted.  The focus on communications and transport alone, with the special emphasis on rail, will help to bring far-flung areas of the country back into the mainstream, able to share better in the prosperity to which we have all contributed.  And better rail communications will not only keep trucks off our roads but will benefit enterprises such as the Port of Tauranga.

    But it is not just economic activity and output that will benefit.  It will be local employment as well – and more jobs will provide a shot in the arm to retailing, construction, new investment – a veritable virtuous circle.

    And even beyond those considerations will be the benefits to the environment that are clearly being targeted.  Tree-planting on a large scale will boost forestry but will also help us to meet our greenhouse gas target.  The shift in transport policy away from building more roads in favour of updating our rail network will do likewise, as well as reducing the road toll and opening up new development.

    The one fly in the ointment, perhaps – especially for those conditioned by years of being told that cutting government spending is the top priority – is the cost of these measures.  Funding all these initiatives from one dedicated new fund is a good idea, but the money for the fund still has to come from somewhere, doesn’t it?

    Even though it may be clear that the rewards and returns from making this kind of investment in our regions would satisfy even the hardest-headed private investor, the question as to where the money to be invested comes from in the first place will still be asked.

    Well, not necessarily.  You may be surprised to hear that the one thing that governments are never short of is money.  How do we know that?  Because governments all around the world have been creating large quantities of new money for the past ten years or more.  They haven’t called it “creating new money” but have preferred to call it something like “quantitative easing”, but creating new money is what it is.

    When governments have created new money over recent years, however, their aim was usually the limited one of providing money to the commercial banks so that, after the Global Financial Crisis, they could re-build their balance sheets.  But new money created by governments does not have to go on such limited purposes – indeed, creating it to invest in the productive economy so as to produce an immediate return to the country as a whole makes a good deal more sense than just helping out the banks.

    And experience in earlier times and in other countries, has shown just that.  Many countries have in the past created new money to fund increases in output – whether it was Japan re-building its industry after its defeat in the Second World War (and they are doing so again today) or President Roosevelt building American industrial capacity in preparation for that same conflict.  What those countries both realised was that the need and the capacity to increase output both existed, and that it was ridiculous that such an effort should be frustrated for the lack of money, when the government could create all the money that was needed.

    Our own history offers us one of the most important instances of this being done.  In the 1930s, in the middle of the Great Depression, the great Michael Joseph Savage authorised the creation of new money so that thousands of new state houses could be built, thereby providing jobs for the unemployed and homes for the homeless and – incidentally – an income-producing asset for the government.

    As the economist Ann Pettifor (who recently visited New Zealand) remarked, “We can afford what we can do” – in other words, the real constraint is not the lack of money but a lack of productive capacity, and  that constraint, for those who believe in a market economy, is easily overcome.  If the money is there, the capacity will come.  Money is merely a facilitator or enabler and it makes no sense for a government that is ready to create new money for other purposes to decline to do so for productive purposes, if the need is there and the capacity can be built.

    The great economist, John Maynard Keynes was very clear.  Given that the banks create new money every day of the week for their own profit-making purposes, why shouldn’t governments do likewise for the purpose of investing in our productive capacity?  Creating money by the government cannot be inflationary, said Keynes, if it is matched by increased output – and isn’t increasing output exactly what the Fund is designed to do and will achieve?  Why shouldn’t the government use all of its powers to support such a worthwhile goal?

    Bryan Gould

    25 February 2018

     

     

  • Welcome Back Super Rugby

    The beginning of a new Super rugby season will be welcomed by most, but not by everyone.  For those not sold on rugby, it can mean long hours on winter evenings, consigned to watching something, in the flesh or on the screen, that may be virtually unintelligible to them.  And, while the summer sun still shines, it will have to compete with the Winter Olympics and the Blackcaps series versus England for the attention of sports fans.

    But those of us who follow and enjoy our national game will have real cause to celebrate.  Six Nations rugby (give or take the odd England defeat at Murrayfield)and Northern Hemisphere club competitions are all very well, but if you want to see the world’s best rugby, displayed week after week, there is no substitute for what Super rugby has to offer.

    The most intense competition and the highest level of skills are to be found in Super rugby, and in domestic derbies in particular.  The Australians and South Africans, Argentines and Japanese, have their part to play of course, albeit with fewer teams this year, but the record shows that they usually contribute no more than supporting roles.

    For the true rugby aficionado, it is not just the outcome of the competition itself that matters.  Yes, of course, we want our teams to win, both each match and the championship as a whole.  But there is much else to look out for, other than the team results, much of it concerning the performances and fortunes of individual players.

    Will, for example, experienced players who have been absent through injury or for other reasons – Brodie Retallick or Ben Smith or Jordie Barrett – come back as though they have never been away?  Will the emerging stars of last season – Rieko Ioane or Ngani Laumape, or Richie Mo’unga or Asafo Aumua – come back to a new season with all guns blazing again?

    And what new names will emerge – to spark our interest and raise our hopes?  And how will we make good the loss of Lima Sapoaga or James Lowe?  Will Damian MacKenzie make the transition apparently required of him, not only by the Chiefs but by the All Blacks as well?

    Will our established world-class stars – Beaudie Barrett or Sam Whitelock or Sam Cane or Aaron Smith –  effortlessly recapture their high standards?  Will Julian Savea force his way back into the All Blacks or Patrick Tuipulotu cement his place in the squad?  Will Jerome Kaino re-establish his claim to the Number 6 jersey?  Will Augustine Pulu or Brad Weber take up where Tawera Kerr-Barlow left off?  And what will all of this mean for the All Black selectors and their continued quest to fashion a team that will win the World Cup next year, to say nothing of beating England at Twickenham later this year?

    And we should not overlook the Championship itself.  Like many fans, no doubt, I have loyalties to more than one contender and more than one coach.  I will be content if the prize goes to any one of the New Zealand teams, even, praise be, the Blues under Tana Umaga.

    And a question for each of us to answer.  Do we realise how privileged we are to see by far the best team game in the world played by the world’s top players in our own back yard?  What better sporting spectacle can there be than a thrilling contest of skill and spirit and courage, individual brilliance and instinctive teamwork, fought out by players so well-known to us that they are almost friends or family members?

    Rugby is, after all, our national game.  It has that status not just because we happen – men and women, boys and girls – to play it better than anyone else or because it is followed with passion by thousands of Kiwis.  Rugby has, for good or ill – and any objective assessment would strike the balance on the positive side – been a major influence in shaping our national identity.  It has brought our founding races together and it continues to provide a small nation with international standing and a powerful reason for national pride and confidence.

    Welcome back, Super rugby!

    Bryan Gould

    24 February 2018