Month: March 2023

On Wednesday the 22 March Xi Jinping ended a 3 day state visit to the Kremlin, whose ostensible purpose was to discuss how to achieve peace in Ukraine with President Vladimir Putin. However, this summit has a second, much more important purpose – to reaffirm the Sino-Russian alliance against the West. This video looks at why, and how, the West should contain this sinister alliance, and the wider ‘Axis of Authoritarianism’.

The West faces a massive geopolitical challenge to its support for the ideals of global peace, democracy and development from a loose coalition of authoritarian states led by China and Russia. This coalition is growing increasingly cohesive and assertive which means the West must at all costs stand together, affirm the moral rightness of its cause and contain the rising threat. To clarify, the ‘West’ in the opinion of this channel, is made up principally of the USA, Europe, Canada, Australia and New Zealand with Argentina, Uruguay, Chile, Israel, Japan and Taiwan (and South Korea!) being part of the ‘Wider West.’ 

Let us first deal with the membership of this so-called ‘Axis of Authoritarianism.’ First its de facto leader, China with 1.5 billion people, 19% of global GDP and a 2 million strong military. Secondly, Russia with 146 million people, 12% of global oil production and a 1.15 million strong military, albeit poorly led and equipped. Thirdly, Iran with 82 million people, 14% of global gas reserves and an 870,000 man military. This is the core alliance. The wider alliance is more fragmentary but is steadily strengthening its ties as the world moves more and more into 2 blocs that mirror the Cold War – Free and Authoritarian. It consists of Kim Jong Un’s North Korea, Maduro’s Venezuela, Assad’s Syria, Lukashenko’s Belarus, El Sisi’s Egypt and Min Aung Hlaing’s Myanmar. These dictators do not possess a shared ideology like communism, fascism or Islamism but are solely interested in holding power and fear being brought to account for their crimes. 

The deepening China-Russia alliance signaled by Xi’s visit, and his inviting Putin to come to China should cause extreme concern to everyone. Here are a few cursory facts to show the nature of these regimes. China has imprisoned 1 million Uighur Muslims in concentration camps since 2017 for no crime other than being different. Chinese opioids wreak havoc on the USA & Europe, so much so that the leading cause of death in Americans aged 18-45 is opioid (mainly fentanyl) overdoses. China’s Belt and Road initiative massively indebts Asian countries like Sri Lanka, which had to agree to a 99 year port lease in 2017. Russia of course illegally annexed Crimea in 2014 and in 2022 launched an imperialist war to conquer Ukraine which has killed over 8000 civilians. Russia saw 6.6 trillion rubles lost to corruption in 2021, as it is a kleptocracy that steals from its own people. And Russia poisons exiled dissidents with nerve agents. The internal oppression and external aggression of these regimes is clear to see, and so it is our moral duty to stand up against them, as well as essential to the survival of the rules-based international order.

Currently the USA is the only Western military prepared for a potential confrontation. Every other Western military lacks the manpower, equipment, ammo and funds for more than a few weeks fighting. In order to create a sizeable deterrent and prevent confrontation, rearmament is needed. British historian Mark Felton lays out the shocking decline of the UK armed forces in particular since the Cold War in his video ‘Britain’s Shrinking Military.’ The Defence budget has shrunk from 4.1% in 1991 to 2.5% today. The army in 1991 had 153,000 soldiers and 1200 tanks to only 86,000 and 223 respectively today. The Royal Navy, traditionally our strongest arm, declined from 63,000 personnel in 1991 to 30,000 today, and from 51 destroyer and frigates and 29 subs to 18 and 10 respectively. Finally the RAF went from 90,000 personnel and 850 fighter jets to 33,000 and 115 respectively. This decline must be speedily reversed, and the £11 billion extra for defence promised over 5 years in the Conservative government’s Spring Budget is a start, but much more needs to be invested, and much faster.

Why the focus on expensive arms one might ask? Why not merely international outreach and ‘soft power’? Because the truth is the Axis of Authoritarianism understands only one language: force. Behind the protestations of respect for peace and democracy, lies a ruthless, realpolitik might-makes-right view of power. On the 4th February last year Putin staged a state visit to Beijing, where a joint statement was made calling for States to “respect the rights of peoples to independently determine the development paths of their countries” among other things. A mere 3 weeks later on the 24th February he ignored this and launched a brutal invasion of Ukraine. China tacitly condoned it. On the 24th February this year China’s ‘Position on the Political Settlement of the Ukraine Crisis’ was published declaring “The sovereignty, independence and territorial integrity of all countries must be effectively upheld.” Except of course China routinely trespasses in Vietnamese and Philippine waters and threatens to invade the independent country Taiwan. Just on Wednesday (22 March) Xi and Putin calling Russia and China the ‘Comprehensive Strategic Partnership of Coordination’ (meaning alliance) published a joint statement stating ‘the United Nations Charter must be observed and international law must be respected.’ This statement is likely as sincere as the previous two. The point is China and Russia tell lie after lie because they have no real respect for truthful diplomacy and compromise, only for raw balance of power. And it is time to rebalance the scales.  

In conclusion, the ‘Axis of Authoritarianism’ whose senior partners are China then Russia, must urgently be be contained by Western rearmament because its increasing cohesiveness and assertiveness pose a threat to peace and democracy, and existing soft power methods are ineffective in the face of a duplicitous realpolitik whose only aim is power.

This channel predicts there will be a recession by the end of 2023. This is a short piece covering bank collapses, the UK budget and economic theories. 

3 major banks have recently collapsed, drawing parallels with 2008. Silvergate Bank, on the 8th March. Silicon Valley Bank on the 10th. And Signature Bank on the 12th. The US, UK and EU regulators state these banks were special cases, unlikely to be repeated, but this is what they would say, as after all their role is to reassure and stabilize. The fact is more banks and companies are likely to collapse in the coming months. Credit Suisse today alone, Wednesday 15th March, has lost a massive 20% of its stock- value and looks very unstable, with Saudi backers refusing to invest any more capital. These collapses, I predict, will snowball into a financial crisis albeit less severe than that of 2008.

The UK Conservative Chancellor the Exchequer Jeremy Hunt released his Spring Budget today which was generally sensible and should be praised for its moderation. However it is simply outside the power of any one government to stop the boom and bust cycle of capitalism. It points out government success in combating inflation, with only 2.9% predicted by the OBR by December. It also keeps the Energy Price Guarantee at £2500 till June, saving hard-working British families millions, sets up Great British Nuclear, keeps the freeze on fuel duty, and granting a package of measures designed to get long-term sick, universal credit claimants, older workers and parents with children under 3 back to work. Time will tell how effective it is.

The main reason I believe a recession will happen this year is because of critically low consumer confidence and overleveraged businesses. The British economist John Maynard Keynes explained that the business cycle of peaks and troughs was largely down to people’s ‘animal spirits’ and right now those spirits have much to be bleak about. Ukraine, the cost of living crisis, China and the trigger for a crisis of confidence could well be Silicon Valley Bank. Furthermore, the US economist Hyman Minsky, popular since the financial crisis, stated that after crashes capitalism starts cautious, but then as time passes it becomes more daring, and eventually reckless and engages in speculation which results in another crash. The process is driven by complacency mixed with greed. The speculation is crypto and the crash should be soon. 

Now I would like to say that my prediction, like all economic predictions, should be treated with caution. Other than the commonsense idea that economics deals with people, and people are inherently unpredictable, there are weightier intellectual arguments. Nicholas Taleb argues that the events that really shape our world are Black Swans, unforeseeable, catastrophic happenings that are then retrospectively written about. And US economist John Muth with his theory of Rational Expectations says people’s expectations about the future determines whether, say, the price of a product will rise, or whether the whole economy will remain healthy. Maybe people will continue to be optimistic despite the overleveraged, financialised nature of our current economy. In which case a recession may not happen for some years. 

One thing is for sure, caution in all things is an essential conservative trait that people and governments would do well to adopt.

On the 4th March 2023, late at night, weary delegates from 193 UN member states gathered in New York rejoiced. They had just agreed a landmark deal to protect 30% of international waters by 2030. This would be through Marine Protected Areas. This video looks at how the High Seas Treaty, which must now be ratified, will be instrumental in saving our planet’s biodiversity, how economics explains its necessity and why conservatism is a force for good. 

Our ocean’s marine life has been greatly affected by human activity. Overfishing drives species to the brink. Deep sea mining destroys their habitats. Cargo ship traffic kills many large marine animals. An incredible 10% of marine plants and animals are at risk of extinction. And things are getting worse, not better. The international community has recognised this is unsustainable for decades, yet conservation efforts have mostly failed. The UN formed an ad hoc working group on ocean biodiversity in 2004 but Resolution 69/292 which called for a legally-binding oceans treaty was only passed in 2015. By 2020 only 1.2% of international waters were in Marine Protected Areas. COP15, held in Montreal in December 2022 was a breakthrough since 196 nations agreed to protect 30% of the planet’s surface by 2030 (currently only 17% of land and 8% of marine areas are protected.) The UN High Seas Treaty reaffirms the oceans aspect of COP15, as well as organizing marine genetic research and requiring environmental assessments for deep sea activities. 

The UK Conservative government is a leading supporter of the Treaty, and should be praised for its dedication to making it more stringent. The UK also supports developing countries to carry out marine science through the £500 million Blue Planet Fund and we are the chair of the Global Ocean Alliance, which has 73 member states. In comparison with countries like China and the USA, we are significantly more active on saving the oceans. The UK should continue to be a champion of ocean health and not listen to naysayers like Nigel Farage. 

We will now turn to the economics of this. Conservation efforts are often painted as somehow being anti-capitalist or anti-free-market when, properly understood through economics, they in fact are essential for the long term survival of the free market. The Theory of Externalities was developed by the celebrated British economist Arthur Cecil Pigou (1877-1959) in his 1920 book The Economics of Welfare. He explained an externality is where a third party is affected by a transaction, an act of buying and selling. This can be negative or positive. Crucially, the interests of the parties to the transaction may be served by it, but the interests of society as a whole suffer from it. This has a direct bearing on protecting our environment, since it is often profitable to exploit and degrade it for private gain, but public loss. The failure of marine conservation is therefore a market failure, which needs strong governmental and intergovernmental action to remediate. For example, a positive externality is fishing invasive species and selling them to consumers as this allows native ecosystems to recover, benefitting other fishermen. On the other hand, a negative externality would be a steelworks, which produces thousands of tonnes of CO2, selling to manufacturers. This CO2 traps solar radiation, creating a greenhouse effect that overheats lakes and rivers, causing mass fish-die offs, harming fishermen’s livelihoods, food availability and the biodiversity that all humans wish to keep. The steelworks operations, as they are, are a big net negative to humanity, especially when all the other runaway effects of climate change are considered like melting ice caps. Pigou suggested taxing negative externalities and subsidizing positive ones to have a long term efficient economy. 

William Nordhaus (b. 1941) an American economist, deals directly with climate-change externalities in his 2018 paper Climate change: The Ultimate Challenge for Economics. Nordhaus explains the concept of free-riding as a massive obstacle to lowering emissions. He states this is where there are:  

Nationalist or non-cooperative policies that seek to maximize the interests of a single country at the expense of other countries. 

He illustrates this with an example 

Suppose that when country A spends $100 on abatement, global damages decline by $200. However, country A might get only $20 of the benefits, so it would tend to decline the responsibility. 

His solution is to adopt carbon taxes in all countries, as a form of Pigovian tax, since this will disincentivise emissions-heavy activities, and correct the externality. 

Conservatism too is often wrongly portrayed nowadays as weak on wildlife conservation. It is true, American and Australian conservatives like Donald Trump and Scott Morrison performed badly on this, and the climate in general. But European and UK conservatives are generally better. This is because we recognise conservation must be at the heart of any conservatism. Conservatism at its very core aims to conserve the best parts of our country, which includes our diverse natural wildlife. This applies as much to marine fauna, like the swift salmon of the river Tay, as to larger, more relatable mammals like the majestic deers of Richmond Park. 

Conservation is also about taking a long term view of prosperity, rather than a selfish, short term one. Again this chimes with the conservative ideal of maintaining our systems rather than the leftist penchant for launching grand plans which invariably have disastrous side-effects. Again UK conservatives naturally do, and should, view the nation and its resources as a plant to be gently nurtured, and not a machine to be worked until it breaks. Margaret Thatcher in 1988 summed up this point succinctly “

“It’s we Conservatives who are not merely friends of the Earth – we are its guardians and trustees for generations to come. The core of Tory philosophy and for the case for protecting the environment are the same. No generation has a freehold on this earth. All we have is a life tenancy – with a full repairing lease.”  

Today the tradition of green conservatism continues with such groups as Bright Blue and publications like ‘Green conservatism: protecting the environment through open markets’.  Prominent Conservatives like peer Lord Howard of Lympne support it, not to mention Rishi Sunak (who sensibly abandoned fracking). Let us hope the movement grows still further. 

In conclusion, the UN High Seas Treaty will help save our ocean’s biodiversity through its 30 by 30 legally binding pledge which curbs the negative Pigovian externalities of overfishing, deep sea mining and cargo ship collisions by establishing Marine Protected Areas. The fact that the Treaty was championed by the UK Conservative government also reflects the importance that conservatism here places on conservation. This is because protecting and nurturing the best parts of our nation has always been a priority, which has given rise to a more formal environmentalism since Margaret Thatcher. Furthermore, Nordhaus points out that the market failure of human overexploitation of the oceans and climate change in general is compounded by free-riding which is a failure of individual governments, necessitating strong international agreements, like the High Seas Treaty, between as many nations as possible. Only thus, can our youth and those yet unborn continue to enjoy the benefits of the global, prosperous order we have created.