Little Ice Age, Protestant Reformation, Louis XIV, Enlightenment, Seven Years’ War, American Revolution and French Revolution

Posted by PITHOCRATES - November 28th, 2013

Politics 101

(Originally published August 30th, 2012)

King Louis XIV remained Catholic as Protestantism was Breaking Out in Europe and Britain

It’s been awhile since the last ice age.  In fact the last time we had a real ice age predated the first civilizations.  We still wore animal skins and hunted and gathered our food.  Long before we first farmed.  But it would get cool again.  Shortly after the Black Death (during the 1300s) it did get unseasonably cool.  So cool that we now call it the Little Ice Age (from 1350 to 1850 or thereabouts).  The glaciers didn’t cover Europe.  But it was cold.  And wet.  The spring took forever to change into summer.  While summer was quick to turn into fall.  Which led to short growing seasons.  Poor harvests.  Hunger.  And famine.

Martin Luther was no fan of the Pope.  Especially because of the indulgences he was selling.  A shortcut to heaven.  For those with money.  Which is what the Pope wanted.  Money.  For he was doing some costly renovations in Rome.  So in 1517 Martin Luther nailed up his Ninety-Five Theses to the church door demanding reform.  And kicking off the Protestant Reformation.  Well, the Catholic Church wasn’t interested in reform.  So Luther set up a new church.  With a new religion.  Protestantism.  A more plain religion.  With masses in the common language of the people.  Instead of Latin.  And no fancy things in the church.  No altars.  No stain glass.  No icons.  Just the word of God.  With over a thousand years of Catholicism already under their belt, though, a lot of people took offense to this.  And their offense offended the new Protestants.  So they went to war with each other for a few centuries or so over their religious differences.

King Louis XIV was one of the great French monarchs.  Under his rule France was the dominant European power.  The Sun King believed in the divine right of kings.  Absolute monarchism.  Doing pretty much as he pleased.  Which included a few wars.  And growing an empire with oversea colonies.  It cost a pretty penny.  And a lot of lives.  Louis remained Catholic as Protestantism was breaking out in Europe.  And in England.  For a couple hundred years or so England and France were bitter enemies.  Contesting colonial lands throughout the globe.  And defending the true faith.  Catholicism.  Or Protestantism.  The Catholic-Protestant battle lines stretched across Europe.  And to distant lands across the globe.  Including the New World.  Where they would both spend fortunes in waging war.

For the French the American War of Independence had nothing to do with the Americans

The Enlightenment, or the Age of Reason, gave the French Voltaire.  One of the great Enlightenment philosophers.  When Benjamin Franklin was in France the French were eager to bring two of the world’s greatest Enlightenment philosophers together.  And did.  The French also gave us the great Charles-Louis de Secondat, baron de La Brède et de Montesquieu.  The greatest influence on the Founding Fathers as they drafted our Constitution.  So there was some great thinking percolating in France.  Thoughts that focused on science and reason.  Not tradition and faith.  Even questioning some long-held beliefs about the Catholic Church, the aristocracy and the absolute monarchy.

Louis XIV built a great French empire.  The French seemed invincible.  Until Louis XV took over.  Who lost the Seven Years’ War to the British.  And saw French North America become British.  (And the Louisiana Territory go to Spain.)  That was tough having their eternal foe humiliate them.  The Protestant British.  It was a blow to French pride.  French commerce.  And French finances.  The near-perpetual state of war that had existed between Britain and France had cost both nations a lot of money.  The British decided to recoup some of that money by taxing their American colonies.  Which didn’t go over well with the Americans.  For unlike France the British had a constitutional monarchy.  Where the Parliament restricted the king’s powers.  That great institute of the people.  Which the Americans had no representation in.  Leading to their rebellion.  Because they didn’t like being treated like second-class subjects of the British Empire.  Which brought about the American Revolutionary War.

After the Americans defeated a British army at the Battle of Saratoga the French joined the Americans in their fight for independence from the oppression of a constitutional monarchy.  Which seemed rather odd being that the French at this time was still an absolute monarchy (though now ruled by Louis XVI).  Which was far more oppressive than the constitutional variety.  But for the French the American War of Independence had nothing to do with the Americans.  It had to do with French interests.  It was a chance to strike back at their eternal enemy.  The Protestant British.  And more importantly, when they won they could get back all their colonies they lost in the Seven Years’ War.

The French were Intoxicated with all of those Enlightenment Ideals and the American Win over an Oppressive Monarchy

The Americans won their independence.  But the French didn’t get anything they wanted.  All they got was a lot of debt.  To add to the enormous pile of debt they already had.  One of the French conditions for their alliance was that the Americans would not make a separate peace with the British.  Which is what the Americans did.  Why?  Because the French and the Spanish were conspiring against the Americans during the peace talks.  So they could expand their holdings in North America at the expense of the British and the Americans.  The French were even willing to trade American Independence away.  The British, who would rather have Americans on their former lands than the French or Spanish, made a separate peace with the Americans.

This act of diplomacy stunned the French.  For they had assurances from the American Congress that they would take the lead in the peace talks.  The Americans double-crossed them before they could double-cross the Americans.  This wasn’t supposed to happen in the world of European diplomacy.  Especially with rubes like the Americans.  But it did.  And the French were now in a world of hurt.  Broke.  And facing bankruptcy.  Desperately needing new tax revenue King Louis XVI called an Assembly of Notables.  The nobility and clergy.  But they didn’t want to pay any more taxes.  So the king called the Estates-General of 1789.  Which included the clergy, the nobility and everyone else (i.e., the Third Estate).

Meanwhile there was widespread hunger and malnutrition.  Poor grain harvests (in part due to the Little Ice Age) pushed the price of bread out of reach for many.  People were cold, hungry and poor.  In the Third Estate, that is.  For though they may have been suffering they saw that the nobility and the Catholic clergy were not.  In fact, they were living rather well.  Which inflamed the masses.  Who became intoxicated with all of those Enlightenment ideals.  And that American victory over an oppressive monarchy.  It got the people thinking.  That they didn’t need a nobility any more.  The Catholic Church.  Or a king.  And the people would get rid of these things.  For awhile, at least.  With something called the French Revolution.

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Hinchingbrooke Hospital breaks free from the NHS Bureaucracy and Improves Health Care

Posted by PITHOCRATES - October 13th, 2013

Week in Review

Britain has government-run national health care.  The National Health Service (NHS) provides free health care to all Britons.  And the medical tourists who travel to the country for free health care.  Straining the NHS budget.  At a time when Britain’s aging population is stretching their limited resources thin.  Leading to longer wait times.  Longer travel times as they close local hospitals to consolidate their resources in fewer locations.  And rationing.

Even with their longer wait times, travel times and rationing of services they are still running a deficit in the NHS.  To address these chronic cost overruns they are trying to find £20 billion ($30.54 billion) in efficiency savings over three years.  But there is a beacon of hope for the NHS.  At Hinchingbrooke Hospital (see Set doctors and nurses free to use their common sense – as Hinchingbrooke Hospital does by Charles Moore posted on The Telegraph).

Last month, I visited Hinchingbrooke Hospital, near Huntingdon, the only NHS Trust in the country operated by a private partner…

I spent half a day at Hinchingbrooke, talking to doctors, nurses, administrators and patients, and seeing several wards…

One can visit a large organisation without being aware of big problems. Indeed, one of the great difficulties of the NHS is that internal communications are so bad that people can work well in one area without being aware of utter disaster a few yards away. In the case of Hinchingbrooke, under previous management, maternity was very good while the colorectal unit was shameful. So what follows is not definitive; but I feel I learnt something.

Uniquely in the NHS, Hinchingbrooke’s executive board is dominated by clinical practitioners (doctors and nurses, to you and me). The chief executive is an obstetrician. Only three of the 14 board members have non-clinical backgrounds.

In the only trust that has a private partner doctors and nurses determine how best to treat patients.  Instead of the faceless bureaucracy in the rest of the NHS.  Or what the proponents of Obamacare hope to force onto the American people.

One of the key working methods, borrowed from Toyota, is “Stop the Line”. Anyone in the hospital can stop the line if he or she believes that there might be a “serious untoward incident” or danger to a patient…

A similar, lesser action is a “swarm”. If you are urgently worried about something, you can summon all the relevant people together immediately. Unlike “whistle-blowing”, which is inevitably retrospective and often involves grievance and disloyalty, these ways of acting are instant and preventative. You are encouraged to use them. Someone stops the line in Hinchingbrooke most days.

Nurses work differently from most parts of the NHS. They all wear uniform, even if in managerial roles, and they are encouraged to take part in management without abandoning clinical work…

But what struck me about Hinchingbrooke was not that it was brilliantly original – simply that it was free to act according to common sense. Involve staff in decisions. Make sure that doctors and nurses can run things. Learn from commercial examples of how to improve services. Let the right hand know what the left is doing. Encourage innovation. Don’t “benchmark to the middle”, but to the top. And little things: get A&E nurses to wear identifiable name-badges; get rid of hospital car-park fines. Most of this is simple, but, in the leviathan of the NHS, it is not easy. And at present there are about 2,300 NHS hospitals in the United Kingdom, and only one Hinchingbrooke…

This is far behind the public. As you understand better if you spend a morning in Hinchingbrooke Hospital, the public want health care free at the point of use, but have no ideological prejudice about who delivers it, or how. They rightly judge by results – are they, their spouses, parents, children, well or ill? Are the staff medically competent, efficient and kind? They are not sentimental about the most shocking producer interest ever to have gained power in this country.

The one hospital where things are greatly improving is the one hospital that is moving away from bureaucratic national health care and towards private health care.  Like it once was in the United States.  While President Obama and the Democrats want to move the American health care systems towards the bureaucratic national health care of the NHS.  Where there are longer wait times.  And service rationing.  Well, everywhere in the NHS but Hinchingbrooke Hospital.

Do President Obama and the Democrats care that they will destroy the American health care system?  No.  Because it’s not about health care.  It’s about creating the “most shocking producer interest ever to have gained power in this country.”  Yes, it’s about the power.  Social Security and Medicare made the elderly dependent on government.  Giving the government power over the elderly.  If they can’t raise taxes they just threaten to cut Social Security and Medicare benefits.  National health care, though, makes everyone dependent on government.  Giving the government power over everyone.

Until the day they can no longer maintain that power.  And that day has come in Britain.  Their aging population is breaking the system.  Which is in essence a Ponzi scheme.  The masses in the workforce pay in via taxes.  And the few sick consume health care services at the top of the pyramid.  While a bloated bureaucracy makes sure to take very good care of itself.  But the aging population is shrinking the workforce paying the taxes.  And swelling the number of sick consuming the health care services.  Inverting the pyramid of the Ponzi scheme.  As it will in America thanks to Obamacare.  Because the United States has an aging population, too.

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Free Trade, the Corn Laws and The Economist

Posted by PITHOCRATES - September 8th, 2013

Week in Review

Today the political left attacks capitalism as being unfair.  And mean.  Whereas they laud government intervention into the free market.  To level the playing field.  And to redistribute income.  To help those who can’t be as successful as others.  They support unions.  And oppose free trade.  Because free trade lowers prices for consumers.  By breaking up monopolies.  And giving them choice.  Free trade is an essential element of capitalism.  But the fight to make people’s lives better with free trade wasn’t easy.  As people who got rich with government-protected high prices opposed free trade (see Why did The Economist favour free trade? by C.R. posted 9/6/2013 on The Economist).

IN NINETEENTH century Europe and America, debates over whether tariffs or free trade produced the most economic growth dominated the political scene. Up until the early 1840s, protection appeared to be winning the argument. In Britain, high tariffs were imposed on agricultural imports in 1819, by legislation known as the Corn Laws. The ideas of Friedrich List, a German economist who argued that tariffs boosted industrial development through the protection of infant industries, were gaining ground, particularly in the United States. One Pennsylvanian legislator even joked in 1833 that the dictionary definition of man should be changed to “an animal that makes tariff speeches” so frequently were they heard.

Against this atmosphere, James Wilson founded The Economist in 1843 to campaign for free trade. His first target was to repeal the Corns Laws in Britain. He argued:

They are, in fact, laws passed by the seller to compel the buyer to give him more for his article than it is worth. They are laws enacted by the noble shopkeepers who rule us, to compel the nation to deal at their shop alone.”

The UAW got very generous contracts with the Big Three during the Fifties and the Sixties.  Raising the price of cars.  Which wasn’t a problem when they were the only ones making cars.  But then came the imports.  Which told the people how much more they were paying than these articles were worth.  And started buying the imports.  As they did those generous pay and benefit packages became more difficult to pay.  So the Big Three lobbied for tariffs on those less costly imports.  And got them.  Raising the price of the imports.  Forcing Americans to deal with the Big Three alone.  And buy their more costly cars.

More people bought cars than made them, though.  And the people who made the cars were better paid than most Americans.  So these tariffs forced poorer people to spend more on a car leaving them less for their families.  So richer people could have more.  This is what tariffs do.  They allow fewer people to have more.  While more people have to do with less.  So fewer buy more.  While more buy less.  Because there are more people who buy cars than make them these tariffs, then, reduce economic activity.  And because the Big Three didn’t have to figure out how to give more for less to their customers they didn’t.  Giving their customers ‘rust buckets’ in the Seventies.  Something else that tariffs do.  Lead to inferior goods.  Because if the government forces people to buy from you then the quality of what you sell doesn’t matter.

Wilson believed that protectionism caused “war among the material interests of the world”, in other words, war between nations and classes. A high tariff regime was no longer economically “productive”; Britain was stuck in an economic depression in the early 1840s. In contrast, free trade produced “abundance and employment”. It was appropriate for Britain’s economy where “a large proportion of the population and property depended on commerce and industry alone”. On the other hand, List’s ideas about protection were dismissed as unnecessary “swaddling clothes” for a mature economy, such as Britain’s.

The Economist’s early views on free trade were strongly influenced by the classical economists Adam Smith and David Ricardo, as Ruth Dudley Edwards, a historian, has pointed out. Wilson, like Smith, realised that trade was a two way exchange. Countries needed to “increase imports to increase exports” to boost economic growth. Consumers, Smith argued in the Wealth of Nations, should buy products from where they were cheapest. All protection did was create monopolies, which were “a great enemy to good management”. Ricardo took Smith’s ideas further, arguing that all countries benefit from free trade by producing what they were best at relative to other countries.

That’s what the Big Three wanted.  A monopoly on cars sold in America.  And there is only one way to get one.  The government has to create them.  Hence the Big Three’s request for tariff protection.

David Ricardo’s comparative advantage said nations should make what they can make best and trade for those things they can’t.  For example, if two countries can both make one thing but one can do so at lower costs they can make more of them for the same costs.  Giving them a larger surplus to trade for other things.  While the other nation will consume more resources to build the same quantity leaving less to make the other things they need.  While having fewer things available for export.  So if you try to make things you can’t make efficiently you end up consuming more resources to have less.  Whereas the nation that makes only what it can make best ends up consuming fewer resources that are then available to make other things.  And they have more things to trade.  Leading to a higher standard of living.  And if their trading partners do likewise they, too, experience a higher standard of living.

Free trade leads to greater economic activity.  Which made Britain wealthy.  Allowing them to extend their empire for another 70 years or so.  Despite the warnings of the rich landowners who said repealing the Corn Laws would cause harm.  Instead, repealing the Corn Laws led to greater economic activity.  And less costly food. Allowing people to feed their families more easily.  The only harm suffered was to the profits of the big landowners.  Who lost their monopoly.  And could no longer charge more than their food was worth.

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John Kerry insults Britain because the House of Commons said ‘No’ to Military Action in Syria

Posted by PITHOCRATES - September 1st, 2013

Week in Review

There is a special relationship between Britain and the United States.  The first Americans were British.  As the American colonies were part of the British Empire.  The American colonists fought alongside British regulars against the French and Indians during the Seven Years’ War.  The cost of that war and the subsequent taxation to pay for it created a bit of a falling out between the British and the Americans.  In a little thing we call the American Revolution.  After that falling out, though, we resumed our special relationship with our former masters.  Who was our major trade partner.  Not France.  Who helped us in the American Revolution.  Why?  Because Britain’s Royal Navy ruled the seas.  And had a vast empire to trade with.

The French were inspired so much by our revolution that they had one of their own.  The French Revolution.  And unlike the American Revolution the French Revolution was rather vengeful.  With French citizens killing other French citizens.  Including their king and queen.  Which just appalled President Washington.  Then the French started waging war with her neighbors.  Including their eternal foe.  Britain.  The Americans remained neutral in the conflict.  But their neutrality favored the British.  As America’s economic future was tied more closely to the British than the French.  Something that irked the French in charge of France at the time.  The same people that killed King Louis XVI.  The head of France that helped the Americans in their revolution.

Then the Franco-American relations soured.  Citizen Genêt came to the U.S.  The new French ambassador.  To encourage the Americans to support France in their wars against Britain and Spain.  Recruiting American privateers to attack British shipping.  Even basing these operations out of American ports.  Bringing captured British vessels to American ports.  And he recruited a militia to march on the Spanish in Florida.  Infuriating President Washington.  It even got the ever-quarreling Alexander Hamilton and Thomas Jefferson to agree on something.  The danger Citizen Genêt was placing the Americans in.  Risking war with the British Empire.  So they asked for his recall.  Which the French did.  But because that probably meant the guillotine Genêt asked for asylum in America and got it.  Living out his days as an American.

Then there was the XYZ Affair.  The British and the French were interdicting trade of the other with neutral powers.   Including the Americans.  The Jay Treaty eased tensions between Britain and America.  But it angered the French.  Who stepped up their attacks on American shipping.  Hoping to avoid war with France President Adams sent a diplomatic mission to France.  But the French said before the Americans could enter any negotiations they first had to pay a bribe.  And agree to a loan.  The Americans refused and left.  When word reached America there was outrage.  Congress even annulled the 1778 Treaty of Alliance.  The treaty that brought the French into the American Revolution.  And promised America military support if the British ever attacked the French.  People wanted to go to war with France.  But eventually they reached an agreement and avoided said war.

So the Franco-American alliance was tenuous at best.  And short-lived.  The French entered into it not to help the Americans succeed in their lofty idealism.  Of life without a king.  For France was an absolute monarchy.  And the last thing an absolute monarchy wants is to fill their people’s heads with silly notions of liberty.  Because that could lead to things like the French Revolution.  No.  The French allied with the Americans to regain territory they lost to the British.  Which they lost a lot of at the conclusion of the Seven Years’ War.  Which the Americans helped them lose.  No doubt weighing heavily on their minds.  As during the peace negotiations they tried to strike a deal with the British to keep the Americans east of the Appalachians.  Thankfully, for the Americans, Benjamin Franklin was in Paris during the peace negotiations.  And made a more favorable peace for the Americans.  To France’s dismay.  Which no doubt led to the tenuous Franco-American relations following the French Revolution.

So this is America’s history.  A history that is based in friendship and amity between the British and the Americans.  Apart from that small episode called the American Revolution.  While King Louis XVI did help America win her independence from Britain France’s motive for their support was to take large chunks of North America back.  Even at the expense of the Americans.  We had a brief alliance during the Revolutionary War with France.  But the Americans have prospered because of the special relationship with Britain.  Two people that share a language, a history, a culture, a legal system and a form of government (representative government).  So what does the current American administration do to our BFF?  This (see Syria: John Kerry slaps Britain in face as he calls France ‘oldest allies’ by Peter Foster posted 8/30/2013 on The Telegraph).

John Kerry administered a diplomatic slap in the face to Britain following David Cameron’s withdrawal of military support for intervention in Syria, omitting the UK from a long list of ‘friends’ prepared to support US actions against the Assad regime.

The diplomatic smart was made worse by Mr Kerry’s pointed reference to the French as “our oldest ally” – a reference that dates back to France’s role supporting America against Britain in the American Revolutionary War that began in 1776…

He then listed the Obama administration’s supporters, including the Arab League, the Organisation for Islamic Cooperation, the Turks, Australians and the French. Britain, however, was conspicuous by its absence from that list…

“Turkey said there is no doubt that the regime is responsible. Our oldest ally, the French, said the regime, quote, “committed this vile action, and it is an outrage to use weapons that the community has banned for the last 90 years in all international conventions.”

What is it with this administration and the British?  First President Obama returns a bust of Winston Churchill to the British embassy.  And now this slap in the face.  One would get the impression that they don’t like the British.  Perhaps it’s because of Britain’s support in the Iraq War.  Or that John Kerry can speak French.  And is a Francophile at heart.  But as the U.S. Secretary of State he should not spurn our BFF.

America and France are great friends.  But Britain and America are greater friends.  Because of the special relationship.  Insulting them is not stately.  It’s just impudent and impertinent.  Things a secretary of state should just not be.

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North Korea Manufactures and Sells Meth to Chinese addicts to bring Hard Currency into the Country

Posted by PITHOCRATES - August 25th, 2013

Week in Review

Keynesian economists, and those on the left, think there is nothing wrong with printing money.  Because they don’t understand money.  What it truly is.  So what is money?  It’s a temporary storage of wealth.  It is not wealth.  Doctors make a lot of money because they have learned great skills.  Skills few people have.  And doctors are willing to exchange these skills for money.  The wealth is a doctor’s skills.  The money temporarily holds this wealth until the doctor finds something to trade that money for.  From someone else that has wealth.  Who created something of value the doctor is willing to trade for.

All money did was make this trading of valuable things easier.  So we could trade with anyone even if they don’t want anything we can make or do.  A doctor doesn’t have to find someone who wants their gallbladder removed who has a television set if the doctor wants a television set.  The doctor can just go to a store and buy one.  Because of money.  Making the exchange of goods and services far easier than in a barter system.

Those who think money is wealth and that we should just print it and hand it out to the people are missing one very important point.  If you did this no one would have to work.  Those on the left would applaud that.  But if no one worked there would be no valuable things to trade.  And if there are no valuable things to trade then your money is worthless.  For if there is nothing to buy what good is having money?

North Korea has a lot of money.  But their money is worthless.  Because they just print it.  While their economy contains no valuable things to trade.  Not a big problem in a closed economy.  And you make your people slaves.  But it’s a problem if you want to trade with the outside world for the luxury items the lucky few in the ruling elite enjoy.  For if you have no valuable things in your economy then you must trade for valuable things with hard currency.  Money that isn’t worthless paper.  So North Korea came up with a way to get hard currency (see How North Korea got itself hooked on meth by Max Fisher published 8/21/2013 on The Washington Post).

A new study published in the journal North Korea Review says that parts of North Korea are experiencing a crystal meth “epidemic,” with an “upsurge” of recreational meth use and accompanying addiction in the country’s northern provinces…

So how do people in North Korea, a country where markets are so tightly regulated that even video CDs can be considered dangerous contraband and where social controls are often beyond Orwellian, manage to get hold of meth..?

The problem actually goes back to the 1990s, when North Korea experienced a famine so devastating that virtually the entire world believed the country would collapse at any moment. But it didn’t, in part because Pyongyang finally decided to open up the world’s most closed economy just a small crack, by allowing a degree of black market trade across North Korea’s border with China. The idea was that the black market would bring in food, which it did, preventing North Korea’s implosion.

The black market trade into China has remained that little bit open ever since, either because Pyongyang authorities can’t close it now or because they see some trade as beneficial, probably both. Some provinces along the border have seen their economies liberalize a tiny, tiny bit — most notably North Hamgyung, which is named in the North Korea Review report as particularly blighted by meth addiction.

In the years after the border with China opened that little crack, two other things have happened that led to the current meth crisis. First, medicine ran out and the once-not-terrible health system collapsed — more on this later. Second, North Korea started manufacturing meth in big state-run labs. The country badly needs hard currency and has almost no legitimate international trade. But it was able to exploit the black market trade across the Chinese border by sending state-made meth into China and bringing back the money of Chinese addicts.

This is where things started to spin out of control for North Korea. The state-run meth factories and the cross-border black market trade started to mingle. And some of that meth ended up migrating back across the border and into North Korea, through the black market trade that brings in Chinese rice and DVDs and the like.

This is where the collapse of the North Korean health system becomes relevant. As Isaac Stone Fish reported in a great 2011 Newsweek story, many regular North Koreans started using meth to treat health problems. Real medicine is extremely scarce in the country. But meth is much more common, which means that the prices of medical drugs are artificially inflated, while the price of meth is artificially low. In a culture without much health education and lots of emphasis on traditional remedies, people were ready to believe that meth would do the trick for their medical problems, and many got addicted.

Poor Chinese.  First the British got them addicted to opium.  Then North Korea got them addicted to meth.  It appears the Chinese people are nothing but pawns in the game of international trade.

Back in the days of mercantile Britain trade was all about who collected the most hard currency.  Basically gold and silver in those days.  The British loved Chinese tea.  And were filling ships full of the stuff to bring it back to Britain.  The problem was that the Chinese didn’t want anything the British were selling.  So Chinese goods were flowing to Britain.  But no British goods were flowing to China.  And without having exports to offset imports Britain was forced to trade the only thing they had that China wanted.  Their hard currency.  Their silver.  So Chinese goods flowed out of china.  And Britain’s hard currency flowed out of Britain.  So China was accumulating piles of hard currency while Britain saw their piles diminish.  Which was the exact opposite mercantile Britain wanted.  So they did something about it.  Thanks to India.

India was part of the British Empire.  And she grew opium poppies.  Something some Chinese did want.  So the British used this opium demand to stop the flow of hard currency out of the empire.  And traded Indian opium for Chinese tea.  This solved the trade deficit problem.  But it created a lot of addicts in China.  The addiction problem got so bad that it spawned two wars.  The Opium Wars.  Which did not end well for China.  And things did not get better in the century or so that followed.  And now here is North Korea.  Turning Chinese into addicts to get hard currency out of China (and into North Korea).  Just like the British did.  Of course, North Korea is nothing like the mighty British Empire.  So one would believe that China is allowing this addiction problem to happen.  As it is probably a smaller price to pay than the refugee problem should North Korea collapse.  And they may like that North Korean buffer between them and South Korea.  Japan.  And the United States.

North Korea is everything the left would like to have in the United States.  Tightly regulated markets.  National health care.  No rich people accumulating private property.  Where they frown on profits.  The even put people before profits.  Just like liberals want to do.  There’s no talk radio.  No Rush Limbaugh.  No Fox News.  No free trade.  No low-cost imports to undermine union manufacturing.  No obesity.  Because there is no junk food.  And no 32 ounce sugary beverages.  And a government that can do what is right for the people without having to worry about a Tea Party challenger in the next primary election.  North Korea is liberal nirvana.  Yet life there is horrible and wretched.  Because it’s everything liberals want.  But nothing the people want.

Liberals want to keep expanding government.  To have more government intervention into the free market.  But where does it end?  How far do they want to take things towards North Korea before they say they have enough?  And why anyone should worry about this is because as horrible and wretched life is in North Korea, those in the ruling elite have it pretty darn good.  Because the people in charge of these regimes never suffer like the people outside of the ruling elite.  So the farther they move towards North Korea the less they have to worry about an election taking away their comfy life.  This is why we should worry about a government growing larger.  For throughout world history life like that in North Korea has been the norm.  While life like that in the United States has been the exception.  And the United States has only been around for 225 years (counting from the ratification of the U.S. Constitution).  A crazy new fad the entitled ruling elite (i.e., liberals) would like to do away with.  So they can rule like they did in the good old days.  Much like they do today in North Korea.  Where the supreme ruler, Kim Jong-un, has an obesity problem.  One of the few in North Korea that isn’t gripped with a gnawing hunger every minute of every day.  This is life in a country where the ruling elite hates capitalism.  And puts people before profits.  This liberal nirvana.  Those in power live well.  While everyone else suffers.

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The Rising Costs of the British Welfare State has the Taxing Authority shaming People using Legal tax Avoidance Schemes

Posted by PITHOCRATES - August 11th, 2013

Week in Review

Britain’s aging population and her vast welfare state is making government very expensive per taxpayer.  As the tax base shrinks and people live longer into retirement state pensions and the National Health Service are consuming an ever larger percentage of the available pot of money.  Forcing the taxing authorities to get more money from each individual taxpayer.   Especially the wealthy.  Who are paying confiscatory tax rates to make up for that shrinking tax base.  So these people use every law in the tax code to minimize their tax liability.  Which the taxing authority strongly objects to.  As they want rich people to submit and pay.  No matter the amount they must pay (see Britain plans to name, shame ‘cowboy’ tax advisers by William James posted 8/12/2013 on Reuters).

British authorities would get the right to name and shame tax advisers who deliberately steer their clients into tax avoidance schemes that are likely to break the law, under a government proposal announced on Monday…

Tax avoidance schemes seek legal ways to reduce tax bills for companies or wealthy individuals. But some which take advantage of complex ownership structures, often involving overseas tax havens, are illegal.

The new policy would empower Her Majesty’s Revenue and Customs (HMRC) to name the so-called high risk tax advisers it considers to be promoting schemes which are deliberately opaque and likely to be hiding illegal activity.

Despite tax avoidance schemes being legal and the fact that only some people may be breaking the law the taxing authority will shame tax advisors who help their clients to not willingly submit and pay.  No matter how high those tax rates get.  Of course it’s nothing new in Britain.  For they have a record of excessively taxing some of their people.

The British Americans, for example.  But in the 1700s it was the cost of world war that they were trying to pay off.  Today it’s the cost of their massive welfare state they’re trying to fund.  Of course, that war debt may have lost the American colonies.  But it built an empire that lasted for a century.  So that war debt could be looked at as an investment into the future of all British people.  Unlike the cost of the welfare state.  Where it is just generational theft.  For those taxes today pay for obligations from the past.  Which doesn’t invest into the future of all British people.  But discounts their future.

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Spain wants to tear up the Treaty of Utrecht and take back Gibraltar from Britain

Posted by PITHOCRATES - August 11th, 2013

Week in Review

8/14/2013 CORRECTION:  There were factual errors/omissions in this piece.  We apologize for them.  And we apologize to the good people of Spain if we have offended them.  But it should be noted that some of the corrections are from quotes pulled from the sourced Mirror article.  A British newspaper.

The point of the piece is a recurring theme in history.  There are rarely any innocents when it comes to international disputes.  That was the point of the French and the Spanish helping the Americans during the Revolutionary War.  They did this not for American interests but for their own interests.

We also will note that the world’s power center shifted from the Mediterranean to the great sea powers of Europe.  Because these great European powers advanced seafaring to the point that they were first to conquer the oceans.  Also, the man that discovered America (Christopher Columbus) was sailing for Spain.  During the time of the Age of Discovery.  Where Spain dominated that discovery.  And Spain was home to the School of Salamanca.  Where the seeds of the Renaissance and the Enlightenment were sown.  And they would bear their greatest fruit in the late 18th century.  Thanks to America’s Founding Fathers being students of the Enlightenment.  So Spain has a formidable place in world history.  One that we admire and greatly respect.

A reader from Madrid sent in a well-written and very respectful criticism.  We include it here in its entirety.

Dear Pithocrates, I have read your paper on Gibraltar which is rather accurate but there are some missing points which are very relevant to understand the roots of the issue. These points are as follows:

a) It is true that the Spanish captured Gibraltar from the moors in 1462, but you shouldn´t omit that the moors captured it previously from the visigotic kingdom of Spain in 711.

b) You state that “Gibraltar was captured in turn by the Royal Navy in 1704”, but you omit that it was in the context of a Spanish dynastic sucesion war and this capture was in the name of one of aspirants to the Spanish crown, supported by British and Dutchs.

c) The Treaty of Utrecht didn´t handed over the surrounding waters and the istmus where the airstrip lies. The istmus was a neutral zone wich was taken by the British in XIX century by asking quarantine land due an epidemy in Gibraltar. It doesn´t seem fair play. This is the key point for Spain since Gibraltar has no waters to drop blocks in and the airport is out of Gibraltar territory.

I fully agree that we can´t go back to the first wrong but your statement that Spain wants to tear up the treaty is far from reality.  In essence Spain wants the British to meet the treaty in full since is not an acceptable behave to throw concrete blocks in non British waters nor contaminate them with chopy bunkering practice,. If you study the history of Spain, you will learn that some part of it was outstanding, glorious and brilliant and some not, but ALWAYS we have been people of honour and we honoured the treaties we signed off.

Finally I believe that in XXI the gunboat policy is out of place, but in any case it is clear that Spain was not the first to put the navy in this conflict.

I would be very grateful if you share these lines with your readers in order to clarify the situation. Spaniards and British have had a long common history. We have been rivals for centuries and in the past we fought very often each other and sometimes were allies. We have in Gibraltar a common “heritage” and we should be intelligent enough not to make it a wedge but a hinge between us.

Best, regards,
[name withheld by Pithocrates to protect writer’s privacy]
Madrid (Spain)

PD: In addition there is a little geographical mistake in your text: none of the sides of Gibraltar is on the Atlantic ocean, both are in the Med (Mediterranean sea is considered eastward Tarifa).

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Do you know what you will find at the southern tip of Spain?  Britain.  That’s right.  Gibraltar belongs to Britain.  Something Spain isn’t all that happy about.  Kind of how Argentina isn’t all that happy about Britain being in the Falkland Islands.  And both Argentina and Spain try to make life difficult for the British living in these British possessions (see Gibraltar: Britain to send Navy warships to Mediterranean in show of force to Spain by James Lyons posted 8/9/2013 on the Mirror).

Britain is sending warships to Gibraltar after David Cameron failed in his attempt to end the diplomatic row with Spain…

The 10-vessel Med visit follows weeks of rising diplomatic tension as the Madrid government holds up traffic at the border in retaliation for Gibraltar’s efforts to stop Spanish trawlers plundering fish stocks…

The PM, in a phone call to his Spanish counterpart Mariano Rajoy, issued a coded warning of legal action over the border checks and the threat to impose a £43 crossing fee.

But the checks still happened today and the Spanish hit back by criticising the Gibraltar government for making an artificial reef to protect fish stocks.

Under the seas surrounding the Falkland Islands are oil and gas deposits.  In the waters around Gibraltar it’s fish stocks.  So there are economic reasons.  But what really irks Spain is that unlike the cold and windy Falkland Islands Gibraltar is a sunny vacation paradise.  And you don’t need a boat or a plane to get there from Spain.  All you have to do is drive there.  And cross an active runway.  Yes, the road through Gibraltar actually crosses an active runway.  Why, you may ask, doesn’t the road go around the runway?  Well, the thing is, Gibraltar is so narrow that one end of the runway ends at the waters of the Atlantic Ocean.  While the other ends at the water of the Mediterranean Sea.

Gibraltar is an outpost of Britishness at the mouth of the Mediterranean, and has been for 300 years.

The 2.3 square miles land mass, dominated by the 1,300-foot limestone Rock of Gibraltar, is one of the last remaining parts of the empire…

The 30,000 inhabitants of the British Overseas Territory cling to their UK roots.

Sterling currency, red post boxes, familiar British shops and banks and the use of the English language are all legacies of the Rock’s long association with Britain…

The results of several referendums in Gibraltar over the years, the most recent in 2002, have been overwhelmingly in favour of remaining linked to Britain.

So it’s only a small sliver of land.  And the people who live there are British.  And want to remain British.  As it is in the Falklands.  Referendum after referendum is always the same.  These British people want to remain British.  It makes one wonder what would happen to them if Spain and Argentina got their way.  Would they deport them?  Segregate them?  Or simply make them stop being British?

So how did it come to this?  How did a tip of Spain become British?

Captured from the Moors by the Spanish in 1462, Gibraltar was captured in turn by the Royal Navy in 1704.

Nine years later it was officially handed over to Britain in the Treaty of Utrecht, and it has remained in British hands ever since.

It is this treaty which is at the heart of Spain’s claim to the land.

The Rock was ceded to Britain “to be held and enjoyed absolutely, with all manner of right for ever, without any exception or impediment whatsoever”.

But successive Spanish governments have argued that this is an anachronism and that Spain’s territorial integrity justifies the return of Gibraltar to Spanish control.

Critics of Spain’s attitude towards Gibraltar have pointed out that it has its own city enclaves, Ceuta and Melilla, on the north African coast, bordering Morocco.

Despite repeated demands by Morocco that the cities should be returned to its territory, Spain refuses to do so.

Interestingly, the Spanish took the land from someone else.  The Moors.  So the British didn’t do anything the Spanish didn’t do.  They got the land by military conquest.  Then made it permanent by treaty.  A treaty they say now is silly to maintain.  Because Gibraltar is attached to the Spanish mainland and logically belongs to them.  While they themselves are holding on to lands that by their logic belong to Morocco.

The Spanish Empire once stretched throughout the world.  But it was overtaken by the British Empire.  Whose representative government and capitalism vaulted the British into the number one world power.  While the Spanish Empire declined the British Empire only grew stronger.  France, too, lost bits of her empire to the British.  Which is why the French aided the Americans in the American Revolutionary War.  And why the Spanish joined that conflict by allying themselves with the French against the British.  Neither of them cared about helping the Americans.  They went to war against the British when they were preoccupied with the Americans to reclaim their lost pieces of empire.  And hoped to limit the Americans’ expansion into North America by the treaty that would end the war.  A treaty that would undo the Treaty of Utrecht.  And allow further expansion of France and Spain into North America.

How far back do you go to right past wrongs?  Should Spain return their land to the Moors?  Should they take back Mexico and return it to the Aztecs?  Do you go back to the first wrong?  Which would be difficult without a historical record going back to the first wrong.  So do you go back just far enough?  And if so who determines how far that is?

No.  You can’t do this.  All you can do is honor the treaties you have now.  Treaties that were signed willingly by all parties concerned.  Yes, some parties were negotiating from a position of weakness.  But that’s war.  In hindsight Napoleon would much rather have signed a treaty before losing at Waterloo.  Just as Hitler would have, in hindsight, preferred to sign peace treaties with all combatants before his invasion of the Soviet Union.  But when you wage war and lose you have little choice but to negotiate from a position of weakness.  And because the British bested the Spanish in battle Gibraltar belongs to Britain.  Just as the Spanish would be holding on to Cornwall in England if the roles were reversed.

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Britain’s National Health Service may be Rationing Care but one thing they have an Abundance of are Problems to Fix

Posted by PITHOCRATES - August 10th, 2013

Week in Review

Obamacare is but a waypoint on the way to true national health care.  Just like they have in Britain.  Where they’ve been doing national health care since 1948.  Which means if anyone is doing national health care right it has to be the British.  For they’ve been doing it for some 65 years.  So just how well are they doing it?  Well, suffice it to say they can make some improvements (see How many reviews does the NHS need? by Nick Triggle posted 8/6/2013 on BBC News Health).

NHS reviews are getting a bit like buses. Miss one and you don’t need to wait long for another to come round the corner.

A month ago there was the Cavendish Review into healthcare assistants, and then two weeks later the Keogh Review into mortality rates, which led to 11 trusts being put into special measures, was published.

Now it is Prof Don Berwick’s review on patient safety.

All three were commissioned off the back of the Francis Inquiry into the Stafford Hospital scandal…

The Francis Inquiry made 290 recommendations. The three follow-up reports have brought that number to almost 500 and there is still a fourth, on complaints handling, to come.

And yet there is still confusion over what the government is doing on issues such as minimum staffing, criminalising neglect, improving nurse training and introducing a robust system of oversight for healthcare assistants.

And that’s doing national health care well.  Imagine the number of recommendations if they were only starting out with national health care?  Things would probably be a lot worse without those 65 years of experience.  Something Obamacare doesn’t have.  Which probably explains why they are having so much trouble getting it up and running.

So if the left gets their way they will use Obamacare as a pathway to national health care.  Like they have in Britain.  And we, too, can expect a flurry of reports on substandard care.  And hundreds of recommendations to improve that substandard care.  Of course we could just go back to the way things used to be.  And keep health care in the private sector.  Where there may have been problems.  But there was not a flurry of reports on substandard care.  Only about people who couldn’t afford the outstanding level of quality in our health care system.  It seems such a shame to destroy the one just so you can afford to give substandard care to everyone.

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More Doctors are Leaving Britain’s National Health Service for Better Jobs Elsewhere

Posted by PITHOCRATES - August 10th, 2013

Week in Review

According to BBC Radio 4 doctors in the National Health Service (NHS) are fed up with being blamed for all the woes in the NHS (see UK doctors ‘flee NHS for overseas’ says RCGP posted 8/7/2013 on BBC News health).

A constant barrage of negative headlines about the NHS is leading to a growing number of doctors fleeing Britain to practice abroad, according to the Royal College of General Practitioners.

Britain’s aging population is placing great strains on the NHS.  Health care spending is rising as people live longer into retirement while a smaller population enters the workforce to pay for them.  Leading to a doctor shortage.  Rationing of care.  And a lowering of the level of quality as fewer resources must cover more people.

According to this report everyone is blaming greedy doctors who don’t want to do their fair share of work.  This while the doctor shortage is so bad that about a third of the doctors in the NHS are immigrants.  And the British government is investing in more doctors to cope with the increasing pressures of these doctor shortages in the face of that aging population.  But there is no sympathy for doctors.  People say that they paid to educate and train them so it’s their duty to stay in the UK and look out after them.

So this is life under national health care.  Overworked doctors.  About a third of which will be immigrants.  As the treatment of doctors discourages others from entering the profession.  Creating a doctor shortage filled by immigrants.  And a general attitude among the people that because they pay for these doctors with their taxes that makes these doctors their bitch.

They also say these doctors are paid well.  Who earn around $150,000 (in U.S. dollars).  Which is a lot of money.  Yet there is a doctor shortage because more people aren’t leaping at the opportunity to earn those big bucks, too.  Why?  Because it’s too damn hard.  That’s why we pay doctors a lot of money.  It’s about the only way to encourage them to enter the profession.  To learn a very difficult field.  Put in more hours than most.  All while being blamed for all the woes in the NHS.

And they wonder why UK doctors want to leave the NHS?

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Despite the Left’s Opposition to Fracking even the Environmental British are Joining In

Posted by PITHOCRATES - August 4th, 2013

Week in Review

One of the reasons the government tells us we must ‘invest’ in clean energy is to wean us off of costly foreign oil.  To give us energy independence.  And so we stop sending out money to nations in the world who don’t much care for us.  That’s why we must spend enormous amounts of tax dollars on things like solar and wind power.  Because we need them.  But because they are such poor business models they can’t operate without government subsidies.  So is there another option to give us that energy independence?  That doesn’t require government subsidies?  While even lowering our energy costs?  Yes there is.  And the British are now trying to play catch up to the United States (see The potential prize from fracking is huge by Michael Fallon posted 7/31/2013 on The Telegraph).

North, south, east and west, shale gas represents an exciting new potential resource for Britain that could contribute to our energy security, growth and jobs.

We only have to look across the Atlantic to see how it has reinvigorated the US economy: gas prices have halved, cutting costs for industry and consumers, and creating thousands of jobs and billions in new investment. Countries from India to Australia have looked on in envy at this boom – and are now joining in.

For its part, this Government is serious about shale. We are encouraging industry to find out how much is recoverable in all parts of the country. Given increasingly volatile international gas and oil prices, and our commitment to helping hard-pressed families with their bills, it would be irresponsible to ignore a new energy source right underneath our feet…

…residents understandably want reassurances that their water will not be contaminated. The facts are that around 2.5 million wells have now been fracked worldwide, more than 27,000 of them in the US in 2011. There is no evidence from America of fracking causing any groundwater contamination.

Other than in Hollywood movies.  And on television shows.  There it’s contaminating groundwater like there’s no tomorrow.  But with all that fracking going on in the United States the news is surprisingly barren of contaminated groundwater reports.  And you know they’d be leading all the news programs if there were.  Because the left hates fracking.  And the mainstream media leans left.  Way left.

That energy boom is a private boom.  It’s not because of the government.  It’s in spite of the government.  Who has launched a war on coal and oil.  Shutting down oil production on the Gulf of Mexico.  And on all federal lands.  Or making it very difficult for those who try.

Much of the global warming nonsense came from the University of East Anglia.  Making Britain near ground zero in the battle against global warming.  And here they are.  Wanting to frack to bring energy costs down for households.  Create jobs.  And reduce dependency on foreign oil.  Pity the United States government doesn’t care enough about the American people to do the same.

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