Are we the baddies?

If, like me, you're looking at the geopolitical situation with a mixture of horror and bafflement, it can be easy to assume it's simply that humans are innately stupid and evil. But I know that's not true. I've been fortunate to visit and work in many cultures. Everywhere I go from Sierra Leone to Saudi Arabia people want the same things. Safety for their family and themselves. Knowing where the next meal will come from. And rules that apply to everyone equally.

So how did we end up here?

I'm GenX (1965 - 1980). I grew up in the shadow of the boomers ("I almost fought in a war for you") but raised by the silent generation (who were children during WW2). I was at school when the Reagan / Thatcher axis were handed an economic theory (now largely discredited) that said the best social outcomes came from behaving like sociopaths. Making decisions according to an illusion of rationality. It was marketed brilliantly to the masses, and many bought into it. We now generally refer to it as Neo-liberalism.

It hasn't worked, for the simple reason it was bullshit.

A natural experiment took place over North Sea Oil. The greatest beneficiaries of this lottery win were the United Kingdom and Norway, countries with strong historical ties, broadly similar social and legal systems. But also divided by a different history. Norway has an unashamedly socialist culture.

"Koselig is a term that describes the feeling of warmth, comfort, and intimacy that comes from being surrounded by loved ones, or simply being in a cozy and inviting environment. While there’s no direct translation for Koselig in English, it is similar to the Danish concept of “hygge.” However, Koselig carries its own unique Norwegian flavor, with a focus on nature, simplicity, and the joy of spending time with others."

When faced with sudden wealth (and I'm not saying this was an easy process: it had its ups and downs) they viewed it as a one-off event that should be shared among all Norwegians, including those yet to be born.

Britain was in the throes of a transformation to a more individualistic approach. Their strategy was to reduce personal taxes. The North Sea accounted for about 10% of Britains revenue in the eighties, so it acted as a cushion.

It allowed (as Michael Heseltine, a Conservative Minister stated) short-term consumerist policies such as subsidised housing and tax 'relief'. Britons felt wealthier as the valuations on their properties went up and taxes were suppressed. There was a consumer boom.

Little of it was spent on infrastructure - in fact those investments were cashed out in the nineties with a (now much regretted) privatisation programme that included water, electricity and gas. Efficiency was a distracting side show - there is little empirical evidence the private sector can run a monopoly more effectively than the public, but it is to this day used as a false justification. All it does is put off investment, shifting things around on the national balance sheet.

Russia's unprovoked invasion of Ukraine forced the hand of many countries with regard to dependence on cheap gas, and it is to the UK's credit that they have increased their renewable base. But Norway was already there - 98% of its domestic power comes from renewables. They are more insulated from hydrocarbon price fluctuations. After all, you can always reduce production and save it for later.

Ordinary people pay the price for these poor decisions, but it was our fault. Thatcherism was welcomed. It made people feel better off. But today we are seeing the price. A destruction of social capital. Long term stagnation of productivity. Inflation (when you print money, that's the only path to correction). Poverty.

And dignity. The move to a service economy means encouraging low wage, insecure, low skill jobs for most people. It's hard to provide fulfilling work without a strong production base that needs craft skills.

So the middle class feel betrayed, and 30% youth unemployment fuels the fire. A window for populist leaders opens. They no longer feel any need to be honest, because they are appealing to a base that does not want to acknowledge that the short term philosophies they were sold thirty years ago are the problem. They want it to be someone the fault of someone else.

There's no way out of this if we keep trying the same flawed economic models. We need something new. And that terrifies the establishment. In the US, Republican policies are actively killing off their voter base. Conservative parties know that they are reaching the point where they will never win another election.

Their answer is to avoid elections. That's why democracy is under threat, and that's why it is so important that we pay attention.

Norway vs. UK oil strategy: https://eandt.theiet.org/2021/01/20/north-sea-oil-tale-two-countries

The Empirical Failures of Neoliberalism: https://rooseveltinstitute.org/publications/the-empirical-failures-of-neoliberalism/

Public vs. Private Sector Efficiency: https://www.gre.ac.uk/__data/assets/pdf_file/0010/123031/Public-and-private-sector-efficiency.pdf