Britain

Important People–People Who Matter

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The UK government has decided that senior executives can temporarily leave quarantine in England if they are undertaking business activities which are likely to be of significant economic benefit to the UK.

(Hopefully, the virus will be informed and will conduct itself accordingly)

I suspect that many of the activities which in reality could benefit the UK economy greatly do not meet the requirements of this ruling by the Department for Business, Industry, and Industrial Strategy and hence are not viewed by the government as truly important.

An extremely successful startup CEO once remarked to me that ‘the secret to startups is that you have very smart people working on very small things.”   By ‘small’, he definitely did not mean ‘unimportant’, rather, that the activity…whatever its future potential…was still not yet large enough in revenue and perhaps also in public awareness to get proper attention at the senior levels of a typical large corporation. (And by ‘smart’, he didn’t mean just IQ, but the whole range of business skills)

Governments will always tend to focus on things which are large, or fashionable, or both, and will more often than not act as inhibitors toward true innovations.

Corruption rules our country today.

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I am succumbing to temptation to repeat a post from 4 years ago. The reason is that the problem is now far worse. We do not have just a Principle agent problem, the country is run by corporate renegades and those on foreign payrolls.

The principalagent problem, in political science and economics, (also known as agency dilemma or the agency problem) occurs when one person or entity (the “agent”) is able to make decisions on behalf of, or that impact, another person or entity: the “principal”.[1] This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

The Founders were well aware of this problem and tried to protect the citizens with certain provisions of the Constitution.

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

This provision was violated by Barack Obama who spent billions to subsidize insurance companies to support his “Affordable Care Act” which was not successful.

Of course, the Amendments were intended to protect the rights of the people but the one that has been ignored for 100 years is the Tenth.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The Civil War largely ended Federalism.

In recent years, political parties have mislead their voters, the worst offender being the Republican Party. The Democrats posture as the party of the working man but it has become a party with two wings, the rich who want social liberties, and the poor who want to be taken care of. Jay Cost has written a good book about the Democrats Party called, “Spoiled Rotten, which explains the current policies of the party that has adopted “Identity politics” in which race and victim status has become a principal focus. My own review of the book is here.

The Republicans have gradually become the party of small business but the interests of small business are not being considered as paramount as the party seems to be evolving into another party of professional politicians whose personal interest trumps (so to speak) the interests of the voters. The result has been the rebellion of the Tea Party and more recently the election of Dave Brat, an economics professor, to Congress defeating Eric Cantor, a member of the GOP leadership, in 2014.

The election of Donald Trump has presented the GOP Congress with a crisis to which many have responded by retiring. One wonders what the next step of their career will be. Few, I suspect, will return home to the district that elected them. Most will remain in DC as Cantor has done.

Immediately thereafter, Cantor accepted a position as vice chairman of investment bank Moelis & Company. and,

In February 2015, the firm opened its Washington DC office, following the hire of Eric Cantor, former House Majority Leader, in September 2014.

That was bad enough in 2017 but we now have President Ron Klain, elected by no one, with Joe Biden as a prop when he can read his cue cards.

I think Angelo Codevilla’s piece about “The Ruling Class” has the best explanation.

When this majority discovered that virtually no one in a position of power in either party or with a national voice would take their objections seriously, that decisions about their money were being made in bipartisan backroom deals with interested parties, and that the laws on these matters were being voted by people who had not read them, the term “political class” came into use. Then, after those in power changed their plans from buying toxic assets to buying up equity in banks and major industries but refused to explain why, when they reasserted their right to decide ad hoc on these and so many other matters, supposing them to be beyond the general public’s understanding, the American people started referring to those in and around government as the “ruling class.” And in fact Republican and Democratic office holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a class.

Now, we have a ruling class whose loyalty seems to be to other governments, China, Russia, The EU ? Who are they working for? Biden attacks BREXIT, Supporting the EU over the UK, infuriating the British ruling party. Labour has already ridiculed Biden for his dementia. Who is writing Biden’s speeches ?

Thinking, Making, Profiting

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256 years ago this month, James Watt made the conceptual breakthrough that enabled a much more efficient steam engine…an engine that would play a major role in driving the Industrial Revolution.  He had been thinking about possibilities for improving the coal-hungry Newcomen engine, then the best available, which lost huge amounts of heat every cycle through the successive heating and cooling of the cylinder walls:

It was in the Green of Glasgow.  I had gone to take a walk on a fine Sabbath afternoon…I was thinking upon the engine at the time…when the idea came into my mind, that as steam was an elastic body it would rush into a vacuum, and if a communication was made between the cylinder and an exhausted vessel, it would rush into it, and might be there condensed without cooling the cylinder.

But in addition to the many details involved in reducing this idea to practice, there was another problem inhibiting the creation of reasonably-efficient steam engines.  The boring of the cylinders…even when the best tools and the highest skills of the day were applied…was so imprecise that considerable quantities of steam escaped around the piston, greatly lowering the overall efficiency of the engine.

Enter Matthew Boulton, who became Watt’s partner, and John Wilkinson, a Boulton associate and foundry operator who was obsessed with all things cast iron.   Boulton and Wilkinson wanted a steam engine to provide the blast for Wilkinson’s foundry, and they wanted an engine with especially-large cylinders…which made the problem of tight cylinder/piston fit even harder to solve.

Wilkinson saw that the technology he had already developed for the very precise boring of cannon could, with some modifications, be adapted to the boring of steam engine cylinders.   Amid “searing heat and grinding din,” he achieved a cylinder, four feet in diameter, which “does not err the thickness of an old shilling at any part.”  With the combination of Watt’s separate condenser and Wilkinson’s improved boring process, the steam engine was ready for the starring role that it was to hold for the next century and beyond.

Key point: It wasn’t only the design of the improved steam engine that mattered, but also the process for making it.

What if Britain had been offshoring its foundry operations, with their “searing heat and grinding din” to another country?  Spain, let’s say.  Given the importance of the interaction between the design talent and the manufacturing talent, would the improved steam engine have been developed in the 1770s timeframe at all?  And whenever it had been developed, to which individuals and countries would the financial benefits of steam power have accrued?

The present-day parallel is the relationship between microchip designers and microchip manufacturing facilities…foundries, as they are actually called.

More about John Wilkinson, here.

The Age of Duty

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The age of duty passes, I suppose, with the death of Prince Philip, the chosen spouse of Her Highness, Queen Elizabeth II of England and whatever remains of the Commonwealth and domains. (And in the theology of a remote South Pacific island tribe, the worshipped deity and incarnation of a local volcano spirit, through a process which no one outside that tribe can quite figure out.)

No, I’m not a royalty devotee, in any particular degree. I’m an American, of British descent yet purely republican (small r there, let it be known), so I suppose it is a sentimental thing on my part or even a degree of decent human sympathy. As my daughter said, unforced, on reading the news the other morning, “Oh, poor Queen!” A seven-decade long marriage, for that time always under the constant, unblinking, pitilessly Sauron-like, and censorious eye of the public media ended by death at the end of a horrible and trying year. Poor Queen. A woman who was (and still remains) under unsparing scrutiny for nearly all of her life from the age of twelve or so, and yet performed flawlessly in the public sphere, on practically every occasion. The loss of her sister, her mother, now her husband, and all this on top of  a fraught and very public estrangement from an adult grandson … poor Queen, indeed. Her private circle of heart-friends and close-mouthed supporters is narrowed substantially by one, and that possibly the dearest and most personal supporter of all. Sympathy indeed. She has a pair of new dogs, and the remaining family and friends to comfort her, so at least she has that.

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The Deep State and World War I

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I have been reading, actually rereading, a book on the origins of World War I. It is titled “The Sleepwalkers” It is a bit of a revisionist treatment of the topic which has been popularized by Barbara Tuchman and “The Guns of August which lays the blame for the war on Germany. This book does a pretty good job of assigning responsibility to two new culprits, Sir Edward Grey, who is also blamed by Pat Buchanan in “The Unnecessary War.” Buchanan blames Grey and Churchill, which I disagree with. Buchanan goes on to blame Churchill for WWII, as well but I think he has a good argument with Grey about WWI.

What is striking to me on this rereading, is the role of the bureaucracies of several countries. Many know of the willfulness and erratic behavior of Kaiser Wilhelm. His ministers often did not inform him of serious matters, lest he impulsively make them worse. A gross example was “The Daily Telegraph Affair.” In this example, the Kaiser wrote a letter to then English newspaper making some extreme statements. His ministers were horrified.

The Russian Czar was equally erratic and his ministers frequently maneuvered to discourage his role in foreign affairs.

What seems to me to be new insight concerns the English and French bureaucracies. Edward VII had been a Francophile and Germanophobe and had encouraged The Entente Cordiale with France and Russia. Edward died in 1910, leaving his son George V on the throne. George V was new, uncertain and left foreign affairs in the hands of his Foreign Minister Sir Edward Grey. Grey was a quiet, seemingly passive man but he was also a bureaucratic manipulator. He was a Germanophobe and had a collection of like minded men in the foreign office. The worst of the Germanophobes was Eyre Crowe born in Germany and spoke with a German accent but a Germany hater. Grey’s policy was not popular with other Liberals in government so he kept the policy of alliance with France vague right up until 1914. He denied the existence of an alliance with France right up to the declaration of war. As for Crowe:

He is best known for his vigorous warning, in 1907, that Germany’s expansionist intentions toward Britain were hostile and had to be met with a closer alliance (Entente) with France.

Crowe organized the Ministry of Blockade during the World War and worked closely with French President Georges Clemenceau at the Supreme Council at the Paris Peace Conference in 1919.

Lloyd George and Crowe’s rivals in the Foreign Office tried to prevent Eyre’s advancement but as a consequence of his patronage by Lord Curzon, Eyre served as Permanent Under-Secretary at the Foreign Office from 1920 until his death in 1925.

A similar group in France ran the foreign Ministry and was referred to as the “Centrale.” The French government was as unstable as it was before WWII and for the same reasons. Weak parties and weak Foreign Ministers who came and went, often in months not years. The man who was the center of this system was Maurice Herbette. There is very little about this man in English sources. He apparently controlled the Foreign Ministry’s public communications and very nearly caused a war with the Agadir Crisis of 1911.

The point of this discussion of history is that we have a similar situation in this country right now. We have a weak, very weak, president in Joe Biden who is senile and who is being controlled by someone mysterious. The Deep State is a term used to describe the federal bureaucracy and probably includes a network of rich corporatist donors who control the Democrat Party.

The faceless bureaucrats of 1914 botched the crisis the followed the assassination of the heir to the Austro-Hungarian throne. Yes, the Serbian Black Hand created the crisis and there has been much discussion of the competence of the “Three Emperors” who ruled the main belligerents, but the real rulers of these three countries plus republican France were unknown (to the public), unelected bureaucrats who might well have resembled the people running Joe Biden.