Define Capitalism! - holiday homework for C@W

I've recently come across a book called The Ethics of Capitalism (Daniel Halliday and John Thrasher, OUP 2020).  Unsurprisingly, it starts by groping for a definition.

... Treating the relationship between markets and freedom as all or nothing tends to be a mistake of both the “purest” defenders and opponents of capitalism. It is better, then, to think of capitalism as a certain approach to harnessing and promoting markets, in part with the help of government and civil society, not a deference to markets as such... Market forces and markets are ubiquitous, and yet the existence and promotion of markets alone are not the “essence” of capitalism. What, then, is? ... In many respects, no two capitalist societies are entirely alike, so there is limited value in generating an exhaustive, philosophically precise definition of capitalism.  

... We need to make sure that any definition of capitalism, however flexible, at least captures most existing societies that are seen as more or less capitalist.  One crude way to do this is to use a proxy measure like the Economic Freedom of the World Index, which is produced annually by the Fraser Institute.  Their methodology measures size of government, legal system and security of property rights, sound money, freedom to trade internationally, and regulation.   

... A country’s economic freedom score is highly correlated with its per capita income.  Countries that are unfree, like Venezuela, have very low per capita incomes, while countries that are very free, like Hong Kong or Canada, have very high per capita incomes.  The ranking on the list also correlates well with where people around the world are trying to enter as immigrants and from where they are trying to escape. This gives us one way of arriving at an approximate and preliminary definition of capitalism. Although we will expand on this somewhat, we should think of capitalist societies as those that rank highly on most of the measures that the Economic Freedom of the World Index highlights.  In particular, capitalist societies will have: 

A. Strong legal protections for private property 

B. Wide dispersion of private property across their population 

C. Extensive international trade 

D. Consumer sovereignty (including competition in the provision of goods and services) 

E. Diversity of employment contracts 

Existing capitalist countries will have these features to greater or lesser degrees, but without at least meeting these (admittedly broad) conditions, it is unlikely that we would consider the society in question capitalist.

And that's as far as they go in their build-up.  Even if it's a useful background discussion (and there's plenty more of interesting stuff in the book), as regards essaying a definition of capitalism this is a pathetic cop-out.    

Eventually they get to this: 

...“pure” capitalism [is] the economic arrangement in which power is de-centralised, property is widespread and employment options are diverse.

Feeble.  I've occasionally shared a few definitional ideas of my own here in the past.  What do dedicated C@W readers say?   We want a definition in no more than a couple of sentences, even if you need to add an explanatory paragraph or two. 

ND

2020 - Prediction results

 So here are what our post on predictions at the end of 2019 said:

"For the first time in 13 years of this competition I have reviewed the answers and no one was even close. My cat could have done better.

I guess this anecdotally suggests that 2019 was the most crazy year yet - even weirder than the 2010 and 2009 years of the financial crash.

Only gridbot predicted an election but it produced a hard brexit and a hung parliament. Nick Drew did well to suggest there would be a centrist party but it did not even survive the year out to qualify for the final.

My own predictions of May to survive and the remainders to win was fortunately 100% wrong.

Maybe 2020 will see the beginning of a return to normality and some more predictable events unfolding. Or perhaps the zeitgeist of the end of the decade will continue with unknown terrors to come."

Uncanny, perhaps, but the later efforts at prediction for 2020 were also some way off the rather over-interesting events that took place this year. Suffice to say no one was close on the FTSE prediction, nobody cares about tax rates or energy usage levels, the pandemic having seen of both quite easily. 

Our dearly departed friend, Raedwald, at least predicted that Keir Starmer would become leader. Anonymous predicted I would not improve my use of spell check, but thanks to Google chrome that  was found untrue. 

So a win for Raedwald posthumously which feels fitting. 

I will be thinking hard for relevant questions for 2020, this year proving a little more challenging than normal. I think after Brexit and Covid, we deserve a more normal year next year, but perhaps that is itself wishful thinking!

Unreconstructed Remainers: The Last Outing

There are those Remainers like Grayson Perry who after 2016 acquired a modicum of reflective humility about how little they probably represent those whom they once thought they spoke for. 

But there are plenty who did not.  The Graun, which these days rarely opens its CiF pieces for BTL comments (which itself speak volumes) has today seen fit to open the floodgates under a Brexit piece.  And what a deluge it is; some 2,000 gobbets of turgid Remainerist bile, deposited in a mere three hours on a Christmas Sunday morning.

The Comment piece that sits grandly above it is from none other than Will Hutton, the man who destroyed that once estimable institution the Industrial Society, a story for another day.  Funnily enough, while predicting we'll be back to the EU on our knees within the decade, even Hutton is obliged to acknowledge a list of detailed achievements the UK made in last week's trade agreement.  No such qualifying remarks in the bilge below, which as a body of unrestrained online echo-chamber emotion could serve as a data-source for a psycho-sociological thesis on the low intellectual content of metropolitan *progressive* thought.

What's perhaps most striking is the sheer raging impotence of it, what with Starmer whipping in for a supportive vote in Parliament.  That'll be the next major belly-laugh on offer in this bleak Covid midwinter.

Although many of these people will still be fuming in their smart progressive sitting rooms and their rancid progressive bedsits for years to come, I can't see there being many more outburst-outings quite like this one.

ND  

Gregg Wallace at Xmas - Inside the Brexit Factory

GW     I’m ‘ere in the Westminster sosssidge processing plant.  You always wonnied ter see ‘aa “Brussels Sosssidges” were made, dincha?  Whotcha mean, ‘no, Gregg’?  Course ya did!  Stop retching!

I’m ‘ere watching the piles of raw materials arriving at the gates from Brussels.  Blimey, look at that lot!   Let’s talk to delivery-boy David Frost – Dave, hi, I’m Gregg.  Wotcha got there then, mate?  

DF     Well Gregg, it’s two thousand pages of typical Brussels output, and as you can see, in this form it’s pretty inedible.  Particularly the fisheries bits.  

GW     To’ally in-die-gestible, I’d say, mate.  And, phwoar, it stinks!  Crikey - must need a load of processing before it gets to the punters – wot ‘appens nah? 

DF     Well, we’ve already done a bit of softening up so that customers have a fair idea of what they’ll be getting.  But now we need to put it into what we call ‘pre-digestion’. 

GW (to camera)   And that’s because the average ‘ew-man just couldn’t stomach this stuff unprocessed – too dense and, frankly, just plain unpalatabool: doesn’t look much like what they are expectin’ at all!

... So, it’s twenty seconds after this stuff came in the gates, and nah I’m over at the ‘press’ department, where the raw ingredients are prepared before they are suitable for servin' to the public.  Hi, Allegra Stratton, I’m Gregg: wot ‘happens in your great big ‘press’ machine then, eh? 

AS     So, what we do here Gregg is, yesterday we warmed up the press so now it’s ready to receive the juicy bits we’re going to feed in. 

GW     Yeah, I can see why you’re bein’ a bit selective!  You wouldn’t want summer this stuff getting into the press, wouldya?!  That Irish bit, for example, that'd be really 'ard to swallow.  Can I ‘av a go wiv your machine? 

AS     Yes of course.  We’ve separated out the juicy bits over here, so if you just tip them into this end – that’s it.  Now the ‘press’ doesn’t have much time to process this stuff so, look, just a few seconds later all those bits you fed in come straight out again in all these different outlets, almost exactly the same as they went in!  Except now they have an air of authority, it’s what we call ‘independent credibility’. 

GW     In-dee-pendent wot?  You pulling my plonker, girl? 

AS (blushes)   Oh ... they told me that’s what you like, Gregg and ... well, we’re very grateful for the publicity ...

GW     Yeah awright girl, afterwards, yeah? ...  so, ‘aa many of these press processes do you do in a yee-er? 

AS     Well, we do lots all the time, but we always rush through a specially big batch just before Christmas.   Also, sometimes at 8pm on a Bank Holiday Friday evening, that’s another time when we often do big batches.   That’s when pre-digestion really helps the process along. 

GW     And what about the stuffing?  And what happens to the other 1,998 pages, eh?  That’s a load of indigestible ingredients! 

AS     So, we find that if it’s fed through immediately after, it seems to slip down nicely: as far as the average customer’s concerned, it’s the juicy bits on top that they like.  And everyone’s going to get a proper bit of stuffing ... but your viewers don’t really want to see what they’re eating, do they? 

GW    So nah, I’m wiv the public relations manager.  Hi Boris, I’m Gregg.  ‘Aa d’you get punters to swallow this lot then, eh? 

BJ    Well Gregg, lovely to meet you, just been on the ‘phone with our good friends in Brussels, together we’ve put together a ginormous package that everyone will love, in time for Christmas too!  Got to dash now; you’ve got to, er, finish up with Allegra - and I’ve got some Christmas stuffing to do, too ...

 

Produced for the BBC by ND / C@W productions 2020

Optimism from the bottom of the sherry glass

I should really save this for next week, but I can't resist being a little Happy on a Christmas Eve.

In the space of December we havd or will have had;

1) Pfizer vaccine approval

2) Moderna vaccine approval

3) AstaZeneca on the cusp (28th Dec allegedly, but we will see I think there maybe a delay)

4) A Free Trade Deal with the EU/UK

What a month, after surely the worst year in living memory (was any particular year in the 1970's really worse? certainly not the 1960's or since then) it is a big bang to end on. 

Yes, the vaccine will take 4-5 months to roll out and against an ever-evolving virus this will be a race that will have twists and turns yet. But the worst is here now and improvements will permanent rather than the tides we have seen this year. 

The brexit deal is even better. The benefits of Brexit, such as no more payments to French fisherman and Greek mafia masquerading as farmers, we have banked and also the decline in immigration to more sustainable levels. With trade deals to be done we are away from the worst of Brussels with only limited downside in the long-term. Better yet, our politicians are newly accountable, much that they will come to regret that in time!

Predicting the FTSE from here for next year will be a challenge, but that is for next week. 

Merry Xmas one and all!

"Affordable" as a theological concept: the Energy White Paper

As part of the usual service to t'readership I tend to offer a pre-digestion of big government reports like the Energy White Paper, published last week as part of a raft of important documents**.  This one, however, defies easy summary, except to say that the clue is in the name: Powering our Net Zero Future.  A big turn-off for some, no doubt: but that's where we're headed anyway, and I find it interesting to see how they go about discussing some of the challenges.

Actually, of course, they don't anywhere quite say this is going to be bloody difficult, if not actually impossible.  But for those able to read between the lines, there are hints enough in the veritable smogasbord (cliché ! - Ed) of interesting issues set out.  There's some intelligent work going on across a very broad front, most of which seems (on this evidence) to be fairly clear-sighted as to the difficulties involved.  

So dive in if you are interested; but I want to pick up on one overarching aspect.  The government claims to be most concerned that the costs of Net Zero to be borne by Red Wall voters the ordinary energy consumer are "affordable", a word that appears 19 times.  Sounds like an appropriate concern, right?  Well we may be glad they have it in mind, but I'm sorry to say, it's almost meaningless.

1. Electricity and gas (particularly the former; and also petrol / diesel etc) have such enormous utility value to consumers, we can - and are ultimately willing to - "afford" almost anything.  One of the clearest demonstrations is that literally no consumers - not households, not even industry - were militating against the old monopoly regimes for gas and electricity on the grounds of the prices they charged being too high.  Those monopolies were ended on wholly ideological grounds - albeit that the ideologues confidently and correctly predicted huge consequential price reductions.  Another is the amount of Duty heaped upon motor fuels.  Governments know they can stick almost anything on the price of such mass-consumed essentials, and we'll pay.  (Relatively easy to collect, too.)
   
2. Greens (and outriders such as the CCC) advance a quite different argument: "we can't afford not to" - meaning, the cost of not lowering our CO2 emissions would exceed the bill for doing so.  Some of them seem to mean this literally, i.e. to be understood in cash terms.  Others of them know that can't possibly be proved (even if it has the structure of a logical case) and mean it in some metaphysical sense, as if cost-incurring UK actions in 2021 will certainly cause the rest of the world to act so as to ... (etc).  Or perhaps in a weaker sense: if the UK doesn't take the lead in incurring such costs in 2021, it will let the rest of the world off the hook, and then ... (etc).  Who knows - it's theological stuff.
3. Lots of people of all stripes really like to believe another line of reasoning: it's "affordable" because it's an investment in another industrial revolution that will generate a surplus of wealth.  Again, this has the structure of a logical thesis.  But it's an absolute act of faith in the "WW2 US Economy" model.
4. Keynsianism, the weaker version of #3: we can "afford" to have men dig holes and fill them up again ... (as suggested here, in the context of energy, many times since at least 2014 and probably before)
   

Anyhow, the government has *affordability* on its agenda: and in practical terms we may hope this means they will - as the White Paper avers - ensure that contracts are awarded as competitvely as possible, a continuity / extension of the extremely successful CfD auctions of recent years; and hold Ofgem to their mission of beating up on the natural monopolies and suppliers.  Sadly, one can easily find some cases where the WP indicates they'll just be doling out largesse to chosen "(pick-the-)winners" - rarely a good idea.  Then again, these are mostly R&D-type efforts, one of the few areas where government intervention can sometimes genuinely pay dividends (for someone).

The really egregious stuff comes in the vexed area of nuclear power, which must demonstrate "clear value for money" (= "affordable", obviously), and that the industry can prove it is able to "reduce costs & deliver on time and budget".  Given all of recent history in the matter, will EDF be put off by these strictures?  Don't make me laugh - we already know the evidence-free, jesuitical arguments they will deploy on this one, when the time comes. 

ND

 ____________

** one of them details their modelling methodology which, they claim, generates 700,000 separate scenarios for 2050.  Call me lazy but I ain't reviewing that one ...

Tiers for Fears

 The Government is scared, why now and not a week ago I don't really get. The only way to make sense of it is that the scientific advice the Government has been getting is of poor quality. The way the Government has destroyed itself to follow advice, does not look like politics leading to me. Far from it, the Government is being led by the nose by the scientific advice and is being ruined by it. 

Meanwhile, with a wrecked Christmas anyway it is right to ask why this was not planned for. It would have been a much better call to stop travel and close shops a week or two ago in the face of rising cases. 

Moreover, the suddenness of the move has spooked other Countries, now isolating themselves from the UK. At least we won't notice a no-deal Brexit now!

What a mess and what a disastrous set of guidance from SAGE in my view. Now they are advising total lockdown in the South East for a couple of months, London was in Tier 2 last week. When this mess is over, and it will be with the good news that 500,000 people already have been vaccinated, the whole approach needs to be looked at. 

As much as Keir Starmer witters on about what he would have done several weeks ago with the benefit of today's knowledge, I think any Government would have been side-swiped by the weakness of the officialdom in the Government Scientific advisory space. A good way to tell this is that a big song and dance was made about getting rid of Dominic Cummings and pals, but we are in more of a mess now than ever on the communication side with the new people just as flummoxed as the past ones!

Weekend Reading: the Sublime and the Hilarious

Here are two excellent reads for the weekend.

The first is a stonker: an essay entitled How Race Politics Liberated the Elites - if society is taken to be inherently oppressive, the notion of a common good disappears.    

Some extracts: 

... The decision-making class has discovered that it enjoys the mandate of heaven, and with this comes certain permissions; certain exemptions from democratic scruple. The permission structure is built around grievance politics. Very simply: if the nation is fundamentally racist, sexist and homophobic, I owe it nothing. More than that, conscience demands that I repudiate it.

... for the white bourgeoisie ... America’s illegitimacy transcends any particular historical facts about slavery and segregation. Indeed it transcends America, as one can surmise by the ease with which American grievance politics has been exported throughout the Western world. In this we sometimes see the use of American historical references that have been weirdly transposed, as when a house once lived in by Rosa Parks was relocated from Detroit to Berlin...  Under the empire of Christendom, the market for material relics from the Passion of Christ was similarly global; they left the holy land and ended up in various seats of earthly power.  Most recently, the transatlantic festival of George Floyd attests to the fact that it isn’t simply America that stands accused...

There appears to be a circle of mutual support between political correctness, technocratic administration, and the bloated educational machinery. Because smartness (as indicated by educational credentials) confers title to rule in a technocratic regime, the ruling class adopts a distinctly cognitivist view: virtue does not consist of anything you do or don’t do, it consists of having the correct opinions. This is attractive, as one may then exempt oneself from the high-minded policies one inflicts upon everyone else. ...You can de-legitimise the police out of a professed concern for black people, and the explosion of murder will be confined to black parts of the city you never see, and journalists are not interested in. In this way, you can be magnanimous while avoiding the moral pollution and that comes from noticing reality...

The second is less demanding, and you may have seen promoted elsewhere; but I'm puffing it, too.  It's a Beeb investigation into Indian propaganda methods against Pakistan, replete with an astonishing array of nicely crafted fake NGOs, newspaper websites and other ingenious subterfuge.  Well, what else did we imagine?  OK, but it's still pretty funny illuminating.

Settle down by your fireside ...

ND 

Timing is everything

How ironic, after all these years we finally get a legal approval for the 3rd runway at Heathrow. Not for not to rehearse in depth the oddness of our planning system that allows NIMBY's to hold up major national infrastructure.

Instead to marvel at what must now be the ruins of the economic case put forward by the BAA and the airlines about how necessary this is for capacity. As I have said before, we won't be worrying about capacity as the airlines are closing rapidly and the price of slots at Heathrow, I understand, is collapsing. Heathrow currently is not even the busiest airport in Europe at the moment, having fallen behind Charles de Gaulle and Schipol. 

So of course, let's go an build a 3rd runway now. Maybe by the time it is actually done air travel will have recovered, I have a hunch though that climate change puritanism is also going to have a bigger and bigger impact in future years, now that Finance Directors have discovered how cheap zoom is. 

Net zero carbon in the North Sea

Older readers who can remember the 1970's (I just about can't, so making the most of this to annoy Mr. Drew) would be forgivne for laughing until their sides split at the idea of the region becoming a net-zero carbon emmissions zone. The whole sea was swathed in a fleet of oil and gas rigs sucking up liquid cash for around 20 good years for the UK. 

Now though the Government has decided to help the area become a net zero area, with huge further investments in offshore wind. This comes of course with a reduction in oil extraction. It has long been the case that the oil Major's have been selling down their assets - aware that many have become liabilities with a cash payment upfront rather than long term  assets. The decommissioning costs a huge for offshore infrastructure. 

The Government is being bold, but given there are only 10 points in its white paper it is also being very thin. Additionally, the National Infrastructure whie paper is almost more important than the overall energy white paper - without the capacity in the Grid to cope with the vagueries of wind and solar power, there can't really be a big charge toward net zero except with Nuclear power, which is only foreseen as a supporting element from here on. 

Shame the fields in the North Sea could not last a bit longer, the Government could really have done with the cash now too. 

2021 and Beyond

Enough Covid already!  - let's get back to the day job.  

It's very hard to read the Brexit negotiations right now, being on the ordinary punters' side of the dense and acrid battlefield smokescreens emitted by the spin operations of both sides.  Several of the 'liberal' meejah seem to have concluded over the weekend that of course a deal is about to be done.  For weeks, the Telegraph has been heaving with industry lobbyists stressing that No Deal is suicidal, with lurid images of anarchy at the ports, famine across the nation, and the Royal Navy sinking French trawlers. Feeding into this, the EC smokescreen includes a revealing "compromise proposal":  we'll give you 6 months' relief on your anarchy & famine, in return for perpetual lockstep on regulations and state aid.  (The classic EC tactic - always offer a strictly time-limited concession, after which it'll be 100% what they want - recall the "emergency handbrake" they offered Cameron.  Thanks, but no banana.)  The Boris smokescreen, by contrast, is along the lines of Belloc: 

The stocks are sold; the Press is squared: The Middle Class is quite prepared ...

(Oh, and nobody seems much to care, or even notice, that the Irish question has been quietly *solved*.) 

So – what do we envisage as our fate in post-Brexit 2021?  You don’t need an unusual degree of imagination to conjure up dire and all-too-plausible scenarios: but it seems to me there are some big overarching positives out there. 

• As noted before, the UK is genuinely very flexible in the teeth of big change (but no, let’s not rehearse the previous post), particularly vs the EC 
• HMG is willing to prime the pump quite dramatically 
• Adding those two together: any prospect of a period of (relative) stability is likely to encourage a burst of pent-up investment 
  
• Though I realise the EC’s speciality is always delaying and never letting go, when the Brexit thing is behind us we have a government with a very workable majority, and a Civil Service busting (as they were in January) to get stuck into a sustained period of coherent policy-making and delivery

It'll be whatever Boris wants, really, and if it’s a massive Keynsian splurge on the Red Wall, as seems to be the plan**, that’ll suit the bill nicely from Whitehall’s POV.  People who say he doesn't know what he wants are only partly correct: his Mayoral stint shows that in default of anything more inspired, he's happy enough to go for build build build.  

A bit early for the annual Detailed Predictions compo: but - what do we all expect next year?

 ND

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**See today's Energy White Paper, for example, of which more anon

Covid & British Regulators: Makes You Proud ...

Seriously: this is one of our great competitive strengths.

 

2020 has not been a year of pride for this Brit.  Although it started well with the Greenwich Speech, on the scale of what matters I can't think of anything from Boris Johnson's government that has subsequently been greatly to his credit**, and an awful lot that is utterly disgraceful.  (Card-carrying Tory writing here.)

This is, until the lightning-fast regulatory approval and delivery of Covid vaccine, outstripping the rest of the Western world by, what - weeks?  months?  And how much slower still would they have been if we hadn't set the pace?

This is pragmatic regulation at its very best; and we may hope that it, and we as a nation, will be rewarded.  I have frequently lauded Ofgem, the regulator in my own specialist sphere, for its speed, flexibility, practice of consulting properly, willingness to experiment - and to admit shortcomings, and to reiterate swiftly, intelligently and without stupid pride of authorship.  

In absolute terms, when you are faced with what seems like a slow response from Ofgem, it's certainly possible to be frustrated.  That is, until you talk to anyone working in energy in the EU, where the regulators are slothful, inflexible, uncommunicative, stolid, obtuse and unresponsive.  I've lost count of the number of times I've heard continentals say, in open sessions, "they do this already in the UK", or "the British are so much better at this". 

It's pretty obvious that in the brave new Covid / "Zero Carbon" world, national flexibility is at a massive premium.  The vaccine approval, and a pretty impressive roll-out process, are deeply hopeful signs we are going to make new-found Brexit freedoms tell to our advantage - and in parallel, are going to make the obtuse, Civil-Code-bound federasts squirm.

That's my crumb of comfort at the end of a bleak 2020, and I'm sticking to it.  (For now.)

ND

_____________ 

** The defence spending & foreign aid announcements? - Ed 

Corporate Software Madness, Part 94

A periodic discussion point around C@W is the hash that apparently capable companies (and governments...) make of software procurement and installation.  The amounts of $$$ that unscrupulous and rapacious consultancies - "system integrators" - make from these suckers is quite astonishing; and  frequently with crap end-results to boot.  They advise their clients to spend far too much; they pocket the lion's share (often leaving the software vendor grovelling in the dirt); and their implementation skills & project management are deficient.  Yet still it goes on - year after year.

So I snorted loudy, but was not unduly amazed, upon reading this announcement - possibly the biggest triumph of optimism over experience I've ever seen:

E.ON enlists software company SAP to digitalise its power grid and customer service in a 2-year project, the heads of the two companies, Johannes Teyssen (E.ON) and Christian Klein (SAP) said in an interview. In total, E.ON is investing several hundred million euros in the digitalisation of its network and sales division and a “high double-digit million euro amount” in the cooperation with SAP, Teyssen said...

A story.  Many years ago I worked for an energy company that knew what it was doing.  When gas trading started in the UK we knew, from our US experience, exactly what was needed for deal-capture and processing which, in the early days of trading (with modest deal-flow) was not a massive software requirement.  We turned loose two of our own employees who were versed in MS Access, and they designed and delivered a wholly workable system in 6 weeks flat.  Cost?  Bugger-all, seeing that Access was conveniently on everyone's PC already, licensed as part of the Office suite.  Just two guys' time, and a round of training for front, middle and back office staff.

Shortly thereafter I was invited to expensive lunch by a competitor.  As always, the reason only came up at coffee.  We are outgrowing our gas trading spreadsheets, he said, and we know we need some proper software.  Our 'Big 4' consultantcy has advised us to budget £6m - does that sound about right?

I let him carry on in his state of blissful stupidity.  Reprehensible, I know.  Well, it was their money - and a nice lunch.  Their project took nearly a year.  You may safely bet the consultancy spent the full budget for them.

Now, about E.ON's high double-digit million euro amount.  "... in cooperation ..." ?!  €99m buys one f*** of a lot of "cooperation" in my book.  All so wearily familiar.  Still, I suppose they'll claim it as a necessary outlay to the German network regulator.  Add it to the Energiewende bill - it's small beer in that context. 

*   *   *   *   *

Footnote:   Further to my recent note on Centrica trying to flog off its LNG portfolio:  "Centrica resumes talks on potential sale of North Sea oil and gas venture Spirit Energy (Bloomberg).  The company is in discussions with 'a number of parties' regarding a sale of its controlling stake in Spirit Energy.  The stake could be worth $1.8-1.9bn."  Maybe that LNG sale isn't going so well.

ND

Deal or No Deal

Here we are again, another round of latre night, over the weekend, Pret-eating, high stress negotiations. You would have thought we had become quite skilled at these given they have been a constant stream for nearly 4 years now. 

But from what I can see, no, no progress has been made. The whole point of negotiaitons is to, err, negotiate. if you just turn up with a list of red lines which can't be crossed, then not much will ever be achieved. 

The original concept is that you have some giveaways, some core red lines and somethings you will only give up in order to close a deal and also if the other side gives something back. That way you get a good deal. 

With the EU, they seem to have very firm lines, this is ahuge drawback of having to agree them with 27 in the first place, it makes them a very inflexible negotiator which is a big risk to ever dealing with the EU. I think the EU makes them seem it is powerful, but in fact it just shows the whole thing for the ponderous animal that it is. 

For the UK side, a no deal is disastrous and represents and outcome only the most crazed anti-EU people ever wanted. Even Farage and his pals all thought we would get a deal of some sort. If it comes to leaving the EU with no deal it is a huge failure of UK statecraft. Why is there no back up plan for a Norway or Swiss light, or even an Australian type deal? The UK has staked its economic future on an all-or-nothing free trade deal with the EU. Frankly, it has been a terrible strategy for a while, whislt it played well in a 2019 election, it has been a waste of another year to pursue this single strategy. 

Of course, if it works then many will say what a great plan and team we have, however, to be less than 50/50 the day before the deadline is not good at all. 

Germany: another burst of suicidal energy policy

As the whole world knows (but Greens prefer to ignore) Germany's Energiewende policy has been monstrously expensive but of very poor efficacy as regards its ostensible aim (CO2 reduction) - as few bangs for the buck as it's possible to imagine.  By any ranking, the top two countries in Europe on CO2** are the UK and Denmark.  Most commentators have said: the Germans will think twice before their next round of energy policy-making.

But no.  They've just conducted an auction for subsidies to decommission, prematurely, 5 GW of coal-burning power stations in 2021 - and in a second round, a further 10 GW to close in 2022.  They are claiming it as a great success, naturlich - but it's actually a madhouse: the "winning" first-round bids have been from relatively modern & efficient black coal plants (the newest being of 2015 vintage), leaving open the stinking abominations that are their lignite plants.

Additionally, Germany has no Capacity Market, meaning no explicit price signals for the looming, everybody-knows-this German electricity capacity crunch.

In the round, the "design" of their system is utter nonsense.  I have long said the Germans don't understand markets; and they ain't doing anything to contradict that.  

ND

_______

** I well realise some of you say this is a competition you'd rather not enter

Starmer: A Prediction

And so it rumbles on.  Everyone in Starmer vs Corbyn has doubled down, and there's no pretence that it's anything other than high-stakes posturing for positioning.  (One of Corbyn's outriders has kindly made the point explicit now.) 

I don't detect anyone on the Left in Labour (with the possible exception of Paul Mason who, somewhat bizarrely, believes Starmer is his creation) who hasn't now essentially given up on their Leader.  For some, they'd barely ever given him a scintilla of benefit of the doubt; either itching for a pretext to go to war, or fully expecting something would lead to it anyway.  There were plenty more trying hard to believe Starmer's "continuity-corbyn" 10-point plan was genuine; but they must always have suspected and feared it was not. 

All these People's Fronters and Popular Fronters hate each other so cordially, they'll be reaching for whatever weapons come to hand.  Starmer's crew are obviously tooled up with Party apparatus, which can appear to be overwhelming firepower.  But this is asymmetric warfare: B-52s vs the Viet Cong, who can disappear down tunnels and snipe lethally when targets of opportunity present themselves.

Here's the prediction.  Thus far, the Corbynite ranks have shown a fair amount of discipline (e.g. during the ill-fated 'negotiated corbo-climbdown' phase).  Some groupuscule on the Left will eventually decide to go nuclear.  What have they got?  Starmer's DPP / CPS past has been trawled over already, and maybe there's more to come; but I'd say there's something else.

Starmer is about to dragoon his MPs to vote for the Brexit deal, a prospect which many of them just hate.  He was Shadow Brexit Secretary.  He consorted with Barnier.  There will be something from those liaisons that will be deeply to his discredit.

It'll come out.

ND

UPDATE: this, from Paul Mason lui-même.  His creation is giving him concern.  

HERE's MORE:  https://twitter.com/siennamarla/status/1336664555406192644 and https://twitter.com/RaynerSkyNews/status/1336782648677707778