The Hidden Damage of Brexit

On the 29. March, the UK is suppose to exit from the EU. That day is not very far away, and yet it is still not clear how exactly this exit is going to happen. Possibilities range from a clean, no deal break, to no Brexit at all, and everything in between. As I argued in my last piece, I expect there to be a very soft Brexit. Either the UK or the EU is going to give in to a compromise at the last minute. But there is a possibility that either side is so afraid to make concessions that we are going to get a clean break.

A lot of people seem to be very frightened by that possibility. We are being bombarded with horror scenarios in case the UK will “crash out” of the Union. The most pessimistic ones are even predicting an outright breakdown of the economy, with shortages in important products like food and medicine. But how much is there really to these negative predictions? Are we dealing with genuine concerns, or is this a deliberate “project fear”?

Of course, governments can cause a lot of damage to the economy, no question. In fact, most of what governments do is damaging. But if economic history has taught us anything, it is that market are robust systems. We are always getting the combined wisdom and luck of all participants. It takes a hell of a lot of interventions to visibly disrupt markets.

A majority of the damage caused by governments is not directly visible. Yes, regulations and taxes are damaging the economy, but most of the damage comes in the form of misallocating resources.

This misallocation has two effects. On the one hand it causes an artificial boom in certain industries. If, for example, we are going to get more tariffs then this will cause a boom in people dealing with the bureaucracy of these tariffs. This is the most visible side to the intervention. Usually, most people do not perceive this to be a problem. After all, what they see is that jobs are being created. What could be wrong with that?

What is wrong with that is that the resources being used to create these jobs are not available for the real needs they where suppose to satisfy. This is the damage side of the regulation. Unfortunately, this damage side is not very visible at all. We do not easily see the opportunity costs that are lost from a government intervention. The great 19. century economist Frédéric Bastiat already described this phenomenon in his famous article “That which is seen, and that which is not seen”.

Libertarians know this phenomenon all too well. The fact that the damage is not easily visible is the main reason why it is so difficult to argue against government interventions. Theoretical arguments like this are not very persuasive. At the very least, they are less persuasive than to argue that visible jobs are being created. Arguing against job creation appears to be cruel. In addition to that, the interventionist argument is also being supported by a number of economists at Universities. These academics think they are very smart by showing the visible side in statistics to “proof” that government interventions work. In reality they are clueless.

Strangely enough, it is a lot of the usual interventionists who are now hysterically pointing out the destructiveness of government interventions. Be that as it may, there can be no doubt that Brexit has and will cause economic damage. Tariffs and access barriers are a big disruption to the free flow of markets. If Brexit is going to be a long term economic success, the UK government will have to use it to abolish more barriers and regulations than Brexit creates. Given how protectionist the EU is, this, in principle, should be easily doable. But we are talking about governments here. Nothing is easily done with governments.

In the short term however, there is no way around Brexit causing some economic disruption. In fact, we have already seen quite huge damages since the 2016 vote. The value of the Pound fell by over 15%! That is a hell of a move for a major currency. It means every asset valued in Pounds has lost at least 15% of its value, an enormous damage for the UK.

In addition to that, since the referendum, all international businesses with activities in the EU had to reallocate resources to plan for the exit. And since May’s government was unable to lay out a clear plan for its Brexit strategy from the beginning, or really at all, businesses had to plan with an additional amount of uncertainty. Nothing is more destructive than uncertainty for a business. Consequently, this too has added a lot of unnecessary damage.

How much of that damage was visible though? Sure for people who buy a lot overseas or run an international business, it has been very visible. This however, is a minority of people. The average person in the street probably has not noticed much of it. That does not mean they were not effected, it just means they did not notice.

Here is where the no deal horror scenarios get it completely wrong. They are not wrong that Brexit has and will cause damage. At least in the short term, it will! But where there are wrong is that this damage will be very visible to most people. In fact, we have probably already seen most of the damage. Sure, in the last 2 ½ years, businesses had to put resources into planning the exit. This damage, however, is probably mostly done by now. Going forward, we are unlikely to see anything close to the disruption we saw in 2016.

I am always amazed how good markets are to solve problems. Like many libertarians, I have expected the economy of most western countries to collapse under the burden of welfare states and central banking by now. It has not happened. I still think it is going to eventually, but I have clearly totally underestimated the ability of markets so solve problems. Somehow, entrepreneurs always seem to find new ways to optimize wealth creations and get around regulations.

The fact, for example, that we still have car manufacturers, able to produce cars profitably, is nothing short of a miracle. This industry has been bombarded with a constant tsunami of new regulations, and yet they have not drowned in it.

That is not to say that governments are incapable of breaking the economy. Markets are not indestructible. We have seen many governments succeeding in causing an almost total collapse. The most resent example is Venezuela. Chávez declared an outright war on the market. Nevertheless, it took the openly socialist government in Caracas a number of years before the economy finally completely broke.

A lot of damage has to accumulate for it to become clearly visible. And by the time that happens, the connection between interventionism and the decline in wealth is not that obvious anymore. Governments often have no problems blaming the damage on the market rather than their own doings.

That is why many libertarians almost long for a collapse of the system. Not because they are cruel and want to see people suffer. But only if the damage becomes visible enough, we will be able to win the argument against interventionism. At that point we could finally move to a better system.

Realistically, however, even if we get to that point, we will only see the state being moved back just enough to make the damage less visible. Once the damage is reduced enough, interventionism continues to triumphs again.

The same will be true for Brexit. Don’t expect there to be too much visual disruptions of a no deal. I know, the remain crowd longs for big Lorry queue and empty supermarket shelves. Not because they are cruel, but because they want to be proven right. But even though, at least in the short term, they are right, they are not going to be visibly proven right.

For that to happen, governments would need to decide that they want disruption. They would need to actively decide to control every Lorry, and take their time doing it. But that is unlikely to happen, given that this would cause enormous damage to both sides. The political pressure to not do that is significant, and most likely bigger than the gain from visible disruptions.

But even if it happened, that would just cause lorry queues. There is almost no chance of product shortages in the UK. While there might be a very small possibility that the EU will decide to actively disrupt the flow of goods, there is not much incentive on the UK side to do that when it comes to imports. The UK government has a strong interest to make Brexit look like a success. So they are going to let the goods in, unchecked if necessary. Many Tories have already said that they would take unilateral measures to ease import disruptions.

The only imports that No.10 seems hell bound to disrupt is immigration. Theresa May has declared that she will do everything to stop foreigners from coming in large numbers. And unfortunately, she will probably succeed. Meaning, that particular disruption is mostly still ahead of us. But again, it won’t be that visible for most people. Brexit is only as good as the government that does it. And the UK government is pretty terrible at the moment.

Explaining The Democratic Brexit Chaos

The last 2 ½ years, since the UK decided to leave the EU, have been quite a political journey. Not a good one, but an interesting one. Much can be learned about politics observing this spectacle. As a libertarian, I know that politics is useless when it comes to solving problems. I also understand that it is very difficult, if not impossible, to reduce the size of the state.

States are like gigantic machines that keep on moving into one direction, no matter what lies in their path. Most of the time, the only thing that can keep them from growing is when they reach the point where their sizes suffocates the ability of society to function. Not that there is an inherent moral limit to stop growing at that point. But if society cannot function, it also cannot produce enough resources to fuel the machine. And so, like any machine running out of fuel, it has no choice but to slow down.

From a libertarian point of view, Brexit is an opportunity to shrink the size of one state, the EU, before it starts to suffocate society. But even shrinking the size of a state like the EU, which has no army, no police and no taxing power, turns out to be very very difficult indeed. Even just leaving seems difficult.

One reason for that is that not everyone who wants to leave the EU is motivated by liberalism. It has long been clear that there are two very different groups of Brexiteers. One group wants to get rid of the control of Brussels and replace it with nothing. They want open borders for goods and people. The other wants to gain back control from Brussels and give that control to Westminster. And we need to be honest about this, the latter group is far bigger than the former.

What we have seen in the last two years is a demonstration that democracy is not in itself freedom. The process of politics remains to be a civil war between different groups of interest. The only accomplishment of democracy, and why it might be worth having, is that this war stays largely cold rather than hot. The loosing party is encouraged to accept their defeat and continue fighting peacefully in the next election.

Many people do not perceive the democratic process to be a war. I bet that has changed since the referendum. This has caught many by surprise. As far as I can tell, there are two reason why the condition of a cold war has become more apparent. The most obvious one is that the change proposed is larger than usual. It is so large that the loosing site will not be able to simply reverse the decision in the next election. But the prospect of another battle in the imminent future is a major motivation to convince the losers to keep the war cold and civilized.

The other reason which makes this war messy is that it is complicated. The two war parties, remain and leave, are roughly the same size. In addition to that, the two camps are split on major issues themselves. As far as I can tell, there are at least five different interest groups in this battle.

Firstly there is the camp of liberal Brexiteers. Their main interest is to just get out of the EU. Their motivation is big picture politics. The EU needs to be stopped before it really starts to suffocate everyone. Since this is all about the long term future, this group is not too concerned with the short term disruptions the exit might cause. In the long run, leaving will be better for everyone. I am personally, very much in this group.

Secondly, there is the Brexit camp that likes protectionism. They want a strong state, as long as they see themselves in control of it. A lot of them have the strongest opposition to the most liberal aspect of the EU, like free movement. But they are mostly interested in specific issues, and not so much in the big picture. A lot of them are perfectly willing to make compromises with the EU, as long as their issue of interest is fixed.

Then there is the group of EU enthusiasts. Ironically, this third group is probably the biggest one. There are a few libertarians in this group, who mainly like the EU for its enforcement of free movement and opposition to nationalism. The waste majority of people, however, like the EU precisely because it is a giant state. They love the state.

They understand full well that we live in a world of global markets. Shutting oneself off from these markets will have bad consequences. But allowing these markets without global governments will weaken the state very much. Producers and taxpayers can move flexibly. They will play those little nation states against each other like a fiddle. Consequently, the ability to do politics will be weakened significantly. Forget about high taxes and welfare expenditure. Their argument for the EU is essentially mine against it.

Ironically Theresa May, and most of the Tory party, is in this third group. May in particular really loves a powerful government, the bigger the better. She clearly believes that less state control equals more chaos, and negotiates with the EU in that spirit.

The fourth group is a group of remainers around the labour leader Jeremy Corbyn. Just like the third group, this group loves the state. But unlike them, Corbyn does not understand the huge benefits of global markets. He things he can beat globalism by organizing the national economy from the top.

In other words, this group is really very much like group two. However, for political reasons, it pretends to be in group three. Corbyn very much wants to get out of the EU. But since he is in the opposition, he cannot say that openly. His interest, therefore, is to not disrupt the Brexit process to the degree that Brexit won’t happen. At the same time, he has an interest in making the government look as incompetent as possible, in order to provoke another general election.

Lastly, there is a very bizarre fifth group. It is small but significant. It is an interest group in Northern Ireland. They are hardcore UK nationalists, but ironically, that does not make them Brexiteers but strong supporters of remain. I am sure I will not have to explain the details of this, as my readers will know. Despite its size, this is really the most disruptive group. There truly is no logical way, how the UK can genuinely leave the EU without a border in northern Ireland. The only possible solution is an officially existing border which is practically not enforced, and therefore stay invisible.

So, to sum up, we have a battle in which the loser cannot hope for a second chance in the near future; we have five different major interest groups with very different agendas, neither of which has a majority; and on top of that we have an EU enthusiast in charge of Brexit and a Brexiteer in charge of opposing the process. What could possible go wrong?

Looking at the situation, the most reasanable outcome is a giant compromise. Every group will have to give a little and take a little. If we assume a fair compromise, we can expect the reasult to be 20% liked and 80% hated by each group. In reality, it won’t be a completely fair compromise. But by and large, theoretically, the most likely outcome of this is a compromise that almost no one likes. And it looks very much like that is exactly what we are going to get. So the political model described above seems to represent reality well.

That is not to say that Theresa May did a good job. There certainly could have been a better deal with a more competent negotiator. But then, the fact that we have such a bad negotiator also is an outcome of the political process. That means it is not entirely accidental either. In a democracy, a leader needs to be elected. And in this process, all the different interests that I described above come into play. So instead of expecting the leadership to be won by some idealistic Brexiteer, we should expect someone to win who resembles a ruthless pragmatic compromise that no one likes. Which is what Theresa May pretty much is.

Still, the analysis above is not entirely accurate. With the current deal on the table, the liberal Brexiteers don’t really get 20%, they get pretty much nothing. The deal essentially agrees on the worst protectionism of both worlds. Free movement, the best and most liberal thing about the EU, will be ended and all the other regulations will stay.

Why did the liberal voice turn out to be excluded from current proposals? One possibility is that they really got unlucky. That is possible, but not likely.

Another possibility is that the system is rigged against liberalism. The problem with achieving liberal politics is, that it fundamentally opposes all other interest groups together. Liberalism is idealistic and therefore not well suited for compromises. Every compromise feels like a total defeat. In this particular battle, the liberal Brexiteers have portrayed everything but an essentially no deal departure as a betrayal of Brexit. But in a battle where you can realistically hope for 20%, asking for all or nothing will most likely get you nothing. Realistically, we would need to get lucky to get no deal.

There is, however, another possibility. Maybe I am simply fooling myself to believe that the liberal Brexiteers are a significantly large group in all of this. Maybe there are really only four and not five groups, all of which are like protectionism in some form.

The political process within states can neither solve problems, nor will it likely lead to a serious reformation of the status quo. Unless the state has reach the point where it starts to suffocate society, and the status quo itself is in a crises, Leviathan usually continues to grow. The best outcome, libertarian Brexiteers like myself can hope for is that by some giant accident, the different groups hate each other so much that they don’t end up agreeing on anything, and we get no deal by default.

Hope springs eternal. It is not really that realistic, because the fact that a no deal needs to be prevented is the one thing that all of the other parties can agree on. That means the more likely outcome from such a chaos is that there won’t be much of an exit from the EU at all. The only question with such an outcome will be, whether it will keep the civil war cold. In this country, however, it probably will.

Brexit is often described as one of the biggest democratic events in the history of the UK. In an ideal democracy, we would get the rule of the average opinion. What else could the will of the people be than that?

The problem wth averages is that they can be completely detached from reality. The average woman in England has 1.8 children. I, however, have never met one single woman that actually has 1.8 children, how could she? The statistical average for every woman does not actually describe a single real world woman.

If democracy is supposed to represent the average opinion of the people, in other words, the will of the people, than it is possible that the policy resulting from this, while it describes the will of all people, does not describe the will of any single real human being part of that same people. I don’t think that a lot of democracy advocates understand this simple truth. They clearly assume that the will of the people needs to satisfy most people.

The latter, however, is only the case if society is largely in agreement on issues. The more opinions there are, the more likely democracy will deliver a result that no one likes. Alternatively, the system will simply end up paralyzed. And as I have described above, when it comes to Brexit, opinions differ hugely. So democracy probably really did win, and was not betrayed, when it comes to Brexit. It is just foolish expect democracy to produce good outcomes. In reality, democracy really is that messy. It is the wrong system.

The principle of the state is that one size always has to fit all. For this to work, at least most people need to roughly have the same size. The more sizes differ, the more likely it is that the average size, that is supposed to fit all, fits no one. That is why, state advocates always end up to be some kind of egalitarians. Only then, at least the illusion can be kept up that the whole thing actually works.

But in reality, people are not equal. They differ in many ways, and they certainly often do not agree with each other. The only peaceful and harmonious solution in that kind of reality is liberty. Instead of asking how can we find a size that fits all, we need to instead ask, how can we minimize the rules that need to be enforced on everyone. That would be the only universal size we need to find. Of course there need to be rules to make society function. But these rules should be at the absolute minimum possible. In other words, we should have a maximum of interpersonal liberty. That way, everyone can wear their own size.

It is, however, naive to expect liberty as an outcome from the political process within the state. By promising that the war will be cold and civilized, the state has legitimizes the process of everyone fighting against each other. And since it is very much a war, one cannot expect this process to stay harmonious and peaceful forever. Eventually, the conflicts of interest will become so large that people will definitely hate and eventually most likly even fight each other. For that not to happen, we should really hate the game and not the players. And to be clear, the game is not Brexit. Brexit is just a battle within the game. The actual game is the monopoly that is the state.

Why is Fascism is Considered More Evil Than Communism

We have all seen it happen and some of us may even be guilty of doing this ourselves. If two individuals are having a particularly nasty argument about politics it is almost inevitable that somebody is going to get called a fascist. Quite what that means exactly is hard to ascertain. Those on the political left call fascism’s authoritarian strong state tendencies. Yet, whatever your preferred political stance happens to be. We all seem to be able to agree that being a fascist is a bad thing.

Aside from a handful of deranged individuals the default ideological staring point of pretty much every person that opens their mouths to expresses a political opinion today is that they are definitely not a fascist. And this is for a good reason.

The brutal fascist regimes of Adolf Hitler and Benito Mussolini were responsible for piling up dead bodies on a scale unknown to humanity before that point. This is before we begin to count the tens of millions more who died on the battlefields of the second world war that was fought (among other things) to bring down fascism.  But there is a puzzling fact here. There were not one but two murderous ideologies from the twentieth century that have the blood of millions of people on their hands. The first being fascism, the second being communism.

This presents us with a puzzling state of affairs. Fascism is rightly regarded as taboo. As I mentioned above, calling yourself a fascist or even harboring empathy for fascism bars you from entering any meaningful civilized political discourse.  And yet the same rule does not apply for communism.

In fact there are a great many people today who openly express their sympathy for the ideals of communism. The rather shocking sentiments that are expressed in this article  in The Guardian are quite common place in socialist circles.  This is even more difficult to explain when we compare the body count of the two ideologies. Nazi Germany killed six million Jews during the Holocaust. This increases to around ten million if we include Soviet POW’s, Poles, Gypsies and Homosexuals.

On this metric communism is by far the worse ideology. During the terrible reign of Joseph Stalin the estimated death toll ranges from around 15 million all the way to 25 million. And that was at the behest of just one leader. If we include Chairman Mao: 45 million, Pol Pot: around 2 million, Kim Jong Un & Kim Il Sung: around 3 million the loss of life at the hands of communist regimes becomes truly staggering. And this is far from an exhaustive list of the communist leaders of the twentieth century. Moreover, while fascism has only been put into practice in two countries communism has been tried in over 20; all with grimly predictable results. Nor has communism been a fantastic economic success. Communist countries have traditionally lagged behind their capitalist and mixed economy counterparts to put it mildly.

So why is wearing a swastika generally understood to be grounds for making somebody a pariah while communism or an affiliation with communism is for the most part accepted?

There are some plausible theories for why this may be the case. The first is the idea that because the allies won the Second World War fascism is discredited whereas communism was the ideology of one of the victors. There is some logic in this. The fact that so many of our countrymen lost their lives fighting Hitler and Mussolini makes fascism not only a barbaric ideology but thoroughly unpatriotic. But this ignores the events that took place straight after Hitler unloaded the contents of his pistol into his cranium deep inside his Berlin bunker. The cold war began as soon as world war two ended. Where WWII lasted for six years the Cold War simmered for just under five decades. Add to this the fact that a nuclear armed USSR was just as much an existential threat to the western world as Hitler’s Wehrmacht was. I reckon that we have a fairly convincing case that fascism is no more unpatriotic than communism.

Another possible explanation for why communism is still deemed morally acceptable is that our count

ry is awash with genuine communists. Perhaps such a large number of people endorse what Mao, Stalin and Khrushchev did that it would be impossible to paint communism with the same stigma as fascism. There might be some more mileage in this. Indeed, last year when the centenary of the Russian Revolution rolled around people described Lenin and his fellow Soviets in fawning terms as ‘revolutionaries’.

But despite the obvious appeal communism still has for many I don’t find this explanation particularly convincing. To give credit where credit is due apart from the small die hard cadres of the  hard-left (useful idiots to use Stalin’s term for them) the savage realities of life under Soviet rule lost the USSR its appeal to western left wingers somewhere in the 1960s. After this the left adjusted itself just enough so that the charge of “Soviet lackey” wouldn’t stick. An endeavor in which they were largely successful. Even today very few left wing people profess to be dyed in the wool communists. As I write this article the Communist Party of Britain has just over 700 members… This is hardly enough comrades to sway national opinion.

I believe the real reason that the hammer and sickle does not convey as much dread as the death head should leave us feeling much less comfortable. But first we need to understand a little bit about both ideologies.

I agree with Johnathon Meades. Fascism is now a meaningless term. This is in part because it has been used as a catch-all political slur rather than an objective statement of fact. Surely the sight of black clad, masked thugs assaulting political opponents whilst somehow claiming to be ‘anti-fascists’ is proof enough that fascism is a rather loose term to say the least.

But even during its heyday fascism was a mess of contradictions. Let us focus solely on Nazi Germany for a moment. It was radically modernist whilst steeping itself if folk tales and ancient Germanic lore. It was an aggressive expansionist country while at the same time being isolationist in its outlook. Hitler spent a decade establishing a strong centralized state that ultimately proved chaotic and ineffective when confronted with the challenge of invading an almost pathetically unprepared USSR. These sorts of contradictions are even present in fascist Italy. Mussolini commissioned some of the most monumental modernist architecture in Europe by drawing heavily on ancient Roman themes. Anyway, you get the idea.

Admittedly this does not give us much to work with and I am by no means an expert on the subject. Sure enough any attempt to make some kind of sense out of the historical morass of fascism is bound to fall foul of some factoid hidden in the endless pages of literature that have been devoted to fascism in the decades following the second world war. And yet I believe one thing does go at least some way to helping us understand what made Nazi Germany and Fascist Italy tick- fear.

If we look closely at the history of the two fascist regimes I believe fear is a common factor. This is not to paint the twin fascist dictators as merely frightened children, far from it. Powerful and violent emotions are born out of fear; hatred, revulsion, anger, misanthropy etc. Mein Kampf is a book filled with a terrible fear. Fear of betrayal by the Weimar elite, fear of the international ‘Jewry’, fear that the fabled fatherland will be lost at the hands of foreign powers.

It has been said that fascism constitutes a ‘conservative revolution’ and I think this is at least party right. The iconography of Nazi Germany speaks to this negative emotion by restoring order, promoting safety and traditional hierarchy. The photograph of the Reichstag fire, propaganda posters showing the ideal German family huddled together, terrible anti-Semitic pictures of Jews depicted as monsters and films like The Triumph of the Will all played on the fears of ordinary Germans. This is echoed in Fascist Italy where the cult of Il Duce who will keep Italy safe and rally the nation behind him was extremely effective.

So to summarize my view is that at least to some extent fascism owes its success to the ability of the leader to play on the fears of their citizens.

We could perhaps say the same of communism. Communist dictators have never been strangers to using fear of an external enemy or the capitalist class to whip up violence. Fear of the vengeful bourgeoisie has played an important role in communist propaganda around the world.  Yet, I think the thing that really drives communism is different. The imperative element of communism is hope. Once again, this is not to make communism seem benign. Like fear, hope can be a potent all-consuming impulse that has an abundance of negative outcomes. People who are excessively hopeful can scorn those who try to stand in their way, distrust people who do not share their ambitions and openly ignore evidence that may prove their desires impossible. This subtle but crucial difference goes some way to differentiating the two monster ideologies of the twentieth century.

 

If we compare the propaganda of the Soviet Union to that of the Third Reich this difference is clear to see. The outpouring of art that followed the ascension of Vladimir Lenin to the upper echelons of the Russian Empire is awash with bountiful fields, smiling peasant girls, rose cheeked proletarians and well-fed iron jowled soldiers. The propaganda looks very different because the emotion that the USSR’s leaders played on was very different. You only have to compare the Nuremberg rally to the Soviet Parade of Athletics. Even as the capitalist countries enjoyed the economic prosperity brought by the post war boom the Soviets were almost certain that it would only be a matter of time before the standard of living in the USSR would outpace those of the USA, spoiler alert- they never did.

 

It is this hope that has helped communist regimes stagger on for so long after political fratricide and economic disaster. Commitment to the illusion that things were ‘getting better’ defined the public facade of the Soviet elite from the 1960s onward. In Bill Curtis’ brilliant documentary Hypernormalisation he describes a bizarre state of affairs where everybody in the eastern bloc knew that the old communist economies were failing and yet, nobody was allowed to state this out loud. They were living in a sort of alternate reality where the only permissible sentiment one could express was faith in the communist system.

I believe this hopeful aspect of communism explains what is arguable one of the strangest political phenomena of our age: the firm belief by many that “communism has never really been tried.” Or “it wasn’t real communism.”

How can we have a state of affairs where a political system has been tried and failed miserably in a wide variety of different nations across almost every single continent but people still cling to the belief that it might actually work? The answer has to be hope. Ultimately communism is draws sustenance from following formula:

If we can just get people to do X then Y will follow. If Y is a positive or necessary goal then any amount of coercion to make people do X is justified.

This is why I think so many people are willing to give communism a pass whilst fascism is deemed beyond the pale. When most historians discuss fascism they quite rightly talk frame it as a reaction to something. Like a diamond buried deep underground, fascism is formed by the crushing pressure of powerful social forces whereas communism is something different. The political system that emerged after the Russian Revolution was part reaction to the hardships sustained by The Great War but after the gunshots of civil war died down it became a utopian project to create a better future. You can take that idea with as much salt as you feel would be appropriate. Whether Lenin, Stalin or Mao really cared much about the fate of their countrymen can be debated. However, the utopian aspect of communism is certainly how the ideology was sold to the unlucky masses who now found themselves under collectivist rule.

The real reason then why communism is not as maligned as fascism is to put it bluntly that we have learned our lesson from fascism but not from communism. The basic belief that forcing individuals to do things because the outcome would be desirable by a certain number of people (the end justifies the means if you like) is still a very important feature of our current political arrangement. Waking up to this fact would be a hugely positive step. I am not the only person to have made this point. Jordan Peterson has made an appeal to members of the political left to define ‘when the left wing doctrine has gone too far’ but to no avail. Similarly Albert Camus famously quipped that the left is really more of a religion than a political ideology.

There have been a small number of socialists who have woken up to this fact George Orwell being chief among them. But for the 21st century socialist movement moderation seems to be tantamount to treason.  We see the logic of semi-theocratic hopefulness regardless of the costs being regurgitated by the postmodernist left. The thinly veiled contempt that Theodore Adorno had for the American working class for caring about bowling, fast cars and TV more than the class war could well be interpreted as Adorno’s anger that the people he was supposed to be fighting for did not share his hopeful Frankfurt School ambitions. Indeed, when the postmodernist left talks about society being nothing more than a power struggle all sorts of violent ends become justified in the hope that they will help society reach he promised land.

This should be a sobering thought for all of us. The logic of the ends justifying the means is not limited to the radical left. Given the fact that the basic principle of forcing people to do X because Y is desirable is widely put into practise in our political system I believe that we run the real risk of brining in an ideology that looks very similar to communism. That will bring equally devastating results. As long as only a tiny few are willing to stand up for the rights of individuals to do as they wish and rely on the beauty of socioeconomic networks as agents of progress rather than resorting to  the blunt force of legislation than I see no ideological barrier to retreating back into authoritarianism.

Climate Change – Solving The Problems

In part one I argued that the science is not as settled as it looks. The climate is too complex to make easy predictions, based on single factors like the greenhouse effect. I then continued to argue in part two, that even if the planet were to get warmer, it would not be clear to what degree this would be a problem. We would almost certainly see many positive effects from it.

But yes, we would see some problems from a changing climate. This brings us to the last IPCC assumption. It is here, where I think the public debate is the most wrong. On the first two assumptions, the official narrative is at least partially right. Sure, the science is not as clear as it is commonly assumed, but it is difficult to argue that a warming is not possible. So we are talking about probabilities. And sure, the general debate tries to avoid talking about positive effects of a warmer climate, but it would be difficult to argue that a changing climate poses no challenges.

Most change comes with problems. Old solutions stop working and need to be adjusted. This usually comes with some economic costs. And in particular, the climate has always been a major problem for humans. In part two, I already mentioned the statistic that the number of climate related deaths is down by 98%. Not too long ago, in many years, there where millions of people dying from negative climatic effects worldwide. This number is now down to the thousands, or tens of thousands.

Given the large number of casualties we have seen throughout history, one can hardly argue that the climate has not been a problem in the past. In fact, it has been one of the biggest problems humans have faced. There are even some extreme cases of historic cultures who practiced human sacrifices to appease the gods they thought in control of the weather. That gives us an idea of what a huge problem the climate has been at times.

That we are now facing significantly less danger from the atmosphere has everything to do with us having access to cheap, reliable energy, on a large scale. And fossil fuels have been the main source for that energy. They are an incredibly effective energy storage. Just thirty liters of fuel can move a car, weighing a ton, for several hundred miles. Fossil fuels have all the attributes a modern energy source needs to have. They are cheap, plentiful and reliable.

Despite all the propaganda we are hearing, as I write this, there are only two energy sources which meet these requirements: Fossil fuels and nuclear. And the problem with nuclear is that it is not a very mobile energy source. Maybe we will be able to develop other methods to produce cheap, reliable energy on a large scale in the future. In fact, that seems very likely. But right now, this is simply not possible. Anyone who says otherwise either does not know what he is talking about, or is outright lying.

The fact that we have figured out how to use this historic organic energy, has transformed our lives from being hard and short, to being long and quite comfortable. Without fossil fuels, it would have never been possible to lift people out of the poverty of nature. It is these fuels that give us the comfortable modern lives we enjoy today. Sure there have been problems. Industrial regions have experienced very unhealthy levels of pollution. But even with these problems, people usually prefer a life with pollution rather than going back to a life without the benefits of using this energy.

The remarkable thing has been that, thanks to technology, the more fossil fuels we have burned, the more our air quality has improved. We have successfully solved the pollution problem by filtering out the harmful substances. And in theory there is no limit to how much the air can be cleaned. In fact, there have already been experiments, in which the air coming out of the exhaust of a modern car, was cleaner than the surround one.

One of the reasons why so fewer people are now dying from the local weather is because historically, one of the biggest killers has been the failure of local food production. Before we had modern, fossil fuel powered, world wide transportation most people where essentially dependent on producing food locally. When this local food production failed, it usually resulted in many people starving.

Thanks to modern global transportation networks, which are almost exclusively powered by fossil fuels, we now have a very effective global food market. Not only that, we can now produce food in regions where it was previously uneconomical, because they were too remote from the consumer. Modern transportation, and refrigeration, has changed that.

But that is not all. Fossil fuels also serve as an effective fertilizer. This, too, has made infertile land available for farmers. For all these reasons, mass starvation has essentially disappeared from this planet, at least in any region that is politically not shielded from that global market.

And this is just food. Everyone of us uses lots of energy everyday, to make our lives much better in a huge amount of ways. Most of that energy still comes from fossil fuels. This gives us an indication of what is at stake. If we want to get out of fossil fuels, we would either have to go back to the short and hard lives our ancestors had before they gained access to all this energy, or we would need to find an equal alternative energy source.

The emphasis is on equal. People are quick to mention all kinds of alternative energy sources. These, however, usually fail to be real alternatives to fossil fuels. Again, a modern energy source needs to be cheap, plentiful and reliable. With the exception of nuclear, any other alternative energy production fails on at least one of these attributes. Many fail on more than one, or even on all three.

Wind energy is neither cheap, nor is it reliable. And amazingly, it is not even that plentiful. So we have a failure on all three accounts. That won’t get us out of fossil fuels. Solar fails as well. Yes, it is plentiful, but it is not cheap, at least not yet, and, most importantly, predictably unreliable. The sun simply does not shine at night. In order to make unreliable energy sources more reliable, we would need to have a good energy storage. While we do have some reliable storage technologies, all of these are very expensive and not scalable.

Given the enormous amount of energy that we are consuming, and its importance for our well being, we can now see that any kind of increase in the cost of producing energy, or a decrease in using it, would very quickly have serious negative consequences for our lives.

Let us take Germany as an example. I am from there, so I know a little bit about how Germany deals with energy. It is almost never good advice to follow the lead of German politics. Germany has always been on the forefront of dangerous political movements. It was Karl Marx who invented modern communism, and it was Germans who really took fascism to its extreme. Germany is one of the few countries that has been destroyed by both those ideologies. Millions of people were murdered. Giving this important “tradition”, it is no surprise that Germany is also one of the leaders of greenism. We just can’t help it, we have to destroy the country every few decades.

Germany is a special kind of stupid. It is popular in Germany to not only want to get out of fossil fuels, but to also get out of nuclear energy. And remember, these are the only two useful energy sources we have at the moment. The country has invested a lot in wind and solar energy, and it is forcing its residents to prioritize buying this electricity. That is why many environmentalists refer to Germany as a leading example for the future of energy usage. Countless times have I heart that Germany, on many days, can now generate the energy it needs from renewables.

This is complete nonsense. When Germany, a few years ago, decided to get out of nuclear energy the biggest economic research institute of the country, ifo, had a thorough look at the real numbers. Ifo, btw., is by no stretch of the imagination skeptical of the catastrophic climate change narrative. The report starts by stressing that global warming is real and a problem. But it is some refreshing realism of what is possible today in terms of energy policy.

Besides many other problems, renewable energies have given Germany one of the most expensive electricity prices in the EU. Germans now pay about 30 cents per kWh. The EU average is 20 cents. Before the country started to invest in wind and solar, its electricity prizes were below average. France’s average is 15 cents, and in the US it is about 10 cents. Both are leaders in using nuclear energy.

The 10 cents that Germany pays above the average EU country today costs the economy, which consumes about ½ trillion kWh per year, €50 billion a year. That is €50 billion in economic damage from trying to be more green, every year, just for Germany alone.

One might argue that this is a small price to pay for saving the climate. But is Germany saving the climate for this €50 billion? What does it get out for this huge amount of money? And yes, even for a big economy like Germany, this is indeed real money. Germany’s energy mix is about the average of a normal OECD country. 21% of its energy use is electricity. The other 79% are almost entirely fossil fuels.

When we are talking about wind and solar, we are just talking about electricity. So how much electricity can Germany produce reliably for that extra €50 billion? The answer is about 2.8% of its electricity. That means about 0.6% of the overall energy consumption of Germany comes from solar and wind. In other words, for the €50 billion every year, Germany’s contribution to saving us from the greenhouse effect is a rounding error. And this is already not far from the limit of how much electricity can be theoretically reliably produced by wind and solar in Germany.

Since the government in Berlin has decided to get out of nuclear, fossil fuel consumption has actually increased. In order to remain a first world country, Germany is building a lot of new coal power stations. This is just scratching the surface of the craziness. I will spare you more details, as I think this alone, very well, illustrates the point which I am trying to make: Not using fossil fuels is prohibitively expensive.

Sure, if it was not for the environmentalists, we could go full nuclear on electricity, and therefore at least save those 20% of fossil fuel energy going into electricity. This leaves us with the paradox that if the climate change deniers got their way, CO2 emissions would almost certainly go down to the maximum amount possible. Given the prices that France and the US are paying, I am all for nuclear, bring it on! But that is about as much as we can realistically reduce our fossil fuel consumption at the moment. Short of developing really new energy technologies, technologies that are just as cheap, plentiful and reliable as fossil fuels, we will not get out of them on any significant scale, period!

I have no doubt that we will eventually find alternatives. E=mc2, so there is plenty of energy around. It is therefore just a question of engineering to make that energy available in the right form. But we cannot just pretend that we already have energy sources that are simply not real.

Once we have developed equal alternatives, we will get out of fossil fuels almost automatically. No fancy political conferences needed. If an energy source is cheap, plentiful and reliable, it will be easy to persuade people to use it. For that reason it did not take much convincing to historically get into fossil fuels. There is at least one non climate reason why we would want to get out of oil, coal and natural gas: Oil and gas revenues cause conflicts, and economically sustain a number of horrible regimes.

Governments around the world have paid lip service to try to get out of fossil fuels for decades. They are almost all doing the exact opposite. Most have increased their consumptions massively. They know full well that if they were actually starting to reduce their CO2 emissions, they would very quickly be chased out of power with pitchforks.

The climate change debate is at no point more wrong than when it comes to the solutions. Humans have always battled with the climate. The way we have dealt with it, very successfully, is by dealing with the consequences. This strategy has a proven track record of working very well. It has made us conquer the whole planet, from the Sahara desert to Alaska. The track record is actually worse when it comes to adopting to cold temperatures rather than hot ones.

And the one thing that really made us almost entirely independent from the weather is the use of cheap, plentiful and reliable energy. A lot of people have this strange idea that the only thing preventing us from going off fossil fuels is the oil lobby. But it is not the oil lobby that is doing that. It is the we-dont-want-short-and-shitty-lives lobby that is behind it. In other words it is all of us. Pretending otherwise is either ignorance or outright hypocrisy.

We already spend most of our lives indoors. One of the major reasons for that is that we are already hiding from very imperfect climates in most places on this planet. Probably the biggest downside from being homeless is to have constant exposure to the climate. For indoors, we have developed technologies that can give us any climate we like, completely independent of what is going on outside. These technologies are readily available, and easily scalable.

People facing 50°C heat waves need an air-condition and cheap energy to power it. The last thing they need is politicians meeting on conferences, discussion how they can make energy more expensive to save the climate. I am not much into conspiracy theories, but if I was, I could make the argument that climate change is a conspiracy to keep the poor countries down.

The environmentalists want to make us believe that the best, no the only thing, we can do about climate change is to abandon a strategy with a very successful track record of thousands of years. They want us to use less, or at least much more expensive and unreliable energy, in order to not disturb nature. It is almost like a religious cult, which has replaced god with nature. Nature is this wonderful entity, a mother that has a great plan for all of us. So we must not interfere with that plan.

That is superstitious nonsense. Basing our policy decisions on this mysticism will throw us back into the dark ages. Earth is a ball of dirt, accidentally cruising around the sun at a distance that enables life. It does not care about us, nor does it have a wise master plan. Nature is at its core ruthless and brutal. It is therefore wise to try to control it as much as we can. And we have gone a long, successful, way of doing that. Sure, sometimes we make mistakes and overdo it. But the overall track record of that strategy is very convincing. It would therefore be foolish to abandon it. If we did, the costs would be astronomical. And other than the costs of climate change, which are highly speculative, these costs would be certain.

The future will not be without problems. Despite the fact that we now live civilized lives, in other words, despite the fact that we have already gone a long way to defeat nature, it looks like mother earth will continue to give us some problems in the future. However, on the world market, we can be sure that billions of people are thinking about solutions for these problems. And only one lone genius needs to come up with one to solve a problem. Thanks to globalization, we now have a system in which we can rely on the combined wisdom, and luck, of several billion people for solutions of any kind. Just like in the past, we cannot yet imagine what kind of amazing solutions they will come up with.

With governments, on the other hand, we get the combined wisdom of a small group of politicians. These are often people, whose skills were not sufficient enough to get a job with a similar salary in the real economy. Many know very little about anything, and their motives are often questionable. In many cases it is just power. This group certainly cannot predict the climate, let alone control it.

On the market, we have the incentive to actually solve problems. Entrepreneurs only get paid if they can deliver a solution. In politics, the incentives are often reversed. Politicians get paid looking for solutions, not for finding them. More often than not, their incentive is to only make it look like they are trying to solve the problem. However, if they ever were to succeed of delivering a solution, the problem would go away, and with it the justification for their existence. So it is better for them not to succeed. Given those two choices, to either trust politicians, or the combined wisdom of human kind, it should be a no brainer which one to pick.

The only danger the future holds will be that ideologically motivated governments will prevent us from pursuing free market solutions, and force us into highly destructive ones. Using less, or more expensive, energy is one of those crazy solutions. Dangerous political ideologies have taken over governments many times in the past. In fact, as a libertarian, I would make the argument that governments are designed to attract those ideologies. The consequences of letting them save the planet will be horrific. While fossil fuels have a track record of saving humans, the environmentalists want us to abandon that strategy. This cure however, will be worst than the disease. We, therefore, must not let them save us!