Free trade has taken far too long to come to Africa

But while it’s taken far too long it does seem to be getting closer:

Africa has built the world’s largest free trade area with 1.3 billion customers, heralded as a chance to begin a new area of prosperity.

The agreement, signed by 54 African states and creating a bloc encompassing economies worth $2.5 trillion, took almost 20 years to negotiate. It is hoped that the African Continental Free Trade Area will give its members the benefits of economies of scale and cheaper imports, which would mean more affordable products. The countries have lacked many of these typical advantages of free trade.

There is that view out there - a particularly silly one in our opinion - that free trade is just the manner by which those of us in the rich countries continue to pillage and colonialise those in the poor. Obviously, we don’t agree. But even if you do want to maintain trade barriers between rich and poor on some spurious grounds of infant industry protection this is still an advance, this free trade area.

The entire continent of Africa is, in economic terms, about the size of the UK. Togo around and about the economic size of Swansea. Swaziland of Wolverhampton. Nigeria or South Africa perhaps equal to London.

Whatever we do about trade beyond the borders of this sceptered isle we all know that we’d be immeasurably poorer if we had trade barriers between the conurbations within it. Even if nothing else just that economies of scale argument - no one British town is large enough to support an entire supply chain of all the necessaries for an advanced industrial society. It would be absurd for Bath, Bristol, Gloucester and Swindon all to have their own steel mills, fertiliser and tyre factories. And yet that’s the sort of economy that a non-internal free trade Africa does have.

It may have taken too long to arrive and implementation is bound to be patchy for a time. But it’s still a good thing - Africans will be richer for it which is, after all, rather the point of having an African economy in the first place.

Low point of the Dow

On July 8th, 1932, the Dow Jones Industrial Average hit its lowest level of the Great Depression, closing at 41.22. Share prices started to fall on September 4th of 1929, but the big drop was the stock market crash on “Black Tuesday,” October 29th 1929. It began in the US, but it spread elsewhere and lasted until the late 1930s in some places, the most severe economic downturn the industrialized world had ever known.

International trade dropped by 50 percent, and it cut personal incomes, tax receipts, prices and profits. Unemployment hit 25 percent in the US, and 33 percent in some other countries. It was the longest, deepest, and most widespread downturn of the century. Many people lost their entire savings and investments. Construction and heavy industry came to a standstill in some places, while farm communities saw crop prices fall by 60 percent. Many farms ceased to be viable and were abandoned or repossessed.

The Keynesian explanation is that widespread loss of confidence cut consumption and investment. With prices falling, it paid to hold money that could buy more later. It suggests that people avoided the markets for fear of losing more. Milton Friedman and Anna J. Schwartz took a more monetarist approach, arguing that the Great Depression was caused by the shrinking of the money supply. One third of banks went under, leading to a 35 percent monetary contraction that triggered the Great Depression. They said the Federal Reserve Bank should have lowered interest rates, increased the monetary base, and injected liquidity into the banking system. Instead, they did the opposite, turning what would have been a normal recession into the Great Depression.

One reason the Fed found it difficult to act was the presence of the gold standard. The Federal Reserve Act required 40 percent gold backing of Federal Reserve notes issued, and they had almost hit the allowable limit of credit they could back with gold. In April 1933 a Presidential Order outlawed the private ownership of gold bullion, coins and certificates, reducing the pressure of Federal Reserve gold, but by then it was too late.

Humanity does sometimes learn from its mistakes, however, and its response to the Financial Crisis of 2008-2009 was the opposite of their response to the 1929 crash. This time interest rates were slashed, Quantitative Easing flooded money into the market, and liquidity was made available to banks. There was no longer a gold standard to stop this. The result was that there was no 10-year Great Depression. World GDP dropped by about 15 percent from 1929-1932. By contrast, it dropped by less than 1 percent between 2008-2009.

Ben Bernanke, then Chair of the Federal Reserve, put it succinctly when he said:

“I would like to say to Milton and Anna: Regarding the Great Depression, you're right. We did it. We're very sorry. But thanks to you, we won't do it again.”

The Financial Crisis and its recession produced a period of low or briefly negative growth, but it was on nothing like the scale of the stagnation and the misery it caused in the Great Depression. At some times we learn lessons, and this was one of them.

Getting World Population Day wrong again

That there could be, at some point, too many people is a logically simple proposition. At some point between now and the surface of the planet having someone on every square metre we’d have more than enough of us. The important point being to work out what it is that means we won’t reach that point. Apart from the obvious one that we’d all have starved long before that happens.

Global population of eight billion and growing: we can’t go on like this

Well, actually, we can. Given the onward march of agricultural productivity we’ve no particular problem with feeding the extra couple of billion mouths we expect to arrive. And if we were to bring up the average of global agriculture to something even vaguely approaching current best practice we’d be bathing in food, not just eating it. It is important though to note that this is wrong:

Our growing population crisis therefore needs to be tackled there as a priority: by boosting women’s rights, by making contraception easily available and by improving education for all.

Women’s rights should of course be boosted - human rights are human rights and all humans should have them. So too should education be better for all but that’s a result of fertility rates dropping, not a cause of it. Sure, there’s a very strong correlation between female education and lower fertility. But it’s when women aren’t spending their entire adult lives either pregnant or nursing that education makes economic sense. And humans do tend to do things which make economic sense, not do those things which don’t.

So too with contraception. Of course those who wish to limit their fertility should have the ability to do so. And if circumstance means they’ve not the ability to do so we can and perhaps should help. But it’s not the availability of contraception which reduces fertility.

The usual estimation is that about 10% of any fall in the fertility rate comes from that general availability of effective contraception. The other 90% comes from the fall in desired fertility. Which seems logical enough. Fertility rates did first start falling long before the invention of cheap, modern, contraceptives. Plus, obviously enough, people must desire to have fewer children before they’ll employ a technology which produces fewer children.

What is it that reduces desired fertility? The joint effects of the intertwined increasing urbanisation and increasing richness of society. Richer people have fewer children. Urban populations have fewer than rural. As places become richer they become more urban.

So, what do we need to do in Africa to reduce future population growth? Aid Africa in becoming rich. All else is tinkering around the edges.

Think on it just for a moment. No rich society has, absent immigration and its second generation effects*, a fertility rate even approaching replacement levels. Thus if you’d like other places to have fertility rates like ours you should be striving to make them as rich as us.

*Immigrants tend to bring the fertility rates of their source culture with them, this dying out to be replaced by the rates of the host population somewhere between the second and third generation.

The Moon Is a Harsh Mistress

The science fiction writer, Robert Heinlein, was born on July 7th 1907. Together with Isaac Asimov and Arthur C Clarke, he was one of the best-known SF writers who were the “big three” of the golden age of hard SF writing that featured accurate and realistic future science. They lifted SF out of its space opera phase of death rays and tentacled aliens, and into works that explored how scientific progress might shape future societies and future attitudes. He was the only one of the three I never met in person, but I am told he was as boyish and optimistic as Asimov and Clarke undoubtedly were.

Heinlein explored social and political ideas, bringing to bear his own libertarian views and his emphasis on self-reliant individuals who were competent enough to stand up to and to deal with whatever fate and circumstance might throw at them.

His libertarian masterpiece, “The Moon Is a Harsh Mistress” (1966), deals with the rebellion of the lunar colony against the oppressive rules imposed from Earth. The freewheeling and freedom-loving lunar settlers parallel the early American colonists in their own struggle for independence. Its central thread is the close friendship between the human and a lunar computer that has had so many subsystems tacked on that it has achieved consciousness, and with that a personality of its own.

The flag the rebellious colonists adapt features a cannon, with the letters TANSTAAFL superimposed, standing for “There ain’t no such thing as a free lunch.” It was a phrase Milton Friedman later adopted. The book regularly features in lists by libertarian and neoliberal thinkers of their recommended top ten reads for would-be acolytes. It helps that it is superbly written and action-packed in and among the thoughtful insights that run through it.

Heinlein at one stage wrote a series of SF books for young adults, with teenage protagonists facing up to and overcoming the challenges of space with the resources of character and self-reliance that his adult heroes exhibited. His “Space Cadet” (1948), has teenagers training in space, and manning the monopoly of destructive weaponry that the world has entrusted to their keeping. Again, resourcefulness and confidence abound as his cadets face their fears and limitations and surmount them. A minor point of interest is that its opening chapter features mobile phones some 45 years before their actual appearance.

In a letter Heinlein described himself. "As for libertarian, I've been one all my life, a radical one. You might use the term 'philosophical anarchist' or 'autarchist' about me, but 'libertarian' is easier to define and fits well enough."

He was fairly radical in his vision of future sexual mores, with group sex, multiple partner marriages, and even incest, making appearances. It was all treated in a laid-back way as nothing remarkable. The same can be said of his imagined future political and social arrangements. He had been ‘liberal’ (i.e. left) in his youthful views, but came to hold that motivated individuals treating each other decently made for a surer societal base than collective action.

Elon Musk says a part of his own inspiration was sparked by Heinlein's books, and of the many honours awarded Heinlein both before and after his death, the one he might have liked best was that the International Astronomical Union named the Heinlein crater on Mars in his honour in 1994.

When the capitalists are trying to make a quid or two you should recognise that you've won

Pride is here and there’s the usual whining that the capitalists - the corporates - are having too much to do with it. Which is entirely the wrong way to be thinking about matters:

He also voiced concerns that the onerous costs for road closures, barricades and parking suspensions imposed on Pride had forced it to rely heavily on corporate sponsorship. There was a danger of “pinkwashing”, he said. “Some corporates seem to see Pride as a marketing opportunity to target LGBT+ customers.”

That’s what victory looks like Peter.

Everything from High Street shops, supermarkets and banks are changing their logos, adding new window displays and selling special products.

But is this "rainbow washing"? In other words - is it jumping on a bandwagon without making any meaningful change?

Some LGBT campaigners are asking what brands actually do to support their community.

Do to support? They’re trying to make money out of it. Which is indeed that victory.

It’s taken too long, certainly, it’s not entirely complete as yet. But that the capitalists, the corporates, are seeing the love that dare not speak its name as just another opportunity to make a quid or two means that it has all been normalised.

As it should be, obviously. That very insistence upon viewing as just another set of potential consumers means being viewed exactly equally to everyone else. Which is rather what the point of the entire centuries long exercise was, isn’t it?

The almighty dollar

On July 6th, 1785, the US Congress unanimously decided that the name of the US currency would be the "dollar" and adopted a decimal subdivision of it.

Count Hieronymus Schlick of Bohemia had minted high quality silver coins known as Joachimstalers, named for Joachimstal, the valley where the silver was mined. The German word for valley is thal, pronounced tal. Joachimstaler was later shortened to the German ‘taler,’ which became ‘dollar.’ The coins circulated widely in the American colonies, and were respected for their quality and reliability.

The Coinage Act of 1792, specified a "dollar" to be 371 grains and 4 sixteenths part of a grain of pure silver. Alexander Hamilton decided to base it on the average weight of worn Spanish ‘dollars’ (pieces of eight), and weighed a sample of them to come up with the 371 figure.

The familiar greenback dollar bill was tied to precious metals until 1971, when President Nixon suspended the convertibility of paper money into bullion, making the dollar a fiat currency like most others. This means it has value because the US government says it does, and because people have confidence in it. Given the world dominance of the US economy, and the widespread use of the dollar for international transactions, the US dollar is the world’s leading reserve currency.

One of the key motives behind the creation of the Euro was the resentment in parts of Europe, especially France, at what they perceived to be the ‘unfair’ advantage the dollar’s position gave to America. They wanted the new currency of the EU to be able to stand up to the dollar, and maybe even replace it as the world’s primary reserve currency.

In fact some countries outside the US, especially in the Caribbean, use its dollar as their official currency, and in many others it is accepted de facto as an alternative, usually a preferred one. People’s acceptance of it is ultimately based on their trust in the US government and its Federal Reserve Bank. Even a currency tied to gold and silver, as the US dollar used to be, is promissory, in that people trusted that the government would exchange the notes for bullion if requested.

British banknotes say “I promise to pay the bearer on demand the sum of X pounds,” but if you take one into a bank, even the Bank of England, they will only give you another banknote of equal value in exchange.

A problem for those who want currencies tied to gold is that there is not very much of it. All of the gold ever mined in history would only fill up about one third of the Washington Monument. And the gold supply cannot be increased at a steady rate to match the increase in productivity and growth, generally reckoned to be between 1 and 2 percent per year, and at the upper end of that range. The Bank of England’s Governor is required to send an open letter to the Chancellor when inflation goes above 2 percent. Had bullion-backed currencies been the norm at the time of the 2008 Financial Crisis, it would not have been possible to do Quantitative Easing, and a worldwide repeat of the Great Depression might have resulted.

It would be nice if there were a clear solution to the problems that confront fiat currencies, but there does not appear to be an obvious one. It seems that governments must respond to crises on an ad hoc basis, learning from what has or has not worked before, and treading very carefully. For the moment it is the dollar that ultimately underpins the global economy, and we have to hope that those who control it will do so responsibly.

We can't help but think this is an error about climate change

Ed Miliband, in common with a number of other people in and around politics, is hitching climate change to social justice. We can’t help but think that this is a significant error. It’s going to mean we do ever less about climate change itself.

Leave aside, for our purposes here, whatever anyone actually thinks or believes about climate change itself. Just for the sake of argument let us start from the idea that the IPCC is right and then examine the logic from thereon.

A new approach must connect the climate crisis with inequality to offer a compelling and attractive way forward for society

But there are plenty of people who don’t think there is an inequality problem, and others who wouldn’t want to take action about it even if there were. Some of whom still remain open to the idea that climate change could be a real problem that we should do something about. The linkage would seem to reduce support for climate change action therefore.

Tackling the climate and ecological crisis requires urgently reimagining how we live and work. A Green New Deal – conceived of in the UK, popularised by US congresswoman Alexandria Ocasio-Cortez and now powered by social movements here – should not just decarbonise today’s economy but build the sustainable and just economy of tomorrow.

But the number who share that definition of “just economy” is rather small.

The way we do this is by connecting the two great long-term crises that confront us today: the climate emergency and inequality. This is how we construct a broad and durable coalition that can sustain this unprecedented transformation. As well as truth-telling about the disaster that will confront us if we do not act, with the costs falling on those least responsible, ours must be a story of how we build a more equal, prosperous, democratic society.

The number who share that vision of what society should be like is, we suspect, rather smaller than current Labour Party voting intention and most unlikely to be greater than it. Meaning that no more than 18% of the adult population share it.

The number who think that perhaps something should be done about climate change is rather higher than this. Which is why we think this is a mistake. Hitching doing something about Flipper boiling in those vapours of the last ice floe to some demand about radical equality seems to reduce, not increase, support for the plan of action.

But then as the short Frenchman said, never disturb your enemies while they’re making a mistake.

The cloning of Dolly the sheep

It was on July 5th, 1996, that Dolly came into this world. Dolly was unusual, in that she did not have a mixture of her father’s and mother’s genes, but instead had only an exact copy of her mother’s. Dolly was not an example of virgin birth, but of cloning, and she was a sheep, probably the most famous one in the world.

She was produced by a partnership of the Roslin Institute of the University of Edinburgh and the biotechnology company PPL Therapeutics. She was the product of somatic cell nuclear transfer, in which a cell nucleus, in this case from a mammary gland, was inserted into a developing egg cell whose own nucleus had been removed. Electric shock stimulated it to divide, and the resulting blastocyst was gestated in a surrogate mother.

Her name was a tribute to Dolly Parton, because her creators couldn’t think of any more impressive mammary glands. Dolly the sheep died aged six-and-a-half, instead of the more normal 11 or 12 years, but it was of a progressive lung disease (Jaagsiekte), common among sheep, caused by a retrovirus and unrelated to her cloned origins. Indeed, in 2016, four identical clones of Dolly were still alive and well aged 9 years, and Dolly herself produced 6 healthy lambs. The scientists found no defects in other cloned sheep.

Since Dolly, many other animals have been cloned, including pigs, deer, horses and bulls. Chines biotechnicians report a 70-80% success rate for cloned pigs, and the Korean company Sooam Biotech produces 500 cloned embryos a day. The first cloned primates were produced in China from a macaque money in 2017, and in 2019, five identical gene-edited cloned monkeys were produced to aid the study of diseases.

Intriguingly, an extinct Pyrenean Ibex was cloned in Spain in 2009, but unfortunately died shortly after birth from lung defects. It did pave the way, however, for the possible revival of extinct species using similar cloning techniques. Researchers are already engaged on projects to restore the dodo, great auk and woolly mammoth, and no doubt others will follow.

There are some who rail against this type of research, arguing that men should not play gods. People argued similarly when Louise Brown, the world’s first “test tube baby” was born by IVF in 1978. Since then more than 8 million children have entered the world through this technique. Gene editing of cloned embryos will enable us to bring up animals resistant to diseases and deformities, though there will be painstaking refinement of techniques along the way to achieving this.

There can be little doubt that humans will be cloned, although the advantages are less obvious, in that it is the shuffling of genes through sexual reproduction that is the engine of the variety that can be tested against the environment. Just as there are companies that can clone a beloved but departed pet, there may well be ones that offer to clone a child that died tragically young. How closely the new offspring will resemble the one lost, however, will depend on how its environmental upbringing will switch on its genetic potential.

Should this be stopped? No, it is what we do. To those who ask what good will come of it, the reply is attributed to Benjamin Franklin who watched the first human balloon flight in Paris, and later to Michael Faraday when asked about electromagnetism. “What good is it?” The reply was, “What good is a new-born baby?” We don’t know, but it has potential.

If only there were a solution to this problem

Apparently Brazilian chicken has a certain salmonella problem:

Brazil is the largest exporter of frozen chicken in the world, exporting $750m-worth of the meat to Europe last year. But about one in five of its birds are contaminated with the food poisoning bug salmonella.

Presumably someone will want to do something about this. The question being, what?

The EU has been running a major salmonella reduction programme for more than a decade for its domestic poultry flocks. In the UK high standards and close monitoring meant that salmonella rates ranged from 1.5% to 2.2% between 2013 and 2017, according to the Food Standards Agency (FSA).

Given the effort invested there it would appear that there is no method of ensuring zero salmonella in chicken. Sure, a reduction of a one in five to a one in fifty chance of said infection is pretty good but those are still odds which should lead us to be careful in handling raw carcasses, making sure they’re fully cooked before consumption and so on.

Given this impossibility of elimination of the problem perhaps it’s possible to manage it in some manner? For example, why not a rinse in a light chlorine wash? As the Americans do to their chicken and as we do to our bagged salads. There is that EU insistence that we must never do this because reasons but those reasons are never really made very clear. Except that rather cynical idea that the chicken producers of Europe really don’t want to have to compete with the American ones.

But then when discussing the politics of trade the correct thing to wonder about is “Are we being cynical enough?” rather than any worry that we might be too much so.

Happy birthday, America

On July 4th we celebrate US independence. It was on this date in 1776 that the US Declaration of Independence was adopted in what is now Independence Hall in Pennsylvania by the Second Continental Congress. The thirteen colonies now became thirteen independent sovereign states, united to become free of British rule.

The United States became a beacon to the world, an example of a nation governed by laws not men, laws that protected the rights of its citizens from arbitrary power, enabling them to stand up against government itself if they needed to. The Founding Fathers were conscious that they were building “a city on a hill,” one that the world could look up to and be inspired by its example.

The US was to become the home of those seeking refuge from persecution and oppression, and for those seeking to make a better life for themselves in a country that would allow them to do so. America became the land of opportunity, where talent and hard work could make good.

The experience of settling in and developing the new land embedded in immigrants a practical streak that has not left them today. The US became known as a “can do” country. It is noteworthy that Thomas Jefferson’s draft declared, “We hold these truths to be sacred and undeniable.” Benjamin Franklin, ever practical, scored out the last three words with thick black strokes and substituted “self-evident.”

America had its flaws, of course, as all countries did then and still do. Many of those signing that document were slave-owners, including Jefferson himself, and slaves were not awarded the rights asserted for others. It took nearly a century before that was rectified. The native Americans were likewise excluded, and were also treated badly. But America does tend to correct itself and to renew itself. “America the Beautiful,” which is effectively its second national anthem, contains lines that few other nations could write about themselves.

“America! America! God mend thine every flaw, Confirm thy soul in self-control, Thy liberty in law.”

The world owes America a debt, in that its citizens have sacrificed themselves in two World Wars to save the world from conquest and tyranny, and to assert the right of nations to be free. In the second of those wars it saved the world from appalling barbarism and unimaginable cruelty.

America has also created wealth on a scale previously undreamed of, and it has been generous with that wealth, helping other nations to lift themselves from the devastation of wars, or the impact of natural calamities. Through globalization, the US has enabled poor people on the margins in distant countries to secure themselves a better life and to look to a better future.

America has its problems, but it has solved problems in the past, and there is every prospect that it will do so into the future. So, on their founding day, let us light the barbecues and enjoy the fireworks, and say with conviction, “Happy birthday, America!”