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2024 – Losing the Mandate of Heaven

The Mandate of Heaven was a more subtle Chinese version of the European Divine Right of Kings.  More subtle, because the Mandate of Heaven only conferred power on an emperor for so long as that emperor acted in the interests of the people.  We see an echo of the Mandate of Heaven in the Faustian pact between the Chinese Communist Party and the Chinese people – the deal being that the CCP holds absolute political power so long as it continues to deliver economic prosperity to the people.

A similar arrangement emerged in the western states as an outcome of the neoliberal revolution of the 1980s and 1990s.  Neoliberalism – the combination of laissez faire economics, social liberalism, and multinational/global corporate capitalism – offered western populations a return to prosperity following the economic crises of the 1970s in exchange for signing away real political power to a supranational technocracy who’s right to rule was based on its claim to possess essential knowledge.

In 2023, there was considerable speculation about the Chinese government losing its Mandate of Heaven as the Chinese economy failed to recover from the economic vandalism of years of lockdown.  Less attention though, has been afforded to the even more precarious position of the western (fake) technocracy.  And yet, the western central bankers have played fast and loose with economies equally weakened by years of lockdown… often mistaking supply-side shocks resulting from broken supply chains for monetary inflation caused by excessive state spending.  In 2023, the inflation disappeared, but the interest rate rises – whose full impact will only be felt in 2024 – remain.  Meanwhile, the NATO arm of the technocracy has failed to move the front lines in Ukraine despite the gift of billions of dollars’ worth of the west’s best hi-tech weapons.  At the same time, the sanctions salad served up by the technocracy has undermined Europe’s industrial base while barely denting a Russian economy which had begun disengaging from the western system following the US-inspired coup in 2014.  Globally, some 75 percent of the world’s countries – holding even more of the remaining resources – are either indifferent to or actively hostile to the western states.  And at a national level, cultural and political technocrats have largely failed to stem the tide of populism other than in the two remaining corrupt electoral systems – UK and USA – where two neoliberal coalitions prevent any third-party challenger from gaining ground…  although with both economies entering a new depression, it is surely only a matter of time before a demagogue far more dangerous than a Farage or a Trump emerges to lead the populist backlash.

2023 in retrospect

Looking back at last year’s predictions, I should, perhaps, have heeded Keynes’ warning that “markets can remain insane for longer than you can remain solvent.”  That is, things happened a great deal slower than anticipated:

  • Concern about the economy did rise to become the top political issue, but only in the second half of the year.
  • Insolvencies and unemployment began to tick up, but mostly in the small business sector where the damage is less obvious.
  • A degree of disinflation set in – although far less pronounced in the UK as in Europe and the USA.  Indeed, the UK may well be experiencing deflation in the discretionary parts of the private sector even as the state and regulated monopolies continue to force prices up… that is, “stagflation.”
  • Supply chains appear to have returned to normality… although in part at least, this is due to falling demand in the discretionary sectors of the western economies.
  • No Dragon Kings turned up… although sustained terror attacks on Red Sea and (especially) Straits of Hormuz shipping would burst the “everything bubble,” and bring down the western economies.
  • War weariness was setting in even before the Hamas attack on Israel and the ill-advised Israeli reaction.  Ukraine tabs on establishment media websites had been removed from the front page following Ukraine’s failed summer offensive – which, at best, moved Zelensky’s drinks cabinet six inches closer to Moscow.  And the US Congress has become restless about the prospect of sending more good money after bad… particularly since Israel is seen as a far more worthy cause among America’s ruling elite.
  • The extent to which Britain is broken is revealed week-in, week-out.  But we have yet to see one or more of the mainstream political parties adopt it as an election slogan.
  • Reform UK (formerly the Brexit Party) did overtake the LibDems to become the UK’s third party.  Although this was as much to do with the LibDems falling into obscurity as with Reform winning hearts and minds.

So, what might we expect in 2024?

As I always remind readers, making predictions is really hard… especially about the future.  So please don’t bet the house on what follows or take any of it as any kind of financial advice… it is merely an attempt to draw on unfolding trends to look at what is likely.

The end of the Big Take

Across the UK economy, the broad response – with two exceptions – to rising costs was rising prices.  That is, faced with the choice between cost cutting and raising prices, all of the big players opted for the latter.  The big corporations simply passed their rising costs onto consumers.  The same with the regulated monopolies, whose regulators apparently forgot that they were supposed to act in the interest of consumers not shareholders.  Government – national and local – too, decided that the best approach to managing its rising costs was to increase taxes and to introduce measures like fake clean air zones to fleece motorists.  The big public sector trades unions also got in on the act.  In a repeat of the mid-1970s, when most people got poorer even as an “aristocracy of labour” received inflation-busting pay increases, already well-paid workers such as doctors and train drivers took to the picket lines even as the UK’s precariat found out what “warm banks” are.  And, of course, the Bank of England added to the misery by raising the cost of money itself – leaving millions struggling to service debts and building up a mortgage default crisis for 2024 as some 1.4 million mortgages roll over from 1.5% to 6% interest; adding around £900-per-month to a two year mortgage on an average priced house… what could possibly go wrong?

There were, however, two groups who weren’t on the take… small businesses – particularly those in the discretionary economy – and ordinary households.  Neither have had the luxury of being able to jack-up prices because each price increase has been followed by an equivalent loss of business.  And so, even where workers have had a wage increase, it has mostly been below inflation (and often accompanied by a cut in hours) while business owners have simply had to eat the loss by cutting their income from the business.

At a time when the technocracy has become practiced in the art of fiddling official figures – such as the trick of announcing a positive figure then revising it down lateranecdotal clues about the true state of the economy may prove a more reliable indicator.  So here are four from the end of 2023:

  • Even London’s Oxford Street, once the wealthiest retail district in Europe is in freefall as its consumer base collapses,
  • Britain – famously a nation of animal lovers – has reached the point at which so many people have been forced to give away their pets that the animal rescue charities have been overwhelmed,
  • The UK’s houses were darker this Christmas as far fewer of us could afford to run external Christmas lights due to the high cost of electricity,
  • Social media feeds have been filling up with notices from small businesses announcing that they will not be reopening in the new year.

The impact of this will not appear in official data for some months yet.  But the message is clear enough – ordinary households and small businesses are tapped out.  There was only so much currency to go around – far less, in fact, as the banks have been tightening lending standards – and nowhere near enough to satisfy the banks, the government, the regulated monopolies, nor the global corporations.  And each attempt by these bodies to raise their income will only result in less income coming in.  So that it will eventually dawn on all of these bodies that cuts can no longer be avoided… the Big Take is at an end, the Big Shrink is just beginning.

The beginning of the end of the BBC

Ever since the arrival of satellite TV in the 1980s, there has been growing clamour for an end to the UK’s anachronistic television licencing system.  Introduced at a time when bandwidth was severely limited, the television licence was intended to fund one politically-neutral public service broadcaster as a counterbalance to commercial radio and TV outlets.

In those days, political balance meant only balancing those who favoured state involvement in the economy with those supporting free markets.  But following the neoliberal revolution politics became more complicated.  The Political Compass, for example, introduced the idea that the divide between authoritarians and libertarians was as important as the economic divide.  And so, the neoliberal left and neoliberal right might have no differences on economic matters (both support global corporate capitalism) while being polls apart on social issues.

For broadcasters like the BBC, this allowed the appearance of balance with none of its substance.  People on the left criticised its economic bias in favour of free markets and corporate capitalism even as those on the right criticised its extreme liberalism on social issues like immigration, sexuality and gender, race, and the environment.  This allowed BBC managers to claim that since both left and right were criticising them, they must, in fact, be impartial.

The truth though, is that the left and right criticisms are not coming from opposite ends of the same pole but are at right angles.  And what the BBC actually represents is an increasingly militant version of what David Graeber called “the extreme centre” – “it strikes me that what’s called ‘the moderates’ are the most immoderate people possible.”

To add to the BBC’s woes, the media landscape has changed beyond recognition even since the days of satellite TV.  The arrival of subscription TV alongside catch-up streaming services has rendered the licence fee model untenable.  Moreover, a growing number of hard-pressed Brits have discovered the true terms of the licence system rather than the propaganda spouted by activists and the BBC itself:

  • The licence fee is not a tax – nobody is forced to pay it
  • You only need to pay the licence fee is you watch or record TV as it is being broadcast or watch catch-up on the BBC’s I-Player.

Even before the licence fee was raised to £169-a-year, nearly three million households had opted out of paying.  With money getting tighter in 2024, the licence fee becomes an obvious spending cut to make for anyone prepared to watch TV on catch-up or (as in my own case) not to watch TV at all.  Indeed, BBC insiders seem to recognise this, as reports suggest the BBC will set out its own alternatives to the licence fee before more radical reform is pushed by anti-licence fee activists.

Given the plethora of television services and the increase of overtly partisan channels like GB News and LBC, the deeper question is whether we need a specially-funded BBC at all.  And even for those who say we do, do we need the BBC enough to force other, hard-pressed households to pay for it?

An early election?

Technically, Britain’s Tory Government can remain in place until January 2025 (four years after the last election, plus a month for campaigning).  But the only reason to do so would be a desperate hope that something might turn up to save them from a massive defeat (following the course taken by John Major in 1997).

Any rational planning though, must surely rule this out.  By definition, the Tory government would be more unpopular in December 2024 than they are in December 2023.  And nothing is more guaranteed to dent their popularity even further, than asking a beleaguered British electorate to spend their Christmas holiday being bombarded by the inane chattering of professional gobshites prior to setting off into the cold depths of winter to grudgingly cast their votes.

This leaves us with two likely election dates – the bookies’ favourite, October (prior to the clocks going back) or early May.  My reason for suspecting that we might see an election in May 2024 concerns damage limitation.  Like John Major’s and Alec Douglas Hume’s Tories before them, Sunak’s Tories have simply outstayed their welcome.  In 2024, the British electorate mostly shares sentiments voiced by Oliver Cromwell in 1653:

“You have sat too long here for any good you have been doing.  Depart, I say, and let us have done with you.  In the name of God, go.”

At this point, no Tory promise will be believed – why would anyone believe they can deliver in the next five years what they signally failed to deliver in the last 14… and particularly the last five, when they enjoyed an 80-seat majority?  Worse still, the UK economy is going to get worse before (if at all) it gets better – with even the Bank of England ruling out a return to growth before 2025. 

Against this backdrop, Tory strategists may attempt some “bread and circuses” – i.e., tax breaks and public spending giveaways – at the suspiciously early 6 March budget in an attempt to bolster their base and hang onto as many seats as possible.  This might also explain why the cut to National Insurance (a UK tax on employment) announced in November is coming in in January rather than April, as is usually the case with tax changes.

While sitting MPs are unlikely to see the coming election as “a good election to lose,” party managers and strategists are increasingly concerned about growing divides within the Tory Party which make it less electable the longer this goes on.  Having failed to regenerate the party under Boris Johnson, despite that huge majority, a period in opposition might be the only means by which the Tory Party can rebuild.

An early election might also wrong-foot the opposition parties, whose manifestos are still being written.  This might leave the opposition looking less confident than they would appear going into an October election which would allow them to use their annual conferences as a platform for unveiling their policies.

The nail in the Tory coffin

The 1983 general election is popularly remembered for Labour’s disastrous manifesto – aka, “the longest suicide note in history.”  Largely written out of history though, is the fact that in 1982, after three years of economic vandalism, Thatcher was behind in the polls.

History remembers one of the two factors that propelled Thatcher to victory in 1983… the other not so much.  Thatcher’s gamble, against the advice of most of the British military, to retake the Falkland Islands following the Argentinian occupation, paid off.  The wave of patriotism and flag-waving that accompanied the returning task force (although Thatcher insisted on hiding maimed and injured squaddies) served to bolster Thatcher’s image as a decisive leader in the run up to the election.

Less remembered is the huge assistance Thatcher received in 1983 from defecting Labour MPs from the right of the Party.  The so-called “gang of four” – David Owen, Shirley Williams, Bill Rodgers, and Roy Jenkins – had established the Social Democratic Party in March 1981.  And by the end of 1982, had developed the funds and selected the candidates to run, in partnership with the Liberals, for election the following year.

Because of the UK’s antiquated first-past-the-post electoral system, despite the SDP/Liberal Alliance securing 26% of the vote, they won just 11 of the seats.  What they did achieve though, was a massive split in the anti-Thatcher vote – Labour ended up with just 28% of the votes, allowing Thatcher to secure another 37 seats in constituencies which would otherwise have been won by Labour.

In 2024, Reform UK may be about to do the same to the Tories as the SDP did to Labour.  That is, while Reform has little chance of winning more than a handful of seats, by taking votes away from the Tories – who are already non grata among the majority of UK voters – if they stick to their promise to stand in every constituency, they may well gift Starmer’s Labour seats which would otherwise be odds on to remain Tory.  And if that happens, Starmer could end up boring his way to a majority even bigger than Blair’s in 1997.

The last neoliberal government

If the 2024 election is not considered a good election to lose by Tory politicians, Labour politicians may end up lamenting the win.  As Philippe Legrain observed ahead of the 2010 election:

“Some election victories are a poisoned chalice.  With hindsight, it was fortunate for Labour and catastrophic for the Conservatives that John Major won in 1992.  Sterling’s ejection from the ERM shredded the Tories’ reputation for economic competence, and five years of in-fighting, blunders and scandal consigned the Conservatives to the political wilderness after 1997.  It seemed for a while as if the party might never win office again.  The Tories would surely have bounced back more quickly if they had lost in 1992.  Conversely, a Labour victory in 1992 could have been fatal.  Had the pound plunged within months of Labour taking office, the party’s chances of re-election would have been remote.  The Labour government would have marked a brief progressive interregnum between long periods of Conservative dominance.”

The economic woes which have only just begun to hit the British people will go from bad to worse in the early years of Keir Starmer’s government.   And given that the next chancellor is likely to be Rachel Reeves – a consummate Bank of England insider – there is no evidence that the Labour leadership has the first clue as to how to rebuild an economy which no longer responds to the neoliberal prescriptions of the 1980s.

Rather than Tony Blair, Starmer may turn out to be more like Harold Wilson in the mid-1970s – desperately trying to hold on to a crumbling political and economic consensus even as his own party turns to new heretical ideas which at least seem to offer a return to prosperity.

Peace of sorts

Despite the detached ramblings of your Russophobic social media friend, the Russian economy didn’t collapse.  Russia didn’t run out of weapons and manpower either.  And Zelensky didn’t lead the march on Moscow (or even the liberation of Crimea).  Indeed, as a consequence of sanctions on cheap Russian fossil fuels and raw materials, it is the EU and UK economies which are most at risk of economic collapse as their industries have been rendered unprofitable (and in Britain’s case, its financial system no longer safe).

With an election in November 2024, political strategists in the USA are already uneasy about the impact of further multi-billion dollar currency and weapons donations to a Ukraine military which has proved unable to move the front lines more than a few miles… and even then only temporarily.  Optimistically, some western media outlets imagine a negotiated settlement similar to the one Boris Johnson scuppered last year.  But if Russia is successfully implementing the Falkenhayn strategy, a Russian offensive in 2024 will allow them to dictate terms… terms which the western states will never accept.

One possible outcome is the creation of two states – East and West Ukraine – similar to the way West and East Germany were created after the Second World War.  Another possibility is a Russian occupation of Ukraine and a setting up of a “Ukrainian government in exile” in Brussels or London.  However, with former leaders such as Yulia Timoshenko and Viktor Medvedchuk becoming more vocal in their criticisms of the Zelensky regime, don’t rule out a coup either.

The first shortages

In the western economies, shortages are regulated by price.  If, as happened briefly last winter, certain foods are in short supply, their price rises so that the rich can still afford them but the poor cannot.  Even in an economy as grotesquely unequal as the UK’s though, it is rare for absolute shortages to arise.  Having to fall back on the generosity of strangers may be degrading, but even so, a network of food banks is – for the moment – preventing people from starving.

By the end of 2024 though, we could witness the first absolute shortages in the UK.  This will likely begin with energy shortages, as Britain is increasingly dependent upon imported LNG (which may not meet demand) and electricity to bridge its growing supply and demand gaps – largely resulting from the intermittency from wind generation.  Sooner or later, even the closure of British industry will be insufficient and widespread power cuts will follow.

Economic and financial problems surrounding Britain’s unsustainable balance of trade (aka “current account”) deficit are also likely to cause shortages of goods and materials in 2024 – although this may simply result in higher prices rather than absolute shortages.

Domestically, however, bankruptcies and unemployment will likely cause a big decrease in the availability and consumption of a swathe of discretionary goods and services.

What then of the Mandate of Heaven?

National cultural and political elites, together with technocratic managers of supranational governance structures have garnered huge wealth and power during the neoliberal era through the claim to know how to deliver growing prosperity to the western populations.  In reality, of course, it was the last of the cheap and easy oil and gas supplies from the North Sea, and later from Russia, which underwrote that final debt-based economic boom from the mid-1990s through to 2008.

Despite the ever more desperate rain dancing by the western central bankers in the years since the crash, prosperity has continued to retreat.  Even in the leafy suburbs adjacent to the top-tier universities, the streets were darkened by an absence of Christmas lights this year.  Only in the small, gated communities where the top ten percent have retreated is it still possible to pretend that nothing is wrong.

Briefly, the technocracy had been able to blame pandemic viruses and Russian militarism for economic woes which seem to worsen with each passing month.  But increasingly, ordinary people have come to understand that it was the technocracy’s lockdowns and self-destructive sanctions which have exacerbated an already declining economy.  And as the situation worsens in 2024 as a consequence of technocratic energy policy and technocratic interest rate rises, the Brexiteer demand to “take back control” will likely grow louder.

Whether the Marie Antoinettes in Westminster pay heed is an open question.  But then, the reason we are able to refer to that ill-fated queen is because of the way the people dealt with an earlier class of tyrants who had lost the Mandate of Heaven.

As you made it to the end…

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