Every newspaper has the story that Honda has stopped production today. The issue is straightforward: port logistics are stopping them getting the parts that they need. And rumour has it that they are far from alone. All this is happening before Brexit adds to the woes come 1 January.
I do not wish to revisit Remainer sentiment. That some of us said this would happen is not the point. Unless, of course, it is. By which I mean that some of us said that this would happen not because we were Remainers but because it was entirely predictable that chaos would ensue from leaving the EU, and that was before COVID 19 was added into the mix.
It takes only a little understanding of the human condition, and what follows on from it about the business condition, to realise that most of the time most of us survive by a thread. The stresses of life seem to be pretty big for many. Whether they really are is irrelevant: perception is what matters here. That is what is actually real, because perceptions relate to how we see the world. And, if most of us, most of the time see the world as stressful then that is what it is.
How do we cope? Through the use of routine. We eliminate as many decisions as we can during days that demand we take more decisions than we might wish for by simply reducing the rest to the level of repetitive action to which little thought need be given. And that's fine. Broadly speaking, most of us do not create destructive routines (or we would no longer be here) and so this process works.
The same is true of most of the remaining decisions, of course. We reduce them to the point where heuristics can handle most of the required choices. That leaves our energy for what is difficult. And even then those remaining decisions seem to be hard,
What Brexit was always bound to do was require massive degrees of decision making, almost none of which could be based on routine, and where the heuristics simply cannot work because the rules are not known. So, what Brexit was always going to do was increase stress. And it was always going to increase the error rate, because the great thing about routines and most heuristics is that we know that we can use them because mistakes do not happen when we do; experience has proven that. But now we have no such back ups.
So, right across the country right now very large numbers of people are flying blind. The government has not told them what to do, because the government has no deal, and so does not know what to say (and if in doubt, note that the Northern Ireland arrangements were supposedly agreed yesterday, weeks before being used and years after the need to know them was understood to exist). And, as is usual in life, training is absent and there is no time to read the manual.
Of course, such situations happen daily in life. But the ratio of routine and heuristic decision making to ‘flying by the seat of your pants' judgement is usually quite high. Only now it is not. There is far too much guesswork in the system now. And that means the system will fail.
All human systems are, proverbially, as good as their weakest link. Right now there are vast numbers of ver weak links. Of course systems will fail. And the impact can and will be exponential. Once something has gone wrong the scale of decision making required grows, very rapidly over relatively short periods. And every one of those will carry a high risk of being called wrong. The risk of chaos is very high.
And that's what is happening. This has nothing to do with Remainers, the EU, or anyone else sabotaging anything. With the greatest will in the world, this was likely. It has been exacerbated by the government's refusal to reach an early deal so that the transition period could be used for actual Brexit preparation. And Covid has obviously not helped. But I stress, this was always going to happen. Asking literally millions of people to amend their routines and heuristics and simultaneously make decisions based on ignorance was always going to be a recipe for disaster. And disaster is what is unfolding.
I take no pleasure from this.
People will probably die because the government did not understand this.
Others will suffer considerable hardship.
And none of those is necessary. Even if Brexit was the right thing to do, and even if the vote was properly held (and neither is true), this could only have been avoided by having a deal agreed before a transition and then having as long a transition as possible before the new rules had to be used. Simultaneous systems would have made sense to the greatest degree possible. But none of that has happened. There has, in effect, been no transition period. There has just been an extended negotiation.
Who do I blame? It's not hard to work that one out, is it? The UK government is, of course, responsible. It wanted Brexit. It created the chaos. It created the delay. It has not done the preparation. But most of all, the people in our government have no comprehension of the issues I have noted in this post. The idea that in the real world it takes time to make things work has clearly not occurred to them. And that is why they are to blame and no one else is.
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The people who have overseen this – Johnson, Gove, Rees-Mogg etc are guilty of culpable negligence – if I handled my tax affairs the way they have handled Brexit I would be up in court.
They own the police (Cumming’s affair) and the courts won’t be far behind!
Totally agree.
And, what are we going to do next? – spend much time, effort and money to cobble together a system that will still work less well than we have now. Still facing the same compromises, still having to work together, still having to negotiate
The likes of Raab who say a deal is always done at the last minute, do not understand that even, say, a business sale/purchase will have worked out most of the detail before completing any last minute horse trading on price and warranties. The process of transfer and ongoing practicalities are generally well understood long before lawyers sit up late at night to sign up.
In the case of Brexit we won’t even begin to know anything until after the ‘deal’ is done.
And, for what?
A very good analysis, which I must confess had not occurred to me earlier.
Where have you been hiding Patrick..?
Good article, the only thing I might question is this statement, “our government have no comprehension of the issues I have noted in this post”. I think they DO have comprehension of these issues but do not care one iota. Their objective is to create a situation where their elite vulture capitalist pals can literally make a killing. People’s personal disasters will be explored by these leeches to make even more money. Apparently there are billions of profit resting on a No Deal “result”. If true, this Govt. has done everything to ensure that a ND outcome is most likely. The Uk is led by crooks and sociopaths.
[…] By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics. He is a member of the Progressive Economy Forum. Originally published at Tax Research UK […]
On a not entirely unrelated theme, I have been corresponding with the Bank of England on their statement that: “bank created money is destroyed when the loan is repaid.”
The most recent reply from the bank states: “You must also consider what happens over a time period. As old loans get repaid, new loans come along and assuming there is inflation and real growth in the economy, the new loans tend to be larger in total value than the loans being repaid.”
The total of all loans in UK is around £1.4 trillion, which makes the bank’s explanation plausible, but this makes the UK financial stability dependent on the ability of its population to maintain repayments on their mortgages. It still doesn’t feel right but because the loan does not get “destroyed” is goes to the borrower to fund his/her wishes. And the bank gets all the repayments for nothing. But at this moment I am stumped.
It is impossible for a loan repayment not to create money when moneu=y is o only created by the promise to repay and when that happens there can be no money left
Patrick Byrne.
I also struggle with this and the explanation you got from the BoE is similar to my conclusion.
There is a lag between a loan being made and repaid and this time difference is crucial.
If I take out a mortgage the money is created and enters the economy when I purchase the house. (In fact I am bypassed and the money goes direct to the seller from the mortgage provider.)
On the balance sheet the loan and my debt balance out but in reality, I won’t pay off my debt obligation for 21 years or more. The money enters the economy at the creation of the money but will not be removed from the economy for 21 years.
If the rate at which new loans are being created is ever expanding, then the amount of loan created money in the economy is going to expand faster than it is being repaid/destroyed.
The process is never put on hold so that the repayments can “catch up” with the loans created, so everything can zero out.
So, as far as I can see, bank created money does contribute to the amount of aggregate money in the economy?????
The difference is debt!
That’s how it works
A salient point that illustrates if nothing else the corrosive effect of ideology.
There is nothing else to be said – surely?
Johnson, Francois, Hannan, Mogg, Baker, Farage – guilty as charged.
But it is this contemporary mode of capitalism based on destroying things in order to make money – such as Credit Default Swaps – basically bets placed on the poor performance of companies – that goes beyond ideology and into practice that needs to be outlawed.
These are immoral acts that somehow no one wants to tackle.
I was travelling around the M25 yesterday. Lots of signs warning of delays at the ports, but not entirely sure why there are these problems now – after all (to borrow a phrase) nothing has changed. Is perhaps that there increased volume with 31 Dec approaching? I’ve seen no explanation of the present difficulties.
Share the foreboding. What’s striking is that almost none of the media have made any attempt to get to grips with what is likely to happen. We can anticipate that the BBC and the pro-Brexit oligarch press will minimise.
It has been like this for some weeks. For example, https://www.bbc.co.uk/news/business-54908129
It seems to be a combination of (a) thousands of containers of PPE getting in the way (b) ditto due to more than usual empty containers lying around (presumably reflecting increased imports earlier, or earlier disruption in trade, or both) (c) the usual seasonal imports before Christmas (d) additional increased imports to stockpile against Brexit (e) Coronavirus affecting the people so the system just operates at a lower capacity (f) issues with the haulage booking systems for the lorries to get in and out (and no doubt other things too – perhaps Chris Grayling being engaged by the ports operator … he is a modern anti-Midas: everything he touches turns to manure).
While there is a surplus of empty containers here, there is a shortage of empty containers in China. https://theloadstar.com/container-shortages-the-biggest-disrupter-where-are-all-the-empty-boxes/
And I see a storm washed approaching 2000 containers off one vessel in the Pacific in recent weeks – about 50% more than the annual average in one go.
Thanks
There’s a major worldwide issue with container shipping with ports overloaded etc. It’s the reason Honda is late getting supplies. All on the BBC website.
I agree and am planning to say I told you so to all these at other sites, where I have been clear for 2+ years that No Deal was the only plan.
Where I differ with you Prof, is on whether that belongs only to the Tories and the Brexity media.
I think that the current Labour leadership is playing its neocon/lib part in delivering the Hard BS, as did the supposed breakaway PLP’er supposed Remainiacs. The media likewise – I can post examples of how the Guardian is doing that currently as I have elsewhere if you or anybody asks, it is rather a long comment.
Part of me thinks there’s a school of thought in Labour that believes its traditional voters need to feel the fallout from Brexit for them to be weaned off the Tories and come back to them.
It’s a dangerous game of course. They’re as likely to fall for an even more ultra-nationalist message. Fertile ground for the knife in the back route to fascism.
JohnS,
The actual truth is what you think may happen accidentally is the message the current leadership of Labour is actually there to do! Aided and abetted by the media, especially the On-Groaniad.
Sir Keir and his gang of thugs job is to make sure the red wall doesn’t rebuild.
That is why they are kicking the bricks ‘the membership’ away.
It doesn’t suit the modern connived and controlled advanced democracies with two party systems, to actually have mass grassroots supported political opposition and elected representatives who actually come from these roots. It creates too many loose canons for them who aren’t hothoused into Parliament via a line that leads them from nepotism to university to spad to being parachuted into controlled local party controlled nomination and secure seat.
I’ll leave at least this bit of Guardian bollocks from the weekend to back my statements by someone who I never heard of but seems to be an ‘associate editor’ (no, me neither) putting it up as the standard to follow in this putsch.
“A politics that values stability, locality, honour, loyalty and patriotism, as much as individual freedoms, has an honourable history on the British left.”
‘- Julian Coman is a Guardian associate editor’
https://www.theguardian.com/commentisfree/2020/dec/08/labour-conservative-values-liberal-left-working-class-voters
Convinced?
A fair analysis. Depressing.
But, for a bit of gallows humour, “From codpieces to zeppelins: here’s to the best of Brexit” by Marina Hyde in The Guardian today captures the absurdity of the whole farce rather well.
It does..
Having experienced restructures at work (organizational change) I totally concur with your argument Richard. Even if the restructure is well thought out, too many details are overlooked and the inevitable stressed on systems and humans results in error and more stress. Often the fixes to the restructuring bring us back to where we started from. I expect the government will blame the people for not engaging with ‘change’.