The New Silk Roads – Peter Frankopan

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Waxing eloquent about China’s astonishingly grandiose Belt and Road Initiative, which is both colossal in its sweep and gargantuan in its wake, Helga Zepp-LaRouche, president of the Schiller Institute think tank in Germany, said, “the Belt and Road Initiative will continue to grow and become a true world land bridge. It not only brings economic prosperity to all participating countries, but also serves as a true basis for a peace order for the 21st century.”

Peter Frankopan, author of the bestselling book, “The Silk Roads – A New History of the World”, seeks to unwrap and dissect the Socio-cultural and political aspects that lie hidden behind one of the most (if not the most) ambitious projects ever embarked upon the history of mankind. The Belt and Road Initiative proposed by China and President Xi Jing Ping, audaciously attempts to not only bridge the past with the present, but also seeks to shape the future in a manner un-envisaged and unimaginable. While many expert political commentators feel that the initiative is a dangerous ploy to restore China’s ‘rightful’ place in the political and economic scheme of things, more liberal policy experts of the likes of Zepp-LaRouche opine that the mega project may usher in a new and peaceful world order. Mr. Frankopan also highlights the rapid shift in the balance of economic power from the West to the East. While many of the most reputed vineyards in Bordeaux are now the properties of influential and affluent Chinese – of the likes of Jack Ma and Zhao Wei – one of England’s most famous football clubs, Manchester City is owned by Mansour bin Zayed al Nayhan, the deputy Prime Minister of the United Arab Emirates. Or take the case of Iranian businessman Mehrdad Safari. In February 2017, he so liked an apartment which he had rented in a tower in Istanbul, he “bought the entire block for $90 million (excluding VAT). The sands of prosperity are slowly but steadily scattering across the East.

But as Mr. Frankopan brings to his reader’s attention, a Brexit obsessed and Trump intoxicated world is too busy entangled and enmeshed in its own closeted affairs to pay attention to the paradigm if not tectonic shift that is characterizing the geo political landscape of the world. As an analogy for highlighting this ‘Eastward’ shift, Mr. Frankopan invokes the signature tune of the 1993 Disney film Aladdin, where Aladdin sings “A Whole New World”, to Jasmine. The continuing rise of countries such as India, South Korea and Taiwan, along with the behemoth China, signifies an inexorable tilt towards the tenet that “The Future is Asia.”

Mr. Frankopan in a measured and admirably informed manner, endeavours to demonstrate to his readers both the advantages and perils dotting the BRI landscape. As Mr. Frankopan points out, “Over 80 countries are now part of the initiative, ”.. This accounts for greater than 63% of the world’s population and 29% of its global economic output. As Mr. Frankopan points out, the projects envisaged by a mutual co-operation amongst the participation nations is eye-popping in both size and scale. The Trans-Anatolian Pipeline (“TANAP”) links the Shah Deniz II gas field in Azerbaijan with south-eastern Europe. “A new ‘International North-South transport corridor’ proposing to connect South East Asia and Northern Europe, is expected to net a whopping $2 billion in transit fees alone to Iran. A spanking new sixteen-lane expressway costing a cool $2.4 billion is expected to link Ashgabat with Turkmenabat. But as Mr. Frankopan warns, not everything about the Belt Road Initiative is hunky dory. The projects littering the pathway of the BRI have been mired in conspiracy and murkiness. Countries have come dangerously close to being wrapped in a nefarious debt trap leading to a situation of neo-colonisation. Following a humongous and mind numbing scandal involving a sovereign wealth fund – and one that caused a Prime Minister both his job and reputation – Malaysia terminated an original contract awarded to China Communications Construction Company (CCCC) for working on the East Coast Railway Link (ECRL). The Government also sought to halve the estimated project cost of S$27 billion $13 billion. Or take the case of Sri Lanka. In December 2017, Sri Lanka formally handed control of Hambantota port to China in exchange for writing down the country’s debt. Under a $1.1 billion deal, Chinese firms now have a 70 percent stake in the port along with a 99-year lease agreement to operate it. But as Cambodian prime minister Hun Sen says: “Other countries have lots of ideas but no money. But for China, when it comes with an idea, it also comes with the money.” In 2017, Starbucks announced that it would open 2,000 stores in China by 2021 – this means a new Starbucks outlet every 15 hours.

Yet China denies that it is out to either destabilize or interfere with the internal affairs of the countries it professes to partner with in its imperial initiative. As Mr. Frankopan points out, “Xi has insisted that China’s investments in sub-Saharan Africa are guided by a policy of “no interference in African countries’ internal affairs; no imposition of our will on African countries; no attachment of political strings to assistance to Africa; and no seeking of selfish political gains””.  But it was precisely with a determined and avowed objective of laying their hands upon the resources in a country that the British Empire embarked upon their untrammeled march across each of their colonies.

Mr. Frankopan does not pull any punches either in holding forth over the lamentable human rights records of China. The “re-education camps” into which a greater number of 100,000 Uighur Muslims in the western provinces have ‘disappeared’ gets a somber mention, as does the overt and covert role played by Russia in the civil conflict ravaging Syria.

The Asian environment that is agog with optimism is not without reason. As Mr. Frankopan asserts, “some 65 to 70% of proven oil and gas reserves, half of global wheat production, nearly 85% of global rice production; some three-fourths of silicon and rare earths, plus a lion’s share of opium poppy production.”

Mr. Frankopan’s “The New Silk Roads” provides more than just a glimpse into the future that is at once appealing as well as apprehensive, in equal measure.

The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society – Binyamin Appelbaum

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Milton Friedman once observed, ““I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.” Frenzied advocates of the free market breed pounced on this pronouncement in the same vein a believer entrenches within himself what he perceives to be a gospel. As regulations were systematically relegated to the apex of irrelevancies and the economy, ‘unshackled’, the dark side of capitalism took over the stage and in a macabre dance, decimated in a systematic manner the orderly workings of global markets, gifting to the world the second greatest recession post the Great Depression of 1929. By the time the dust had settled on the endemic practices, real gross domestic product (GDP as adjusted for inflation or deflation, in the United States—declined by 4.3 percent, and unemployment increased from 5 percent to 9.5 percent, peaking at 10 percent in October 2009. Spain, Greece, Ireland, Italy, and Portugal suffered sovereign debt crises that required intervention by the European Union, the European Central Bank, and the International Monetary Fund (IMF) and resulted in the imposition of painful austerity measures. The entire financial system of tiny Iceland was almost wiped out and the three largest banks of the country had to be nationalized.

In his brilliant book, “The Economist’s Hour: How The False Prophets of Free Markets Fractured Our Society”, Binyamin Appelbaum dissects in a surgical fashion the events leading to the proliferation of free market tenets and their unintended consequences. The hotbed of the transition from regulated markets to free markets was the Chicago Business School. Luminaries such as Friedman, George Stigler, a friend of Friedman who exclaimed that “competition is a tough weed, not a delicate flower”, and Friedman’s brother-in-law, Aaron Director, took to the pulpit at the University arguing that the only Mantra worth its incantation was economic efficiency. Working overtime, they more than just succeeded in turning legislations such as antitrust mere relics, thereby embellishing corporate concentration and market power. Further, boosting their enthusiasm was works such as ‘The Road to Serfdom’ by Friedrich Hayek, an economist nursing a preternatural revulsion towards any role played by the Government in an economy.

These were the renowned usual suspects. As Mr. Appelbaum illustrates in an adroit manner, there were other brilliant ‘converts’ to the Friedman cause, who did their best to espouse the glories of the invisible hand. For example, Walter Oi a mercurial economist who also was suffering from a serious visual impairment, calculated the economic cost to the nation of removing the labor of would-be workers from national output during their terms of service. Then there was Richard Posner. A scholar and federal jurist Posner postulated in 2001, that, other than the economic approach, there was no longer any other perspective—political or legal—taken seriously in antitrust policy. Mr. Appelbaum citing Posner: “antitrust is dead, isn’t it?”

Mr. Appelbaum also describes in startling detail the brazen conflict of interest in the form of a ‘Revolving Door’ scenario where some economists seem to be pursuing personal causes rather than enhancing the prospects of society. Stellar protagonists such as Alan Greenspan and Lawrence Summers enjoying implicit and back door financial support and hefty consultancies from parties peddling their own interest assisted in no small deal in pushing, or rather bulldozing through, policies characterized by more than just a taint of self-preservation.

As Mr. Appelbaum details in a tragi-comic fashion, the demolition wreaked by the free market mavens was not restricted to the United States alone. A band of economists, popularly termed the “Chicago Boys” (by virtue of their academic affiliation), extrapolated them polices and passion overseas with an overzealous attitude. Chile, Paraguay, Iceland and Taiwan were all experimental terrains where these much vaunted economists could ride rough shod.

As Mr. Appelbaum clinically illustrates, this egregious market mind-set has not only gone awry, but led to situations that are absolutely unenviable. Inequality has exponentially increased in the developed world and millions of jobs lost under an austerity squeeze as countries struggle to maintain a balanced budget. From 1980 to 2010, life expectancy for poor Americans perilously declined, even as the rich lived longer. Meanwhile, the primacy of economics has not generated faster economic growth. From 1990 until the eve of the financial crisis, U.S. real GDP per person grew by a little under 2 percent a year, less than the 2.5 percent a year in the oil-shocked 1970s.

Mr. Appelbaum’ s book is also made memorable, courtesy some extraordinary anecdotes and the description of some lively and singularly peculiar characters. For example, in describing Phil Gramm, a Professor of Economics at the Texas A&M University, and also a Republican Senator, Mark McKinnon remarked, “he looks like a turtle and he sounds like a rooster.” But, “he has an uncanny ability to sense the public mood before anyone else does.” Also a quote by Paul Samuelson on Milton Friedman, “To keep the fish that they carried on long journeys lively and fresh, sea captains used to introduce an eel into the barrel. In the economics profession, Milton Friedman is that eel.” But the last word on anecdotes, sans any semblance of doubt has been accorded by Mr. Appelbaum to the acerbic and irascible George Stigler. “When a reporter observed to Stigler that he had written one hundred papers while another economist, Harry Johnson, had written some five hundred, Stigler replied, ‘mine are all different.’ Stigler, who was tall, observed of the liberal economist John Kenneth Galbraith, also tall, and of Friedman, who was not, ‘all great economists are tall. There are two exceptions: John Kenneth Galbraith and Milton Friedman.’”

As Nobel Laureate Joseph Stiglitz once remarked to Foreign Policy: “Obviously, the costs [of globalization] would be borne by particular communities, particular places—and manufacturing had located [to] places where wages were low, suggesting that these were places where adjustment costs were likely large.” In his work, Mr. Appelbaum brings to bear those very same adjustments which while bestowing untold wealth upon a small concentration of people, has brought wanton grief to a majority of the world population, who are at the time of this writing suffering the impact of a medley of causes with which they had nothing to associate themselves with.

70 Policies That Shaped India – Gautam Chikermane

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India is a land renowned not just for its myriad and spell binding diversity, but also for its mind numbing economic policies and extraordinarily convoluted statues. Mystical at best, and macabre at worst, India’s socio economic policies post-Independence have evoked reverence and revulsion in equal measure. Populist, Pedantic, Pithy and Pragmatic, India’s trajectory towards becoming the second fasted economy in the world, – suffering an existential Balance Of Payments (BOP) crisis along the way – makes for some riveting analysis. While all the tomes in the world would not do justice to such an endeavor, it is essential that every Indian connected in some way or the other with policy making or pursuing her profession in the field of Economics, or even nursing a curiosity to understand the progress of her nation, acquire a fundamental grasp of the nation’s progressive journey thus far.

Gautam Chikermane, Vice President at Observer Research Foundation and a renowned author, in his book, “70 7POLICIES THAT SHAPED INDIA -1947 to 2017, Independence to $2.5 Trillion” provides an exhilarating and whirlwind tour of the genesis, impact and ramifications of the barrage of policies instituted by the Indian Government since Independence. Using a marvelously ‘condensed’ approach – a self-limiting 350 words per policy – Mr. Chikermane breezes through 70 path breaking policies that both made and almost marred India. However, supplementing this precise narration is a plethora of endnotes that allow the reader to traipse and trawl through the intricacies and nuances embedded in each such policy. Commencing with the archaic Controller of Capital Issues Act and concluding with the most talked about Goods and Service Tax Act, 2017, Mr. Chikermane takes us along a path, both draconian and delectable.

Mr. Chikermane illustrates in startling detail, the futility of instituting a slew of bureaucratic committees when the actual crying need of the hour was a firm push to initiate structural reforms that would address systemic issues. For example, to unearth the ails plaguing Asia’s first Free Trade Zone, the Kandla Free Trade Zone in just six years, between 1978 and 1984, there were seven attempts to fix the problem: a committee to look into the problem hindering the growth of KAFTZ (1978); Alexander Committee on Import & Export Policies (1978); Review Committee on Electronics (1979); Dagli Committee on Controls and Subsidies (1979); Tondon Committee on Export Strategy (1980); Committee on FTZs and 100 percent EOUs (1982); and Abid Hussain Committee on Trade policy (1984).

In a frenzied bout of nationalization, a primary natural resource such as coal was targeted and the government nationalised 937 mines: 226 coking coal mines and 711 non-coking coal mines. As Mr. Chikermane states, “Because nationalisation was done in a piecemeal manner, by the time it reached non-coking coal mines, many mines were reported to have been stripped of their plant and equipment. In terms of outcomes, the first decade of coal nationalisation saw “political patronage of mafia activities” and bureaucratic corruption.”

The quirky implementation and execution of some laws, as Mr. Chikermane exposes, test the very ingenuity of foolhardy imagination. For example, in exercise of the powers bestowed upon an ‘inspector’ under the Standards of Weights and Measures Act, 1976, entrepreneurs were criminally charged and sentenced to be imprisoned for two years for using “M.R.P.” instead of “Maximum Retail Price”. This absurdity, was in the general interests of both business and commonsense set aside, courtesy a 29 July 1997 order of the Andhra High Court in the Lucas Indian Service Ltd and Others vs. the State of Andhra Pradesh.

Mr. Chikermane also informs his reader about the internecine squabble between the executive, judiciary and the legislature that acts as a spanner in the works even when an avowed objective is a furtherance of egalitarian measures. With a view to abolishing the insidious ‘Zamindari’ system it was proposed to reduce the right of property from a fundamental right to a legal one. Thus was enacted the Abolishment of the Right to Property Act, 1978. However, between 1951 through 1976, seven amendments—1st (1951), 4th (1955), 17th (1964), 25th 273 274 275 (1971), 39th (1975), 40th (1976), and 42nd (1976)—were brought in, all of which were struck down by the Supreme Court.

While of these policies have been epochal in nature, few others can best be described as ill conceived. The Statement on Industrial Policy, 1991 is undoubtedly a torch bearer for the former category. Pioneered by the late Prime Minister P.V.Narasimha Rao and executed by the Prime Minister in waiting, Dr. Manmohan Singh, the policy ushered in an era of industrialization and set India on a path leading to territories unchartered and opportunities unexplored. As Mr. Chikermane asserts, “in the economic history of India, 24 July 1991 will be remembered as the date when five major initiatives were unleashed.” These initiatives included:

  • Abolishing 329 industrial licenses in addition to automatic clearances for projects;
  • Flexibility in FDI approvals, and the formation of a Special Empowered Board;
  • Foreign technology agreements, under which automatic permissions would be given in “high-priority” industries;
  • A review of the public sector portfolio through a de-reservation and, referring sick public sector enterprises to the Board for Industrial and Financial Reconstruction;
  • An amendment of the MRTPC Act to remove threshold limits of assets, with emphasis on controlling and regulating monopolistic, restrictive and unfair trade practices

The book is structured into 8 chapters with each Chapter denoting a decade. Key policies ushered in each decade under consideration is elucidated in a manner that is simple, easily understandable and thought provoking. However, the greatest attribute of this work is its altruistic motive. The book is absolutely free and can be downloaded from the Observer Research Foundation website. The link for the download is:

https://www.orfonline.org/research/70-policies-that-shaped-india-1947-to-2017-independence-to-2-5-trillion/

From first-hand experience, I would urge everyone having a penchant towards economic reforms and policy making to download their copy. Rest assured they would come out curious, if not wiser.

Artificial Intelligence: A Guide For Thinking Humans – Melanie Mitchell

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René Descartes, a French philosopher, mathematician and scientist in elucidating his famous theory of dualism, expounded that there exist two kinds of foundation: mental and physical. While the mental can exist outside of the body, and the body cannot think. Popularly known as mind-body dualism or Cartesian Duality (after the theory’s proponent), the central tenet of this philosophy is that the immaterial mind and the material body, while being ontologically distinct substances, causally interact. British philosopher Gilbert Ryle‘s in describing René Descartes’ mind-body dualism, introduced the now immortal phrase, “ghost in the machine” to highlight the view of Descartes and others that mental and physical activity occur simultaneously but separately.

Ray Kurzweil, the high priest of futurism and Director of Engineering at Google, takes Cartesian Duality to a higher plane with his public advocacy of concepts such as Technological Singularity and radical life extension. Kurzweil argues that with giant leaps in the domain of Artificial Intelligence, mankind will experience a radical life extension by 2045. Skeptics on the other hand bristle at this very notion, claiming such “Kurzweilian” aspirations to be mere fantasies putting to shame even the most ludicrous of pipe dreams.

The advances in the field of AI have spawned a seminal debate that has a vertical cleave. On one side of the chasm are the undying optimists such as Ray Kurzweil predicting a new epoch in the history of mankind, while on the other side of the divide are placed pessimists and naysayers such as Nick Bostrom, James Barrat and even the likes of Bill Gates, Elon Musk and Stephen Hawking who advocate extreme caution and warn about existential risks. So what is the actual fact? Melanie Mitchell, a computer science professor at Portland State University takes this conundrum head on in her eminently readable book, ““Artificial Intelligence: A Guide for Thinking Humans.” A measured book, that abhors mind numbing technicalities and arcane elaborations, Ms. Mitchell’s work embodies a matter-of-fact narrative that seeks to demystify the future of both AI and its users.

The book begins with a meeting organized by Blaise Agüera y Arcas, a computer scientist leading Google’s foray into machine intelligence. In the meeting, the genius AI pioneer and author of the Pulitzer Prize winning book, “Gödel, Escher, Bach: an Eternal Golden Braid” (or just “gee-ee-bee’), Douglas Hofstadter expresses downright alarm at the principle of Singularity being touted by Kurzweil. “If this actually happens, “we will be superseded. We will be relics. We will be left in the dust.” A former research assistant of Hofstadter, Ms. Mitchell is surprised to hear such an exclamation from her mentor. This spurs her on to assess the impact of AI, in an unbiased vein.

Tracing the modest trajectory of the beginning of AI, Ms. Mitchell informs her reader about a small workshop in Dartmouth in 1956 where the seeds of AI were first sown. John McCarthy, universally acknowledged as the father of AI and the inventor of the term itself, persuaded Marvin Minsky, a fellow student at Princeton, Claude Shannon, the inventor of information theory and Nathaniel Rochester, a pioneering electrical engineer, to help him organize “a 2 month, 10-man study of artificial intelligence to be carried out during the summer of 1956.” What began as a muted endeavor has now morphed into a creature that is both revered and reviled, in equal measure. Ms. Mitchell lends a technical element to the book by dwelling on concepts such as symbolic and sub-symbolic AI. Ms. Mitchell, however lends a fascinating insight into the myriad ways in which various intrepid pioneers and computer experts attempted to distill the element of “learning” into a computer thereby bestowing it with immense scalability and computational skills.

For example, using a technique termed, back-propagation, errors are taken away at the output units and to “propagate” the blame for that error backward so as to assign proper blame to each of the weights in the network. This allows back-propagation to determine how much to change each weight in order to reduce the error. The beauty of Ms. Mitchell’s explanations lies in its simplicity. She breaks down seemingly esoteric concepts into small chunks of ‘learnable’ elements.

It is these kind of techniques that have enabled IBM’s Watson to defeat World Chess Champion Garry Kasparov, and trump over Jeopardy! Champions Ken Jennings and Brad Rutter. So with such stupendous advances, is the time where Artificial Intelligence surpasses human intelligence already upon us? Ms. Mitchell does not think so. Taking recourse to the views of Alan Turing’s “argument from consciousness,” Ms. Mitchell brings to our attention, Turing’s summary of the neurologist Geoffrey Jefferson’s quote:

“Not until a machine can write a sonnet or compose a concerto because of thoughts and emotions felt, and not by the chance fall of symbols, could we agree that machine equals brain—that is, not only write it but know that it had written it. No mechanism could feel (and not merely artificially signal, an easy contrivance) pleasure at its successes, grief when its valves fuse, be warmed by flattery, be made miserable by its mistakes, be charmed by sex, be angry or depressed when it cannot get what it wants.”

Ms. Mitchell also highlights – in a somewhat metaphysical manner – the inherent limitations of a computer to gainfully engage in the attributes of abstraction and analogy. In the words of her own mentor Hofstadter and his coauthor, the psychologist Emmanuel Sander, “Without concepts there can be no thought, and without analogies there can be no concepts.” If computers are bereft of common sense, it is not for the want of their users trying to ‘embed’ some into them. A famous case in point being Douglas Lenat’s Cyc project which ultimately turned out to be a bold, albeit futile exercise.

A computer’s inherent limitation in thinking like a human being was also demonstrated by The Winograd schemas. These were schemas designed precisely to be easy for humans but tricky for computers. Hector Levesque, Ernest Davis, and Leora Morgenstern three AI researchers, “proposed using a large set of Winograd schemas as an alternative to the Turing test. The authors argued that, unlike the Turing test, a test that consists of Winograd schemas forestalls the possibility of a machine giving the correct answer without actually understanding anything about the sentence. The three researchers hypothesized (in notably cautious language) that “with a very high probability, anything that answers correctly is engaging in behaviour that we would say shows thinking in people.”

Finally, Ms. Mitchell concludes by declaring that machines are as yet incapable of generalizing, understanding cause and effect, or transferring knowledge from situation to situation – skills human beings begin to develop in infancy. Thus while computers won’t dethrone man anytime soon, goading them on to bring such an endeavor to fruition might not be a wise idea, after all.

Raised In Captivity – Chuck Klosterman

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In a Where-Murakami-meets-Ogden Nash menagerie, Chuck Klosterman, in his book “Raised In Captivity”, whips up a cascade of stories that prima facie, look like an obeisance to absurdity. Bewildering, Puzzling, and irrational, these cryptic tales come careening at the reader, each one more powerful than its immediate predecessor in both velocity and bafflement.  Albert Camus, once said, ‘basically, at the very bottom of life, which seduces us all, there is only absurdity, and more absurdity. And maybe that’s what gives us our joy for living, because the only thing that can defeat absurdity is lucidity.’

Yet, maybe it is in this very absurdity that Mr. Klosterman eggs us on to find lucidity. Perhaps it is his way of trying to rend asunder our moorings to the stereotypical and obsession with the banal. Mr. Klosterman also succeeds in elevating irony to the pedestal that it deserves, a pinnacle which finds itself relegated to mere nostalgia in our current world. Opaque, convoluted and dense, Mr. Klosterman’s collection is more a haphazard and random entwining than an intricate and pattern obeying latticework. A husband and wife duo spend a majority of their lives in an attic, forming part of a Russian Bar. Accessible only via a rope-ladder, the claustrophobic confine is a peculiar haven for a doubly peculiar activity. The couple, employing an algorithm, keep permanently deleting entries forming part of Wikipedia. In another short story, there is a death by stereo. A man is bludgeoned to death by using a sound system as an uncommon weapon. A singularly unique medical procedure permits pregnant women to transfer their natal pain to their spouses/partners. A stunning sight of a lightning, striking a huge whale alters both the perception and life of an accidental witness, who happens to be wandering around in a state of rumination, if not contemplation. A man – in a mind numbing fashion finds himself a confidant of a confirmed sex addict.

Then there is the puma in the toilet of an aircraft in motion, and a woman who hires a hitman to kill her husband, only to find that her choice is a stickler, not only for perfection, but methodologies too, because of which the proposed time to make the hit is a whopping four years! In story titled “If Something Is Free The Product Is You”, the reader gets to read seven and a half pages about a screw driver and nothing else!

This collection of thirty four asymmetric stories, confuse and confound in equal measure. But they are also in a queer manner, a construct of the times we found ourselves in and potentially existential crises for which we have to brace ourselves if we keep going about things the way in which we are right now.

 

Brexit: What the Hell Happens Now? by Ian Dunt

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Theresa Reintke, a German politician and member of the European Parliament, while waxing eloquent at the conclusion of the European Council meeting held on the 17th and 18th October, 2019, over the current shambolic state of affairs in the United Kingdom, said, “The EU is not tired of the UK. The EU is not tired of the British people. We are simply tired of Prime Ministers who don’t understand that if they don’t get their deal through Parliament they should put it back to the people.”  The latest Prime Minister to have the metaphorical egg slapped on his face is the intransigent and remorseless Boris Johnson, whose party failed to defeat an amendment, to delay approval of the UK Prime Minister’s departure deal from the European Union. Popularly known as the Letwin Amendment – named after Sir Oliver Letwin, a British politician who has served as the Member of Parliament for West Dorset since 1997 – this amendment was passed 322 – 306. As a consequence, the confusion surrounding the entire Brexit charade has become even more confounding. A vacuous and uncertain future has gripped the people of United Kingdom in a vice like grip. “What happens next” is the universal conundrum escaping the lips of millions of hapless and helpless souls, who are being held ransom to the self-serving interests of a band of obnoxious politicians.

The question of what happens after Brexit was in fact answered in a brilliantly lucid fashion by Ian Dunt, the editor of Politics.co.uk in his marvelous book, “Brexit: What the Hell Happens Now?” The reference to the word hell in the title of Mr. Dunt’s book could have been neither aberration nor accident. For as he assiduously points out, by voting to leave the European Union in a referendum initiated by a complacent and, to an extent, naive David Cameron, the United Kingdom has chosen a hellacious path to tread. On the 23 June 2016, voters in the UK were posed the existential question: ‘Should the United Kingdom remain a member of the European Union or leave the European Union.’ The results were: Remain 16,141,241 (48.1%) Leave 17,410,742 (51.9%). While the Brexiters, of the likes of Liam Fox, David Davis, Nigel Farage and Jacob Rees-Mogg were besides themselves with glee at the stupefying decision made by the voters, the Leave campaigners, “misunderstood the EU, misunderstood Article 50, misunderstood the WTO, misunderstood the economy and misunderstood the legal framework in which they must now operate.”

As Mr. Dunt articulates, the very edifice of the Leave campaign was based on a farrago of fictitious provocation, masquerading as justifiable truths. A bus campaign where a misleading slogan, ‘We send the EU £350 million a week. Let’s fund our NHS instead’, was painted on its sides; rhetorical jeremiads for a points-based system of immigration, and similar preposterous stuff jousted with a lackadaisical opposition which was astonishingly bereft of ideas. Echo chambers were thus perpetuated and information bubbles manufactured which ultimately led to people placing emotion over reason.

Mr. Dunt, in his extremely readable book, takes unsuspecting readers through the Gordian Knot of Brexit and solves the seemingly intractable puzzle, all the while employing language that is simple, easy to understand and most critically, retain. So here are a few key takeaways from Mr. Dunt’s exemplary book:

  • ARTICLE 50 IS A DECEPTIVE CREATURE

Theresa May activated Article 50 – the European Union rule that must be invoked by any country wishing to leave – on 29 March 2017. Article 50 is very short. As Mr. Dunt illustrates in a chilling fashion, the creator of the Article, the former Italian Prime Minister Giuliano Amato exclaimed after the Brexit referendum, ‘I wrote Article 50, so I know it well. My intention was that it should be a classic safety valve that was there but never used.’ Choosing to be flamboyantly colloquial, Mr. Amato added for good measure, that if another leader ‘is as mad as Cameron’ and offers a referendum on leaving the EU, Amato warned, they should know that: ‘When it comes to the economy, they have to lose.’ As Mr. Dunt points out, the United Kingdom must comply with administrative, legal and trade Brexits to extricate itself fully from the European Union. A task easier said than done.

  • LOSING THE SINGLE MARKET

 At the heart of the European Union, lies the quintessential philosophy of a Single   Market, within whose confines is enshrined the principles of freedom of movement,   goods, services and people. Devoid of the bane of tariffs, these principles provide an element of certainty for the members of the Union in so far as trade is concerned. In one fell swoop, UK has deprived itself of the benefits conferred by the Single Market. Further, as Mr. Dunt, elucidates, “It is likely to lose it with many of the countries that trade with Europe. The EU has these agreements with Australia, Canada, China, Israel, Japan, New Zealand, the United States and Switzerland. When Brexiters say that they want to leave Europe to trade with the rest of the world, they fail to realise that leaving Europe is an obstacle to trading with the rest of the world.”

  • UK CANNOT HAVE THE CAKE & EAT IT TOO

The Brexiteers while nursing a grouse against the Freedom of Movement, seem to possess enough alacrity to still long for the Single Market benefits. However as could be expected, the EU is vehement in its assertion that there will be no compromise on freedom of movement. Jean-Claude Juncker said there would be no ‘nuances’ for the UK. A statement released by the 27 remaining European leaders stressed that access to the single market ‘requires acceptance of all four freedoms’. Angela Merkel told the German parliament: ‘If you wish to have free access to the single market then you have to accept the fundamental European rights.’ The then French President Francois Hollande stated: ‘There cannot be freedom of movement of goods, free movement of capital, free movement of services if there isn’t a free movement of people.’

  • COUNTRY TEMPLATES – NORWAY

Even though not a member of the EU, Norway, along with Lichtenstein, and Iceland are members of a wider European Economic Area (“EEA”), that enables them to enjoy the benefits of free trade. If the UK is looking to emulate the Norway Model, it needs to understand the nuances that separate Norway from itself. Using a clever set of tactics, “Norway goes above the head of the EU, to the global regulatory plane and influences standards there. These standards then float down to the EU level. A classic example is the Fish and Fisheries Product Committee of the Codex Alimentarius, whose Chairman is Bjorn Knudtsen, a Norwegian. The UK however enjoys no such privileges.

  • PITFALLS OF LEAVING THE CUSTOMS UNION

As Mr. Dunt illustrates, ‘Raoul Ruparel, who was hired by David Davis to provide expertise on the Brexit process, has admitted that leaving the customs union would reduce GDP by between 1 and 1.2% in the long term and cost the UK economy £25 billion a year. Other studies expect the hit to GDP to reach 4.5% by 2030. This is because leaving the customs union opens a Pandora’s Box of bureaucratic horror.’

  • KEEPING THE UNITED KINGDOM INTACT

 It needs to be reiterated in no uncertain terms that Scotland and Northern Ireland voted by 62% and 55% respectively to stay in the EU. With such a resounding and decisive mandate, it is ambiguous as to whether the existing constitutional arrangements binding the two countries with the UK can survive contact with the EU machine.

  • GRAPPLING WITH THE WORLD TRADE ORGANISATION

Once the UK manages to successfully extricate itself from the EU, it may find itself making the proverbial transition from the frying pan, into the fire. The WTO can be a raging cauldron where as Mr. Dunt informs his readers, ‘each and every member can trigger a trade dispute against you. To join it, Britain must conduct some of the most technical, complicated and unprecedented trade negotiations in history.’

  • LACK OF PURPOSE, TRANSPARENCY & VISION

The transitional period since the triggering of Article 50 has been mired in confusion, shrouded by deception and characterized by an absolute lack of cohesiveness and purpose. This unfortunate fact is illustrated superbly by Mr. Dunt. ‘The International Trade Secretary Liam Fox started by promising to obtain trade deals with the rest of the world while his colleagues secured an agreement with the EU. In July 2016, he told The Sunday Times that ‘about a dozen free trade deals outside the EU’ would be ‘ready for when we leave’. There was, of course, a problem: Britain could not negotiate or sign a trade deal while a member of the EU. Even if this hadn’t been illegal, it would have been illogical. Potential trading partners didn’t want to negotiate a trade deal with the UK until they could see what its relationship would be with the single market.’ An absolute farce!

  • THE IMMIGRATION FACTOR

The vicious spiel concocted by the advocates for Leaving on the subject of immigration, has led to a virtual paranoia, which partly was responsible for the Brexit verdict. Mr. Dunt hits the nail on the head when he argues that for the development of the economy, immigration is an absolute key. ‘Immigrants are useful in two respects, economically speaking. Firstly, in general someone else has already paid for their education and training. Those who arrived between 2001 and 2011, for instance, endowed the UK with productive human capital that would have cost it £6.8 billion in education spending. Secondly, they often leave to go back home when they’ve finished working, meaning even later life costs are sometimes avoided.’ Alas, when everything looks like a nail, the viewer has to go about his work with a hammer.

  • NIGHTMARE OF REPLICATION

The EU is an incredibly smooth machine whose working is lubricated by the grease of structured components. Every Regulatory Function has its own agency manned by people possessing the requisite expertise. Britain, once it is out of the EU must endeavor to replicate the same set of supremely efficient regulatory systems. The almost insurmountable nature of this exercise is revealed by Mr. Dunt, when he sets out an illustrative list of agencies whose workings would need to be mirrored:

One element, of which Britain finds itself absolutely shorn of, is time. With a jaw dropping string of legal, administrative and trade compliance, matched by a disproportionate lack of expertise, Britain finds itself at the cross roads. With a united and unrelenting EU refusing to either accord or accommodate, the UK finds itself in a bind. At the time of this writing, the policy mavens have issued a dense ‘Withdrawal Amendment Bill’ that is couched in extraordinarily complex language and adorned by the calisthenics of a convoluted and complex language.

The only way out for the UK perhaps might not be either the Single Market or the Customs Union or even the European Economic Area, but Theresa Reitke’s Second Referendum.

9 Lessons in Brexit – Ivan Rogers

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On the 19th of October, 2019, England took on Australia in the Quarterfinals of the ongoing Rugby World Cup in Japan. However, rugby was not the only encounter that had gripped the English imagination that day – and night. The Boris Johnson Government which was accumulating incremental degrees of transience every passing day, was facing what arguably was its sternest test. It found itself wrestling to nullify an amendment that provided parliament for withholding approval of the prime minister’s deal until the withdrawal bill implementing Brexit has been passed. But the events leading upto the voting on the bill have been, if anything, a medley of absolute cacophony. Manufactured concoctions of lies, figments of phantasmagorical imagination and an abject disregard for transparency have all contributed in equal measure to the unenviable position, Britain finds itself today – between the Devil and the Deep Sea.

No one can be more qualified or credible to hold forth on this mayhem than Mr. Ivan Rogers. A former senior civil servant, who was also Britain’s ambassador to the EU, Mr. Rogers resigned from his post in January 2017. He has been a beacon of clarity in demystifying the maze that is Brexit and separating the wheat from the chaff. In his wonderful book, “9 Lessons in Brexit”, he lays out in an unsparing manner, the elemental facets that the political mavens need to equip themselves with, if Brexit needs a closure that is timely, expedient and sans any catastrophe.

With no consideration for either niceties or bromides, “9 Lessons” is an essential polemic that details in a stark fashion the ludicrousness and banalities of self-serving politicians who, in an attempt to shamelessly propel their interests and ideologies, use an unsuspecting and unwitting populace as convenient pawns. So here is an attempt to present an informed summary of the intricate latticework of wisdom that Mr. Rogers offers:

LESSON 1: BREXIT IS A BREXIT IS A BREXIT

Mr. Roger’s basically tries to remind the “Leave” campaigners that one cannot have the cake and possibly consume it too. In other words, once the momentous or inglorious (as may be appropriate) decision has been made to exit the European Union, you cannot ” from just outside the fence, achieve all the benefits you got when just inside it.” Britain also needs to be prepared for the fact that the concept of a ‘frictionless trade’ would be nothing other than a pipe dream, once it moves outside both the Customs Union and the Single Market.

LESSON 2: SOVEREIGNTY  IS NOT AN EXCLUSIVE ENGLISH PRESERVE 

The European Union would not bend over backwards to either accommodate or accord privileges to a departing United Kingdom. Whether it be the cumbersome situation of being hemmed and hawed in by the onerous General Data Protection Regulations (“GDPR”); or the Schroedinger’s Customs Union Facilitated Customs Arrangement proposal, whereby UK derived all the necessary benefits only by staying in a Customs Union with the EU whilst leaving it to have a fully sovereign trade policy, Mr. Rogers emphatically asserts that “the public will soon conclude that much of the supposed control they won back was just a simulacrum of sovereignty for some empty suits in Westminster, with the real decisions about their lives still taken elsewhere.”

LESSON 3: BREXIT IS A PROCESS (AT WHICH THE EU IS A MASTER) & NOT AN EVENT 

As Mr. Rogers puts it with flair and flamboyance, the people advocating for Brexit, three years ago, “had not the slightest fag packet plan on what they were going to try and do and in which order.” The sheer complexity and intricacies underpinning the Brexit negotiations – and stretching into a domain of intractability – would be overwhelming for the English, but not for Brussels, which is a veritable master of negotiations.

LESSON 4: BREXIT DOES NOT HAVE A SINGLE TRUE DESTINATION

The shallow and straw-man arguments forming the premise of both the “No Deal” Right and Downing Street attempting to lend authenticity and credibility to their views whilst actively seeking to de-legitimize opposing views only exacerbates the simmering melting pot of issues instead of cooling it.

LESSON 5: WTO TERMS & THEIR ADEQUACY 

As Mr. Rogers painstakingly argues, this is yet another classic case of “cakeism.” “If moving beyond WTO terms with major markets represents a major step forward in liberalising trade, then deliberately moving back to WTO terms from an existing deep preferential agreement – which is what the Single Market is – represents a major step backward to less free trade. You really can’t have it both ways.”

LESSON 6: THE PROBLEM LIES WITH SERVICES SILLY

Services sectors represent over three quarters of the British economy. The future prospects of this burgeoning industry is alarmingly proposed to be sacrificed at the altar of the primary goal of ending the freedom of movement. This defenestration of a 90 billion pound per annum industry, as Mr. Rogers highlights, is a ploy that is neither logical nor desirable.

LESSON 7: THE CURSE OF THE “PLUSES”

As a famous saying goes, ‘comparison is the thief of joy.’ The Leave campaigners seem to be squarely falling into the trap of comparison by digging a grave with “pluses” carved out as epitaphs. There have mushroomed countries serving as ‘comparability templates’ for spurring a No-Deal Brexit.  While it was “Canada +++” or “Super-Canada”, as it was termed by the former Foreign Secretary, Norway has now joined the club. As Mr. Rogers, with a trace of inimitably dry British humour puts it, “we have Norway +, which used to be “Norway-then-Canada” then became “Norway-for-now” and then became “Norway + forever”. And now even “No deal +”, which also makes appearances as “Managed no deal” and “No deal minideals”.

LESSON 8: TRANSPARENCY MY FRIEND, TRANSPARENCY 

Mr Rogers informs his readers that till now, the United Kingdom has been totally nontransparent in all its negotiations with the European Union. Bringing in elements of secrecy and opaqueness to the table, the British government, in the words of Mr. Rogers has been left, “permanently divided against itself and,therefore, largely unable to articulate any agreed, coherent position, has floundered in its wake.”

LESSON 9: BE HONEST WITH THE PUBLIC 

The last takeaway from Mr Rogers’ book is perhaps the most important as well. Possessing a direct and inextricable linkage with the 8th lesson, this principle argues for ‘real honesty with the public.’ This according to Mr. Rogers “is the best – the only – policy if we are to get to the other side of Brexit with a healthy democracy, a reasonably unified country and a strong economy.” One cannot but unequivocally concur with this proposal.

By the time the lights at the Oita Stadium were switched off, England had handed The Wallabies a convincing, and surprising thumping, winning the game 40-16, and in the process, guaranteeing themselves a berth in the Semi Finals. However, the same could not be said for Boris Johnson and Co. The former Tory minister Oliver Letwin’s amendment passed 322 to 306. The verdict now means that Mr. Johnson is deprived of passing through his Brexit deal, which in turn means that an extension is in the offing. At least now, we fervently hope that all the parties involved pay heed to the invaluable and precocious lessons handed out by Mr. Rogers that will culminate in a Brexit that is in the general interests of not just the United Kingdom, but also the European Union and global trade relationships.