Joe Biden: cometh the hour, cometh the man?

I greeted the defeat of Donald Trump in the US Presidential election with relief rather than joy. It was the most important thing to be decided in these elections: but otherwise it was a poor night for the Democrats. That bodes ill for the success of the new administration. But perhaps the new President, Joe Biden, will rise to the occasion.

The first Democratic disappointment was the failure to suppress Mr Trump’s vote more than it did. In fact “suppress” is not the word: Mr Trump’s vote was huge. Victory depended on a series of narrow wins in key states: very similar in character to Mr Trump’s victory in 2016. Based on polling evidence, most people had expected something more decisive. The next disappointment was the Democrats’ failure to secure the Senate. This game isn’t over yet: it will be decided by the double run-off section in early January in Georgia, but the Republicans are favourites. But the Democrats fell short in a whole series of contests where they were expected to do well, and that was the pattern of the night. The Democrats hung on to the their majority in the House in Representatives, but went backwards. They did not make breakthroughs at state level either: important because these elections will affect redistricting for the House. Down-ticket Republicans polled more than Mr Trump.

If the Democrats couldn’t win big this year, when can they? Looked at strategically it the Republicans are winning the battle to be the natural party of government, albeit by a narrow margin. This should worry Democrats a lot. They have long been expecting a demographic dividend, as America becomes less white, and as older, conservative voters die off. Instead Republicans are managing to recruit amongst ethnic minorities. I don’t know what data on younger voters is, but I suspect it follows educational attainment. Less well-educated Americans gravitate towards the Republicans, regardless of race and age, it seems.

This bodes ill for the Democrats in 2024, and of Kamala Harris’s chances in that election if Joe Biden steps down, as expected. There will be a lot of soul-searching. Some want to go down a left-wing populist route, stoking up anger over wealthy elites rigging the system to their advantage. Such a strategy has worked in Latin America (though whether it has done poor voters there any good is another question) – but I don’t think it has traction in America, not least amongst those of Latin American heritage, for whom socialism is often a toxic brand, based on the record of Latin American socialists.

Beyond that, Mr Biden is going to find it very hard to govern. He needs the Senate to unlock major spending initiatives, or legal reforms, for example to health care, or reforms to make it easier to elect Democrats. Nothing in these election results is going to discourage the dominant no-prisoners wing of the Republican Party, represented by the senate leader Mitch McConnell, as well as Mr Trump himself. Republicans will suddenly rediscover their fiscal conservatism and stoke up worries about public debt, conveniently forgotten when Republicans such as Ronald Reagan, George W. Bush or Donald Trump have been in charge. The new administration will be undermined at every turn. And on top of likely control of the Senate, they have stacked the Supreme Court with conservatives. Mr Biden’s appeals for Americans to unite to tackle the country’s problems are entirely futile. Further, Republicans are trying to undermine his legitimacy by saying the election was “stolen”. The extreme partisan nature of US politics will continue.

So what does Joe Biden need to do? The critical things are to revive the economy, get on top of the virus, and put pressure on the Republicans. The economy is critical. Until 2020 this was looking good for Mr Trump. The acid test isn’t the level of the stock market, so beloved of the President, but whether the economy is running hot enough to push up wages and well as create a plentiful supply of less skilled jobs. Mr Trump’s success there doubtless accounts for much of the strength of his support. How much he was actually responsible for this, and how much he was building on his predecessor, we will never know. The virus, of course, is the test Mr Biden has set himself. On both counts luck looks to be on the new President’s. side. The first of the vaccines is coming good, and other promising ones are behind it. This is already having a positive effect on confidence. This means that he is not as reliant as he might of been on Congress to provide funding for the states. The second piece of luck is that the Federal Reserve takes an expansive view of its role in keeping the economy going, and should not jack up interest rates at the first sign of success.

What do I mean by putting pressure on the Republicans? His life will be a lot easier if a small handful of Republican Senators break ranks. It will also be easier if Supreme Court justices also feel a bit of political pressure to appear non-partisan. This dos not mean indulging in the culture wars (on abortion and such matters), which tend to polarise politics and rally the Republican faithful. It does mean keeping the heat up on healthcare and support for “seniors” and veterans. The Republicans aren’t having it all their own way. MrTrump is not going to disappear; surely the party’s stalwarts are going to tire of bowing and scraping to their monarch. Mr Trump is also likely to face a blizzard of lawsuits – though this is unlikely to change public opinion much.

The interesting thing is that of all senior Democrats, Joe Biden seems to understand what needs to be done best. He has it in him to empathise with the average working class Trump supporter. His campaign was very skilful. He is going to need all of that skill in the years ahead. But he knows that. Cometh the hour, cometh the man?

September: the virus strikes back

I still have not yet recovered blogging groove, as I settle down in my new home, and with family caring issues taking priority. So I am doing a consolidated look-back on the last month’s news again. If last time the central theme was the rise of Great Power politics, this time the theme is the virus.

After the Spring crisis passed, more or less, in the developed world (not so much in the US), people relaxed in the summer (or winter depending on your hemisphere). But the virus is coming back, with the world both better prepared, but less psychologically and economically resilient. The stress is showing.

The virus’s most spectacular victim was the US President. This drama is still playing out. What has emerged is interesting, though. Donald Trump has made a great show of not allowing the virus to affect him, being rarely seen in a mask. But in fact huge efforts are made to screen anybody that comes near him, with extensive use of a quick-turnaround test. But such measures only work so far, and if enough people come into proximity, the test is bound to have miss a few. A reception for his nominee for the Supreme Court appears to have been too hubristic.

Once Mr Trump was infected his behaviour stands in complete contrast to our own Boris Johnson. Mr Johnson soldiered on valiantly, did what the doctors told him, and went to a public hospital only when he had to, with treatment recognisably similar to any member of the public. Such a passive approach was not for Mr Trump. He quickly ordered the most aggressive treatment possible, and checked himself into and then out of an elite hospital. He now claims to have conquered the virus in days. We shall see. This probably reflects cultural differences between our two countries as much as personality. Many Americans, and especially the rich and powerful, struggle with the idea that they can’t take full control of their treatment, as is often the case with the UK’s NHS. Private treatment is available here, but, quite often the best expertise is tied to the public service, and Britons don’t like public and private to mix. It is one reason why nationalising health care is unpopular in the US, even if less well-off Americans have little practical control.

But what effect will this have on the US election campaign? Democrats continue to have reason for quiet confidence. A month ago they seemed a bit rattled, as Mr Trump had forced the narrative onto his own agenda: law and order. But the Democrats’ candidate, Joe Biden, is a seasoned campaigner, backed up by a solid team. He held his nerve. The riots subsided and soon the news was dominated by the death of Supreme Court Justice Ruth Bader Ginsburg, and the unseemly haste to replace her before the election. Mr Biden refused the invitation to stoke up the culture war on abortion, but instead moved the narrative on to court challenges to President Obama’s health care system, which many working class Americans now depend on. This was followed by the first TV debate, dominated by Mr Trump’s hyper=aggressive behaviour. Mr Biden was not given the rope to hang himself with, and the focus became the personality of the President, which the Democrats are quite happy with. And now Mr Trump’s infection has put the virus centre stage. Mr Biden’s poll lead seems to be holding up, and perhaps even increasing. Most Americans have chosen who they will vote for, and not a few have voted already. Everything that is happening seems to reinforcing those choices, on both sides, and making each side more motivated. As in the mid-term Congressional elections in 2018, that is mainly working for the Democrats. Can they seize the Senate?

But the biggest question to me is what will happen after the election, with the country so bitterly divided. Mr Trump doesn’t seem to care. But if Mr Biden wins, he will have a big job on his hands. He does seem to be aware of this.

Here in Britain, the UK government’s reputation is floundering. There is something curious about this. After its initial fumblings, and the appalling early death rate that resulted, the country’s record bears comparison with many of its peers. The record of the US is worse, and so is that of France, since June. Also the records of England (directly under the control of the UK government) and Scotland (mainly under the control of the devolved SNP government) is pretty similar. But Mr Johnson’s Conservatives have suffered much worse damage to their reputation. Mr Johnson’s style is ill-suited to the occasion, and, worse, he has surrounded himself with weak ministers, while more competent people remain on the sidelines criticising his record. There is a lot to criticise, of course, especially with the government’s failure to understand effective process management (with vastly inappropriate and over-centralised structures), and the lack of a clear strategy, as different factions vie to be heard. But others are making the same or worse mistakes and getting away with it. Mr Johnson is failing at the sorts of things politicians are supposed to be good at, as well as the ones for which they have little expertise. Many of theConservatives that voted Mr Johnson into office last year seem surprised; but most others are not.

So far the big winner from the crisis appears to be China. Although they too fumbled the early stages, with dire consequences for the rest of the world, their brand of totalitarian government has stamped out the disease and kept the virus at bay. Meanwhile everybody else is struggling: as they ease restrictions to let life go on as it should, the virus comes back, and the exponential dynamics of infectious diseases stoke. Still, some countries seem better able to handle the challenge than others. But it is hard to generalise. Herd immunity can be bought only at a very high price, in direct and indirect deaths, and debilitating “long-covid”, and may not last long-term anyway. But containment comes at a very high price too. A vaccine seems the best hope.

The world in August 2020: the dance of the Great Powers

I haven’t posted at all in August. This is mainly because my wife and I finally completed our house move to a village in East Sussex. We have been reunited with the bulk of our possessions after nearly four months of storage, and we have been unpacking figuring out what to do with them. Then came choosing and ordering all sorts of new things to fit our new house and lifestyle; getting to know the neighbours has been constrained by social distancing, but there has been some of that too. It just hasn’t felt appropriate to take time out to do some blogging. Besides I quite like to take extended periods off for reflection. I’m sill not sure what direction to take the blog. I’ve had two main ideas. One is to try to dig a bit deeper to develop some ideas in series of essays. The second is the opposite: to fire off quick opinions on the issues of the day. Of course I can do both. I’m going to try the second idea first, by reflecting on the month that has just passed.

The pandemic gets messy

The biggest issue of the day remains the Covid-19 pandemic. In the developed world the good news is that death rates have plummeted (outside the USA). But infections remain persistent, which makes loosening restrictions much harder. The exponential nature of infectious diseases means that things can quickly get out of control. Not enough people have caught it to confer herd immunity, and it looks likely that immunity isn’t conferred for long periods after illness anyway. Meanwhile the impact on jobs and normal life has been heavy, and could get worse as measures to head off the worst, such as paying people to do nothing, run out of steam. Difficult decisions pile up on governments and members of the public, and everybody, across the world, is struggling. Apart from trying to head off another wave of nasty, slow deaths, the biggest worry seems to be the effect this is all having on children’s education, closely followed by how to rebuild economies as people realise (or not) that the we can’t go back to how things were before.

The US election: is Trump catching up?

The month started with US President Donald Trump trailing his Democratic challenger Joe Biden for November’s presidential election. It ended with all sorts of experts from both sides saying that Mr Trump is closing the gap with his relentless focus on law and order, following riots in various US cities over police racism. The betting now has the two contenders nearly even. The hard evidence for this catching up is rather thin so far, so we await polling based on the month end, after the republican convention. Doubtless both sides have their reasons for talking up the President’s chances, but I remain sceptical. Compared to four years ago, many more people have already made up their minds. Those that have plumped for Trump will be cheering him on, and remain on fire. But Trump sceptics will have seen nothing in his transparent politicking and outright lies to persuade them to change their minds. Mr Biden seems to be holding his nerve, and appears to be well-advised. Mr Trump, on the other hand, remains his own worst enemy. Still the polls don’t have to narrow by very much for the election to become quite close, such is the built-in Republican advantage. But this is no rerun of 2016.

Belarus: spheres of influence

The big idea of the moment on the political right (taking in some on the left too) is national sovereignty and the primacy of the nation-state, with a reaction against supranational structures and treaties. Alas, just as it did in the 19th Century this soon morphs into an international system based on a small number of “Great Powers”, surrounded by minor powers, satellites and colonies who are not fully independent in any practical sense. Each Great Power demands its sphere of influence, where other Great Powers must keep their noses out. This is evident in Belarus, where there is a popular uprising against a rigged election and a dictatorial regime that has been in power for too long. But Belarus is, more clearly than any other country, within Russia’s sphere of influence. The rest of the world seems to accept this, and are keeping out of it. This is bad news for the people taking part in the uprising. President Lukashenko’s support in his security forces looks strong, and the Russian government do not want the uprising to succeed. They only want to weaken Mr Lukashenko’s regime so that they are less able to resist Russian influence, which doubtless involves making the Russian oligarchy richer. Belarus’s claim to be an independent nation is probably the weakest in Europe, after all; it only won independence from Russia by accident.

China: victim culture

Another Great Power seeking to undermine the independence of others to further its interests is China. Like Russia (which feels it was shafted when its communist regime collapsed in the 1990s) and the USA (where Trump supporters are convinced that their country has been taken advantage of by all and sundry), this assertiveness is driven by a strong sense of historical victimisation. In China’s case this is based on abuse by colonial powers in the 19th Century (it did not achieve Great Power status and was treated as fair game, by the values of the time) and then subjected to a decade of attack by Japan from the 1930s, in which it was devastated. China’s sense of victimhood has more historical validity than Russia’s or Donald Trump’s. But victim mentality is hard to turn into mature, constructive engagement and long-term success. The country is demonstrating its contempt for Western liberalism by crushing dissent in Hong Kong (where nobody questions its sphere of influence). Its subordination of all to its national interest, and its willingness to bully and bend rules, including its tolerance of cyber attacks from within its borders (or worse) have raised security fears for equipment supplied by businesses based their, and any data they might get their hands on. This is causing costly commercial disengagement with the West, not helped by Mr trump’s paranoia. It has now also deeply antagonised the other Asian giant, India. It is hard to know where all this is going. Personally I’m not as convinced as most commentators by the country’s unique combination of central party control with rampant commercialism, with the former increasingly taking priority. There are distinct financial instabilities which even China’s highly competent management may be unable to control, and the rest of the world is slowly ganging up against it.

A revitalised European Union

The EU hit a low point early in the year, as the advance of Covid-19 made it look irrelevant, and Britain’s exit diminished it. But the institution advances in times of crisis, and release from the Brexit saga seems to have invigorated it, as well as fresh leadership within the Commission. Its scheme to deliver collective relief for the Covid crisis broke new ground, especially with the issue of collective debt. The usual Anglo-Saxon sneerers (like the New Statesman columnist John Gray) predict the EU’s imminent demise, but, not for the first time, the institution lives on. The flaws of the nation-state system may not be evident to these critics, but it surely is to the EU’s member states. But it is sobering for British Europhiles like me to realise that the EU’s step forward has been made much easier by the UK’s departure. shared debt would have been a very hard sell in Britain’s political climate, even if Brexit had been headed off.

Brexit endgame

But Brexit isn’t done yet. What will happen once Britain ends its transition period from leaving the European Union on 1 January 2021? Negotiations seem deadlocked, with both sides blaming the other for intransigence. They may well both be right. Britain’s light-headed government as a strong belief in cobbling things together at the last minute, and does not want to end up as appearing to be an EU satellite. It hankers after status somewhere in between being a Great Power, where it develops spheres of influence, while not being in a minor power, where it would be in somebody else’s sphere of influence. There is no sign that this has been properly thought through, and so what it is prepared to compromise on. But the EU is behaving decidedly in the manner of Great Power which doesn’t mind denting a neighbour’s sovereignty for its own convenience. But a no-deal would be very costly to both sides, so the betting is that a way will be found of saving face.

Britain’s essay-crisis government

Britain’s Conservative government’s approach to Brexit, leaving everything difficult to the last minute and trying to bodge through, is reflected in everything it does, and the results aren’t pretty. The most egregious example in August was the collapse of its attempt to replace A-level and GCSE exam results with a moderated system of teacher assessments putting the overall results in line with previous years. Instead there has been massive grade inflation, and doubtless injustice as some teachers were more generous with their assessments than others (though, of course, this may be the case with exam marking too). The government had plenty of time to prepare, and yet walked straight into the elephant trap, relying on moderation by algorithm rather than human intervention. This partly reflects the managerial approach of the Prime Minister, Boris Johnson, who celebrates his light touch, but abhors competence and dissent amongst his ministers. But it goes deeper. Britain’s political class has for a couple of generations become political specialists, with little experience of serious organisation and management beyond election campaigns. The civil service is little better, drawing a critical distinction between “policy” and “implementation”. Civil servants take pride in specialising in the the first, and assuming that the second can be dealt with by separate implementation specialists. In the real world policy and implementation need to be in a close feedback loop which separation makes impossible. And when the government (in both political and civil service guises) asks for help from practical people, it usually asks the wrong ones: people from big business or the major consultancies that support them. Big business succeeds by making things simple and employing economies of scale; public services are in the public sector largely because the have to deal with human complexity, for which this approach is ineffective (otherwise the private sector would already be handling them). The government’s sub-standard Covid testing and tracing regime arises from the false application of big business wisdom.

Ed Davey: the new Lib Dem leader

The British Liberal Democrats chose a new leader, Ed Davey, who comfortably beat his rival, Layla Moran. I know them both quite well. The party went for the experienced Ed, who was a coalition minister. Many of Layla’s supporters had hoped to put those coalition years, with their student tuition fees and benefits cuts, behind them. But many members had joined precisely because they thought the coalition was a worthy project. On being chosen, Ed said that the party had to “wake up and smell the coffee”. A rather tired cliché, but he is right that the party needs to broaden its appeal beyond an opposition to Brexit that tipped into taking sides in a culture war. Like the Labour leader, Keir Starmer, he seems to want to make competence centre stage, as the Conservatives seek to distract the public from their failures with cultures wars. But will the party be crushed by Labour? Or will Labour seek to operate in a sort of partnership depending on relative local strength? The answer to that depends on the party’s local strengths, and relatively little on the leadership. Meanwhile there is a lot of quotidian work to be done to make the party’s national infrastructure more effective, after years of crisis management have created dysfunction . The same can be said of Labour, but, as a smaller party the job is much easier for the Lib Dems. The party’s President, Mark Pack, and Chief Executive, Mike Dixon, recent appointments both, are up for this patient work – the signs are that Ed is too.

Deadly and contagious, this virus is reshaping our society

When the pandemic started to seriously intrude into our daily lives, in March, my view was the it might accelerate some changes, but it was being overplayed by some commentators as a society-changing event. My view is changing. And it is changing because the virus is proving so hard either to beat or to live with. It just won’t go away. In this week’s statement the Chancellor, Rishi Sunak, made some steps towards acknowledging this. But many people are still in denial.

It is too early to develop a clear view of how this pandemic is evolving. But I can see at least three phases. The first phase is over. This saw the initial emergence of the disease, and immediate hard lockdowns to try and contain its spread, alongside the mobilisation of the health systems. In East Asia and Europe, and in some parts of America (such as New York) this strategy has succeeded in preventing or stemming a rapid advance. Elsewhere weak health systems or perverse political leadership means that the disease is still spreading rapidly. But that aside we are now in an awkward second phase. The lockdowns are being eased, but alongside this the disease is making local breakouts. It is becoming clearer that restrictions on our daily lives cannot be relaxed fully. Even if the disease can be stamped out in some areas, it remains prevalent in neighbouring ones, and the threat of it returning ever-present.

We still don’t know enough about the virus that is causing all the trouble, how it spreads, and its effects on the human body. But some aspects are becoming clearer. The first is that it is deadly. It does not seem to affect many of the people it infects, and some people seem to think that it merely hastens the demise of people already at death’s door. And yet 20-30% of the population appears to be vulnerable in most places, and it has the capacity to double the death-rate, or more. Hospitals become overwhelmed and unable to deal with other health conditions. The second aspect is that it is highly contagious, much more so than other viruses that are deadlier to the infected (such as ebola). Just how contagious is unknown, but we do know that super spreading events occur, where dozens of people are infected by a single individual at once. Being indoors seems dangerous, as does being in proximity to people who are exhaling heavily, such as people singing, shouting or exercising. Wearing masks seems to be a significant help in reducing infection risk. What makes the virus so much of a problem is this combination of lethality and contagiousness. We are conditioned to deal with diseases that are highly contagious but not so deadly (like most flu) or deadlier but much less contagious. To these two known aspects there is an important unknown. Does catching the disease confer immunity to it? There is a widespread assumption that it does, meaning that we can expect herd immunity to arise at some point, when most people can’t catch or spread the virus. But the emerging evidence is troubling. Antibody tests show low rates of prevalence even in places where the disease has been widespread. And there are reports of people being infected multiple times. A second unknown is how quickly we can get an effective vaccine. There has been impressive progress, but plenty of reason to be cautious.

So where does that leave us? Developed societies have no choice but to try and contain the disease. This means changing behaviours to reduce the risk of catching it. This arises partly through public policy and partly through private choice. As I said in my previous post this means that many people are going to avoid social gatherings indoors, including going out to pubs and restaurants. The more prevalent the disease at any time and place, the more such measures have to be taken. The best we can hope for is containing the disease to low prevalence, allowing quite high levels if freedom, but stamping on local outbreaks as they occur. This is being done most successfully in East Asia; in Europe Germany is the main large exemplar. But even this is far from normal. The big problem is that we are going to have to live with this disease for a year at least and probably a lot longer. This has profound consequences.

The main consequence is in the world of work, and in the economy generally. There are two main aspects to this. First is that sectors that rely on close social contact and free movement are going to shrink, perhaps drastically. This includes hospitality and travel. The second is that productivity in most sectors is going to be dented as health precautions take effect. This will inevitably reduce the standard of living. Prices will rise faster than pay; taxes will probably have to rise to curb excess demand and inflation. All this is too much for most people to take on all at once. Many are still trying to negotiate with the virus. I hear owners of indoor gyms complaining about not being allowed to open, like other businesses are. And yet an indoor gym must be one of the best spreading environments conceivable, after a mass indoor choir.

So how did Mr Sunak face up to this huge challenge in his budget statement this week? Pretty well in the circumstances. The most important thing is that he is pivoting from trying to keep old jobs alive (e.g. through the furlough scheme) to creating new ones, in particular focusing efforts on younger people, whose livelihoods are most at risk. His generosity towards the hospitality sector with his VAT scheme and meal discounts may look hopeless against the tide of events – but it does demonstrate some empathy towards one of the sectors most under pressure, which could reduce the short-term trauma somewhat. His £1,000 bonus for firms that retain furloughed staff until January looks harder to justify. It is hard to believe that it will make much difference to job retention, and yet it is estimated to cost huge sums. Surely it would have been better to top up benefits for the out-of-work. His reduction of stamp duty on property purchases looks like an expensive sop to party donors – though I personally stand to benefit.

But, as most people see, this is only a start. In the pipeline are more job losses and business failures, which will bring more problems in their wake. There is also an upcoming crisis in local government finance, as central government support to meet the extra costs of the crisis is woefully inadequate, and the role local government needs to play in combatting the virus is becoming ever larger. This will be the third phase of the pandemic, as the economic crisis deepens, while the struggle to contain the virus continues. Conventional economic management tools are not going to help as much as they should be. A lot of the problem is restriction to the supply side of the economy, while demand is suppressed by fear as much as lack of funds – so boosting demand simply risks creating inflation or a currency crisis. However job creation in public services: health care, social care and education, looks like a sensible way forward. Lower productivity means more people will be needed in these sectors. A rebalancing of the economy from private to public sector will surely mean tax rises in due course, but with no shortage of liquidity in financial markets the government can probably defer some of the hard decisions.

And meanwhile the public will have to confront some hard truths. The virus shows that the free-wheeling individualism at the core of western societies has its limits. It is not sustainable to suggest that individuals can judge the health risks for themselves, since by spreading a lethal disease the consequences of their actions will mainly be felt by others. The failure of so many people in Britain and parts of America to wear masks in public shows how far we have to go. We have something to learn form the East Asians. But not China. That is another story.

What are Donald Trump’s chances in November?

Like many Britons who follow politics, I follow US politics enthusiastically. But I don’t like to comment so much on it here. I have no special connection to the US zeitgeist,and it seems to be a bit rude to comment on somebody else’s politics. But we can’t help but be affected by the US, so I feel I must comment from time to time. The big question is whether Donald Trump will be reelected as President this November.

At the start of the year Mr Trump’s position looked strong. The economy was doing well, he was delivering to his base, and all of his potential Democratic opponents had limitations and weaknesses. He easily saw off impeachment, successfully portraying it as a manifestation of partisan politics. Mr Trump’s divisive style never made him a shoo-in in this year’s election, but he was the betting favourite. But then things started to go wrong. The Democrats resolved their selection race with unexpected speed, in favour of Joe Biden, the candidate, apparently, that Mr Trump most feared. And then came the Coronavirus epidemic, which saw Mr Trump conspicuously flailing. This was followed by the Black Lives Matter explosion after the murder of George Floyd, and more presidential flailing. Mr Biden has a steady and growing poll lead both nationally and in the battleground states, a lead that is bigger and steadier than Hillary Clinton achieved at this stage in 2016. But we have over four months to go, and a lot can happen.

To win, what Mr Trump needs to do is to motivate his base, demotivate the Democrats’ base and win over independent voters. The first part of this is going well enough for him. Mr Trump’s base has two main components: his fanbase and anti-liberals. The fanbase consists of less well-educated white people, who have felt excluded by political elites for decades. Mr Trump speaks their language and expresses what they feel. They experience a sort of euphoria when Mr Trump expresses their values from the top of the political system; they are happy to disregard incompetence for the sheer joy of seeing one their own in charge. And with Mr Trump, unlike many other populists, what you see is what you get; there is no guile about him. This increases the bond of trust. The anti-liberals, on the other hand, are not admirers of Mr Trump personally, but they love him because because he is a bastion against the advance of liberal values. They are passionate about such things as stopping abortion and maintaining complete freedom over the ownership of firearms. They don’t believe in a strong Federal state, apart from having strong armed forces, so they aren’t bothered by Mr Trump’s evident incompetence. This group is diverse, but religious groups are prominent. They also include many business owners who dislike government regulation and taxes, and seek opportunities for cosy deals. For this group Mr Trump has delivered on his promises, most notably in the appointment of Supreme Court (and other) justices, but also with tax cuts for companies and the neutering of federal regulation; he has also held the line against gun law reform, in spite of a spate of mass shootings. For the anti-liberals the Democrats pose as great a threat as ever, and there is no sign that their enthusiasm for reelecting Donald Trump is fading. Doubtless Mr Trump’s partisan approach to the Covid crisis and the BLM uprising helps motivate this group too. They are on fire.

How about the Democrats’ base? Their main weakness is their candidate. He’s been around for a long time, and there is lot of grey in his record, not least around claims of sexual harassment. Before the BLM explosion there were signs that younger voters were becoming demotivated by all the questions being raised by his record. But Mr Trump clearly doesn’t get why people are so angry about the Floyd murder. To him this is just an isolated crime, and not evidence of a systemic failure. He doesn’t feel the pain of decades of being fobbed off with talk of progress. In fact his behaviour has given succour to the forces of darkness. He has thus become a channel for anger across the Democrats’ base, and has managed to fire them up.

And how about independents? This is a harder group for people on this side of the Atlantic to read. Mr Trump picked up many independents in 2016, because his campaign to undermine Mrs Clinton’s credibility was so successful, and her campaign to reassure them was so weak. Mr Trump fitted the American model of a successful and admirable businessman much better than the European one, so people there were prepared to give him the benefit of the doubt, while most Europeans had written him off as a nutcase. It is probably this group that is gradually coming over to Mr Biden as Mr Trump showcases his incompetence. But they are doubtless wary of the Democrats too.

So what next? The campaign hasn’t really got started yet. We know that Mr Trump will try to make it about Mr Biden and not himself, by hammering on his weaknesses. He already refers to him as “Sleepy Joe”. But this is surely not as effective as “Crooked Hillary”‘; voters are tired of hyperactive and hyper partisan politics; “sleepy” doesn’t sound so bad. But there are plenty of cracks in Mr Biden’s candidacy, so the attack could work. A further issue is whether the need to keep his base fired up moves Mr Biden into tricky policy territory. The demand to “defund” the police may not be as bad as it sounds, but it sounds like an invitation to criminals.

A big question hangs over the future course of the epidemic. Mr Trump is playing on the idea that the threat was exaggerated and lockdown measures were overdone (by Democrat governors and mayors), and he is supporting the lifting of the lockdown, even though many think this is premature. This builds on the different experiences of the epidemic across America. It has been devastating in big, crowded cities, such as New York and New Orleans, but much less so in less densely populated places. By and large Republican voters’ experience has been much less severe than that of Democrats. So if the disease retreats even as the lockdown is removed, and the economy bounces back, the Republicans will claim vindication while the pain of many cities will be forgotten as they will vote Democrat anyway. And the administration’s financial management of the crisis has been perfectly competent, largely because Mr Trump has been happy to leave that to others, and not disrupt it.

On the other hand, the disease could boomerang, hitting Republican areas hard, and disrupting the economic recovery. This is particularly likely as Autumn approaches and the weather cools: i.e. just as America approaches the vote. This could create a perfect storm for the Republicans. Mr Trump’s plan to hold mass election rallies in defiance of social distancing and mask-wearing looks especially risky.

And that points to something that I think will be the deciding issue against Mr Trump. He has become very dependent on his own judgement. When he was first elected, it was expected by many that he would surround himself with competent people, and let them do most of the work. And that seemed to be what was happening, with the recruitment of many generals to his administration, and with Steve Bannon advising on political strategy. But Mr Trump hates to be managed and he has replaced almost everybody with more compliant people who will go along with his madnesses, with the interesting exceptions of the Treasury and the Federal Reserve. This has made Mr Trump much more likely to make mistakes. Mr Biden, on the other hand, while gaffe-prone, surely knows how to ask for and accept advice.

But four months is an eternity in this crazy year.

Will the Euro survive the Coronavirus crisis?

So far in this astonishing episode, the world’s financial systems have held up well. Remarkably, lessons have been learned from the Great Financial Crisis, both in the behaviour of policymakers, and in the resilience of banks. But many claim that the Euro is especially vulnerable. Are they right?

The crisis so far has not been good for the egos of the Europocrats. The response has been led almost totally by the governments of its member states. It turns out that the EU really is just a free trade area after all. When something more important than trade comes along it has nothing important to do. And when its leaders at last got together to sort out a financial response, the outcome was pathetic, and spoiled by the sort of bickering shows that there is little solidarity amongst the member states.

Yanis Varoufakis, the former Greek finance minister, called this out on BBC Radio 4. The most important part of the EU’s infrastructure, the Euro, has turned into an instrument of oppression. The rich northern states, notably Germany and the Netherlands, were vetoing any serious aid to the most afflicted states, such as Italy and Spain, while not allowing them to help themselves. He said that German leaders should level with their public: the Euro was really good for their economy, but to keep it going they needed to be more generous to other members. The Italians, in particular, are throughly disillusioned and could provoke an existential crisis for the zone.

There is plenty of truth in what Mr Varoufakis is saying, but nobody should bet on the dissolution of the Euro just yet. Critics of the system miss two things. Firstly, as this week’s Buttonwood column in The Economist has pointed out, the European Central Bank (ECB) has learned a lot from the previous crisis and has now become the EU’s most effective institution, and not bogged down by the bickering that undermines the more overtly political arms. It has, amongst other things, rushed to buy up debt from Italy and Spain, thus greatly assisting a strong fiscal response to the crisis. This has the effect of mutualising their debt by stealth. The ECB has learnt the art of doing just enough to keep the Euro going, while being unable to fix its deeper flaws.

The second point is more subtle. It is wrong to suggest, as Mr Varoufakis does, the Euro is in effect a plot by Germany to rob Italy. It is better understood as a conspiracy between German workers and Italian savers. The Germans get plentiful and secure jobs, because their currency is held down, allowing its industry to run a surplus. Italian savers get more buying power for their money in a currency that is stronger than their own would be, with less risk of inflation. The victims are Italian workers, whose firms struggle to make progress with such a strong currency, and German savers, who lose buying power. It is arguments between these victims that drive the acrimonious politics of the Eurozone. Politicians like to blame an outsider, so German ones like to blame lazy Italian workers for low returns by their savers, and Italian ones like to blame the Germans for screwing their businesses.

So the Euro’s losers drive the day to day politics, but as soon as it looks as if they might succeed in their goal of causing the collapse of the Euro, the winners, German workers and Italian savers, hoist it out of trouble with a twitch upon a thread. The clearest example of this is Marine Le Pen’s tilt at the French presidency. Her bid featured resentment at the Euro, and it got her into the final round against Emmanuel Macron, but it rapidly collapsed when, in one of the debates, she floated the idea that France might leave the Euro. French savers, many of them older voters sympathetic to Ms Le Pen’s anger at liberal elites, suddenly realised that there could be a cost to their protest and deserted her. Something like this effect will happen in Italian politics if anti-Euro politicians get too much traction there.

So the Euro is safe but the politics is grim. What is needed are two things: more enlightened self-interest from northern leaders, and more willingness to embrace economic reforms by southern ones. The big trading surpluses by northern countries mean that they could easily be more generous to their southern neighbours by buying their goods and services or through direct aid (though lending them money simply builds trouble for later). Each of the southern economies has economic inefficiencies that their leaders should do more to tackle. In Italy it is excessive petty regulations to protect economic vested interests. In Spain it is lack of labour market flexibility. In Greece it is a failure to collect enough tax, especially from the better off. Until they tackle these they will always be supplicants and politically vulnerable.

For all that, the Euro has some very challenging times ahead (as do the US dollar and the Chinese Yuan, for differing reasons). Italy could easily be faced with a banking crisis, at a time when the attempts to mutualise banking risk across the Eurozone are incomplete. The acrimony will continue.

And this will set the EU on a trajectory that makes it more and more resemble the Holy Roman Empire. This was a tangle of German states, led by an Emperor with little practical authority. It was much despised by Enlightenment thinkers, and finally brought to an end by Napoleon. But it was the foundation of the strong commerce and devolved administration that makes Germany (and Austria) such successful states today. This is something Anglo-Saxon observers almost never understand.

Donald Trump’s message to Iran: get nukes fast

US President Donald Trump doesn’t do quiet confidence. If he had, then he might have ended 2019 displaying it. Which makes his actions in Iran in early 2020 baffling.

As Autumn approached Mr Trump might have been worried about his reelection and his legacy. He came into office promising to show his vaunted business skills, in contrast to his inept predecessors. He was the arch deal maker, he claimed. And yet he had practically nothing to show for it. His attempts to negotiate with North Korea had run into the sand. His dramatic ripping up of the “worst deal ever” to limit Iran’s nuclear ambitions had not restrained that country’s foreign adventures, and seemed to be hastening the day when it would become nuclear. There were almost no trade deals: even the replacement for NAFTA was stuck in Congress. On other issues, his attempt to negotiate a fabulous new deal for Americans on healthcare had long since collapsed. It was painfully slow to find funding for his border wall. He had aggressively slapped tariffs on Chinese trade, but he seemed unable to close any kind of deal with China, while America’s trade deficit roared ahead. His one significant achievement in his term to date was corporate tax cuts, which probably left most Americans unimpressed.

It got worse. He allowed Turkey’s President Erdogan to talk him into winding down the American presence in Syria, abandoning his Kurdish ally. Whatever strategic sense this made, it was tactically inept. It angered many of his Republican allies.

But this blew over, and things started to look up. As the race to be his Democratic opponent in 2020 started to heat up, it became clear that each of the candidates had weaknesses that he could exploit. There is nobody he can be truly scared of. The House of Representatives also cracked after revelations on Mr Trump’s attempts to pressurise Ukraine, and set impeachment proceedings in motion. This largely works in Mr Trump’s favour; ordinary voters will not be able to fully understand his wrongdoing and its implications, especially after these are buried by the barrage of nonsense supplied by him and his many allies. The whole episode will just serve to distract attention from his weak record in office. Meanwhile he managed to close a deal with the Democrats in Congress for the NAFTA replacement, and some kind of interim deal with China looks close. The wall is being built. Even in the Middle East, Iran was under increasing pressure from its own people, and those fed up with its meddling in Iraq and Lebanon. Thin pickings, perhaps, and North Korea is going from bad to worse, but enough for Mr Trump to suggest things were going his way at last. His core support was holding up. If opinion polls still seemed against him, he might reflect that they were probably good enough: all he needs to do in November is hold the states that voted for him last time; he needs no majority in the popular vote. Enough for some quiet confidence.

But then came the Iran/Iraq episode. He firstly overreacted to a militia attack on a US base in Iraq, and then, after those Iranian-backed militias made a not-all-that-serious attack on the US embassy, he launched his assassination of Qasem Soleimani and his associates. This is a dramatic escalation, to which Iran has “no choice”, in the oft-repeated phrase, to respond. The Iranian government is playing the episode for all it is worth to distract attention from its other troubles.

What makes this very striking is that it goes against the general restraint Mr Trump has shown in the Middle East. He is much criticised for this, and has shown no tactical acumen, but he is not wrong in principle. Not, at any rate, in his wish to disengage the US military involvement, and treat Russian adventurism with a shrug. We need to get beyond the post-colonialist thinking that everything that happens in the region is somehow the result of US and western government actions, while denying multiple local actors agency and responsibility themselves. Mr Trump is, though, wrong in principle to think that ripping up the Iranian nuclear deal and applying sanctions to that country will make it more amenable, rather than making the whole region a lot messier. This is the logic of the bully, who assumes their own actions are principled and everybody else simply responds to the exercise of menace.

The defence put up by Mr Trump’s supporters are really hard to fathom. Soleimani was a bad man and his removal will make peace more likely, they say. Soleimani, and his like in the Iranian regime, are indeed bad people. They use innocent human lives as pawns in their games, and have no compunction in perpetrating murder. But he was also a senior state actor, and acting against him is like declaring war on the Iranian state. Assassination is a very dubious instrument of state policy. Israel has long used it, but its conflicts with neighbours and people within its borders have just dragged on regardless. The Iranians are no worse than the Russians, but would the US attack senior Russian officials in this way?

Which brings me to the central point. The US under Mr Trump treats nuclear armed powers with respect, even such mavericks as North Korea. Mr Trump seems to think that the rational response to his behaviour is to come to the negotiating table to make serious concessions. Iranian leaders are just as likely to think that the only rational course for them is to acquire nuclear weapons as fast as they can.

As I write the Iranian response has begun with some missile strikes at US bases in Iraq. They are suggesting that this is the limit of their response, though it is hard to know whether to take that seriously. Mr Trump seems to be shrugging it off. If that is all that happens, then Mr Trump will have got off lightly, and he and his supporters will claim victory.

But earlier the Iranian regime abandoned its vestigial adherence to the nuclear deal. Their thinking may be to deliver this rather underwhelming response and then go as hard and fast as they can for nuclear weapons. In their eyes that is probably the most rational approach: if Mr Trump wants to scale down US action in the Middle East, there will be little they can do to stop Iran, if that country does not present too many easy targets for air strikes.

The US public is unlikely to understand that this is what is happening, and look on Mr Trump’s actions favourably. If so Mr Trump’s faith in his own genius will be affirmed. At some point this has to unravel. Doesn’t it?

Has Donald Trump made a serious mistake?

I was astonished a week ago when the US President, Donald Trump, launched a Twitter attack on Democrat Congresswomen, telling them to “go back to where they came from”. My first reaction was that he had lost the plot. Since then he has doubled down on this attack, incorporating it into a central theme of his campaigning. I have read and heard quite a number of comments on this from neutral and unsympathetic commentators. They all say that this is a clever strategy by the President, and makes life for the Democrats more difficult. This view is so widely held that I am compelled to challenge it. Mr Trump has blundered and is compounding his mistake.

Why is this comment so shocking? Rather too much hot air is being expended on whether or not it is racist or merely xenophobic. This type of comment is a favourite line of attack by racists, and can be taken to shocking extremes, as we see with the Burmese attack on the Rohingyas – an ethnic group that has lived in the country for many generations, but whom ethnic Burmese regard as being “from” Bengal. But you don’t have to be ethnically separate in order for people to think that you aren’t really “from here” and that your home is somewhere else, even if it isn’t. Mr Trump’s supporters don’t regard themselves as being racist, since they don’t think that it is ethnicity that they are attacking. But it really doesn’t make much difference what name you call it: it touches a very raw nerve on the part of anybody of immigrant stock. It says that however hard you try, you are not accepted as belonging. It says that the accuser is making no effort at all to be inclusive. It is particularly shocking in a country that is founded on immigration. No serious British politician would say such a thing intentionally (although I would not put it past The Brexit Party’s Nigel Farage, now that Mr Trump has blazed the trail).

Why do so many commentators think Mr Trump is being clever? First they say that it fires up his core supporters. That is clearly true. They are the type of people who think that it is a perfectly fair thing to say about somebody from a first or second generation immigrant background whom they disagree with, and they adore the way Mr Trump flouts the rules of political correctness. But Mr Trump needs more than his core support to win. In 2016 he persuaded many others that he stood for a fresh start against an under-performing political establishment. Stoking up fear and loathing does not get through to these voters.

The second thing that the commentators are saying is that the four congresswomen at the heart of Mr Trump’s assault are to the left of the Democrats and that by drawing attention to them he will put centrist voters off the party. But Mr Trump is drawing more attention to their ethnicity than he is to their political views with his “go home” attacks. He is attacking their views too, of course: I heard on the radio part of Mr Trump’s recent campaign rally implying that one of them was an Al-Qaeda supporter, inciting chants of “send her home”. Perhaps there is a parallel with his “lock her up” attacks on his 2016 opponent Hillary Clinton, but this served to reinforce his claim that there was something dodgy about her, rather than distract from it. Once again, it’s a great way to fire up the base, but it is far from obvious that the attack will be effective beyond that.

Meanwhile, consider the damage that he is doing to his own and his party’s standing. His attack could not be better targeted to anger or worry voters of Latino or Asian background, and their friends. The picture may be a bit more complicated with black voters, but the racist undercurrent won’t be lost on them either. Mr Trump is crafting his appeal to white, less educated and older voters, demographic groups that are all in decline (if you take the age criterion as being defined by a particular birth date, which seems applicable in this case). He is doing so at the cost of winding up everybody else. This is a strategically disastrous course for his Republican party, recalling the attack by that party on Latinos in the 1990s in California, which has proved catastrophic for them. The Presidential and Congressional elections of 2020 are more about tactics that strategy – but it is hard to see how the Republicans can do well without at least apathy amongst better-educated, younger or non-white voters. Stirring them up will make that harder.

A final line of defence for Mr Trump is that the attack is a “dead cat” – a tactic to distract attention from something that is more profoundly damaging. But there is no imminent election: it is hard to see what he is trying to distract people from and why it should be now.

Of course Mr Trump is not to be underestimated. In 2016 he showed a real mastery of the art of creating doubts about his opponents. He can point to enough success in his term to say that he has proved sceptics wrong: in many cases the disastrous nature of his policies will only be evident after 2020. His robust attitude to America’s trading partners, especially China, draws praise; the economy seems to be doing well enough to boost wages; he has made conservative appointments to the judiciary, which appeals to a sizeable chunk of the electorate. But the xenophobia takes voters who might be impressed by all this to a different place. He has not made his reelection impossible, but he has surely made it harder.

Some commentators suggest that his best chance of success is if the Democrats select a candidate from the left of the party. But after this episode one wonders whether amongst Mr Trump’s many remarkable achievements will be making a candidate from the left electable.

Why Donald Trump is right about Syria

The US President Donald Trump doesn’t do complicated. That’s one of his biggest weaknesses, as well as a major strength. Most real problems are complicated; but simple is easy to communicate. And the idea that “elites” use the excuse of complexity to mask incompetence or worse has a powerful resonance with many people.

Take Mr Trump’s diplomacy with North Korea. It is a hard problem, though arguably not all that complicated, and it has defeated every US regime that has tried to tackle it. Mr Trump’s is no different, though he assumed that his genius could crack it. He hopes that he can tempt the country into rolling up its nuclear programme by offering the benefits of an open economy. But convincing the paranoid is hard work, especially when you want to appear tough yourself. At least Mr Trump didn’t fall for the something-for-nothing deal that his counterpart sought. Meanwhile he hopes that his theatrics, and the reduction in tension arising with nuclear and missile tests now done, will be result enough, and he sticks to this simple message. While the intelligentsia gabbles on about his failure, there is unlikely to be much damage to his reputation.

No foreign policy problem is more complicated than that of the Middle East, a place where your worst enemy can be your friend elsewhere in the neighbourhood. But is Mr Trump onto something by pushing for the withdrawal of US forces from Syria? Sometimes it requires a simple vision to cut through nonsense.

Mr Trump’s stance has caused despair amongst foreign policy professionals. Extracting the US from Syria will mean that the country loses influence, and it would mean that the country’s most reliable ally, the Kurds, will go over into the Syrian government/Russian camp. Years of diplomacy and relationship building will be trashed.

But the US and its European allies have achieved nothing of value in Syria since its civil war erupted in 2011. The Islamic State terrorist organisation has nearly been crushed there, it is true, but was it a real threat in the first place? And has the level of threat diminished? IS’s leaders promoted it as a base for attacks against western interests around the world, in deliberately provocative propaganda. But did we respond to those provocations in the right way? Was there much practical sustenance to terrorists arising from IS’s Syrian bases? Such attacks as there have been were perpetrated by lone wolves and small cells, with little direct connection to Syria. They are more likely to have been provoked by western military action rather than deterred by it. Security experts are now telling us how little the wiping out of IS’s bases in Syria and Iraq makes to the level of threat – though admittedly they would say that regardless. The western powers simply gave what IS’s attention-seekers what they craved, with a bit of martyrdom thrown in. In the end the Syrian government, with their Russian and Iranian allies, would doubtless have dealt with them anyway, or they would have collapsed from their own contradictions.

Meanwhile the continuing western presence is creating more conflict, in particular with the Turkish government. The Turks are by no means good guys, but then are the Iranians, Saudis and Russians? Turkey is a European power as well as a Middle Eastern one: the war in Syria makes other aspects of our difficult relationship with it harder to manage. It was the Turkish president Recep Tayyip Erdogan that started Mr Trump down this course in the first place.

By now the concept of liberal intervention should be dead. It was pioneered by Tony Blair, for use in the former Yugoslavia, and then picked up by the neoconservatives that surrounded George Bush Junior. The Balkans are part of Europe, and military intervention there was followed through with state-building by mainly European nations. It more-or-less worked. But such follow-through could never be replicated in Iraq, Libya or Syria. Instead all we have learnt is how alien these places are to our concept of society. Military intervention, unless contained within clear boundaries and part of a broad coalition, like the First Gulf War, is doomed because it has to be followed by the process of state-building, which Western countries cannot do.

So what is to be done instead? Military interventions may often be helpful to prevent civil wars from escalating, or to break a stalemate and bring peace – or even to bring down a murderous regime. But it needs to be led by local powers, with outsiders providing logistical or air support if appropriate. In Syria these local powers are Turkey, Iran, Saudi Arabia and Israel. These regimes inspire no confidence: they are as likely to see civil wars as opportunities to develop their rivalries as crises to be fixed. But that is surely because the have become to used to the idea of superpower leadership. They are not used to taking leadership roles themselves. We in the west haven’t got used to that idea either. So many commentators, especially from the left, assume that all the problems in distant lands are the fault of western powers, and therefore it is our responsibility to fix them. They ascribe no agency to local actors. I call this way of thinking “post-colonialism” as it reminds me of the arrogance of the colonial era. Civil wars and state collapses do not benefit the neighbourhood. Sooner or later the local powers will learn how to manage them towards peaceful outcomes, even if this doesn’t look very pretty to our eyes. Mostly they are learning this the hard way (as Yemen shows – a civil breakdown that has been mainly left to the locals). But, for example in West Africa, there have been better examples. Western intervention doesn’t help. And if the Russians want to play superpower games, more fool them.

Mr Trump seems to get this better than most. The paradox of his ambition to “Make America Great Again” is that it means a retreat from global responsibility, and taking a narrower view of its interests: the opposite of greatness. But the colonial era is over; the Cold War has passed; and Pax Americana is now broken. It is about time the world joined Mr Trump and woke up to the consequences of that.

Are there Australian lessons for Brexit?

I have now just a week to go in my long trip to Australia. I’m not all that surprised that I haven’t managed to update this blog regularly on my travels. It turns out that it is quite hard to fit into my holiday routine. But witnessing the mounting political tension on Brexit in the UK from afar, I will manage one more post. Does an Australian perspective have anything important to say on Brexit? Well, yes and no.

Australia is beloved of Brexiteers, partly because it is part of an “Anglosphere” which they hope can substitute for Britain’s European identity. But there are two more substantive reasons. One is that Australia shows that a medium-sized nation can be economically successful as a fully sovereign state. The second is that a country that attaches itself to the booming Asian, and especially Chinese, economy will prosper.

Let’s start with the first proposition. Australia is undeniably successful without being part of a wider formal economic block like the EU. Indeed most Australians would probably be horrified at the loss of sovereignty that such an arrangement involves. They are fiercely self-reliant and independentlyminded. Most of the Australian6s I have had proper conversations with have been internationally aware and sympathetic to Britain’s membership of the EU. That makes them unrepresentative. It is very hard to get any kind of international news on television or radio out here. The bulletins are consumed by stories on the latest bushfires, weather events, local political spats and sport. Only the Royal Family can intrude. I suspect that most Australians are pretty sympathetic to Brexit. The country has half or less of the population of the UK, and still makes a very good go of things. Indeed it is prosperous. One shouldn’t make too much of this, though. Australia’s dependence on the US for security has meant that it had to send its boys to be killed in Vietnam. And Australians worry about Chinese intrusion into their state currently.

Australia’s success has a lot to do with the second proposition – that its economy is tied to the fast-growing Asian economy, rather than the lacklustre European one. Australia exports substantial amounts of minerals and agricultural produce to China, in particular, and attracts lots of Asian tourists and students. There is a lot of Chinese investment. That keeps its exchange rate high, so that Australians can afford lots of exotic imports. A popular theme of the Brexit case was that Britain should unshackle itself from the European corpse, and trade more with Asia. Although the example usually given is Singapore, Australia seems to make the case even more convincingly.

But, of course, we have to think of the differences between Britain and Australia. The first is Australia’s relative isolation. The country has little choice but to go it alone, as it is not geographically close to any other large nation – if you exclude Indonesia, which is not close to any of Australia’s major economic hubs, quite apart from a cultural gulf that makes the divide between Britain and its European neighbours look trivial. Indeed the internal distances within the Australian continent are often more daunting than those between Britain and even its more distant European neighbours. Australians are self-reliant because they have to be.

But they are still a success. That is surely down to the next big difference: it is a vast continent with huge exportable assets. These include massive mineral wealth and agricultural land. The Australian economy has a highly extractive character. That even applies to its agriculture, where few farmers give serious consideration to the long-term sustainability of their methods. While on our trip we experienced dust storms in New South Wales. Dust of that sort doesn’t come from deserts (where such fine particles would have been blown out long, long ago) nor form vegetated land; it is agricultural top soil being left exposed by exploitative farming methods. Even without leaving vast areas of topsoil exposed, agriculture depends heavily on artificial fertilisers, which can only do so much. All this means high agricultural productivity and competitiveness of exports for the time being. Britain does not have the option of exploiting its natural resources in a similar way, even if it wanted to – which it very clearly doesn’t. Nobody suggests that despoiling hundreds of square miles of British countryside is what the country must to to escape economic dependence on Europe.

So what could Britain do instead to ride the Asian wave? Asia has strong demand for capital goods. But Britain has hollowed out its manufacturing industry (unlike Germany which is riding the Asian wave successfully from within the EU). There is hi-tech expertise and products. Britain could do better here, but China is investing hugely so that it becomes less dependent on foreigners. Tourism? Professional services? Universities and schools? There are possibilities in all of these, though Britain tends to shoot itself in the foot, especially with over enthusiastic anti-immigration policies. But it would be a hard road. Anyway it is far from clear that Britain is better off being outside Europe and free of its regulations and trade restrictions, or within it and so having a wider semi-domestic market in which to scale up its products and services. Britain’s proximity to the rest of Europe is one of its comparative advantages over Australia – it seems silly to get in the way of that.

Another point is worth making. Some Brexit supporters suggest that Australia could be part of a wider international support network, economic and political, rather as the Commonwealth was before Britain joined the European Community. From here that looks naïve. Australia has long outgrown its old links to Britain. We used to be a significant source of agricultural outputs – but now Britain cannot compete with the closer and larger China. On other matters, education or business services, Australia looks more like a competitor than a partner. Distance prevents the intimate supply chain links that are a feature of Britain’s economic relationship with its neighbours.

While the Empire 2.0 and linking up to Asia’s dynamism look like fatuous arguments for Brexit, Australia still shows that smaller countries can plough there own furrow if they want to. Outside the EU Britain would still keep its strong links to the continent, and the laws of comparative advantage suggest that the economy would in due course rebalance to a new reality. The only question is how much poorer (or, for the Brexit optimists, richer) that new reality would be. Lacking Australia’s natural assets, it seems likely that it would be quite a bit poorer.