Whatâs necessary is impossible Jean-Claude Juncker, the boozy former president of the European Commission, once said something that struck a chord with me. Since then, Iâve been repeating his aphorism ad infinitum: âWe all know what to do. We just donât know how to get re-elected after weâve done it.â Chancellor Healeyâs new budget reminded me of this cynical witticism. Or rather it wasnât so much the budget itself as the way conservative commentators have responded to it (Iâm singling out conservative commentators because I read no other). Talking about the state of our economy, they seem to keep dipping into their thesauruses (thesauri?) to see how many synonyms for âdisasterâ they can find. Each one is perfectly legitimate as a characterisation of our economy, but then the trouble starts. When they try to suggest ways of improving the sorry state of affairs, they come up with what one has to see as merely palliative tweaks. Lower this tax, cut this item of spending, remove waste, that sort of thing. Alas, some systems are beyond tweaking. This brings back a rather more distant memory of Houston, circa 1978. I met an inventor who I thought was nuts. His claim was that his understanding of thermodynamics was so profound that he could fix any technical problem with the production and transportation of oil and gas. Just in case my diagnosis of his mental faculties was awry, I introduced him to some oil companies I was doing business with. My friendâs proposal to them was simple: tell me which system malfunctions, give me a few days, Iâll come back with a solution, you pay me. And what do you know, the blighter was as good as his word. However, most of the time he didnât fix the faulty system â heâd get rid of it altogether, replacing it with something that worked much better. âIn my experience,â heâd tell me, âmost problems arenât symptomatic but systemic. If a system never works properly, chances are itâs fundamentally flawed and canât be fixed.â That approach has implications that go beyond oil wells and gas pipelines â and it certainly applies to the economic model followed by Britain and, mutatis mutandis, just about every other Western country. That model is systemically flawed. Therefore it canât be improved; it can only be replaced. No economy can sustain the burden of debt breaking its back; no economy can function at its best when the state extorts half of the nationâs wealth (and Iâm being conservative). The problem has many facets, one of which is demographic. As the population gets older, the ratio of people producing and consuming wealth is constantly shifting towards the latter. And the picture becomes even darker, when we factor in younger people on welfare. At the moment, about 10 million working-age Britons receive some form of state benefits â in addition to 13 million state pensioners. Thatâs a third of the UK population, and every constituent of this proportion is trending upwards. As Rabelaisâs Gargantua remarked, LâappĂ©tit vient en mangeant (âAppetite comes with eatingâ). And yet our government is doing nothing to curtail such appetites and much to enhance them. A ship is heading for the rocks, and its captain is shouting: âFull speed ahead.â When I wrote my book about the 2008 crisis (The Crisis Behind Our Crisis, 2010), the sum total of the worldâs indebtedness equated ten times the worldâs combined GDP. Since then things have only got worse. The UK is currently paying ÂŁ124 billion a year to service the national debt which has just gone over ÂŁ3 trillion. This means that our government isnât paying its way and hasnât done so for a long time. (The US national debt is much higher even in per capita terms, but the country benefits from the dollar being the worldâs reserve currency.) At the same time, the productive economy is being strangulated with taxes that always go up. Over 581,000 businesses ceased trading in one year covering parts of 2024 and 2025. In addition, 53,756 British firms are reported to be in âcritical financial distressâ. Wealthy people are leaving Britain in droves, taking their capital with them, along with the jobs they generate. At first, these were mostly foreign businessmen who had at some point found the British trading climate more clement than elsewhere. They are fleeing now, closely followed by their British colleagues born and bred. Getting back to Junckerâs aphorism, Iâm not sure our government knows what to do. I am, however, certain that it doesnât care one way or the other. As Iâve mentioned many times, its view of the economy and politics in general is wholly informed by Marxist dogma or at least Marxist instincts. If a sound government seeks reducing the number of people dependent on it, a Marxist government is eager to increase it. Our powers that be feel that wealth, except their own, is the work of the devil. People independent of the state financially would be less malleable, less prepared to accept the stateâs diktats on every aspect of their lives. The ideal government our rulers see in their mindâs eye is the closest approximation of the Soviet Union they can get away with, ideally minus the concentration camps. Thatâs why, if they are at all bothered by the shameful state of our economy, itâs only in the context of their being able to hold on to power for a long stretch. At the moment, they feel they can trick enough people with statistical legerdemain and the odd crumb, like slightly cheaper gherkins, to keep conservatives out of power. However, even supposing for the sake of argument that Iâm wrong and our ministers are genuinely concerned about the declining standard of living, there is precious little they can do about it. They probably do know what must be done, which is a sweeping reform of our tax-and-spend model. That would involve tightening, in due course reducing, the money supply, cutting the social budget down to the bare essentials, reducing the public sector to at most 25 per cent of the economy, privatising everything feasible including the NHS, rolling up most of the red tape, cutting all taxes but especially those on companies new and old, turning Britain into a kind of offshore paradise for business foreign and domestic â I could go on for ever, and so could you. More important, so probably could Messrs Burnham, Healey et al. But even if they wanted â which they donât â to restore Britainâs economic freedom, along with all other kinds, they wouldnât be able to. No semblance of such a reform is politically possible, which is why even our supposedly conservative parties steer clear of the subject. They keep coming up with tweaks, trying to treat cancer with paracetamol. Their idea of running the economy is doing a bit less of what Labour are doing, which may delay the total collapse but not prevent it. The circle is vicious: co governments over at least the past 80 years, with a brief Thatcherite interlude, have been corrupting the people with socialist twaddle about equality, class war, the rich getting richer and so on. Governments have been competing against one another as to which cardinal sins they can encourage and reward. Eventually the people bought the notion of a paternalistic provider state letting them trade much freedom for a little security, and now they quite like it. They wonât like it when the whole structure collapses, burying them under the rubble. But then itâll be too late. A change of ruling party may make things slightly better quantitatively but not qualitatively. Things wonât get better; theyâll just get worse at a slightly slower pace. But the final destination will remain the same until a government is willing to introduce meaningful reform. But their will wonât produce a way: whatâs economically necessary is politically â also socially and culturally â impossible. http://www.alexanderboot.com/whats-necessary-is-impossible/?utm_source=rss&utm_medium=rss&utm_campaign=whats-necessary-is-impossible #europeancommission #juncker #rss #feeds #linksharing #qwibbit