Blog 2023 Malcolm Blair-Robinson

On the face of it the military operation sponsored by Britain and France, with America as reluctant partner and the Arab league a somewhat fair-weather supporter, is going well. The technology is working well, the weapons appear far more accurate than in the Iraq war and civilian casualties appear minimal, in spite of the claims of Gaddafi T.V. The advance on Benghazi was stopped in the nick of time. Armoured columns have been turned to cinders. The no fly zone is in place. Yet all is far from over.

Worse, nobody knows what over is, when it happens. There is disagreement at every level of command as to who should be in charge and what the mission goal is. Within this confusion the military are doing a very good job, sticking rigidly to the letter of U.N. 1973. But, if stuck to, 1973, as a narrow  military mission,  is without a political objective, an exit strategy or even a coherent purpose. As has been said here before, you cannot engage in a civil war to stop killing as a narrow aim. You can engage on one side against the other, but then you are sucked into the maelstrom. The rule is you never engage in other people’s civil wars. You can send volunteers, as we did to the American and Spanish civil wars to both sides, but you stay neutral. Likewise, the Congo and Nigeria. Remember Katanga and Biafra?

The problems now are these. Unlike initial appearances, the rebels have no military capacity to win a civil war. They need help to hold onto what they have. It is not clear whether they have a sustainable political system, or even who they actually are. One moment army units are defecting to them, next this military backbone has melted away. Meanwhile organised into infantry units embedded into towns they have recaptured, Gaddafi forces are proving difficult for the Allies to dislodge, without civilian casualties. To shift them would require some considerable degree of bombardment with collateral damage of innocent lives, or ground troops. Both are a no go.

So what happens? The rebels are too weak to win. Gaddafi is too strong to lose. Is it to be two Libyas? The Allies hope that Gaddafi will jack it in or fall victim to a cruise missile while taking his evening promenade. Even then there is no guarantee that there would not be chaos to follow with rival factions forming militias and fighting all over the place. The truth is that hatred of Gaddafi has clouded judgement and hijacked statecraft and common sense. Obama and Gates could see this coming. This is why they held back. This is why America, having shown willing, wants to hand over command.

Amid the argument raging as to who this new commander should be, one question rises above all others. Command of what exactly? If Cameron comes out of this well and does not end up looking a fool, he will be one of the luckiest politicians in history.

David Mellor was right to say that governments cannot deliver growth; growth comes from the ambition and the enterprise of the people. This is very true, but not quite complete. Governments can certainly introduce policies which inhibit and restrict growth. Conversely they can create conditions where growth is more likely. There is a third way, favoured by Labour. Governments can manufacture false growth by creating pointless jobs. This is the human equivalent to printing money. It can work in given circumstances for a short period, but like printing too much money, or manufacturing and then stockpiling cars that will not sell, too much of it leads to disaster.

It is this disaster which is at the heart of our national crisis. Labour binged on public sector employment using borrowed money to pay for it, creating a state which was too big for the private sector to sustain. Had there been no world crash, this domestic crash would have happened anyway. What makes Osborne’s job difficult is that he has two problems to resolve; economic growth and remodelling the economy. This cannot be done without a slow down, any more than a bus can take a corner at speed. However after the corner, speed can be built up again quickly, but only if on the right road. Without getting bogged down in detailed figures, which can always be argued at budget time, the central question is this. Is the budget leading the country in the right direction? Yes it is. Will it end the pain? Not yet.

Labour is trying to claim that under the Brown government recovery was well under way and the Coalition is ruining it. This is a delusion. The same one which believes money printed has the same value as money earned or that stockpiled cars are as good as sold. The only way to increase spending is to borrow more. The hope is that somehow the higher level of economic activity will pay for the extra borrowing. It is a lovely idea, but time and again it has not worked.

Meanwhile the government is trying to reduce the state, reduce housing costs by halting excessive house price inflation, switch the engine of the economy from services to manufacturing, increase saving and reduce borrowing. After the pain, a far more viable economic model will emerge and recovery will be on a firm foundation. Labour’s road is founded on sand. Soon or later it would become uneven, then lumpy then finally collapse. Not every detail of Osborne’s budget is right, but the shape and purpose is.

The biggest cloud now on the horizon is inflation. It is true that inflation erodes the value of debt. It is also true that it soon prices inflating economies out of world markets. At the moment China’s economy is inflating at 5% p.a. Some of this inflation is being exported to us. Commodities, energy and taxes account for most of the rest. We are not yet in the grip of wage inflation and because of this the Bank of England hesitates to act. It must not delay much longer. Inflation is like fire. If not dowsed early, it suddenly gets out of control.