The Grenfell Fire, and the Logic of Plastics in Cladding

For me, the most depressing recent news was the London fire, in which a high-rise of flats (apartments for Americans) somehow caught fire, and once it did, it spread like crazy. There is a lot of blame to share around for the death toll. Apparently people were told to stay in their flats, but that advice was given by firemen who were unaware that the building had no useful fire doors, or the other usual means of containing and retarding fires. After all, if the building is concrete, and there is no easy way to spread the fire, it should be able to be kept local. So what went wrong? We don’t know about why the interior of the building seemed to burn very nicely, but it seemed that the outside burned furiously. The outside had an aluminium cladding, apparently to make it look more attractive. The aluminium tiles were backed by polyethylene, which is essentially a solid hydrocarbon of structure similar to diesel, but a much larger molecular weight. That burns very well, and if you saw video of it, you would see great globs of fire falling off the building.

We don’t know exactly why the polyethylene was there. Some say heat insulation, others say to give the cladding rigidity. Much has also been made of the fact that for about $3 a tile more, the backing could have been fire resistant. I am not sure what that backing is as the maker’s website does not say, but would guess it is some sort of polyamide or polyurethane with non-flammable filler. These certainly do not catch fire as easily, but there is another catch with some of them: in a fire they do burn, and while not as well, they tend to give off some rather poisonous gases. There is another catch. According to the manufacturer, the fire resistant tiles passed ASTM E 84 tests, which are the standard tests for surface burning characteristics, but so did the polyethylene backed tiles. That sort of lab test does not represent a real fire.

This brought back memories of my past, when I got involved with two structural foams that could be suitable for building cladding. One was a glass foam, originally intended to be made from waste glass. This would make quite a good wall cladding without the aluminium, except possibly on the bottom floor because it does not have very good impact resistance. Thin glass shatters on impact, but it does not burn or corrode. You can also have a wide range of colours. The other is a plastic foam, for which you do not even need fillers to make it fire resistant.

The story of my involvement with that goes back to the late 1970s. In the late 1960s, New Zealand discovered a large offshore natural gas field, and the government took it upon itself to enter a “take or pay” agreement so the field would be developed. It was not clear what their idea was, but presumably electricity generation was one of them. However, when the first energy crisis struck, about 1972 from memory, there was a sort of panic, and after a lot of deliberation they decided to construct a synthetic fuels plant at Motunui, which was to use a process developed by Mobil. I was on a committee to advise on the science, and I advised this was a bad idea because they could not build it for anything like the costs presented to them. As it turned out, my projected cost was out by $200 million, but no site had been chosen, and my estimate was “plus site development”. (In the end, the site development would have been about $130 million, so I was rather pleased with myself.) However, at the committee, I was about 4.5 times greater than the figure they were comfortable with (and note the government was going to pay) so I was never asked to be on such committees again. However, when that process was chosen, I knew that there was one byproduct they would not know what to do with: 1,2,4,5-tetramethylbenzene. The reason: it is a solid, which is not good in petrol for cars. The good news from my point of view was that it could be oxidized to pyromellitic dianhydride, which would be a precursor to stepladder and even ladder polymers, and in particular to polyimide plastics. The bad news was that the top public servants did not want their synfuels project upstaged, and the politicians were unenthused, probably because they were totally out of their depth.

So to get rid of the road blocks, I needed a stunt. As it happened, the fire hazard with plastic foams was to be the subject of a half-hour nationwide TV program, and I was invited to comment as a scientist. I agreed, provided I could have a few minutes for a demonstration of fire resistant foams. That was agreed, so I made myself some polyimide foam. This was rigid, and not much use for furniture, but you can’t really do much development work with one day’s notice. So I turned up, and at the end of the program, which had the dangers of fires, and of the poisonous gases drilled into everyone, I had the cameras turned on me. I put a bit of home-made foam in the palm of my hand and directed a gas torch at it. It glowed a nice yellow-hot under the flames, and I just sat there. Eventually they got bored of watching this, and they turned off the torch, then made the comment, “It still stinks, though.” So, with a bit of acting here, I held the plastic up to my face and sniffed deeply, and made no expression. Since there was no fire, while the plastic was ablating slowly, once the torch was taken away there was no more reaction. Unfortunately, my wife forgot to record this so I can’t actually prove it.

The whole point of this, of course, is it is possible to make very fire resistant foams. Without the type of chemical plant I was proposing, such foams would be expensive, but the question then is, is preventing x number of deaths worth spending a few extra dollars (or in this case, pounds)? In my opinion, there is no real excuse. Yes, the foam I made was rigid, but as building insulation, so what? While science can provide answers to many problems, there is not much point in it if nobody in power takes any notice.

UK Election Fallout and Qatar: what would you do if in charge?

Suppose like me you are an author of fiction. Given the following situations, put yourself in someone’s shoes and ask yourself, what next?

The first event was the rather unfortunate end result of the UK election. What was delivered was what I consider to be the worst possible outcome. The problem is, voters are sucked in by “jam today”, or “I am annoyed about something.” So, what now? First, some background. The national debt of Britain now stands at £ 1.73 trillion, and the interest payment on this debt is about 6% of revenue. That might seem to be reasonably sustainable, but there is the overall issue of Brexit looming. The UK has apparently had a recent surge in GDP, despite the threat of Brexit, but it is not clear that will last, and interest rates will probably grow from their record low. Suppose they double, which is easy from such lows. 6% suddenly turns to 12%, and that is ugly. (The existing loans will stay at their agreed rate, but can you pay them back when they mature? Otherwise you have to borrow at the new rate.) It appears that Jeremy Corbyn was promising a lot of spending, together with an unspecified increase in taxes. My guess is a lot of the youth vote that went to Corbyn thought the rich would pay. The usual problem with that assessment is that while the rich can be made to pay significantly higher taxes, to get the amounts needed to make a significant difference in revenue tax rises have to go a lot deeper. There are just not enough rich to soak. On the other hand, people may well argue they needed more money to go to health, education, or whatever. The question then is, can you pay for what you want?

May was apparently promising austerity. That is hardly attractive, but it was also put forward in a rather clumsy way. Cutting out school lunches is not only hardly a vote winner, but it is also never going to make a huge difference. Putting that up front is a strange way to win an election. It seems that the Tories were so convinced they were going to win that they decided to put up some policies that they knew would be unpopular, so they could say later, “You voted for them.” The two who are believed to have largely written the manifesto have resigned (really, pushed by angry senior Tories) but the question remains, why were they left to write it? Why did the senior Cabinet Ministers not know what was in it, or if they knew, why did they not do something about it? There’s plenty of blame to go around here, folks, nevertheless there are two hard facts: if Britain and the EU cannot manage Brexit properly, there will be severe economic problems, and economic problems seem to be like a very active virus that goes everywhere very quickly. The second is, if debt gets out of hand, the country spends so much on interest repayments that it ends up in the position Greece is now in. Anyone want that?

So, put yourself in some position: what would you do? My opinion is the Tories should realize that Corbyn has no chance currently of forming a government (because he needs every non-Tory vote) and get on doing something that has at least some public appeal. May either has to go, or learn oratory and get some empathy for the others.

The other event is the Arab attempt at isolating Qatar, on the grounds it is financing terrorism. Actually, the Saudis are almost certainly the biggest such supporters. The real reason appears to be either Qatar is friendly with Iran, or alternatively Qatar is the home of al Jazeera, a TV network that tries by and large to report the facts, warts and all. The US position on this is obscure. President Trump has lashed out against Qatar, without any particular evidence, although Qatar is known to have given refuge a number of Egypt’s Muslim Brotherhood. The US is also bombing Assad’s troops in Syria to prevent them getting at fleeing ISIS fighters; it seems that terrorism is being actively supported by the US, which make no strategic sense. At first, it looks as if Qatar could be quickly invaded from Saudi Arabia, but whoever does that would have to be very careful because Qatar houses the biggest local US base in the region, and has 11,000 military personnel there. To add to the complications, Turkey has promised to send troops. Fighting Turkey should mean fighting NATO, although with President Trump nothing automatically follows.

So, imagine you are the leader of Qatar, what would you do? Return the Muslim Brotherhood members to Egypt where they would probably be tortured and/or executed? Promise to stop funding terrorists? (If you really are not, this is easy to keep, but maybe not so easy to convince others that you are keeping it.) Remember, whatever you decide to do, you have to be prepared for whatever consequences follow. Not easy working out what leaders should do, is it? Writing fiction is, of course, easier, because you control what happens next. But if you want that fiction to have some relation with reality, what happens next has to be plausible, so here is your chance to get some practice.

Why Are Countries Separating?

In many of my futuristic novels, I have selected a form of government to be in the background. Thus I have had a theocracy, a dictatorship, essentially no government (for the initial settlement of Mars), anarchy, crumbling “democracy” (i.e. our representative republic), real democracy, and finally, something else that I shall call federalism. The concept behind federalism is that a number of countries willingly join a Federation, and on most issues they continue on as they have always done, but there was also an over-riding Council whose function is to set a limited number of rules, and act as referees to make sure the various politicians in the countries behave. Another function is to provide factual information, and prevent political movements from achieving goals by lying. (Hey, I thought about “fake news” before it was popular, but that of course is hardly true either. Telling lies to get votes was bread and butter for the politicians of the Res Publica, and many of the inscriptions on the walls of Karnak by Ramses II had little relation with the facts.) This Federation also has to deal with the futuristic problems that we can see now, such as energy availability, resource allocation, climate change, etc. Interestingly enough, at least for me, the problems upon which the novels depended invariably arose from a similar source: people gaming the system. That may merely reflect my lack of imagination, but I rather fancy that any system will work well if all the people try to make it work. Most Romans thought Augustus was a great leader, even though he was effectively a dictator and probably the greatest manipulator ever.

The plots of these novels focused on how people were trying to get around the various rules. If there were an underlying message here, it was that rules only really work when people can see the point in them. A classic example is road rules. I suspect most of us have, at some time broken the speed limits, and while I have no intention of being specific and attracting unnecessary tickets, I know I have. I actually try to obey parking limits, but some times, well, something happens and I can’t quite make it. However, wherever I am, there is a rule on which side of the road I should drive on, and I keep to that assiduously. There is no specific preference – some countries drive on the right and others drive on the left, but a country has to choose one and stick with it, otherwise there are messy collisions all over the place. Everybody sticks to that rule because they see the point. (Confession time – once I did not. I came over a rise in Czechoslovakia, it was pitch black, and there was a little fire to my left. Suddenly, I realized the problem – there was a tank with camouflage netting parked in the middle of the road. I evaded around the left, not the right, because being in a British car I could better see the space I could use on my right, and also because I was better trained in sliding on gravel, etc, at speed and getting back on the road from that side. Must have given the tankers a bit of a fright. They would see a car first coming straight at their tank at 100k, then it would evade towards them and start sliding sideways, sending up showers of gravel from the side of the road.)

However, the point is, in general people will happily accept such rules if they see a point to them. Which side of the road you should drive on has a very clear point. The speed limit, perhaps less so. We recognize that road construction usually requires speed limits but I know that in some hilly terrain, overtaking a truck would be more important than sticking to a number. The problem with such rules, though is the rule makers seem to get carried away and think there should be rules for everything.

Some may recognize this Federal system. I made it up in the 1980s, and I was inspired in part by the European Union. You may recall at that time there was talk of the currency being the ecu, or European Currency Unit. Accordingly, in my novels I invented the fecu, however I put in one rule that Europe ignored. (They should have consulted me!!) In the novels, the fecu is used for transactions between companies and major corporations, and has a fixed value, a sort of resource standard. However, salaries in different countries, and goods in different countries, are paid in dollars, drachmas, whatever, and the average citizen never sees a fecu. I think the euro is a weakness of the EU because I don’t think you can run a common currency when countries have different economic policies.

Another question is whether the UE, through Brussels, has too many rules. Some say yes, others say no, but in the various discussions on Brexit, there is a lot of talk about untangling the thousands of rules. If that is a problem, there are too many of them. Good rules have a wide acceptance, and they could stay.

Which naturally brings me to the French election. All the commentators I have read say the French were upset over EU rules, and wanted change. So, what do they do? They elect a plutocrat, a banker! Trust the French – reminds me of “plus ça change, plus c’est la même chose” (Jean-Baptiste Alphonse Karr) which translates out as “the more it changes, the more it is the same thing”. So, how do you get rid of the rule of plutocrats? The French elect one. The British go the indirect way and try the “go it alone” way. Neither will probably work, but in answer to the title question, I think it is because so many voters have given up on traditional representatives acting in the interests of the population at large they are prepared to try anything.

The Need for, and the Problems of, Recycling

The modern economies rely on the supply of raw materials, and of these, elements are the most critical because there are no alternatives to them. Businesses will collapse if certain elements became unavailable, and the British Geological Society puts out a “risk list” of elements that have a risk of supply disruption. The list is debatable, because it includes political risk, thus the most risky from their perspective are the rare earth elements, the problem here being that China is essentially the main producer and reserve holder. These elements’ risk factors also depend on their demand, thus if there is no known use for something, it has zero risk because even if there is none of it, who cares? However, the overall conclusion is, we could have a problem. As in many such issues, not everyone agrees. Staff at the University of Geneva have published a report arguing that there is no shortage, at least for the foreseeable future. They argue you can mine over three kilometers below the Earth’s surface, or in the oceans. Whether you want to do this, or can even find the deposits, is less clear.

There is no shortage of elements but the bulk of them are distributed in very low concentrations in rock, or seawater. It may surprise some to know that there is plenty of gold in seawater. The problem is, it is rather dilute, and of course there are massive amounts of other materials. Thus there is about eleven tonnes of gold in a trillion tonnes of seawater. Good luck trying to get it out. Same with the rare earth elements. They are not especially rare; however they are particularly rare in workable deposits. Part of the problem is their chemistry has a certain similarity to aluminium, and as a result, they tend to be spread out amongst feldsic/granitic material and as microscopic inclusions (mixed with a lot of other stuff) in basalt. Rather interestingly, there are massive deposits on the Moon, where, as the Moon cooled down, the various rocks crystallised into solids, and one of the last of the liquids to solidify was KREEP, a mix of potassium (K), rare earth elements, and phosphate (P). This also indicates the reason why we have ore deposits on Earth: geological processing. Taking gold as an example, it, and silica dissolve in supercritical water, and as the water comes to the surface and cools down, the gold and the silica come out of solution, which is why you find gold in quartz veins. There are, of course, a variety of geological routes to make ores, but geology is a slow process, so once we run out of easy to find deposits, we have a deep problem. And on a planet such as Mars, there has not been so much geological processing, and no plate tectonics.

One way out of this is recycling, if you can work out how to do it and make a dollar. One big user of rare elements is mobile phones. Thus the “swipe-screen” uses indium/tin oxide, the electronics use copper, silver and gold for carrying current, tantalum for microcapacitors, and neodymium in the magnets. These are the critical elements, and in general there are no substitutes for their specific uses. However, the total number of elements used can be up to sixty. The problem for recycling is first, to get hold of the old ones, as opposed to have them lying about or thrown in the trash, and then to separate out what you want. If you simply melt them, you get a horrible mix. The process could be simplified if the phones could be split into parts, thus only the screens contain indium, but how do you do that?

Early on in my scientific career, I was asked by a company to devise a means of recycling coloured plastics. I did this, a pilot plant was built, a few bugs were ironed out and we could recycle coloured polyethylene to get a very light beige product that could be made into new coloured products by the addition of pigments, and the casual user would not know the difference between that and new plastics for most uses. So this should have been a success? Well, no. There were two problems. This was during the oil crisis of the seventies, and what had happened was that there was an oversupply of new polyethylene in the world. Such surplus was dumped on the New Zealand market, where “it would not do any harm”. That dumping made the venture economically unsustainable. Some time later, the dumping stopped, but by this time the original company had lost interest. Also, the manufacturers introduced more cross-linking, and in a quick demonstration, the process did not work without altering the conditions beyond what had been assumed. There were ways around that, but the warning was clear: the manufacturers were not being friendly to recycling as they kept their information close to their chests. Such changes really hinder recycling. However, that was not the worst: new laminates started appearing, and these were a horror for recycling because the two or more different plastics put together as layers do not separate easily, and any product made from a resultant mix will be of very low quality.

So, we can either have a problem with elements, or we can recycle. Recyclers tend not to have the high technology of the multinational corporations, so my recommendation is, manufacturers should be made to design their goods in a way that aids recycling. For example, a laptop or a mobile phone has lithium ion batteries. It is also essentially impossible to get the battery out when it dies and leave the item in a workable condition. It might suit the manufacturer to force the consumer to buy another laptop as opposed to a new battery, but as the technology matures, is that good enough? Similarly, if the motherboards could be removed/replaced, that would aid recycling and also reduce demand for new gadgets. When I was young, people fixed things. I think it is time to return to those times, and also make objects as recyclable as possible. The problem then is, how do you manage that in a market where competition rules, and the consumer does not think about recycling when he or she buys a new product?

Trump on Taxation

President Trump has announced the intention to make sweeping tax reform, and a significant tax reduction for companies, at present reducing from 35% to 16%. His argument is that by doing this, he will encourage multinational companies to stop hoarding money in offshore tax shelters and bring it back to invest in the US. So what to make of this? The tax reform is an extremely good idea. The simpler and more transparent the tax law is, the less time everybody wastes on minimizing tax and the more they devote to actually earning money. Everybody accepts tax reduction is good for them, but the problem then is, does the government earn enough money to pay for what it wants done? That is a detail that has to be left because it depends on what is available to tax, and how much the government wants to spend.

Company tax is an odd animal because one argument is that you collect more or less the same tax irrespective of the rate. It goes like this. A company earns money, but those earnings are spent in four basic ways: investing in new plant; buying goods/services from other companies; paying staff; paying dividends. Looking at these in inverse order, money transferred to dividends becomes personal income, and that is taxed, so what we are avoiding is double tax. Many countries avoid such double taxation by giving company tax credits with the dividends, and while I am unaware of US tax policy on this, as a general rule as long as there is no double taxation, lowering the company tax rate has no adverse effect on dividends because those on the low tax rates in general cannot afford the stock. The important thing is that unlike people, companies do not spend on themselves, leaving aside “perks” such as company jets. My view is such “luxury expense” for senior staff should be taxed as a personal benefit to them.

Paying staff means the staff pay tax on their earnings. Now, if the staff are low paid, lowering company tax does reduce the tax collected, because most staff do not pay the 35% rate, although some may be on a higher rate. Similarly, buying goods and services from other companies simply transfers the taxable profits, although if the goods are imported, the profits go elsewhere. The question here is, then, will the US increase local production? The reason many multinationals manufacture offshore is that wages there are seriously lower, and they do not have to pay benefits and compliance is less strict. There is rationality in thinking that such goods manufactured offshore should be taxed as if the company met home compliance and had paid home benefits and wages because that levels the playing field from the “own country” point of view, but of course it hurts developing countries.

The virtuous part, according to Trump, is that by lowering company tax, multinationals will bring back more of the offshore funds accreted, and all companies will have more money to invest and create new jobs, or pay dividends. The next question is, is this valid reasoning? I am not so sure. The problem with investing to create new jobs is you have to have something to invest in. That is not so easy to find. There is no real evidence that company tax is inhibiting investment because there is no real evidence that, leaving aside small individual companies in trouble, there is a widespread shortage of money. What I see is more a general shortage of ideas. Thus we see the new product is another mobile phone that is only a little bit different from the last one. Ask yourself this: what would you really want that is not currently available if you had the money to buy it?

What that suggests is the economic slowdown is not caused by higher corporate tax, but more through inequality. Those with money already have most of what they want, and those without money cannot afford much of what is there. If we really want to promote growth, then I am afraid the poorer have to have more purchasing power, because they are the only ones at the moment who could power acceleration in sales. Of course the rich will keep on buying, but only at their current rate, and that will not power the growth President Trump wants. So my question is, will President Trump do anything to reduce inequality?

Is there a solution to the Palestinian question?

Back from a quiet time, and look at what happened? The first was that at the end of 2016, New Zealand co-sponsored a UN resolution “demanding” that Israel stop building settlements in the occupied territories of the West Bank. This generated a surprising amount of heat, if not much light. For those who have read my fiction, I have advocated logic as a way of analyzing problems, and it seems to me this question is suitable for such an approach, not that it is likely to succeed.

We start by acknowledging where we are. Israel is a Jewish state, and it occupies by military force the West Bank, which was largely populated by Palestinians, many of whom were forced out of the rest of Israel. The two sides have been very antagonistic towards each other, and the objective is to try to find a solution where both can live in peace. The question is, what are the conditions that might lead to that outcome? In my opinion, the options are:

  1. Move the Jews out of the area. However, the Jews have such an invested infrastructure this option is not a starter.
  2. Move the Palestinians somewhere else. The problem is, where? People say Jordan, but Jordan is already overrun by Syrian refugees, and in any case, why does someone else have to pay the price? While most of the Jews came recently, the Palestinians have been there for a very long time. Whoever advocates this solution can do their own bit, by accepting a Palestinian family, providing them a home and jobs, and a guaranteed income until they can fend for themselves. In short, put your money where your mouth is. I bet there will not be sufficient takers to make a difference.
  3. Incorporate the Palestinians into Israel, with full citizenship, and enough money to make a start to life. That is a non-starter because Israel is a Jewish state, and a Muslim majority would be non-acceptable.
  4. Have a two state solution.

In my opinion, only (4) has any hope, but here the problem is the West Bank is not exactly large, and it is covered with a pox of Israeli settlements. Some people say, they are only 3% of the area. Before addressing that, we must ask, are the settlements legal?

When the first settlements were being considered, the legal counsel to the Israeli Foreign Ministry was asked whether international law permitted civilian settlement in the occupied territories. The reply: that would contravene the explicit provisions of the Fourth Geneva Convention. The settlements are illegal because international law forbids an occupying power from moving part of its population to occupied territory. The territory is under military occupation, and it is for that reason the Arabs who live there do not have to be integrated into Israel.

Here is the legal dilemma from the Israeli point of view. Granting citizenship to the Palestinians would mean either Israel ceased to be a proper representative republic, or it would cease to be a Jewish state. Not granting such citizenship meant they were under military occupation, and international law should apply.

In this context, it seems that everybody who keeps asserting Russia violates international law and should be punished are strangely quiet on Israel. Instead we have the rather bizarre situation where the people of the West Bank fall into two subsets: settlers enjoy the full rights of Israeli citizens, while the Palestinians are still under military occupation and have essentially no rights. The question then is, how long will this go on? Obviously, the hard right of Israeli politics seems to think, forever. Whatever else they have, compassion for the Palestinians is not one of them.

Returning to the 3% problem, the area of the settlements is not the issue. The settlements are all connected to Israel proper by roads controlled by Israel that slice up the West bank. The settlements all demand water, sewage, electricity, and other services. All of these services are controlled by Israel, and are unavailable to the Palestinians, and worse than that, Israel would not let the Palestinians cross their fixed infrastructure, because they would expect it to be damaged.

If there is to be a two-state solution, the Palestinians have to go some way. They have to accept the right of Israel to exist, not because it is right but because there is no alternative. Incidents such as the recent one where a Palestinian drove a truck through some Israeli soldiers have to stop. First it is not right to kill people, and particularly those who are not directly responsible for your problems, and second it is counterproductive, because it just firms up Israeli opinion about them. The Palestinians have been severely wronged, and everybody should acknowledge that, but the Palestinians cannot progress by living in a morass of moaning about wrongs. That does not mean that others should not do something to help, though. When the United Nations voted to form Israel, they gave away that which they did not own. In the Naqba, about 700,000 Palestinians were displaced, and their property taken over by Israel. Of course, following the UN resolution, the Israelis could say they had no choice. Maybe, but if that was what the UN wanted, they should have purchased the Palestinian properties and given them to the Israelis. The fact of the matter is that Israel was founded on promises (Lloyd George offered the concept to Jews to help raise money for the war effort, which probably did not help the attitude of a certain Austrian corporal.), terrorism (it is the one shining example that proves that sometimes terrorism does work) and military force. One of the great ironies is that the Jews sent to Palestine in the late 1930s from Germany, organized by a certain Reinhardt Heydrich, set about terrorist activities against the British during WW II, while Heydrich was busy organizing the mass murder of Jews in Europe. The fact that the Palestinians and other “Arab” countries tried military means to right the wrongs done to the Palestinians is also irrelevant, although through their lack of effectiveness it has obviously made the problem worse.

But the past is irrelevant. We are here. If we accept that the two-state solution is the only possibility for civilized peace, then both sides must make serious concessions, and more to the point, the rest of the world that voted to create this problem has to come to the party with serious investment to make Palestine at least a plausible state. If you vote to give away that which you do not own, then you should be prepared to pay for it, to give the Palestinians some hope. The alternative is that the Palestinians live in perpetual military occupation, with no rights, and subjugated by a military force that does not like them one bit.

The recent example of a soldier who saw a Palestinian lying on the ground, and because he believed that Palestinian had injured an Israeli, he shot him. The Palestinian was subjugated, and would have been taken away for trial, but this soldier simply executed him. If you see interviews of Israelis, a large number (including some right wing rabbis I saw interviewed) seem to think the soldier was right. Sorry, but that is not civilized, it is not legal, and it most certainly is not helpful.

So if neither side is interested in reaching a solution, how does this end? I confess I have no idea, except I cannot see it ending well

Where to now, economy?

While I write futuristic novels, none of them involve trying to predict the future; rather I use the future as an excuse to formulate a situation that has little merit other than to be the background to a story that is really looking at something else. However, like most people, I am curious about what could be coming. That includes wondering where the economy is going.

Some time ago I saw an interview with Mervyn King, an ex-Governor of the Bank of England. According to him, in a market economy banking crises are endemic because a market economy cannot provide all the required price and investment signals. This is effectively a statement that there is an inherent failure in the market economy, and it arises because nobody can predict the future, and there are the problems of positive feedback (where the effects of the problem make it worse) and hunting (where the correction dramatically overshoots and causes the opposite problem). Thus suppose commodity A suddenly has a shortage. Prices rise, the masses start acquiring A and the price rises further, but there is no fundamental reason for the rise. When reality strikes, prices drop, and keep dropping.

I recall in my youth the price of potatoes tanked, and farmers found themselves dumping them. My father immediately began renting land, and with a trailer, went around the potato dumps and picked up free seed. Next season, because everyone had got out of potatoes, and also partly because of adverse weather in places, prices leaped five times above average. At that point, my father made a lot of money, but immediately got out of potatoes, on the grounds that next year everyone would be back into them. Now, King’s point is, bankers lend to farmers, but they cannot know what next season’s prices will be, and hence cannot know whether the farmer will prosper or go bust. In New Zealand there are a number of dairy farmers who got into it with expensive farm conversions when prices were very high a couple of years ago. When the world became swimming in milk, the debts still had to be serviced.

The question then is, can anything be done about this? My guess is, so far there are no signs that anything better would work. A long time ago I was in the old USSR, a command economy, and basically it was not working at all well. Prices were stable, by command. I went into a restaurant and picked up a menu that was printed twenty years before and the prices held! The problem was, I also went into a major store to see an array of empty shelves. The prices might have been stable, but if the goods were not available, their price was irrelevant. In one of my trilogies, I proposed an economy that was stable, BUT there is no evidence it would actually work. The proposal was simply background to make the rest of the story easier to follow, and in any case, there were price rises due to resource shortages. However, there was no possibility of major recessions, or major booms. Perhaps I was dreaming?

Another one of King’s points was that while central banks avoided a catastrophe in 2007 – 2008, since then, the basic fundamentals have not been corrected. In particular, there is a serious disequilibrium between saving and debt, largely due to very low interest rates. The problem is, the longer this goes on, the harder it will be to return to some desirable “normal”.

King was also somewhat skeptical about the European Union, and noted that a single interest rate imposed on countries with varying rates of wage and cost inflation leads inexorably to divergence in competitiveness. Well, yes, it would. German banks would seem to have to take some major losses, but they seem reluctant to do so. (Note that Germany itself has defaulted on debt before.)

King’s way out is to boost productivity and growth, and he was enthusiastic about the TPP trade agreement. My guess is that Trump will kill that option.

The problem I see with that analysis is that King thinks society in the future will be more or less the same as now. I am less convinced. In many western countries, the biggest problem is that local manufacturing has been exported, and this has led to the hollowing out of middle classes. While the very top corporations are raking in huge profits (and paying increasingly less tax) the wage earners tend to find their wages actually reduced. Governments are compensating by increasing their borrowing, thus taking advantage of lower interest rates. The problem here is, with the exception of the US and others undertaking quantitative easing, while central banks might offer low interest rates, they do not lend because to do so without borrowing is simply to enlarge the money supply. The US has got away with quantitative easing largely because trillions of dollars have been secreted away in foreign banks as a consequence of tax avoidance. However, the debts remain.

For the general economies of countries like New Zealand, while the Reserve Bank recently lowered interest rates, the commercial banks actually slightly raised them. The reason: they need deposits, and as interest rates have dropped, people have gone searching for yield elsewhere. Here, a lot has gone into housing, largely because there is a shortage of houses, but this has not created a lot of new houses. Instead, as King would have noted, this must lead to a bubble happily fermenting, although because of the underlying shortage (which is politician induced) it may not burst. Here, politicians are the problem through sending perverse signals and regulations to the market. Money has also fled towards stocks, but again that tends to raise the price when more money goes there than into new ventures. Now, what happens if this bubble bursts? Governments are in so much debt they have little room to maneuver. By itself, politicians might consider that as merely unfortunate, but the problem then is the consequences, one of which I included in my novel ‘Bot War. I hope that consequence does not come to pass, but I am far from confident.