The Truth We Refuse to Hear

Europe’s delusions of sovereignty in an era of technological and political dependence. It's time to take The Sniff Test.

A Blow for the Good Guys

I spent a long time thinking how to sign off my father’s eulogy. I settled on three lessons he left me. These were to stand on your own two feet, respect without fear and, most importantly, tell the truth. The truth is that most of us don’t want to hear it.

Around the time I was growing up, the idea of relativism took hold in universities. On the surface this is the bland observation that no one culture is superior to another. Yet like many intellectual movements, the blandness masks a deeper intent. Relativism today is the rejection of the single truth. Its purpose is to undermine the shared identity of Western society.

We are lead to believe that we do not need to listen to contrary opinions. Then, once we form our tribes, what the tribe says becomes the truth. What starts as an honest expression of personal opinion, becomes a binding attachment to any argument made by a leading member of our tribe.

Donald Trump demonstrates this more than anyone. His supporters justify his every pronouncement and his strange relationship to the facts. His opponents are outraged because he does what he said he would do and that does not align with their world view. Democracy spirals in what W.B. Yeats called the widening gyre, in which the centre cannot hold and anarchy “is loosed upon the world”.

Other parts of the world do not have the luxury of ignoring their opponents. Benjamin Netanyahu believes the Ayatollahs when they say they would destroy Israel. He promised to destroy their nuclear capabilities for so long that people simply forgot. Trump echoes the message and he controls the bunker busters that are the only way to ensure this from the air. Meanwhile, Chinese cargo planes enter Iranian airspace before disappearing from the radar.

Niall Ferguson called Israel’s Operation Rising Lion “a blow for the good guys in Cold War II”. While most of us would rather there was no such war, how long will we continue to believe that ignoring the truth makes it go away?

The Cognitive Dissonance of the West

In negotiations between democracies, hostility is a threat and lashing out is seen as weakness. Academics run endless game theory simulations showing the winning strategy is cooperation, coupled with brief retaliation when slighted. This holds as long as mutual gain is the goal.

At home we’ve grown comfortable with the idea of mutual gain and use it to avoid hard choices. Politicians take the easy option of pouring money into the NHS black hole, instead of investing for growth beyond their term in office. The national debt rises and there is a long period of softening up the electorate for the inevitable tax increases.

Authoritarians cannot afford this casual attitude to the truth. They play winner takes all, where the mutual cooperation of game theory is not an option. In negotiations with the West, they take advantage of the constant offer of the olive branch.

Obama’s deal with Iran was temporary and thereafter it would be free to develop nuclear weapons. Trump cancelled it when Europeans showed no interest in an extension. Either way, Iran’s nuclear programme continued.

The economist Charles Calomiris talks of the cognitive dissonance of the West. This is when we knowingly hold conflicting beliefs. We see the threat from international foes, or unsustainable debts, but must run into the wall to believe in the collision. In the meantime we are happy to believe politicians that lie to us.

The Delusion of Europe

Trump understands the power of optimism. He claims he is Making America Great Again and frames his policies as stopping foreigners abusing the US. This is not the truth at the heart of Team Trump.

For a long time the American right believed in minimising the role of the state. Michael Boskin was chair of the White House Council of Economic Advisors in the early nineties. He supposedly said it didn’t matter whether the US made potato chips or computer chips.

White House thinking has shifted since then. You cannot defend yourself with iPhones, let alone snack foods. America faces its greatest threat from the rise of China. It is starting from a bad place having ceded the global manufacturing supply chain to its arch rival.

Trump said he would pursue a weaker dollar, falling interest rates and a lower oil price. A weaker currency makes manufacturing more competitive in time. Lower interest rates make it cheaper to borrow to invest, while lower oil means more energy for factories. The problem is he does not control any of these prices.

There is a business school consensus among commentators about the benefits of cooperative outcomes. They should instead judge a policy on the likelihood of it delivering the three, much repeated, economic goals.

Europe still has time to embrace economic nationalism but must stop smarting over tariffs. Politicians avoid the truth that welfare is subsidised by US military spending and privacy laws are to compensate for technology failings. Europe mythologises a time when politics was settled at the United Nations, economics at the World Trade Organisation, and the agenda at the World Economic Forum. It deludes itself about its capabilities.

A Humiliation for France

Last month Pakistan shot six Indian aircraft from the skies, including three French-made Rafale jets. Dassault, which makes the jets, called this “absolutely incorrect” but Pakistan has offered the only evidence. It’s most likely that the jets that fired into Pakistan were taken out using Chinese technology. The pilots saw neither the missiles nor the jets that fired them.

Most defence experts are political scientists rather than chemists. Until last month they did not know the difference between gallium nitride and gallium arsenide. Nitride is more conductive and works at higher frequencies, voltages and power densities. Arsenide is used in European technology.

Modern warfare requires the latest telecommunications equipment and the ability to manufacture at scale. This means controlling raw materials and owning advanced manufacturing plants, as well as possessing knowledge. China controls 90% of the world’s gallium processing capacity.

France marketed the Rafale as the latest in stealth fighters. Its Spectra electronic warfare system is supposed to be the equal of fifth generation technology. That was never proven and is now exposed as a lie.

Europe may up its defence spending, but remains beholden to foreign powers until it can reliably produce the latest technology. The opportunity exists to wake the continent from its low growth slumber by reducing its trade surplus and investing in industry. To be effective this requires an honest conversation with voters about the level of welfare.

The decades after World War II saw the rise of technocratic experts. They take many of the decisions that politicians of old would have done. The rise of health and welfare spending swamps the budget and leaves Chancellor Reeves scrapping for pennies. Politicians dare not admit that they have little control. The people do not want to hear that democracy means what the technocrats say it does.

The Trade-off in Modern Democracies

Rudi Dutschke coined the phrase the “long march through the institutions” in the late 1960s. He argued that rather than bringing about revolutionary change through violent uprising, it is more effective to change institutions from the inside. I write about this a lot in terms of the takeover of education and the civil service, but few are prepared to listen. You should take the far left at its word.

An advisor to Ed Miliband told me that policy was to tear down private schools. The attempt to match them in the state system had failed and equality demanded a new approach. I believe he spoke the truth.

VAT on school fees accelerates a trend in private school closures and every new announcement will be met by a cheer. Yet, the more children leave, the higher the cost to the state to educate them and the lower the taxes from this policy. This is a common theme.

It transpires that Reeves’ tax policies were in large part designed by minor economists. They forecast 0.3% of the non-domiciled population would leave when their status was abolished. Oxford Economics now predicts that it will be 40% by 2027. Add to that the home grown millionaires heading out. Black holes appear in budgets when policies that we know will fail are adopted because they are politically palatable.

Labour’s leaders are no different to the rest of us. If someone presents an easy way out of a difficult situation they give it credence. We all want to believe that there is a pain free solution.

I believe that the government wants to build 1.5 million homes over its five year term. It may even believe that it can. Yet homebuilding in its first year is down 10% from the year before. There are no easy fixes and this government lacks the backbone to take tough decisions.

There is a trade-off for modern democracies. You can make good political decisions with bad economic consequences, or good economic decisions with bad political consequences. Politics matters more, which leaves bad economics to be passed around like a hot potato in the children’s game. There will come a time when a politician spells out home truths and the scales fall from our eyes.

Other parts of the world lack the luxury of being wrong. This is acute when they have learned the lessons of history. Jews paid an intolerable price for the West procrastinating over the rise of Hitler. Gaza pays an intolerable price for the application of that lesson.

There may be comforting illusions, or more palatable narratives but the truth still matters. The West faces opponents that are hostile to its values. The purpose of The Sniff Test is to tell the truth as I see it. My father would not have it any other way.

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