Thursday 16 March 2023

This week King Charles the third addressed the Commonwealth of Nations. What an odd assembly of people were at Westminster Abbey on Monday to listen to him. There was a contingent of New Zealand Maori natives doing a traditional greeting for him, but back in New Zealand the day had passed without a thought let alone a public holiday in celebration. So what does it all mean, really?

From the 19th century, Britain, with the supremacy of its navy, emerged as the most powerful empire of the modern era and in collusion with the other European colonising countries quite ruthlessly redrew the national boundaries throughout Africa and the Middle East with no respect or concern for the tribal boundaries that had evolved over millennia. But that British empire disintegrated over the latter half of the 20th century to be gradually replaced by an organisation called the British Commonwealth and eventually the Commonwealth of Nations.

I recall back in April 2018 watching New Zealand’s then foreign minister, Winston Peters, announcing from the London meeting of the Commonwealth Foreign Ministers that Britain was now keen to resurrect the glory of the British Empire by putting together a trade deal between we proud members of the Commonwealth of Nations.

Pub quiz night: name the 52 members, outside Britain, of the Commonwealth of Nations. Did you get to 10? If so I think you are well above average. Did you get Lesotho, Tuvalu, St Kitts & Nevis, Belize, Malawi, or Swaziland? This Commonwealth has 19 African members, 7 Asian, 13 Caribbean & American, 3 European and 11 from the South Pacific.

The total GDP of these 53 nations in 2021 is $US13 trillion which sounds impressive until you note that China on its own has $US18 trillion GDP and the USA has over $US20 trillion GDP. But if there is anything ‘common’ about them it is certainly not ‘wealth’.  The top 4 countries in the group (UK, India, Canada and Australia) account for 75% of the total group’s GDP. The top 11 (where New Zealand is #11) account for 95% of the whole group’s GDP. So 42 countries out of 53 (79%) bring in only 5% of the total group’s GDP. The Commonwealth includes the three poorest countries on the planet. In the same pub quiz, name them! (Kirobati, Nauru and Tuvulu. I bet you didn’t know any of them).

We, the Commonwealth of Nations, are the largely-abandoned urchins of the British Empire who were left to fend for ourselves after Lady Britannia, in 1973, decided to go back to her Euro-chums’ social circuit after their two little WW’s were all forgiven and forgotten. Yes, we do meet up for family games every few years, and play a bit of cricket together which is all jolly good fun, but that’s as far as it goes. If we ever went to visit mother England we had to stand and wait in the foreigners’ queue in Heathrow while the Germans were fast-tracked through lovers’ lane.

But now after many spats in the Euro love nest, mainly about Angela the Hun letting riffraff in through the back door (not intended as a euphemism, but with Germans who knows?) Britain has divorced Europe and it has been a very expensive settlement. Add in the covid pandemic, Ukrainian war and the global opinion shift against carbon-based energy, and Britain will be suffering for a while and that is likely to make the rabble a bit restless and looking to bring back the guillotines. And like many an absentee parent finding themselves hung over, short of a few quid and debt collectors knocking, she remembers the forgotten family and reminds us that we are still family. So while divorce negotiations were in process back in 2018, the Queen called a meeting of all the family heads of their former global empire, perfectly timed right after the fun of the family games in Australia and immediately before her grand birthday party to which they had all been invited. She told them that she thought that we, as the much-loved family of the British Empire, might like to set up some sort of a trade thingy between us to top up Britain’s coffers and, since she was getting a bit wobbly on her pins, perhaps we should put Charles in charge of it all. Did she really mean all 53 members of the Commonwealth? That would be an enormously daunting prospect for a trade deal, particularly given the disparity in populations, locations, cultures and economies. The EU only has twenty eight members and our Trans Pacific Partnership has twelve members. Is Charles the man with the experience and charisma to pull together the biggest trading bloc on earth? Especially given that 79% of the members account for just 5% of the wealth.

Well, five years later,  Charles the Prince of Wales is now King Charles the third and from Westminster Abbey he has addressed the Commonwealth members on the 2023 Commonwealth Day celebration. His message was: “our defining values: peace and justice; tolerance, respect and solidarity; care for our environment and for the most vulnerable among us…..Whether on climate change and biodiversity loss, youth opportunity and education, global health, or economic cooperation, the Commonwealth can play an indispensable role in the most pressing issues of our time.”

The tragic reality is that the Great British Empire is long gone, its influence is nothing, the world has moved on and this Commonwealth is as relevant as a Morris Dancers Society. This Commonwealth alliance that today has little practical reason for being, has also no chance of ever being a trading bloc especially when you consider that Commonwealth members of Canada, Australia, New Zealand, Singapore, Brunei and Malaysia already belong to Trans Pacific bloc; India and South Africa are already in a trading bloc with China, Brazil and Russia; Cyprus and Malta are in the EU and the African nations have their own trading blocs.

But just as we are saying ‘there there’ to the dottery old British Empire, are we are now also watching the decline of it’s successor, the American Empire? I say ’Empire’ but America’s Empire is not a formal political entity in the sense of declaring it’s president an Emperor like Julius Caesar, Suleiman the magnificent, or Napoleon. Even Britain, prior to Elizabeth 2nd, declared it’s sovereign the Emperor/Empress of India. In the modern context I refer to ‘Empire’ in the sense of dominating global currencies and military firepower. By those criteria, America ascended the imperial throne at the end of World War 2, officially deposing England and warding off the claim of the aspirant, Germany. The English had been poking their noses, warships and their guns around the world as far back as the 17th century and by the late 18th and 19th centuries their manufacturing technology and their formidable navy led to domination of global trade through colonies in South Africa, India, Hong Kong, Malaysia, Singapore, the South Pacific and the Americas.

All was going well for the Brits during the 19th century but, by the early 20th century, America was starting to get the better of their balance of trade. The USA now had their own cotton gins. However, Britain remained the centre of world commerce and much of the global trade was conducted in British pounds and all major currencies were pegged to gold bars.

Then came World War 1. That conflict was such an expensive war that many European countries, beginning with Germany, had to abandon the gold standard to print unsupported currency in order to pay military expenses; their currencies devalued rapidly. Three years into the war and even Britain needed to borrow money to keep going and the Yanks were there to help. Eventually even Britain was forced to abandon the gold standard as the base of their currency and the British international merchants who traded in pounds found their bank accounts severely depleted. The greenback $US was now the leading reserve currency.

When World War 2 broke out only twenty years later, the US stayed out of the conflict for a long time but nonetheless profited from the war as the preferred supplier of weapons, ammunition and supplies to the allied forces. They required payment for most of it in gold and by the end of the war they held most of the gold on earth in Fort Knox. The Americans only entered the war after they were directly attacked at Pearl Harbour by Japan, an ally of Germany. I say directly but the main island of Maui is over 2,000 nautical miles off the coast of California and is geopolitically a part of East Asia. Playing a major role in ending the war in Europe gave the Americans the opportunity to claim ‘top of the table’ seat on the global international stage. In 1944, delegates from forty-four Allied countries met in Bretton Wood, New Hampshire, to come up with a system to manage foreign exchange that would not put any country at a disadvantage. It was decided that the world’s currencies could never again be linked to gold, but they could be linked to the U.S. dollar, which in turn was linked to the gold in Fort Knox. The agreement was that the central banks would maintain fixed exchange rates between their currencies and the U.S. dollar. The United States would then guarantee to redeem U.S. dollars for gold on demand.

So now, instead of gold reserves, other countries accumulated reserves of U.S. dollars. Needing a place to store their dollars, countries began buying U.S. Treasury securities, which they considered to be a safe store of money. Now the US currency virtually replaced the international currency of gold. How would that work out? All went jolly well during the relatively peaceful decade of the 1950’s. America was Camelot and Truman, Eisenhower, and Kennedy were the three great emperors of America. I say peaceful, but WW2 had delivered two contenders for world domination, the USA and the USSR. The allies tried to buy a compromise, splitting both Germany and Korea into Russian/American zones of control. Russia tagged China to support the North Korean communists in their war against South Korea and USA and that war ground to an unresolved stalemate. And then came Vietnam. Russia had shown no interest in Vietnam until USA decided to throw bags full of money to support the French attempt to suppress communism in North Vietnam. That is when the Russian bear began to feel poked and in 1954, the kitchen got too hot, and the French pulled out. That was the start of a very expensive war with the USA that, in my opinion, began the collapse of the American empire. Kennedy, elected in 1960, recognised the disaster that was Vietnam and committed to a withdrawal of all troops by 1965. This plan ended with what appears to have been a palace assassination in Dallas Texas. Lyndon Johnson, who succeeded Kennedy, recommitted to Vietnam and at the same time launched an ambitious and expensive “Great Society” social programme intended to end poverty and racial discrimination in America. Or, in other words, to try to hide what was now becoming a very obvious cultural divide in America. Much of the proposed funding, however, went into the increasingly expensive war in Vietnam and the late 60’s exploded in violent cultural riots highlighted by the continued political assassinations of Martin Luthor King in April 1968 and Robert Kennedy in June 1968. In a tragedy worthy of Shakespeare, America lost it’s soul in the five years between the assassinations of the Kennedy brothers 1963-1968.

In my opinion, the collapse of the American empire manifested itself, as it’s creation had done, with the greenback. The Vietnam war costs, in addition to the “Great Society” domestic programme budget, had become so expensive that in 1971 Richard Nixon had to abandon the gold standard for the US dollar and flood the banks with paper money. This created the floating exchange rates that we have today. However, despite large deficit spending, trillions of dollars in foreign debt and unlimited printing of US Dollars (the last incidence was the Global Financial Crisis of 2007-8) the U.S. Treasury remains the world’s reserve currency because the world trusts that the US will always remain solvent. The US gross domestic product as at 2016 was way ahead of anyone else at over $US18 trillion. That is bigger than the whole BRICS (China, Russia, India, Brazil, and South Africa) trading bloc combined. But everything balances tentatively on the tightrope of trust and confidence. The trust and confidence that the US is politically stable enough to maintain its dominant economy. What could possibly shake that trust and confidence?

His name is Donald Trump. He did not cause a cultural divide in the USA, but he is the highest profile manifestation of it. There is a cultural chasm in America that the rest of the civilised world did not really understand. Not until the good old boys motivated themselves to get sufficient numbers to the polls to elect Donald Trump in 2016, and he has shown us all very clearly what a problem it is for them. It appears that the Civil War never ended because, although they were militarily defeated and subjected to new laws, the hearts and minds of the South were never changed. The cultural difference is as entrenched as any tribal conflict in the middle east. It may have been suppressed by the force of law, but mainly it was suppressed through lack of leadership from the south to stand up and raise the Confederate flag once again. Donald Trump was seen as that man. He talked the Confederate talk. He promised brick walls against the Mexicans, he promised the drawbridge pulled up against Muslims.

The first English settlement in America was from the Pilgrims seeking religious freedom who settled in Virginia in the early 1600’s, but the larger migration came with two distinct groups in the 17th century. First were the Puritans, following the path of the Pilgrims, escaping religious persecution in their home county of East Anglia. They settled in Massachusetts and brought their distinctive East Anglia twang with them, which was the root of the general American accent, albeit modified by other European groups that migrated to America, especially New York and Boston.

Then subsequently the Royalists (Cavaliers) left south and southwest England in the mid seventeenth century to the safety of America when the civil war in England broke out. These aristocrats left because they opposed the “Parliamentarians” wanting more power over governance. They brought a completely different culture of royalist aristocracy opposing ‘government by the people’ to America and with it they brought the distinctive South England drawl. They settled further south in Virginia and the Carolinas. They bought vast tracts of land and grew tobacco and cotton crops. They imported slaves on British slave boats and exported their cotton and tobacco to England. They established a social hierarchy where even the serfs were happy for their aristocracy to run the politics and businesses and for the slaves to be lower on the social structure than them. And that formed the basis of the southern lifestyle that the Confederates went to civil war to protect.

Political factionalism in the USA was originally created by the Federalists wanting big government and the Democratic-Republicans favouring decentralised government. The dominant Democratic Republicans split in the early-mid 19th century over the question of slavery. It was in 1854 that the Liberals formed the Republican Party in Wisconsin to oppose slavery and led to the Civil War against the Southern Democrats.

The Charlottesville riot in August 2017 demonstrated that the surrender in 1865 was only a cease fire, not a capitulation. The month after Trump was sworn in, the Charlottesville Council voted 3-2 to remove the statue of Confederate General Robert E Lee. A riot broke out as the good old boys of the traditional south marched opposing the removal. The confederates had declared war. The ghost of General Robert E Lee had risen. The Liberals also turned up ready for the fight. One man drove a car into a crowd; a woman was killed and 19 people injured. Trump appeared unconcerned. Confederates celebrated US President Donald Trump’s remarks about the protests when, after being pushed persistently to make a stance, he denounced violence “on all sides” rather than explicitly condemning white supremacists. After two days, following massive pressure from his own camp, Trump added “including KKK, neo-Nazis and white supremacists.” No one believed him. Racism is alive and strong in the USA, it has Trump as a sympathiser and is the basis of the great cultural divide.

Washington DC made life very difficult for Trump. Even Trump would agree that being president with so many enemies is no fun. He knows who likes him, those good old boys down south and the mid-western solid rural folk. Significantly, after Charlottesville, polls showed Alabama, Alaska, Arkansas, Dakota: North and South, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Oklahoma, South Carolina, Texas, Tennessee, Utah, Wyoming, West Virginia were all in the 50-60% Trump approval rating. Florida and Georgia were close at 48%. Suddenly the states don’t look quite so united. The irony being that the political party philosophies had reversed and it was now the Republicans who supported the traditional southern confederates and the Democrats who were dominated the big government Federalists.

The 2020 election saw Trump removed as president and replaced by Joe Biden. Biden was elected President even though Trump won more votes than when he had been elected in 2016 and even though Biden was clearly suffering from age-related cognitive failure.  On Trump’s departure he rallied a small army of ‘good old boys’ looking very much like a confederate reincarnation to march on the Capitol Hill building right in the heart of Washington DC and put terror into the heart of the Yankees although now . They were demanding a divorce and they meant business. This was an unprecedented response to an election result.

Divorce means division of property and the geo-political split was clear. This was a renewed battle between the Confederates and the Yankees, albeit under different banners to the original war. The Cavaliers and the Puritans. It is tribal, it is primal, it is never going to go away. Trump left the office in Washington DC with his army and returned to his home in Florida. Would he be the sort of guy that would see himself as general Robert E Lee reincarnated? Would he like a general’s uniform with medals and would he like to establish a royal, ruling Trump family dynasty?  Yes, I do think he might like all that. Would he relitigate the South’s old claims? Would they follow him? Especially the strategically vital and lucrative marginal state of Florida? 

If he declared Florida as the capital of a new country with his Mar a Lago palace becoming the presidential palace then maybe Florida would lap that up with Georgia following like a lamb. Finally has the Mid-West/ South got enough money to fight a war with the Yankees? Did you think they were just chicken farmers and moonshine bootleggers after the civil war? If so, you were wrong.

Texas is the second largest economy after California. Apart from the bigger than anywhere farms bringing in huge agricultural revenues and ten billion barrels of oil, they have NASA there and all the spinoff aero-tech businesses that brings. North Dakota is the next largest oil producer with a very respectable 5.7 billion barrels of oil. Mississippi is full of huge hi-tech, high-wage factories including the $1,4 billion Russian owned Severstal steel mill producing steel for cars. The Yokohama tyre factory, Nissan factory at Jackson, GE Aviation at Hattiesburg, Hybrid Plastics, one of the top ten nanotechnology producers in the US. They have a Rolls Royce engine building plant, a navy shipbuilding plant and a plant building unmanned helicopters for the navy. Mississippi is a busy little state. Tennessee has GM and Nissan car plants, 142 solar power companies, manufacturing plants for Whirlpool and Electrolux, Eastern Chemical and Delta faucet companies. Tennessee has won economic “State of the Year” award in 2009, 2013 and 2014. And Florida does more than a bit of orange juice too. It has the fourth largest economy in the US behind California, Texas and New York. Florida produces over $100 billion worth of food; 70% of the country’s citrus and in the winter months supplying 80% of the country’s fresh fruit and veg. It’s aerospace and aviation businesses contribute over $140 billion. The Florida tourism industry employs a million people, 10% of the workforce, and earns $US54 billion pa. Allied to tourism is that Florida is also full of wealthy retirees and the flow on bio-tech research and Life Sciences industry is substantial. If the secret to eternal youth is going to be discovered, it will probably happen in Florida. Bundle up the smaller states’ rural economies with these and you have a combined GDP of $US 6-7 Trillion. It would be the third biggest GDP in the world. It would be bigger than Japan and Germany and bigger than the UK and Russia combined. It would not be an insignificant little country for Trump to preside over.

The east coast would be completely cut off from the west coast so maybe California will expand its borders to include Colorado, Arizona, New Mexico, Nevada, Idaho, Oregon, Washington State and Hawaii and declare itself the independent country of OprahLand? Montana becomes an isolated state so may choose to just get right out and join Canada? Maybe the remaining 19 states of the USA: Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia and Wisconsin, will just then rename itself Massachusetts the Nation in respect for the tribe that occupied the Boston region when Puritan settlers from England first arrived there.

But divorce in the 21^st century is somewhat more complicated than it was when the confederates first demanded it in the 19^th century. Now there are two really big issues, the nukes and the dollar. Much of the nuke hardware is bunkered in the deserts of TrumpLand, but the software and the launch codes are in Yankee territory. The rest of their weapons of mass destruction are on warships, submarines and in the skies. What port do all those military assets call home? And the dollar? TrumpLand would want its own currency. He would probably approach bitcoin or one of the others with a request to ‘give me a couple of trillion dollars of your finest crypto currency my good man’ which, although not a currency trader, I would suspect might have a very destabilising effect on the greenback, the foundation stone of the American Empire. The lawyers will be able to retire in luxury off this divorce settlement. Meanwhile what an ideal time for China to put up a toll gate on the South China seas to keep the world in passive resistance while it performs a classical siege of Taiwan to starve them into submission.  

Perhaps Harry Duke of Sussex can set up the American branch of the retired emperors club, with Joe Biden it’s first member.