Economics Essay 75: Cross Elasticity of Demand

Explain how the concept of cross elasticity of demand can be used to understand the relationship between markets.

The concept of cross elasticity of demand measures the responsiveness of the quantity demanded of one good to changes in the price of another good. It helps us understand the relationship between markets and the degree of substitutability or complementarity between different products. Here are a few examples of how cross elasticity of demand can be used to understand market relationships:

1. Substitutable Goods: When the cross elasticity of demand between two goods is positive, it indicates that the goods are substitutes, meaning consumers can easily switch between them in response to price changes.

Example: Coffee and tea are often considered substitutes. If the price of coffee increases, consumers may choose to switch to tea, leading to a higher demand for tea. The cross elasticity of demand between coffee and tea would be positive.

2. Complementary Goods: When the cross elasticity of demand between two goods is negative, it suggests that the goods are complements, meaning they are typically consumed together, and a change in the price of one affects the demand for the other.

Example: Cars and gasoline are complements. If the price of cars decreases, it is likely to increase the demand for cars, which, in turn, increases the demand for gasoline. The cross elasticity of demand between cars and gasoline would be negative.

3. Independent Goods: When the cross elasticity of demand between two goods is close to zero, it indicates that the goods are independent of each other. Changes in the price of one good have little to no impact on the demand for the other.

Example: The cross elasticity of demand between smartphones and toothpaste is likely to be close to zero since there is no significant relationship or substitutability between them.

By analyzing the cross elasticity of demand, businesses can make informed decisions about pricing, marketing strategies, and product development. It helps them understand the impact of price changes in related markets and the potential for capturing market share from substitute goods. It also assists policymakers in assessing market relationships and potential market failures.

A political backlash against monetary policy is looming

Martin Sandbu in The FT

Three weeks ago, Sanna Marin, Finland’s prime minister, retweeted a link to an article by a Finnish academic together with the following quote: “There is something seriously wrong with the prevailing ideas of monetary policy when central banks protect their credibility by driving economies into recession.” 

Defenders of those prevailing ideas predictably pushed back, warning against second-guessing independent central banks or not valuing their credibility. But defensiveness is the wrong response. Not just because Marin didn’t actually criticise any central bank actions. But, more profoundly, because avoiding a debate over whether our macroeconomic regime is fit for purpose is more perilous than having one. 

Comparisons with the 1970s often fail to notice one important lesson of that decade: a macroeconomic regime that cannot justify itself will be toppled, first intellectually, then politically. It was from the ashes of 1970s monetary chaos that theories were born justifying independent central banks with a mandate to keep inflation low. Before the century was out, independent inflation-targeting was de rigueur in most advanced economies. 

Forty years on, a new intellectual and political reckoning would be less surprising than the absence of one. The “great moderation” produced by the 1980s monetary revolution has in many countries long been accompanied by stagnant wages for the low paid. The glacial recovery from the global financial crisis prompted the world’s two biggest central banks to revise their policy framework during the pandemic. In 2020 and 2021, the Federal Reserve and the European Central Bank vowed to tolerate a period of higher inflation if employment had further to rise or there would be little room to loosen policy in case of a downturn. But this new attitude fell at the first hurdle. 

With cost of living crises biting and recessions looming in key advanced economies, what are the odds of avoiding a more profound reckoning for much longer? Marin is not the only national leader expressing unease about central banks. French president Emmanuel Macron recently worried aloud about “experts and European monetary policymakers telling us we must crush European demand to contain inflation better”. 

Precisely because central bankers are independent, it falls to political leaders to tell their citizens why it is right to meet Russian energy blackmail with actions to clamp down further on incomes and jobs. They would be remiss if they did not question whether this is the best we can do. 

In comparison, central bankers have it easy. They have legally imposed inflation-fighting mandates, which are not for them to question. And they have an argument: that losing their “credibility” — by which they mean people no longer believe they can keep inflation low — will cost even more jobs and lost income. 

But the credibility of central banks itself is only as good as the credibility of the macroeconomic regime as a whole. That is not to say central bank independence should be jettisoned, but to ask openly whether it actually works for the economy. 

In pursuit of individual mandates central banks may be collectively overtightening, as Maurice Obstfeld has suggested. Or monetary policy uncoordinated with fiscal policy may be making matters worse, as Marin hinted in follow-up comments. 

The IMF has warned governments against budgeting “at cross-purposes” with monetary tightening. But raising interest rates puts monetary policy at cross-purposes with fiscal policy priorities such as investing in the green transition or, indeed, in energy infrastructure that would itself remedy energy-induced inflation. Even if monetary considerations should take priority, such monetary dominance is undoubtedly something to be democratically debated, not technocratically imposed. 

It may even be that central bankers are not independent enough but cave in to the political pressure arising from each new monthly record in current inflation, rather than coolly focusing on their benign medium-term forecasts. 

Like in the 1980s, in time bright economists will suggest better ways of designing monetary policy against energy price shocks. And unless we have a lucky escape from a sharp downturn this winter, a political backlash is surely coming too. The alternative to openly debating these issues in a democratic space is to let that backlash fester until it breaks out in the more radical and dangerous form of a populist assault on institutions. Central banks’ credibility would not be worth much then.

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Central banks were always political – so their ‘independence’ doesn’t mean much

The separation of monetary and fiscal policy serves the neoliberal status quo. It won’t survive the next crash writes Larry Elliott in The Guardian 

 

‘The Federal Reserve is coming under enormous pressure from Donald Trump to cut interest rates.’ Donald Trump with Jerome Powell, then his nominee for chairman of the Federal Reserve, Washington DC, November 2017. Photograph: Carlos Barría/Reuters


Independent central banks were once all the rage. Taking decisions over interest rates and handing them to technocrats was seen as a sensible way of preventing politicians from trying to buy votes with cheap money. They couldn’t be trusted to keep inflation under control, but central banks could.

And when the global economy came crashing down in the autumn of 2008, it was central banks that prevented another Great Depression. Interest rates were slashed and the electronic money taps were turned on with quantitative easing (QE). That, at least, is the way central banks tell the story.

An alternative narrative goes like this. Collectively, central banks failed to stop the biggest asset-price bubble in history from developing during the early 2000s. Instead of taking action to prevent a ruinous buildup of debt, they congratulated themselves on keeping inflation low.

Even when the storm broke, some institutions – most notably the European Central Bank (ECB) – were slow to act. And while the monetary stimulus provided by record-low interest rates and QE did arrest the slide into depression, the recovery was slow and patchy. The price of houses and shares soared, but wages flatlined.

A decade on from the 2008 crash, another financial crisis is brewing. The US central bank – the Federal Reserve – is coming under huge pressure from Donald Trump to cut interest rates and restart QE. The poor state of the German economy and the threat of deflation means that on Thursday the ECB will cut the already negative interest rate for bank deposits and announce the resumption of its QE programme.

But central banks are almost out of ammo. If cutting interest rates to zero or just above was insufficient to bring about the sort of sustained recovery seen after previous recessions, then it is not obvious why a couple of quarter-point cuts will make much difference now. Likewise, expecting a bit more QE to do anything other than give a fillip to shares on Wall Street and the City is the triumph of hope over experience.

There were alternatives to the response to the 2008 crisis. Governments could have changed the mix, placing more emphasis on fiscal measures – tax cuts and spending increases – than on monetary stimulus, and then seeking to make the two arms of policy work together. They could have taken advantage of low interest rates to borrow more for the public spending programmes that would have created jobs and demand in their economies. Finance ministries could have ensured that QE contributed to the long-term good of the economy – the environment, for example – if they had issued bonds and instructed central banks to buy them.

This sort of approach does, though, involve breaking one of the big taboos of the modern age: the belief that monetary and fiscal policy should be kept separate and that central banks should be allowed to operate free from political interference.

The consensus blossomed during the good times of the late 1990s and early 2000s, and survived the financial crisis of 2008 . But challenges from both the left and right, especially in the US, suggest that it won’t survive the next one. Trump says the Fed has damaged the economy by pushing up interest rates too quickly. Bernie Sanders says the US central bank has been captured by Wall Street. Both arguments are correct. It is a good thing that central bank independence is finally coming under scrutiny.

For a start, it has become clear that the notion of depoliticised central bankers is a myth. When he was governor of the Bank of England, Mervyn King lectured the government about the need for austerity while jealously guarding the right to set interest rates free from any political interference. Likewise, rarely does Mario Draghi, the outgoing president of the ECB, hold a press conference without urging eurozone countries to reduce budget deficits and embrace structural reform.

Central bankers have views and – perhaps unsurprisingly – they tend to be quite conservative ones. As the US economist Thomas Palley notes in a recent paper, central bank independence is a product of the neoliberal Chicago school of economics and aims to advance neoliberal interests. More specifically, workers like high employment because in those circumstances it is easier to bid up pay. Employers prefer higher unemployment because it keeps wages down and profits up. Central banks side with capital over labour because they accept the neoliberal idea that there is a point – the natural rate of unemployment – beyond which stimulating the economy merely leads to higher inflation. They are, Palley says, institutions “favoured by capital to guard against the danger that a democracy may choose economic policies capital dislikes”.

Until now, monetary policy has been deemed too important to be left to politicians. When the next crisis arrives it will become too political an issue to be left to unelected technocrats. If that crisis is to be tackled effectively, the age of independent central banks will have to come to an end.

Americans really pay a bribe for a good education? In Britain, we’ve got far subtler ways

The deviousness that some routinely resort to here puts the US scandal in the shade writes Catherine Bennett in The Guardian

‘Emily Thornberry hoovered up three precious places at an outstanding part-selective school.’ Photograph: George Cracknell Wright/Rex/Shutterstock


“Dude, dude, what do you think, I’m a moron?” Thus, one of the parents accused of involvement in the US college bribery racket. He’d been warned – by a wiretapped conspirator – not to reveal that he paid $50,000 for his daughter’s fraudulent test results, part of a system the fixer calls “the side door”.

Appropriately soothed – “I’m not saying you’re a moron” – the accused father is recorded, by the FBI, assuring the scam’s organiser that he’ll deliver, if required, the agreed fiction. “I’m going to say that I’ve been inspired how you’re helping underprivileged kids get into college. Totally got it.”

Although many of the best bits of an FBI affidavit – presenting the case against the accused parents – have been widely circulated, this sublime page-turner deserves to be enjoyed in full, if not put up for literary awards pending film adaptation (Laura Dern has been suggested for Felicity Huffman), and made compulsory reading in all admission departments. It’s not just that extracts can’t convey the fathomless entitlement and mendacity exhibited by affluent, ostensibly respectable parents. They can’t begin to do justice to the affidavit’s entertainment value as savage social comedy, something productions of Molière often attempt, but rarely achieve.

Even the dramatis personae, in the investigation the FBI named “Operation Varsity Blues”, reads like an updated Tartuffe: “Todd Blake is an entrepreneur and investor. Diane Blake is an executive at a retail merchandising firm.” Here, too, cultivated, fluent people, many of whom also sound deluded, greedy and hypocritical, appear to be playing with their children’s lives for no reason beyond self-gratification. But the dialogue, when not jaw-dropping, races along (“And it works?” asks a defendant. “Every time.”), the plots and motives are horribly plausible, and the jeopardy is evidently real to the alleged conspirators, even if the all-encompassing irony of their alleged scheme is not. “She actually won’t really be part of the water polo team, right?”

And from a fellow future defendant, on the risks, if this status-enhancing, child-perfecting scam were to be discovered: “You know, the, the embarrassment to everyone in the communities. Oh my God, it would just be – yeah. Ugh.”

Are FBI affidavits regularly as good as the tale of Operation Varsity Blues? If so, the death of the novel should be easier to bear. Although this document has one overriding purpose – to show that accused parents and witnesses colluded in fraudulent applications – special thanks are due to special agent Laura Smith, the author, who never writes a dull page. Maybe the individual cases were fully as compelling as this edited evidence suggests. Or maybe agent Smith’s organisation of her material really does indicate considerable, dry artistry? Either way, you cherish the detail when an accused parent replies, following an allegedly fraudulently extracted college offer: “This is wonderful news! [high-five emoji].”

  Actress Felicity Huffman has been indicted in the university admissions scandal. Photograph: David McNew/AFP/Getty Images

Ditto Smith’s generous quotation from a statement provided for a girl who has been reinvented, apparently for scam purposes, as a “US Club Soccer All American”: “On the soccer or lacrosse etc I am the one who looks like a boy amongst girls with my hair tied up, arms sleeveless, and blood and bruises from head to toe.”

Not, of course, that’s there’s anything illegal, here or in the US, about reproducing personal statements from professional suppliers or collaborating with a teacher and/or parent – the latter, though risibly unfair, is routine. Another Varsity Blues alleged tactic, that of buying a diagnosis requiring extra exam time, may have no exact UK parallel but, according to a 2017 BBC report, one in five children in independent schools received extra time for GCSE and A-levels. David Kynaston and David Green, in a powerful critique of independent schools, recently pointed out various advantages, made possible by high fees: “Far greater resources are available for diagnosing special needs, challenging exam results and guiding university applications.”

If, mercifully, UK universities are low on dependable side doors, the shamelessness of some of the US defendants, as they appear to pursue their imagined birthright (Ivy League bragging rights) can still sound uncomfortably familiar. Many British parents, equally fearful of mediocrity, are similarly unabashed on local tricks and stratagems – not only private education, but house moves, music lessons (for reserved school places), intensive coaching, internships, resits, religious conversions, fake addresses, and, the Times now reports, FOI requests to Oxbridge, from disappointed parents – that will end up, added to financial and cultural capital, delivering much the same outcome as the US scandal. Legal or otherwise, the result is enhanced educational opportunities for the privileged and untalented, fewer for the talented but disadvantaged.

The pervasive cunning is hardly surprising given the official esteem for “sharp-elbowed” parental operators, who, David Laws once argued, set a fine example. It follows, as demonstrated by UK politicians on all sides, that extreme resourcefulness in, say, keeping places from less fortunate residents, is readily passed off as understandable dedication as opposed to insatiable self-interest. Don’t we all want [smiling face with halo emoji] the best for our kids?

Following some unspecified epiphany, David Cameron, of previously wavering faith, secured places at an oversubscribed church school, some distance from No 10, requiring proof of “Sunday worship in a church at least twice a month for 36 months before the closing applications date”. Equally instructively, my own, affluent MP, Emily Thornberry, had, earlier, hoovered up three of the few precious places at an outstanding, part-selective school in Hertfordshire, 13 miles from home, which tradition annually reserves for her Islington constituents. On Twitter, she has reminded critics: “All my children educated in the state sector.” There is no suggestion that either MP has broken any laws.

There must be, beyond legality, some ethically significant factor that makes non-paying wangling infinitely superior to the ugly, US variety. But you probably have to buy a place at Harvard to find out what it is.

We tell ourselves we choose our own life course, but is this ever true? The role of universities and advertising explored

By abetting the ad industry, universities are leading us into temptation, when they should be enlightening us writes George Monbiot in The Guardian

 

To what extent do we decide? We tell ourselves we choose our own life course, but is this ever true? If you or I had lived 500 years ago, our worldview, and the decisions we made as a result, would have been utterly different. Our minds are shaped by our social environment, in particular the belief systems projected by those in power: monarchs, aristocrats and theologians then; corporations, billionaires and the media today.

Humans, the supremely social mammals, are ethical and intellectual sponges. We unconsciously absorb, for good or ill, the influences that surround us. Indeed, the very notion that we might form our own minds is a received idea that would have been quite alien to most people five centuries ago. This is not to suggest we have no capacity for independent thought. But to exercise it, we must – consciously and with great effort – swim against the social current that sweeps us along, mostly without our knowledge. 

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Surely, though, even if we are broadly shaped by the social environment, we control the small decisions we make? Sometimes. Perhaps. But here, too, we are subject to constant influence, some of which we see, much of which we don’t. And there is one major industry that seeks to decide on our behalf. Its techniques get more sophisticated every year, drawing on the latest findings in neuroscience and psychology. It is called advertising.
Every month, new books on the subject are published with titles like The Persuasion Code: How Neuromarketing Can Help You Persuade Anyone, Anywhere, Anytime. While many are doubtless overhyped, they describe a discipline that is rapidly closing in on our minds, making independent thought ever harder. More sophisticated advertising meshes with digital technologies designed to eliminate agency.

Earlier this year, the child psychologist Richard Freed explained how new psychological research has been used to develop social media, computer games and phones with genuinely addictive qualities. He quoted a technologist who boasts, with apparent justification: “We have the ability to twiddle some knobs in a machine learning dashboard we build, and around the world hundreds of thousands of people are going to quietly change their behaviour in ways that, unbeknownst to them, feel second-nature but are really by design.”

The purpose of this brain hacking is to create more effective platforms for advertising. But the effort is wasted if we retain our ability to resist it. Facebook, according to a leaked report, carried out research – shared with an advertiser – to determine when teenagers using its network feel insecure, worthless or stressed. These appear to be the optimum moments for hitting them with a micro-targeted promotion. Facebook denied that it offered “tools to target people based on their emotional state”.

We can expect commercial enterprises to attempt whatever lawful ruses they can pull off. It is up to society, represented by government, to stop them, through the kind of regulation that has so far been lacking. But what puzzles and disgusts me even more than this failure is the willingness of universities to host research that helps advertisers hack our minds. The Enlightenment ideal, which all universities claim to endorse, is that everyone should think for themselves. So why do they run departments in which researchers explore new means of blocking this capacity?

 ‘Facebook, according to a leaked report, developed tools to determine when teenagers using its network feel insecure, worthless or stressed.’ Photograph: Alamy Stock Photo

I ask because, while considering the frenzy of consumerism that rises beyond its usual planet-trashing levels at this time of year, I recently stumbled across a paper that astonished me. It was written by academics at public universities in the Netherlands and the US. Their purpose seemed to me starkly at odds with the public interest. They sought to identify “the different ways in which consumers resist advertising, and the tactics that can be used to counter or avoid such resistance”.

Among the “neutralising” techniques it highlighted were “disguising the persuasive intent of the message”; distracting our attention by using confusing phrases that make it harder to focus on the advertiser’s intentions; and “using cognitive depletion as a tactic for reducing consumers’ ability to contest messages”. This means hitting us with enough advertisements to exhaust our mental resources, breaking down our capacity to think.

Intrigued, I started looking for other academic papers on the same theme, and found an entire literature. There were articles on every imaginable aspect of resistance, and helpful tips on overcoming it. For example, I came across a paper that counsels advertisers on how to rebuild public trust when the celebrity they work with gets into trouble. Rather than dumping this lucrative asset, the researchers advised that the best means to enhance “the authentic persuasive appeal of a celebrity endorser” whose standing has slipped is to get them to display “a Duchenne smile”, otherwise known as “a genuine smile”. It precisely anatomised such smiles, showed how to spot them, and discussed the “construction” of sincerity and “genuineness”: a magnificent exercise in inauthentic authenticity.

Facebook told advertisers it can identify teens feeling 'insecure' and 'worthless'


Another paper considered how to persuade sceptical people to accept a company’s corporate social responsibility claims, especially when these claims conflict with the company’s overall objectives. (An obvious example is ExxonMobil’s attempts to convince people that it is environmentally responsible, because it is researching algal fuels that could one day reduce CO2 – even as it continues to pump millions of barrels of fossil oil a day). I hoped the paper would recommend that the best means of persuading people is for a company to change its practices. Instead, the authors’ research showed how images and statements could be cleverly combined to “minimise stakeholder scepticism”.

A further paper discussed advertisements that work by stimulating Fomo – fear of missing out. It noted that such ads work through “controlled motivation”, which is “anathema to wellbeing”. Fomo ads, the paper explained, tend to cause significant discomfort to those who notice them. It then went on to show how an improved understanding of people’s responses “provides the opportunity to enhance the effectiveness of Fomo as a purchase trigger”. One tactic it proposed is to keep stimulating the fear of missing out, during and after the decision to buy. This, it suggested, will make people more susceptible to further ads on the same lines.

Yes, I know: I work in an industry that receives most of its income from advertising, so I am complicit in this too. But so are we all. Advertising – with its destructive impacts on the living planet, our peace of mind and our free will – sits at the heart of our growth-based economy. This gives us all the more reason to challenge it. Among the places in which the challenge should begin are universities, and the academic societies that are supposed to set and uphold ethical standards. If they cannot swim against the currents of constructed desire and constructed thought, who can?

Oxbridge bashing is an empty ritual if we ignore wider social inequities

Priyamvada Gopal in The Guardian

The numbers are clearly unacceptable. Several colleges in both Oxford and Cambridge frequently admit cohorts with no black students in them at all. Roughly 1.5% of total offers are made to black British applicants and more than 80% of offers are made to the children of the top two social classes. With offers made overwhelmingly to those in London and a handful of the home counties, both universities are consistently excluding entire ethnic and regional demographics. They also continue to admit a grotesquely disproportionate number of privately schooled students. In effect, the two ancients are running a generous quota scheme for white students, independent schools and the offspring of affluent south-eastern English parents. 

There is undoubtedly a great deal that both institutions can and must do to remedy this. Our admissions processes at Cambridge are not sufficiently responsive to the gravity of the situation. Despite periodic panics in response to such media “revelations” or staged political scolding, and notwithstanding the good intentions of many involved in admissions, questions of diversity and inclusion are not taken seriously enough in their own right.

The focus on educational achievement, itself defined in purely numerical terms and worsened by internal league tables, means there is little sense of meaningful diversity as an educational and community good in its own right. Despite having contextual indicators that would allow us to diversify our admissions, we balk at non-traditional attainment profiles for fear that the student will not be able to cope once here.

For any Oxbridge college to not have a single black student at any given point in time, where they would rightly not tolerate having low numbers of women, is not just about looking institutionally racist but also impoverishes the educational and social environment we provide. The same holds true for regional and class exclusions.

When I first came to Cambridge in 2001, having taught at different institutions in the US, I was struck by the relative whiteness and sheer cultural homogeneity of this university. Even the minimal improvements I’ve seen since then in some years – more students from ethnic minority backgrounds, more young women from northern comprehensives – have made a huge difference both to me as a teacher and, more importantly, to what students are able to learn from each other.

Not all of them will get first-class marks, but they both gain a lot from and have a great deal to give to the educational environment here, not least by expanding the definition of what counts as achievement. We need more of them. (At Cambridge, in recent years, a quantum of vocal BME students as well as students from northern comprehensives has demanded change, often to good effect. There is some cause for hope.)

There is also undoubtedly a culture of denial when it comes to matters of race and racism, which students speak of both in class and privately and which I have experienced when I’ve tried to draw attention to them. And more than one student from northern comprehensives has told me about being discouraged by teachers from applying and feeling amazed to have received an offer only to feel alienated by the stultifying class conformity of the affluent south-east once they get here.

It is simply not good enough for Oxford and Cambridge to say that they are welcoming of diversity and in effect blame certain demographics for not applying despite their outreach programmes. It is Oxbridge that must change more substantially to provide a better environment for a diverse student body. The two ancients must be held to account; homogeneity must fall.

But should they be the only ones held to account? In having a necessary conversation about elitism and exclusion, are we forgetting – or being encouraged – to not have a larger one about wider deprivation and systemic inequality? It is striking that some quarters only too happy to periodically attack Oxbridge for its failings, from rightwing tabloids to Tory ministers, are rarely interested in the roots of inequality and lack of opportunity of which Oxbridge exclusion is a symptom but is hardly the origin.

We should be careful that a headline-friendly focus on these two institutions alone does not become an easy way to avoid even more painful and challenging questions. It seems somewhat selective and inadequate to focus on what David Lammy rightly calls “social apartheid” at Oxbridge without discussing the widespread and worsening economic apartheid in this country.

We know that access to university education in general is sharply determined by school achievement that, in turn, is shaped by parental income and education levels. In an economically stratified society, it is inevitable that most young people from economically deprived backgrounds have a substantially lower chance of achieving the kind of marks that enable access to higher education.

Hence it is incoherent to have a discussion about access to higher education without having one simultaneously about economic disadvantage, which, in some cases, including British Caribbean and Bangladeshi communities, has an added ethnic minority dimension to it. In a context of worsening economic fault lines, there’s a whiff of something convenient about only attacking the admissions failings of top universities.

The other obvious missing dimension to this discussion is the existence and encouragement for independent schools. It’s somewhat contradictory to encourage a market culture where money can buy a deluxe education and then feel shocked when the well-off get their money’s worth by easily meeting the requirements for offers from high-status institutions. It’s worth saying that as long as independent schools, hardly bastions of ethnic diversity, exist, there will remain a fundamental apartheid between two kinds of students.

Oxbridge, or even the Russell Group of universities more broadly, can only do so much to mitigate this state of affairs, which lifting the tuition fee cap will only worsen. Lammy notes that more offers are made to Eton than to students on free school meals.

But why not also question the very existence of Eton and the lamentable state of an economic order that necessitates free school meals for many? Add to this the parlous condition of state education with its chronic underfunding, inflated classroom sizes, an undermining testing and target culture and difficulties in recruiting and retaining good teachers.

The same politicians who rightly point to Oxbridge’s demographic narrowness are rarely willing to grasp the nettle of a two-tier educational structure in which some are destined to do much better than others. Who, for instance, would be willing to call for the abolition of private schooling, subject as such a suggestion would be to shrill denunciations about how individual choice, personal aspiration and the workings of the market are being interfered with?

There are other tough discussions that could be had if the aim truly is to address and undo inequalities in university demographics. Would politicians and institutions be willing, for instance, to impose representational quotas for both ethnic minorities and state-educated students that reflect the national pie-chart?

Currently, the Office for Fair Access (Offa) makes some toothless demands around “widening participation”, a rather feeble phrase, which are not accompanied by penalties for failure. Lammy, whose suggestion that admissions be centralised has some merit to it, not least towards undoing the unhelpful internal collegiate caste system at Oxbridge, has made also a comparison between Oxbridge’s abysmal intake of black students and Harvard’s healthy numbers.

Would the political and intellectual classes be willing to have a discussion about something like “affirmative action” in the US, a process of “positive discrimination” by which underrepresented ethnic minorities and disadvantaged groups are given special consideration? We must hope so. For failing a wide-ranging discussion aimed at radical measures, all the huffing and puffing about Oxbridge is destined to remain a yearly ritual, each controversial headline simply making way for the same unsurprising headlines every year.

Private Schools, Grammar schools and Comprehensives

You can print money, so long as it’s not for the people

Zoe Williams in The Guardian

In its broadest sense, the phrase “there’s no magic money tree” is just a variation on “money doesn’t grow on trees”, a thing you say to children to indicate that wealth comes not from the beneficence of a magical universe, but from hard graft in a corporeal reality. The pedantic child might point to the discrepant amounts of work required to yield a given amount of money, and say that its value is a social construction.

Over time, that loose, rather weak-minded meaning has ceded to a specific economic critique; Jeremy Corbyn – along with anyone who challenges the prevailing fiscal narrative – is dangerous and wrong, since he wants to print money. Money cannot be created from nowhere, because there’s no magic money tree. End of.

The flaw in that argument is that all money is created from nowhere. In normal circumstances, it is created from nowhere as credit, by private banks, and lent to us, usually (85% of the time) in the form of a mortgage on an existing residential property. Decades of credit extension have perverted the housing market to turn a mortgage into a lifetime’s bonded servitude. The economists Jordá, Schularick and Taylor argued convincingly last year that the causes of this economic crisis, the next and the one before are all, fundamentally, the extension of credit and its impact on house prices. So the magic money tree isn’t gushing cash in a socially responsible fashion (if it were used responsibly, it wouldn’t be magic) but the idea that we have a centrally planned, carefully stewarded monetary policy, with finite creation and demonstrable long-term aims, which some loonie leftie wants to come along and unravel, is simply wrong.

In abnormal circumstances, such as the ones we’ve lived through since the financial crisis, central banks are also magic money trees. In the bizarre construction of current economic orthodoxy, you’re not allowed to say so, even though the Bank of England has created £375bn in quantitative easing (QE); theFederal Reserve bought $1.25tn worth of mortgage-backed securities in its first round of QE; the European Central Bank had as a core principle that it couldn’t create money until, suddenly, in awesome amounts, it could; the Bank of Korea has a stimulus package, as does the People’s Bank of China; and Japan started it. Central banks typically justify money creation on the basis that it’s temporary, it’s unfortunate, it’s driven by the crisis and it will ultimately get back to normal.

None of that alters the fact that no bank had that money in savings. I recently said out loud, “we do have a magic money tree, it’s called the Bank of England” in a Newsnight debate with a former adviser to Blair, John McTernan. He made a face like a politician accidentally talking to a member of the public but what the camera didn’t catch was Evan Davis, who stuck his tongue out, like a cat taking a pill. It was days ago, and people are still tweeting me pictures of the Zimbabwean dollar and the Weimar Republic, saying “is this what you want? IS IT?”

Quantitative easing is bizarrely unapproachable, even though it’s happening right across the world and its unwinding will dominate the economic picture for years to come; one is allowed to reference QE, so long as one maintains at all times a technocratic tone, to indicate that one understands and approves of it as nothing more than a lever to create stability. It was the best idea ever, until you suggest something similar could be done for a social purpose, and then it’s the most perilous idea ever. To interrogate why the benefit must always go to the existing asset-holding class, why human ingenuity can’t devise anything more productive and equitable, is to reveal the shaming depth of your incomprehension. It’s not that you don’t understand money; it’s that you don’t understand the exigencies of the debate, which are that you sign up to a number of false principles before you start.

It turned out that the “no money tree” brigade meant: “If you create money infinitely, that will cause inflation” That is a really curious argument against Corbyn’s people’s QE, like going up to someone eating a banana and saying: “If you eat limitless bananas, you will give yourself potassium poisoning.” There’s a secondary argument about the independence of central banks from governments, which is actually rather an elegant example of our dishevelled politics: if the government issues no directive to the Bank of England, and all the gains of QE go to the wealthiest, that’s “independent”. If the government had said, invest this in, say, the green economy, that would have been independence lost. It has become normal to see upwards redistribution as a law of the physical universe, and anything else as the interference of a heavy-handed state.

None of this is to say that people’s QE is straightforward and unproblematic; Corbyn is talking about spending on infrastructure (housing, broadband), whereas that phrase as it was coined described helicopter money, or overt money financing, literally getting money into the economy by randomly giving it to people. They’re two discrete propositions – overt money financing and green and social investment – and rolling them into one doesn’t do much to promote understanding on this terrain.

However, the real barrier to debate is, as with so much in the realm of debt and austerity, that it’s conducted in bad faith, with infantilising aphorisms, aimed not at deepening understanding but at shooing away public interest with unavoidable economic realities. As a tactic, this has reached the end of its plausibility.

The spirit's in the laws

Joe Yates in Cricinfo

Spirit of Cricket? - Laws be damned!

Once again, following Ben Stokes' obstructing-the-field dismissal in an ODI at Lord's, the spirit of cricket debate reared its ugly and pretentious head. Ugly because there is a general lack of consensus on what the spirit of cricket actually is and pretentious because of what certain players, past and present, contributed to the discussion. One player said, 'I would have withdrawn the appeal.' Another said, 'we wouldn't have appealed in the first place.'

Really? The self-righteousness is nauseating!

First, let's deal with the basics. Ben Stokes intercepted a ball with his hand that was seemingly headed for the stumps with him well out of his ground. Under the laws, this action was grounds for an appeal, which the Australians rightfully did. The only question now was intent, which was for the umpires to decide. Upon consideration of the available evidence, the umpires concluded that, under law 37, Stokes had indeed obstructed the field and gave him out.

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So where exactly does the spirit of cricket come into this?

The only real way to settle this tediously endless debate on the spirit of cricket is to fall back to the MCC's preamble to the laws of cricket. The essence of this preamble is thus: The captain is responsible for the conduct of his players; all players must play fair; the umpires are the sole arbiters of what is fair; you must respect the opposition, your captain, the umpires, and the game's traditional values (whatever they are in this rapidly evolving age of protective equipment, cameras, microphones and DRS).

The problem comes when someone says something like this: "That may have been within the laws of the game, but it wasn't within its spirit."

Come again? How is that possible? Is this to suggest that the spirit of cricket is independent of, or even contrary to, its laws? Never may that happen!

The spirit of cricket is guided by principles - principles of fair play and honourable conduct. It has much less to do with how a batsman is dismissed. Violations of the spirit of cricket, such as ball-tampering, time-wasting, aggressive or dishonest appealing, and dissent are not dealt with by the umpires on the field as much as they are by the match referee after the game. Although even these offences can be handled on field by the umpires under Law 42, which legislates specifically for fair or unfair play.

So the only way to invoke the spirit of cricket in Ben Stokes' dismissal is in the validity of the appeal. Since there was deemed sufficient evidence to give him out, there was clearly enough evidence for an appeal. Ergo, spirit of cricket intact.

The spirit of cricket debate invariably surfaces when there is an unusual or rare dismissal, such as obstructing the field or running out the non-striker, a.k.a. mankading. Strong opinions were voiced when Ravi Ashwin mankaded Lahiru Thirimanne but the appeal was withdrawn 'in the interests of the spirit of cricket.'

Many believe that when a batsman backs up too far, he is gaining an unfair advantage. An advantage, certainly, but why is it unfair? It would only be unfair if the fielding side could do nothing about it. There is absolutely nothing in the laws of cricket stating that a batsman cannot leave his crease before the bowler bowls. There is a law (Law 38), however, that states that if a batsman is out of his crease when the ball is in play, which it is when the bowler starts his run-up (Law 22), he can be run out. Simple. Elegant. Balanced.

It is the same with obstructing the field. There is nothing in the laws of cricket stating that a batsman cannot interfere with the fielding side. However, there is a law that states that if he does, he can be given out. Where the most harm comes to the game of cricket is when the laws are flouted or ignored in favour of this intangible and mysterious spirit. The spirit of cricket is harmed when fielding teams are forced to think twice before raising a legitimate appeal or running out a batsman who is out of his crease when the ball is live.

The spirit of cricket was damaged far more when Steven Smith's integrity and maturity were called into question by not withdrawing the appeal than by the appeal itself. Where was the respect for the opponents or the umpires there?

Cricket is an invented sport. Like all sports, cricket has rules, or in cricket's case, Laws. If there is a law whose existence or application is widely seen to be against the interests, or spirit, of the game, then change or abolish that law. But we all know that is not going to happen. The laws of cricket have been developed and refined over many decades across three centuries - and are very clear.

The spirit of cricket should not and cannot exist separately from the laws of cricket. It is contained within its laws. Anyone who feels differently should either start a rigorous campaign to get the laws changed, or rethink what they consider to be in the game's spirit. And it most certainly should not be considered against the spirit of the game if the laws are correctly applied.

Knowing, accepting and playing within these Laws IS the Spirit of Cricket.

If you cheat on your partner, it’s probably about more than just sex

Phillipa Perry in The Guardian

According to a study published this week, the likelihood of people cheating on their partners rises if they are financially dependent on them – and especially if they are male. From the research carried out by a Connecticut sociology professor, Christin Munsch, it seems that men still expect to be breadwinners in the family, and that they can still feel emasculated when their female partners make more money. Old scripts die hard, it seems.

Babies and toddlers, as anyone who has lived in close proximity to one will know, are not always terribly good at articulating what they feel, but they are very good at acting out their emotions: they bite, they scream, they lie on the floor and beat their fists and generally try to squirm out of situations that don’t appeal to them. We adults do our best to put into words how they are feeling so that they will eventually learn to talk about their emotions, which in therapy-speak we would call “processing feelings”. If you don’t learn how to process feelings, you tend to carry on “acting out”. We don’t dispute that when a baby throws his toys out of the pram, he is actually doing his best to show how he feels.

A man or woman who has an extramarital fling is also very possibly doing their best to manage their feelings by acting out and having an affair. It can be hard to start a conversation with a spouse who is doing their best to provide for the family about how dissatisfied you are with the lack of meaning in your life, about your envy, or your boredom. You don’t want to appear ungrateful. You don’t want to rock the boat.

When unpicking the fallout of affairs in couples counselling, quite often the person who has had the affair says things like, “it just happened”, “it didn’t mean anything”, “it wasn’t anything to do with you”, “I was drunk”, or “it was just a one-night stand”. The financially dependent party might wish they didn’t feel how they feel, and try very hard to push what seem like ungrateful feelings away. But even if they do try to process how they are feeling with their partner, that partner might find it understandably hard to listen to and easy to dismiss. Feelings don’t go away just because we want them to, and unconsciously we look for a way to deal with them.

So when a distraught couple is in the counselling room and the so-called guilty party is saying “it didn’t mean anything”, the counsellor might try to help them find out what it really did mean. It’s probably true that the straying partner does not prefer their one-night stand to their long-term lover, but it might mean that they do have unresolved issues with their partner, that they could not find a way to articulate or have heard. And the so-called innocent party may have even contributed to the event by not being sufficiently open and sympathetic to their partner’s feelings. Too often people in a relationship do not want to listen to their partner’s woes because they feel that means they are to blame, or that they have to fix them, but actually, being heard non-defensively and sympathetically goes a long way to restoring equilibrium.

 An affair is often an enactment of some deep, pushed away resentment. The fling can seem to temporarily cure feelings of an imbalance or a lack of meaning. This is but one explanation for something complicated that probably has many determining factors. It may be that the stay-at-home wife or husband is someone with attachment issues. For example there are people who seem to always need to have a lover as well as a partner because they dare not rely on just one person in case that person abandons them. This situation may be heightened if they are financially reliant on their partner. Such a situation can arise from early attachment issues with their first primary caregiver. Likewise some people feel they need secrets, otherwise they fear merging with their spouse. This feeling may be heightened when their spouse seems to have a stronger identity than they do.

There are probably as many reasons for why people act out in the form of an affair as there are people, but Munsch’s research does show us that inequality between partners can be a problem, and it’s something worth considering in any relationship.

Teaching philosophy to children? It's a great idea

Studying philosophy cultivates doubt without helplessness, and confidence without hubris. I’ve watched children evolve to be more rational and open-minded because of it

• 
• • Michelle Sowey
  • theguardian.com, Wednesday 20 November 2013 22.23 GMT

'I quickly saw that kids, too, have the capacity to enquire philosophically from an early age'. Photograph: Christopher Furlong/Getty Images

Recently I’ve seen a spate of articles along the lines of "what philosophy can do for you", focusing on the high results that philosophy students score on standardised tests, the marketability of philosophical skills, and the impressive earning potential of philosophy graduates. I’ve even seen pitches like: "If you want to succeed in business, don’t get an MBA. Study philosophy instead." I find this strange, because career advancement and commercial success are the most peripheral of the benefits of philosophy.

In my university days, still uncertain of my future directions, I came across an unforgettable quote by Alex Pozdnyakov, a philosophy student on the other side of the world: “I have this strange phrase I use when people ask me why I chose philosophy. I tell them I wanted to become a professional human being.”

Perfect, I thought. That’s what I want to be.

Since then, training in various jobs has made me into various kinds of professional, but no training has shaped my humanity as deeply as philosophy has. No other discipline has inspired such wonder about the world, or furnished me with thinking tools so universally applicable to the puzzles that confront us as human beings.

When I started running philosophy workshops for primary school children, I quickly saw that kids, too, have the capacity to enquire philosophically from an early age. They’re nimble in playing with ideas and deft in building on each other’s arguments. They’re endlessly inquisitive, wondering about values (“What’s the most treasured object in the world?”), metaphysics (“Is the earth a coincidence?”), language (“If cavemen just went ‘ugh-ugh-ugh’, how did we learn to speak?”) and epistemology (“Since you can have dreams inside dreams, how can you know when you’re dreaming?”).

In small groups, they’ve discussed artificial intelligence, environmental ethics, interspecies communication and authenticity in art. They’ve contemplated the existence of free will, the limits of knowledge, the possibility of justice and countless other problems from the history of philosophical thought. By continually questioning, challenging and evaluating ideas, the children have been able to see for themselves why some arguments fail while others bear up under scrutiny.

Studying philosophy cultivates doubt without helplessness, and confidence without hubris. I’ve watched kids evolve to be more rational, sceptical and open-minded, and I’ve seen them interact in more fair-minded and collaborative ways. As one 10-year-old said, “I’ve started to actually solve arguments and problems with philosophy. And it works better than violence or anything else.”

Over 400 years ago, the French writer Michel de Montaigne asked: “Since philosophy is the art which teaches us how to live, and since children need to learn it as much as we do at other ages, why do we not instruct them in it?” We urgently need to ask ourselves the same question today.

The central place of Theory of Knowledge in the International Baccalaureate (a globally recognised high school diploma) reflects a worldwide appreciation for the importance of philosophy – a discipline that underpins all other academic disciplines. A growing international movement is inviting young children to philosophise in primary schools in the USA, the UK and elsewhere – but Australia is lagging.

Although philosophy features on the high school curriculum in most Australian states, only a very few primary schools dedicate class time to broad philosophical enquiry or to the explicit teaching of critical and creative thinking.

If it were more widely embraced, the practice of philosophical enquiry in primary schools could make schooling a lot more meaningful and engaging for students. It would certainly promote the development of reasoned argument and higher-order thinking – skills which underlie learning in most other domains (including literacy and numeracy) and which are essential for responsible civic engagement.

By setting children on a path of philosophical enquiry early in life, we could offer them irreplaceable gifts: an awareness of life’s moral, aesthetic and political dimensions; the capacity to articulate thoughts clearly and evaluate them honestly; and the confidence to exercise independent judgement and self-correction. What’s more, an early introduction to philosophical dialogue would foster a greater respect for diversity and a deeper empathy for the experiences of others, as well as a crucial understanding of how to use reason to resolve disagreements.

The benefits to students would be there for the taking, if only philosophy educators in Australia could access appropriate funding and institutional support. Such support is provided by charitable organisations like the Philosophy Foundation in the UK and theSquire Foundation in the USA, which lead the way in embedding philosophy in primary school curricula. Unless funding is made available here to pay expert philosophy practitioners or to provide classroom teachers with rigorous training, our kids are condemned to forgo the many rich rewards that philosophy promises – or to suffer from the variable level of professionalism that characterises many volunteer-run educational programs.

Here’s something to think about on World Philosophy Day: while academic achievement, career advancement and financial success are no trifling things, they’re simply visible husks that may grow around a philosophical life. The hidden kernel is made of freedom, clarity of thought, and a professional mastery of what it means to be human. These are qualities we should seek for all our children, no matter what they grow up to become.

US control is diminishing, but it still thinks it owns the world

The United States has long assumed the right to use violence to achieve its aims, but it is now less able to implement its policies

• 
• • Noam Chomsky for TomDispatch, part of the Guardian Comment Network
  • guardian.co.uk, Monday 4 February 2013 14.01 GMT

'We "stabilise" countries when we invade them and destroy them.' Photograph: Olivier Laban-Mattei/AFP/Getty Images

 

This piece is adapted from Uprisings, a chapter in Power Systems: Conversations on Global Democratic Uprisings and the New Challenges to US Empire, Noam Chomsky's new book of interviews with David Barsamian (with thanks to the publisher, Metropolitan Books). The questions are Barsamian's, the answers Chomsky's.

Does the United States still have the same level of control over the energy resources of the Middle East as it once had?

The major energy-producing countries are still firmly under the control of the western-backed dictatorships. So, actually, the progress made by the Arab spring is limited, but it's not insignificant. The western-controlled dictatorial system is being eroded. In fact, it's been being eroded for some time. So, for example, if you go back 50 years, the energy resources – the main concern of US planners – have been mostly nationalised. There are constantly attempts to reverse that, but they have not succeeded.

Take the US invasion of Iraq, for example. To everyone except a dedicated ideologue, it was pretty obvious that we invaded Iraq not because of our love of democracy but because it's maybe the second- or third-largest source of oil in the world, and is right in the middle of the major energy-producing region. You're not supposed to say this. It's considered a conspiracy theory.
The United States was seriously defeated in Iraq by Iraqi nationalism – mostly by nonviolent resistance. The United States could kill the insurgents, but they couldn't deal with half a million people demonstrating in the streets. Step by step, Iraq was able to dismantle the controls put in place by the occupying forces. By November 2007, it was becoming pretty clear that it was going to be very hard to reach US goals. And at that point, interestingly, those goals were explicitly stated. So in November 2007 the Bush II administration came out with an official declaration about what any future arrangement with Iraq would have to be. It had two major requirements: one, that the United States must be free to carry out combat operations from its military bases, which it will retain; and, two, "encouraging the flow of foreign investments to Iraq, especially American investments". In January 2008, Bush made this clear in one of his signing statements. A couple of months later, in the face of Iraqi resistance, the United States had to give that up. Control of Iraq is now disappearing before their eyes.

Iraq was an attempt to reinstitute by force something like the old system of control, but it was beaten back. In general, I think, US policies remain constant, going back to the second world war. But the capacity to implement them is declining.

Declining because of economic weakness?

Partly because the world is just becoming more diverse. It has more diverse power centres. At the end of the second world war, the United States was absolutely at the peak of its power. It had half the world's wealth, and every one of its competitors was seriously damaged or destroyed. It had a position of unimaginable security and developed plans to essentially run the world – not unrealistically at the time.

This was called "grand area" planning?

Yes. Right after the second world war, George Kennan, head of the US state department policy planning staff, and others sketched out the details, and then they were implemented. What's happening now in the Middle East and north Africa, to an extent, and in South America substantially goes all the way back to the late 1940s. The first major successful resistance to US hegemony was in 1949. That's when an event took place that, interestingly, is called "the loss of China". It's a very interesting phrase, never challenged. There was a lot of discussion about who is responsible for the loss of China. It became a huge domestic issue. But it's a very interesting phrase. You can only lose something if you own it. It was just taken for granted: we possess China – and, if they move toward independence, we've lost China. Later came concerns about "the loss of Latin America", "the loss of the Middle East", "the loss of" certain countries, all based on the premise that we own the world and anything that weakens our control is a loss to us and we wonder how to recover it.

Today, if you read, say, foreign policy journals or, in a farcical form, listen to the Republican debates, they're asking, "How do we prevent further losses?"

On the other hand, the capacity to preserve control has sharply declined. By 1970, the world was already what was called tripolar economically, with a US-based North American industrial centre, a German-based European centre, roughly comparable in size, and a Japan-based east Asian centre, which was then the most dynamic growth region in the world. Since then, the global economic order has become much more diverse. So it's harder to carry out our policies, but the underlying principles have not changed much.

Take the Clinton doctrine. The Clinton doctrine was that the United States was entitled to resort to unilateral force to ensure "uninhibited access to key markets, energy supplies and strategic resources". That goes beyond anything that George W Bush said. But it was quiet and it wasn't arrogant and abrasive, so it didn't cause much of an uproar. The belief in that entitlement continues right to the present. It's also part of the intellectual culture.

Right after the assassination of Osama bin Laden, amid all the cheers and applause, there were a few critical comments questioning the legality of the act. Centuries ago, there used to be something called presumption of innocence. If you apprehend a suspect, he's a suspect until proven guilty. He should be brought to trial. It's a core part of American law. You can trace it back to Magna Carta. So there were a couple of voices saying maybe we shouldn't throw out the whole basis of Anglo-American law. That led to a lot of very angry and infuriated reactions, but the most interesting ones were, as usual, on the left-liberal end of the spectrum. Matthew Yglesias, a well-known and highly respected left-liberal commentator, wrote an article in which he ridiculed these views. He said they were "amazingly naive" and silly. Then he explained the reason. He said: "One of the main functions of the international institutional order is precisely to legitimate the use of deadly military force by western powers." Of course, he didn't mean Norway. He meant the United States. So the principle on which the international system is based is that the US is entitled to use force at will. To talk about the US violating international law or something like that is amazingly naive, completely silly. Incidentally, I was the target of those remarks, and I'm happy to confess my guilt. I do think that Magna Carta and international law are worth paying some attention to.

I merely mention that to illustrate that, in the intellectual culture, even at what's called the left-liberal end of the political spectrum, the core principles haven't changed very much. But the capacity to implement them has been sharply reduced. That's why you get all this talk about American decline. Take a look at the year-end issue of Foreign Affairs, the main establishment journal. Its big front-page cover asks, in bold face, "Is America Over?" It's a standard complaint of those who believe they should have everything. If you believe you should have everything and anything gets away from you, it's a tragedy, and the world is collapsing. So is America over? A long time ago we "lost" China, we've lost southeast Asia, we've lost South America. Maybe we'll lose the Middle East and north African countries. Is America over? It's a kind of paranoia, but it's the paranoia of the super-rich and the super-powerful. If you don't have everything, it's a disaster.

The New York Times describes the "defining policy quandary of the Arab spring as how to square contradictory US impulses, including support for democratic change, a desire for stability, and wariness of Islamists who have become a potent political force". The Times identifies three US goals. What do you make of them?

Two of them are accurate. The United States is in favour of stability. But you have to remember what stability means. Stability means conformity to US orders. So, for example, one of the charges against Iran, the big foreign policy threat, is that it is destabilising Iraq and Afghanistan. How? By trying to expand its influence into neighbouring countries. On the other hand, we "stabilise" countries when we invade them and destroy them.

I've occasionally quoted one of my favourite illustrations of this, which is from a well-known, very good liberal foreign policy analyst, James Chace, a former editor of Foreign Affairs. Writing about the overthrow of the Salvador Allende regime and the imposition of the dictatorship of Augusto Pinochet in 1973, he said that we had to "destabilise" Chile in the interests of "stability". That's not perceived to be a contradiction – and it isn't. We had to destroy the parliamentary system in order to gain stability, meaning that they do what we say. So yes, we are in favour of stability in this technical sense.

Concern about political Islam is just like concern about any independent development. Anything that's independent you have to have concern about, because it may undermine you. In fact, it's a little paradoxical, because traditionally the United States and Britain have by and large strongly supported radical Islamic fundamentalism, not political Islam, as a force to block secular nationalism, the real concern. So, for example, Saudi Arabia is the most extreme fundamentalist state in the world, a radical Islamic state. It has missionary zeal, is spreading radical Islam to Pakistan and funding terror. But it's the bastion of US and British policy. They've consistently supported it against the threat of secular nationalism from Gamal Abdel Nasser's Egypt and Abd al-Karim Qasim's Iraq, among many others. But they don't like political Islam because it may become independent.

The first of the three points, our yearning for democracy, that's about on the level of Joseph Stalin talking about the Russian commitment to freedom, democracy and liberty for the world. It's the kind of statement you laugh about when you hear it from commissars or Iranian clerics, but you nod politely, and maybe even with awe, when you hear it from their western counterparts.

If you look at the record, the yearning for democracy is a bad joke. That's even recognised by leading scholars, though they don't put it this way. One of the major scholars on so-called democracy promotion is Thomas Carothers, who is pretty conservative and highly regarded – a neo-Reaganite, not a flaming liberal. He worked in Reagan's state department and has several books reviewing the course of democracy promotion, which he takes very seriously. He says, yes, this is a deep-seated American ideal, but it has a funny history. The history is that every US administration is "schizophrenic". They support democracy only if it conforms to certain strategic and economic interests. He describes this as a strange pathology, as if the United States needed psychiatric treatment or something. Of course, there's another interpretation, but one that can't come to mind if you're a well-educated, properly behaved intellectual.

Within several months of the toppling of [President Hosni] Mubarak in Egypt, he was in the dock facing criminal charges and prosecution. It's inconceivable that US leaders will ever be held to account for their crimes in Iraq or beyond. Is that going to change anytime soon?

That's basically the Yglesias principle: the very foundation of the international order is that the United States has the right to use violence at will. So how can you charge anybody?

And no one else has that right?

Of course not. Well, maybe our clients do. If Israel invades Lebanon and kills 1,000 people and destroys half the country, OK, that's all right. It's interesting. Barack Obama was a senator before he was president. He didn't do much as a senator, but he did a couple of things, including one he was particularly proud of. In fact, if you looked at his website before the primaries, he highlighted the fact that, during the Israeli invasion of Lebanon in 2006, he co-sponsored a Senate resolution demanding that the United States do nothing to impede Israel's military actions until they had achieved their objectives, and censuring Iran and Syria because they were supporting resistance to Israel's destruction of southern Lebanon, incidentally, for the fifth time in 25 years. So they inherit the right. Other clients do, too.

But the rights really reside in Washington. That's what it means to own the world. It's like the air you breathe. You can't question it. The main founder of contemporary IR [international relations] theory, Hans Morgenthau, was really quite a decent person, one of the very few political scientists and international affairs specialists to criticise the Vietnam war on moral, not tactical, grounds. Very rare. He wrote a book called The Purpose of American Politics. You already know what's coming. Other countries don't have purposes. The purpose of America, on the other hand, is "transcendent" – to bring freedom and justice to the rest of the world. But he's a good scholar, like Carothers. So he went through the records. He said that, when you studied the record, it looked as if the United States hadn't lived up to its transcendent purpose. But then he says that to criticise our transcendent purpose "is to fall into the error of atheism, which denies the validity of religion on similar grounds" – which is a good comparison. It's a deeply entrenched religious belief. It's so deep that it's going to be hard to disentangle it. And if anyone questions that, it leads to near-hysteria and often to charges of anti-Americanism or "hating America" – interesting concepts that don't exist in democratic societies, only in totalitarian societies and here, where they're just taken for granted.