CRASH 2: Radical Reality is the only thing that can save us now.

There is no such thing as ‘political reality’. It is simply another term for denial.

Since first using the term ‘radical realism’ some seven months ago, a few readers have been enthusiastic about the term, while others seemed to worry that the two words together might hide a generally heartless, and possibly even highly dictatorial, agenda. I don’t see it that way, but then I would say that. So it may be helpful if I apply it to one of the Big Issues of the day.

My basic thesis is very simple: the more one remains in denial about reality, the more radical the eventual solution will have to be. Radical Realism’s central thought is that you should never kick the can down the road: analyse the nature of the problem – minus the blinkers of bad-science political polemics – and then try a remedy where the data and previous experience suggest a high degree of success.

Detractors will no doubt observe that ‘political’ realities will always push the real solution out of the way in favour of fudge and gesture. My contention is that ‘political reality’ is an oxymoron: the very introduction of the word ‘political’ means that, for short term gain, tactics or lack of spine, reality is altered in favour of retention of power. The whole culture would have to change for Radical Reality (RR) to work at its full potential; in the meantime, my strategy would be to use the discipline as a catalyst for (1) practical change and (2) analysis of where we went wrong with the previous policy – or idea, or economic form etc etc.

What I attempt to do below is analyse EU direction on this basis.

The idea of a ‘United Europe’ has emerged gradually from a concept framed 55 years ago (the EEC) of economic interdependence in order to maximise growth and make war in Europe seem pointless and unaffordable. The question now is whether the ‘European dream’ has paid enough attention to reality…and has it been radical enough in achieving the goal? The answer is pretty obviously ‘no’ and ‘no’.

The most basic reality required for such a project should always have been cultural. Europe stretches from the Saxon Protestant ethic of the north and centre, down to the Latin Catholic ethic to the south-centre and south. In its enlarged (some would say engorged) form today, its aspirations stretch to the Slavic cultures of the East, and to Arab-influenced Islam at the very edge of south-eastern Europe.

These are, to say the least of it, potentially inflammable cultural variations. When exposed to each other, they have tended to cause friction, even massacre. Indeed, multiculturalism itself is a theory very easily blown apart by the empiricism of RR. But as long as such an area restricted itself to trade as a mutual binding agent (we could argue) then there shouldn’t be any trouble.

In fact, there was trouble – and it emerged during the 1980s – between the UK on the one hand, and most other leading EU States on the other. Having adopted the sea-change economics of Friedman and Reagan, Britain’s Prime Minister Margaret Thatcher rejected the entire idea of a super-state built upon redistributionist, bloated bureaucracy. What also emerged, the more this fundamental principle was questioned, was the shocking discovery that administrators were powerful, unelected and, in a worrying minority of cases, utterly corrupt.

Ever since that realisation, the UK has remained an arm’s-length EU member. And at that stage, the first inability to be radical about the reality emerges in Brussels: that is, a  complete failure to recognise the overwhelming administrative cost of the EC, and to end the protectionist corruption that gobbles up taxpayers’ money while getting in the way of growth.

During the 1990s, however, the monetarist gospel did make headway in Europe. But already, those whose dreams were larger than life were busy eyeing the goal of a single currency – as the precursor to a Federal State, the EU – or the United States of Europe. And here too – crucially, during the period 1998-99 – the reality of fiscal discipline as the underlying foundation of the euro was lost.

The Germans began by insisting on it, but the French rejected the idea as unsaleable to the French voter. The French were probably right, but their observation should’ve meant the end of the project. On the contrary, via the farcical compromise of fiscal rules without any penalties for ignoring them, the euro went ahead.

It was at this point that – with pc at its height – the northern half of the EU (Northern France, Holland and Germany) made its most catastrophic denial of reality….by allowing into the so-called EMU – today known as the Eurozone – member States threatening two distinct econo-cultural obstacles to success: (1) an ability to compete economically; and (2) a track-record of poor fiscal management.

The radical approach at the time (1999-2000) would have been a much stiffer set of criteria for eurozone entry, and centralised fiscal discipline….if, of course, that was what you wanted. The radical approach I and millions of others began promoting for Britain was to begin negotiating withdrawal from the EU – for reasons ranging from econo-political unwieldiness and undemocratic structures to severe doubts about a single currency. But the UK’s ‘political realities’ were preferred to sound governance; and so in 2011 we are sort of in and out, with President Sarkozy referring to crisis managers as ‘us’ and David Cameron as ‘you’: as in, shut up you, you’re not one of us. This is clearly the worst of all worlds….but was entirely predictable.

My sense (from watching body language, listening to sources, and reading between the media lines) is that, rather than face reality and be radical about how the European single market should now change for the good of its citizens, three denial systems are in play: these are (1) it’s all over, let’s cling on and wait for debt forgiveness (the ClubMeds); (2) we’re up the creek, let’s cling on to Germany’s coat-tails (France); and (3) The rest of this Union are clearly useless so now we’ll have to take control (Germany).

Now you could argue that in fact the last of these is a reality, but it isn’t: it is German control neurosis overstating the theory that no European Union of any meaning can exist without tight central control…by Germans. The RR approach in these circumstances should be for an analysis of how and why the mess happened in the first place; and then to ask whether German control would work in practice.

Tighter control from Berlin will not work for the likes of France, Spain and Italy. I doubt very much if it would be acceptable to the Irish either. Further, tighter control will only produce smarter ClubMed ways of avoiding the rules. The Latin culture prefers to evade laws it doesn’t like – especially if they emanate from people with a history of invading them.

But this reality isn’t being faced. Far from it: Germany is now being persuaded by the idiots (economists, bankers, Camerlot and France) that borrowing more bailout firepower is the answer. It so obviously isn’t, I could almost weep with frustration about it. (I refer the reader to Wolfgang Munchau’s more erudite analysis of why in Monday’s FT).

Let’s examine what RR followers would now do towards the achievement of a better solution.

In the UK, they would do the maths about what the EU costs and where it’s going – and pull out. There is nothing the EU could do to stop this at the moment. The RR planners would also be busy reconfiguring the UK economy, and building for a future of marketing added value to emerging Asia.

In France, they would sell gold while it’s high, and stuff so much money up the Parisian bankers’ backsides, debt incontinence would become virtually impossible. This would jolt its Triple A rating down two notches, but such is inevitable in the medium-term anyway: France has been living well beyond its means for decades.

And in Berlin, they would leave the eurozone, reintroduce the Mark and watch as the euro dropped like a stone….to the delight of the ClubMeds, who would at last have a manageable debt. (Germany’s ability to export to Asia is not dependent on the price of its currency, within reason).

Now all these actions would cause great pain and hardship, plus an enormous amount of chaos…and naturally, some unpredictable stuff. However, every one of those actions will be eschewed in favour of insanity….aka, political reality. If they were followed, Europe would emerge from the coming crisis in far better shape than it will having borrowed a bazooka it can’t afford – one loaded with sago pudding where the shells should be.

Radical Realism would easily overwhelm most of the broader versions of bonkersness in the world beyond Europe – globalism, paper-banking, mercantilism – because they too are flawed at the core. In relation to mercantilism specifically, I maintain my view that China’s long-term goal is not imperial, but rather the control of supply: by which I mean self-sufficiency. I imagine they’ll be ruthless in how they go about it, because Beijing has form when it comes to the absence of ruth. The UK could easily become self-sufficient, if it was prepared to be radical about population control, education, and complete economic reformulation.

It’s the word ‘radical’ that scares most people off – and perhaps attracts the lunatic fringe. So maybe I need to apply some RR to the branding of RR. But in the meantime, I hope this piece has clarified what Radical Realism is actually about. It doesn’t obviate the idea of having a social goal, and it actively encourages the idea of having ideals. The one thing it rejects totally, however, is the insanity of living in a reality that no longer applies.