by Alasdair Macleod, GoldMoney:

Trump and Johnson face a common enemy in their complacent and costly establishments, but it is wrong to think they share a common approach to government business and finances. For the moment, all attention in Britain is focused on Brexit, but under Johnson’s predecessors, spending has become increasingly driven by process instead of outcomes. Johnson’s chief strategist has identified the reversal of this trend as offering the key to delivering outcomes in a post-Brexit UK while balancing the budget and reducing tax.

Introduction

Superficially, the electorates of America and Britain share one thing in common. They have both become sick of the establishment’s arrogant presumption that it knows better than the common people. Donald Trump spotted it and won the presidency in the face of enormous hostility from the establishment, both Democrat and Republican, as well as the deep state comprised of unaccountable intelligence operators and bureaucrats. The year before, the Westminster establishment found ordinary people rebelled against its assumed right to run the affairs of the electorate.

In Britain, if a mistake was made, it was to offer a referendum which produced the wrong answer. That is how the establishment appears to see it. In America, the UK as well as in Europe an elite has emerged for which democracy has become an irritant. But the establishment knows the rules and cannot deny their validity. The electorates in America and Britain have now given their establishments an unpalatable message, that they overrated their own importance. The bureaucrats no longer represent the interests of the people. Quite simply, the establishment and its bureaucrats have broken their contract with their electors, drifting away from the primary reason for their existence. The ordinary person has had enough of being ignored.

The result is the establishment is being forced to fight for its survival. President Trump has been fighting this battle on behalf of the American people for nearly two years. The British establishment has been fighting a rear-guard action for three over Brexit. Neither establishment has yet been vanquished. In America, there are signs of an accommodation, a compromise, which will allow the state to gradually resume control. In the UK, the survival of Boris Johnson and his new government depends on his refusal to compromise in its fight against the establishment’s Europhiles and placemen.

Brexit is a conflict that is only now being forced to a conclusion after three years of a Remainer government trying to appear to comply with the referendum result, while locking the United Kingdom into the EU, potentially in perpetuity. The electorate rumbled it and threatened the ruling Conservative party with extinction. Recognising the danger, their parliamentary party in conjunction with the party membership ejected the complicit Theresa May and elected Boris Johnson to take the country out of the EU on the delayed date of 31 October.

It is by no means certain Johnson will succeed. Remainers are now fighting his government in the courts, with the Supreme Court due to adjudicate next Tuesday (17 September) on whether the prorogation of Parliament was legal. And a way has to be found around the Benn-Burt Law, the last act of Remainer MPs.

The behaviour of the opposition parties in Parliament has been unedifying. The public sees a parliament out of control under a partisan Speaker. Not surprisingly, the opinion polls are swinging more in support of Johnson’s Conservatives and against the other parties, widening the gulf even further between Parliament and the people its members are elected to serve. If Parliament had any public respect before recent events, then it has certainly lost it now.

The similarities between President Trump’s position fighting the Federal establishment and that of Boris Johnson fighting Westminster gives the impression to many international observers that Boris is a British version of The Donald. Trump is urging the British to leave the EU, and thinks Johnson is the man to do it. Johnson is happy to encourage Trump’s support for a quick, post-Brexit trade deal. They get on together well.

But they are not peas in the same pod. Johnson has shown a free-marketeer grasp over trade issues and the damage that tariffs can do, while Trump is an interventionist. And when it comes to deficit financing, the evidence is emerging that Boris will fund promised spending in education, policing and health by cutting bureaucracy rather than relying on deficit stimulation now to provide tax income tomorrow. This is where Dominic Cummings comes into play.

This article skims over recent developments in Britain’s fight to free itself from the EU, particularly with respect to the role of Cummings. Making a huge assumption that Johnson and Cummings manage to implement Brexit on 31 October and the Conservatives are re-elected in a general election shortly, it also looks at how the government is likely to fund its promised expenditure plans.

Cummings – the confident back-room operator

Dominic Cummings scares much of the Westminster establishment, with good reason: he is intent on destroying it in its current form and replacing it with a system that prioritises objectives, minimising non-essential political and administrative intervention. There will be no tolerance of virtue-signalling by ministers and pressure groups. Of the money allocated to a project, instead of a Pareto eighty per cent being spent on process and twenty per cent on the final objective, Cummings is bent on ensuring it is the other way around, even releasing funds to permit tax cuts while retaining a balanced budget.

But first Cummings is dedicated to achieving Brexit on 31 October, when he will have directed the strategy to remove Britain from under the stultifying regulations and bureaucracy emanating from EU membership, freeing him to pursue his ultimate objective. On Brexit, we can only watch developments, because outsiders can only guess the government’s next moves and the final outcome.

To understand more fully Cummings’s role as special advisor to Boris Johnson, his ambitions, intentions and prospects for success, it is worth delving into his personal story. He was born in Durham in North-East England to middle-class parents in 1971. He attended Durham School, a middle-of-the-road fee-paying school, and then attended Exeter College at Oxford University, graduating with a First in Ancient and Modern History.

Robin Lane Fox, his tutor in Ancient History described him in a recent BBC profile as “extremely aware of his own abilities and had every reason to be”. When asked who was cleverer, Boris Johnson or Dominic Cummings, Lane Fox responded “Dominic is cleverer by a long way than Boris. Different class altogether”.

Lane Fox would also have known Johnson, who attended Oxford at Balliol, where he entered as a Brackenbury Scholar to read Literae Humaniores, a four-year course in Ancient Greek and Latin Classics. But Johnson, who as a student appears to have lacked Cummings’s focus, only got a 2:1. However, his intellect should not be in doubt, and while one can understand Lane Fox underestimating Johnson due to his lack of intellectual focus, Cummings appears to have been exceptional.

His other tutor in Modern History was Norman Stone, who died in June. Stone was also a notable intellect, and in his day had been an advisor to Margaret Thatcher. Both Stone and Thatcher shared a distrust of the British and European establishments. Stone’s was based on his deep knowledge of European history, honed from his studies at Glasgow University. Smith’s association with Glasgow University would have also had a bearing on Stone’s free-market thinking. Adam Smith, the founder of economics as a human science, had been appointed as its Professor of Logic, and the following year he was appointed Professor of Moral Philosophy.[i]

Stone was a man who would cut to the quick and did not suffer mediocracy, let alone fools. He was a chain-smoking hard-drinking argumentative Glaswegian who would not have endeared himself to “the humourless halfwits who are the bedrock of university management and the political class”. As an example of his impiety and wit he came up with one of the best questions ever set in a Cambridge tripos: “Romanticism: masculine, feminine or neuter?”

In his own way, Stone wanted to help Mrs Thatcher undermine the rotten British political system, which by 1979 had drifted onto the rocks of socialism. The Thatcher revolution saved Britain by driving Marxist Labour into the wilderness, much as the Johnson/Cummings partnership seeks to today.

After Thatcher’s initial success against socialism, the establishment reconstituted itself on proto-capitalist lines and ejected her in 1990. Despite Stone’s brilliance, his influence and role as Thatcher’s foreign policy advisor on Europe and speech writer was sadly limited in the light of events. Stone would have found that with all its mediocracy, the establishment always regroups. But perhaps a more sober, focused and ruthless operator in his protégé might have a better chance. It appears that Stone quickly recognised Cummings’s intellect, and would have been attracted by his directness and sense of purpose. They were like-minded dissident geniuses.

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