moneyweek.com 8October 2021 MoneyWeek
Bestoftheblogs 23It’ll be a cold,
cold Christmas
©Shutterstockft.com/alphaville
As theprospectofa“fuel-
starvedwinter” becomesever
more real for theUK, you
migh tbewonderinghow those
in gov ernmentcharged with
managing UKenergy securi ty
couldhavegot it so wrong,
says Izabella Kaminska. One
manwith“greaterinsight than
most”isP hilipLambert,the
head ofLambertEnergy,an
influentialenergyadvisory
firm.Hebelievesthe crisis is
only likely to getworse andis
theproduct of a“monumental
misallocati on of capital”.
Thecoming ener gy crisis
Lamberthad beenwaryof
speaking publiclyabout the
matter forfearofu psetting
thefanatical net-zero lobby
–anyone whodoes so risks
“vilificationandintimidation”.
Butbehindcloseddoors,
Lambert, whoisanadvocate
forthe ne ed to decarbonise as
bbc.com/worklife
When reflecting on meeting
some one forthe firsttime, do
youfindyourself “wincing
at thefauxpas,imagining all
thewaysyou mayhavebored
or offended”? If so,multiple
studiesshowthatyou arenot
alone,saysDavid Robson –it’s
howmostpeoplefeel. Yetthat
same research showsweare
usua llybettercompany than
we think. We dwellonour
Trade is the way to regime change
iea.or g.uk
Former Bank ofEngland chief
MervynKinghas said that the
centra lbankhas become
“addicte d” to creatingmore
money. Thefateoft he Roman
empire is awarning aboutthe
consequences,saysGeorge
Maher.Ancient Rome created
the world’sfirst fi at currency,
initiallyasaway of paying
soldie rs.Itspread acrossthe
empire andthe currencyproved
as stable as theempireitself.
Youcould tr avel from Britannia
to Judaea andthe prices of
goodsand the valueofyour
coinswouldbe the same.
This pricestabilitywas
irreparablydamagedbythe
emperorSeptimius Severus
(193 to 211AD).Hedoubled the
wagesofsoldiers to recruit
more,and paid foritby
debasingthe metalcoins.Just
as toda y, this inflation ledto
risingprices anderoded
confidence in the currency. The
Romanseventually abandoned
their currency, theempiretrade
collapsed andpolitical chaos
ensued,leading in the end to
the breakupofthe empire itself.
“Confidenceinour curren cy is
crucial–andwhateverdestroys
that will destroymuchofwhat
we have.”quicklyaspossible,hasbeen
warningthatcurrentnet-zero
policiesrisktriggeringanenergy
povertycrisissogreatthatit
couldderailgreenmeasures,
underminingpublicsupport
forclimateactionasliving
standardsslumpandpeople
struggletoheattheirhomesand
leading,ironically,togreater
dependencyondirtierfuelssuch
ascoalandwood.
Thisneedn’thavehappened.
Until 201 6,theUK’s
decarbonisationpolicywas
basedonacceptingthatnatural
gaswouldbeacrucialtransition
fuel,fillingthegapleftbythe
intermittentandunpredictable
natureofrenewables.Itwas
producing“enviableresults”.All
thischangedwhen“ideological
compulsions”begantooverride
practicalconsiderations,says
Lambert,andthenet-zero
policywasrushedthrough
parliament with little debate
or consultation.Asaresult,natural-gas infrastruct urewas
starvedofessentialinvestment,
whichhas left Britain inits
“mostprecariousenergy state
sincethe 1970s”.Meanwhile,
expertswho know of the
dangerousconsequencesof
“depriving thesystemof80% of
itslifeblood”havebeenfrozen
outofadvisingonthe process.
To top it all,the
Internatio nalEnergyAgency
thisyearrecommended
suspending all newexploration
foroil,gas or coal.This, says
Lambert, wi ll lead to “disas ter”and“impoverishmentand
misery forbillionsofp eople”.
Theirony is that thepremature
rush to netzerowillbenefit the
biom ass andcoalindustryas
they arecheaper to run
andrequirelessinvestment
than thegas industry,and
constraintheefficient
develo pmentofs calable
rene wables (becausetheyrely
on natural gasasaback -up).
There’ smuchtor egretinthe
government’s actions. The
chickenscould cometo ro ostas
soon as thiswinter.imagined shortcomings and
theimpressionwe’ve made,
andhence miss all thecuesof
friendliness directed towardsus.
This is knownasthe “liking
gap” andmay standint he
wayofmutuallybenefic ial
collaborations at work.Unfortunately, tips on the
artofc onversation pr oba bly
won’thelp–theywill just draw
attentio ntoall thewaysin
whichyou migh tfail.Instead,
just takeadeep breathand
prac tise more –“themore
peopletalktostrangers, theless
they worryabout theirability to
do so”. Andifyou findyourself
agonisingabout it afterwards,
just put yourself in th eother
person’s shoesand askwhether
they wouldreallyhavenotic ed
or rememberedthe su pposed
faux pas. “The chancesare
that youweremore much more
likeabl ethanyou thin k.”Relax,people
like you
Lessons on QE
from ancient Rome
voxeu.org
Historyshows that thetop-downimpositionofdemocracy is “not desirableand rare ly successful”, say
GiacomoMagistretti andMarco Tabellini.But democracycan in deed be “exported” throughtrade.
Ourstudy of alarge cross -count ry database from 1960 to 2015 showsthatthe economic integration
that comesthrough tradebenefitslessdemocraticcount ries ,not on ly by fo stering GDPgrowth, but
also indir ectlybyfavouring thetransitio ntodemocracy andthe socioeconomic andpolitical benefits
associatedwithit. When acount ry becomes integrated with ademocracy throughtrade,its democracy
score,asmeasure dbyani ndex,risessignificantly ;integration with non-democraticpartnersproduces
no such ch ange.The study showed that adoubling in economic integratio nwithdemocraticpartners
in afive-year peri od raises that country’sdemocracy indexbyalmostthree points –anequiv alenttot he
diff erence betweenthe democracy score forTunisia in 2014 andthatoff ulldemocracies.Suchchanges
maybet he naturalresultofi ncreases in GDPper capita.But ourresults suggestinstead that it might
rather come from theexposureofautocratic regimes to thebenefitsofdemocracy andthe import of
goodswhose production re stson“soundcontractual enforc emen tand strong property rights”.
©iStockphotosEnthusiasmfornet-zeromaybetestedthiswinterReach outoverthe “liking gap”