A Rum Bunch (Macro Macchiato 04/11/19)
They are a rum bunch, the English. Take this week’s festivities for instance. The English will set off fireworks to commemorate the discovery and defeat of the Gunpowder Plot of 1605, when pro-European conspirators attempted to blow up Parliament and the Protestant King James, who was a recent import from Scotland, replacing both with the King’s daughter as a pro-European Catholic head of state.
The plot was foiled, the conspirators were hunted down and were killed fighting the militia or were executed in the then-fashionable manner of being hanged, drawn and quartered.
Commemorating these events was enforced by law until 1859, thirty years after England removed the most pressing legal disadvantages on Catholics. Effigies of the conspirators and the Pope are still burned in English high streets every 5th November. The English, who profess to love dogs and horses, carelessly distress millions by setting off loud bangs with fireworks. That’s just the most domestic of the oddities this week presents.
Back in 1605 it was the pro-European minority who wanted to do away with Parliament, now it is the anti-Europeans minority government in who bemoan Parliament’s rejection of Brexit policies. The minority ex-Conservative government (in reality now controlled by an English nationalist faction, the bizarrely-titled European Research Group) positions itself as promoting the People Against Parliament and feeds on the popular sense of ennui about Parliamentarians after several decades of sleaze, graft, corruption and incompetence. This is despite the fact that the Conservatives have been in power for most of the years of sleaze, graft, corruption and incompetence.
Back in 1605 Parliament was yet to establish itself as the pinnacle of law-making in the nation; that didn’t happen until the Glorious Revolution of 1688 when a descendant of the unexploded Scottish King James 1st was ousted in favour of a Dutchman who was happy to let Parliament reign to preserve an anti-French coalition in Europe.
Now the UK’s current Prime Minister, a Brussels-schooled beneficiary of the EU project, whose later education came from Eton and Oxford, promotes himself as an anti-establishment candidate who wants to take power from Europe and from Parliament and return it to the people (who never had it) by persuading them to give him carte blanche to restyle Britain as a buccaneering, 21st century, no-holds-barred, mercantilist throwback.
Back in 1605 the nation celebrated the survival of its recently-enthroned Scottish king who, by dint of being king of both nations, united England with Scotland for the first time. Now many anti-European English folk are English nationalists who would be happy to rebuild Hadrian’s Wall (but a bit further north) and wave goodbye to union with Scotland (and Ulster for that matter) if that were the price of the sort of “freedom for my people” that the English denied Mel Gibson in Braveheart. The Scottish government meanwhile would be delighted to let the English persuade themselves to give the Scots the independence they seek in any case.
What’s all this got to do with shipping? Well, the English may not be the seafaring superpower that they were even within living memory, but London and other port cities like Liverpool remain important maritime clusters for legacy reasons. Most maritime law is still based on English law, and the IMO is based in London, so it could be said that Britannia continues to rule the waves, though Brexit would mean that the government wants to waive at least some of the rules of trade. The UK remains the global hub for shipbroking, though brokers with EU passports may be thinking hard about how their residency and right to work may be affected should Brexit finally go ahead.
London’s insurance market remains the centre of global maritime insurance and presumably will do so regardless of whether the UK remains in the EU or leaves. The English will remain a trading – and importing nation though the English may value their legal independence higher than their collective wealth.
THE TAKE AWAY
The UK’s centuries-old problematic relationship with Europe is relevant because it is a symptom of a political adjustment that is taking place world-wide. Populations have become disaffected with the status quo. For many people the benefits of globalisation are intangible. They are the Brexiteers and Trump voters, the shoe-throwers of the Arab Spring and the disaffected middle-class bus-fare protestors of Latin America. The return of nationalism, of the supremacy of the nation state over international rules-based systems, indicates unpredictable policy switches which can cause disruptions to global trade.
We’ve seen the results in the recent spike in oil tanker earnings and in the weak peak season for container shipping. These are only the first ripples. Bigger and longer-lasting waves will follow. It is a commonplace that shipping markets are driven by changes to the supply of ships. But we live in a time of chronic overcapacity of all types of ship when short-term and long-term demand-side disruptions result in increased freight market volatility. Strap yourselves in, it is going to be a bumpy ride.