Category Archives: politics

The End Days for British Democracy

Economics, Philosophy, politics, , , , , , , , ,

Britain with its Westminster system of democracy has claimed to be the exemplar of good democratic practice. Many countries, most commonly in the former British colonies have adopted the Westminster practice of government. However classical Athens home of the first democracy provides a terrible warning of what happens when the practice of democratic politics becomes corrupted. Tragically Athens provides a template for the systematic corruption of democratic government, a model that Westminster appears to be copying.

While the primary cause for its abrupt end was a brutal foreign conquest, it was already rotting from within. It was the poor behaviour and discreditable practices of its leaders that caused it to lose popular support. According to one source, democracy was so discredited that few of the citizens could not be roused to defend it. What is true, is that after the destruction of Athens by Sulla and his Roman army, no attempt was made to restore democracy.

Given that democracy in Athens involved the demos or the all the citizens how did it become so unpopular. Leading politicians increasingly used informers to discredit their rivals. These informers were planted within the households of their rivals with the purpose of gathering information to discredit their rivals. Often these informer stories were fabrications, but so artfully put together that they put an end of their rival’s careers. Politics became the amphitheatre in which your rivals were discredited and destroyed through a process of character assassination.

In the UK the tabloid press and social media perform a similar function to the Athenian informer. The informed source always claims that there scurrilous stories are in the public interest. What they mean is that by revealing discreditable stories about politicians, they are stopping this rogue from achieving public office, where he would abuse the power of that office. Strangely it’s is only politicians of the opposing party who behave so discreditably. No doubt the same justification was claimed by the Athenian informers.

This has three unfortunate negative impacts. Citizens become disillusioned about the practice of politics. Increasingly they come to believe that all politicians are rogues. The disillusioned people withdraw their support and involvement in the democratic process, so it loses legitimacy. Only a certain type of politician can thrive in these circumstances, that is the rogue. Only the rogue is immune to stories about themselves. They care little for discreditable stories about them, stories that would destroy an honest politician. In fact they claim that the open displays of their roguery demonstrates their honesty. They unlike the other politicians are the prepared to be open about their failings. Unfortunately an people are becoming disillusioned about politics believing that all politicians are rogues a liars. Finally when the practice of politics is reduced to little more than character assassination, politicians are incapable of raising to the occasion when a crisis threatens. They simply don’t what to do.The cheats, the liars and purveyors of scurrilous story are helpless, they have nothing to offer apart from dissimulation. Government policy degenerates into a search for scapegoats on whom to deflect the blame for their failing policies.

There is another minor vice that is beginning to pervade Westminster democracy. The intra party struggle for ideological purity. A struggle in which the enemy is not the opposition party, but perceived opponents within the party. Each of the main political parties has embarked on a Soviet style purging political deviants. The consequence of which, is the unedifying spectacle of seemingly endless civil war within the party. Debates on issues of national importance become secondary to the internal party debate on matters of ideological purity.

One consequence is that if the British experienced the devastation wreaked on by foreign invasion, they would be as unwilling as the Athenians to restore their old discredited democratic system. Athenian democracy was never restored, they remained content to accept domination by a remote central government either in Rome or Constantinople, in preference to government by their own local leaders.

As an incredulous student I remember a lecture by Professor Oakshott in which he said the poor behaviour of the Athenian politicians has discredited the idea of democracy for centuries, and the rehabilitation of democracy and its procedures was but a recent historical phenomenon. I fear that the bad practice which masquerades as democratic politics in both the USA and the UK, will as did that of the Athenians, again make democracy seem the least desirable form of political governance.

Advertisement

There is an alternative – moral economics and economists

Economics, politics, , , , , , , , , , , , , , , , , , ,

Economists see the free market economy as the end point of social evolution. Industrialisation and the market economy are but inevitable stages in the development of society. Sophisticated developed societies are market economies. They are the high point of social evolution, a belief best demonstrated in Francis Fukuyama’s claim that history ended with the development of liberal democracy. All these democracies were of course free markets. Human freedom has reached it’s zenith in the free market. (Milton Friedman even thought the killing and imprisonment of thousands in Pinochet’s Chile, as a price worth paying for the restoration of human and economic freedoms.)

This triumphalism of the market economists is a recent phenomenon. In the period after the second world war and as a consequence of the Great Depression, free market economists were a small discredited minority. Instead economists such as Karl Polanyi, Nicholas Kaldor and John Maynard Keynes who supported the state management of the economy were those held in the highest regard. However with the economic crisis of the 1970s, these economists fell out of favour to be replaced by the free market economists, who persuaded governments institute the new era of neo-liberalism.

Karl Polanyi is now one of those unfashionable economists that is now being studied again after the collapse of the market economy. What makes him so different from the free market economists is that he did not believe that free markets were a product of social evolution. He sees the economy as part of an integral part of a network of social institutions. Changes in the economy were a consequence of changes in wider society and changes in the economy in its turn changed the society in which it was located.

Polanyi traces the origins on the free market industrial society of today to Tudor society. The old military aristocracy was losing power to a new rising class comprised of small landowners and the merchants in the towns and cities. It was the demands of these two groups that kick started the social and economic change that led to industrialisation and development of the free market. Landowners wanted the rural peasantry off the land, so they could introduce new and more profitable farming methods. This was enclosure of common lands. Legislation made it almost impossible for the poor ‘inefficient’ peasant farmers to continue to farm the land. They could not afford the costs of enclosing their farmland. . The great merchants in the cities wanted the end of the guild system, which they believed restricted their ability to make money. Guilds imposed regulatory controls on their members, which the great merchants believed placed unfair restrictions on their ability to trade. These two groups were over represented in parliament. Also the great merchants (Wolsey and Thomas Cromwell) were the source of loans for a government that was always short of money. Consequently the government introduced measures to help both groups.

Once example was the vagrancy laws which could be used to control the landless peasantry. Landless peasants without work and no support within the community could be whipped and driven out of the community, so relieving the landowners of the obligation to support them. E.P. Thompson about the Black Laws introduced in the 18th century) which further disempowered the working poor. These acts introduced capital punishment for offences such as trespass or for destroying a farm gates. These had the effect speeding up the exodus of peasants from the land. Formerly the rural peasantry could collect fallen branches from the woods, now this was illegal. Similarly poaching as means of supplementing a poor diet was now a hanging offence. This created a new class of landless proletariat who would supply the labour for the new industries that were developing in the towns and cities.

This breaking of the link between the poor and the land, created the flexible and mobile workforce that the new industries would need. Obviously there were other important factors that facilitated the industrial revolution such as advances in technology.

If I understand Polanyi correctly the free market and industrialisation, were accidental changes following on from a power grab by the landowning and merchant classes.

Social and economic change produced a new ideology, that of capitalism. In the new social environment, people thought differently. What now ensured societies well being was Adam Smiths ‘invisible hand’ of the free market. Now the price system would be responsible for distribution of wealth, and consequent responsibility for people’s well-being. Poverty now was not deserving of amelioration, it was a consequence of a personal failings. However even Adam Smith was shocked at the brutal way the new capitalists were treating there employees in Glasgow. However the moral coda that he inserted at the end of ‘The Wealth of Nations’ stating that employers owed a duty of care to there employees was ignored. Capitalist ideology dehumanised society, people and land were now valued according to their utility. They were now things, society was commodified, people and land were things that were bought. Valued only according to their usefulness. This was according to Weber the process of disenchantment. What today has become known as financialisation. Society was an inhuman affair in which people only had value in their functionality.

Perhaps the best illustration of the new way of thinking is represented in the writings of those twentieth century economic historians who wrote that the introduction of the Factory Acts were responsible for the slowing of economic growth in the 19th century, as the money that should have been reinvested in the business was instead spent on wages or improving the welfare of the workers. This was the cause of Britain’s relatively poor economic performance compared to foreign rivals. There spokesman was the liberal MP John Bright who argued that the country’s continued prosperity was dependent on the continued exploitation of children in the Mills. An attitude that still prevalent today. During the 2015 election campaign Ed Milliband was criticised by a member of the audience for not understanding that the success of his business depended on his continued ability to continuation of that exploitation of his workers through the zero hours system. Some employers certainly in the medieval period treated their workers equally badly, but they did not boast of the fact, or claim that their behaviour had moral sanction from the nations code of ethics. Then the prevailing Christian code of ethics would have condemned such behaviour. The stocks were often occupied by tradesmen who had cheated there customers. Whatever the failings of the Middle Ages a different and anti capitalist ethics prevailed.

Polanyi writes that the unregulated free market is a threat to social order. The example he uses to demonstrate this is the Speenhamland system which was introduced in the late 18th century. Until industrialisation there was a thriving cottage based textile trade. With the introduction of new technology and the growth of the factory system, these people faced impoverishment. Trade was lost to the new mills taken and payment for whatever they produced was reduced to the price paid for such products by mills. In France the impoverished peasants together with the urban proletariat provided the foot soldiers that made revolution possible. This was avoided in Britain, because the poor could apply to the parish for relief. They never became as desperate as the working poor in France. The parish money enabled these workers to remain in their homes and provided them with sufficient money to satisfy there family’ basic needs. Unlike their French counterparts desperation did not drive them to revolution. There were no equivalence in England of the Chateau burnings of France.

One writer rightly describes Polanyi as a moral economist. All new economics students in the U.K. are taught that moral preoccupations have no place in the study and practice of economics. It is a science different in nature from ethics. Even today economists and writers prefer Polanyi without the moral dimension. Threats to the social order posed by the economy are said to bring forth a reaction, societies develop protective measures that seek to minimise the disruptive effects of the free market. Anybody who has read ‘The Great Transformation’ cannot fail to note his suppressed anger when he describes the impact of the Great Depression on people in Europe.

Polanyi is important today not just because he offers an alternative vision of economics and society; but because he was one of that great generation of economists, who persuaded governments that a new way of managing the economy was possible. A way that would prevent a recurrence of both the crash of 1929 and the Great Depression. Unfortunately a later generation of economists have persuaded governments to abandon the policies of these economists and revert to the failed economic policies of the 1920s.

One last point Polanyi makes and that is that the market based price system is only a recent historical development. Only in the last two to three hundred years have households satisfied a majority of there needs by exchanging money for goods and services in the market. Prior to take the market only provided a minimum of a households needs. There is no reason why the price system and free market will always be the means by which goods and services are distributed. When the managing director of the IMF warns of another Great Depression, all that can be certain is that the free market so beloved of the Neo-Liberals will disappear.

Why do we constantly choose men who we would reject as friends as our leaders?

Economics, Neo-Liberal economics, politics, , , , , , , , , ,

As somebody with a keen interest in history, I often see in past times leaders who resemble those of today. I see in the last three Caesars, Caligula, Claudius and Nero men who embody the characteristics, so often demonstrated in the behaviours of contemporary politicians. Caligula was mad and brutal, once slaughtering a senators son and forcing that same senator to share in his jokes about his dead son. This senator having one surviving son was forced to participate in this charade to preserve that son. He was reputed to have wanted to make his horse a senator and to have declared war on the sea. Claudius was a vindictive mediocrity, who ordered an invasion of Britain, so he could have a triumph in Rome. He believed this would establish his right to the throne. Claudius was poisoned by his wife, so her son Nero could become Emperor. Nero was a vainglorious man who believed that he was a talented poet, musician and playwright. He was neither, but his courtiers out of fear flattered him by praising him as a talented artist. Madness, mediocrity, charlatanry and vaingloriousness are personality traits that I can identity in so many of contemporary leading politicians.

Although contemporary political leaders no longer have the power or right to kill their enemies, they as so many vindictive Caesars try to destroy them. The media can be relied upon to indulge in the character assassination of their rivals. Any right wing politician can expect the media to conduct on their behalf the most vituperative and vile attacks on their left wing rivals. Intimidation is their weapon of preference. It is no coincidence that so many politicians are poor public speakers. They don’t need to employ reasoned speech, as they have much more effective means of silencing their critics.

Without exception the person who abuses, exploits and intimidates people is recognised as the person best qualified to be leader. These are people who amongst our friendship groups, we would reject recognising them as unpleasant dysfunctional individuals. Today power and the ability to use and exploit power are seen as the only political virtue required of a politician. What we worship is the abuse of power. Bad behaviour by our leaders is excused as being necessary to get the job done.

Contemporary politics lacks any great motivating belief or ideology. The politicians who govern us today have grown up in what is an age of relative plenty*. They and the people found the great ideologies of the past unnecessary, as no great change was needed in society, all were well fed and housed. The great anger at the injustices of society of which gave rise to the great reforming and revolutionary ideologies of the past was no longer there. The left grew complacent and abandoned socialism and was negligent in the protecting the rights of the people.

Whether it be called individualism or something else, people saw the life as being the acquisition of material goods, the securing of a comfortable lifestyle. However in this complacent society, there were the malcontents. These malcontents were of the right, the wealthy right. They wanted a return to the unequal society of the past. A society that gave them a unique set of privileges of wealth and status. They wanted back a society that deferred to wealth and privilege.

All societies have periods of crisis, any organisation created by fallible mankind is prone to periods of failure. When the economic crisis of the 1970s occurred, rather than take action to remedy the most obvious failings of a society that served most people well; the right seized the initiative and implemented a series of changes that would create not a society that served all well, but one that served to benefit a small group of the most privileged.

They also had an ideology, Neo-liberalism which claimed that by dismantling the regulatory state it would free the economy to create more wealth for all. These regulations which they were so eager to destroy were those that protected the well being of the people. Soon even the political left adopted this philosophy believing it the only means of attaining political success. Neo-liberalism is a belief system empty of any moral code. The only moral value that can be ascribed to this philosophy is a belief in success to be achieved at any cost.

What Neo-liberalism created was a moral waste ground, a society in which the old social contract was destroyed. No longer did the political leaders govern in the interests of the people, so the people no longer gave there consent to be governed by their current leaders. Dissatisfaction with the political leadership has grown, increasingly people have turned to political groupings outside parliament which promise change. Change that will benefit them the people. Although these leaders are charismatic, what they offer is unreal solutions to real problems. Solutions such as leaving the EU as the means to restore national prosperity and pride. These political groups are so like the millennial cults of the past, that offered magical but unreal solutions to real problems. Since they preach the impossible, they don’t employ reasoned argument, but the tactics of the advertising industry to sell there set of impossible truths. Criticism of such movements only attracts hostility and threats. The British Brexiteers constantly make threats about what will happen if they are denied. A threat left unspecified.

Returning to my main argument since the onset of the Neo-liberal revolution we have been taught that the only people that count are the ‘movers and shakers’ of society. Such people can be identified by their abrasive personal style and there contempt for the ordinary people. The billionaire heroes of Ayn Rand’s ‘Atlas Unchained’. Even politicians that are far from being characterised as movers or shakers feel they have to adopt this mode of behaviour. A politician would feel insulted if they were described as principled and of good character. Unless of course it was in their election literature and being used as a means of winning votes.

There is also the self fulfilling prophecy. Our expectations of the political class are so low we expect them to behave in an unprincipled manner. Any politician that behaves differently is an object if suspicion.

* This has become increasingly less so since the Neo-liberal reforms of the late 20th century and the financial crash of 2008

Why our times desperately need the economics of optimism

economic history, Economics, politics, , , , , , , , , , , ,

Economics can be categorised and divided in a number of ways, but one the most fundamental divisions in economics is between that of the economics of optimism and that pessimism. Quite simply the first tells you how to do things and the second why should not attempt to do things. The former is the economics of change, the latter is the economics of no change. Usually the first is associated with left of centre politics and the latter with right of centre politics. Possibly the best example of the latter is the current policy of austerity practised by the Conservative government. They can say no too many desirable things such as more spending of health care on the grounds that there is no extra money to finance such spending. In the words of the Prime Minister Mrs May,  there is no ‘money tree’. They prioritise sound finance over other social goods. In contrast the social democrats or socialists would ask the question, how can we raise more money to finance increased spending on health.

Usually the economics of pessimism holds sway in economics, so I will explain that first. One of the earliest exponents of this school was the clergyman Thomas Malthus. The originator of the theory of diminishing returns. He stated quite simply that there was a finite quantity of productive resources and if the population increased indefinitely the same quantity of wealth would be divided between more and more people and so each successive generation would have less than the previous. There was he believed a  saviour which prevented the mass impoverishment of all, a natural system of checks and balances that kept the population numbers in check. These were disease, famine and war.

Today’s economists of pessimism believe that there is a similar limit on to the good things in life and for the sake of the well being of society the poor must be denied a fair share of these good thins. There is just not enough to go around.  Far better that wealth is restricted to the deserving few, the wealth creators, without whom we would all go hungry. These are the billionaires that the popular right wing novelist  Ayn Rand lauds in her books. Wealth is the just reward for their zeal and enterprise. She does not deny that the masses deserve some share of the  wealth. However all they are entitled to are the ‘crumbs’ that fall from the rich man’s table. What these economists call the trickle down theory.

In the simple story told by Ayn Rand, if the super rich were prevented from enjoying their obscene wealth, they would cease in their work of wealth creation. In one of her books she describes how the billionaires disappear from society and go into hiding. Without their enterprise societies collapse and thousands of the poor starve to death. Only when the billionaires cease their strike do things return to normal and the surviving poor are now able to benefit from that minimal income that the generous billionaires think they deserve.

There is interestingly another strand to this economics of pessimism, traditional Catholicism of the Catholic ultras. This although a Christian philosophy of life and economics, is in practical terms is little different from that of Ayn Rand. Mankind they believe is corrupted by original sin and human society is but a corruption construction made by sinful man. Any attempt to reform or improve this damned and corrupt society is doomed to failure. Only God has the power and knowledge to create the good society, or heaven on earth. Any attempts to redistribute are income doomed to failure by the very nature of this dysfunctional society. They are likely to have the unintended consequence of making things worse for all as increased taxes to will add to the costs of production so making businesses inefficient so reducing output making all poorer.  All that is permissible is individual acts of kindness or charity. In a corrupted society inequality is inevitable, as are the vast inequalities of wealth and income. Changing or improving a society of people damned with original sin is impossible and should not be attempted.

Although the economics of pessimism has usually been the dominant mode of economics, there was a brief period during the 1950s and 60s, when the reverse is true. Usually this philosophy is associated with J.M.Keynes, but there were others such as Michael Polanyi. Briefly economic practice was directed to making and preserving the good society or the welfare state. Economic policy making was intended to  five combat what William Beveridge defined as the “Giant Evils” in society: squalor, ignorance, want, idleness, and disease. Perhaps for the first time in its history the economy was directed in a manner which benefited the majority of people rather than the lucky minority.

Then when the economic crisis of the 1970s hit the Western economies it was easy for the economists of pessimism, to demonstrate that the crisis was caused by the profligate spending urged on governments by the economists of optimism.   Since then the pessimists have prevailed.

Now when faced with a crisis in Western economies, economies that fail to generate sufficient employment and income to meet the needs of their people, government policy can be summed up as either ‘can’t do’ or ‘won’t do’. As the governments have shown little interest in the welfare of their peoples, populist movements have developed. Movements that threaten governments with their ideology of economic pessimism. European right wing populist movements with the exception of the British, are threatening to intervene in the economy to protect and maximise the welfare of the people. If governments persist with their policies of ‘can’t and won’t do’, they will be replaced by those that can. What the populists of both the right and the left espouse is an economics of optimism or more simply the economics of ‘can do’. While some doubts must be expressed about the politics of the populists, what they do believe is that governments need an activist economic strategy. If the National Rally of Marie Le Pen ever attain power they will find that they need to intervene in business to protect the welfare of the people of France. Employment protection measures will be re-introduced, employers will find it impossible to pay less than a living  wage. Taxes will be increased on business to finance health and social care. Policies that are normally associated with the left. Societies may become less free and more intolerant but people will accept that if it means a better standard of living. What is forgotten is that the popularity of Hitler in Germany came improving the material well being of the German people. In return they tolerated the cruelties and barbarism of the Nazis.

The Economy does not Exist

economic history, Economics, politics, , , , , , ,

Perhaps now being in my eighth decade I can look back with some perspective on society. While I must admit that wisdom does not necessarily come with age, one’s vision and understanding does sharpen over time. What becomes increasingly evident is the follies of mankind and in particular the politicians. One often repeated folly occurs when politicians say that … must be done for the sake of the economy. To their listeners it sounds impressive, but it is just yet another must say meaningless phrase that politicians say. The economy does not exist, it is not a thing as such. It is merely a word that economists give to a series of activities that create wealth, and the means by which that wealth is distributed. The crofter the Outer Hebrides and the investment banker in London will be included by the government statistician as being part of the British economy, but the link between the two is tenuous. Rather it is better to say that the economy is lots of different things that involve wealth creation and distribution, but it is no more than that.

There is a very simple example that illustrates this point. Government ministers take policy decisions that they claim are for the benefit of the economy, but which in reality damage significant sectors of the economy. British governments have pursued policies designed to keep the exchange value of the pound high. The reasoning being that as so many of our goods are imported from abroad, if foreign currency is relatively cheap compared to the cost of the pound, imports will be comparatively cheap. As over 50% of our food comes from abroad, it makes the fruit and vegetables in the supermarket cheap to buy. However this same policy is damaging to our domestic manufacturing industry. If the pound is expensive in terms of foreign currencies, it makes British exports expensive and foreign imported manufactured goods cheap. Consequently British manufacturers are hit twice, their expensive imports are hard to sell abroad and they are increasingly undercut in the domestic market by cheap foreign imports. This is why British manufacturing industry only accounts for 10% of national output (GDP) and why of all the developed countries the U.K. has the largest trade deficit as a percentage of GDP.

What I am trying to say is that by treating the economy as one thing, rather than several things, government economic policy making is condemned to be both wrong headed and damaging. Anyone looking back over government economic policy, will see a series of constant policy errors and misjudgements.Observing this record of failure politicians came to believe that a policy of doing nothing or as little as possible was the best policy option. From this came Neo-Liberalism and free market economics. There was an equally obvious conclusion that politicians could have drawn and that was that governments had been using the wrong economic policies or applying them correctly, which they preferred to ignore. Also it was a terrible misreading of history, a recovery from the ravages of war in 1949s and 50s was only made possible by the government regulation of the economy. Money was directed towards rebuilding the economy away from consumption. Rationing of goods was very unpopular, but it made possible the post war economic recovery.

Today the only economic policy measure used is monetary policy, the government believes that by controlling the supply of money they can best manage the economy. One way they control the money supply is through varying interest rates. Their reasoning is that of interest rates are low people will be encouraged to borrow more and the increase in the amount of money in circulation will increase the demand for goods and services so increasing economic growth. What they don’t understand is that a policy of cheap money can be bad for the economy. Interest rates are the price paid to borrow money and as such the price at which money is borrowed should be high enough to discourage foolish and silly investments. Unfortunately when money costs next to nothing to borrow it encourages many foolish speculative investments. As money borrowed today can buy shares that can be sold tomorrow at a profit. If only a higher price was charged for borrowing money such speculative punts would be discouraged.

Government ministers need to realise that a booming stock market is not the economy, but only one part. The froth on the coffee. When money is made so easily by speculating, why bother with the long term investment that business desperately needs. Such investment does not deliver the quick and astronomic returns of speculation, it only delivers in the future. Why wait several years for a return on your money when a speculative will deliver a profit tomorrow or the day after. Consequently the UK’s investment in infra structure is as low as that of the European basket case, Greece.

South Korea offers an instructive comparison. After the Korean War in 1951, it was a basket case. The country’s economy had been devastated by war. Now South Korea is one of the world’s major manufacturing nations. This was a country which the government actively interfered in the economy. What it employed was sectorial economics, in which the government decided on which industrial sectors to promote and how to support them. Samsung was originally a manufacturer of agricultural machinery, who following the dictates of the government concentrated on the manufacture of electronic goods. Samsung is now one of the world’s leading manufacturer of electronic goods. Neo-Liberal Britain’s last major manufacturer of electronic goods GEC disappeared long ago, after its directors made a series of foolish acquisitions.

The only large British owned and managed manufacturing industry is in engineering, where there are two remaining industrial giants. BAE and Rolls Royce. It is no coincidence that these two companies have been in receipt of government largesse in the form of defence contracts. Sometimes politicians cannot see what is in the front of their noses.

Obviously South Korea is not without its problems, it does as does all developed countries have a severe youth unemployment problem. However in ten years time South Korea will still be a major manufacturing nation of hi-tech goods, the same cannot be said of the U.K. Quite possibly it will continue on the path of slow decline, which has been its history this century. Only if politicians stop believing that there is an economy and instead acknowledge the economic reality, they might develop policies that promoted economic growth and welfare and not the reverse.

*This essay owes a considerable debt to Markus Gabriel’s book ‘Why World does not Exist’

Intellectual stupidity a practice common to both Economists and Politicians

christianity, Economics, Philosophy, politics, , , , , , , , , , , , ,

Intellectual stupidity is not a concept that is to be found in book on either the subject of economics and politics. This is a concept that was created by Robert Musil. He distinguishes between two types of stupidity, natural and intellectual. The first is the one due to physiological factors, it occurs when an individual lacks the mental capacity for higher order thinking. Although he would be criticised today for his use of this offensive word, he can be justified when its contrasted with intellectual stupidity. A term Hannah Arendt had in mind when she criticised evil as personified by Adolf Eichmann as banal. This was a man who lacked intellectual curiosity, he was unable to empathise with the millions of victims of the holocaust. He thought the was a good man because he made the trains to the death camps run on time. The fact that these trains took millions to their deaths was no significance to him. Their deaths were somebody else’s responsibility. He was in his mind a good administrator not an essential player in the holocaust.

Politics and economics practitioners are blighted with a similar failing. Milton Friedman was guilty of this failing. When Milton Friedman was told that the Chilean government when introducing the free market reforms he advocated were imprisoning, torturing and killing opponents of these reforms, he said it was a price worth paying. Just as with Adolf Eichmann his vision all that mattered was the introduction the Chicago School of Economic management to human societies. Human rights was for him just a matter of secondary concern. Recent political history has been dominated by such practitioners of intellectual stupidity.

In Britain such stupidity has been demonstrated by successive governments in there implementation of the free market economy. They see there role as being facilitators of a Hayekian free market system. When ever such reforms produce failures such as the collapse of Carillon, a company to which many government sources had been outsourced; it was a consequence of poor management with the company. Never was the policy of privatisation of government services considered to be a flawed concept. The ‘Economist’ magazine while exposing the failures of Carillon’s management mounted a strong defence of the outsourcing of government services. Now two other outsourcing giants Capita and Interserve are in trouble. Yet our government remains committed to outsourcing as a policy practice. This is demonstrates intellectual stupidity, as government ministers cannot contemplate any alternative policies or thinking.

Intellectually stupid politicians are always trying to second guess their civil servants. Rather than seeing them as experienced administrators who can offer them practical and useful advice on policy matters; they are seen conspirators who are trying to obstruct their policies. The traditional civil service practice of providing the minister with a series of policy alternatives from which to choose is seen as a threat to the integrity of government policy making. Just recently a senior politician who studied history at University decided that economists at the Treasury were conspiring to undermine Brexit, by producing erroneous data on the consequences of leaving the EU. This politician who has only a brief acquaintance with the subject of economics, claimed he could see not just errors but treachery in the work of these Treasury economists. This failure to accept any alternative view of events to the individual’s own is typical of the intellectually stupid thinker.

Why is intellectual stupidity the default mode of thinking of our politicians?

Perhaps part of the explanation lies in the books they read. Friedrich Hayek’s book ‘The Road to Serfdom’ can be read in a few hours, possibly on a wet afternoon, when there is nothing else to do. In this short book he claims to offer the solution to our contemporary malaise. There is no end to these books that claim to have the answer. Another such is Ayn Rand’s ‘Atlas Unchained’, yet another writer who claims to provide the solution to our current malaise. What these books encourage in their readers is a cult like belief, that they alone have the exclusive possession of the truth. The blinkered mindset of an ‘Moonie’, Jehovah’s Witness or Scientologist, is mirrored in the thinking of so many of our leading politicians. The lack of curiosity about alternative thinking is characteristic of the intellectually stupid.

These politicians have also been to the elite universities and this has given them an intellectual arrogance. They after a short period at university just ‘know’. One exemplar of this type is the politician who is an English graduate who decided that he did not need any advice from experts in their field (educationalists and economists), as he had acquired sufficient understanding ‘to know’. He as with so many of his colleagues ‘knows’ any further knowledge would be superfluous to the task in hand. These politicians can be best described as ‘generic’ politicians, as such they believe that they have already possess all the skills and knowledge necessary for the most demanding of political positions.

This lack of intelligent curiosity is demonstrated in these three remarks made by politicians about food banks in the U.K. The first said that increase in food bank use food was because people were attracted there by the free food on offer. Another said increased food bank use was a good thing, as it had shown that his government was more effective than the former at publicising this service. The last said people go to food banks for many reasons. What none of these politicians could say that people on low incomes were reduced to such desperate straits, that they were forced to go to food banks to get the food they needed for themselves and there families. Just as Adolf Eichmann could not bring himself to admit the his trains were taking the Jews to there death, so these conservative politicians cannot admit that there policies are creating such widespread impoverishment that thousands are now forced to go to food banks in order to survive.

This callousness is not the consequence of intellectual dishonesty, but a thinking that prevents thinking of either the Jews or the less well off, as people of any consequence. They are demonised either as a threat to the well being of the German people or a threat to the well being of the British economy and society. The political philosophy of both Adolf Eichmann and contemporary conservatives treats certain groups of people as inferior beings who lack the rights accorded humanity in general. A world view best summed up by the Nazi official who called Jews vermin.

What Robert Musil writes about intellectual stupidity is very similar to the thinking of Augustine on evil. He describes evil as a not knowing of God. People who don’t know God commit what we term bad acts. Augustine as a Neo-Platonist also equated God with Good, so people who did not choose to know God could not know good. The intellectually stupid chose not to know the evil of their actions and as such are unable to know good. These intellectually stupid would be the people who Augustine’s would accuse of doing evil acts.

The Economics of the School Playground or Free Market Economics

economic history, Economics, Feminism, irony, Neo-Liberal economics, politics, Uncategorized, , , , , , , , , , ,

Recently I met a group of friends who like me are nearer to seventy than sixty. What surprised me was that the ethics of the school playground still prevailed amongst us. As we had not met for several years, there was an immediate struggle within the group for supremacy. One particularly made a determined effort. First through trying to put down what he saw as the weakest member of the group, by making a slighting references to his speech impediment. Once having demonstrated his superiority to over him in his mind, he went on to list his recent achievements to demonstrate his superiority over the others. This competitive behaviour is apparently typical behaviour of men in any social situation. Once he felt that he had achieved top dog status he calmed down and returned to a more normal conversational mode. This is little more than a grown version of the  playground behaviour we indulged in as children. In my primary school it  was superiority in the traditional sports of marbles, conkers or any athletic activity that counted.  There was inevitably one boy who excelled at all things and who had the admiration of all, the alpha boy (male). What struck me was that if the behaviour and the ethics of the playground still governed the behaviour of this group of near seventy old men, surely these playground behaviours must come to the fore in all spheres of activity in which men participate.

Obviously it is possible to overstate the influence of the learnt playground behaviours on adult males; however there do seem to be striking similarities between behaviours of boys in the playground and those of adult males.  Is this not demonstrated in the male obsession with competitive sport? Men are taught from their earliest age that life is a competition in which its necessary to win or at least do well. Losers are beneath contempt, I still remember with horror the way us boys treated the designated loser in the playground. The vital social skill of co-operation is placed well below that of competitive ability. Until very recently economists were men, the Cambridge economist Joan Robinson (1903-83) being one of the exceptions. Does the dominance of men in economics with their competitive behaviours influence there understanding of the economy? The answer is a probable yes. Economists see the competitive market as the infra structure upon which the economy is grounded. All sectors of the economy are nothing more than competitive markets in one guise or another. Economic theory is a theory of winners and losers. Losers play an essential role in the economy as through their failure they remove from the market those producers that are inefficient, those that produce the wrong products and those workers that are less efficient. Unfortunately the losers suffer the penalty of unemployment, but they have a function in that they provide an incentive to those in work to try harder to avoid the penalty of unemployment.

Co-operation rarely gets a mention in economic textbooks, except in negative terms;  trade associations and trade unions are seen as nothing than barriers to the efficient working of the market. However this ignores the fact that society as a whole is largely a co-operative enterprise,in which people co-operate for the greater good. Education and healthcare in this country are  examples of collaborative enterprises. Even in the commercial market the rival traders see the benefits of collaboration. When I worked for a London insurance broker, my employers and others collaborated in the financing of the Lloyds insurance market and its management. They co-operated because they knew a regulated and well organised market would attract more business as people with place their money with businesses they trusted. Unfortunately with the deregulation of the market in the 1908s there has been a falling away of standards and trust particularly in regard to the life assurance companies.

There is one example from the playground that male economists seem to have forgotten. Rules are needed to make the games boys play work. One game that we used to play at the Scout hut was British Bulldog. There would be two teams of boys, one trying to stop the other team from  reaching the other side of the room. The easiest way to stop the members of the team trying to cross the room would have been  through extreme violence, such as a punch. To prevent this game degenerating into a fight rules were imposed which prohibited any contact apart from the grabbing and tackling of opponents. Just as British Bulldog needed rules to make the game work, so does the economy needs rules as without them bad practice thrives.

Seemingly economists have voiced their approval of the actions of the playground bully, he who but for rules would have got his pleasure from hurting others. All influential economists are of the Neo-Liberal school which sees government regulation hampering the legitimate activities of business entrepreneur (bully).  Their mantra is that business knows what is best for business. The malign impact of this abandoning of all rules is demonstrated clearly in the food market. There successive governments have since the 1980s weakened or removed much of the legislation governing food hygiene, In tandem with this they have reduced to an almost insignificant number, the number public health and food inspectors. One consequence of this has been shown in the recurrent food scandals, most recently the beef scandal in which supermarkets were found to be selling horse meat instead of beef in many of their processed meat products.  Criminal gangs have also found that lax food and healthy regulation make it possible to relabel and process food that unfit meat to the supermarkets for sale to the public. Food writers write of a food mafia that is exploiting lax food and hygiene regulations to the detriment of public health.

There is hope for change as there are now many more women becoming economists. I don’t want to make the suggestion that women are any less competitive than men, having two daughters I can testify that women can be extremely competitive. However women value co-operative behaviours more highly, they learn from an early age the value of supportive groupings. One example of this co-operative behaviour is the support that mothers offer each other with childcare. All the pre-school child care groups in my locality were organised and run by local women with or more usually without government support (funding). What I am trying to suggest is that the different life experiences of women make them value collaborative behaviours more highly than men.

Many of these new economists reject the  social darwinism of the mainstream, one economist such economist is Ann Pettifor. She has warned of the dangers of the unregulated financial markets in her book ‘The Coming First World Debt Crisis’. These unregulated market she explains are in danger of bringing about an economic crash greater than that of 2008/9. In the UK private sector indebtedness amounts to 2000% of GDP, the highest in the developed world. This level of debt is a threat to the future viability of the economy, yet the government persistently ignores their problem. Lord Oakshot described the British Treasury as the bastion of free market fundamentalism. It almost goes without saying that the senior economists at the Treasury are male and are so wedded to the idea of competitive markets, that they refuse to consider any other than the most minimal of regulation in the financial markets.

This is not to deny that some of the new women economists are of the orthodox persuasion, as a number of them work for that centre of economic orthodoxy the British Treasury. What I suspect is that a greater percentage of female economists are of the non-mainstream variety, than is true of their male colleagues. If men tend to see the world as nothing more than a series of competitive interactions, they will have a preference for those economic practices that encourage competition and they will see any regulation of the competitive market as anathema.  Unfortunately despite its public statements to the contrary, the male dominated Treasury sees little reason to do other than minimally regulate the financial markets, despite the likelihood of an unregulated financial market repeating the experience of the crash of 2008/9.

Why are our leaders so stupid?

christianity, economic history, Economics, irony, Philosophy, politics, religion, Uncategorized, , , , , , , , , , , , , , , , , , , ,

What puzzles me is why are people such as Donald Trump and Boris Johnson so popular. The first advocates the policies of a clown and the second pretends to be a clown to achieve political success.

When I was at school in the 1950s I remember being told about Columbus’s voyage to America. The Headmistress told us that it was a particularly daring adventure, as people at the time believed the world was flat and thought that Columbus was in danger of falling off the edge of the world. The  truth was very different as I discovered later. Columbus was an experienced sailor who knew about the fishing grounds off North America that European sailors visited each year that the Atlantic Ocean was bounded by a large landmass to the West. Also it was known at this time that the earth was round. The classical Greeks had realised that the earth was round because they knew there was a horizon, beyond which the eye could not see, therefore  the earth surface must be curved.If was the geographer Eratosthenes (276BC to 195/4 BC)  who calculated with an incredible degree of accuracy the earth’s circumference. It is highly unlikely that Columbus was unaware of that the earth was round. My teacher was typical of those of the time that believed that people of the past had a childlike understanding of the world, whereas in fact the opposite was true.

We assume today that our knowledge and understanding is superior to that of the past. Yet our politicians constantly disapprove this notion. In the USA Donald Trump is likely to become the Republican Party’s candidate for the Presidency and Boris Johnson possible future Conservative Party leader What both these leading politicians have in common is an anti-intellectualism, both of them in their campaigns seek to  appeal to most primeval of voters instincts. Trump blames the Mexicans for crime and wants to erect a wall to keep them out, and Johnson believes that Obama’s part Kenyan ancestry makes him anti British, because of the injustices the British inflicted on Kenyans during the days of Empire. To say that both these politicians are intelligent men who are just using anti immigrant and anti foreigner feeling to win support and that they don’t really believe what they are saying does these two men a disservice, they believe what they are saying. They are both populists who believe in simple solutions to difficult and complex problems, both of them personify the  anti-intellectualism which is dominant in the our society. The political dialogue in both countries is dominated by the anti-intellectualism of those such as the Tea Party whose policies are moving closer to the mainstream in both countries. UKIP a party that gets much media coverage seems to be campaigning for things such as ending the smoking ban in pubs. Sam Goldwyn once  said a movie never lost money for underestimating the intelligence of the average cinema goer, now in politics the belief is that no politician ever fails for underestimating the intelligence of the average voter. There is a change in society that has made stupid politics the dominant strand. Possibility it is linked to Walter Benjamin’s insight (when writing about the cinema) that contemporary media  leaves little time or scope for reflection, as the media image is all involving leaving no opportunity for distancing necessary for reflecting on the projected image.

If I was to compare contemporary England with medieval England, I would say that the former is technically sophisticated but intellectually unsophisticated. This is not to say that there are not a community of intellectuals whose thinking is far superior to that of those of the medieval era, but these people are excluded from the public debate, which is dominated by the advocates of stupid politics. Obviously Trump and Johnson are not stupid men, they just find a politics of idiocy the most effective means of self promotion. What is most disturbing is that these men intend to pursue the policies they advocate, without regard to the damage caused to society through the introduction of their simplistic policies.

As an economist I can see the dangers of practising stupid politics. Britain has endured years of austerity because the government believes in a nonsense called ‘expansionary fiscal contraction’, that is cutting government expenditure will increase growth. Despite this policy having no economic credibility the opposition’s chief economics spokesman, a man who had a top class degree in economics from Oxbridge immediately signed up to the policy. Knowing it was fallacious economics made no difference, he did not want to appear out of step in with all the others who were practising stupid politics. Bonhoeffer said that the success of the Nazi’s was due to fact that good people did not speak up, similarly stupid politics is prevailing because the intelligent do not speak up. In England it is the noise and abuse made by the practitioners of stupid politics that scares of the intelligent when we most need them.

Intelligent women for example are put of entering the English Parliament because of the sexist behaviour in the bear pit that is the House of Commons. When female opposition MPs speak, male MPs on the government benches often  make crude sexual gestures with their hands and shout sexist abuse. Also any show of intelligence is likely to get a politician pilloried in the tabloid press as a geek, as happened to the last leader of the opposition. Anti-intellectualism is rife in the English political culture and it’s preventing intelligent government.

What really provoked me into writing this article was a tweet by the illusionist Derren Brown, in which he referenced a You Tube in which two evangelical preachers explain why it is necessary for them to own private executive jets. One says it is so he can get some quiet time in which to talk to God, as he would be unable to do that on a flight with other passengers who would disturb him. Christ when he wanted a quiet place for meditation found a quiet spot in a garden or in the countryside, surely these two men could have done the same. These two men are Christian literalists they believe that the bible is the word of God and that all should to obey the word of God as explained in the bible. These two Christian literalists are following a practice condemned as being wrong as far back s the early Middle Ages. St. Augustine in his book on Christian teaching explained that the bible should not be taken literally, the word of the bible required explanation by the Christian teacher. Following St. Augustine’s advice all medieval bibles contained commentaries on the page side by side with the biblical text. These commentaries were there for the preacher to help him explain the text to the people. What these evangelical preachers are doing is practising a type of Christianity that even the least educated of medieval priests would have recognised as wrong. If these men had been medieval clerics they would have been relegated to some obscure rural parish where they could have done little harm. Yet these men are seen as representative of true Christian belief, religion seems to mirror the practice of stupid politics.

This simplistic religious view of the world that divides the world up into good and bad guys is very influential. George Bush’s crusade against the evil of Saddam Hussein’s Iraq is representative of good versus bad guy politics. Isis and other Islamic fundamentalist groups embody the same good bad guy philosophy. A philosophy that justifies the cruel treatment of all unbelievers whether they be Christian, Yazidi or Shia Muslim, as they are already condemned by God for rejecting the true religion and as such are wordless people. One of the main targets for Islamic fundamentalists are the Sufi Muslims who practice a more sophisticated and humane religion. The simplistic belief of the fundamentalists contrasts unfavourably with the sophisticated Islam of the medieval  period as demonstrated in the poetry of the Rumi  (1207-73) or the philosophy of Averroes (1126-1198). Christian thinkers owed much to these men, Francis of Assisi’s thinking was greatly influenced by the poetry of Rumi. Depressingly anti-intellectualism is not only a feature of Western politics but also in the politics of much of the Muslim world.

There are many sophisticated and intelligent clerics today but they do not get a hearing in today, because their speech is too subtle and nuanced for a world that wants simple truths. Rowan Williams the very intellectual former Archbishop of Canterbury was pilloried in the press as a bearded weirdy. They were not interested in the message from an educated Christian, for them Christianity is that of the simple minded fundamentalists.

There is no doubt that the public appetite is for stupid thinking, there is a wanting for people offering a few simple homespun truths that they claim will solve the world’s ills. Does not the constant diet of super hero films coming out of Hollywood demonstrate that something is very wrong in our culture? Hollywood appears to have opted out of making adult films, as it has correctly judged that the audience for its films want simple child like stories. The only hope is that the world particularly the Western world will tire of simple childlike stories and politics. When politicians such as Donald Trump and Boris Johnson get chance to put into practice their childlike policy solutions and those policies prove to be a resounding failure, the pendulum will surely swing in favour of a more grown up politics.

Is Apple responsible for its own woes – a sceptical economist’s observation on falling IPhone sales

Economics, politics, society, Uncategorized, United Kingdom, , , , , , ,

As an enthusiastic purchaser of all Apple products, my attention was caught by an article in my paper, in which it was stated that Apple was having problems selling it latest Iphone. It’s stores are apparently stockpiling unsold IPhones. Today as if in confirmation of this I received an email from Apple offering me generous terms for upgrading my IPhone 5s to the latest model. What I am going to suggest is that Apple itself is in part responsible for its own woes.
Reading this article reminded me of a story about Henry Ford. It might be apocryphal but Henry Ford was considering automating the production line at his Detroit car assembly plant. He spoke to one of his most trusted advisers, who said it is claimed, ‘that if you lay all these men off, who will buy your cars’. Henry Ford considered his friends advice and continued with his labour intensive methods of production and so the story goes sales of his cars remained high. 
Apple and all the major manufacturing companies in the US and Western Europe have done the opposite of Henry Ford. They have by outsourcing production to foreign countries where labour is cheap, impoverished many of their potential customers. When the Rover car plant was being closed in Oxford, a study was produced that showed the replacement jobs for those car workers would be in the service sector, where wages were 30% lower than in manufacturing. Similarly in those former mining areas in England, high income mining jobs have been replaced by low income jobs in call centres or warehouses. The same trend is evident in the USA where increasingly the new jobs that there are created are relatively low income jobs in the service sector. If they are in manufacturing they are again likely to be relatively low income low skill jobs. A recent study showed that incomes for men in the USA with no more than a high school diploma showed a decline in incomes since 2007. 
Checking with Amazon I note that the price of the most basic IPhone 6s is £524 in UK and the similar model in the US is over $800. In the new age of capitalism when increasing numbers of workers are in low wage economy, they are effectively priced out of the market for expensive smart phones. The wisdom of Henry Ford seemed to have been forgotten by the current generation of business leaders.
What is common to all large corporations is the tax strike, as these businesses use a variety of tax avoidance schemes to avoid to paying their taxes. Usually this involves locating the head office in a low tax location, so corporation tax due on profits on the profits earned from sales in high countries . Ireland is the low tax headquarters for Apple in Europe and Luxembourg is that for Amazon. The scale of corporate tax avoidance is subject to varying calculations, in Britain even the conservative tax authorities estimate the scale of tax avoidance at being a sum in excess of £30 billion, other sources such the sum is much higher. The consequence is that the government’s of Western Europe and have less cash than is normal for the government of a developed country. The consequence is that government’s lack tax revenues to fund those activities undertaken by government and are over dependent on borrowing to finance their activities. This has had a knock effect in that in times of financial stress governments are forced to cut their borrowings and spending, resulting in an age of austerity. This austerity further reduces the incomes of the low paid through benefit cuts and job losses. These newly poor Europeans are unlikely to be customers for new expensive IPhones. 
I believe businesses such as Apple face a problem in that by minimising their costs of production in by outsourcing production and by minimising their tax payments they maximise short term profits, at the expense of long term sales revenue. It is the latter which generates real profits for the company and actions which damage revenue streams threaten the long term viability of the business. Car manufacturers have long faced this problem and have overcome that by boosting the income of potential buyers by offering low cost loans for car purchase. Perhaps Apple to maintain sales will have to look to alternate ways of boosting their potential customers income. 
This particular economist doubts the wisdom of replacing earned income with cheap loans as an the main means of increasing household incomes. Already consumer debt in the UK is reaching 180% of GDP, a sum which becomes unviable if there is a collapse of the banks, as happened in 2008/9. Borrowed income is more volatile and less reliable than earned income and is a source of financial instability and economic meltdown.

Stupid, Stupid Economics

economic history, Economics, politics, Railways, scepticism, , , , , , , , ,

  

Whenever I open the paper I read yet another article that makes me despair of the competence of our politicians in managing our affairs. The latest example occurred when I read that our Chancellor of the Exchequer was going to fund the increase in spending on the National Health Service (NHS) by ending grants given to student nurses to fund their training and instead make them fund their own training by forcing them to take out loans. It does appear on the surface as a reasonable policy as it means it can transfer the £800 million pounds spent on grants to und extra health service spending. However in both parliament and the media this went unquestioned as all accepted his reasoning. However the logic of his actions was nonsensical as any enquiry would have shown.
First of all that £800 million is not going to be taken from nurses training to fund extra NHS, he is in fact increasing overall spending by a further £800 million. The money that would have gone to fund these grants will now instead be paid to the loans company to enable them to lend the money to student nurses to fund their training. Nurse training takes several years and these nurses will not start paying back these loans until some time in the future. Then when they do start to repay them, repayments will only total a small proportion of the total. Sleight of hand and some imaginative book keeping will make it appear that the Chancellor has kept within his budgetary limits on NHS spending when in fact he has done the reverse. When Disraeli said that there are ‘lies, damned lies and statistics’ he could have been speaking of the practices of contemporary Western governments as when such stupid economic practises are commonplace. 
The British media is fond of reporting on the nonsense spoken by some of the more extreme of the Republican candidates for the American Presidency but in the words of the Bible, they have pointed out the splinter in their neighbour’s eye, while ignoring the beam in their own eye. Just because British politicians speak in an educated voice, one developed in years of tutoring at elite schools and universities, it does not mean that they are not incapable of speaking nonsense equal to that spoken by Donald Trump. Their education is one of manner not intellect.
Just last Sunday I had to travel 20 miles to collect my daughter from a railway station. The train service that should have come to her home station, terminated at this distant station. When I arrived at the station there were hundreds perhaps even a thousand people queuing in the cold night waiting for a replacement bus to take them to their destination. This is no unusual occurrence as every train traveller has similar stories, in Britain we have come to accept that on Sunday’s and public holidays our railways cease to work. In this case it was said to be a signal failure, when in effect it either routine maintenance work or essential upgrading work that had gone wrong. In Britain the convention is never tell the people the truth.
Perhaps this is yet another good example of stupid economics. British railways to the user provide what at its best is an adequate service, which all too often is mediocre or occasionally awful. Yet our elected politicians see the privatised railways as a success story. What they see is increased numbers travelling by rail as demonstrating the successful of privatisation. Failing to see that this is due the flight from the cities caused by high housing costs forcing millions to live distant from their place of work. These millions then have no alternative but to use the train to get to work. No matter how many complaints about the inadequate service, such as thousands being forced to travel at peak times in conditions worse than those in which livestock are transported, all politicians know the railways are a success story. They just know that railways run by private enterprise are superior to those run by the state, now matter how bad the service appears to customers. Politicians see their role as that of the PR division of the railway companies whose role is to deflect complaints about poor service by convincing rail users that they are not receiving a poor but the best possible service. As with so many evangelical salesman they tell people that their patience and will be rewarded with a place in railway heaven. 

Why is Stupid Economics so prevalent
The question must be asked why is stupid economics so widely practised. There are several possible answers. One must be the education that our leaders received, nearly all studied philosophy at an elite university. There they would have been taught that we live in a post modern age and what were assumed to be economic truths, were only the truths of a former age, that of mass production. Truths such as those that said a universal welfare and health system can be provided out of taxation are the ephemera of another age and have no place in today’s society. Post modernism teaches that truth is relative to a particular historical period and the truths of one age have no place in another time. The truth of post modernism is Neo-Liberalism and the associated in the virtue of the free markets. It is said that this is no longer an age of great truths, whereas it is an age that no longer believes in the big or great government. It is the age of the small state, the unregulated market and unrestricted freedom. The Treasury has even rewritten economic theory to reverse one of the truths of the modern age which is that government spending increases the level of economic activity, now it is claimed to do the reverse. Post Modernism teaches that what you believe is true is true, it’s what in former times was called relativism. Therefore stupid economics must prevail there are no economic truths, there are no grounds from which to crisis erupted the practise of stupidity..

There is one other answer that comes from the education our leaders received at their elite universities. Nearly all studied politics of which a part is a study of voting behaviour. This teaches that people respond not to policies but to emotion and feeling. Therefore rational policy making is less important that engaging with people’s feelings and emotions. As they are so distant from the people that they cannot gauge what the people are thinking from the press and other intermediaries. All to often they equate the headlines in the tabloid press with popular feeling. (Such headlines may coincide with popular emotions and feelings but not necessarily so), what they are seeing in these papers are what a number of university educated journalists believe is the popular feeling. They are looking at a mirror which reflects their contempt for the people, a people incapable of thought. Such contempt is a bad foundation of which o make policy.

One other factor is the decline in the great institutions that make up the democratic state. Parliament is seen less as the great assembly in which to make one’s reputation, than as a pathway to a profitable career in consultancy or to a directorship in a newly privatised industries. 
  
What these leaders would never understand that there can be a place for nonsense as opposed to stupidity in economic policy making. The former is a practise which contributes to the well being of the country, while the latter is just stupid as does no one any good. A good example of nonsense economics comes from the Second World War. People were urged to contribute their aluminium pots and pans to the war effort to provide the material for constructing Spitfires. In fact the amounts collected could never have helped build more than one Spitfire. Government economists used this policy as a ploy to convince people that they were contributing to the war effort and helping beat the enemy. It was nothing more than a morale boosting exercise, but it was a very effective one, as it made the householder believe than by sacrificing one pan they were helping to beat Hitler. I fear this good practise of nonsense economics is beyond the wit of our contemporary leaders. They prefer to practise the dumb economics of the herd think.