Tag Archives: David Cameron

Sensible economics and other nonsense spoken by politicians

Economics, Neo-Liberal economics, Philosophy, , , , , , , , ,

Recently a speech given by our former Prime Minister on the topic of sensible economics caught my attention. There is growing agitation in the country for the end of austerity. An economic policy that has failed to achieve any of its targets. Realising his heritage was at stake he gave a speech explaining why it would be foolish to abandon this sensible economic programme which he had initiated. For this man and all practitioners of sensible economics, the growing numbers of people using food banks,  stagnant or falling incomes etc. are not a sign of policy failure. What people failed to understand he said was that these sacrifices were necessary for the greater national good. Sacrifices which were necessary to rectify the failings of past governments.The problem was not bad economic policies but the impatience of the ignorant majority.

Sensible economics is convincing because all the words in which it is spoken are suggestive of  good sense. It is so convincing that it has become the accepted dialogue in which the economic debate is conducted. Who could be against sensible economics when it states that the ‘books must be balanced’ and that we should guard against ‘paying ourselves more than is prudent’. Any deviation from the path of sensible economics such as a return to ‘tax and spend’ threatens to return the UK to the bad days of the past. However sensible economics is not economics, its just a number of moral and commons sense phrases that one would hear in conversations at the golf club bar or at the dinner parties in Notting Hill, which have become the authoritative dialogue in which all matters economic are discussed.

Sensible economics does appear to offer a number of simple policy solutions to today’s problems that all can understand. Everybody knows that civil servants contribute little of value to the economy, so the best policy is to reduce their numbers to reduce costs. An argument that is so convincing that all governments over the past thirty years have done this. A good government is one that employs less civil servants than it did than when it first came into office. Ignored by the various governments is that these civil servants provide an invaluable source of expertise necessary for good government. Our rail industry’s record over investment decisions is one of constant failure. Projects have been badly managed with so many cost over runs that they government has been forced to cancel a programme of electrification of the rail network, because it the funds for this programme have been squandered on other projects. While the government can blame incompetence in the railways on others what it cannot do is shift the blame for other major failures. Regardless of reforms implemented as part of sensible economics programme the economy is preforming as badly as ever or even in some examples worse than ever, as is demonstrated by the trade deficit. The UK’s trade deficit is not only the highest as proportion of GDP for a developed country but it is worsening.

I can quote an example of this thinking from my local community network. When I expressed concern about an overly slow response time (30 minutes) by the police to a serious crime in which a member of my family was involved; I was told by a number of correspondents that this was not due to a lack of police numbers, but bad police practices. According to them the police did not respond to a young man threatening shop staff and customers with a hammer;  because they were too busy completing their paper work, too which they gave priority. Sensible economics has permeated throughout society so thoroughly that even the most nonsensical of statements such as this one are believed. In fact the reason for the delay was that the police needed time to assembly a team armed with tasers. All such teams at the time of the incident were otherwise engaged.

Perhaps the best explanation of the sensible economics being the only dialogue in which the economic debate is conducted comes from the writings of Foucault. Risking over simplifying his work, what he states is that control of society comes from the control of language. Language is the language of the powerful, as the meaning of the words used in the public debate are  given them by the powerful. Such as the following: the poor are welfare scroungers, poor because they are indolent  and lacking in initiative. It is their personal failings that explain their poverty. Welfare programmes only encourage this indolence and should be cut back.  If welfare programmes are wasteful it provides a reason for the wealthy to avoid taxes, as there taxes will only wasted on the useless poor.  When this becomes the authoritative dialogue in which public debate is held  it becomes the prism through which any thing of any significance is viewed in society. Only yesterday I read in the papers that public servants have lost there public service ethos. What nurses today lack it is  the care and compassion that motivated their predecessors. When the public debate is conducted in terms that vilify them, it is easy to deny nurses their claim for a living wage.  This is the stuff of sensible economics, it nothing more than a means of entrenching the power of the rich and powerful, through denying a hearing to the alternative view.

Sensible economics or Neo-liberalism has had an easy ride. Rather than challenging the tenets of this dialogue, social democratic and opposition parties have been over impressed by the electoral success of the right and adopted its language. They remain the opposition in name, as they believe that elections can only be won by adopting the policies of sensible economics. It was the former social democratic government that introduced the unfair mean testing that the current government uses to deny the poor and disabled their welfare claims. When the opposition adopts the language of its opponents, it is signalling that it has lost the argument, its surrendered to its opponents.

What Foucault failed to understand is that the dialogue of the powerful is not all pervasive. There are other ideologies and dialogues in society.* Perhaps best described as the dialogues of the loser. Sociologists have a term that describes these dialogues, soteriology. These are dialogues that explain why certain groups are unfairly disadvantaged and discriminated against. Socialism is one such soteriology which was accurately described by Durkheim as a ‘cry of pain’.

These subordinate or challenger dialogues appeared to disappear because of the all pervasiveness of sensible economics. The media is largely controlled by billionaires who could deny a voice to any alternative messsage. The parliamentary left having adopted the ideologies of sensible economics for fear of losing the access to power have been a useful ancillary in suppressing the alternative dialogues, as to admit the validity of other dialogues would demonstrate the falsity of the current policies.

However as the failures of sensible economics has become more apparent, this dialogue has been losing its grip on the popular imagination. When the Prime Minister dismissed a nurse’s claim for a living wage, as there being no money tree, she stretched credulity too far. The narrative of nurses being forced to go to food banks because of low pay was to well entrenched in the public imagination to be so easily dismissed. Also a dialogue that claims to be authoritative discredits itself when it resorts to childish language borrowed from fairy tales.

Once a challenger dialogue or ideology is giving public space it becomes harder for the dominant ideology to maintain its dominance. Sensible economics strength comes from it being the authoritative source of truth. Once it is questioned its authoritative voice seems to become less authoritative and truthful. It cannot stand public scrutiny. This public scrutiny has come from the opposition party which has become infected with a challenger ideology. No longer does the opposition repeat the truths of the governing party but it challenges them. Often demonstrating that the ‘emperor really has no clothes’, the new social media gives a voice to these new challenger dialogues. They have been so effective that a media baron who considered himself the kingmaker, a man who believed that politicians could only succeed if they had they his support, discovered that social media had destroyed his power. He ran a sustained campaign of invective against the socialist leader of the opposition in his media outlets but failed prevent the opposition taking effective power away from his nominee.

This essay is not intended to argue the superiority or otherwise of challenger ideologies such as socialism but to suggest that when there is a dominant unchallenged dialogue the result is poor government policy making. If decisions are made in accordance with the established truths of sensible economics and are never subject to challenge from believers in alternative dialogues silly decisions can be made. The government as an economy measure reduced the naval planning and ship design departments to a bare minimum. Consequently when the navy wanted to build a fleet of modern warships they lacked the ship design expertise and had to buy in help from the Americans. Unfortunately the poor standard of oversight meant these billion pound ships when delivered to the navy proved to be faulty, they were prone to engine breakdown. At one time the new Type 45 destroyers were in dock together, unable to put to sea because of faulty engines. If there was a strong political opposition either inside or outside parliament such poor decision taking would be less likely to occur as policy decisions would be subject to criticism. In such circumstances the folly of dismissing nearly all of the navy’s ship design staff would have been highlighted. When sensible economics dominates the political debate, it being nothing more than a collection of common sense phrases it encourages policy making made in ignorance. It is a doctrine of no expertise, any politician can grasp its essence so why need to consult experts.

  • This idea of different ideologies competing for dominance I have borrowed from Antonio Gramsci

New Economics – a new approach to policy making

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As a sceptical economist it is all to easy demonstrate the failings of contemporary economics, what is much harder is to suggest an alternative to the current practice of economics. However it is not so difficult as it appears as history suggests an alternative approach to economics.

Economists generally take the individual as the basic building block from which society is constructed. In most textbooks there is a very tedious chapter on how primitive man built up a chain of exchange networks that were to become the rudimentary economy. From this starting point economists develop a theory which demonstrates the superiority of the free market. However this is erroneous as the basic building block that makes up the economy is the community, it is communities that exchange goods and services. In Celtic Britain it was the local top man (as representative of the community) with whom traders from the Mediterranean dealt. They exchanged their goods for British tin but it was a very ritualised transaction. Obviously there was bargaining but not as the economists imagined, there was no protracted bargaining to establish the equivalence of one unit of tin for one amphora of wine. Even the local market where individuals exchanged goods was not as one as economists imagined where individuals freely bargained for goods, it was a market that was regulated by the community. The local rulers realised how disruptive an unregulated economy could be, as traders would seek to exploit times of famine or shortage by pushing up the exchange value of their goods and so leaving the poorer members of the community to go hungry. The anger this generated could lead to food riots and threats to the established order. When the Bible explains that Joseph built store houses in which to keep grain in the years of surplus for distribution in years of shortage, this was not as the Bible suggests an unusual practice, but one common to all established societies of the time. Rulers were above all interested in social stability and maintaining social order.

There was discovered in Babylon the code of Hammurabi (1157 BC). It was a pillar which set out the prices of the goods to be exchanged in the local markets. Economists have claimed that it would be honoured more in the breach than in practice, as its impossible for the state to control prices, as these prices would fluctuate of their own accord with changes in the market. In years of plenty prices would fall and in years of shortage prices would rise. However this is to misunderstand Hammurabi’s intent he wanted to ensure a reasonably equitable distribution of resources to maintain social order. There would have been a number of inspectors to check that traders were abiding by the regulations and failure to abide by them could result in severe punishment. What economists fail to understand is that economic power must always take second place to political power as the latter has the monopoly of violence. Threats to life and limb would ensure that Hammurabi’s traders observed the law.

Today societies in the Middle East have continued this practice by supplying their peoples with supplies of cheap flour. Economists deplore this wasteful habit, but what they fail to understand is that cheap flour is the means by which the governments of these countries maintain social order. Without the cheap flour there would be food riots and regime change. When economists from the International Monetary Fund and the World Bank try to force these governments to put into policies that end the practice, they are forcing on these governments politics that will lead to widespread discontent. What these economist fail to see is that in these poor economies the economy does not work as is described in the textbooks and the same is true of advanced economies.

Hard as it must be to accept the Arab strongmen that distribute free or cheap flour to their people have a better understanding of economics that most economists. Economist tend to believe that the free market is the best mechanism for ensuring a fair and equitable distribution of resources. However this is fallacious as it ignores the existence of power and how the powerful can abuse the market to best benefit themselves. Hammurabi recognised that the great landowners if given the opportunity would manipulate the market by holding back supplies to increase their price and so to maximise their income. He denied them this opportunity by threatening those that tried to manipulate the market in their own interests with dire punishments. In such societies it was easy to attract the anger of the government and suffer severe consequence which would include bodily mutilation or death. Our current leader David Cameron has a much more naive view of the economy he does not believe that those with the most economic power will abuse that power to benefit themselves at the expense of the majority.  Instead he believes that those businesses that conduct such abuses will be stopped from abusing that power by the market. If there prices are too high or they withhold supplies to the market consumers will switch to other suppliers so forcing the abusive business to mend its ways. This view ignores the realities of power, the abusive supplier has the power to manipulate the market so that consumers are forced to buy their goods. They can use a variety of means to deny entry to the market to alternative suppliers. David Cameron is not alone in his naive view of the economy, it is shared by the political class as a whole.

The iniquities of the free market are best demonstrated by the private rental market in the UK. In this market there is a great inequality of power, there are the tenants who if they cannot find accommodation will be forced on to the street and the landlords that can choose who if anybody shall be a tenant. The desperate tenant is forced to accept the price for tenancy chosen by the landlord, so now there are many examples of well paid professionals being forced to pay up to 50% of their income in rent. The landlord can choose not to let his property until he finds a tenant willing to pay the high rent he wants for the property. The tenant only has a choice between paying the high rent or homelessness. One consequence is that there is an increasing proportion of the population that is homeless or forced to live in inadequate, squalid and unhealthy living conditions. The only response by the political classes to this crisis is to promise to build more houses sometime in the future. It goes without saying that governments have promised this for the past twenty years but there is little evidence of a substantial increase in the number of houses being built. Not one British politician has the wit of a Hammurabi.

What economists and politicians must recognise is that the free unregulated market works to the benefit of the most powerful players within the market. The market left to its own devices will always leave many people hungry and poorly housed, if housed at all. From the view of the majority the free market system is dysfunctional it works to deny them a good standard of living and instead works to keep them poor. Until a government legislates to prevent the abusive practices of the most powerful players in the market the people will continue to suffer a decline in there living standards. Now in Britain for the first time in decades the young will experience a poorer standard of living than their parents. The economy is just not working for the majority of the people.

This is a truth largely unrecognised by the political classes. Discontent so far has been limited to supporting the few politicians that recognise this truth. Politicians that are on the fringe of the political class. In Britain it is the former back bench MP Jeremy Corbyn and in the USA Donald Trump and Bernie Saunders. However if politicians continue to fail to recognise the failings of the current system the discontent won’t be limited to voting for politicians but it will take a more serious and aggressive form. In the last century troops appeared on the streets of Britain and the USA to maintain order. The first combat that the commander in chief of land forces in Europe, General Eisenhower experienced was when he commanded troops to shoot at unemployed ex soldiers protesting in Washington.

What politicians don’t understand is that the economy does not work as described in the textbooks. The unregulated free market rather than deliver the greatest possible wealth to the community, functions instead to meet the demands of the most powerful players, the business corporations. The free market is a dysfunctional economic system in that it fails to maximise the welfare of the people. Hammurabi was right in 1157 BC the market needs regulating so it operates in the best interests of the majority. The state has to ensure a reasonably fair distribution of wealth and to do this must prevent the abuse of power by the most powerful players the big that will prevent this happening. While inflicting bodily harm on the corporate offenders is inappropriate in the 21st century there have be legal sanctions to ensure that company bosses don’t abuse their power. A start would be a recognition that there is such a thing as economic crime and for which the most appropriate sanction is a prison sentence. Why should it not be an offence when company bosses take money out of a failing company to ensure that when it fails they will have a substantial nest egg to cushion them during their brief period of unemployment.

Economists complain that government regulation impedes the workings of the free market, while ignoring that this is precisely what the large corporations do. Microsoft, Apple and Google have all exploited their monopoly power, to rig the market it their favour. The same applies to the privatised transport and energy giants in Britain. Perhaps the best example is the energy company EDF securing a deal that will guarantee them energy payments which most experts agree will be three times the average price paid for energy from their proposed nuclear power station at Hinkley Point.

Economic policy making should be based on the recognition that the market fails to deliver. The priority for government policy should be that of Hammurabi and the various Middle Eastern dictators  and the Social Democrat states of the Europe of the 1960s that is to ensure a reasonable distribution of economic wealth.  A distribution policy that would ensure that even the poorest paid are not short of the essentials needed for the good life. Such a policy would require state intervention in many forms to achieve this end, it might for example involve competition regulation* that would prevent monopolies from abusing their power or changes in the law that equalised the power relationship between employee and employer. Governments must realise that their role is to ensure that the economy is run for the benefit of all not a small minority. They cannot claim as they do at present, that this is an unrealistic aim as history is full  of examples that prove the contrary.

*Britain does have a competitions policy but it is so ineffective that is fails to prevent monopolies or cartels abusing their power. It is as effective as the human rights laws in the old Soviet Union, which failed to prevent millions being sent to labour camps.

Knowing the Correct Nothing is the surest way of advancing in economics and politics

Economics, Politics, , , , , , , ,

Probably it has been remarked elsewhere that ignorance is no barrier to advancement. This is certainly true of the economics. Despite the subject matter of economics being the stuff of existence, economists have little knowledge of the real economy. There are two explanations of this ignorance.

One is the age old bane of economics and that is economists of previous generations have already established all the fundamental truths of the subject and all the current generation of economists need to do is to refine the ideas and practices of the past. They are literally standing on the shoulders of the giants of the past, giants such as Ricardo and Marshall.  Economists established in the nineteenth century that the truth that the free market was the best possible economic system and their contemporaries today see their role as providing the necessary information and advice to enable policy makers to make the imperfect market nearer to the free market ideal. They do not see any need develop and advance the study of economics through a study of the real economy, as they already know all they need to know. The fallacy of this approach can be demonstrated by the famous question the Queen asked of economists after the crash of 2008/9, which was why did none of you know it was coming? The inward looking nature of the subject means they will always be caught by surprise by events in the real world.

The other explanation is that the practitioners of economics in the real world are politicians and all they want is winning slogans that will enable the to win elections. Slogans that mask the truth, that is the very vacuous nature of their economic policy making. Rather than truth what matters is appearance, what sounds right or appears right. These politicians have no interest in those few economists that talk about the complex nature of the economy and the difficulty of effective policy making. They prefer the economist that in Mrs Thatcher’s words ‘give answers’, and these economists tend to be the apostles of a simplistic Neo-Liberal economics. There are dozens of economic thinks tank that for the right money will come up with a simplistic solution, that can be sold as a winning economic policy.

One of such of these simple sellable solutions is the need to cut of government bureaucracy. In this vein both the Labour government of Gordon Brown and the coalition government of David Cameron have boasted about the number of civil servants they have cut from the payroll. It’s a simple solution that everybody knows is right, as if you employ less civil servants you reduce the cost of employing civil servants and you reduce taxation. In such a scenario everybody is a winner, except no politician have ever considered that some of these civil servants they dispense with may perform a service that is essential for the maintenance of the good society. 

Now with the Treasury and every other government department are lacking the core of experienced civil servants that in the past would have advised on policy making. Now they have to buy in the expertise that would formally been provided in house. The bill for consultation on the proposed High Speed Rail link has cost £1/4 billion pounds and is rising, much of this money has been spend on outside advisers from various think tanks and consultancies. One wonders how much less the bill would have been,  if much of this work had been provided in house. 

Perhaps the supreme example of this folly is the reducing the number civil servants is at the tax collecting body that is ‘Her Majesties Revenue and Customs’.  There are only 300 tax inspectors employed in the investigative body that collects taxes from the rich and powerful. Constantly these overworked and under resourced tax inspectors are out manoeuvred by the accountants of the rich and powerful so they frequently fail to collect the tax owed.  In consequence the IMF has laBelled Britain the world’s largest tax haven.

In practical economics that is politics what matters is not being right or having tge correct understanding economic reality, but a sharing the common fallacy and ignorance of the real economy that passes as the public debate. If one listens to the economic spokesman of either party they in the essentials relaying the same message. It never matters in politics if the economics spokesman is wrong, only that they share in the general consensus of wrongness.    

Why there will never be another British Winston Churchill, the theory of political dwarfism

Economics, Philosophy, Politics, society, , , , , , , , , , , , , ,

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Political dwarfism explained

Politics in the UK is dominated by a set of mediocrities, not that this is new, if you read history there is frequently despair about the quality of political leadership. What is not new is the depths to which our current leadership has plunged. They seem to be indifferent to the problems besetting UK society, seeing it as not their concern. At the risk of using an over employed metaphor, they are the band playing on the deck of the Titanic, although unlike that band they are oblivious to the dangers that surround them.

There is one startling example that demonstrates this indifference. In London a housing estate has been taken over by an American property company; that will make the current tenants homeless through the simple expedient of tripling the rents on existing properties to bring them in line with current market rates. Fortunately the tenants have secured a stay on the rent rises which will enable them to stay in their homes over Christmas. Originally the estate was established to provide housing for people on low incomes, a good intent that matters little in a residential property market driven by speculative greed. Despite the publicity given to the plight of these people in the media, the political classes as a whole have remained indifferent to their plight. Even the Mayor of London a man ever eager to court publicity has remained aloof from the tenants campaign. The only public figure to have sided with the tenants is a comedian, Russell Brand. A man demonstrated the commitment that should be expected from the politicians. Instead they are all to keen to demonstrate their helplessness in the face of ‘market forces’. What is so puzzling is why even the publicity seeking mayor like his Westminster colleagues is so eager to embrace this culture of ‘political dwarfism’.

Politics should be about doing, however British politics is about not doing, postponing decision making to the distant and ever receding future or making ‘faux’ decisions. (A decision that turns out to be less than it appears, often nothing more than ‘soundbite’). If decisive action is ever taken its at the behest of some superior force, either the world’s superpower or more usually a large business corporation. So eager are our politicians to embrace insignificance that they are negotiating the Transatlantic Trade and Investment Partnership. This a treaty that will give business corporations a major voice in policy making and the power to veto decisions they dislike. When the treaty is in place, business corporations will be able to bid to run various public services and if denied the that opportunity they can sue the government for compensation for lost revenues. A good example of this is the private health care provider who is suing a local health care trust for turned down their bid. The bid was rejected because because the price was too high. They are asking for a judicial review of the decision because in making its decision the health care authority had not taken into account the private health care providers need to make a profit. Quite probably in the near future private corporations will be deciding what public services will and should be provided by them. The only role for the government will be to sign cheques promising tax payers money to these corporations.

Probably there any many reasons for the popularity of adopting ‘political dwarfism’ as a persona amongst our current generation of politicians. The one most normally cited is the popularity of Neo-Liberal ideology, which relegates politicians to the role of bit players on the world stage. However explanation that interests me is language and the culture that determines how politicians use that language.

Contemporary Political Language

Greek philosophers originally put their philosophy into verse believing that the language of poetry was the best means of explains the ultimate truths of existence. In contrast political language today has very different functions rather than being the language of challenging truths its that of complacency, one of non enquiry, the means for reciting pre-agreed truths and pre-agreed propaganda. A language that obscures and hides truth. The current Chancellor of the Exchequer is a master of rephrasing his language to hide the failure of his policies. We are living in the fastest growing economy in the developed world according to his speeches. What is hidden is that it’s a recovery of statistics, a sleight of hand to hide the emptiness of his political rhetoric. The recovery is a debt led property boom, inflating property values and the property trade, which generates an inflationary increase in national incomes, demonstrating what appears to be a rise in the average incomes of all. Yet the truth is that for the vast majority there has been no increase in incomes, either they are experiencing slow or no growth in their incomes, or working for poverty wages.

One would expect the opposition to make the most of this growing inequality and inequity in incomes, yet all they can offer is a ‘faux’ policy alternative. They will generate a faster growth in the economy, which will boost incomes for all. However it is a policy so light on detail that it is practically meaningless, more a hope than a policy. Politicians seem to have lost the ability to express meaningful truths in language, language for them is the language of non truths, the language of evasion and obscurantism.

Why this decline in the spoken language?

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Politicians have always used language for propaganda purpose or evasion or what parliament calls dissembling (lying), but it was never in the past the predominate use of language. This example provides an interesting illustration of this. When a young man was asked by Lloyd George at house party what he hoped to do with his future, he answered that he was undecided between a career in the navy and politics. Lloyd George advised him to go into politics as he would experience more ‘boardings and mutinies’ than he would in the navy. This politician had a reputation for deviousness, he was the Welsh wizard, yet he introduced the beginnings of the welfare state and led Britain to victory in a world war. Today’s politicians could probably match him for deviousness, yet not for vision. His vision came from an upbringing in Welsh baptism, that imbued him with a sense of justice.

If I can go back to Churchill I can make the point more clearly. Churchill would have studied classics at Harrow and many of his contemporaries would have gone on to study classics at one of the Oxbridge colleges, whereas today contemporary politicians study PPE at an Oxbridge college. This is a significant factor as the education of today’s politicians and the past differs drastically. One classical writer studied on both classics and politics courses is the Roman philosopher Cicero, but who is treated very differently in each subject. Students of classics particularly of Churchill’s time would have seen Cicero as a heroic figure whose command of language was one to emulate. A man whose courage was matched by his oratory. The Cicero they studied was the Cicero who at risk to life and reputation defended in court a man who was the victim of a friend of the dictator Sulla. (Sulla was a dictator who had killed hundreds, when taking over the Roman Republic.) This was also the man who gave up his life to defend the restored Roman Republic. He was such a significant opponent of Mark Anthony (one of the triumvirate of politicians seeking to overthrow the Republic), that he had the murdered man’s hands nailed to the Senate door to demonstrate his command of Rome. In my politics course as is so of contemporary politics courses, Cicero was dismissed as a plagiarist, whose books were copies of better Greek originals. A man who rather than being a heroic defender of the Republic, was a man who took many ignoble actions to advance his career. In the space of 50 years Cicero had been diminished from being a man to aspire to to being to yet just another very ordinary politician motivated by the spirit of self advancement, all be it a good self propagandist. With an education devoid of heroes or heroic figures, an education that trashed the value driven figures of the past, future politicians educated in politics courses were lacking the language of value. A realist education that sees only human frailty and failure cannot but give a very downbeat view of the world.

An observer of the 19th century parliament would have noted that speeches were liberally sprinkled with Latin phrases, speakers tried to out do each other in their command of rhetoric. Observers could drop into parliament to be amused by the wit of Disraeli or the eloquence of Gladstone. The latter a man who on his campaign trails could speak to an audience of thousands for an hour or more and yet command their attention. Today’s politicians could not speak for ten minutes and hope the attention of an audience for that time span but instead they sprinkle their speeches with brief ‘sound bites’ (always of less than a minute’s duration) to capture their audiences attention.

Obviously the decline of the teaching of classics cannot be held responsible for the decline in the quality of parliamentary debates. It is just one factor but one that I think is a predominant factor. Now There is an intellectual culture that values mundanity and the accepted over creativity and originality of thought. A culture that equates any value system or ideology as a fantasy, at best useful for getting out the vote, but nothing more. This culture of mundanity goes by many names, the most popular are post modernism and Neo-Liberalism. While the first is a both a philosophy and a literary theory and the second is an economics, what they both have in common is a contempt for any value driven system, seeing instead a society of things in which values are an alien intrusion.

Why how language is used matters

Language is both a servant and a master, and it is the extent to which it is the latter that explains the mediocrity of the present political class. It is a servant when I use language to get something done, as when I order my cappuccino at my favourite coffee shop. Using it is this way has no impact on my behaviours, it’s nothing more than a request. However language is much more than a means of making requests, it is determines my perception of the society in which I live. Society is one of those strange objects that is both intangible and tangible. I know it’s there it is a given in my life, but it’s not something than I can readily comprehend. I just know it’s there, I know it’s an organised system of social relationships, whose meaning I understand through language. When I go into my coffee shop I am immediately aware that I’m entering a place of structured inter relationships. I know to order my coffee from the barista and not the manager or the chef. All have a identity disclosed in language, which tells me how I should interact with them or even not at all, as is the case with customers to whom I am a stranger. The coffee shop etiquette is something we all learn, and that etiquette is expressed in language. Anybody who fails to understand that etiquette will get bad or poor service.

Similarly the politician has come across a language which explains to them their role and that role within the greater network of social relationships that is the political system. If as at present it is the language of Neo-Liberalism, it is a language of can’t does. Neo-Liberals believe humankind has discovered the perfect social organisation, the free market and their only role is to remove any obstacles that prevent the free market operating. Consequently the voter that expects their MP to do something about the pitifully poor wage they receive is doomed to disappointment. The MP believes in the long term, in the long term the market will right itself and all will receive a living wage.

This stance of ‘doing nothing’ is reinforced by contemporary post modern philosophy that teaches that the higher moral order of which past philosophers such as Marx spoke are only the wishes of a particular age. Socialism was only had meaning in the Industrial Age of great factories, when labour protection and wage legislation made sense, because all did similar jobs in large industrial units. Now when all do very individual jobs in very different work environments, universal legislation covering all workers makes no sense and so it’s right to abolish all worker protections. Also there can in the post modern age there be no universal values as it is an age of extreme individualism. Values are relative to the individual and their unique social circumstances. Although it rarely said any notion of universal human rights is contrary to post modernism. All there can be is a democracy of rights, a competition of rights. Alistair McIntyre when speaking of a debate between two people debating the rights of their own ethical position, likens it to a shouting match. If they have different ethics, there can be no common ground between them which make any meaningful communication between them impossible. They might both be English speakers, but as for any chance of communication between them, they might as well be speaking different languages.

If the members of our political classes, particularly the leadership have been schooled at the elite colleges that teach post modernist philosophy and Neo-Liberal economics they will have been schooled in a culture that has little belief in the efficacy of human agency. Values have no place in the pseudo-science of Neo-Liberal economics and values for a post modernist are little more than an individual’s chosen life style, they have no universal validity. How can the product of such a culture, be value driven as was aWinston Churchill who had a belief not only in the rightness of British democracy, but in Britain’s unique role in the world. In an education system that excludes any education in values from its curriculum it is not surprising that it produce politicians that are only capable of having a mundane hum drum vision of the world. John Major the British PM summed up the current way of thinking, when he spoke of the need for a ‘vision thing’. He was unfairly characterised by cartoonists as a grey figure, when in fact it was a characteristic he shared with his generation of politicians.

How can such language of universal,dullness produce and thinkers of great thoughts? Whether the politician be David Cameron, Nick Clegg or Ed Miliband, all will be indistinguishable to the future historian, just a group of indistinguishable mediocrities that will fail to leave their mark on history.

The Dog’s Opinion or the Received Wisdom of Westminster

Economics, Politics, society, , , , , , , ,

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Kierkegaard has a wonderful phrase which he uses when referring to public opinion, he calls it the ‘dog’s opinion’, in that it contributes as much to public debate and has as much truth value as the barking sounds made by his neighbour’s dog. It is worthless, I put a similar value on the consensus of opinion that passes for the received wisdom of the Palace of Westminster. This consensus of opinion at present has determined that the priority of any government is to reduce the public sector deficit. Only policies that contribute to reducing that deficit are judged to be worthwhile. Trying to make new policy commitments that don’t involve spending any extra money are next to impossible and lead to nonsensical policy statements by our leading politicians.

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David Cameron was the first to make a meaningless sound bite on the flooding problem. He said money would be no object in tackling this problem. Afterwards it was quickly established what he really mean was not what he appeared to be saying. There was to be no extra government money, other than a few small sums to spent on diverting troops to flood control, he was addressing others. What I think he meant was that the insurance industry should not hold back on compensating homeowners for their losses. Not to be out done the leader of the opposition had to produce his own nonsensical policy pronouncement. Ed Milliband said he would commit much more money to resolving the problem than the current government. He then made the statement completely meaningless by saying that the money would not come from extra government spending but through reordering its priorities. However given that most government spending has already been committed to a variety of projects only a small sum of money is available to be redirected to compensating flood victims or spending on flood defences. What he is really trying not to say is that his policy is exactly the same as David Cameron’s.

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One really popular but nonsensical policy pronouncement that comes from all parties in parliament, is that they will improve public services not by spending more money on them, but by reforming them to make them more efficient. What these reforms are and how much each reform will save is never spelt out, neither is how it will really lead to an improvement in service. Fortunately it has never to be spelt out, it is ‘responsible politics’, that it is not wasting public money. Any such announcement of reforms in the public sector, will be met with a warm response in the house, as the received opinion is that this is the correct approach to public service. Any minister that announced extra spending to improve public services would be met with howls of derision in the House, as ALL MP’S know that is exactly how not to improve public services. It’s a waste of money, as only reform will improve services.

Never having considered in any but the vaguest terms what reform means, it always in practice means the following. Cuts in staff numbers, worsening of terms of employment and cutting wages of the remaining staff. The crudest cost cutting possible, which generally results in a poorer service provision. Since the quality of such service provision is impossible to measure, it’s always possible to produce statistics to prove that contrary to what service users experience, that the service has improved.

HMRC into which the Inland Revenue has been subsumed demonstrates this clearly. Prior to the era of the great civil service reforms, which started in 1979, it was possible to ring up and speak to a tax inspector to get valuable and informed advice on tax matters. Now after the great cost cutting years of Thatcher, Major, Blair and Wilson, the same quality of advice is no longer available. What the relatively unskilled, demotivated but cost efficient service offer is a much poorer service. Advice offered is often poor or incomplete, errors are made in tax collection. Tax avoidance has grown exponentially because an underpaid, unskilled inspectorate is no match for the army of well paid tax accountants advising on tax avoidance schemes. When Gordon Brown announced that he was cutting the tax inspectorate by 10,000, he was cheered to the rafters. Those MP’s did not need facts or figures, they knew he was right.

What really provoked my ire was the triumvirate of George Osborne, Danny Alexander and Ed Balls pronouncing on the impossibility of an independent Scotland keeping the pound sterling as their national currency. It was if that if these three great men agreed on something, any opposition is but folly. They claim that if Scotland wanted to keep the pound sterling it had to submit to a currency union with the UK. Ignoring any inconsistencies in their reasoning, they knew they were right. I would want to ask them why this reasoning did not apply to the ‘treasure islands’ of Jersey, Guernsey, The Isle of Man and Gibraltar. Although small in total population, the banks of these ‘countries’ handle many times the quantity of currency handled by Scottish banks, yet their tax policies are contrary to those of the UK. They are in contravention of them as tax havens, yet this does not stop these countries using the pound sterling as their national currency. In fact the inhabitants of the Westminster Palace encourage them to pursue such policies.

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What these politicians display is an ignorance anything outside the approved group think of Westminster. Any cursory knowledge of economic history would demonstrate to them that all kinds of currency unions are possible. The sterling area existed for over a hundred years and countries that wished to use sterling as a trading currency only had to deposit their reserves in the Bank of England. Their currencies were tied to the pound sterling in a fixed exchange rate and they were free to use sterling as they wished. There is no reason why a Scottish pound could not exist in parallel with sterling, but such options are closed off to Westminster consensus.

Another aspect of this group think is a commitment to the ‘purity’ of the pound sterling. The foolish notion disproved throughout history is that if the currency is right all will be right with the economy. While it is necessary for the national currency to have a certain degree of soundness, it is overdone in Westminster’s worship of the pound. Nobody in Westminster seems to know that in the 19th century when the USA experienced phenomenal rates of growth, the dollar was one of the weakest of international currencies. Some of the slowest growth in Britain occurred in the 1920’s when the government put a strong pound at the heart of its economic policy. This strong pound through overpricing British goods wreaked havoc on the export industries.

Words that I dread coming out of politicians mouths are reform and modernise as they always herald the introduction of some new and ill thought out policy measure.

‘Collective unwisdom’ is not a feature peculiar to this parliament, there have been several times in history when parliament has been equally poor. The British population in the 1930’s had a similarly low opinion of Parliament. This is the period in which the Boulton Paul Defiant was built, a fighter plane that I think embodies best the follies of our politicians. After 1938 the British government decided it had to build fighter planes quickly to counter the threat from Germany. One plane they choose was the Boulton Paul Defiant, whose only virtue was that it was cheap to build. This plane had two faults it was in terms of speed about 100 miles per hour slower than its German rival the Messerschmidt 109 and its guns were positioned in the rear of the plane. This slow moving plane was a death trap, as to get the best shot at its German rival it had to turn around so the gun turret faced the German fighter. In the process of turning around it was defenceless and this is when the German fighter shot it down. Hundreds of RAF pilots were killed in these planes without them shooting down one Messerschmidt. It is my wish that one of these planes should be positioned outside Westminster so as to constantly remind them of the limitations of the wisdom of conventional Parliamentary thinking.

When Nonsense masquerades as Economics

Economics, Politics, society, , ,

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Perhaps the most most abused subject by the practitioners of politics is economics. As an observer I frequently get the impression that politicians make economic policy according to their own personal preferences or prejudices. Professional economists usually follow the trend dictated by their leaders. One such nonsense is the claim by our political leaders that it is necessary to get down the government debts to produce a healthy growing economy. It seems to have escaped the notice of our leaders that the reverse has happened. This has been the feeblest recovery ever from an economic downturn, Britain’s GDP still has not returned to the levels of 2008/9. That is the pre crash GDP. This insistence on cutting government expenditure to cut the deficit, has ruined the economies of Spain, Italy, Greece and Ireland and done little more than spread the misery to the rest of they EU.

Economics has become deformed by the simplistic morality of the right. Government indebtedness has become one of the great moral wrongs. David Cameron was explaining this week that over half the money borrowed by the government was accounted for by payments to debt holders. This figure is an over simplification, but any story will do to fool the voters. What is so noticeable is that debt is only wrong if its government debt, debt is fine if its private debt. The debt fuelled housing bubble in London is fine. This government sees nothing wrong with the accumulation of large debts in the private sector. The latest figure shows that private sector debt totals 123% of GDP, even the massaged figures for bank indebtedness shows that bank debt is equal to 150% of GDP. Bank indebtedness according the Bank of England’s deputy government was almost equal to 600% of GDP. Given that the banks have not mended their ways it is unbelievable that government statisticians can claim that bank debt has fallen rapidly to only 150% of GDP. Of all these debts, government debt is the smallest, rising even after years of austerity to about 86% of GDP. To be a politician requires a certain blindness to economic reality, a myopia shared by all the leaders at Westminster.

Prior to the crash and the EU forced austerity, Italy had government debts of about 100% of GDP, yet the same time had a successful economy. There was a trade deficit with Germany, but their deficit was small compared to the debt addicted UK. The public sector debt was not a problem because it was funded debt, the majority of the debt was owed to Italians. That debt would only have been a problem if it had been owed largely by foreigners, as is the case in much of the developing world. There unlike Italy debt is a major drain on the countries resources, particularly as vulture funds frequently buy up this debt and enforce repayment terms that effectively bankrupt the country. Italy was not in the same situation of say, the Republic of the Congo, it was in no danger of being pushed to the edge by foreign creditors. The same applies to the UK.

There is an amnesia about the past in political circles about the past. UK public sector debt in the 1950’s and 60’s was for much of the time well in excess of 100%, probably fair to say it averaged 150% over this period. Yet this was also the time that the UK recorded the highest levels of economic growth in the twentieth century. Similarly the national debt for the period of the wars with France 1786-1815, national debt was in excess of 100% of GDP. Yet again this was a period of exceptionally high growth. What matters is not the size of the debt but whether it is funded and to what use it is put. Part of the high levels of national debt were due to the huge American loan (Marshall Aid) used to help finance the reconstruction of the UK economy.

Politicians accept that it is a good that people borrow to buy a house, that business borrows to fund investment, yet its bad if the government borrows to invest in the national infra structure. The consequences can be of this belief can be seen all too clearly in the USA. Republic President’s Regan and Bush took action to cut government spending on the domestic economy in the USA so as to reduce government debt. The result was the inter state highway was neglected and only recently a road bridge collapsed through lack of maintenance. One government report there stated that a large number of road bridges were in varying states of disrepair, but not I think could be classed as unsafe, they were just on the right side of the safe/unsafe boundaries. California one the richest states in the USA has cut funding to such an extent it is unlikely that they could cope with an emergency caused by an earthquake. It would be a repeat of the New Orleans scenario, where neglect of the flood defences led to catastrophic funding. Fortunately in Britain we have not had as yet to cope with such a major emergency. Could our emergency services cope with a major disaster given the cuts to such services? How much was the failure of the police to respond in sufficient numbers to the riots in London due to financial considerations?

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What the Right and the current generation don’t understand is that there is good and bad public sector debt. Borrowing to build the national infra structure is good, borrowing to finance foreign wars of conquest is bad. Borrowing to cover shortfalls in tax revenue is good as it enables the government to continue with its activities and avoids any disruption to the economy.

The 1950’s provides a good example of good government borrowing. Billions of dollars were borrowed from the USA in then form to Marshall Aid. The money was used to rebuild an industrial infra structure damaged by war.

There is one problem caused by this government myopia. When the government of 1980/81 took drastic action to cut the deficit, the resulting recession wiped out 20% of our industrial capacity. A problem that still bedevils the British economy. The current recovery in the housing market is threatened by a shortage of bricks, due a reduction in capacity in the brick making industry. If there had not been North Sea oil, the 1980’s would have witnessed a series of economic crises brought on by the UK’s ever increasing trade deficits. The austerity programme of the current government has had the same effect, investment in British manufacturing has sunk to very low levels. When the recovery starts it will be cut short by a trade crisis, the recovery will suck in imports of goods that a decimated UK manufacturing will be unable to provide. Already at our current low levels of growth, the UK is predicted to have the highest trade deficit of any developed country. A debt fuelled consumer boom can only make that situation worse.

How can the naivety of our current leaders be explained. Our government is one of the best educated in history, almost all have been educated at our elite universities. The same applies to Parliament, it’s full of Oxbridge graduates. Yet the level of debate on matters of economic policy is abysmal. The yah-booing of Prime Ministers Question is a true measure of the lack of sophistication in the political debate. Possibly this contempt for reality and preference for the imagined world of the Neo-Liberal, is due to the simplicity of the Neo-Liberal story. Hayek’s ‘The Road to Serfdom can be read in the brief span of a wet afternoon. It over simplifies the economic reality, providing a few simple phrases that even the dimmest of MP’s can grasp. In the jargon of today it is not intellectually challenging. It is the illusory promise that Neo-Liberalism makes of easy but decisive policy measures that will change the world, that makes it appealing. It offers simple ( if wrong solutions) to complex economic problems. Given the concentration of political minds on the mechanics winning political points in the context of the Westminster debate, any intellectually lite discipline is welcome, as it economic decision making will require little effort and time freeing the politicians time to concentrate on the real business of politics, the machination of intra and inter party politics.

Perhaps another reason is the loss of confidence within our political class. In the 1960’s a confident USA boasted that the space race cost less than the USA spent on cosmetics. Today the space race is too expensive. The US and Britain seem to be opting out of the grown up world, the governments of both being unable to make decisions. British leaders at present present a pitiful spectre, travelling the world begging it to invest in the renewal of Britain’s infra structure.