Tag Archives: Scepticism

The dogs opinion – letter to my daughters 1

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

I have reached that time in my life when I find it impossible not the look back on my life and reflect on it. What I don’t intend to do is pass on my wisdom to a younger generation, all too often age is confused with wisdom. There are plenty of foolish seventy year olds around, certainly in sufficient numbers to disabuse me of any notion that age might in some way equate to wisdom. Instead passing on my tenets of wisdom, I make will some observations on life in general.

Kierkegaard is one of the most profound observers of humanity. One of my favourite sayings of his, is that public opinion is the dogs opinion. What is often claimed to be received wisdom is often nothing more than a series of fallacious understanding believed by the majority to represent truth. There are many occasions when society is swept by new and compelling misunderstandings of society and human behaviour. I say swept because even the most intelligent of people feel obliged to subscribe to the current nonsense that will now pass as accepted wisdom. Brexit Britain and Nazi Germany can be used to illustrate how public opinion can be corrupted

National socialism was the passion that gripped Germany in the 1930s. Jews, Jewish thinking and Jewish ways of behaviour were held have corrupted Germany society and to be responsible for the malaise into which Germany had sunk. Germany to recover its national health and natural vitality had to rid itself of this alien virus. A return to the Germany of folkloric heroes, men and women the becoming equals of the heroes Nibelungenleid. Once Germany was freed of the alien virus of Jewish cosmopolitanism this happy result would be achieved.

Brexitism is a nationalism similar to nationalism which swept through Germany in the 1930s, both identify an alien virus as being responsible for national decline and decay. Although in this example the alien virus is Europeanism, our national spirit Brexiteers believe has been sapped and fatally weakened through contact with European cosmopolitanism. Just as with the Nazis the solution is to eradicate this virus from U.K. society. What is proposed is a violent break with the greater Europe or the EU. Britain will be returned to splendid isolation on the of an island situated on the edge of Europe. Geographically European but politically anything but.

Not surprisingly the government’s of both countries adopted similar solutions to this problem. Expel those responsible for spreading the virus. Although the expulsion policy was less brutal in Britain, it is in essence it is similar to that of the Nazi’s. If people are denied to right to work and reside in the country, they will leave. In Britain it has been this has been enforced through the hostile environment which denies Europeans the right to remain in this country, while in Germany it was the violence of the brown shirts.

Brexitism is a nonsense, but a nonsense that is increasingly held by the political elite. A nonsense that is beginning to permeate all levels of society. In the 1960s it was believed that the quality of parliamentary democracy would be improved by the influx of educated graduates as MPs. Yet it is these very people that have become enthusiasts for Brexit. It is as if are governing classes are gripped by a religious fervour, a fervour that prevents them accepting anything contrary to their belief system.

The parliament of local squires and trade unionists of the past so derided by political commentators in the 1960s; was the one that withstood the fascism of Mosley and his blackshirts and resisted Hitler in the dark days of 1940. Today’s parliament of graduates (often educated at the elite universities) have surrendered their integrity to nothing more than a media campaign led by a group of populists.

Nietzsche despite being claimed as one of there own by the Nazis was nothing of the kind. He was a fierce critic of German nationalism seeing it correctly as yet another non thinking belief system of the majority. It was for him the wisdom of sheep, the herd instinct, the wish to fit in and be the same as the others. An unquestioning desire to live like others. This is why he opposed democracy, believing that it would give power to the undistinguished middle classes. As today’s parliament is drawn overwhelmingly from the middle classes, it is worrying to think that Nietzsche might be right. The next Prime Minister is criticised for being a follower of public opinion. In the words of one critic he sees which way public opinion is going, and then rushes to the front saying follow me. If this critic had been brutally honest, he would have said that the same is true of the majority of MPs. Unfortunately we are led by a parliament of sheep that are constantly looking for somebody or something to follow. Prior to the referendum of 2016 the parliamentary sheep believed that public opinion favoured remaining in the EU, now although by a small margin public opinion was demonstrated to be the contrary, these sheep switched sides. Truth they believe resides in majority opinion.

Returning to Kierkegaard he believed that it did not matter, if only one man believed the truth. The truth was the truth no matter how many believed it. Therefore it was of no consequence, if what the majority believed was wrong. He took this belief to extremes, believing that the Danes were insufficiently Christian lived a life contrary to the mainstream, provoking controversy about his person hoping his example would lead Danes into changing their lives. His appearance helped in his task as he looked distinctly physically odd. One leg seemed shorter than the other, his badly fitting trousers gave that impression. He tried to be a Danish Socrates button holing people in the street and engaging them in a conversation through which he demonstrated the unsoundness of their beliefs. As a figure of controversy and mockery, he certainly was a lone speaker of Christian truths. The isolation and mockery made him convinced that he was a martyr for the truth. He found this martyrdom unpleasant, but thought it necessary to bring Danes to a sense of the truth. Although his martyrdom failed to change any minds, his books did for so later generations, who appreciated his unique approach to truth.

What Kierkegaard and Nietzsche shared was a scepticism of the received truth. This isolated them from there fellow men. Truth is often more offensive to people that the accepted lies by which live their lives. A knowledge of the thinking of the sceptic philosophers is the best protection against the fallacious enthusiasms that periodically sweep through society which carry others away. I cannot believe that anybody schooled in scepticism can believe in nonsense, such as that preached by our Brexiteers.

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Against Riches

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Socrates is perhaps the first of the great philosophers and he was hopeless with money. His wife was driven to despair when he instead of working at his profitable trade as a stone mason, he spent his time in philosophical discussions with his friends in the market place. There is some dissonance between philosophers and wealth. Even when such as Bertrand Russel they inherit wealth, they usually mismanage it and bequeath their heirs less wealth than they themselves inherited. Wittgenstein was a philosopher in the true socratic tradition, he gave the estates he inherited to his brother, as managing an estate would be a distraction to his study of philosophy. There is something about the love of wisdom that causes philosophers to disdain wealth.

Wealth does seem to produce trivial or just plain silly thinking in the people that possess it in abundance. Possibly best demonstrated in the life style website Goop of the actress of Gwyneth Paltrow. There one can find all manner of bizarre lifestyle practices that are claimed to enable the practitioner to lead a better life. While such sites are easily mocked and are of little real significance, what is disturbing the reverence with which the thoughts of the very rich are treated. Billionaires think that the possession of such great wealth distinguishes them from the common run of mankind. They see themselves as supermen, who think that they should be privileged not just for their possession of great wealth, but for there thinking, they are the thinkers of exceptional thougts. I remember reading as a child that the common man would be out of their depth at the dinner table of the Mountbatten’s*, because these gifted individuals thought thoughts beyond the comprehension of the ordinary man.

These ‘great thinkers’ can rely upon myth makers to weave a story that demonstrates their superiority. Ayn Rand is the latest of the myth makers who claim the possession of great wealth as an indicator of a great mind, a person who is one of society’s shakers and movers. Prior to that it was people such as Lord Blake who claimed that membership of the aristocracy was the best qualification that a person could have for leadership roles in society.

Yet when the thoughts of these great men are examined, they are notable not for there genius but their mediocrity. I remember reading of what billionaire who claimed to be able to solve Britain’s unemployment problem. He claimed that it could be done by abolishing the minimum wage. What he claimed was that the current wage rates made too many people to expensive to employ, therefore there was unemployment. Obviously if wages were cut all would be employed. What never occurred to him was that a certain minimum level of income was necessary for human survival. The fact that low wages would lead to hunger and other social ills was of no consequence to him. For him the poor never featured in his thinking as fellow human beings.

The question I want to answer is why does the possession of great wealth make it impossible to think great thoughts. I am not condemning the possession of wealth, just the possession of great wealth. As a person of modest wealth that would be hypocritical, I do believe that there is a certain minimum level of wealth that is necessary for the good life. There is no virtue is not being able to pay the bills.

When trying to ask why such ordinary men believe that they alone are uniquely gifted with knowledge denied to others, one answer is arrogance. The vast majority of the wealthy were born into wealth and as such from the very moment they were conscious, they expected to be deferred to by those around them.Whatever they said would be treated with respect, no matter how silly their ideas. Growing up on a country estate, I soon learnt that the greatest misdemeanour was to show disrespect to the seigneur or a member of his extended family. Disrespect meant uttering some disagreement no matter how moderate the thoughts expressed by a member of this group. The father of the current seigneur demanded that his workers only spoke to him if he spoke to them first. Anybody who disrespected this rule was immediately dismissed. While this is an extreme example, it does demonstrate how privilege of birth leads to the corruption of the intellect.

All of these people it can be argued have been educated at our elite universities, so they should as Lord Mountbatten thought be better educated than the common place individual. However such education seems to be designed to give them an elegance of expression rather than of thought. All the lazy prejudices of the wealthy are given a literary sheen that makes them when expressed appear profound. A friend of mine who was a former member of the working classes, always criticised Bob Crowe* when he appeared on television for the inarticulate nature of his expression and thinking. What he was doing was equating a limited verbal vocabulary with an unsophisticated manner of thinking. Yet I never heard him utter such criticisms of the various representatives of the employing class or the political right who appeared on TV. He as with all of us was over impressed with an elegance of speech which disguised a vacuity of thinking.

Probably it helps that the ideas of the wealthy are so often part of the mainstream of the public dialogue.  In an unequal society the ideology of social and intellectual inequality is one of the essential props necessary for the perpetuation of the system. Therefore it is easier to get one’s thinking accepted and into print if such thinking accords with the accepted belief system. Finding a publisher is much easier if an individual writes in the language of the mainstream. The media then confirms the thinking of the most mediocre of the class of the wealthy. It really should be of little surprise that the wealthy and privileged should think that their thoughts are those that are correct and true, as they are rarely exposed to contrary thinking in the media.

What I want to argue for is the superiority of the thinking of the lower middle classes, a group for whom life is often a struggle. This is not a struggle for survival but a struggle for success. A struggle to gain those material goods thought necessary for the good life. Yet they are also group which has sufficient leisure for study and whose education introduced them to the writings of the great thinkers of the past. Aristotle was a doctor and as such is one whose life is an exemplar for the middle class thinker. There is no privilege, one has to earn the right to heard, one has to compete within the market place of ideas. Not having a privileged status one is denied to opportunity to think stupid thoughts, as such thinking would be ridiculed. Isaiah Berlin wrote that the case for right wing philosophy is almost impossible to make*. A reasoned philosophy cannot have as it’s founding principles self satisfaction, complacency, greed or the abuse of power. When people such as Lord Blake defend privilege they rely upon tradition, they see tradition as the passing down of a superiority in thinking and manner from one privileged generation to another. Bear and bull baiting were traditional sports practised in Britain for centuries, yet this did not make them right, both were justly outlawed because of they were barbaric. Blake’s defence of privilege is equally fallacious.

Not having a privileged upbringing makes one aware of the inequalities and unfairness of human society, whether one wishes it or not you are constantly being reminded of the failings of that society. One is born a critic of society, a discontent being inured which makes one instantly critical of existing human practices and ideas.  Without this critical faculty, thinking becomes trivial ,insubstantial and uninteresting, it is the thinking of the self satisfied. This sense of a lack of an indefinable something in society is what drives us to look for new and different answers. Kierkegaard writes of the abyss, the point at beyond which the thinking person comes to that point at human thought ceases provide any meaning to life. For Kierkegaard it is at this point that people turn to Christ. Only Christ can provide this missing something . Although I love Kierkegaard as an author, I would suggest that this sense of an abyss instead forces on one a recognition of the inadequacy of existing ideas and the desperation to seek new answers.  I don’t believe philosophers can ever adequately answer the problem posed by the abyss. Every generation will find fault with existing thinking and will feel the need to find new answers to the challenge of the abyss. It is the reinventing of the wheel but a very profitable reinventing. Being born to wealth means the sense of the abyss will never be as acute, as wealth can always buy distractions from the abyss. Possibly this is why the life of the super rich is one of conspicuous consumption, they constantly need new toys to distract them from the emptiness of their lives.

If the rich and privileged are not capable of great thoughts, I would argue that they are disqualified from great holdings of wealth which give them power over the lives of others, which they are not qualified to possess. There is one contemporary example which demonstrates the unfitness of the rich to their wealth. Hugh Hefner the millionaire publisher used his magazine ‘Playboy’ as a vehicle for promoting his thinking and superior lifestyle. A man whose written thoughts were no more than a manual on how to exploit young women, which demonstrates the essential nastiness that is at the heart of the culture of the rich and powerful.

* A former member of the Royal family at whose table the now Prince of Wales regularly dined.

  • The former leader of the RMT union who in negotiations regularly outsmarted his opponents. Men all of whom had been educated at the elite universities and whom one would think would be superior in the skills of reasoning and argument. I do suspect Bob Crowe overplayed his inarticulacy, so as to give his opponents a false sense of superiority.
  • One exception to the rule is Michael Oakshott, but his conservative philosophy was a philosophy of scepticism, which was inherited  from the Greek philosophers of scepticism, men such as Pyrro and Sextus Empiricus. Reading Wikipedia `I see that I have a very different understanding of Michael Oakshott to that of the author of an article on him.

The nonsense politicians speak on economic matters (a decoding of politician’s economic speak)

Economics, Politics, , , , , , ,

What people don’t realise is that when politicians speak on economic policy matters, they don’t really know what they are talking about, its just a glorious pretence of a speech. Their speeches are usually peppered with phrases supplied by their speech writers to create the impression that speaker is knows what they are talking about. Often this is done through the spurious use of statistics and handy method of knowing when a politician is pretending to a knowledge they lack is the number of times they refer to statistical evidence in their speech. The more statistics in a speech the more likely the politician is totally ignorant of the issue they are discussing. Politicians differ from economists in that economists know that they know something about the economy but the not everything and the speech of a good economist is cautious. Economists don’t wish to claim a knowledge they lack, whereas a politician would never admit to their ignorance.  Their sense of amour propre would never allow them to appear as lacking in knowledge. They are the solvers of mankind’s problems and unlike the common run of mankind they never admit to any failings.

What I hope to do is this essay is reveal some of the real thinking that underlines much of policy making.

The most common policy is  the ‘wishful thinking’ economic policy. This policy making is usually to be associated with the new right, although the new left can also be guilty of the same. Wishful thinking policy making is based on a wilful ignorance of economic realities or to put it more succinctly a wishing away the facts of economic life. Of all the developed countries Britain has the largest trade deficit as a proportion of national GDP. The simplest and most correct explanation is that the country is no longer producing the goods and services that other countries want. The solution would usually be to develop an industrial strategy that encouraged businesses to focus on producing those very goods and services that other countries want. This is wrong according the EU leavers as what is preventing our exports abroad is EU regulations, which prevents us exporting to countries outside the EU. However there is nothing in EU regulations that prevents the UK exporting to any country in the world. This analysis would only have any validity if there are as yet undiscovered countries to which the UK can export, as all the known and existing countries are already free to buy our goods if they want them.

Another common form of economic policy making in the UK, is that it will be all right on the day policy. This thinking can be summed up in a few words, in the past many serious crisis which have occurred and yet the nation rose to the occasion and survived relatively unscathed. If it had not we would not be enjoying the level of prosperity that we do today. Why look for trouble when it can be avoided. Mrs May’s government will not put into practice any serious measures to prepare the economy for Brexit, as there is the belief that the country which managed the 1940s existential crisis  will somehow manage the 2020s EU exit quite comfortably. Complacency might be another word to characterise this policy. The Chancellor’ claim that his was a budget that prepares for Brexit will be shown be meaningless. No action is proposed to counter any negative impacts of Brexit and the so called reserve to cushion the economy through Brexit will be shown to be largely a figment of the Chancellor’s imagining. Another phrase to describe this type of policy making would be hoping for the best policy making.

Big gesture little action the policy making of fear, the fear that any policy introduced could make things worse. Nothing scares a politician more that being blamed for a bad policy. To be fair to politicians rather than do nothing, they do tend to produce distractors which are small easy to make policy changes, which function to distract from the real problem. This is why the budget is always about small changes in tax and never about big policy measures to tackle the real problems afflicting the nation’s economy.

Elephant in the room economics (very similar to the previous policy), this is when the politician ignores the real problem and instead focuses on a smaller less significant problem which they believe will focus attention away from the major problem. The annual budget statement is a conjuring trick in which the government produces lots of small policy measures that capture the attention and distract from unpleasant reality. The one great problem of today is the growing level of household debt which reached the level of 160% of GDP prior to the crash of 2008 and is today nearing the same levels. Rather than take action to reduce this debt which would in effect make people poorer and be very unpopular, the government prefers to do nothing. It is sleep walking into yet another financial crisis, a policy which also has the advantage of postponing the coming crisis into the future and making it the responsibility of a future government.

I could make this an endless list but my intention is to introduce some scepticism about the grand policy claims of our political leaders on matters economic. There was a famous American journalist Louis Heron, who said his approach to interviewing politicians, was to think ‘why is this lying bastard lying to me’. This `i would rephrase as why is this ignorant bastard trying to pretend to me that they know what they are doing.

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.

A Surfeit of reform – the mess that is the British Education System

Economics, Education, Philosophy, Politics, , , , , , ,

My understanding of economics is derived from scepticism, the philosophy of Sextus Empiricus and Nietzsche when at his most lucid. The sceptic knows that nothing is true that there is no certainty in human knowledge. What ever the answer posed to a problem at the best it is but a partial answer. Sextus Empiricus was sceptical of human knowledge that he thought it best society continue in the same old tested and proven ways, as given the limitations of human knowledge any reforms proposed by the philosophers would inevitably worsen the human condition. This is illustrated by the probable apophrical story about Plato. Dion the tyrant of Syracuse invited the philosopher Plato to advise on improving Syracuse  society. His reforms proved to be totally impractical and caused nothing but discontent among the people so much so  that an angry Dion ending up selling Plato into slavery. However I would not go as far in my scepticism as Sextus as society is constantly changing and keeping things in the time honoured way is impossible. However a sceptic such as myself knows that all the grand theories of economics are untrue, they only contain at the best only partial truths.

Siracusa-sicily-italy

Syracuse, Sicily

Economists have observed that if a good is in short supply its price rises so encourages producers to produce more in the expectation of increasing their income. This is an indisputable truth but the free market theorists develop this further claiming that changes in price  will cause the market to move into an equilibrium where supply equals demand. It is this last statement that as a sceptic I would contest. There is no evidence that markets ever move into a state of equilibrium, as demonstrated by the housing market where demand has exceeded supply for decades. All that can be said is that market theory which states that price is the means through which supply and demand are brought into equilibrium is unproven.

There is one good example of the Plato school of economics in action and that is the mess that is the British education system. Concern was expressed in our governing circles about the poor quality of the British schooling system in the 1980s. A model for reform was found in public choice theory which is the application of market principles to public services. The local covered market in my city in which there are competing fruit and vegetable stall holders is a good example to explain the purposes of the reform. If one stall holder in the market sells produce that is of a poor quality or too high a price, they will lose sales to their rivals. Consequently competition between stallholders ensures that only good quality produce is sold at he lowest prices. Reforming politicians decided that the system that worked so well in the market would work well if introduced into the provision of public services. All that had to be done was to convert schools into the equivalent of competing fruit and vegetable store holders. Legislation was passed to achieve this and now there are a variety of competing state schools, academies, technical colleges and free schools to name but a few.

However this new market system of education has one huge flaw. There is no central co-ordinating authority to ensure that supply of school places matches the demand for school places. The problem that arises is that it is impossible to organise all these independent competing school to provide the number of school places needed. All the government can do is to encourage or cajole these competing schools into providing the required number of school places. However each school is responsible for its own finances and is not invest in providing the facilities for extra students unless they can be sure the places will be filled. They will respond after the event when there are a surplus of children unable to get into schools, once it is obvious that there is a need for places the school will respond. However there is one other caveat it takes time to create additional school places, it will require investment in buildings and new teaching staff and the consequence is that there will always be a time lag between demand for school places and the provision of those places. Leaving school provision to a market comprising several independent competing schools only ensures that demand will never match supply, so the provision of schooling for each child takes second place to preserving the integrity of the market, though a policy of non interference.

What I would say as a sceptical economist is that what is a proven truth in one sector of the economy cannot be easily or effectively transposed into another different sector, which may effectively run better on different principles. The free market principle of herding cats is not the best principle on which to organise the provision of school places and schooling in general.

Unfortunately the belief in the beneficial effects of the free market is so deeply imbedded in the political culture of the country that even the free market reforms produce some obviously dysfunctional results they are ignored.

Silly and childish economics, the perspective of a Christian sceptic

christianity, Economics, society, , , , , ,

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Perhaps it is less so now, but when I was a first year economics student there was the inevitable lectures and seminars on the nature of economics. What we students were supposed to understand was that economics was a value free subject, a subject whose analyses were not skewed by individual value judgements. The techniques employed by economists offered an objective means for finding solutions to problems not influenced by ideology. In theory economists can offer objective impartial advice to both right of centre and left of centre politicians. Their arguments for example, against legislation to protect workers incomes is not part of a centre right ideology but based on sound economic analysis economists would state. Governments that set artificially high wages are more likely to cause distress by creating unemployment which adds to the misery of the working classes. Most famously demonstrated in Samuelson’s case of the New York tailors who secured legislation to guarantee high wages only to see their jobs disappear to the low wage tailors in Puerto Rico. This can be demonstrated by through the use of marginal revenue product analysis, which is a rational non ideological truth.

However this claim to value neutrality is fallacious as a very strange value laden ideology has been smuggled in through the back door. Underpinning much economic analysis is a simplistic social Darwinism. Darwin states only the fittest survive in the evolutionary struggle and in economics theory only the strongest business best adapted to the market survive. The theory of ‘creative destruction’ whereby only the strongest businesses survive after a period of intense struggle in the competitive market is nothing other than social Darwinism. The pain and suffering caused to humanity by pursuit social Darwinism theories are irrelevant; they are of one mind with the eugenicists such as Chamberlain, who saw the pain of eliminating the undesirable human elements as a price worth paying to save the human race. Yet coexisting with this social Darwinism is a strange Panglossian optimism, which believes that the free market economics and society is the most perfect of all possible societies. These advocates of free market economics believe that like some latter day Leibinz (who believes a good God was incapable of creating a less than perfect world), the market economy is incapable of delivering nothing less than the perfect world

When stated in its barest and simplest form the fundamentals of economics seem just plain silly. Yet as critical thinking is absent in the study of economics, as most economics faculties operate like some latter day religious cult. They reveal step by step the received truths of economics and students become acolytes who preach the received truths to unbelievers. To prevent being swallowed up in this nonsense it is necessary to achieve some distancing from the subject; another perspective that enables you to separate the economic ‘wheat’ from the economic ‘chaff’. What economists need is an ethical standpoint that enabling them to distance themselves from the subject, taking a more objective standpoint.

Christianity has enabled me to distance myself from the subject. It has imbued me with a healthy scepticism towards the follies of trending intellectuals. However my Christianity is not of the usual form. Fortunately the Anglican Church has a tradition of tolerating heretics such as myself.

The starting point for my personal philosophy is two fold. A childhood immersed in the Anglican theology, I was a choirboy at St. Peter’s church and a study of theology at York St. John when I was made redundant in my fifties. This has I think given me two perspectives on Christianity, the child like vision of God as a loving father of his children and a more reflective understanding of a sixty year old negative theologian. I think that despite my sophisticated theological training in times of crisis I tend to revert to my child like faith for consolation. It was perhaps my child like faith that enabled me to hang on to my sense of there being a truth, even though scepticism dominated my philosophy classes a scepticism which repeatedly demonstrated how fallacious were my most cherished longest beliefs.

There is a trite phrase that states something along the lines that each generation creates their own Christianity to suit their own beliefs. This is the belief of the traditionalists who regard many of the contemporary religious practices and beliefs as a passing fancy and that The Old Testament truths such as the condemnation homosexuality are one of the eternal truths to which the church will return once the current fads in religious belief have passed away. They cannot recognise that religion evolves into a progressively more sophisticated forms along with advance of other forms of human knowledge. They would accept that science and medicine have evolved into a more advanced understanding of disease, yet they cannot accept that religion must evolve in the same way. It cannot be locked within the beliefs and practices of the early Christian fathers.

Any starting point for a new Christian interpretation must accept that much of ‘The New Testament’ is nothing more than a series of forgeries. The four gospels were written not by the apostles Matthew, Mark, Luke and John, but by writers writing after the fall of Jerusalem in AD 70.; when it is highly unlikely that any of the apostles were still alive. Probably this is why the four gospels do not agree on the life of Jesus in particular with the details of the crucifixion. Matthew for instance makes only reference to the crucifixion but not the resurrection. The bible we read today is the creation of the Christian Fathers who selected which religious texts to include in the bible. Rather than dismissing the bible as a simple work of fiction, it should instead be recognised as the way of expressing the truths of religion in the language of its times.

The myths that populate ‘The New Testament’ must be seen as Karl Jaspers explains as the only possible way of expressing difficult religious truths. God is essentially unknowable, yet we must have some means of expressing our knowledge of God.

The supernatural should not be taken to mean that there is some religious super being who has powers beyond human comprehension; but simply a being who exists beyond or outside the natural world of human understanding. I accept the truth of Jesus’s miracles not as true stories, but as a person of the 1st century AD struggling to explain the concept ‘Godness’. We all know what the word God means, but struggle to explain it. The religious myths of The New Testament give expression to our sense of what God is and what it means to be God. Christ did not walk on water but he was unique and different from other men. How else could a religious writer explain this difference from other men except by granting Christ miraculous powers?

Negative theologians can be mocked for worshipping an unknown God. Bertrand Russell long ago mocked Christians for believing in an unknowable, invisible God, as he in his experience was unlikely ever to come across such an being. However our answer is that God makes his presence felt amongst us, he pushes himself into our existence and it is this presence that we can know, so this unknowable God can be known.

This I can express through my understanding of the concept good. Everybody knows what good means yet they cannot explain it except through describing good actions. Visiting and comforting an ill house bound neighbour is good, we can describe the good action, but not the essence of goodness. God for me is the essence of what we understand by good, Good is God’s presence within society. A presence which gives the meaning to our moral actions. I am what is more correctly termed a Neo-Platonist; yet I believe than people such as me are part of the Christian consensus.

What is needed is a new set of myths for a contemporary Christianity. How can an ethical language forged in the early centuries AD combat the contemporary social Darwinism of the new economics? A language that is completely at odds with the culture of our times. Even the simplest and dumbest of parliamentarians can understand the simple truths of Neo-Liberal economics. What is needed is a new set of contemporary myths that can counter this ideology, yet simple enough for even the least bright MP to understand.

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Misplaced Scepticism – Public Choice Theory

Economics, Politics, society, , , ,

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Today when reading my paper my eye was caught by the headline for an article on the ‘Benefit Culture’. The journalist is a self proclaimed sceptic and his articles exposing the follies of the great and powerful make good reading. Scepticism is the necessary tool of the journalist, only the journalist has the licence to speak the truth to the powerful. This scepticism has permeated upwards from the journalists to the politicians in contemporary Britain. Disappointingly the scepticism in its upward trajectory has morphed into a shallow scepticism, a scepticism of the type that ‘everyone knows’, known as ‘public choice theory’ it is one that sees public servants as only interested in feathering their own nests. A scepticism derived from the stories circulating amongst the great and good. They know for instance that NHS consultants don’t operate on Friday afternoons, as they want an early exit so they can get a round of golf in before tea. If they are making an early exit so it is more likely to being doing so to attend to their profitable private practice to service the needs of the great and the good.

Public choice theory states that it is mistaken to put more money into a public service to improve the quality of service, as that money will be spent on public servants on increasing their salaries, recruiting more staff so as to push the existing members up to higher levels of management to manage all the new staff, anything except improving the service. The solution is to introduce the free market into the public service, if public servants had to work for a private corporation they would be motivated to provide a better service. If service users become customers they will have a choice of service providers. Those that provide a poor service they won’t be used, so they will lose business and income putting so salaries and jobs will be put at risk. Only the discipline of the market can ensure a good quality service for users say its proponents. This is why the UK government has put most of its services out to tender. Security is no longer provided by the public services but is increasing replaced by private contractors, mercenaries instead of soldiers contractors provide security on dangerous overseas missions. Mercenaries instead of the army provide security on merchant vessels under threat from piracy.

Public choice theory is a foreign import, imported from the USA. Where it’s most vocal exponent is Charles Murray, a libertarian who has written ceaselessly on the evils of the state provision of public services. Know doubt his books are required reading for government ministers, along with Hayek and Friedman.

Kierkegaard devised a classic phrase to describe the thinking of the type ‘everyone knows …’ or what passes as public opinion. It is the ‘dog’s opinion’, that is equally meaningless as the noises that emanate from my dog’s mouth.

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Being imbued with the spirit of scepticism the government is paralysed by a crisis of indecision. If it wants to undertake a large scale infra structure project, such as the construction as the high speed rail link between London and Birmingham, it can’t trust the project to civil servants. Civil servants would spend a large proportion of the cash on themselves on either self promotion to higher grades or spending it on new departments to take on the responsibility for the project. All of which would make the project far more expensive than if undertaken by a private construction company. To avoid this problem, the government employs for-profit private consultants. At present a £1/4 billion has been spent on HS2 largely on consultant fees. To this outsider it does not seem to be the cheaper option.

Entrusting private sector companies to project manage and construct government infra structure projects can lead to all sorts of problems. When the Labour government decided to upgrade the London Underground system, they awarded most of the work to a consortium of construction companies, who would project manage the project and also undertake the construction work . They awarded the contracts to themselves at very generous prices, with the result that the money long ran out before the project was completed.

Public choice theorists in government believe that the civil servants can’t be trusted, as they are only interested in feathering their own nests. To reduce the scope for the abuse of public funds, as few as possible of them should employed. Conservative and Labour governments have made it a priority to get rid of as many state employees as they can. This can have unfortunate consequences, the HMRC has been slimmed down so much that it tax collecting powers have been severely diminished. Now as a consequence the UK comes increasingly to resemble Greece, where large numbers of individuals and businesses avoid paying tax. Three of the multi national giants (Google, Microsoft and Starbucks), while earning vast revenues in the UK pay little or no tax on their incomes.

There is a solution to the crisis in government and that is a return to the mixed economy or Social Democracy. In the Social Democratic state it is recognised that it is the role of the government to provide those services which the free market cannot provide effectively, such as universal health care and education. This however will not happen while the current generation are in power. Conservatives, Labour and the Liberal Democrats are all wedded to the ideas of Neo-Liberal and ardent practitioners of public choice theory. Only when the next financial crises comes is there any chance of change. Hopefully after that the three main Neo-Liberal parties will be decimated at the polls and replaced by a new generation of politicians with very different ideas.