Tag Archives: second world war

Warning signs

Sometimes as an economist you notice things that others don’t. Today I visited the centre of the city in which I live and for the second time this week, I noticed that the cafes and shops were relatively empty. One reason is the belt tightening that invariably happens after the Christmas shopping spree. The other reason is more ominous and that is that the uncertainty generated by fears about Brexit which are causing people to be more careful with there spending. In times of uncertainty it is sensible to be cautious about spending, it makes sense to increase one’s savings to protect against future uncertainties. All the extra spending on credit cards that was recorded last year will come to a halt once people start to fea the future. They won’t want to saddle themselves with extra debts.

While the evidence I present is only anecdotal this is how economic downturns start. Consumers become more and more cautious with their spending  because they fear for the future. This action becomes something of a self fulfilling prophecy as failing consumer spending means that firms cut back on there spending on staff and purchases of stock. Gradually at first but then more rapidly people become poorer, because of falling spending by businesses and the down turn in economic activity can  within a short time develop into a recession.

These downturns occur because of flaws in the economic system,  as happened with the financial crisis of 2008/9 or because of misguided economic policy making. The second is happening now. There should be a golden rule in politics, that governments never take action that might be detrimental to economic welfare except in the most extreme circumstances. The problem about such actions is that there is no way of foretelling whether the action taken by the government will lead to an uncontrollable downturn in economic activity or whether it will result in a more modest adjustment.

There is a terrible warning that all politicians regularly fail to heed. When the Prime Minister Jim Callaghan returned to the country in 1976 from an overseas trip, there was a crisis developing in the financial markets. He made a foolish remark in response to a journalists question about the crisis, he said ‘what crisis?’ This gave the impression that the government was not in control and the financial crisis rapidly got out of hand.

Yesterday the Prime Minister Theresa May had her Jim Callaghan moment. She stated that Britain will be leaving the single market, giving the impression to informed observers that she had little grasp of economics. The EU is the largest market for British exports and announcing that she intends to make it more difficult for British firms to access that market, is an act of supreme folly. Today two banks announced in response to her speech that they are moving some banking operations to Europe. There will be many more such announcements in the following weeks and months. This will generate fear and uncertainty amongst British consumers, leading to large cuts in there spending, as they save more and more for the expected rainy day. The consequence is that it likely that later this year  that the economy will tip into recession.

Unfortunately the folly of her decision is compounded by the school boy howlers  made by her ministers. Today the Foreign Secretary compared the attitude of the French President to Brexit to that of a Second World War prison camp guard. Such remarks will merely serve to convince the financial markets that this government has little understanding of the economic reality and has but a very weak grasp  of the essentials of policy making.

As I said in the second paragraph my evidence is anecdotal but the incompetence of this government makes me fear for the future.


Fundamentalist Religion and the Economics of Fear


A Rural Christian Childhood

When I remember when I was young and staying at an aunt’s house I picked up a copy of John Bunyan’s ‘Pilgrim’s Progress’ to read before going to bed. It was a old edition illustrated with what I imagine were wood cuts, which terrified me. Having tried scan the text for parts with interesting stories I gave up. What I read about Doubting Castle and Giant Despair and the numerous beatings that Christian and his companions suffered filled me with despair. I resolved that evening to live a virtuous life and not suffer the fates inflicted on Christian. However the fear that motivated me to adopt the strict lifestyle of my aunt disappeared on my return home. There days spent playing out in the sunlight summer countryside of Kent restored my childish optimism. Even when attending services at the village church, there was little to remind me of the horrors that that abounded in ‘The Pilgrim’s Progress’. Church services were happy affairs reaffirming the good life lived by the inhabitants of our rural community.


What I learnt unconsciously as a child was that any religion or morality of fear was only effective as long as that fear was constantly reinforced by repetition. Sunlight and the beauty of the countryside removed the shadow of fear that clouded my mind. Once those influences that made fear so oppressive, that is the strangeness of the dark oppressive city bedroom, the terrible words and depressing images were removed my fears vanished. Instead there was my love of the Christianity of the countryside. Even through my periods of atheism at the big city university, my affection for the Anglican Church never diminished. Unknowingly I took with me to the city my love of the life affirming Christianity of my childhood.

This simple unreflecting religion of the countryside has remained with me. It was not a religion that was unaware of the unpleasantness of life, many from the village were all too familiar with such, having experienced the horrors of World War II. They did not want a religion that told them that they lived within the confines the ‘Vale of Tears’ and the ‘Slough of Despond’. The beauty of the surrounding countryside gave the lie to such perceptions. What they wanted was a religion that celebrated life they knew and experienced. The religion that enabled them to celebrate the seasonal rites of passage that gave meaning to their lives.

There were two vicars in my time in this village. Neither over intellectualised life and were very representative of that strain of bucolic Anglicanism that once characterised the English church. The one vicar I knew well had been a Cambridge Rowing Blue, a man who epitomised the muscular Anglican Christianity of Charles Kingsley, I suspect that as with Charles Kingsley he always slept in a bedroom with an open window, exposed to even the winter cold. Kingsley believed healthy living was an essential part of the Christian life a healthiness engendered by physical exercise and through a rejection of the soft effeminate lifestyle that avoided exposure to the elements. (It should be mentioned that his insistence on always having an open window led to him catching a chill which caused his death.) Our athletic vicar’s sermons were couched in a language that the unsophisticated country dweller could comprehend. There were no difficult intellectual frills, about the nature if the triune God for example. This God only mentioned The Lord’s Prayer a God whose existence was accepted and whose existence was never questioned or explained. Even this twelve year old choirboy as I was then could understand his sermons.

His predecessor commanded great respect in the village, even although I as a child found his manner gruff and intimidating. During the war he had been a padre and when his unit had been captured by the Germans, he refused repatriation which was his right as a non combatant and instead went into captivity with the rest of his unit. This man my father really liked as he would visit him when working in the fields and talk about their shared wartime experiences. I don’t think he once mentioned religion in his conversations with my father. On reflection I think what I mistook as gruffness was in reality the blunt manner of a countryman. A man with a simplicity of manner and directness of speech, who felt no need to add in the unnecessary courtesies of ‘townified’ speech making.

The Economics of Fear

Between the world of my Kentish childhood and that of England today, there is a yawning chasm, it as if the first never existed. All the certainties of my childhood, fair wages (sufficient income to support a family), good housing, security of tenure and employment have disappeared. One story illustrates this, there was on the estate a worker who was notoriously lazy. One day when he heard the church clock strike twelve for lunch, he stopped his hedge cutting mid stroke and left the half open shears on the hedge in the cutting position. Today such action would merit instant dismissal, then the estate management knew that he had a large family to support and they would be the losers if he lost his job. Now the manual work undertaken by my father and his friends is subject to low wages and insecurity of employment. Within the manual trades workers are either self employed or have zero hours contracts, both of which enable the employer to manage by fear, as the hours of work he gives his workers depends upon their good behaviour. Insecurity and the anxiety it brings are now seen as the best means of managing the workers.

Fear is even the most used management practice in the middle class professions. As a former public service professional I witnessed the introduction of the target based culture and the accompanying culture of institutionalised bullying. Neo-Liberalism the dominant political philosophy of our times is a belief system that states that any service or product can best be judged by the quantitative or monetary value it is given by its purchasers. Other than taxes no price is paid for public services such as policing, health care care and education, this meant that politicians had no means of judging the productivity of the public service sector. It did not matter that the service provided was qualitative and had no direct monetary measure. How could a life saved be valued or in my case how could the treatment that cured my infant daughter of meningitis be valued? Ignoring the impossibility of turning quality into quantity, the government decided that they would introduce quantitive measures of output into these services. This was the target culture, there would be a time limit for how long a patient should wait in the accident and emergency department before being treated. There are very valid reasons for reducing waiting times, but the problem is that this directive outweighs the qualitative judgement of doctors. One consequence was those with minor illnesses nearing the four hour deadline for treatment would get priority over those with more serious illnesses.

Global target setting has one major failing, it is a very crude measure of service and can give misleading results. Very soon the politicians realised that these initial global targets were too broad to measure the output of public service workers. If the state was paying a large salary to a doctor, teacher or policeman, how could they be sure that the service provided by that individual was equivalent in value to say, £30,000? To ensure that the state was getting value for money it had to introduce more and more directives to direct the working practices of the public service workers to achieve the desired ends. The consequence is that the activities of all public service workers are now micro managed from Whitehall by bureaucrats at the behest of their political masters, who have little knowledge of the service they manage. Given the mismatch between the civil servants knowledge of working practices and actual working practice, there had to be found a way to ensure a reluctant workforce complied with these centrally imposed directives. Particularly where the workers thought they contradicted good working practice. Coercion or management through fear is the only possible way of making these directives effective.

Managers in the public sector fear now losing those jobs if their targets are not met and they transmit their fears through the workplace. Managers desperate for their jobs will adopt bullying measures to ensure these targets are met, not caring whether such targets improve the effectiveness of the service they are providing, all that matters is that these targets are met. To strengthen their arm the government has introduced job insecurity into the public service sector to improve efficiency. Workers deemed ineffective can be summarily dismissed and quickly replaced with new more effective staff. Such managers are unaware of the evidence from business that high staff turnover reduces the overall effectiveness of the business rather than increasing it.

The system in the public services now resembles the management practices in the old Soviet Union. There the KGB was the inspectorate that ensured compliance with approved management practices and that targets were met. Targets were met but often by producing poor quality goods or services. The same naivety permeates the English public sector, where London rather than Moscow bureaucrats write the service manual by which the inspectorate judges public sector workers. Their belief is that is they draft a sufficiently detailed manual of what the good teacher, doctor or policeman should do, the government inspectorate will ensure compliance with that manual so taking service provision to a higher level. The fact that top civil servants have little knowledge of the practices in the classroom or hospital does not matter, as constant revision of work practices to eliminate error will result in the perfect instruction manual for public service workers which will deliver the highest level of service provision. What they fail to realise is that this practise engenders uncertainty in the workplace and often confusion as this year’s directives may contradict last year’s. Politicians, civil servants, economists and political servants never understand that one model does fit all. The practice of teaching and medicine is as much an art as a science, individual practice cannot be reduced to a pre agreed script. The agreed script cannot produce the great teacher or doctor, but they can both thrive in a very different culture that values individual creativity. Again the Soviet Union provides an insight into the fallibilities of this system. Centrally given directives drafted in ignorance of working practices are frequently unworkable and can work to frustrate their intended purpose. To persuade workers to adopt these practices it was necessary to use extreme measures, failure to comply meant exile to a labour camp and possibly death. The point I am trying to make is that the more and more directive working practices become, the more and more extreme measures have to be adopted to ensure compliance. Is it not possible when the threat of dismissal proves to be ineffective in ensuring the public sector workers achieve their targets, more extreme measures will be considered such as imprisonment?

Religious fundamentalism and the economics of fear

This essay is intended to demonstrate the similarities between religious fundamentalism and the new economics of fear. Fear is one of the main drivers in Baptist religious practice. One of the last services I attended was in small corrugated iron chapel in a remote country field. There the preacher spotting a large audience of young people on the threshold of adult life, resorted to a sermon on the dangers of hellfire, intending to set them on the right path for adulthood by warning them of the dangers of failing to do so. Similarly When I attended a service given by a well known American preacher he also tried to frighten his audience into becoming Christian by talking about the imminence of death and the likelihood of eternal torment for sinners. Hundreds went up to the front in a sign that they had received the message. One of these was my atheist friend, but by the next day he had recovered his composure and gave up the Christian religion, when the fear of hellfire had been lost. I don’t think he has been to a religious service since. Only by being repeatedly reminded of the perils of hellfire would he have continued in his newly discovered Christian practice and belief.

Management in the public sector is similarly premised on fear, the fear of dismissal rather than hellfire. Both the Baptist preacher and public sector manager lack faith in their congregation and workforce, and believe that only fear can deliver the right behaviours. While I disapprove of the use of fear as a means of controlling human behaviour, I do have some sympathy with the Baptist preacher who is using fear to for a good end, even if I don’t agree with the means used. I have none with the public sector manager who uses fear as a means of improving productivity, the ends don’t justify the means.

If I can compare myself with my atheist friend he was Christian for one night when the terrors of hellfire where present in his mind, while I have remained a Christian (with a few lapses) as a consequence of having been introduced to Christianity which was a celebration of life. Fear is only effective for the moment it is introduced and will only remain an effective motivator of human behaviour if it is constantly reinforced. The consequence for the public sector in Britain is that an ever growing workforce of managers and inspectors is required to ensure that the workforce complies with the ever growing list of centrally issued directives. However productivity is measured this ever growing non productive workforce can only diminish individual productivity, or to put it more simply a decline in the quality of service.