Tag Archives: social democracy

A suggestion from an economist as to how the free market could be made to work for the benefit of all

All the evidence from the economy suggests that the free market system is failing. The list of markets that are failing seems almost endless. Perhaps the most obvious failing market is the housing market. In 1973 a minister (when the state directly provided social housing) could state with some justification that there were no homeless people, today the reverse is true. Yet despite the evidence of thousands either living in temporary local authority accommodation awaiting rehousing andthe  countless others living in unsatisfactory private rental property, politicians deny that the housing market is broken.

Why do politicians not recognise the failure of the free market system? One answer is political fashion, which to paraphrase George Orwell pigs ‘public sector bad, private sector good’. This belief in the supremacy of the market system for providing goods and services can be traced back to one influential thinker, Friedrich Hayek. In his book ‘The Road to Serfdom’  (1944) lauded the supremacy of the free market over any alternative economy model. In this very readable book he states that freedom is the free exchange of goods and services between individuals. When the state decides what people want it is tyranny, an economic tyranny comparable to the political tyranny exercised in the fascist and communist states of Europe. Although to this economist cannot see how the provision of state subsidised social housing is a deprivation of economic liberty.

Hayek was a voice speaking in the wilderness until the economic crisis of the 1970s happened. In Britain in 1976 inflation hit the unheard rate of 27%. Politicians desperately looked for a solution and found one in the writings of Hayek and his prophet Milton Friedman. The next twenty years saw a bonfire of regulations and a rush to transfer what public sector services and businesses to the private sector. What politicians hoped and believed was that the introduction of the free market economy was the once and for all solution to the economic ills of the this decade.

Hayek still grips the imagination of the political classes. The privatised railway system in Britain is one of the most expensive and inefficient in the developed world. Yet despite polling evidence suggesting that a majority of British voters would welcome the re-nationalisation of the railways, the majority of politicians regard this as beyond the pale. Only an outsider such as the current opposition leader would argue for this popular cause. There is one certain outcome from this election and that is even if the opposition won the election, the consensus view within parliament would effectively nullify any attempt to return to a nationalised rail service.

There is one failing in the free market philosophy of Hayek that is always ignored. He assumes that the exchange of goods and services takes place between individuals who are equals. The worker for him is free to bargain with the employers to obtain the best possible wage. In Hayek’s impossible scenario the worker and employer equally benefit from the exchange. What he does not recognise is that there is no equality of power in this exchange. While the employer is free to buy the workers labour at the lowest possible wage he can negotiate, the employee very rarely has the power to negotiate the highest possible wage. History demonstrates that in a market lacking employment protections and trade unions, the worker rather than being able to negotiate the best possible wage has to accept the going rate, no matter how poor. It is a market in which Says law applies. Rather than workers negotiating for the highest rate of pay possible, they have to accept the wage whatever rate of pay the employers are prepared to offer.

When the market works well it is unrivalled as a means of exchange of goods and services. The problem is that in Britain it rarely works well. It is the unequal distribution of bargaining power that prevents the market working to the benefit of all. When one person has significantly more bargaining power than the other, be that person an employer or landlord, the other person is at a significant disadvantage. They will inevitably lose out, whether it be having to accept a low wage or by paying a high rent for inferior accommodation. The only way to make the market work is to introduce some equality of power into the relationship. Only then will the more powerful not be able to exploit the less powerful.

One solution would be to introduce legislation to remedy the imperfections in the free market, as was the practice in the 1950s and 60s. However this is not possible when the majority of political classes are committed to Neo-Liberalism or the free market economy. A majority of the of the current generation of politicians would oppose any such policy. There is another solution that might appeal to the free market politician. Greater equality could be introduced into the market and through the legal system so making the exchange of goods and services a more equal relationship. At present civil law with its remedies for civil wrongs is unavailable to the majority of the population, because of the high costs of legal action. Not only is there the high  cost but the wealthy subject of a legal action can spin out a case almost indefinitely so discouraging all but the most determined and wealthy of plaintiffs. A reformed legal system that made justice available to all could make Hayek’s free market work in a manner which he intended. The free market politician would have no reason to object as such a change would only be to enforce the rights of the individual and not subject the business to the whims of the almighty state.

This might seem an incredible statement but the legal system of the Roman Empire particularly that of Justinian was in some ways superior to that of contemporary Britain. Under this system the aggrieved individual could bring their case before the local magistrate. These magistrates seem to have had more power than contemporary British magistrates. They could interrogate the plaintiff and witnesses before arriving at a verdict. From what I understand of the Roman system there was an approximate equality of position of the plaintiff and defendant, something lacking in British courts.

There already exist in Britain a network of small claims courts(1). The remit of these courts could be extended to include a new category of civil wrongs. These courts would retain the principle of not penalising the less well off plaintiff, by not privileging those defendants that have legal representation and through preventing the defendant claiming their legal fees from the plaintiff. What matters would be that the court proceeding do not privilege the wealthy, making these courts accessible to the poorest.

There is one example demonstrates the ugly nature of our current legal system. The British Human Right act gives every person the  ‘right to enjoy the privacy of your own property.’ In our unbalanced legal system a rich property developer was able to persuade the high court, that privacy meant the right to develop their property regardless of the noise nuisance it caused the neighbour’s. In a fairer legal system there would have been a counter claim by the less well off neighbour, which would have prevented this nonsense becoming law.

One further requirement would be an amendment to the Human Rights Act, an amendment that included new rights such as a fair recompense for work. These rights could be incorporated in a relatively short document as they are only statements of principle and it would be the role of the courts to define what these rights meant in practice.

What I am proposing is a remedy for market failure. A remedy that restores a measure of equality in  the bargaining process in the free market. Rather than looking to government to remedy market imperfections, individuals working through the court system will able remedy the failings of the free market. Employers and landlords will be less inclined to adopt exploitative or abusive practices, if they know doing so will involve them in having to defend such practices in open court. Instead of a race to the bottom in which employers vie to adopt most exploitative cost cutting practices to save, there would be a move upwards towards a fairer employment regime.

A salutary lesson for this left of centre economist is that the legislature cannot be relied upon to protect the rights of citizens. Individual legislators are too easily corrupted by powerful corporate interests. As the recent past demonstrates they are only too willing to legislate away the right of citizens to further the corporate interest. Not so long ago a senior member of the government (of a party claiming to represent the workers) saw his role as frustrate the EU commissions attempt to increase the rights of agency workers.There is an old adage that states that the person who can be best relied upon to defend your rights is yourself. The record of the Westminster parliament over the past forty years only too clearly demonstrates the truth of this adage.

This is only intended to a sketch of how the free market could be changed to the benefit of all. Today’s news has demonstrated the need to find an alternative to seeking remedies through parliament. The Prime Minister announced that she would be introducing a policy which entitled all workers to a 12 month period of absence to care for an ill relative. What she failed to make clear was that this would be unpaid leave. A meaningless reform on a par with all the rights of the Soviet citizen that were written into that country’s constitution. Rights that in a police state were meaningless.

(1) There are a number of tribunals that at present that consider these wrongs,but I have left out reference to them for ease of writing.

Societies of no opportunity – reflections on the Anglo-Saxon societies of today

Politicians always have a story that transforms this dull rather ordinary looking individual into something quite different. These people who look rather like your unimpressive neighbour claim to have charisma. They are imbued with special qualities denied to the common man. Usually these stories come from a shared stock of charismatic images. One that is constantly brought up is how hard was the politicians childhood and how they overcame immense difficulties to achieve their current position. Recently a new story has become part of the common stock of images, the politician as revolutionary. However it as a special kind of revolutionary, what they are doing is overthrowing the tyranny of past thinking. They are much like Nietzsche’s iconoclast taking a hammer to those false idols that trap people into a false way of thinking and behaving*. While Nietzsche was taking a hammer to the Gods and idols of the Judaic Christian tradition, the current revolutionaries are taking the hammer to the idols of the Social/Christian democratic state. They as did Nietzsche believe that these idols encouraged the development of a feeble civilisation, one which suppressed the great men. A civilisation that reduced all to the most mundane levels of living, great men were forced to live the life of the mundane middle which prevented from fulfilling their potential. He despised the UK a society which through its democratic system gave ordinary men the power to rule over the great or the supermen. Similarly today’s political revolutionaries believe that the welfare state has given rise to a culture of feebleness which has led to the current political malaise.

One of the most detested aspects of the social democratic state for them is the dependency culture. State benefits created a type of person that rather than be go-getter looking for work and constantly trying to improve themselves, would instead rely upon the state for handouts to support them and their families. These people were a drag on society and in urgent need of change. I think General Kitchener best epitomises this way of thinking when he objected to the introduction of pensions for war widows in the First World War. He thought this would encourage the wrong kind of man to join the army, one who wanted to get killed or wounded so he or his family could benefit from state handouts. This type of thinking is very prevalent today. Politicians constantly talk about families that live from generation to generation on benefit, families in which no one has worked. Their solution is to reduce benefits to a level that are just sufficient for human survival, so the misery of a life on benefit will be the incentive to make people want to work. This one act will change the feeble creature of the dependency culture into a go-getter that is proud to work and prides themselves in supporting their family.

The lack of evidence to support this policy of cruelty does not matter. Whenever research is undertaken into the unemployed it never produces evidence of a work shy population. One estimate suggests that there are only 33 families in which the parents and then the children have never worked. However such evidence can be dismissed when the popular media can always produce stories about inhabitants of the work shy benefit culture. It is for politicians the morality of the hypocrite they can do evil in the cause of a greater good. Misery and suffering become merely the start of a life cycle that propels the individual towards the good life.

There is one fallacy in this revolutionary logic, it assumes that there is a career path out of poverty for the work shy. However in a low wage economy it is impossible for this new generation  of strivers to move out of poverty. This is the culture in which the strivers have to take two or three jobs to survive. There is little scope for such people either amassing the savers to improve their life circumstances or shave the time study to achieve the qualifications to improve their life chances. What is wrong with our society is not the people but its lack of opportunities? The economy is designed or structured to produce few winners and many losers. In an unfair society which denies an increasing majority of the population the opportunity to live a decent and civilised life, what is needed is a story to justify this unfairness, a story that turns moral dross into moral gold.

One is that told by our new generation of revolutionary politicians. They believe that it is the culture of the welfare state that has produced a generation of the feeble minded. People who lack the drive and initiative to improve themselves. Demolishing the welfare will be the shock these people need, it will transform the general population.  There will be a few degenerates that will be mired in poverty, but the rest will the strivers and achievers. The latter group will be the winners who will be rewarded with the material rewards that characterise the good life. This story has the virtue of demonising the poor as deserving their fate, a just return for their lack of drive. It’s a persuasive story but one that has little foundation in reality. In an unfair unjust society even the hardest working of the strivers can be denied a good life.

There is another story circulating about the unfair society and that is that it the natural outcome of a  the meritocratic society as suggested by the writer Toby Young and the sociologist Peter Saunders. Evidence shows that the IQ scores of the middle classes exceed those of the lowest classes. The argument is that higher income is the just reward for possessing the greater intelligence. However there is doubt that can be cast on IQ as a measure of real innate intelligence. If coaching for the IQ test can improve markedly the individuals test core it cannot be a valid test of innate intelligence. Innate intelligence just is there it can’t be taught, if these tests were a real measure of innate and not acquired intelligence, training in these tests should make little difference to the final score.

What unites this new generation of revolutionaries is their high income. These revolutionaries don’t live in garrets or hovels plotting change, they live in big houses and enjoy the lifestyle of the affluent. It is not unusual for these new  revolutionaries to enjoy six figure incomes, profitable second jobs can be as a columnist for a newspaper or lobbyist for a city finance company. Revolutionaries don’t live the comfortable life they are driven by a desire to change the unfairness of society, an unfairness manifested in widespread poverty and misery. These new revolutionaries wish to increase unfairness, inequality and poverty. Rather than accepting the self image of these new revolutionaries they should be seen as the really are stripped of their revolutionary romantic aura, they are merely the spokesmen for the rich and powerful oligarchs. These politicians rather than ushering in a new revolutionary age are the reactionary spokesmen for a new generation of backward looking oligarchs. What they are spokesman for is a hatred of modernity.  The oligarchs associate modernity with all that they hate which can be reduced to taxation and legislation to improve the life chances of the majority, which they see as reducing their opportunity to make money. As one of their spokesman so eloquently put it, its immoral to increase taxation on the well off. Making excessive amounts of cash and not paying taxes is the new approved morality of these new revolutionaries.

*Nietzsche ‘Twilight of the Idols’

The Great Lie and the Rise of Trump and the alt.right

Economists have to shoulder their share of the blame for the dawning of the age of Trump, May and Farage. Their responsibility lies with the creation of the ‘Great Lie’ which led to the economic and social change which caused the current economic malaise. Governments longer seem to be in control, they seem powerless to arrest the decline in living standards. We now have government that operates on the Pontius Pilate principle, it shares the people’s pain, but it is powerless to anything to alleviate their suffering. In such circumstances when government claims to be helpless in the face of the current crisis, it is hardly surprising that those who claim to have a solution, no matter how wrong headed that solution are now gaining  power.

The ‘Great Lie’  is the one propagated by economists that they have discovered the economic model that if adopted will resolve all the economic and social problems that beset society, that is  the free market. A great lie can be easily identified, it is when economists claim that they have the answer to all society’s problems. Usually such optimistic solutions are called utopian, but economists have greater credibility and there claims are never subject to such scepticism. Economists never seem to accept that the economy as a human creation is as flawed as its makers, mankind. They will never admit that there proposed model for change is but an experiment that may contain as many or more flaws than the system it is replacing.  It is hard to explain why the free market model was so widely accepted, when the very failures of such a system had led to the Great Depression of the 1930s. Until the 1970s it had been accepted that the unfettered free market system was subject to extremes of volatility, whose worst manifestation were the periods of economic depression. Times whne unemploynent was high and people were impoverished. Overnight economists seemed to forget all the negatives of a free market economy and all began to speak from the same hymn sheet, the free market one. The deciding factor seemed to be the unending slow growth and high inflation crisis of the 1970s. A crisis whose origin lay in politics not economics, yet this fact was ignored by politicians desperate a for a solution to the current crisis. (For this particular economist the origins of the crisis were in the excessive demand for raw materials that the Americans required to fight the Vietnam war, which pushed up prices for steel to astronomic levels.)

Economics is pervaded by dishonesty, an unconscious dishonesty but dishonesty never-the-less.The free market or monetary economists never admitted that there would be any downsides to their free market model. Humility was the one quality lacking among these economists. They could make valid and reasoned criticisms of practice of social democratic economics, but were completely blind to the failures of free market economics. When such dishonesty is prevalent among government policy advisors, it should be no surpise that the dishonest claim made by the alt. right with its claim that immigration is the cause of all the problems is an acceptable a truth as the one that the free market works,when it it obvious to many that it does not. 

What these new economists failed to admit was that in creating a free market economy that the people would be exposed to the negative effects of adverse changes in the market. There would be many more losers in the free market. One such example comes from Sunderland, one of the areas that voted in large numbers to leave the EU. One of the main employers is  the Swan Hunter shipyard, which built merchant ships. In the 1970s it was failing to win orders because it could not compete with more modern shipyards in the Far East. The government realised that if it invested in re-equipping the yard with the latest in ship building technology, it could compete with other major shipyards. This would create many new jobs in an area of high unemployment. In 1979 a Neo-Liberal government came to power who thought any government intervention in the economy was wrong and they withdrew their support for the shipyard. All the new shipbuilding technology was sold to a rival shipyard in South Korea. Swan Hunter survives as a manufacturer of warships and equipment for the North Sea oil industry. However the people of Sunderland seem never to have forgotten the government’s betrayal of them and this year they could demonstrate their hostility by voting to leave the EU, against the advice of the government.

While the economists cannot be held responsible for the decisions of the government, they were the cheerleaders for the changes in economic policy making. One of the greatest of these new economists Milton Friedman supported the government of Pinochet when it tortured and killed its opponents, claiming that Chilean society would be better off without these people. A variation on the saying that you cannot make an omelette without breaking eggs, except that in this case the eggs are people.

One chilling example of the eggs being broken is housing policy. Increasing numbers of people, particularly the young are being forced into the private rental market. There they suffer from the twin problems of exorbitantly high rents and insecurity of tenure. When it has been suggested that the solution is to give private tenants security of tenure and to introduce rent controls, the social democratic party in this country has always rejected it as an unworkable solution. They claim that the introduction of such controls would reduce the number of properties for rent and so be against the long term interests of the private tenant. In reality a policy that did both things and which included measures to prevent a reduction in the number of rental properties could be devised. Yet this party clings to the Pontius Pilate principle of politics, vicariously sharing the pain of the private tenant while saying that bad as the situation is there is nothing they can do to improve the lot of the private tenant. When such is the official policy of this party it is no surprise that it is threatened with losing constituencies to the party of the alt. right that claims to have an answer.

There is little doubt that the adoption of free market economics has created an increasing number of losers in society and it is these losers that are looking to the alternatives for a solution. The only solution to the woes of society appear to be those  offered by the xenophobic right; as all the other political parties seem to adopt the same message which is that things may appear to be bad now, but they would be much worse if the government tried an alternative policy.

One solution to the current malaise is for politicians to accept responsibility for their actions, instead of looking for unreal solutions from the world of economics. While it was the unregulated financial markets that caused the crash of 2008/9 the slow recovery has been due to the governments adoption of an austerity policy. If the governments of the West had learnt anything from the 1930s it should be that adopting those economic policies to tackle non existent problems, they should take action to ameliorate the negative effects of the crash. Austerity programmes designed to do little more than cut government debt and increase and prolong the agonies of 2008/9. What is required is imaginative solutions to the crisis, usually not available from economists who are stuck with ‘Big Lie’, that the market will solve the current crisis if left to itself,when it quite obviously won’t.

Don’t dance with the devil, the tragic demise of social democracy

This proverb which warns against dancing with the devil probably dates back to the early medieval period, when there was a strong sense of the presence of the devil in the world. While I don’t believe in the devil as such as I believe that mankind has sufficient potential to do evil without need of the help of a malign supernatural being; I do think it aids explanation to reduce  what is that nexus of  power and evil intent to a personified term the devil. I suspect the medieval users of this proverb were quite aware of the potential to commit evil within us all, but they saw the value of having one simple proverb to remind people of the perils of being complicit in evil. Complicity with the devil would mean either being burnt in this life as witch or suffering the fires of eternal damnation in the next.

What I am writing about is not the individual who acts with evil intent, the one who wishes harm on his fellow men. The serial killer now matter how appalling and frequent are their crimes, they can only hurt a small number of people. What matters to me is the people of evil intent who have the power to commit crimes on a much larger scale. People such as Chairman Mao, Stalin and Pol Pot were monsters and its easy to write them of as exceptions to general run of humankind.Yet there are those politicians of evil intent in the Western democracies that abuse power to cause hurt and pain to millions so as to secure some financial advantage for themselves and their friends. Usually these politicians claim a religious sanction for their actions. There is hardly one of these politicians that would not claim to be a good Christian. Yet they seem unaware of the religious injunction to treat your neighbour as you would yourself. To be fair they do have some sense of neighbourliness, there neighbours they understand are people such as themselves, the great majority, those outside their friendship groups don’t qualify as neighbours. These are the politicians that will impose punitive sanctions on the undeserving poor, while also give generous government contracts to their friends. A recent newspaper article claimed that £500 million was given in contracts to business to assess the fitness or otherwise of benefit claimants. Ministers felt £500 millions was better spent this way, than on the undeserving poor.

Evil may take many forms, but in this essay I am taking it to policies undertaken by politicians which impoverish or cause misery to thousands if not millions, as a means of securing some financial advantage for their friends.

What concerns me is the extent to which social democrat politicians have become complicit in this evil. They have ‘danced with the devil’ in the misguided belief that they can get some advantage by doing so, securing a benefit for the people that would not otherwise be available. Medieval man new that the devil never kept his promises and that all he wanted was to corrupt the soul of the innocent who sought his help.

There is one social democratic politician that exemplifies this tendency. This politician was one of the highest achieving students in economics at one of the countries elite universities. Yet when the Chancellor of the Exchequer made a pronouncement about economic policy, which any sane economist would recognise as nonsense, he instead of opposing the measure supported it. He claimed it showed responsibility to follow the governments lead and it would win support from the voters. He claimed that voters would never vote for a party that appeared irresponsible in matters relating to the economy. It is unfair to say that he was entirely responsible for the adoption of nonsense economics, as all the other senior members of the party agreed with him. (Although they were not as talented an economist as him, they had all secured good degrees at elite universities, which would have given them the analytical skills to identify nonsense when it was spoken by a government minister.) The consequence was that this party appeared indistinguishable from the government to many of its supporters. These disillusioned supporters drifted to other parties that appeared to promise those policies to which this party refused to commit. This party is now haemorrhaging support to those ‘irresponsible’ parties of the populist right and of the nationalist persuasion.

These politician’s who ‘danced with the devil’ thought by being complicit in one evil they could secure a greater good. The greater good they sought was the power, which would then enable them to implement a political programme to alleviate the suffering of the many. What is extraordinary about this saga is that these self same politicians had been involved in campaigning groups that sought to alleviate the miseries of poverty.  They were people who had campaigned for many good causes and as group were more probably more virtuous than any other group of people, yet these politicians as a group were willing to sign up a policy that was contrary to what they believed, because they though it would secure them some advantage.

Faustus sold his soul to the devil in exchange for securing the love of the most beautiful woman in history, Helen of Troy. Social democratic politicians throughout the Western democracies have sold their souls to the devil in return for the chimera of power. Unlike these politicians Faustus got a much better price for his soul, all they secured was the promise not the gift of power.

The Poverty of the Political Imagination

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What concerns me is the smallness of the thinking of the current generation of political leaders. British politicians have never been noted for their intellect. John Major best typified the thinking of British politicians when he spoke of the need for the ‘vision thing’. This smallness of thought is an accelerating trend amongst the political classes. We have a prime minister who was regarded by his tutor a one of the brightest in his class yet all he has given us is a vague vision of the ‘Big Society’, which turned out to be little more than an election slogan. However it is in the so called ‘nudge unit’ that his true vision is exemplified. There is to be no challenging of the political or social consensus or any powerful interest group. Instead there are to be small changes in policy, so small as to be unnoticeable that will persuade people to improve their behaviour.

I guess for a conservative it is comforting to know that the current society is ‘the best possible’ of all of societies. For an extremely wealthy man and his circle of friends there is no need for any change that might diminish or threaten their wealth. The homeless and hungry are so because of their idleness. Any attempt to improve their circumstances is wasted because they any attempt at improvement would be self defeating. They share the attitudes of their predecessors who opposed putting bathrooms in the houses of the working classes, as they would only use them to store coal.

This time of year we are all constantly treated to showings of the Dicken’s fable ‘Scrooge’. At the beginning of the story Scrooge is visited by people collecting money for the poor. Scrooge’s reply is that are there no workhouses? He refuses to give any money as he believes that idle poor deserve no better than the cruel workhouse. In the course of the story he learns the error of his ways and repents his meanness. The story is always seen as a story from our cruel past, rather than seen as an accurate depiction of the cruel present. Can anything be more contemptible than the well feed rich who are our rulers condemning the poor to a lifetime of suffering for their assumed idleness.

Both our Prime Minister and his deputy relied on family connections to find well paid work in the world of commerce and media. How can they condemn those that lack those advantages to advance their career?

II

When analysing the causes of our current social malaise, economists are all too ill equipped to suggest solutions. One of the best analysis of our current malaise was put forward by the columnist Simon Jenkins, who said that our political decision makers suffer from the curse of indecision. This is not only a UK phenomenon, the current crisis has brought out the worst in political classes of the West, they cower before the dysfunctional all powerful market proclaiming their own powerlessness. Rather than a Roosevelt we have an Obama, or a Merkel rather than a Kohl, all who in unison proclaim their powerlessness before the all powerful market. The religion of pessimism has them firmly in its grasp, as all they can suggest is a minor amelioration of people’s misery by appeasing the all powerful market.

Appeasement always takes the same form, cut government expenditure, reduce taxes to release the energies of the powerful giants of industry to rejuvenate the the economy. Failing to notice that our leaders of industry are as frail and impotent as our politicians. They are like so many Wizard of Oz’s, small men who when viewed through the distorting lens of the business corporation appear as giants. Such men are reassured by the fairy tales of such as Rand, Friedman and Hayek who portray them as the movers and shakers of our society, when in reality they are diminished human beings interested only I n increasing their ‘take’ from the business. Others such as politicians believe in this myth and like some pre-historic priest make gifts to these new Gods of the market in the hope that they will smile benignly on them; gifts such as generous tax breaks, indulgence the worst of tax avoidance schemes.

Our legislatures engage in endless rounds of meaningless activity to disguise their inability to tackle the real problems of society. In the face of the worst housing crisis in history all the government can do is offer some funding for new house buyers. A policy that won’t upset the supposed giants of the construction industry, as it does no more than provide a few more new homes at great profit to that industry. Facing a much worst crisis the post war governments of the 1950’s and 60’s embarked on the largest house building project in British history. A project way beyond the imaginations of our current rulers. The great industrial power house that is the USA is scarcely any better at decisive and imaginative policy making. How would the former giants (Fulbright etc.) of Congress view a Congress than can only unite on such trivia as agreeing to classify the tomato sauce that goes on pizzas as one of the five vegetables/fruit that Americans should eat everyday? Its irrelevant that food scientists would regard this decision as a nonsense. What matters is that the powerful food processing industry should be appeased, it must be protected from legislation that might be harmful to its profits.

What has happened? In the 1940’s and 50’s the House of Commons would fill when there was an expectation of a debate between the two titans of right and left, Churchill and Bevan. Who today would willing rush to the Chamber to hear a debate between Cameron and Miliband? In the USA former Presidents such as the two Roosevelt’s and Kennedy bestrode the globe like colossus, now their like has disappeared from the American political scene. Eisenhower the much under rated President warned of the power of the ‘industrial military complex’, while today President’s Bush and Obama seem only to willing to do their bidding.

What has been lost is the vision of a better world that inspired these men to achieve great heights. Certainly they were flawed individuals, yet their vision enabled them to over come their flaws and offer real leadership to their nations. Our current society would disqualify Roosevelt from high office because of his womanising and Churchill because of his excessive drinking, preferring modesty in behaviours and thinking. What is required is a new religion of optimism, which would inspire a new generation of leaders to create a better society. Not a religion of pessimism that forces politicians to view themselves as flawed weak individuals who can best serve their society by doing nothing, believing that their meddling would only make things worst. All that is allowed in policy making is measures to appease the Gods of the market.

III

It is dispiriting to look to our political classes for leadership. They all proclaim their helplessness in face of the current crisis. One suspects that they find comfort in this shared sense of helplessness, if their rivals espouse helplessness, there is no pressure to come up with solutions. In the UK the coalition government have the good luck to have their understanding of the current crisis shared by the opposition. The opposition share the belief that their priority should be cutting the size of the government deficit. Given that neither have an effective policy for achieving that, any future government will waste its energies on cutting the deficit to the exclusion of everything else. Policies that one would expect of a Social Democratic Party such as reversing the privatisation of the health and education services will be excluded on the grounds that they would cost money and do nothing to reduce the deficit. A mean shabby policy that suits our mean spirited times.

If we consider the raw material of our leadership classes, they appear no worse and possibly even better than those of the past. Charles Kennedy was forced out of the leadership because of his alcoholism. Yet by common consent one of our greatest leaders Winston Churchill was a depressive and heavy drinker. Given such unpromising raw material why did Churchill achieve a greatness, that is impossible for the current generation of politicians? Churchill was moved by a religion of optimism, he believed that the English had a unique heritage and future and it was his destiny to help the English attain this greatness. He believed in the genius of the a English speaking peoples. A contrast to the preference of the current generation for small minded and modest thoughts. Ed Miliband epitomises this trend, he believes in ‘under promising’ and ‘over achieving’, such philosophy has no place for the grand vision that motivated Churchill and his political rivals.

I see a solution to the current impasse in the writings of Georges Sorel. He concluded that what mattered was not the embedded truths of an ideology, but the myths that inspired people to action. He used the history of socialism to demonstrate the truths of his proposal. What changed society was not the superiority of socialist thinking, but the willingness of socialist activists to endure untold pain and suffering to attain their ends. A socialist could die happy in prison knowing that his sacrifice was merely part of the struggle that would lead to the success of the working classes. Such activism was responsible for the introduction of cheap social housing and a health service free at the point of use. Greed the main motive of the capitalist classes could never produce martyrs willing to die for the cause, which is why for much of the twentieth society they were on the defensive. They had rely upon the organised church to provide a spiritual vanguard for capitalism. Bishops were always able to distort the Christian message into one of support for a capitalist ideology by sanctifying the political and social leadership of society, as being God given.

What our current political classes need is a new religion of optimism to enable them to overcome their inertia. Flawed individuals can achieve greatness, our greatest leaders have been depressives, alcoholics and womanisers. Unlike the current political class they did not believe that their frailties disqualified them from greatness. Our current leaders having such a pessimistic view of themselves and humanity, that they believe they have no moral right to prevent the nastiest and most anti social of behaviours. Behaviours that in more enlightened times which were discouraged by government action are now encouraged. Restrictions on gambling despite the misery it can cause have been removed. The same applies to excessive alcohol consumption. In the recent past
our legislators debated banning boxing because of the damage it inflicted on its participants, now our government is encouraging the spread of the most violent of sports, cage fighting. The philosophy of our politicians is that anything can be permitted for which there is a demand, now matter how demeaning, damaging or barbaric. With such a philosophy they are unable to turn their their gaze upwards and encompass a different vision of mankind. A new religion of optimism is needed to drag them out of the mire.

Osborne-oenomics explained

Nietzsche’s dictum is that philosophers are in error because while they write about man they never study real man, only their idealised construction of him. They construct ethical systems but never look at the source of those ethical systems, man. He demonstrates how the concepts free will and moral responsibility are of little use in explaining human behaviour. His psychology demonstrates that much of human behaviour is pre-determined, it is their physiological makeup that determines people’s actions not rational thought. Criminal behaviour is more likely to derive from an individual’s biological drives which they cannot control than from conscious decision making. Commentators would do well when commenting on George Osborne’s economic policy to observe Nietzsche’s dictum. Most would see his policy being derived from his reading of the Neo-Liberal commentators of whom they assume he is familiar with. This ignores two key facts, one is that he studied history and probably had but a nodding acquaintance with Hayek etc. and that he is a son of a baronet and it is this latter fact which provides a key to understanding George Osborne.

The baronet is at the lowest level in the aristocratic pecking order and being aware of their nearness to the masses, they have always been the most zealous in defending their privileges of social rank. They are all too aware of what a fall from social grace means. It is these people who have provided the backbone of the Conservative party. The defence of their position often led them to developing the most reactionary of principles. Any improvement in the lot of the servile classes is a threat. A guest at the dining tables of the baronetcy would be aware of the servant problem. The insolence of the lower orders making them such poor servants and the difficulty of recruiting servants as most of the lower orders rejected a life of servitude.

The greatest threat was progressive taxation, particularly taxes on capital. The latter threatened their holdings of wealth and they saw around them the break up and disappearance of many large estates. The social order of which they were part seemed to be disappearing. Since social democracy is dependent on progressive taxation to fund its activities; they hated social democracy as it was that progressive tax system that threatened their existence. They also hated the public services which made such taxation necessary. One service that attracted their ire was the National Health Service. Why should they make such a large and disproportionate contribution to a service that they use but only occasionally. As they would resort to private health care so as to avoid contact with the masses. Is it at wonder that coming from such a background the guiding principle of all George Osborne’s policy is the destruction of what remains of the social democracy of former years? The privatisation and destruction the NHS being the iconic government policy that by which it will be known in history.

Self interest lies behind the desire for a small state, rather than the desire to free enterprise from the the burdens and regulations of the nanny state. A small state does not require large tax revenues to fund its activities. Any policy which shrinks the tax burden on the better off will meet the approval of a baronet’s son. Is not likely a man from his cultural back ground would want to cut taxes? It is no coincidence that one of the first acts of this government was to let Vodaphone of it’s £6 billion tax bill and it is now letting the self same company avoid tax on the multi billion profit from the sale of its shares in Verizon. Tax avoidance is no longer an activity to be discouraged by government but one to be encouraged by the Chancellor. He has decided that multi-nationals that have off shore subsidiaries can channel any profits they make in the UK through these subsidiaries to avoid tax.

One cannot underestimate the impact of the culture of the baronetcy on George Osborne’s thinking. Some members of this social grouping in the heyday of the Social Democracy feared their extinction through a loss of their wealth and position because of what they saw as a penal tax system. Growing up in the sixties on a country estate with family friends in service; I could not but be aware of how this group saw the state as the author of their misfortunes. Any society will suffer periodic crises and the UK society suffered from an economic crisis in the 1970’s culminating in the extraordinary high annual inflation rate of 1974 which topped 27% . It was the OPEC inspired rise in petrol prices which largely caused this spike in commodity prices which caused the high level of inflation. Taking advantage of the weakness of the state in this crisis, the political right forced/persuaded the government to adopt Neo-Liberal policies that would ultimately lead to the demise of the social democratic state.

It is probably no coincidence that the doyen of Neo-Liberals Joseph Schumpeter was an aristocrat. Neo-Liberalism as espoused by George Osborne is the guise through which the baronetcy and others wreaked their vengeance on social democratic state.