Tag Archives: Tony Blair

Astrologers, soothsayers and pseudo economists

All political leaders share one common weakness and that is desire to know the future so as to be one step ahead of their rivals. This makes them susceptible to the practitioners of the various pseudo sciences that can give them both a knowledge of future events and how to use that knowledge to their advantage. These pseudo scientists that in the past practiced this spurious futurology were the astrologers and soothsayers, today these people are more likely to be economists and psephologists. It is the lust for power that makes politicians so susceptible to the machinations of soothsayers of various kinds. There is not one political leader today who does not have an in house psephologist on hand to read the political runes. This is a common practice that runs through the ages, as one contemporary leader Tony Blair had the psephologist Phillip Gould to hand while Elizabeth I had  the astrologer and alchemist John Dee.However I intend to focus this essay not on psephology but on the new pseudo economics.

Soothsaying and astrology as with pseudo economics claim to know the future and can offer policy prescriptions to obtain the best possible future outcomes. These economists claim to possess a unique knowledge of the world, a knowledge that only they understand. Soothsayers or astrologists could state from there understanding of the future when it would be a propitious time for action. There knowledge of the future and future events came from they understanding of the fundamental forces that determined the course of human history. Pseudo economists also claim a knowledge of those planetary forces of economics that will determine the future. In this case it is rather than the movements of the planets determining history it is the movement of market forces that determine history. They will claim that communist leaders wilful ignorance of these market forces will resulted in the collapse of the Soviet Union. Following the lead of these economists historians began to see the future as being one in which the capitalist liberal democratic model was dominant. Possibly the most notable was Francis Fukuyama was perhaps the most notable with his essay and book entitled ‘The End of History and the Last Man’. In both the essay and book he predicted that history would end in all countries becoming capitalist liberal democracies.

Nostradamus pales into insignificance in comparison with these pseudo economists, he could only predict the collapse of great empires in the most elliptical and obscure of terms, he was not granted the knowledge that enabled him to name those empires that would collapse. Economists had a more secure knowledge they knew exactly which empires would collapse, that is the Soviet Union and the China of Mao. If economists know the future and they have the means of introducing the future now, they will do so. They have persuaded politicians throughout the Western World that the future is the free market capitalism system and their role is introduce the reforms that will make the future happen now. This all political leaders have done through a series of measures known as supply side reforms. All regulations such as employment protection laws have been removed because they prevent the free operation of the labour market, similarly health and safety regulation has been emasculated because that also prevents businessman doing what is best. There is an underlying and naive assumption that businessman are well intentioned and will work for the good of all. However the various scandals in the food supply industry show that this is not true.

The apparent success of those societies economists that follow the new free market system as compared to the old communist command economies has led to an over claiming of the success of the new economics and their over confidence has resulted in the practise of the worst kind of pseudo economics. These new economists and the politicians are guilty of creating a new economics that is almost childlike in it’s understanding of the economy and the wider society.

Evidence of this child like science is the introduction of simple moral terms into economics analysis. In its most simplest this new economics states that all government actions are bad, while all action of the free market are good. Obviously it is usually disguised by more complex language, as is demonstrated by the economics of the British Treasury. All economists of my generation that is the ‘Old Keynesians’ understood that all spending by the government increased demand in the economy and the level economic activity. Therefore in a recession the obvious policy was to increase government spending to stimulate economy. Old economists called this process by which spending increased the multiplier as government spending would lead to an increase in spending which was a multiple of the original sum spent. Now the Treasury has decided this no longer happens as it cannot conceive of any situation in which government spending is beneficial, instead it has decided that all government spending reduces overall demand and the level of economic activity. The Treasury has given the multiplier a negative value of 0.6 so if the government spends an additional £100 million pounds it will instead of increasing spending reduce it by £40 million, the Organisation for Economic Development gave the multiplier a value of 1.5, so that the same spending would increase demand by an additional £50 million. When economic policy is determined by such a child like morality such as this it becomes bad economics.

Why I prefer to call bad economics pseudo economics is because it is science that is as fallacious as astrology.

There are some disturbing consequences of the practice of pseudo economics, perhaps the worse is the belief is that governments should give up on most areas of governance in society and transfer their role to the private sector and the market. A belief that the economy works best when left free of government controls and regulations had disastrous consequences the manifested themselves in the great crash of 2008/9. Banks by this time were no longer subject to controls that required them to hold large reserves to protect themselves against a possible bank run that could occur in a financial crisis. Consequently when the crisis happened the banks held such small reserves of cash that they struggled to pay their customers who wanted to withdraw their money. Northern Rock was the first to fail and only a massive injections of government money prevented the failure of two of the big four banks, that is NatWest and Lloyds. Now eight years after the crash the banks are still largely unregulated and hold cash reserves that are again likely to prove inadequate in the event of another financial crash, so that they are likely to again need government cash to fund bail out. Their reserves are now 3% of assets as opposed to 2% of assets at the time of the crash.

Banks have resisted increasing their reserves to what many would regard as a safe level, that is 5% of assets, because money held as cash earns nothing for the bank. Keeping their reserves as low as possible enables them to maximise their profitability but at the expense of security of the institution.

When the government withdraws its governance from the various sectors of the economy it allows bad behaviour to flourish. The banks are not alone in behaving badly, many other sectors of business show evidence of wrong doing.

Despite the evidence politicians remain believers in the new pseudo economics, whenever its suggested that the imperfect markets of the real world need regulation the politicians throw their collective hands up in horror and resist any attempt at regulating these markets. They seem to be in thrall to the contemporary economic Nostradamus’s that believe they have discovered the secret to the future well being of the country is in free market system. If we want a good tomorrow all we have to do is let the markets work unhindered and they will deliver the good tomorrow. However as housing provision is increasingly being transferred to the private sector, the market seems increasingly distant from delivering that good tomorrow. The economic soothsayers are the many consultancies that advise the government. Unfortunately our political leaders are unable to see that these soothsayers and astrologists of the economic world are as misguided and ill informed as their medieval predecessors.

There is a hint of bitterness in my essay as I am a believer in good economics, the practice of which brings benefit to society not the pseudo science of today for most creates insecurity, misery and impoverishment in the name of creating a better tomorrow.

Why politicians would benefit from reading fairy tales

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Folk tales and fairy stories with their black and white characterisation for example the evil step mother and the virtuous, noble and abused step daughter are characterised as stories only for children. Their tales of good and evil are seen as being far too simplistic for adult reading. This is a misreading as the fairy tales we tell our children are but sanitised versions of the original folk tales. In the original story the step sisters cut off parts of their feet so as to fit their feet into the glass slipper. What is not understood is that folk tales are but attempts to explain the malevolent world in which our peasant ancestors lived. Fairies were not seen as good but as spirits that had to appeased as angering them could result in misadventure. When the Church insisted this was a good world created by God, how could the misfortune that people suffered be understood except by understanding there must be a lower level of supernatural beings who were responsible for the evil men suffered. What our peasant ancestors saw was that they lived in a world in which good and evil co-existed, not so simple but realistic.

This simple world view is in contrast to the sophisticated society of today. Rather than the simple black and white world view, it a world view of greys, varying from the darkest of greys (bad) to the palest of greys (good) and between these two there are a whole series of different shades of grey. However bad is not totally excluded, but bad only applies to those people, the psychopaths who operate outside the normal range of behaviours. When morality is seen from the perspective of the political and dominant social classes there is an incredible fluidity to moral concepts, particularly when the politeriat who govern Britain is considered. This merging of good and bad can be seen in the concept of the just war. Killing is bad except when its undertaken as part of a just war. St. Augustine defined the concept when he cited the conditions under which a soldier could kill to defend his country. Others such as Thomas Aquinas further refined this concept. While there was justice in fighting the Second World War to remove Hitler the concept becomes stretched to breaking point with the Iraq war. Our leaders invented the threat of Saddam Hussein’s weapons of mass destruction and the threat they posed to the West to make the war just. One bad example does not made a moral principle bad, however the concept is open to misinterpretation or abuse, as political leaders are always tempted to give it a meaning that suits them. Government’s never fight bad wars only just wars.

Goodness takes on an incredible diversity of meanings when used by politicians. Good for them is the greater good, a good which only they understand. Only they can make the greater good a reality. The austerity programme the UK government imposed on society is for the good of all. It will like the medieval practice of bleeding purge society of ills. All very reminiscent of Stalin, who regularly sent thousands to the death camps, for the good of Russian society. Killing thousands of Ukrainian farmers led to starvation and the death of millions. Britain’s austerity programme has impoverished millions and the spread of poverty level wages has reduced demand and slowed the recovery from recession. When political leaders define good or the greater good it rapidly loses any moral content and all kind of evils can result from this. The Iraq war was intended to achieve two goods, the removal of weapons of mass destruction that threatened the West and the freeing of the Iraqi people from a cruel dictator. Instead of it being a being it good action the reverse happened. Thousands were killed in a bloody civil war consequent on the invasion and now the country is threatened with a new civil war, one against an extremist Sunni militia.

Perhaps if George Bush and Tony Blair had a sounder understanding of morality than they displayed at the time, they would not have committed themselves to the folly of the Iraq war. Politicians have long given up reading Christian moralists such as Erasmus, but if they had not, they might have come across his article entitled ‘War is sweet to those who have never tried it’. Nothing is new, ambitious princes have always through the folly of war damaged the health and welfare of their peoples.

There is a danger in our contemporary society of having leaders lacking any fixed moral reference points. If good is a flexible thing only given the meaning that the leaders and political class give it, there is nothing to stop them committing inhumane experiments of their people. Stalin, Mao and Pol Pot murdered millions in the name of their self proclaimed goods. On the same spectrum but at the other end our politician practice inhumane experiments on us. Austerity is perhaps the worse, although there are plenty of other examples. Children in Britain have had to endure endless experiments with their schooling experiments of varying degrees of cruelty. Education ministers impose diktat after diktat on our schools which seem destined to introduce the spirit of Gradgrind into our schools. Schools are becoming akin to Victorian factories with child labourers repeating a series of unending mundane tasks. Experimentation is not limited only to our children but also to the sick, the disabled and the young unemployed, all the major political parties seem to be engaged in a competition to produce the most inhumane policies towards these groups. When any real understanding of the good is lacking, cruel and inhumane policies will result not so much from a sense of cruelty but an inability to see people as other than things, just another resource. Possibly the bear pit that is Prime Minister’s Question Time is the best representation of the callous unfeeling nature of our politicians.

Not recognising or understanding good is only one part of the problem, the other is the failure to acknowledge the bad. Children understand that out there are bad people, be they evil fairies, step mothers, dwarves or trolls. Politicians having no conception of bad fail to recognise bad people. The evil financial wizards who managed to make billions disappear were never recognised for what they were, in fact many of them were rewarded with titles from the government. Similarly politicians never recognise the evil trolls, dwarves and queens that populate the market. There are many bad landlords who charge exorbitant rents for unfit housing, yet politicians don’t recognise that there can be bad landlords and that only government regulation can resolve this problem. When reforms of the private rental market are suggested, a chorus of ministers, politicians and journalist cry it is impossible. They claim that any regulation would make the market worse, claiming that regulation would force landlords to withdraw from the market. Conveniently ignoring that those self same landlords have borrowed vast sums to buy their rental properties and it would be suicidal not to let them. The free market for them is an unalloyed good in which their can be no bad or evil. Bad landlords are not a problem that the market can’t resolve.A child from their knowledge of fairy tales would recognise really do exist, while politicians with a moral free sensibility cannot.

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There has always been a clash between doing what is expedient in politics and what is principled. However what is unique in the present parliament is the lack of great principled individual politicians, our current parliament is a moral free zone. All the great reforms of the past have been driven by outstanding principled leaders. Lord Shaftesbury a Christian politician was the driving force behind the ending of child labour in the factories and Non-conformist Christian politicians such as Keir Hardie, Lloyd George and Aneurian Bevan were largely responsible for the creation of the welfare system, which their moral free successors are in the process of hastily dismantling.

It would be naive to claim that the politics practised in the past was much superior to today, but then unlike today there were moral giants who could drive through measures of social reform. One has to ask why is our parliament populated by a generation of moral pygmies? Perhaps an answer can be seen in the education of our predecessors. Not so much academic education as their education in values in the wider community. Wilberforce and Shaftesbury were evangelical Christians, Lloyd George and Aneurian Bevan were Non-Conformists and it was their Christian education that gave them a fierce attachment to a compassionate value system. Interestingly Lloyd George was as venal in many respects as our contemporary politicians, a womanising politician who willing sold political office; yet he was redeemed by a greater moral vision. What is lacking in contemporary society is the moral counterweight that the churches in the past provided to unbridled self interest. The great universities educate politicians in the practicalities of government, usually in PPE (Philosophy, Politics and Economics). Contemporary philosophy courses teach scepticism, politics courses the art of vote winning and economics the management of society, skills needed for the second rate political Machiavelli’s. As an economist I tend to single out economics for the greatest part of the blame, it is the great leveller, a subject in which everything is reduced to a material benefit or cost, much like Oscar Wilde’s cynic who knows the price of everything but is ignorant of the value of anything. Economics I believe has a tendency to shrink people’s moral vision. Particularly as current Neo-Liberal economics teaches that the economy is best left untouched by government intervention and that it is the unregulated free market that will deliver the goodies that people want, be it a home or high quality medical care.

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What is moral in a government that values the interests of the drinks industry above that of the health of the community. Successive governments be they Labour or Conservative have facilitated the expansion of the drinks industry by easing the licensing laws. Our more principled ancestors (Non-Conformist politicians) recognised the evils of too free a consumption of alcohol and introduced licensing laws. Neo-Liberal economics teaches that the greatest freedom is the freedom of the individual to consume what they please. The costs to the health service of alcohol abuse, the increase of the number of babies damaged through alcohol fetal syndrome and alcohol induced violence count as nought against the individuals right to self abuse.

The present cannot be remodelled according to the ground rules of the past societies. It is not possible to reinstate the church as a powerful institution in society and it is probably not desirable. There are too many examples from the past of the church abusing its powerful position, not least with the burning of heretics. One answer is to demote the inhuman human sciences from their dominant position in the political and public dialogue. Plato does for me provide a way forward, he said that whoever knows good desires nothing else. What he meant by this was that the study of the nature of good has the potential transforms the human personality. (Such a brief statement does not do justice to the complexity of Plato’s thought, to do it justice would require a lengthy exposition.) Only Christians take the study of good seriously, university ethics courses teach students that good is an unknowable concept and at worst an emotion. I guess contemporary philosophers would be unsuitable to the teaching of good and probably only theologians could teach it without self mockery. What I desire is a reordering of the university syllabus particularly for the great and good in the elite universities. Obviously I am not naive enough to think this teaching would modify the behaviour of the great and the good that enjoy the ‘frat boy’ life style at university, but it might produce a new Lord Shaftesbury to be a moral counter weight to the moral free sheep that populate our politics.