Skip to content

in which I consider the greatest “economic benefit” principle

The question and answer about the mining industry in this brief exchange (at about 54 mins) between Nick Robinson and Jonathan Portes prompted me to tweet to the latter that he had just demonstrated why economists should be allowed to inform, but never to make, policy. Jonathan gracefully replied in general agreement - then went on to explain his comments in that interview in more detail on his NIESR blog. It’s worth reading, particularly this, the heart of the argument (the latter part of which , unkindly, was not clarified in the BBC interview) :

“This is what I was trying to get across: the standard utilitarian Adam Smith case for a liberal, market-oriented approach: that (accompanied by appropriate redistribution) it will maximise welfare. It does not imply, as one or two people suggested, that I don’t care about the human consequences of economic decisions, nor that I think people are a commodity like coal.”

Before I continue I should declare a possible source of bias. My father was a coal miner for the first part of his working life. His father was a coal miner for all of his working life, and his father was an iron-ore miner and then labourer in the collieries.  None of them were around to see the mining industry closed down in the 1980s (with the other heavy industries). I would not possibly presume to represent what their views would have been.

I agree that the utilitarian Adam Smith case is the standard premise of current political orthodoxy in the UK.  It was first translated from theory into practice by the Thatcher Conservative government; adopted by  Labour  as its “Third Way” as its leadership become New Labour; and then by an “Orange Book” leadership coup in the Liberal Democrats.

Since the 1950s, the Adam Smith case has been developed, supported and propagated by an ever-expanding and closely linked network of well-funded thinktanks.  These organisations provide what is now a flood of aligned policies, together with a constant media presence. It is a mode of thought virtually unchallenged by mainstream media, with the BBC notably in thrall to it. Many of the current government – most notably, many of our most senior Ministers – have done nothing (or hardly anything) except work for thinktanks or their party. With the UK’s unwritten constitution, it is not at all clear where the boundary is between government and thinktank, or indeed if there is one.

Following this model, to maximise welfare the role of government must first and foremost be to protect and further the liberal, market-oriented approach. This prevents the state from providing public services. Energy supplies, water, sanitation, communications, roads, railways, waterways, the environment, the National Health Service, ambulances and fire engines, education at all levels, prisons, probation, perhaps the legal system itself, even policing and the armed forces: everything must be divorced from public management and converted to private supply through markets. The state is transformed into a commissioner of private provisions. This is indeed what the UK government (run by all major political parties) has been doing since 1979. Instead of governing a state, government is not even managing an economy: it is setting aside whatever controls it can. Politicians might claim the titles of government office, but economists are in charge.

Politicians are thus  limited to specifying what amount of redistribution is appropriate, and the means of that redistribution. However, given that the government has rejected the principle of shared risk and abandoned public ownership to be replaced by markets, what means remain with government to redistribute any wealth? And why would government do that anyway?

A serious problem for Portes’ case is that the two necessary conditions - a liberal, market-oriented approach and appropriate redistribution - are in conflict: strong adherents of the former assert that they are incompatible. Markets are believed by the adherents of Smith to be the most efficient means of distributing goods and wealth: redistribution thus disrupts markets and undoes what markets do so well. Governments are consequently pressurised (or already convinced) to trust entirely to the liberal, market-oriented approach and to ignore the redistribution. Even if welfare may be maximised,  it is certainly not shared. The signal feature of the US, then the UK, since the 1970s has been the accumulation of wealth by a tiny elite and the accumulation of personal debt by the rest of us. In the UK we now have a government so fundamentalist in its adherence  that it is not just divesting itself of the responsibility for protecting the population at all from the market-oriented approach, but lauding the unfair consequences as not just inevitable, but moral. The standard case has long since been moved from liberal to neoliberal (probably prior to Thatcher), and government is removing the vestiges of the postwar state as provider of social security.

This all makes immigration a problematical. Immigrants may indeed – as Portes demonstrates from the data – add to the general welfare, but the general welfare is not most people’s perception, it’s personal well-being and income. Were there a stronger personal sense of financial and job security, it would be much harder to press the immigration button as all major parties – plus, of course, UKIP – are doing.

The usual definition of the utilitarian case is Bentham’s axiom of  “the greatest happiness of the greatest number”.  You might pause to see whether your ethical views are consistently supportive of this by attempting this thought experiment.  My own ethical outlook came out as consistently opposed to it. What you get out of the axiom depends in part on the definition of  happiness which you plug in.  Portes uses the term “welfare” implying, perhaps, general well-being. But as in the case of the miners, does inflicting hardship on a few ever justify an increase in welfare for the many (assuming the redistribution which hasn’t happened)?

As Portes recognises, there was a failure of government to recognise and to mitigate the consequences of what he thought was an economic decision, based on the availability of cheap coal. Similarly, he put it to government that funding and action should be taken to contain the impact of immigration. To his credit, he sees that economic decisions have human consequences. But was this decision to close the mines, based on the market approach, justifiable as a political decision?

Market decisions are decisions based on price only. What about energy security? Surely the oil price shocks of the 1970s would have been enough to persuade us that dependency on foreign supplies and low prices was a risk.  And what about planning for energy production and use? Government has sloughed off its responsibility to the markets and to private providers, leaving us with an energy infrastructure 60 years old and creaking badly, and most importantly wholly unable to contain the impacts of climate change.

It turns out the popular perceptions of politicians – that all major parties are the same, that they look after wealthy corporations and the wealthiest individuals and not the electorate – are logical consequences of letting politicians believe in the standard utilitarian Adam Smith case. In the core of his blog, Portes offers thanks that no government is acting to protect its own people or business from the liberal, market-oriented approach. But as Ha-Joon Chang argues, was there ever a state which successfully nurtured its business and (social) infrastructure without protecting them from global markets? If we are to rebuild an industrial base and secure medium and large enterprises, and provide a future where we do more than sell houses to each other or seek rent, don’t we need a fundamental shift away from the current orthodoxy?

It’s not Brussels that we need to recapture our government (and country) from, it’s economists and corporate lobbyists.

To finish, a sidebar on the subject of migration. Had my grandmother not held an unassailable terror of the Atlantic crossing, my grandfather –  to be awarded a DSM in The Great War and recipient of a subsequent award from the colliery owners – would have moved his family to join his brother’s in Pennsylvania. Britain’s loss. But then, there were no immigration controls a century ago. Someone would have taken our places.

in which I consider “voter apathy”

At least three Guardian columnists (to my knowledge) have recently responded to comedian Russell Brand’s dismissal of the value of taking part in elections.  None, however, discussed the value of voting in the context of neoliberalism.

Across and around at least the leadership (past and present) of the three largest UK political parties (Conservative, Labour and Liberal Democrat) there has coalesced a neoliberal consensus, marked by obsession with low taxation, deregulation of the corporate sector, (re-) regulation of the public, conversion of welfare to workfare and penal-fare, and privatisation.  Since (at least) the 1970s, the political classes have become impelled by the inability – even immorality – of government as a means to improve the public welfare, or common wealth.

The public  has been conditioned to believe – by politicians themselves, by thinktanks that produce them and think for them, and by a media which (almost) never questions any of this state of affairs –  that politicians can only fail at best; or at worst, are in it “for themselves”. But then, in the neoliberal utopia, we are all “in it for ourselves”.

In a society where everything is to be mediated by money, it’s clearly absurd to expect politicians – indeed entire governments – to be motivated by public service which they sincerely believe to be wrong. It therefore makes little sense to retain old-fashioned notions of “the vote” as being something a citizen (subject, of course, in the UK) exercises in an act of civic responsibility or duty. The subject has no responsibility to the state, only to his/her selfish interests.

Our elites have in any case declared themselves (as did the Cynic so many of them studied in PPE) to be citizens of the world, sovereign like the global corporations they court, laundered together with their unpaid taxes). They are the elect, a higher state than the elected; above and out of reach of our state and its puny government.

The vote thus becomes, like the examinations certificate (see previous posts), a voucher,  to purchase policies which meet our individual selfish needs. Everyone will seek to cash-in their vote for the politician who offers the best return. We reach the moral limit of the marketisation of politics.

Of course, we all know that our votes – even combined – don’t have purchasing power equivalent to the global corporate behemoths (either directly or indirectly through the lobbyists and thinktanks). If the elections since 1979 have taught us anything – and the Coalition is the most egregious example until its successor – it’s that our elections have been turned into a sideshow. Not even bread and circuses. No damn bread, no damn circus.

What we also know – not least because Oliver Letwin helpfully spelt it out for us in his book – is that our votes are exchanged for lies and not even for promises. Our Parties compile election manifestos to hide from us what they will do.

Neoliberalism is wholly incompatible with democracy as we think we understand it. Democracy is based on social and collaborative values; on civic virtue and civic responsibility: neoliberalism is based on selfishness and individualism.

As Costas Lapavitsas wrote –  in the Guardian:

“Ultimately, financialisation will not be reversed without an ambitious programme to re-establish the superiority of the social over the private, and the collective over the individual in contemporary society.”

Substitute “neoliberalism” for “financialisation”, and say it again.

God, we’re crap

If there is one thing that our political classes want us never to forget, it’s that we’re rubbish.

Four decades ago, we came to the conclusion we couldn’t manufacture things. If we tried, we only ended up striking. If we actually made something, it was rubbish anyway. When we came up with ideas, they were rubbish. Don’t even try to make them. Some other country can do it better.

So we stopped trying to compete with Japan, or Germany. 

Gradually we learned that government was rubbish. Not the government, but government itself. It could never deliver anything. It just borrowed too much, and raised taxes. So we came to elect politicians who were absolutely convinced that government was rubbish, and had to stop any attempt to make our lives better, or safer, or healthier. Their job was to run the country down, and run government down. 

From that it was obvious that we couldn’t deliver or manage public services. So they had to go: railways, telecommunications, water, energy, and most recently the NHS and post services. All rubbish. We just can’t do any of this. We can’t run prisons, or probation, or police each other, or be trusted in public spaces. Stop trying.  

We’ve learnt that our old people are rubbish, just because they’re still here and we can’t afford them any more. 

We’ve learnt that our kids are rubbish, so stupid we’ve had to make up easier and easier exams for them to pass just so we can pretend they’re not.

We’ve learnt that we’re all rubbish; because we want too much pay, and time off work. Because everyone else part from ourselves is skiving on benefits, and not hard-working. We’re rubbish compared to the Chinese, or Singaporeans, because we don’t want to go back to Victorian working conditions and because (never forget) our kids are stupid and lazy, and we’re rubbish parents.

We’ve learnt we’re so rubbish that we have to be spied wherever we go and whatever we do. We can’t be trusted.

So here we are. Rubbish. Crap at everything.

Except for the very few of us who can extract rent, we are the fallen. 

And if we keep believing what the elite want us to believe, we deserve what we get from them.

the Tea Party and the new gnostics

There were many flavours of gnosticism, but they all – at least those derived from Judaism or Christianity – had some things in common.

A particular creation myth, and obsession with the first generations of people.

A conviction that redemption is found not through atonement or forgiveness, but through ignorance. Only through complete lack of knowledge and critical thinking could you make that sudden and complete  realisation of the gnosis, the vast and complex conspiracy which explained how the world really worked.

A conviction that this world is evil.

Evolution is a fake, and creationism the truth; Obama is a fake president, and not the real one; the Founding Fathers were fakes, not the servants of God who really created the Constitution; there is a vast conspiracy of evil in the world which can be called communism: a Manichean battle being waged against the forces of public education,  public health and public debt, science, and gun-deniers and corrupted religions.

Gnosticism seems to have erupted again amongst the Tea Party and in the Republican parts of the USA.

on the rights and wrongs of workfare and internships

Why would you do something for someone else?

  1. Because you are in – or wish to establish or develop – a relationship.  By doing so, you wish to demonstrate your positive feelings and your worth.
  2. Because you wish to reciprocate, in order to continue a relationship.
  3. Because your morals or ethics demand that you do so, while not expecting any reciprocal act; you act out of goodness.
  4. Because you feel an obligation to do so; you feel indebted to someone.
  5. Because you feel impelled to do so from your understanding of your culture or society.
  6. Because you wish to take advantage, by doing something for selfish gain and with no intention to reciprocate.
  7. Because you are paid to do so.
  8. Because you are forced to do so through indebtedness: not a social obligation, but a form of peonage.
  9. Because you are forced to do so through threat of – or actual – violence.

You might try to classify these reasons into those where the obligation – the debt caused by your action – can be redeemed through payment of money. I would argue that for the first four it certainly can’t. You would be disappointed or insulted if money were offered in return, because accepting money  would change or devalue your original act and its purpose, and your self-image.

The use of money to settle social debts destroys social relationships, and damages esteem and virtue. The first four reasons can be called  ‘Human Debts’.

You could include reason five in the Human reasons, but as long as there is no punishment for failure other than guilt.

The neoliberal world-view admits only to reasons six and seven. All activity is to be mediated through payment ( usually referred to as “the market” or “markets”); although purely selfish acts are permissible provided they are a step to personal gain.  It can  admit reason five, but only if the prevailing cultural imperative is to act selfishly; not selflessly or to form a personal or social relationship. These, then, are the ‘Neoliberal Debts’.

Clearly – to anyone but a neoliberal – Human Debts not only exist but predominate in our social relationships. It is therefore inevitable that neoliberals use governments to create and exploit ‘Punishment Debts’ – (reasons eight and nine) as punishment for avoiding ‘the markets’.  This is why neoliberal states – although they praise deregulation and claim to protect against the evils of communism – will always massively increase surveillance and regulation of the individual and of public services, in a forlorn but increasingly violent attempt to end Human Debts.

(Of course Human Debts extend into private business as well, because we can’t help being human. Thus neoliberalism has generated managerialism, command-and-control management, management by arbitrary targets and ‘performance’: anything to deter us from interacting through Human Debts.)

Punishment Debts must have existed as long as Human Debts. The links between monetary indebtedness, debt peonage, and slavery are well established.  These are inevitably generated by inequality of power and of monetary wealth: the powerful and wealthy exact redemption of both honour and monetary debt through peonage and slavery.

So what of workfare, a compulsion by government to do something for someone in order to receive welfare; and unpaid internship?

Workfare presumes a debt is owed by the person who would receive it to the state. Someone in need of support is by definition assumed to be a burden, a moral bankrupt through their fecklessness, a failure. Workfare is Punishment Debt: as the Government exacts work for what it perceives as a debt owed to the government, or the state; usually misrepresented as a debt to people in work.

(Remember in neoliberal thinking there can be no debt to society, because society does not exist. The neoliberal state therefore has to create a fiction to replace society – like the mythical collection of “hard working people”).

The neoliberal justifies unpaid internship under reason six, as a purely selfish act. Yet this could only apply if the unpaid intern had sufficient income or wealth to act selfishly: anyone else (unless they are helping someone for reason 3) is only acting on a Punishment Debt. As with workfare, compulsion through the alternatives of poverty, penality, and public castigation are the violence threatened.

At this point, it is worth considering the complementary question to this: why would you pay anyone to work?

[The greatest influences on this post: David Graeber "Debt: The First 5000 Years" ;  Michael Sandel "What Money Can't buy"]

in which I visit Accident and Emergency

There are four posters on the pillar between the two receptionists: the topmost above the standing eyeline,  just the largest print legible. The brightest, bounded in red, demands “HAVE YOU SWITCHED OFF YOUR MOBILE ‘PHONE?”

I haven’t. I’m not clear why I need to. To my left, an adult is using his mobile to tell someone that everything’s OK and they will soon be home.

The topmost poster tells me the government demands that they must ask for my residency status. I happen to be English, as far back as amateur genealogy can get, pretty much. I wonder how I might prove it. I wonder what might prompt the request: a beard? A funny colour?

There are two posters next to each other. The one on the left asks me to show my EHIC. The one on the right tells me that I might not be entitled to free care.

A ‘phone begins to ring somewhere behind reception. It carries on ringing.

The receptionist to the right of the pillar is dealing with what I assume to be parent and daughter, or might be coach and daughter. She wears a hockey skirt and a Pudsey homemade bandage at an odd angle around her head.

The receptionist to my left calls me forward. She has no record of the person I am looking for. Could I go and check at the other A&E entrance? No, that’s where I just came from. They had no record and had directed me to this reception. I had set off ten minutes after the ambulance and had definitely not overtaken it.

There is a fading photograph on the wall behind her, an artist’s impression of a new and futuristic hospital with twin towers. To our left, a gaping hole in the corridor wall is filled with blue sheeting hanging from scaffolding. She starts to search again, and all is resolved as an ambulance crew comes round the corner with the paperwork. I am able to correct the address as he reads it out. He takes me round the corner.

The patient is on a trolley bed, looking better than I expected. He is about to go round to x-ray. There are a handful of people sitting on plastic chairs in the neighbouring corridor. It is not busy.

But then the ambulance was on its way back to Luton after going to Cambridge, where A&E was packed. I follow the trolley around the corner, guiltily wondering at the residency status of the person pushing the trolley. He swings it into a narrow gap between a pillar and the door: I immediately understand the dents and notches in the door.

There is a short wait for x-ray, then back whence we came. My wait is passed as the patient on the next trolley, which swings into the now-vacant gap, seeks conversation.

There is no-one there. We wait a few minutes, then I step outside to tell a nurse that we are back from x-ray. In moments, she leaves her PC and comes in to start bandaging. That completed we mention the cannula, which she removes. What about the crutches, we ask, as we set off for the door, awkwardly using a wheelchair. No need for those.

We pass the nurses’ station. A perhaps more senior nurse (everyone wears different coloured uniforms: there is no means of telling what they mean) says something, and crutches are provided. Then a leaflet on how to use them.

We make only one false turn, but are corrected by two passing visitors. We leave the wheelchair beside a vending machine, exit via an automatic door, and make for the car. As we drive, an ambulance, blue lights on, heads the way we have just come.

in which I try out a metaphor

I was trying to explain to someone how Ofsted causes such immense stress and dysfunctional behaviour in schools: how primary school teachers spend twice their teaching hours every day plus time at weekends to do the demanded paperwork; how schools make data show value add; how teachers are terrified of taking over an assessment of (and target for) a pupil they know to be fiction; how heads dread that phone call for months, even years.

Then I remembered how The Sopranos provided such a perfect metaphor for US society under neoliberalism. And the right metaphor for what Ofsted does came right after.

Here it is.

Follow

Get every new post delivered to your Inbox.

Join 1,546 other followers