Is the Institute for Fiscal Studies on to something?

In a recent ‘Times’ article (republished on the IFS website)
Paul Johnson of the IFS  comments extensively on their recent report on UK living standards:

“..by far the biggest challenge to have reared its head over the past ten years or so … is the massive squeeze on incomes right across the population. After taking account of inflation, average earnings remain below where they were in 2008. That’s unique in at least 150 years.”

He continues:
“Increasing employment and dreadful earnings growth have put paid to another verity. Poverty is no longer overwhelmingly associated with lack of employment. The majority of those officially classified as poor live in a household where someone is in work. More than four in ten children in families where one parent works now fall below the poverty line.”
And further:
“Another profound change relates to what it means to be in the middle of the income distribution. The incomes of those in the middle are no further behind the top than they were 20 years ago. But today half of middle-income families with children live in a rented property. Less than a third did so in the mid 1990s. With the extension of in-work benefits they are also more reliant than before on welfare. In the mid-1990s both the rich and the middle were generally owner-occupiers dependent on their own earnings. Increasingly the renting, benefit-dependent middle earners have, and perhaps feel they have, more in common with the poor than with the rich.”

Although, as we have come to expect of the IFS, he goes off the rails at the end of the article, when he talks about tax revenues (that’s why I have quoted extensively to spare PP readers from having to read it throughout!) his comments are a pretty devastating critique of the current economic circumstances.

His conclusions suggest that Labour has an open goal on living standards. They also imply that the idea that you get more right wing as you age may, with so many still feeling the pinch for much longer, not be as pervasive as most imagined.

Labour’s remaining problem is Brexit on which they are giving mixed messages. A period of Labour silence would surely be advantageous in order to allow the Tories gradually to strangle themselves. It seems to be most unlikely that the government will be able to get its five Brexit bills through the Commons and Lords unscathed and it I would be unsurprising if the government fell at an early hurdle. Still, the longer the government lasts the clearer it will be that leaving the EU is a recipe for impoverishment of the nation and that will, by the day, be getting more obvious to voters. So when Labour seems to suggest that its Brexit policies will be practical and influenced by circumstances as they arise perhaps that is no bad thing.

Add to that the fact that Conservative voters are getting elderly and some will, like Brexit voters, be popping their clogs.

Time I think, is on Labour’s side.

‘Democracy in Chains’: a US export that’s not as new as some might claim

Ivan Horrocks

On Wednesday I read George Monbiot’s most recent column in The Guardian* in which he briefly discusses James McGill Buchanan, a man who features prominently in US historian Nancy MacLean’s new book, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. As Monbiot notes, McLean’s book makes what has previously been largely invisible to the vast majority of people (including it has to be said many politicians) visible, and the title of his piece pulls no punches as to why: ‘A despot in disguise: one man’s mission to rip up democracy’. Monbiot continues with a sub-heading in which he notes that ‘…Buchanan’s vision of totalitarian capitalism has infected public policy in the US. Now it’s being exported.’

Now I’ll admit that I don’t often take issue with much that Monbiot writes, including his work on “rewilding” which gets him branded an extremist in many circles. But I do take issue with his claim that it’s only now that Buchanan’s vision of ‘totalitarian capitalism’ and the way this has infected public policy (and US politics in general it should be noted) is being exported elsewhere.

Why? Well, the answer to that is simple. As a mature student studying for a degree in public administration in the early 1990s one of the subjects covered was public choice theory, the development of a body of work in which, as Monbiot notes in his article, Buchanan played a central role. A leading book on the subject at the time was Peter Self’s Government by the Market? The Politics of Public Choice (Macmillan Press, 1993) in which the author details and critiques how the creation of the new public choice ideology came about, why, its goals and ambitions, and known and likely outcomes for the post-war model of social democracy.

As Self notes, public choice theory was indeed primarily a US development, although by the early 1990s its influence had spread, especially to English-speaking countries, and a prolific volume of work had been produced. In the US public choice theory had two strongholds: ‘…the Virginia School led by James Buchanan and Gordon Tullock, who founded the Public Choice Society in 1963, and the Chicago School, represented by such writers as Mancur Olson and George Stigler.’ (Self, 1993: 1). This body of work developed out from Anthony Downs’ ground breaking book of 1957, An Economic Theory of Democracy.

It’s not my intention to undertake a detailed review of public choice theory here, except to note that the underlying behavioural view – as for neo-classical economics – is that humans are primarily egoistic, rational, utility maximisers. Thus, Buchanan and Tullock (1962) rejected the traditionally accepted view of the difference between ‘political man’, supposedly concerned with public interest, and ‘economic man’ and private interests. Instead they argued ‘that it was reasonable to assume that his basic motives and interests will remain the same. What will change are the constraints and rules under which he operates, which will be critical for the rational calculation and pursuit of private interest.’ (Self, 1993: 2).

This ‘rational’ view does have profound consequences for how we view politics and indeed the construction and operation of political systems and economic and social relations in general, of course. Leaving that aside, for the purpose of this blog I want to focus on one succinct passage in which Self explains the emergence of public choice theory and the fundamental role it played in the new ideology of what in the 1990s was increasingly viewed as ‘government by the market’:

‘Mainstream public choice theories have been fused with market theories and converted into a powerful new ideology which has become politically dominant over the last two decades. This new ideology has overthrown or undercut the previous dominant ideology often described as the Keynesian-welfare state.

In both these cases the dominant ideology is a joint product of economic and political thought. The Keynesian-welfare state combination stressed the limitations and failures of market economics and beneficial capacities of the state for promoting both social welfare and economic prosperity. The new ideology reverses this approach and argues the general beneficence of markets and the many failures of politics. Public choice thought plays a vital part in this new synthesis because it claims to expose the grave intrinsic defects of the political process, especially compared to the merits of market choice. Without this demolition job on the role of government, market ideology could not have flourished in the 1980s.’
(Self, 1993: 56)

This then is where I take issue with Monbiot’s article, because the work of Buchanan and other advocates of public choice ideology is not a recent US export. Far from it. It has been infecting and thus impacting politics, government and public policy in the UK and elsewhere for decades. Nevertheless, Monbiot (following McLean’s argument) is correct in highlighting the more recent role billionaires such as the Charles Koch have played in funding entities that promote – usually by stealth – Buchanan’s/public choice forms of government and constitutionalism that effectively leave ‘democracy in chains’, as McLean so aptly puts it.

But again, it’s important to recognise how long this process has been going on. Thus, Self notes the role that so called “think tanks” played in the early transmission of public choice ideology and how they were usually funded either directly or indirectly by big business. Breaking with the independent tradition of organisations such as the Rand Corporation and Urban Institute, think tanks such as the Heritage Foundation and Hoover Institute (to name just two US example from many), and in the UK the Institute for Economic Affairs and Adam Smith Institute (ditto Canada’s Fraser Institute), all aggressively promote policy ideas and proposals based on public choice principles. (In his 2014 book, The Establishment, Owen Jones discusses the activity and impact on UK politics of several of the UK’s leading right wing/public choice think tanks).

In terms of influence and impact, Self notes  a number of examples from the 1980s of which I simply highlight one:

The Heritage Foundation specialised in detailed, closely argued policy proposals. When President Reagan took office, twenty Foundation ‘staffers’ joined his administration and he was greeted with a twenty volume, 3000 page report entitled ‘Mandate for Leadership’ filled with detailed recommendations for cutting down government and boosting defence. Four years later the Foundation could boost that 61% of its proposals had been implemented…and a new mandate was issued for Reagan’s second term with 1300 specific proposals.’ (Self, 1993: 66, citing The Nation, December 1984).

Although seen by many as at best incestuous and at worst verging on corrupt, over the decades since Peter Self’s book none of the influence/lobbying activity he reported has slowed or been curbed. Indeed, quite the reverse. The purveyors of public choice ideology have continued to evolve ever more ingenious ways to control and shape public policy that furthers their ideology and the interests of their benefactors. This is usually by stealth because it has been consistently shown that such ideas generally lack public support. Currently there’s no more egregious an example of this than the continuing attempts by US Republicans to pass legislation to repeal and replace (or just repeal) Obamacare, thus negatively impacting millions of US citizens, while simultaneously committing to tax cuts that will overwhelmingly benefit the already wealthy.

It’s somewhat ironic then, as retired US senator Barney Frank noted on MSNBC on Wednesday evening, that at the same time the behaviour and actions of President Trump demonstrate to everyone who dislikes government that there is, in fact, something worse than government: No government. Furthermore, through their actions many Republican politicians (ditto their Tory compatriots in the UK) also expose the fact that public choice ideology has never been about devising public policy that responds to public need.

Nor is there anything public – in the sense that most of us understand that term – about public choice theory and ideology. It’s actually a misnomer of the grandest order. For what public choice is really about is bowing down to that base and simplistic measure of humans as egoistical, rational, utility maximisers, and rewarding those that act accordingly.

*https://www.theguardian.com/commentisfree/2017/jul/19/despot-disguise-democracy-james-mcgill-buchanan-totalitarian-capitalism

What’s the difference between a Yorkshireman and a Coconut?

I’m sure not all Yorkshiremen will excuse me but, as a former resident, I’m sure the ones worthy of the name will.

The answer is:- You can get a drink out of a coconut.

Perhaps that is why coconuts don’t flourish in Yorkshire.

Mind you, it turns out that the oil is the important part.

Does George Eustice, the Agriculture Minister, albeit a Cornishman, but still a (prosperous) farmer himself, realise this?

Because there seems a great appetite to think that there is major scope for import substitution when Britain leaves the EU.

George Eustice must realise that there is usually only one harvest a year and that crops and livestock do not grow overnight. His colleagues from the shires seem blissfully unaware, that, for example, about 30% of our lamb is exported – to the EU.

And even in Cornwall, although there may be a supply of tea there are no coconuts.

If farmers are to provide the food Britain needs they need, with just 20 months before potential ‘B’ day, to know precisely what they should be growing in order to earn a living.

And farmers might need to know that, for example, the  days are numbered for British Sugar and that coconuts are the future.

Indeed I think both are true even if we remain in the EU, but if the former may prove of some concern to East of England farmers the latter should be the concern rather for the British consumer.

Food and drink comprises the biggest section of EU regulation and yet, quite remarkably, there is no plan.

In the recent report by a combined Sussex, Cardiff and City Universities  Professor Lang, one of the contributors, said “UK food security and sustainability are now at stake. A food system which has an estimated three to five days of stocks cannot just walk away from the EU, which provides us with 31 per cent of our food. Anyone who thinks that this will be simple is ill-informed.”

And, he could have added, that all of that is based on a just in time ordering system.

When customs controls are reintroduced by the EU, even if the UK may, characteristically, choose not to afford them, then using the M2 as a lorry park is likely to become permanent.

Still, at least coconuts are more likely to come to Liverpool or Tilbury.

I think we have to conclude that food is one of many areas and also actually, probably the most important area where the government does not have the foggiest idea what it is doing. By failing to act now it is giving neither farmers nor their customers – us – any security.

This is a decidedly ill thought out way for the Government to run a country which is leaving a Customs Union. As a result the so called precariat is likely to comprise ever more members and will result in that same precariat becoming pervasive.

A sad indictment.

With a despairing heart, I return to to the more optimistic coconuts.

I cannot find anywhere in the EU that produces them.

So at least it is likely we will still be allowed the luxury of frying or roasting in coconut oil – and indeed organic supplies seem widely available.  Which is perhaps some recompense.

Perhaps this is a suitable way of encouraging ‘healthy life’ afficiandos to buy coconut oil to cook with, and in – if they aren’t already- and trying to encourage the spread of the good word.

When cooked, coconut oil doesn’t generally produce hydrogenated oils – so the oil you’re cooking in doesn’t change much. The table is below:

We can now even use lard without guilt.

In the past, I’ve consumed fish and chips with delicious chips cooked in lard. This was – and is now again – a tribute to Yorkshire, although, of course originally we were told that we should not allow lard, never mind appreciate the taste.

Now I’m much encouraged towards real food and just fry again – preferably in coconut oil – but local lard will certainly do!

Mr Trump just Wants to be Friends

There was a lovely cartoon, I think from a German newspaper, which I cannot unfortunately now trace, but it was a compelling scene. It showed the empty chairs around the table at the Paris climate change talks. They all had the country flags on the back of them, and in the long line of chairs inspection of the US’s uniquely styled empty seat revealed that it was in fact a high chair….

Looking at the rather excruciating images of Trump’s visit to Paris it seems to me that somebody who ought to be at ease internationally is clearly something of a little boy lost and so lacking  in self-awareness  that it shows.

The poor chap wants friends – even worse, he needs friends. As he might say, he needs friends so bad

If we look at his administration, he doesn’t seem to have filled all his cabinet posts even after six months in office. Many, if not most of those he has appointed are friends or friends of friends. He still uses his son-in-law as an advisor and his daughter came to occupy his seat for a short time at the G10.

He seems to have loved all the ceremony of the 14th July in Paris. Yet, having held hands with the UK Prime Minister in America he has reportedly got cold feet about a return visit to the UK because he doesn’t want demonstrations. He wants friends.

He’s gradually discovering that running America isn’t like being a Chief executive of a corporation, where you can sack those you don’t like never to hear from them again. In politics they crop up somewhere else and start criticising you. He doesn’t like that. He wants loyalty – that’s what friends are for. He tried to be friends with Macron – even not finally closing the door on the climate change agreement. The thought may well not survive a few weeks back in the US. But he just wanted to be friends.

Most of his prospective friends will have heard Lord Palmerston’s dictum that “England has no eternal friends, England has no perpetual enemies, England has only eternal and perpetual interests.” So the more the US President tries to acquire international friends the more they seem to recoil.

We know Trump had a difficult upbringing in the indulgent lap of luxury. He had a damaged childhood and his lack of psychological suitability for the task of President becomes ever more evident.

Still if Trump is unaware of Palmerston’s famous dictum then he is unlikely to have discovered the success of the accompanying gunboat diplomacy.

On balance perhaps we’re better off if Trump just wants to have friends.

 

 

Taking back too much control

There is a clause 7 in the European Union (Withdrawal) Bill that seems to have been little mentioned.

It states
“A Minister of the Crown may by regulations make such provision as the
Minister considers appropriate to prevent, remedy or mitigate—
(a) any failure of retained EU law to operate effectively, or
(b) any other deficiency in retained EU law, arising from the withdrawal of
the United Kingdom from the EU.”

Continue reading “Taking back too much control”

The real debt to future generations

An action dubbed East 4 West – Grenfell Solidarity, took place on 27 June. It involved 22 lots of residents in tower blocks mainly across East London hanging out a banner to express their solidarity with the residents of Grenfell Tower. (Twenty two because one for each residential floor in Grenfell Tower).
It was not generally reported as far as I can tell but it does indicate how quickly a movement can be formed. The interesting part is not so much that these tower blocks were hanging out banners – although that in itself requires organisation – but that there was an organisation formed very quickly to do it.

As is now more and more evident to everyone, efforts to put the budget in equilibrium have precisely the opposite effect on society in general. Am I alone in feeling that this could be the start of a greater engagement in the democratic process?

I was also struck by a short piece on radio 4 , where an ex firefighter who lives in a Manchester tower block went to see his tenant management company to ask about the fire systems. Without demur they proudly gave him an envelope with all the details. He was astonished when he read it and and is now apparently working on a structured reply to tell them the alterations they need to make to bring the fire prevention up to standard. So it rather looks as though Grenfel Tower was not the only accident waiting to happen.

As an aside I remember when I ran a company, I was appalled that I was all of a sudden supposed to be an expert in fire protection as well. Of course the idea is that you go to the ‘market’ to hire in that skill, but how do you know the people you hire in possess the correct knowledge?- or are not just on commission? Or do you just say ‘looks good to me’? (I’ve been in a fire so I can say I didn’t follow this last option, but others might have been less diligent). The stupidity is that no authority seems regularly to check anything until after you’ve had a fire.

There is now controversy about who will run the inquiry into the Grenfell fire and whether its remit will be wide enough. The Fraud Squad are investigating the fire alarm firm, which is certainly worrying. But I cannot agree with George Monbiot’s otherwise excellent exposé of red tape – and the clique that likes to run the country – where he says that  “A public inquiry where the government chooses charges, judge and jury puts the bonfire of regulations outside the frame. An independent commission is needed.” But I think that is long grass territory. The inquiry can establish the causes of the fire and the reasons for its rapid spread. Apart from the inadequate response from Kensington & Chelsea Council, the principle reason for a wide remit is to show that deregulation is life threatening. A conclusion I think most have already reached, and indeed, this is suggested by the reversal, by the Government, of the abolition of the requirement to have sprinklers in new schools.

It would certainly make us feel good to have an inquiry that, in due course, concluded that because the Conservatives do not wish to leave any financial debt for ‘future generations’, those generations are to be left instead with pot-holed roads, homes that are fire hazards, hospitals that are obsolete, schools that are falling apart and a shortage of trained doctors.

And that’s a real debt.

But surely that is already obvious.

 

Fire safety as an “optional extra”? (the case of modern day office space)

With the Grenfell Tower disaster still fresh in our minds, and daily reports of the steadily increasing number of tall buildings clad in material that fails to meet fire safety standards, it’s understandable that the more general issue of fire safety and regulation has rightly become something of a talking point.

Continue reading “Fire safety as an “optional extra”? (the case of modern day office space)”

Brexit – Reasons for Resentment

Following the suggestions for the reasons to remain a summary of the reasons to leave the EU might also be useful, though I would suggest there are not, in fact, any compelling reasons to leave, and so I prefer reasons for resentment.

They seem to comprise three basic ideas: the democratic deficit, too much red tape and too much immigration.

Continue reading “Brexit – Reasons for Resentment”

Theresa May – Champion of Worker’s Rights?

Theresa May has promised “the greatest expansion in workers’ rights by any Conservative government in history” if she wins on 8th June.  She claims: “There is only one leader at this election who will put rights and opportunities for ordinary working families first.”

However, a recent report by the Ministry of Justice shows a stark contradiction between those words and the actions of her government.

Continue reading “Theresa May – Champion of Worker’s Rights?”