I made what seemed to me a glaringly obvious comment on this blog and I got the most extraordinary response.
I quoted CBI director Richard Lambert saying:
In a free society, it’s not the job of a politician — or, for that matter, of a regulator — to argue that a particular form of activity is or is not of social value.
I was shocked by this. Now you can call me naive if you wish — but I would think most people in this country would be shocked by this. What he is saying (contrary to what commentators on this blog seem to think) is that it is is not the job of politicians to decide what goods and services should be offered in the market place.
I strongly disagree.
I know no sensible person who disagrees.
Of course the comments are in the context of Lord Turner’s comment that a lot of what banks do has no social value. And I haven’t met a person who has disagreed with that yet — people are begging for politicians to be as honest. Brown would be re-elected if he was, instead of making life as easy as possible for bankers.
But the Right blogosphere have reacted in their usual way.All I have said is a) politicians and regulators do need to curtail some market activities b) if this conflicts with profitable opportunity that is tough on those regulated.
Saying this is not the tyranny of the majority as some, who prove their hatred of democracy by making such comments.
It is not a failure to understand economics. Economics that does not understand that markets fail, people are irrational, and profit is a very poor guide to value is not economics worth having.
It most certainly does not make me a communist — just a normal member of UK society.
And it does not mean I do not understand any of these issues. Far from it: what worries me greatly is that the Right — which influences the Tories far more than most presume — do think the market is the solution to all problems.
Like it or not, it isn’t. And unless we’d had constraints imposed on it we would still have slavery, child labour, no paid holidays, unsafe working conditions, exploitation and discrimination and much more besides.
It’s a reality that most social advance has arisen in response to regulation of the market. Note, that does not say I do not see a role for the market — I do — and expect it will always form the largest part of our economy. But it works best when constrained so that its ability to abuse that is inbuilt from the moment participants start with unequal access to capital and markets is curtailed.
Which is exactly why Richard Lambert was wrong.
And that is exactly why those who comment here are wrong.
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Until someone defines what “social value” is, it’s just a meaningless soundbite. You could quite easily argue that 99% of all human activity creates no “social value.” So what?
The fundamental difference between people on the hard right and the remainder of the population is that of idealism versus pragmatism.
Richard: as long as you, I and others attempt reasoned, measured analysis of what has gone wrong, the right will shout us down. They do not wish to learn from the Great Depression, Asia, Russia, LTCM or the credit crunch – just continue to shout that ‘the left’ have distorted the otherwise perfect market paradigm.
I think its time we stopped bothering with reason and simply labelled the right as selfish, self interested and bigoted – and an elite minority obsessed above all else with preserving their material advantages.
There are sort of conservatives that argue that the proposed health reform in the US will result in empowering bureaucratic death-tribunals to decide who will receive medical attention or not, and I see that on the other side there are sort of progressives that hold that if we do not regulate the markets completely, the consequence is that we will have slavery, child labour, prostitution and drugs
Funny how many sort-ofs behave sort of the same.
As for me there is no regulation better than education and clear signals from the society…how can you attack drug trafficking when at the same time you socially condone drug use?
We are in the midst of a huge financial crisis caused not by de-regulation but by the wrong regulations. Ordering the capital requirements of banks to be based on the credit ratings increased dramatically the returns of hustling up some AAAs… and look at how that led the markets over the subprime cliffs. Also I do not want my banks to be financing anything just because it is supposedly risk free, because if that is the case, I prefer my banks to finance what serves, supposedly, a higher purpose for the society.
There is nothing as dangerous as allowing the markets to leverage themselves unlimited freely, expect of course allowing a regulator to leverage unlimited his opinion on the world.
Alex
I think you’re right
These people have an extraordinary power to reason quite absurdly, beyond any point where sense can apply
They abuse the concept of liberty and democracy in the process
They debase economics to the point where it has nothing to offer
They dismiss all opponents as illogical
Actually, we’re not. we just accept that the greyness of life does not fit the absurd logic these positions require that those who promote them adopt
And at the end of the day all their logic comes down to is their own self interest above all else
And there is not one ethical code on earth that can be reconciled with that
Richard
Richard
“And at the end of the day all their logic comes down to is their own self interest above all else”
I thought you believed that people don’t inherently act out of self-interest.
I find the whole left vs right name calling to be quite banal. It is football fan politics – picking a side and mindlessly backing it. It’s no surprise that it’s most commonly indulged in by the authoritarian proponents of nasty politics at either end of the spectrum.
Paul
Which shows how utterly bizarre your interpretation of me is
I happily support the market system, subject to constraints
I am a Christain – so I believe I should love my neighbour as myself – which does therefore allow me to ghave self interest
And I advise across the social democrat sphere in politics i.e. the centre ground
I’m about as far from an extremist as it is possible to get
Only the far right – the Worstalls, Devil’s Kitchens and the like think otherwise
But that says a lot about them, not me
They may call me extreme. But I know that I reflect a great deal that is mainstream Britian
No wonder they’re worried
Richard
“I happily support the market system, subject to constraints”
With the constraints being that the people operating within it must act in a way that satisfies your preferences. It is authoritarianism of the most unpleasantly dishonest kind.
I believe that your attitudes reflect very little that is mainstream Britain; most people are too busy living their own lives to want to dedicate huge amounts of their time attempting to control others.
“And unless we’d had constraints imposed on it we would still have slavery, …, no paid holidays – blah blah”. We still have slavery (aka tax – I do not consent to 50%+ of my life being taken by force). I have unpaid holidays (I’m self employed) – and I wouldn’t force anyone else to pay for them. I stumbled on your blog accidentally whilst researching another subject and I’d like to thank you for the contribution your adverse opinion of the subject I was researching has made in forming my opnion of same.
@you – “greyness of life” – You may not want to hear this but, grey is a mixture of black and white (i.e. the centre ground, the middle road etc etc) is just a way of saying I won’t be good or bad, just a bit of both. I won’t stand up for what is right or what is wrong – they both hold the same validity – I’ll just mix it up – and pray.
@Per – “empowering bureaucratic death-tribunals to decide who will receive medical attention or not” – such as smokers or overweight people? Welcome to the National Health Service.
Hi Richard. I suspect your definition of sensible excludes anyone who disagrees with you, making your statement “I know no sensible person who disagrees.” a tautalogical nonsense. 😉
I think you missed an important point when you studied economics all those years ago. It is a subject that concerns itself with what is, rather than what ought to be.
“What he is saying (contrary to what commentators on this blog seem to think) is that it is is not the job of politicians to decide what goods and services should be offered in the market place. ” Surely you can see that this is actually a good definition of communism?
It would help if people had a better understanding of where their ideas have come from. Ideas which are “in the air” can be traced to specific sources and things are rarely what they seem. This applies across the political spectrum. Libertarianism can be traced through to Locke and his nonsensical concept of ownership rights, which latter day philosophers have picked up, notably in the USA. Ayn Rand and Robert Nozick are two such who inform the political right, and their fallacious underlying arguments, which depend partly on sloppy definitions, need to be demolished.
Locke himself is an early Enlightenment figure and this too is a movement which is not what it seems. Ostensibly rationalist, it has roots in the Neoplatonist revival of the 15th century which was itself a revival of Gnostic ideas from antiquity, coming about through the translation of fifth century Neoplatonist texts which had come to Italy following the fall of Constantinople in 1453. Socialism, Marxism, and the 18th century Republican ideas which came to fruition in France and the USA can be regarded as developments of the same stream of thought, which runs through figures such as Kant and Hegel.
A close examination will make it evident that all of this stuff is profoundly anti-Christian, which is why successive Catholic Social Teaching documents from Rerum Novarum of 1891 to the latest one, Caritas In Veritatis, issued this year, take the view that Left and Right are wrong.
@Henry – “Ostensibly rationalist” – nice slur (as was the rest of the sentence). So – remove rationality from Locke and give back to the Catholc church? Good try but it doesn’t wash. On the subject of ownership, I’m guessing you think that everyone else but me owns me.
Your last sentence simply reinforces my comment above on greyness.
John – this idea you hold that only an extremist position is acceptable just sounds like fanaticism to me.
Paul,
My idealism vs pragmatism comment I think is demonstrated by you: “It is authoritarianism of the most unpleasantly dishonest kind”.
We have anti-terrorism laws which restrict slightly our freedoms in order to protect us from worse. We *had* financial regulation for the same reason.
I don’t know anyone who would argue that regulation does not impair economic growth potential. Being a pragmatist I just accept this as the necessary price we must pay to avoid what has now happened.
Economic idealism is intellectual lazyness. The real debate is how to create effective regulation that cannot be sidestepped or dumbed down.
Oh dear Alex, where to begin!
Your comment appears to be a perfect example of idealism taken to an excessively unreasonable level, as tends to be the case with people who believe that increased government power is the answer to everything. Your response to my comment took it out of context, as I’m sure you are aware, you I won’t respond to that element.
The idea that anti-terrorism laws only slightly restrict our freedoms is so ludicrous that I don’t think it needs me to reply to it.
The idea that we *had* financial regulation is a little more interesting, as it reveals a more common piece of intellectual laziness. If you are honest with yourself, rather than starting from a position of “we need more regulation” before even considering the issues, you must be aware that finance is among the most heavily regulated and manipulated industries. The idea the government hasn’t had anything to do with the finance sector in recent years is nonsense and a dangerous myth to go unchallenged if we want to avoid a repeat of what has happened recently.
If you really believe that economic idealism is intellectual laziness, then put yours aside and accept that regulation isn’t automatically always the answer and that it might be the cause of some problems, rather than the solution.
@Henry Law
I suspect that many libertarian minded people now in their middle ages were influenced less by the works of Locke or Rand and more by the novels of Solzhenitsyn and memories not only of the Cold War, but also living through the consequences of the darker years of the twentieth century.