Yesterday's electioneering was frustrating. Or, to be fair, the commentary upon it was. Every news report I saw focussed on Paul Johnson of the IFS discussing varying deficit management plans. Robert Peston appeared to be revelling in it.
'Blessed are the bean counters' would appear to be the theme of this election, 'for they shall inherit the policy agenda'. I despair, not very quietly, but since the obsession with the issue is near universal I suppose I have to explain why, and for once with an analogy that goes back to my ideas when being a practicing accountant was my main day job.
It was a normal, and fun, part of my life back then to meet with start up entrepreneurs and to advise and help them in fulfilling their vision. My ability to do so, aided and abetted by my own experience in doing the same thing, was both rewarding and a key economic factor in the success of the firm of which I was senior partner. As a result I had to become quite good at identifying winners.
This was easier than it might seem. Winners were confident about what they wanted to do, had the skills needed to deliver it, or were aware of their weaknesses and were willing to recruit the help needed to address them, and most of all were driven by a desire to provide the goods or services they wanted to sell because they genuinely believed they would meet a need other people had. There was a characteristic they also shared in common: whilst they recognised the need to make money to provide for themselves and to perpetuate the business they had little interest in making money as a goal in its own right. In fact it took very little time at all to realise that those wanting to create a business to make money were the born losers. Precisely because their priorities were wrong they were the ones most likely to fail.
The reason for this was not hard to work out. They were not driven by a desire to serve, so their service was not good enough.
Their obsession with money meant they would not invest enough.
Or pay staff enough.
And they would demand payment terms of customers and suppliers that were too aggressive and be bound to irritate.
Their focus was on the bottom line when it should have been on the top.
That, of course, is the conventional accountant's view. I never was interested in being a conventional accountant. I saw all the importance of financial discipline, controls and reporting, but only as tools to serve a greater goal. They were not ever ends in themselves, which is what the person obsessed with making money made them, for which reason they failed.
Translate that to current political debate and the obsession with austerity springs from the same mindset as the obsession with money making that I saw as the cause of too many failures in the business community. Its small minded pettiness indicates a failure to comprehend the very purpose of the business of government that these who are seeking power at this election should have at the heart of their desire.
That purpose is to meet need. That is what government is for. The whole point if government is to meet the needs of the community that is governed that cannot be cost effectively met in any other way. Since such needs are manifold there should be ample opportunity for politicians to discuss their visions for society.
But that is not what we get. We have instead lessons in book-keeping, cost control and denial of service, withheld investment and opportunity lost, all of which are the very opposite of what successful politicians with the vision to inspire should be delivering.
Let me be clear, at the risk of repetition: I am not denying the importance of financial competence. But it has been elevated way beyond it importance. And in the process the accountant's ability to count anything and value nothing has become predominant. The result is sterile politics, inappropriate focus in election debate, the rise of Paul Johnson and Robert Peston as media stars, and a loss to society that is literally inestimable.
If only we could bless the visionaries who deliver what is of worth. We are, I fear, a long way from achieving that hope, and that is precisely why the choice between austerity programmes that is the supposed centre piece of this election is so utterly uninspiring.
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How Ironic, that a political class that overcame and reformed the ‘Dead Hand of the Treasury’ which knew nothing of value and existed only to cut costs, have now become the ‘Dead Hand’ of deficit-denominated policy-making.
This doesn’t surprise me at all, Richard. Over the years on this blog you’ve noted, and you and commentors have discussed, the demise of political economy as a subject taught at university and the rise of econometrics and related approaches to economics (i.e. maths based and therefore model driven concepts and theories). That had a profound impact on what must now be a generation of students, and when combined with the rise of accountancy as a popular subject we arrive at where we are now.
For example, (and speaking from experience) when I was an undergrad (mature student) in the early 1990s it was still common for students studying politics, government, policy making, public admin, economics, and other social science subjects to take a second/third year political economy option. As far as I’m aware it was a popular subject, with over 250 students taking the course at my university, and I know it was similarly so elsewhere. The nature of the subject meant that seminars and tutorials were routinely spent talking about the impact of various economic theories, the moral and ethical dimensions, and, most importantly, the relationship between the economic and the political (who gets what, why, when and how, to put it simply).
Fast forward to the mid and late 1990s and what were we seeing. In many universities political economy had disappeared from what was on offer. The reasons are no doubt varied, but certainly at my own university at that time the view of the staff was that this was part of a much wider strategy of removing subjects that management viewed as “too political”. In short, anything that might be seen as teaching material that might be construed as critical of government. Of course, in reality, all that happened in disciplines where we objected to this hidden form of censorship was that academics simply changed the title of their modules (out went any reference to Marx, for example) but carried on teaching much the same content (in many universities this pressure to purge anything that can be construed as critical of government/policy continues to this day, by the way).
But this didn’t happen with political economy, perhaps because (in my experience) economics departments always had large numbers of academics who were uncomfortable with that discipline being associated with politics. The outcomes was twofold (at least), the rise and consequent dominance, of econometric forms of economics and the purging of the political from that discipline. But the second outcome was far more significant I think. The production of a generation of economics graduates who have avoided having to think about the wider and deeper social, political and moral/ethical dimensions of that subject and thus of their theories, models, calculations and thinking generally. To give you a flavour of this, since the early 2000s I have routinely come across economics students/graduates who are either unwilling or unable to discuss the moral/political aspects of their research, theories, models and so on.
Of course, for many, many people, this is exactly what they want: not to be burdened with thinking/agonising over the impact on real people of your ideas, suggestions, policies or actions. An existence free of moral and ethical challenges. “Well, we implemented the policy just as the model/theory/numbers said we should, job done. Any consequences are nothing to do with us”.
Of course, we now have a generation of politicians schooled in this approach. No guilt, no shame, no blame on them. And when that’s combined with the kind of ideologically driven, entirely dogmatic government that we’ve just had for the past five years (and may well have again) it provides the perfect storm out of which come many, many casualties, all of which are simply “human collateral”. Nothing more.
As I noted above, when an economics free from moral and political considerations combines with other disciplines/subjects – such as accountancy – that are similarly largely free of moral and political considerations (and deliberately kept so, in my opinion) then we end up with the kind of polity and democracy we have now: so long as the numbers add up the rest can go hang!
a tory got caught out quite recently referring to ESA claiments as ‘stock’…
http://www.theguardian.com/commentisfree/2014/oct/21/cleansing-stock-doublespeak-people-killing
… and i’m pretty sure that’s how the little people are viewed by many in the upper echelons; livestock there to be milked and worked for all they are worth. not that i take offense… my favourite film as a child was Animal Farm.
Absolutely correct Richard; the point you’ve made many times before about the ‘cowardly state’ politicians we now have at Westminster springs to mind. And, having read today’s Guardian story about the anger in Scotland with Labour that is fuelling an (almost certain) SNP landslide in Scotland, it looks like the Scots get this too.
What good has the Con/Dem austerity programme done? The national debt is £1.48 TRILLION (BBC Radio 4 World at One 23/4/15)and rising. A complete failure and obviously an impossible sum to burden the British taxpayer. Yet they promise more of the same……….
Bill,
Please stop listening to the BBC, the IFS etc. Their understanding of these matter are infantile.
Number one: There is no ‘debt burden’ – not one brown penny. Its only purpose is to be a boogy man to get gullible voters to back austerity and the selling off of public assets to predatory corporations at knock down prices.
If you want to understand more, please watch this video (is about Aussie ‘budget crisis’ but applies every bit as much to the UK – and should be compulsory viewing for any political party that calls itself ‘progressive’)…
https://vimeo.com/117137212
It wasn’t austerity, it was a very light version. A bit like the light food you get, which has more salt than previous food and is worse for you.
However what you are saying that the GDP to debt is high and therefore cant be extended..
Richard,
The irony is that the bean counters really are blessed!
Without a proper grounding in accounting, its not possible to reason about and understand macroeconomics. And without a proper grounding of macroeconomics its not possible to understand that ‘micro’ bean counters such as Paul Johnson haven’t a clue what they are talking about…
https://vimeo.com/117137212
PS Thanks for the interesting insights by the way. With the insights from MMT and tales like that I have a very much higher admiration for accountants than I used to
another commentator on here (think it was John M) made the point a while back that empires generally fall as a result of the elite over-burdening their citizens with taxes, etc.
i’m starting to think the best – if not only – way out of this situation is to provide citizens with an alternative means of governing themselves and crucially, an alternative currency with which to trade (after all the endgame right now is a choice between debt-slavery or bankruptcy, as the Greeks have found out).
thankfully the internet is fast providing us with all the tools we need to govern ourselves and trade securely and i see it as only a matter of time before parallel states (or states within states) begin to form and flourish.
And vision is what many of us in Scotland have, hence its momentum. But if we can help our sister nations whilst on the way, all for the good.
I actually heard Osbourne tell an audience the other day that it was Labour who bailed out the banks and portrayed this as having not only put the country in debt but had also the effect of ‘propping up’ a bad banking system. I mean the barefacedness of it………There was no mention of the public crisis that could have emerged had we not gone money moving again.
I was so angry when I heard this going unchallenged that I had to turn the TV off. I am not a big fan of Labour, but when you hear even BBC commentators siding with the Murdoch view of Miliband (geekiness etc.) you have to ask yourself what is going on.
As for Robert Peston – he is a lost cause. He has suffered a bereavement recently and I think that the man could do with a couple of years off. In fact he should perhaps become a gardening correspondent or something like that.
the way the tories get away with pinning all the blame for deregulation on Labour (despite the fact they cheered them on all the way) says much about our politicians and media.
as for Peston, i’ve never understood his popularity. as is the case with most BBC news output, he only ever gives you half the story and it’s generally the half the politicians would have you believe. Paul Mason gives a far more rounded view of things which is probably why he jumped ship to Channel 4.
your summary of the electoral campaign to date is bang on the mark, we just don’t have genuine role models in society today, you are definitely one. Reading gave me goose bumps.
Nick Clegg and his liberals are appalling. The Tories are just a horrible bunch and Labour just don’t have the courage that our country desperately needs them to have.
Richard
your observations on business approach are absolutely spot on, oh, how I recognise those traits locally it’s uncanny!
As far as relating to politicians is concerned I feel one factor is we are now overwelmed by career politicians of who many have no idea or care how proper, truly sustainable wealth and community is achieved.
I am personally sick and tired of listening to a bunch of college boys who have done nothing or achieved anything apart from smarm their way to parlimentary candidacy.
As a simple hard working (not well paid) 60 year old tax paying member of society I must say that reading your blog (some of which I don’t underststand but I’m learning) helps. Thankyou
I agree with cliff on this,we are being let down by below standard career making lightweight politicians,where have the guys who you felt really believed in what they said gone,,these days as with cars if you take the badge off you can’t tell which one it is!