I posted this thread on the courageous state on Twitter this morning:
I have done a lot of Twitter threads of late on how worrying almost everything about the UK economy is, and for good reason. But I think it's only fair to do one that says it really need not be like this. Read on….
Unless someone has seriously misinterpreted what I have been saying, you'll have got the message that I think the Tories have been dangerously misguided on policy since 2010, and still are now.
I would also hope you've got the feeling that I think the Tories are now utterly incompetent managers. May, Johnson and now Truss have not only pursued a hopeless strategy, based around Brexit, but they haven't had a clue how to actually deliver it.
Why is this? Essentially because they, along with Cameron and Osborne who went before them, are all what I have described as cowardly politicians. I have good reason for doing so.
Cowardly politicians share a conviction. This is that markets know how to deliver the answers people want, and governments do not. This is based on their belief that people always want choice, and good choices are based on a market price.
This is a belief based on the political philosophy of neoliberalism, in turn based on what might be called hardcore market economics. In that philosophy only the individual matters. Markets best allocate resources. And those with the most cash must be the winners in life.
The philosophy is fundamentally flawed. Only narcissists, sociopaths and worse, think only individuals matter in life. The majority of us disagree because we know we live in society, and that our communities, from our families upwards, are the biggest determinants of our well-being.
What that means is that the market does not meet all our needs, because as someone once said, money can't buy us love. For that reason we know price is not the basis on which we choose most things that are really important in life.
We also realise that sometimes we just don't have a choice. There are some things we just must do. They are usually done out of a sense of duty. And, again, they're frequently what matters most in life.
For precisely that reason real people don't think the winners in life are necessarily the people with the greatest wealth. That's not just because markets don't give good indication of value. They also ignore luck, like being born rich.
So this philosophy on which the Tories base their thinking is, to coin a phrase, total crap. It just doesn't reflect the reality of the lives we live, and most of us, if we met someone who lived life like this would think them total idiots (or something more graphic).
The only defence the Tories might have for adopting this philosophy is that the very same neoliberal thinking underpinned New Labour (and I rather suspect most of Labour's current Shadow Cabinet's thinking, although they try to hide opinions from view).
It was also LibDem thinking, as their coalition years showed, and there is not too much evidence of change.
And, just to complete the set, the SNP's economic thinking, as indicated by its Growth Commission, is neoliberal too.
The only difference between the Tories and the rest is that other political parties think they are neoliberal because they believe that appeases markets and big business but have the sense to compromise on its delivery. The Tories have now abandoned any sense of that compromise.
To be fair, they were getting to this before Truss. Osborne's austerity, bedroom tax and other attacks on society were all neoliberal in motivation, but he was only ever willing to expose the most vulnerable to his true belief in the state walking away from its responsibilities.
The lies, deceit and corruption that characterised the Brexit debate persuaded the Tories they could go further. The motivation for Brexit (racism apart) was to free business from regulation. The rule book was to be ripped up. It was pure neoliberalism.
As is always the case with neoliberalism the object was for the state to walk away and leave society to pick up the mess. That mess has resulted. Covid disguised its emergence. Now it is apparent. And the new argument to explain this is that the state has not walked away enough.
Enter Truss with her plans to trash every EU derived law and deliver ‘supply side reform', for which read ‘the very worst in business can lower standards to whatever level they can get away with whilst fleecing maximum cash from people'.
It's fair to say that so far it's not this that has ruined Truss. Her total managerial incompetence has done that. But the two are related. A politician who seeks office to trash government is not going to perfect the art of governing. She clearly has not.
The Tory failure is by design in that case. It is not by chance. Truss really believes people want the state to be destroyed because they want to be free of it. It would seem that everyone, from the City of London onwards, has had to tell her this really is not the case.
The Tory attempt to wreck the state has been done as a matter of policy. Whether they will even survive trying that policy is hard to tell.
The problem for us is that all our other politicians believe in much the same stuff as the Tories. Even under Corbyn Labour rattled out the ‘maxed out credit card' line to claim there were limits on the size of the state imposed by its ability to tax markets.
Implicit in that was a profoundly neoliberal belief that everything of value is created in the private sector and the state just uses that value. Even Corbyn and McDonnell could not free themselves from this. And that belief is nonsense.
Education, health care, social care, a strong welfare state, functioning legal systems, enforced regulation and even a fair tax system all create value. They are the underpinnings of a confident country where people can afford to take risk, including in setting up businesses.
The logic of neoliberalism is wrong then. Those who promote it think government is a luxury a strong private sector lets us enjoy. The reality is the opposite. A strong state sector is the bedrock on which risk-taking in a fair, open and truly competitive market can occur.
That is a market where business can compete on the basis of the quality of their products, service and innovation, as well as the strengths of their employees, because those who want to compete by tax cheating and abusing regulation are eliminated by enforced regulation.
We'd have markets based on innovation, quality, and service in such a situation, where fair rewards might also be paid.
We're a long way from that right now, just as we are a long way from having almost any politicians who show the slightest belief in the enormous value public sector employees create. That's because most of our politicians really do not believe the state adds value.
The cowardly politician, who thinks deep down that markets can do better than them - which his why the cult of the political visit in the hi-viz jacket has become so pervasive - is embedded in almost all our politics.
We need a new breed of politicians. I'll call them courageous politicians who believe in a courageous state where the object of government is to ensure that the needs of all in society are met before anything else can happen.
In this society the need to provide healthcare is more important than the bankers' desire for a super car. And the protection of the vulnerable is a price worth paying, even if that means higher overall rates of tax as a consequence.
And it is a society where everyone, and not just the wealthy, can partake in society and its markets, meaning those markets will be stronger as a result.
It is a society where, most likely, we will pay more tax. But it is also a society where there will be a functioning state, NHS, welfare system, social care, and there will be law and order.
There will also be a plan to be sustainable, and a willingness to invest in it.
Markets will be encouraged to thrive - so long as rules are complied with.
At the same time the artificial markets that the Tories set up in education and healthcare, in particular, will be swept away. They have failed, dismally. Instead the aim will be high quality service for everyone, without anyone extracting unnecessary profit.
For exactly the same reason, the natural monopolies, such as energy supply, train services, water and maybe core internet infrastructure will all need to be nationalised. There is no room for failure here.
And I would suggest that the state should run a bank that meets the needs of 95% of all bank customers, including for mortgages, and leave the banking system to get on with its investment gaming, if it so wishes, from which it takes so much pleasure.
No longer should depositors' money be used to support market shenanigans, leaving all of us exposed to risk. That's for private capital to do.
Meanwhile the savings of ordinary people, whether in cash or pensions, would be directed to socially useful purposes. Our private wealth should be used for communal gains, not to support the profit of City institutions.
What else would courageous politicians do? They'd empower people to seek fair pay, because why would you be opposed to it? They'd also encourage life long learning.
And this would be supported by a policy of affordable housing, which is the foundation for personal security for many. Implicit in this policy will be a policy to tackle poverty, which denies many that security, and the provision of social care for the elderly, especially.
And most of all, they'd do something that no market can value. They'd set out to provide freedom from fear. Nothing is more important than that.
Neoliberalism is based on fear. It promotes the idea of failure, because that is implicit in its logic of the market. In fact, it relies on the idea of very obvious failure as the rod it uses to impose a wholly inappropriate work ethic on those it enslaves in meaningless work.
Value at work has to, instead, become the benchmark of the courageous politician, because value at work translates into value for society, and we are a very long way from that right now.
I happen to believe all this is possible. But only if we ditch the ideas in neoliberalism, and the idea that the state cannot create value by itself on behalf of others without any involvement of the market.
We did have politicians of this sort at one time. We could have these courageous politicians again. And with the understanding we now have of money and markets and how they integrate that is possible.
Is that too much to ask? I think not. Believing that is what gives me hope. I look forward to living in a courageous state.
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Spot on.
What Clive said
Courageous politicians? Unfortunately, you will invariably only find out who the courageous politician is, when the crisis strikes; which is too late for selection or election by the public. Furthermore, the proof of the failure of the public to spot a dud is the history of our elections; outstandingly in the recent past. The capacity of the modern digital, algorythmic high-tech world, to manipulate the prejudices of consumers, electors and voters need scarcely be furtther proved here; it has been demonstrated throughout the world (not least by Brexit, by Dom Cummings and the oppotunism Borsi Johnson and the Conservative Party). The Labour Party still lives in the age of the Focus Group and Whitehall ‘spin’.
My core problem is rather with ‘Party’, and FPTP. Party is nothing more than the apotheosis of faction an idea, with its origins as a real political power in the late seventeenth century. I have just heard Mel Stride MP (Conservative) claiming Truss needs time to fix the problems, and the Party calmly to allow her the time; in the interests, he claims, of the country. Of course that is not primarily in the interest of the country, but in the interest of the Conservative Party (Party always conflates the two as its solution of the obvious problem).
Politicians can’t help it. Politicians spend their time, effort and lives serving their Party internst, whatever they think they are doing, or deceive themaseves into believing they are doing. The Party comes first, and the Party is protected first, and often last. That is our political system, like it or not. Add FPTP to the brew and our system becomes the creature of small cliques and cabals, often serving small, ruthlessly self-interested vested interests. That is the British political reality, like it or not. I think the FPTP problem is fixable, but I confess I have no easy answer to the ‘Party’ problem, but I will offer this a a Universal Truth: you cannot trust ‘Party’. Period.
Party does not serve people, it uses people.
True
Agreed, but this is where PR comes in – it could be a way in which to curb the party mentality but it would depend on how it was set up.
But may I also put another iron in the fire?
Party funding.
That is a huge problem that needs sorting out – sorting out first as well in my view.
If you want a courageous state then MPs should go after the Fraudsters
As was made clear by Lord Agnew in his resignation speech: “The Treasury… have little interest in the consequences of fraud to our economy or our society.”
Given that the Crowe Clark Whitehill, Experian and the Centre for Counter Fraud Studies at the University of Portsmouth showed that private sector fraud costs the UK economy £140 billion, while fraud in the public sector was estimated to cost the country £40.4 billion in 2017, tackling this issue would show a courageous state.
https://www.port.ac.uk/news-events-and-blogs/news/uk-foots-190bn-annual-fraud-bill
That is amongst the many things it should do
I would like to live in that world vision, who wouldn’t? Thank you for articulating it so clearly.
I agree. Richard makes ms hope, then the shysters in power, not necessarily those in Government, make me despair. Long may Richard make his ideas public.
Excellent summary Richard.
At least since Ted Heath the completely wrong-headed economic and social disasters inflicted by successive Tory governments have resulted in the next Tory government deciding that the only thing wrong with the previous idiocy is that they did not do it hard enough.
Meanwhile as Britain shrinks democratically, culturally and intellectually the rich grow richer and more powerful and the rest of the population grow poorer and have less control over their own lives.
Out loud, that reads like a prayer.
I’m trying to think of a brave enough politician … Caroline Lucas certainly, Chris Bryant perhaps, Mhairi Black without hesitation, Clive Lewis possibly, and … just in terms of courage, Ken Clarke, Anna Soubry and Antoinette Sandbach.
None of them are near the levers of power, of course.
Agree with list of all above. What a pity the constitution doesn’t allow: the immediate dismissal of governments who behave with criminal recklessness and incompetence, the setting up of an interim government of “All the Talents” while calling for a GE.
I was going to vote for and support Labour but I’m not going to. I hadn’t really taken it in that some words and ideas are proscribed. One example “nationalisation”, never to be mentioned, “public finding of private companies” is the thing. Even though the efficiency and usefulness of anything – whether it’s privatised or nationalised depends on how well it’s run and administered.
To get a courageous state we need a properly democratic one which is why I won’t be voting for Labour at the next election as clearly Sir Keir and his cohort of neoliberals have no interest in bringing either about.
communism under any other name
Utterly stupid comment
Since when did communism seek to support strong markets?
“The logic of neoliberalism is wrong then. Those who promote it think government is a luxury a strong private sector lets us enjoy. The reality is the opposite. A strong state sector is the bedrock on which risk-taking in a fair, open and truly competitive market can occur.”
One of your best and most succinct paragraphs ever, Richard. I still have some hope that the largely non-Party origins (in the sense John Warren uses above) of many of the SNP’s MPs, especially from the 2015 intake, and the vitality of sub-groups within the YES movement (such as the Scottish Currency Group, to name only one example) may yet manage to wrench the SNP away from the reactionary nonsense of the so-called Growth Commission (how ironically poisonous that title now looks!) and move, at least the independence movment well clear of the neo-liberals.
We might see on Monday
And thanks
How about a law which states that if a Government changes its leader – the PM – there should be a General Election within three months? The Tories have a habit of changing their leader at the first sign of unpopularity these days. The new leader than gets voted in by a handful of ageing Tory members who are totally unrepresentative of the country as a whole. No one voted for Truss as PM or her policies which are clearly a change on what the Tories fought the last election on. Not that Tories care about that. Truss has no mandate to be PM. No one voted for her to be PM. A Tory coup d’etat is what we got. We might get another one soon.
I agree with most of what has been said here except the comment about ‘communism’ which is beneath contempt really. I would also like to invoke a past post about detesting the Tories from 10th October.
I loath the Tories: if I a trod on one it would be no more a matter than treading on a dead leaf on the ground. I’d avoid treading on snails, slugs and small insects but if I had the opportunity to tread on a Tory, I’d take it – by accident of course.
Why? I have a 1st Class Degree and an MBA, supposedly intelligent. Why am I so livid to that point of callousness myself?
Because since 2010, they’ve BLIGHTED my life with their stupid, callous policies.
Before 2010, having done nothing wrong and not even responsible for the credit crunch and assuming that because were were in work and worked hard and had a decent wage, we were going to have an extension done on our modest little house because our daughter’s room was too small, so the plan was to enlarge the house we’d got. That plan had to be shelved because of swinging cuts in the public sector where I work. People were made redundant at my LA within months of the Tories getting in and we decided not to take the risk. We lost money in pay and conditions and lost cost of living rises because of austerity.
All I could think of was how would I provide for my kids? My mental health? Well, if I’d not come here to air my frustration and find that I’m not the only one who questions these issues deeply then I don’t know where I’d be quite frankly. Honest!
You might say that PSR is just being selfish. But hang on. If I had had that extension done, our budget would have been someone else’s wages or profit margin – the builder, the supply chain, the Government through VAT, the LA through planning fees. This picture was repeated EVERYWHERE in our country and was responsible for a huge drop in output in the economy.
But no, the Tory numpties don’t see things like that do they?
We’ve have cut back and saved more expecting the worst. My partner – a teacher – had to get out of education because of over-work and because we could not get good initial care for her mother who got vascular dementia – the adult social care service being another failure that the Tories have propagated.
Since that time, I’ve felt under threat every one of the 12 plus years they have been in power and even had insult poured upon insult by BREXIT and then the Covid mismanagement crisis. And now we have Truss. And now because of austerity, the public sector is losing staff in its thousands as they go and work in the slightly better paid private sector.
Infected yeast has more intelligence than a Tory in my view and its a damn sight more useful.
I just can’t abide them anymore.
But I will not turn against friends, colleagues and neighbours who vote Tory, who voted for BREXIT, are members of the BNP even (honest!) because they too are angry and exploited by the Tory’s fascist ways.
I know EXACTLY who the problem is. It is the Tory party – the most detestable bunch of politicians this country has ever seen. You can look back at the Tory party in history and seem them as ignorant, badly informed and old fashioned.
But in an age of enlightenment, and mass information and data transfer they have no excuse at all for their behaviour.
That they have condemned themselves to be detested is now beyond all reasonable doubt.
So, I invite all of you (if I may) to deliver on that for the Tories: Detest them – openly. Disparage them at every opportunity you get.
And remember – they asked for it.
Great article, agree with everything you said. Who do you see as past courageous politicians?
But many right now
We are certainly on the same side on this matter – I’ll be on the barricades with you.
Did McDonnell really believe in the state credit card model? You advised him I remember. I wonder if he thought it impossible to change the public mind on this and that if he worked policy on the MMT view he would have been trashed even sooner than happened.
I am stunned by how awful Liz Truss is in the job. I didn’t listen much to her before she became PM. Whenever she says ‘decisive’ it is clear that she is not. She does not even have the courage to go down fighting – she just runs away. I noted somewhere that another person had felt like me – she is Johnson’s revenge.
I never really advised h8m – precisely because I did nit stare his belief in austerity economics unlike my successor, James Meadway, who is dedicated to it.
Thanks for the correction.
Very well said, I completely agree.
Given the response to Truss, have financial markets and investors finally realised (given the financial crash, ecological destruction, stagnant growth, demand killing inequality, covid and war) like the rest of us, they have no future in a society that attempts to shrink the state, ditch regulations and ignores rising inequality? The answer, post all delusion and fantasy, as you say, stares us in the face: accountable, democratic and highly active government.
Bravo !
The description of the state we are in is exemplary, and I would not disagree strongly with where you would like us to be.
I was particularly taken with your very accurate summary of neo-liberalism, for instance : “Neoliberalism is based on fear.” This is exactly where neo-liberalism started back in the thirties, with a fear of communism, though admittedly the communism on offer was pretty terrifying. But its originators ignored the socialist experience of Rotes Wien, which was quite diffferent – and which some of them did their best to destroy. Ironic that they then imposed fear on the many to whom they claimed to be providing freedom.
Thanks
Are the financial markets really looking to push the govn and the BOE back to quantitative easing for the 1%?
They like undirected (not for the people or better services) QE as it works to increase inequality and to concentrate assets in fewer and fewer hands!