Thursday, January 27, 2011

The Failure Of The British Coalition Government's Economic Policy

The news that the economy has either shrunk or is shrinking should come as no surprise to the casual student of British economic history, and I am as casual a student of that discipline as they come.
The feral, backward, primitive economic ideology now held by the British Conservative Party declared that if public services were slashed, the private sector would immediately jumpstart itself in a blue fit of spontaneous order, the beer would be warm again, the lion would lie down with the lamb and the leopard with the kid, and, pretty soon thereafter, while there might not be a chicken in every pot we'd certainly be off the chicken nuggets.
Problem is, it hasn't happened; for the simple bloody reason that it has never happened. Anywhere.
I can think of two previous examples of this policy's failure right off the top of my head. The first was recounted by Professor Eric Richards in his wonderful book 'Patrick Sellar And The Highland Clearances'. The Sutherlands and the agents did a wonderful job of getting the people out of the glens and down to the coast, but Sellar's obsessive faith in 'The Wealth of Nations' led him to believe that the relocated would gain prosperity merely by dividing their labour. It didn't happen, because it can't happen.
The second instance is more much more recent, yet no less tragic. In the aftermath of the invasion of Iraq in 2003, the shower of ideologically brainwashed wallies who were running Iraq policy at the State Department seemed to have much the same very limited understanding of what you have to do to grow an economy as early 19th Century Anglo-Scottish aristocrats and their agents. As drunk as power as many of them were, I do not do them the discourtesy of thinking they were out to pillage the country. They weren't bright enough for that. Instead, they decided to let the market work its magic. Nearly eight years later, the Iraqis are still suffering suicide bombings, and everyone is petrified of The Eighteenth Brumaire of Moqtada al-Sadr.
In ancient times, and in recent times, the policy of 'let's allow the market to do its thing' hasn't worked. There may be a time and a place where it can work, but it hasn't worked then, and it's not working now. We all face what to me is the terrifying prospect of the effect of interest rate rises on low and stagnant private sector incomes, particularly when the cause of inflation is some juju called 'globalisation', and its impact on commodity prices (we now know that the soundtrack to the end of our civilisation will not be Patrick Allen announcing the four minute warning, but it still might be the voice of a goombah economist, raving in the ruins that globalisation makes us all richer). Globalisation and our coalition government share one overwhelmingly important characteristic. Nobody has ever voted for either of them to come into existence. While I await the advent of all those new energy sources that the economists declare will suddenly come into being as soon it becomes economically viable for them to be developed, I sometimes ponder which is the more fruitless pastime; standing on top of a hillock waiting for the end of the world, or believing that economics is not a zero sum game. Both require more faith in the belief than I can muster.
And all the while wage restraint has been so restrained it might as well have been bound, gagged and drugged.
So let's see how it all turns out. What we can guess is that it's very probably going to turn out badly. How badly should not be guessed. We should all pray that it doesn't. If it should come to it, I, for one, will go down singing 'Nearer My God To Thee'. Somehow, it seems appropriate for the occasion.

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7 Comments:

Blogger APL said...

MK: "Conservative Party declared that if public services were slashed, the private sector would immediately jump-start itself in a blue fit of spontaneous order .."

'Public services' are paid for by one of two things, either tax on the private sector or a future tax on the private sector that is, government borrowing. Borrowing, that thing that the Labour government did with such wild abandon that we are pretty much ruined as a nation.

Blow more smoke Martin, anyone with eyes to see knows Labour did this. And by the way, the government has done nothing about the regulatory drag on the productive sector either.

MK: "Problem is, it hasn't happened .."

Which is most pathetic? You apparent belief that the damage inflicted by thirteen years of a dissipate wasteral reckless bloodthirsty government can be undone in six months or that despite the evidence you believe this Tory-Liberal government is actually cutting government spending.

MK: "The Sutherlands and the agents did a wonderful job of getting the people out of the glens and down to the coast,"

Cite an instance of the destruction of private wealth, self sufficiency and economic activity to support your assertion that the 'Public sector' somehow contributes to the wealth of the UK rather than actually acting as a dead weight on the economic activity and wealth creation of the private sector.

That is the most facile 'apples and oranges' comparison I have heard in quite a while.

If this was a serious post, I might bother to fisk the rest of it. But I just can't be arsed.

28 January, 2011 21:44  
Blogger Martin said...

Woo-Hoo! I've been astroturfed!

You're bald, aren't you? Reading between the lines, I can definitely see that you're as bald as a coot, a veritable cueball. Only a baldy would write a comment like that.

28 January, 2011 23:19  
Blogger Martin said...

Oi! Baldy! Yes, you!

You wrote, such as it was,

"Blow more smoke Martin, anyone with eyes to see knows Labour did this. And by the way, the government has done nothing about the regulatory drag on the productive sector either."

Try this -

"Government is powerless to create anything in the sense in which business produces wealth..."

'The American Business Creed', Sutton, Kaysen and Tobin.

Then this

"Such attitudes lead to some interesting contradictions. Cars have an importance greater than the roads on which they are driven. We welcome expansion of telephone services as improving the general well-being but accept curtailment of postal services as signifying necessary economy. We set great store by the increase in private wealth but regret the added outlay for the police force by which it is protected. Vacuum cleaners to ensure clean houses re praiseworthy and essential in our standard of living. Street cleaners to ensure clean streets are an unfortunate expense. Partly as a result, our houses are generally clean and our streets generally filthy".

John Kenneth Galbraith, 'The Affluent Society', a direct observation on the preceding comment.

You go on, and you do go on,

"Which is most pathetic? You apparent belief that the damage inflicted by thirteen years of a dissipate wasteral reckless bloodthirsty government can be undone in six months or that despite the evidence you believe this Tory-Liberal government is actually cutting government spending."

This is bullshit partisan boilerplate rhetoric of the most childish and therefore most tedious type, bereft of either facts or analysis, with the grossly out of context use of the word 'bloodthirsty' perhaps even betraying mental illness. You aren't just a baldy - you're a baldy nutter!

"Cite an instance of the destruction of private wealth, self sufficiency and economic activity to support your assertion that the 'Public sector' somehow contributes to the wealth of the UK rather than actually acting as a dead weight on the economic activity and wealth creation of the private sector."

Try reading Professor Galbraith's observations above, or a book called 'The Spirit Level'. I have read it, and, as a poor person who's had many different emplyments, almost all of them below my educational level (on account ofmy disability), it makes perfect sense to me.

Oh, wait! People like you don't read books that challenge your worldviews.

Sloganise that, my baldy nutter friend!

28 January, 2011 23:43  
Blogger APL said...

MK: "I can definitely see that you're as bald as a coot, a veritable cuebal."

argumentum ad hominem, always a good sign.

The tone of my post may have been a little intemperate kindly put it down to enthusiasm rather than any other motive.

MK: "This is bullshit partisan boilerplate rhetoric of the most childish and therefore most tedious type"

Perhaps, but as that seems to be the bill of fare on this blog, you can hardly complain when comments are in a similar vein.

29 January, 2011 10:38  
Blogger Martin said...

"argumentum ad hominem, always a good sign" -

Ah, so you ARE a baldy, then! The old baldy antennae can still sniff them out sight unseen!

"Perhaps, but as that seems to be the bill of fare on this blog, you can hardly complain when comments are in a similar vein."

Cur the late Frankie Howed - Ohhh!OOOOHHH!!!

The bill of fare is provided free of charge, Baldy, so don't complain when the chef's special is not to your liking. Away with you, O naked pated one! Fie thee to Chromdomia!

29 January, 2011 17:12  
Blogger APL said...

MK: "People like you don't read books that challenge your worldviews"

Clearly neither do 'people like you' choose to engage the argument.

MK: "The bill of fare is provided free of charge "

Then it looks like I paid exactly what it's worth.

Caio

30 January, 2011 00:13  
Blogger Martin said...

Arrivederci.

30 January, 2011 22:41  

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