Winner of the New Statesman SPERI Prize in Political Economy 2016

Wednesday, 27 May 2020

A government without common sense, and with class arrogance

Recently the Prime Minister urged workers and employers to use their ‘good solid British common sense’ to decide what was safe with the recent relaxation of the lockdown. Which prompts an obvious question (thanks @SuffolkJason). What has happened to the government’s common sense in dealing with coronavirus?

When you see a pandemic sweeping China and with every chance of it coming to the UK, isn’t it common sense to prepare for that possibility by

  1. Checking your PPE stockpile and ordering what is missing

  2. Exploring how you could ramp up testing capacity quickly if that was needed

When the first cases arrive in the UK, isn’t it common sense to do some things to help your test, trace and isolate (TTI) infrastructure by, for example, stopping flights coming from countries with many cases, or at least enforcing quarantine?

Once the number of cases begins to overwhelm your TTI operation (which you will be improving by hiring more people to do the tracing and increasing testing capability), you have a choice between a lockdown (the choice almost all other countries are taking) or letting the virus infect a majority of the population in a controlled way (what one country, Sweden, is doing). The latter will involve hundreds of thousands of deaths. Isn’t the common sense choice a lockdown in those circumstances, seeing that the basic duty of a government is to avoid its citizen’s dying.

Common sense is not always a reliable guide, and it should always defer to science if there is a conflict. But science means the consensus among scientists, and not the collective views of a few in a committee. The collective scientific view was that there was an alternative way of controlling the virus beyond total lockdown, and that is some form of partial lockdown combined with a TTI infrastructure that could take over from full lockdown once numbers of new infections had been brought down.

There will always be individual scientists who say that TTI cannot work, as in the case of Sweden. Was that the case in the UK, or were the scientists advising the government told that testing could not be expanded? That will be for an inquiry to sort out. But no politician with common sense allows hundreds of thousands of their citizens to die without trying those alternatives.

Finally (and I have missed a lot out here) isn’t it common sense to isolate as far as possible care homes by

  1. Ensuring carers can afford to take time off if they get sick

  2. Allowing residents and carers to get tested if they get sick, and on a regular basis otherwise

  3. Not transfer untested patients from hospitals who can then spread the virus through a care home!

Ironically we managed to give our potential policymakers a test for common sense a year before the pandemic hit. We set them two questions that would sort out the small minority that appeared to lack any common sense. The test involved just two questions.

  1. “Would you want to leave the largest and most developed trading bloc in the world?”

  2. "If the answer to the above is yes, would you be prepared to leave with no accompanying trade deal?”

Anyone answering yes to both questions clearly lacked any common sense. What could possibly be the sense in isolating yourself from your closest and largest trading partner, when you were prepared to do trade deals with other countries?

You know what happened next. We have a government with a cabinet where almost every member has been chosen because they answered yes to both questions. (We could have chosen to have a government whose leaders did not answer yes to both questions. However the powers that be, including parts of the Labour establishment, decided that was too great a price to pay, even if it meant leaving the EU and having a government without common sense. You could say that they, too, did not have common sense.)

You might retort that UK voters also failed to have common sense. But you cannot have common sense if you do not have the relevant information. Like, for example, that if you stop EU migrants coming by ending free movement that will just lead to more non-EU immigration (source).

It takes some skill to ensure that enough people hear fake stories such that they vote for decisions which violate common sense. Dominic Cummings has that skill set, which is why he is so essential to the Prime Minister, and why Johnson would burn so much of his own political capital to keep him. I also suspect that Johnson would flounder without him.


Lacking common sense does not come from stupidity, but from letting your judgement be clouded by an ideology that puts the economy and the freedom to do business above everything else, and where freedom is defined not in terms of the ability to do things (including avoiding catching a virus) but in terms of the absence of any kind of government intervention designed to protect workers or the environment. This hatred of state interference in the economy means you are inclined to do nothing when threatened with the biggest health crisis in a generation.

If you have the common sense to understand why you needed an economic and social lockdown to stop the pandemic getting out of control, you will also have the sense to realise that the lockdown can only be relaxed step by step, when an alternative control mechanism is in place. Yet even here the government has shown it lacks common sense. Sending many people back to work is a relaxation in the lockdown, and it was done with no mechanism in place to isolate the colleagues of workers who caught the virus as a result.

We had a functioning test, trace and isolate (TTI) regime in place when the virus first hit the UK, and it helped to keep numbers low for a while with little supporting measures from the government. It would seem obvious, therefore, to build a more effective TTI infrastructure by expanding the infrastructure that already works. But that would be common sense. Ideology dictates that the government farms the whole process out to some private companies with no experience at all. No doubt they told the government that their infrastructure would be “world-beating” and ministers liked the sound of that. We can but hope that it works.

In this short article for the Daily Mirror I set out how we get from today to a full economic recovery, applying common sense with a bit of macroeconomic knowledge. V-shaped recoveries are possible. Our government has already started out on a different path, easing lockdown before TTI is ready and when daily infections remain high, which raises the danger of delaying the point at which the economy can recover.

While ideology accounts for part of the reason why this government has failed so badly, and carries on failing, there is something else. That something is an attitude of being apart, or more accurately above, most other people. It is the attitude that some public schools seem to encourage. If you break the rules somebody else will sort things out, or literally clear up the mess if you go trashing after finishing your exams at Oxford. 

While in some that creates a kind of paternalism, and in a few revolutionaries, in many it creates contempt. The contempt of those that can so easily manipulate others. Cummings ignored the lockdown rules because he believes rules do not apply to people like him. Johnson has been breaking rules all his life, and he has never really suffered for it. With privilege you can break the rules. You can have contempt for those who obey rules, like Rees Mogg saying those who died in Grenfell Tower should have ignored instructions to stay in their flat. For those for whom breaking the rules is common sense. It is the arrogance to charge some of those in the NHS we helped save your life an extra fee to use the service they work in. 

Contrast that with anyone claiming universal credit who is late for an appointment at a job centre and has their money stopped, however good the reason they were late. They have no privileges at all. No press conference at No.10. When neoliberal ideology is mixed with the arrogance of the upper class and the contempt of those who manipulate the opinions of voters you get a lethal combination. A combination that leads to the second highest deaths from coronavirus in the world behind the US, and higher than the US when normalised by population size. About one in a thousand of UK citizens has died as a result of coronavirus, and that will be the enduring legacy of Boris Johnson and Dominic Cummings.  

Monday, 18 May 2020

On V shaped recoveries, and where the Treasury’s deficit obsession will matter

I should perhaps go through some of the thinking that lay behind my Guardian article about not repeating austerity, because I fear there is a danger of worrying about the wrong thing. I have always been reasonably confident that we would not get an exact repeat of 2010, where the Chancellor says at the low point of a recession (i.e. before a recovery has begun) that we have to start cutting back spending because the deficit is too high.

There are two reasons for that confidence. First, the circumstances that allowed 2010 were uniquely advantageous. We had just had a global financial crisis, so false claims about what financial markets might do seemed plausible. There was also a Euro crisis. Everyone was saving more (or borrowing less) as a result of the financial crisis, so you could easily persuade people the government should too. And finally we had had a period of strong growth in some public services under the Labour government.

None of that holds today. Most people have had enough of austerity, something our Prime Minister understands. He knows there are huge political dangers in worrying about debt just after a pandemic where the government’s decisions have been woeful. The media will obsess about the deficit, but I think the government at the moment is going to ignore them.

I wrote the Guardian piece because I realised that not only had the media not changed, but neither had the Treasury. The leaked document I discuss in that article showed that, but there was much stronger evidence of their concern, and that was the Chancellor channeling their pressure to ease the lockdown as soon as possible.

Austerity is a type of short term penny pinching by the government leading to much larger longer term costs. The only justification for relaxing the lockdown by forcing large sections of (typically working class) workers to go back to work is saving the Treasury money on furloughing, which is why the pressure to relax furloughing is coming from the Chancellor and the Treasury rather than No.10. The cost of this is to raise R (how many people someone who has coronavirus infects). The point I make here is that most of the economy will only recover once people are no longer fearful of catching the virus, which means the number of new infections nationally per day must be very low, maybe even single figures.

If R is currently something like 0.2, and if the recent relaxation raises it to 0.3, then the number of new infections is going to fall pretty rapidly anyway. But if R was 0.8, and it now becomes 0.9 as a result of more people at work, then it will take considerably longer to get infection numbers down. So pressure to save some money on furloughing may in the end cost much more by setting back the date of recovery by months.

There is a second sense in which Treasury penny pinching may end up costing a great deal, and it reflects what happened with austerity from 2013 onwards. There has been a great deal of discussion about the nature of the economic recovery from this pandemic, and how much long term damage it could do. When I suggested that in principle there was no reason for the economy not to bounce back, the general consensus on twitter was that there was no way that is going to happen.

The problem with the belief that the economic recovery will be neither quick or complete is that it can be self-fulfilling. It always amazes me how many economists were quite happy to believe that the sudden stop in UK productivity growth after 2010 was somehow caused by the financial crisis (or something else) and had nothing to do with a sustained period during which aggregate demand was being depressed. Once policymakers start believing that, you don’t get the stimulus measures you need to get a complete recovery. Once economic actors believe in it, then it becomes a self-fulfilling result.

Exactly the same could happen after the pandemic, particularly if it takes time before the number of daily infections becomes very low. Consumers may be cautious about embarking on forms of social consumption again, and so it appears as if the V shaped recovery is not going to materialise. What should happen at this point is that the government stimulates the economy in some way, to quickly mop up the additional unemployment created by the pandemic. Instead, I fear that inside the Treasury concerns about the deficit will override their responsibility to stabilise the economy when interest rates are at their lower bound. Indeed I have never been sure that this Treasury accepts that responsibility.

I have always thought that if the pandemic is handled properly, with good support during lockdown and appropriate stimulus subsequently, then a V shaped recovery will happen. There is no reason to have additional unemployment or permanently lost output once the virus is tightly controlled and consumers recognise their chance of getting it are minimal. We will see something close to a complete recovery in the countries that have handled the pandemic well, restrained only by what is happening in the countries with less capable governments. What will stop us having a V shaped recovery is government incompetence, both in handling the pandemic and in how macroeconomic policy supports the recovery.

Tuesday, 12 May 2020

The government is responding to pressure and not thinking clearly about defeating coronavirus

In this article in the Guardian I lay out what the optimal strategy for handling COVID-19 should be for a country like the UK. How does the Prime Minister’s statement on Sunday evening compare to that strategy?

The key to relaxing a lockdown is having a test, trace and isolate infrastructure in place, and very low infection levels. We do not have either. So why was Johnson talking to the nation on Sunday?

He set out a general framework for relaxing the lockdown, all conditional on some function of infection levels and R. (He didn’t specify what the function was.) To set out an approach makes sense. To not tell anyone what exactly the conditions for relaxation are does not make sense, but it gives him flexibility to make it up as he goes along (or “follow the science” as he likes to call it).

In addition he relaxed some of the rules for what people can do outdoors. Those in holiday hotspots are not too happy, and just don’t try driving to Wales. What may prove to be more important, he changed the government’s mantra from ‘stay at home’ to ‘stay alert’. The problem was, apparently, that ‘stay at home’ was too effective. Everyone with any sense agrees that ‘stay alert’ is vacuous. Why was ‘stay at home’ too successful? The answer seems to be that some people who the government thinks should have been working were staying at home at the government’s expense.

Which leads us to the most controversial element in what he said. Those who couldn’t work at home should be working. They should try and maintain social distancing at work, and when getting to work, where possible. What happens when social distancing isn’t possible. We use “good solid British common sense”, according to Mr. Johnson. I guess those using some other country’s common sense might come to different conclusions.

This is an important easing of the lockdown, and one which is going to put some more workers in harm’s way. As Johnson said: “work from home if you can, but you should go to work if you can’t work from home “. There was no qualification to that instruction, no “but only if it is safe to do so” at the end. This chimes with talk from the Treasury of too many people being furloughed, and mooted plans to reduce how much furloughed workers are paid in the future.

It is not workers who choose to be furloughed, but firms who furlough them. Sunday’s message was encouraging them to go back to work, even though they cannot ensure social distancing at work. If you think I’m being alarmist, how about an industry where working has sometimes to break social distancing. Like removers (try moving a metre long chest of drawers staying two metres apart) where previously the governing body had advised its members it was not safe to do business. Here is what the British Association of Removers now say:
“It is clear from the change of emphasis in the PM’s message of Sunday 10th May, that many industries are being encouraged to return to work, but only on the basis of it being unviable for them to work from home AND now having the ability to comply with the stipulated social distancing measures. Following its meeting this morning, the position of the Board of Directors of the BAR is therefore to suggest that a cautious approach to returning to operational activity may now be possible, although it remains the case in our industry that we are unable to comply fully with the social distancing measures outlined by the Government, and our Members must therefore take all appropriate measures to mitigate any associated risks.”

In addition there is the issue of the safety of getting to work if you do not have a car.

Johnson’s “good solid British common sense” is about observing social distancing under all circumstances, unless you are at work. I would suggest this is not common sense at all. It is significantly increasing the risk of transmitting the virus, at a time when the test, trace and isolate infrastructure is not in place, and infection levels are still high. If you don’t believe me, read what most scientists think. It is moving too soon in order to save the Treasury some money in the short term.

I say short term because in the longer term this will cost HMT more. It will surely raise R, which will delay the time when virus numbers come down enough for most people to feel safe interacting with others. Only then can the economic recovery begin in earnest. As I said in the Guardian article, the quickest way to restart the economy is to get the virus under control so infection levels are very low. This is classic Treasury short term penny pinching with a longer term economic cost.

Starmer in his broadcast put this clearly:
"We needed to hear that nobody would be asked to go to work or send their children to school without it being safe to do so."

That clarity was absent from Johnson’s statement on Sunday, and I suspect deliberately so. Martin Fletcher describes the Prime Minister’s rationale well here:
“Caught between those cabinet hawks and party donors who want to reopen the economy as fast as possible, and the doves who stress the need to save lives, Johnson has produced a muddled compromise that has pleased neither camp.”

This is miles away from how a government should relax a lockdown.

Wednesday, 6 May 2020

Why the media in UK and US has moved beyond manufacturing consent, and why that has led to a war about reporting COVID-19

Manufacturing Consent: The Political Economy of the Mass Media (hereafter MC) was a book published by Edward Herman and Noam Chomsky in 1988. From my point of view the key idea behind MC was that media organisations select the news and opinion that they show to viewers in a way that supports the existing economic, social and political system. This could be summed up as saying the mainstream media (MSM) is not subversive.

The book talks about the “propaganda model for manufacturing consent” as involving various elements: the ownership structure and for profit goal, the importance of advertising, the importance of particular news sources, sensitivity to organised criticism, and organising filters like the cold war or terrorism. So, for example, in my idea of mediamacro you see the importance of City economists as a ready source of instant comment on market events, which in turn influences how macroeconomics is interpreted.

As Chomsky famously said to Andrew Marr in a well known 1996 interview, Marr does not himself filter news in the way described above. He is chosen so he does it without thinking. Chomsky said “... what I'm saying is that if you believed something different, you wouldn't be sitting where you're sitting.” I think from today’s perspective their use of the term propaganda to describe this and other mechanisms is unfortunate. With pure propaganda people report not what they see but what those in charge want them to write.

You can see manufacturing consent operating when particular politicians attempt to challenge the current system in some way, like Sanders and Corbyn for example. In the UK the broadcasters tended to see Corbyn as a (perhaps dangerous) outsider, and treated him a bit like you would treat any interloper. When the US MSM turned against Sanders, particularly when it looked like he was going to win, their reasoning may have been genuine (a classic ‘success comes from being in the middle’ model) but it was overwhelming.

I used to call the UK broadcasters, alongside papers like the Financial Times or Guardian, non-partisan but I now think that term is misleading. After all in both the US and UK papers and TV channels are often slanted to one side of the political divide. A better term to use, following the discussion above, is the manufacturing consent media (MC-media). 

The point I want to make here is that in the UK and US we have moved well beyond manufacturing consent. What is new is that they are now joined by what I will call the directed propaganda (DP) media, which includes Fox News in the US and most of the right wing press in the UK. DP-media provides biased and misleading information, or sometimes straight lies, that support a political viewpoint. 

Thus the MSM is made up of the MC-media and the DP-media. A directed propaganda (DP) organisation will choose to distort news such that it becomes pure propaganda for one particular party or viewpoint. A MC-news outlet will report what it sees as the truth, but with an emphasis that comes from its political position. A DP outlet will splash a story about a scientist's love life to avoid a front page about the UK having worst death toll from COVID-19 in Europe. These DP-media outlets started off as very slanted MC-media, but have in recent years shifted to contain a large proportion of propaganda.  

The distinction is not clear cut, but it is obvious from various examples. Consider the current COVID-19 pandemic. President Trump at one point decided that reporting of it in the MC-media was fake news, a hoax perpetrated by the Democrats. This was obviously complete nonsense and no reputable member of the MC-media pretended otherwise. Fox News (or strictly most of it) took up Trump’s theme. We have preliminary evidence that it influenced listeners at their own peril.

In the UK the Sun, Mail and Telegraph have treated Johnson’s illness with COVID and subsequent recovery, together with the birth of yet another Johnson child, in a manner that would not be out of place in North Korea. When the health minister fiddles the figures to achieve a target, the DP-media asks no questions. (As Alastair Campbell writes, it was very different for a Labour government, but he is wrong that this is down to luck.)

Perhaps I can put the distinction as follows. MC media is about filtering out news or opinion that challenges the system. DP outlets filter news that challenges a particular party or viewpoint within that system, and is happy to report lies that support its position.

Why do I call it directed-propaganda? Why not (when the favoured party is in power) state-media, or right wing media (there are no left wing DP outlets in the MSM)? The reason is that DP-media is a reliable supporter of the government of the right nearly all of the time, but not in all circumstances. It has a mind of its own, or rather the mind of the owner who directs it (hence directed propaganda). The most obvious example was Brexit, where the DP media in the UK effectively replaced one right wing administration with another that shared its own view on Brexit. For the Sun and Telegraph in particular, the current UK government is its government.

If that seems quite an achievement, it required help from the MC-media. In the UK the broadcast media had strict codes of balance, even if it meant balancing knowledge with lies. In the US during the election where Trump became president the MC-media had more stories about the mistakes of Clinton rather than Trump.

Both Brexit and the election of Trump were pivotal moments for both countries, because it showed us in no uncertain terms the power of the DP-media. It was, after all, a moment where anyone with a will to see understood that we were embarking on a path that would harm everyone except for a minuscule minority who would benefit. I think too many on the left miss this, partly because of internal divisions over Brexit on the left, but also because it is hard for those who have been blinded by the light to pick out shades of grey. (I’m writing this after arguing with a few on the left who cannot see why they should vote for Biden against Trump.)

Which brings us to a recent battle in the UK between these two media. Journalists who work for the DP-media are attacking some in the MC-media for not 'joining in the national effort to defeat COVID-19', by which they mean providing utterly uncritical support for actions that are in reality a national scandal. Their main target at one point was the Financial Times, which was subject to the ultimate insult in certain quarters as being as bad as the Guardian. 

In the middle of this is the BBC, which at times of crisis has often become the de-facto state broadcaster. More recently there are some signs of it being more independent. When Emily Maitlis attacked the idea that COVID-19 was a great leveler, she received some criticism, but not too much because Newsnight does not appear on the BBC's most popular channel. In contrast the Panorama programme does, and when it did a very good investigation into the failure to provide doctors, nurses and care home workers with sufficient protective equipment, this received extensive criticisism by the DP-media and the government.

The BBC is an important check on DP-media in the UK, because most people who read the right wing press also watch the BBC. This is why the current government, in place because of the efforts of the DP-media, initially proposed to attack the way the BBC was financed as a way of diminishing the organisation. Although many on the left are deeply unhappy about the BBC because of its MC-media type bias against Corbyn, it remains an important bulwark against the power of the DP-media.  

Amartya Sen notes that a free press meant less deaths during a famine, and as I argue here a critical media helps governments reverse obvious errors. The failure of the UK media to criticise the government’s initial herd immunity strategy indicates the limitations of a free press in the UK. However at least the MC-type media in the UK have begun to acknowledge the government's error in retrospect, which is the reason for the recent attacks against it by those in the DP-media. The foundation of this attack is that the public were losing trust in journalism because it was being critical. 

This was a classic DP-media made up story. Real fake news if you like. In this Reuters Institute study, broadcasters top a poll for the institutions that have done the best job during the pandemic, closely followed by the Guardian. In contrast the organisations that have been most uncritical towards the government, the Telegraph and Sun, get negative ratings. And even more interesting is this study, which suggests viewers want more critical coverage, not less.

There is a good reason for this attempt to make publishing data or criticism appear unhelpful or even unpatriotic. While the Financial Times maintains constant coverage of the number of deaths in major countries, the BBC does not. There is some evidence that most people think deaths have been higher in China and France than the UK. If knowledge about the UK’s relative death rate became widespread, coupled with the government’s failure to adequately protect NHS and care staff, the damage to this government - the DP-media’s government - would be for a time at least very large.