Winner of the New Statesman SPERI Prize in Political Economy 2016

Monday 20 December 2021

The Ego-libertarian party


It is easy to argue against measures designed to stop the spread of the Omicron COVID variant before it has become dominant, as 100 Tory MPs did last Tuesday to defy Johnson. But that is exactly when you need measures to be put in place to protect the public. These MPs have been a constant drag on Johnson during the pandemic, and one reason why he has not been following the advice of his scientists.

There have always been the odd nutters among Tory MPs, but they have never numbered 100. It represents nearly half of all Tory backbenchers (Tory MPs who are not part of the payroll vote). Worse still is that they have, most of the time, the support of the right wing press. Both are way out of line with public opinion. There is a reasonable argument that vaccine passports are a gateway to further restrictions on civil liberties, but that argument cannot be made by the same MPs who are at the forefront of restricting civil liberties for those they don’t like.

They call themselves libertarian, but giving the police the right to arrest demonstrators because they are being too noisy is not libertarian. They call themselves libertarian, but making it illegal to rescue refugees from drowning is not libertarian. They call themselves libertarian, but allowing 6 million British citizens to be deported without notice at the will of Priti Patel is not libertarian. They call themselves libertarian, yet have introduced for general elections gerrymandering of the most blatant kind. I could fill the whole post with sentences like this, so how dare people call this government and its leader libertarian?

But why do they think they are libertarian? The answer is that they do believe in complete liberty and lack of interference from the state - for themselves. I have used the term ego-libertarian, which I got from Robert Saunders (@redhistorian), because it is almost right and sounds good. It is not completely right because it is quite possible that ego-libertarians do not just want liberties for themselves, but just for people like them. Not their class, unless their class is limited to parts of finance. Perhaps liberty for people who can help them, but not for people who could threaten their own liberty, get in the way or are casualties of their fanciful schemes. As Kenan Malik notes, in the pre-civil war US the loudest cries for liberty came from the slave owners. Indeed the Conservative party has become in so many ways a copy of the US Republican party.

So arresting demonstrators who make a noise is fine, because they or people like them would not be demonstrating. Nor would they be rescuing refugees, and they will not be deported by Priti Patel. They after all are the Brexiters who knew the UK economy would suffer but also knew they would not be suffering. These may be the Brexiters who made sure they had EU citizenship, or a second home in an EU country, or moved their company to inside the EU.

There are plenty of selfish people in the world, but having the governing party making crucial decisions in a pandemic for their own selfish interest, rather than their idea of what the national interest is, represents a serious problem for our NHS. These MPs, like the newspapers that push a similar line, are completely out of touch with Conservative voters on these issues.

On Wednesday there was a press conference where the Chief Medical Officer (CMO) said quite clearly that people need to avoid social contacts where possible to try and prevent the NHS being overwhelmed. Johnson at the same event did not go that far. The CMO Chris Whitty was immediately criticised by two members of the ego-libertarian wing of the Tory party: here and here. That in turn led to this headline in the Mail.

For these ego-libertarian MPs, not interfering with the economy is always more important than saving lives. They don’t say that out loud, which is why they turn on a scientist when he advises withdrawal from parts of the economy in order to save lives. For these MPs, following their selfish ideology always trumps science. They have no time for experts if experts are advising them to do something they dislike. For the same reason their commitment to preventing climate change, if it is there at all, is skin deep.

Why ego-libertarian rather than neoliberal? Neoliberalism is not profoundly irrational. It would see that an environment where COVID was rampant would be very damaging to key parts of the economy, as individuals curtail social consumption to avoid catching the virus. Ego-libertarianism is irrational and myopic, seeing only that masks are a nuisance to have to wear, see lockdowns only in terms of the direct impact on business. Right wing newspapers see lockdowns as people buying less newspapers. Their thinking does not go beyond the here and now. Neoliberalism is at heart about giving power to corporations. Ego-libertarians want power for themselves, their friends and those who give them money and/or win them elections.

Boris Johnson is also naturally an ego-libertarian. His original strategy of herd immunity, which is basically doing nothing to get in the way of the virus beyond vaccination, is what ego-libertarians push for. He was persuaded to change that because it would have led to the health service being overrun, and he thought that would be devastating to his chances of continuing to win elections. As a result, the state of the health service, rather than deaths or long COVID, has always been the critical trigger for Johnson to take action.

Hence ‘freedom day’ in July, where all measures designed to reduce cases were abandoned. This was done because Johnson was confident that, even though 1,000 or more people would die every week from COVID, the health service could just about cope. Thus at the end of the day his ego-libertarian ideology was not compromised, because it included his wish to stay Prime Minister. Equally for ego-libertarians who are backbenchers this consideration provides no constraint on their aversion to seeing the economy inhibited in any way.

SAGE, the main committee of experts advising the government, believes measures designed to curtail social interaction are required in response to Omicron. They recommend a ‘circuit-breaker’ that ends social contact between most households indoors and ends indoor hospitality like going to a pub. This, according to both SAGE and independent-SAGE, is vital to ensure hospitals already at their limit do not descend into chaos.

For this reason Johnson will probably follow their advice to some extent, although much too late. This in turn may seal his fate, with the ego-libertarian half of his parliamentary party vowing to be rid of him once this Omicron wave dies down. That in turn means that successful candidates to replace Johnson will either have to be, or pretend to be, ego-libertarians who promise to take even less notice of experts than Johnson did.

I hope, despite everything, you have a good Christmas and best wishes for 2022

Monday 13 December 2021

Cutting through


Legislation going through parliament at the moment is the most regressive and repressive that I can remember from a social liberal’s point of view. The right to peaceful protest without being arrested effectively ended. Criminalising refugees, and those in lifeboats saving them in the channel. Those born overseas or dual nationals will soon be able to be deported at the will of Priti Patel, without notice, which affects 6 million UK citizens. The government also wants to have the ability to override any legal decision it doesn’t like.

With a new COVID variant about to lead to an explosion of UK cases, the government is once again being totally inept at preparing for it. Christmas parties are absolutely fine, says Boris Johnson, while the education secretary says he thinks masks in schools may harm learning (which is nonsense - what harms learning is being away from school after catching COVID). This government continues to do nothing about ventilation in schools.

But it wasn’t any of these things that shifted the polls dramatically in favour of Labour over the last week. Instead it was the year old video tape of the then press secretary to the Prime Minister nervously giggling about a recent Christmas party, a party that a year later the Prime Minister was denying the existence of to the Commons.

It’s not hard to see why this footage had such a big impact. People remember the hardships they suffered following the government’s rules last year as the Alpha wave gathered steam, and some have relatives who died from that wave. Christmas parties were banned in London, and the idea that those in No.10 were ignoring the restrictions they themselves had imposed seemed outrageous (as it was). Seeing the press secretary laughing about how they would try and pretend it hadn’t happened illustrated the gulf between the people suffering (and people dying alone) and the apparent indifference to rule breaking in No.10.

It is also interesting that, like the Patterson case I wrote about here, it was the broadcast media that took the lead in making most people aware of this rather than the right wing press. Unlike Patterson it took the Mail (under a new editor) a day to put it on the front page, and then as part of the right wing newspapers’ ongoing moan about any COVID rules at all. In contrast the Sun decided it was a non-story.

Objectively, the issue of a Christmas party is trivial compared to the many tens of thousands of COVID deaths caused by Johnson’s ineptitude at handling the pandemic. But cut through about Conservative sins depends on what appears on the 6 or 10 o’clock news. You will not find anywhere in those news programmes a clear statement that Johnson is responsible for so many deaths. Nor, crucially, will you find much about the issues I listed in my first paragraph. Because the news programmes were not able to ‘balance’ the pictures of Johnson’s press secretary, and because partygate was an insult to everyone, that issue cut through.

Of course everyone reading this blog does not need the 10 o’clock news to alert them to what Johnson is doing. You read a newspaper like the Guardian, Mirror or Financial Times, and probably have many other sources of information. But you are in the minority among voters. Most Tory voters just have these peak time News programmes (probably the BBC) and their right wing newspaper which heavily filters the news. They needed proof that Johnson and those working for him believe they can do what they like, and now they have it.

This Christmas party episode is a perfect example of something I talked about here, The problem for figures like Trump and Johnson is that they get tripped up by their own excesses (in the eyes of the public) or the excesses they encourage in others. Trump encouraged a coup, and his supporters obliged. Johnson encouraged an attitude among those working at No.10 that they, like himself, didn’t need to follow the rules they were proscribing for the public, and they went ahead with parties that others got fined for holding.

Since Johnson became Prime Minister, he and those around him have behaved in an outrageous manner, and have survived only through Johnson’s charm and media bias. The government couldn’t help itself by allowing friends to profit from the PPE crisis its predecessors had created, and from the test and trace programme. Johnson couldn’t help himself regularly putting donors in the Lords, and keeping ministers in place who were found to have broken the ministerial code. It was very likely that one day something similar would break through the shield created by half the press and a timid BBC, such that the public would finally see what Johnson and his entourage were like.

Will this be a flash in the pan? In the short term certainly not. Johnson still hasn’t admitted one party took place, let alone the half dozen or more that happened. The more Johnson sacrifices some former employees to save his own skin, he risks creating individuals who will find the odd photograph to leak to the media. [This was written last Friday and Saturday, and by Sunday it had already happened.] Into the medium term, the task for Labour is to keep reminding voters how they felt when seeing that footage of the Prime Minister’s press secretary. Unlike the Conservatives, they will not have the help of half the media doing it for him.

The problem the Conservatives have beyond the next month is that this episode, along with continuing corruption stories, may have permanently tarnished Johnson’s image among the electorate. With plenty of scandal still in play, this will not go away. Johnson’s charm that took in a large number of the electorate may no longer work its magic. In addition, a broadcast media may be less deferential to a leader whose days seem numbered.

More and more Tory MPs may come to think that their best bet of getting a majority in the next election is to have a new leader who comes with a honeymoon period, and combine that with an early election. After all, many of them only voted for Johnson as leader because in 2019 they were in a Brexit/Farage sized hole and only he could get them out of it. His job done, he could easily be cast aside and everything bad that subsequently comes to the public’s attention can be laid at his door, as Johnson himself once did to those that came before him.

If partygate does prove to be the downfall of Johnson, I think there will be some poetic justice there. Of all the bad things that Johnson has done in such a short time, his complete failure over the pandemic is the worst in terms of lives lost. Not many national leaders are responsible for allowing nearly 100,000 of their own citizens to die outside wartime, and those that did are not remembered fondly. From embracing herd immunity to delayed lockdowns to ‘freedom day’, he has refused to learn from his mistakes or his scientific advisors because of his lifelong ego-libertarian views. Alas too many of his own MPs share similar views, so we will not return to sanity until some other group of parties govern this country.

Tuesday 7 December 2021

They lie about everything else, so why is the economy different?


“All Covid rules have been followed” says Johnson when questioned on the Christmas and other lockdown parties that were held at No.10 last year, a mantra repeated by every Conservative MP. Just one problem - parties were not allowed at this time, and organisers were fined £10,000 if they were caught by the police holding parties. So Johnson and every Conservative MP are lying about this. Does this worry those MPs? I doubt it, as it is what they do all the time.

At the end of November the Prime Minister announced some new measures in anticipation of the new Omicron variant, saying these measures were “precautionary”. Does that mean Johnson is taking a precautionary approach? Of course not. SAGE itself recommended working from home and less social mixing. Not the Prime Minister, who thinks we should have a normal Christmas. The health minister Javid even says ‘cautious’ snogging is OK. This is a government that says it’s following the science when it is doing anything but. So what the government is doing is certainly not precautionary. The evidence we have so far suggests this variant will grow very rapidly, and although there may be less deaths than with Delta the NHS is going to be even more overwhelmed than it currently is

The government says it is leveling up. It is not clear what they mean by this, but it is generally understood that this is about helping the poorer parts of England. One of the best things you can do to improve productivity in the North is to improve its transport system, which includes fast links between the major towns and to London. So cancelling HS2 going to Leeds and the Northern Powerhouse Rail line because of some arbitrary Treasury rule limiting public investment is a blow to leveling up. So is changing the social care rules so families with a little wealth will have to pay a much larger proportion than wealthy families. So is funding social care through national insurance increases rather than higher income tax. So is cutting council spending for the most deprived areas by far more than elsewhere. So is directing regeneration funds away from deprived towns and to those that have a Tory MP. It seems leveling up actually means leveling (further) down.

I used to have a friend who moved from academia to working for a City firm giving economic advice. At first he was agonised that all his predictions seemed to go wrong, but then a colleague told him it was fine, he was a good negative predictor. Which meant if he thought X would happen, the guys on the trading floor would know X was unlikely to happen. I think we can take government statements in the same way. If they say they are doing X, they are actually not doing X. My friend got better with time, but this government shows no signs of doing so. 

The same applies to the economy. When the government says they have established a strong and stable economy, that is exactly what they have not done. As I showed here, before the Global Financial Crisis (GFC) the economy was much stronger under a Labour government than it has been since the GFC under Conservative Chancellors. Some of that may be bad luck (the trend rate of growth has been falling in most G7 countries), but the disasters of austerity and Brexit are entirely down to the governments that enacted them.

The harm caused by Brexit is very clear in this chart from the IMF.

On the horizontal axis is the deviation of GDP from its pre-pandemic trend in the second quarter of 2021. The UK is the worst of all the countries the IMF looked at. On the vertical axis is the deviation of inflation from its pre crisis trend in the third quarter. The UK is among the worst on this score too. We have the unenviable combination of relatively low output and excess inflation. This is partly a result of Brexit, where labour shortages have pushed up prices and wages, and reduced UK growth, but it may also have something to do with the UK’s relatively poor management of the pandemic.

While most people are rightly sceptical of claims that the government followed the rules on Christmas parties at the end of 2020, they seem to buy their line on the economy. Here is an interesting recent Ipsos Mori poll (source, p19).

The Tory lead is highest on ‘managing the economy’. So why, when the Conservatives have done much worse at managing the economy than Labour, is there a perception that the opposite is true?

Before speculating on this, we should look further down the poll to the question on which party has the best policies on ‘improving living standards’. Here Labour have a solid lead. Now from my point of view as an academic economist, it is quite hard to improve living standards while not managing the economy well. The two things normally go together. If we ignore academic quibbles, living standards improve by raising productivity and growth, and strong productivity and growth is close to any economist’s definition of managing the economy well.

This puzzle of divergent popular views on these two questions is not peculiar to this poll. Here is a poll from 2013 showing much the same thing. To help answer this puzzle, it may be helpful to look at answers on managing the economy over time. There are two break points. The first was 1992 and the ERM debacle. After that, Labour tended to be ahead on the ‘managing the economy’ question. The second was the Global Financial Crisis, when the lead switched back to the Conservatives.

There are thousands of possible reasons for believing the Conservatives are better at managing the economy but Labour are better at improving living standards, and I’m not really qualified to assess them, or to say which question is more important when people come to vote. But that will not stop me from giving my own theory.

I think for many people ‘the economy’ is a construct that they know little about, and which they see as largely divorced from their everyday experience (unlike living standards). But most voters know the economy is important, because it occupies so much of the media. They also know that big events, like Black Wednesday and the GFC, are very important. So they attribute bad things that happen in the economy to the government in power at the time.

If I’m right, Labour cannot expect poor growth and stagnant living standards to turn around voters’ view about who is best to run the economy. The best they can do is begin to bust the myth that the Conservatives are better at running the economy by explicitly saying the economy is not an abstract thing, but it is all about the average person’s living standards which reflects the growth in total GDP.

To successfully do this they need to take a leaf out of the Tory play book. Conservative MPs, whenever the opportunity arises, talk about how their government has created a strong economy. Labour needs, at every opportunity, to start saying the opposite. That requires 'lines to take' given to all Labour MPs, with quick rebuttals if questioned. But more than that, it requires Labour MPs to start recognising the evidence that the last Labour government was better at managing the economy than the subsequent Conservative governments.