Wednesday , September 22 2021
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Articles by chris

Capitalism and the state

3 days ago

Greg Smith and Dehenna Davison write:

For many in left behind parts of the country, the reality is that the private sector is stifled by a bloated public sector that is almost Soviet-sized in some areas of the North.

This seems to me to be a case of confusing correlation and causality. The reason why the public sector accounts for such a big share of economic activity in some areas is that the private sector in those places is so weak.
In fact, I’d suggest that – for the economy as a whole – a bigger state can work to the benefit of capitalism.
My story here is not about the several mechanisms through which the rich (pdf) disproportionately influence government policy, nor about crony capitalism, corporate welfare, bank bailouts and implicit subsidies, important as all these are.

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Cancel culture, & the death of classical liberalism

4 days ago

Most of us by now are bored with rightists complaining about cancel culture. But we shouldn’t be, because they show that the left has won an important battle about the meaning of liberty.
What I mean is that such complaints show that the right has abandoned a classical liberal conception of the term.
Let’s take Friedrich Hayek’s discussion of liberty. He defined this in negative terms, as the absence of coercion, where coercion is something which “occurs when one man’s actions are made to serve another man’s will, not for his own but for the other’s purpose.”
But what exactly is and is not coercion? Here’s Hayek:

Coercion should be carefully distinguished from the conditions or terms on which our fellow men are willing to render us specific services or benefits…in a free society

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The politics of abstraction

12 days ago

“Migrants will be turned back to France” cheers the Daily Express – alongside a picture celebrating Emma Raducanu who is herself a migrant, the Canadian-born daughter of Chinese and Romanian parents.
Of course, an Express front page should normally be beneath our notice. This one, however, is significant as I suspect it embodies a widespread phenomenon in mainstream politics – the prioritizing of abstractions over real people.
The Express’s doublethink has happened because, for much of the right, “migrants” are not real people such as Ms Raducanu, or the parents of most of the England team which did so well in the summer’s Euros, or the perfectly nice people you meet at work and in shops. They are instead an abstraction, a phantom invoking a vague sense of the nation (another

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What’s the mechanism?

August 19, 2021

The late great Andrew Glyn always asked: “what’s the mechanism?” The west’s abject failure in Afghanistan highlights both the importance of this question and the fact that too many policy-makers and influencers fail to give it sufficient attention.
President Biden says “we did not go to Afghanistan to nation-build.” Which poses Andrew’s question: what, then, was the mechanism through which the Taliban would be defeated? We know for certain that it was not the ones actually operating: western military strategy as it was implemented failed.  
Exactly why this was the case is another matter, and one not relevant for my purpose*. Instead, my point is that the failure to satisfactorily ask and answer Andrew’s question was not confined to those supporting the military adventure in

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Ambition in capitalist society

August 12, 2021

Ambition, writes Lucy Kellaway, is both necessary and corrosive. She omits an important aspect here, which adds to its corrosiveness – class.
Class influences the level of ambition through two channels. One is that it distorts your awareness of opportunity. In Michael Apted’s superb TV series Up, the privately-educated Andrew knew (16’21" in) at the age of seven that he would go to Cambridge and become a lawyer. For the rest of us, our path to even modest success is not so pre-determined. I never thought about Oxford University until a teacher told me I could get in, and I never met anyone with a degree who wasn’t a teacher until I was in my 20s. If you’re not aware of the possibilities, you are less likely to be ambitious.
Another mechanism is that class sets the reference level of

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Embracing Blair’s legacy

August 7, 2021

Sir Keir Starmer wants Labour to “embrace Tony Blair’s political legacy.” Which poses the question: what is that legacy?
The usual response is merely an exchange of tribal grunts: “Iraq” versus “won three elections”. The truth is more interesting.
Blair’s (and Brown’s) great genius was to see that social democracy had to adapt to new times. So, for example, his expansion of universities was a response to the increased wage inequality between graduates and non-graduates; tax credits were an attempt to tackle the prevalence of low pay caused in part by the weakness of trades unions and globalization; fiscal rules were a reaction to high real interest rates; and the granting of independence to the Bank of England represented the awareness that policy uncertainty had contributed to

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The social mobility con

August 4, 2021

Strange as it might seem, we owe some thanks to Digby Jones – because he has reminded us that social mobility is a con.
Over the weekend he tweeted:

Enough! I can’t stand it anymore! Alex Scott spoils a good presentational job on the BBC Olympics Team with her very noticeable inability to pronounce her ‘g’s at the end of a word. Competitors are NOT taking part, Alex, in the fencin, rowin, boxin, kayakin, weightliftin & swimmin.

Now, Ms Scott epitomizes the meritocratic ideal of someone coming from a poor background and succeeding through personal ability. She is a child of Thatcher:

 it doesn’t matter what your background is. I believe in merit, I belong to meritocracy, and I don’t care two hoots what your background is. What I am concerned with is whatever your background, you

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Cummings on complexity

July 28, 2021

One of the more interesting errors people sometimes make is to have a useful insight but draw incorrect inferences from it. So it is with this tweet from Dominic Cummings:

I get all sorts wrong all the time. And i don’t *know* if Brexit is good or bad. Unlike remain twitter I think the world is highly complex & rapid error-correction of inevitable constant errors is almost the ultimate value.

It is wholly correct to stress that the world is complex and that errors of planning and policy are therefore inevitable. Politicians and journalists should be more aware of this.
I suspect, however, that Mr Cummings might not have drawn the right inferences from it..
Our reaction to complexity should not be to blunder around with a sledgehammer and then try to absolve ourselves by saying:

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Honesty vs electability

July 22, 2021

How dishonest should politicians be? I ask because of an encounter between some ex-Labour voters* and Sir Keir Starmer.
Some gammon claims (2’10" in) that “there’s a lot of people under the age of 25 who just don’t want to work” to which Starmer replies initially: “you’re always going to get some people who maybe don’t want to work.”
What he might have said, of course, is: “you’re just a bigot, and a mug for believing Tory lies”. My chart shows the point. It shows that until 2007 a higher proportion of 18-24 year-olds were in work than were 50-64 year olds. Isn’t it an amazing coincidence that the number of young people who didn’t want to work increased during the financial crisis, fell during the subsequent recovery, and rose again during the 2020 recession? Isn’t it incredible that

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On professional deformation

July 15, 2021

Phil recently tweeted that one problem with Starmer is that he doesn’t realize that “politics isn’t the same as running the DPP.” This hints at a problem many of us have.
Phil’s right. Leading the Labour party isn’t like running the DPP. For one thing, the party isn’t as hierarchical as the DPP: people don’t simply do as they are told. And for another, a Labour leader needs to be a salesman, whereas the boss of the DPP does not. Moving from the DPP to the Labour leadership is like a boss moving from a monopoly utility to a growth company needing to catch customers’ attention in a competitive environment. The two jobs require different skill sets.
What’s more, the forensic skills Starmer acquired as a lawyer aren’t necessarily very useful to him now. He needs to intuit what voters will

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(Not) reading Marx

July 13, 2021

How well-read should we expect politicians to be? This is the question posed by Rachel Reeves’ recent boast (33’50" in) that she hasn’t read Marx’s Capital*.
She, of course, is by no means the worst offender. It’s become fashionable on the right to betray a complete ignorance of Marxism – as for example when they decry taking the knee as Marxist: some Tories think it’s impossible to be a decent person without being a Marxist, which is further than I would go. As the great John Spiers tweeted:

The number of people on this platform using the word Marxist without even having a rudimentary understanding of what it means is hilarious. Like teaching a dog to say sausages and claiming the dog knows what it means!

Such ignorance is in one sense inevitable. It is impossible to have read

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Dehistoricizing identity

July 9, 2021

Talking rubbish about the pensions triple lock is a booming industry. Rachel Cunliffe says the likelihood of a big rise in the state pension “is an act of generational apartheid: socialism for the old, austerity for the young.” And Polly Toynbee says “one generation is destined for a mighty windfall from the government while the other gets nothing.”
Such claims are flat wrong. The triple lock, if it persists, actually benefits the young more than the old simply because young people can look forward to decades of rises in the pension and hence to a comfortable old age whereas the old will fall off their perch after only a few increases. The power of compound growth is a wonderful thing. To put this another way, a mean state pension hurts workers today because it means they’ll have to

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Inflation, markets & the right

July 6, 2021

In the debate about whether inflation will rise significantly, there’s one point which seems to me to be under-rated – that it is those who have most confidence in a market economy who should be most relaxed.
What I mean is that, so far, the threat of rising prices in the UK is a localized one, confined to a few pockets. The NIESR estimates that trimmed mean inflation (which excludes 5% of the highest and lowest price changes) is still lower than it was in October 2020 and is much lower than it was in 2017. And labour shortages are so far confined to a few sectors such as fruit-picking, lorry driving, construction and hospitality. Lloyds Bank says that almost a fifth of firms have difficulties hiring the right staff – which mean that four-fifths have not.
Yes, annual wage inflation is

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Symptoms of stagnation

June 27, 2021

This morning, I got a call about my recent road accident, which of course I never had. Which highlights an important fact – that capitalist stagnation is not merely about arid aggregate data on flatlining productivity, real wages and business investment but about everyday life.
If the cold calls aren’t about non-existent accidents, they’re about my computer viruses, unpaid tax, my pension, or the impending disconnection of my broadband. Fraud and mis-selling are on the rise.
Why? Because in a world of secular stagnation there are fewer legitimate business opportunities – which diverts some entrepreneurs towards crime. Of course, some people are wrong’uns who’ll be fraudsters anyway, and some are moral paragons who never will be. At the margin, however, costs and benefits determine

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The right’s intellectual decline

June 23, 2021

It is sometimes through small windows that we can see a big picture. So it is with the Times’ recent attempt to compare how other songwriters match up to Bob Dylan as a poet.
The thing here is that if I were looking for rivals to Dylan on this point, I’d not look to David Bowie or Joni Mitchell, much as I love them, but to Dar Williams, Jolie Holland, John Prine, Josh Ritter or the incomparable Townes Van Zandt.
That the Times didn’t do so, preferring more famous names, is an insight into a bigger feature of the latter-day right – that it has a very narrow cultural and intellectual palette.
I don’t mean by this that they are uncultured and ill-read: many are far from it – although Nigel Farage has boasted of not listening to music or reading books. Culture, however, is not merely a

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“Heterodox” economics as rediscovery

June 19, 2021

One of the perils of growing old is that you get that jaded “seen-it-all-before” feeling. Which is the reaction I have to so-called heterodox economics. What you youngsters call ”heterodox economics” is what I call “stuff I remember learning in the 1980s”.
Which is not to denigrate it. Quite the opposite. It is the rediscovery of old truths which were forgotten after the late 80s.
Here are some examples of what I mean.
First, Lance Taylor and Nelson Henrique Barbosa Filho complain that standard inflation theory “leaves out social conflict”. But the account of inflation I learned in the 80s put class conflict centre stage. “Conflict over the distribution of income affects the general level of prices in advanced capitalist economies” wrote Bob Rowthorn in his 1977 paper Conflict,

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Johnson’s appeal

June 14, 2021

A few days ago on Twitter I asked why so many people are happily complicit in Boris Johnson’s dishonesty. Based on a small focus group – which is as scientific as any other such group – here are a few theories.
First, Johnson exudes a sunny optimism – in Tom McTague’s words, “an all-encompassing belief that things will be fine” – encapsulated by slogans such as “Get Brexit done”, “level up”, “Global Britain”, and “build back better”. This contrasts with the Guardian’s endless list of complaints about the country, and with the nay-saying fiscal conservatism of the May government: one Tory friend of mine describes Philip Hammond as a “ghoul”. Nobody likes a whiny little shit; they prefer the optimist.
You’ll object here that Johnson achieves this optimism by ignoring details such as the

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On economic intuitions

June 10, 2021

Recently on Twitter Will Bott asked: “a piece of string is wrapped tightly around the Earth. In order for the string to be lifted an extra metre in each direction, roughly how much longer would it need to be?”
Less than half of respondents got this right*, and 37% were wrong by a factor of 10,000. Which tells us that our intuitions can be not just wrong, but wrong by orders of magnitude.
This is not the only evidence here. Shane Frederick has devised a cognitive reflection test – three questions in which there is an intuitive but wrong answer and a non-intuitive but right answer. He has found that even at the US’s top universities, less than half of students get all three questions right.
Which poses the question: if our intuitions can be so wrong, might people’s intuitions about

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Full employment, capitalism – and beyond

June 1, 2021

Is genuinely full employment possible? And if it is, is it compatible with capitalism? These are questions raised by President Biden’s ambition for an economy where “employers have to compete for workers.” This, he hopes, will “give workers more ability to earn a higher wage” and “the power to demand to be treated with dignity and respect in the workplace.” This, he claims, “isn’t just good for individual workers, it also makes our economy a whole lot stronger.”
This might not be a purely American question. James Meadway has argued that a world of ongoing pandemic risk “is one in which the balance of power at work can shift dramatically back in favour of labour.”
Certainly, there’s a precedent for por-worker policies making economies a whole lot stronger. In the 50s and 60s western

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Playing the victim

May 29, 2021

Here are four recent developments:
 – The University of Leicester is sacking academics because they are doing research in critical management studies. The Tories, however, are silent on this whilst at the same time condemning a handful of students who are unsuccessfully campaigning to get Eric Kaufman sacked from Birkbeck. They tolerate actual violations of academic freedom whilst deploring attempted ones.
 – Laurence Fox calls for the Leicester City players who carried a Palestinian flag after the FA Cup final to be hounded out.
 – Matthew Offord MP demands that the BBC not broadcast an edition of Desert Island Discs because of Alexei Sayle’s ant-Zionism.
 – Several people complained to the police about a tweet from an SNP councillor about the Eurovision song contest.
These are all

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Starmer, skill and luck

May 20, 2021

Why is Sir Keir Starmer making such a mess of being Labour leader? A good perspective on this comes from a 2006 article (pdf) in the Harvard Business Review by Boris Groysberg and colleagues: I fear most journalists and Labour activists have overlooked this because the HBR is too left-wing for them.
They looked at what happened when senior managers at General Electric became CEOs of other companies. And they found that bosses with similarly impressive CVs had hugely different performances in their new firms. This, they say, is because what matters is not so much the individual boss’s skills but the match between those skills and the job requirements. So if for example a cost-cutter took over a firm whose priority was to grow rapidly, he failed, whereas he succeeded if he took over a

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Markets & the right

May 16, 2021

Samuel Gregg reminds us of an important fact about rightist thinking – that the right has always been ambivalent about markets.
This is as true in the UK as in the US. We saw this, for example, in the 19th century when the Tories split up over the abolition of the corn laws and when Thomas Carlyle damned economics as the “dismal science” for wanting to abolish slavery. We saw it too in Roger Scruton’s mixed feelings about Thatcher:

She leaned too readily on market economics, and ignored the deeper roots of conservatism in the theory and practice of civil society.

And we see it today in the Tories imposing trade barriers not just between the UK and EU but even within the UK. Perhaps the most spectacular example of this is John Redwood’s seamless move from ardent Thatcherite to

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Class

May 11, 2021

There’s much talk, some sensible and some less so, that the Labour party has lost touch with the working class. Khalid Mahmood for example complains that the party is “doing better among rich urban liberals and young university graduates than it is amongst the most important part of its traditional electoral coalition, the working-class.”
Of course, you can use words to mean whatever you want them to, but to those of us in the Marxian tradition, such a complaint makes no sense because of how we define “working class”.
For us, being working class is not about your lifestyle or background but about economic relationships. If you don’t own (significant) means of production and must sell your labour-power, you are working class. By this definition, young graduates and people drinking fancy

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On centrist vacuousness

May 8, 2021

What would you think of a political party that promised to: cut unemployment by one million over two years; increase public investment; borrow more to finance extra welfare benefits and NHS staffing; increase foreign aid; promote worker coops; and aim for “a major extension of profit sharing and worker share-ownership to give people a real stake where they work”?
It’s pure Corbynism isn’t it?
Well, no. All these were in the 1983 Liberal-SDP manifesto. Back then, they were centrist policies.
Not that this was unusual. In 1924 – the year of picture opposite – Liberals called not just for workers to get a share of profits but also for the compulsory purchase of land for housing development and came close to advocating a land value tax.
By contrast, today’s centrists show no such

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Capital’s political power

April 29, 2021

The Tories are corrupt. That’s the message of handing out PPE contracts to government cronies; Cameron’s lobbying for Greensill; the murky financing of Johnson’s home “improvements”; and Robert Jenrick’s doing the bidding of Tory donors. All this, says Grace Blakeley, highlights the problem of “politicians and business people being in each others’ pockets.”
All this, however, is only part of the story. Even if our politicians were honest and even if the media were unbiased capitalists would still have disproportionate (pdf) power over government. Grace is right to say that “our ‘democracy’ works for the powerful, not the people.” But this is due not to the shortcomings of particular individuals, but to systemic forces.
One of these was pointed out by that great left-wing economist Adam

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On selection mechanisms

April 25, 2021

Market research is vital. Had the breakaway six done some, they’d have known it was an unpopular idea and so wouldn’t have destroyed their bargaining power with UEFA and their (in some cases tiny anyway) popularity with fans.  
Market research is a menace. Sir Keir Starmer’s concern with focus groups is creating timidity and a lack of direction. It’s causing him to reject Wayne Gretzky’s advice to skate to where the puck is going to be rather than to where it has been. Henry Ford never actually said “if I had asked people what they wanted, they would have said faster horses.” But it captures a limitation to how much we should listen to market research.
Which of these paragraphs is correct?
Both. What we have here is an example of Niels Bohr’s saying: the opposite of a great truth is

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Capitalists against competition

April 19, 2021

Capitalists hate competition. That’s the message of plans by several big clubs – as well as Sp*rs – to form a “super” league in which they’ll be protected from the danger of relegation or from competition from emerging teams.
The smarter capitalists have of course long known that profits come from avoiding competition. Warren Buffett advises shareholders to look for companies with “economic moats” – things that protect them from competition. And Peter Thiel says start-ups should aim to become monopolies. “Competition is for losers” he says.
But here’s the thing. Striving for monopoly is by no means always a bad thing. The pursuit of brand power – one of Buffett’s moats – causes firms to try to make high-quality products consumers can trust. The urge for more market share causes them to

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On generational difference

April 16, 2021

There’s been a little pushback to this claim by Ezra Klein, but I suspect there’s a lot in it:

I’ve been struck by the generational divide within the Democratic Party. Washington is run by 20- and 30-somethings who run the numbers, draft the bills, brief the principals. And there is a marked difference between the staffers and even the politicians whose formative years were defined by stagflation, the rise of Reaganism and the relief of the Clinton boom, and those who came of age during financial crises, skyrocketing personal debt, racial reckonings and the climate emergency. There are exceptions to every rule, of course — see Sanders, Bernie — but in general, the younger generation has sharply different views on the role of government, the worth of markets and the risks worth taking

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Prince Philip & the communist ideal

April 14, 2021

One unintended and unremarked effect of the eulogies to Prince Philip is that they have reminded us of Marx’s vision of communism.
What I mean is that several of his admirers describe him as a “renaissance man” on account of his wide range of interests.
This, however, is an example of a common error – of ascribing to agency what is in fact the result of economic forces.
Prince Philip could afford to pursue so many different passions because the day he married the Queen he was freed from what Marx called “the dull compulsion of economic relations.” For most of the rest of us, however, this compulsion forces us to specialize, to develop just one skill to the detriment of other interests. Capitalism rests upon the division of labour. But as Adam Smith saw, this can destroy us:

The man

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The need for institutional brains

April 10, 2021

“The trouble with you, son” said Bill Shankly to a young player “is that your brains are all in your head.” I was reminded of this line from the great man by reading Ian Leslie’s Conflicted, on how to have more productive arguments.
His advice is good: define exactly what the disagreement is about; make your interlocutor feel good and secure; acknowledge your own uncertainties; be less tribal; and so on.
In the heat of argument and when the teacups are flying, however, it is easy to forget these principles. We then have what the ancient Greeks called the problem of akrasia, of lack of self-control. Just because we know the right thing to do does not ensure that we’ll actually do it; even self-confessed “moderates” are apt to forget their own advice on how to argue well.
This is what

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