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Chris Dillow: Stumbling and Mumbling

Stumbling and Mumbling is a personal blog of Chris Dillow, an economist who spent eight years with one of Japan’s largest banks. He blogs about British politics and provides thoughtful analyses on the British economy and sports.

Conceptions of politics

There is a great and overlooked political division today – between those who think policy matters, and those who think it doesn’t. Here are some examples of what I mean. First, Ed Miliband’s speech on the Internal Market Bill was that of a man who thinks a consistent policy would be a good thing. He is exercised by the fact that a man who greeted the signing of the Withdrawal Agreement as a “fantastic moment” now regards it as “contradictory”. Johnson, however, seems to attach no...

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The Hayek question

Thatcher was right. This is my reaction to reports that Dominic Cummings regards Brexit as a way of getting out of limits on state aid and so enabling the government to funnel cash towards the UK’s own future big tech companies. The problem with this is that, as Thatcher said, the state cannot pick winners. Corporate growth is largely unpredictable. “The stochastic element is predominant” concluded Alex Coad in one survey. “Corporate growth rates are random” found Paul Geroski in another...

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On press freedom

In The Enigma of Reason Hugo Mercier and Dan Sperber argue that the main use of reason is to justify and explain conclusions that we have arrived at sub-rationally. Some reactions to Extinction Rebellion’s blockading of newspaper distribution centres seem to me to illustrate their point. For example, Culture Secretary Oliver Dowden said their action “damage[s] our democracy”. Johnson said: “A free press is vital in holding the government and other powerful institutions to account.” And...

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On Marxist Tories

In one respect, the right-wing conspiracy loons are right: Marxists have captured some of our major institutions – the institutions being the government and Tory party. I say this because of the campaign to stop us working from home and to get us back into offices. Such a demand is justifiable only if you take a very dark opinion of capitalism. Those who have faith in capitalism see upside in home-working. Andrew Sentance tweeted: Why are so many people focussing on the negatives of...

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Clarity – who needs it?

Tim Pitt calls on the government to set out “a renewed Conservative economic philosophy.” I’m not sure this is wise. Having a clear philosophy requires you to think, which is not a self-evidently good thing in life or in politics. Worse still, it gives people something to disagree with, and so invites party disunity. Constructive ambiguity can be a good thing. I say this because a new Conservative economic philosophy requires the party to answer loads of tricky questions. Here are a few....

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Tories against Thatcher

Be careful what you wish for. This old saying applies to us lefties. For years, we’ve wanted to see the end of Thatcherism. And we’ve now got it. And it’s an ugly sight. I say this because of Johnson’s campaign to end working from home and get us back into the office. This is anti-Thatcherite in two senses. For one thing, Johnson is contradicting two of Thatcher’s favourite principles – that “you can’t buck the market” and that managers have a right to manage. Many big employers are happy...

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The politics of life & death

What, if anything, is wrong with the Kaldor-Hicks principle? This is the question raised by Chris Whitty’s argument that the benefits of reopening schools outweigh the costs of doing so. Even if we suppose that this is factually correct - which it might not be – it does not follow that it is right to reopen schools. As David Hume said, we cannot derive “ought” from “is”. Which is where the Kaldor-Hicks principle comes in. It says that a policy change is an improvement if the beneficiaries...

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For (and against) a sovereign wealth fund

In their excellent Angrynomics Mark Blyth and Eric Lonergan recommend that the government borrows at negative yields to establish a sovereign wealth fund. There’s more to be said for this than they think, because the UK is better situated than many countries to have such a fund. My chart shows why. It shows that sterling tends to fall when house prices do. In the mid-90s, 2008, 2011 and last year weakness in the housing market was accompanied by a weak pound. Now, I’m using house prices...

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Cents and sensibility

Would Labour have handled the A level fiasco better than the Tories? There’s a reason to think so, and it has nothing to do with the parties’ relative competence. Instead, it’s because Labour ministers would have had different sensibilities, or sympathies. They would have been more awake than the Tories to the situation of 18-year-olds from poor schools and hence more alert to developments which might hurt them. The point here is a Smithian one. Smith thought that sympathy “arise[s] from...

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Algorithms & reification

The A levels U-turn has prompted the question: what went wrong with the algorithm? The answer is: nothing, zip, diddly, jack. What went wrong wasn’t the equation, but people. People create algorithms and they do so according to the principle garbage in, garbage out. The error here was not of high-level maths. It was a basic failure to appreciate the nature of statistics. Statistics cannot discover what isn’t there. And the information we really needed – how to compare students across...

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