Saturday , October 19 2019

Economics & identity

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Simon says that a no-deal Brexit is pretty much in nobody’s interest and so represents a victory of the “force of ideas rather than interests”. I largely agree, but I wonder whether the distinction between ideas and interests is so clear-cut. To see my point, consider a different case: young people. These are more left-leaning than others: a recent Ipsos Mori poll (pdf) showed Labour leading the Tories by 34-28% among 25-34 year-olds, and that 46% of this group support either Labour or the Greens. But this is not because younger people are inherently more leftist. In the 1987 general election, the Tories actually had a big lead among 25-34 year-olds. So, what has changed since then? Home ownership. That’s what. In the late 80s half of 25-34 year-olds owned their own home. Now, only a

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Simon says that a no-deal Brexit is pretty much in nobody’s interest and so represents a victory of the “force of ideas rather than interests”. I largely agree, but I wonder whether the distinction between ideas and interests is so clear-cut.

To see my point, consider a different case: young people. These are more left-leaning than others: a recent Ipsos Mori poll (pdf) showed Labour leading the Tories by 34-28% among 25-34 year-olds, and that 46% of this group support either Labour or the Greens. But this is not because younger people are inherently more leftist. In the 1987 general election, the Tories actually had a big lead among 25-34 year-olds.

So, what has changed since then?

Home ownership. That’s what. In the late 80s half of 25-34 year-olds owned their own home. Now, only a quarter do. This has changed how young people vote.

But what exactly is the mechanism here? I’m not sure that it is simple mechanical self-interested support for specific policies: “Jeremy Corbyn will cut my rent.” This doesn’t, I think, explain the passion with which many young people support Corbyn. Thatchprop

Instead, what’s going on is a change of identity. In the 80s, many young people identified themselves as property-owners and voted accordingly. Today, they see themselves as propertyless and so vote Labour. There’s a reason why Thatcher was keen on home ownership. She knew that property ownership would make people more likely to identify with other owners of wealth, whilst tenancy made more likely to identify with the traditional party of the propertyless.

Perhaps an analogous thing is going on among the older wealthier people who favour no-deal. Simon is right that many of these would lose from such an outcome, not least because in hitting economic growth (both near-term and long) it would reduce interest rates and hence income from savings. But as David Leiser and Zeev Kril have shown, people are terrible and connecting the dots in economics. Just as savers don’t blame austerity for their plight, nor do they blame Brexit.

Being retired does, however, change one’s self-identity. If you no longer spend your days worrying about suppliers or customers (as many now-Brexiters did BITD) the salience of economic interests declines. This creates a gap that can be filled by nationalism.

Similarly, in an economy where productivity is stagnant, we pay less attention to growing the pie and more to preserving what we have. As Will Davies puts it:

Where productivity gains are no longer sought, the goal becomes defending private wealth and keeping it in the family. This is a logic that unites the international oligarch and the comfortable Telegraph-reading retiree in Hampshire. The mentality is one of pulling up the draw-bridge, and cashing in your chips.

It's a similar mechanism to this that helps explain Ben Friedman's point  - which is perhaps the most important fact about contemporary politics - that economic stagnation breeds intolerance and closed-mindedness. 

As the man said:

The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.

In saying this, I’m sort of echoing Amartya Sen’s point – that we all have multiple identities. He writes:

There is a critically important need to see the role of choice in determining the cogency and relevance of particular identities (Identity and Violence, p4)

That word “choice” is awkward. It’s not always the case that we consciously choose our identities, Stars in their Eyes-style (“Tonight, Matthew, I’m going to be a white nationalist.”) But there is nevertheless a big element of contingency in them. Before 2016, for example, only a few of us were Leavers or Remainers.

Now, this is not to adopt a crude economic determinism. Although our identities are influenced by economic conditions they are not wholly determined by them. Marxists have pretty much always realized that class conscious is something that must be deliberately cultivated, that it does not automatically arise purely from material conditions.

The very fact that Brexit has become so salient an issue, and a shaper of identities, shows us that identities are endogenous, and malleable by political processes, not just economic ones. For me, this is one reason why the idea of politics as giving people what they want is deeply flawed. A big part of the political process lies in not just responding to people’s preferences but in shaping those preferences. Thatcher (and Lenin) both knew this, and too many of their epigones have forgotten it.  

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