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August 17, 2017

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Jon

Worst part for me is their assumed morality and superior morality. They assume as their views are common sense [general ignorance] or moderate that they are moral - incidentally what turns people off them as much as a view they are wrong that moral haughtiness.

Moderate is a good word for them mostly.

Jonathan

Not the least irony here is how many of these points would have been familiar to Keynes, Liberal Party member. It isn't just austerity as a response to a major recession, but the role of financial markets in the wider economy, a more nuanced understanding of globalisation and so on. Modern day liberals - not least in the Lib Dems - appear to have abandoned any of their Keynesian heritage

Jolyon Maugham

What is this "centrism" of which you speak? What are its characteristics? Who are its proponents? How does it differ from (for example) "neoliberal", or "blairite"? Genuine questions: it feels like an uncharacteristically unrigorous thing for you to do to attach such a vague and protean expession?

Timlagor

There's nothing moderate about deregulated free markets.

Where the centre is politically is also entirely subject to perspective. Corbyn looks "Moderate" to some and Thatcher to others. USA politics is far to the Right of UK on most issues.

Blissex

What is "centrist" is the make-believe that politics and economics policy are and have been directed at the "common good":

*" the banking crisis wasn’t just a market failure but also an organizational failure" is thus ridiculous, because it was a splendid victory: an immense bezzle was "acquired" by a large minority of property speculators and City financiers, and they managed to shift the costs entirely on everybody else, and even restart the scheme both in the UK and Ireland and the USA.

* "centrists’ second error is less forgivable: fiscal austerity" is also ridiculous because "fiscal austerity" combined with extremely loose credit policy was an intentional and popular policy mix, aiming for lower taxes and wages, and bigger asset prices and business profits, and it has delivered them, as voters wanted.

Anti-worker economic policies are not "failure" or "error", but deliberate and successful, and it is very "centrist" to depict them otherwise.

In the 1950s a humourist wrote of the english love of compromise and how it applied to politics:

«The Labour party is a fair compromise between Socialism and Bureaucracy; the Beveridge Plan is a fair compromise between being and not being a Socialist at the same time; the Liberal Party is a fair compromise between the Beveridge Plan and Toryism; the Independent Labour Party is a fair compromise between Independent Labour and a political party; the Tory-reformers are a fair compromise between revolutionary conservatism and retrograde progress;
and the whole British political life is a huge and non-compromising fight between compromising Conservatives and compromising Socialists.»

Plus since 1997 "centrists" depict it as a big "join hands and sing 'Kumbaya'" where unfortunately some "failure" and "error" were made :-).

Blissex

«Corbyn looks "Moderate" to some and Thatcher to others.»

I feel to urge to mention that a book on the Labour New Left reports that *Tony Benn* was ridiculed by Militant Tendency members with the nickname "Kerensky" :-).

Blissex

«Modern day liberals - not least in the Lib Dems - appear to have abandoned any of their Keynesian heritage»

There are different types of Liberal, and a less SDP-style one like Vince Cable wrote in his book "The Storm" in 2010:

«Not least of the illusions is the belief that investment banking, mortgage—broking and complex financial product design were a source of national comparative advantage and wealth creation. The obsequious pilgrimage of Labour politicians to the City and their exaggerated deference to its concerns have led to a seriously unbalanced economy, more exposed to major financial shocks than others. I discussed in the penultimate chapter some of the reforms at national and international level needed to curb the destabilizing excesses of the financial sector. There may be a deeper problem.

Thirty years ago, Britain had a ‘Dutch disease’, arising from the damaging effect on the exchange rate of oil and gas. What should have been an opportunity became a problem. The oil and gas reserves have now been run down (and, arguably, wasted), ending that disease.
But it has been replaced by the ‘Icelandic disease’, whereby a banking sector outgrows its host economy, creating chronic financial instability.
A brutal solution would be drastically to prune back the industry, as Mrs Thatcher did to coal-mining when Mr Scargill posed a threat to stability comparable to that created by Mr Adam Applegarth of Northern Rock, Sir Fred Goodwin of RBS/Nat West and Mr Bob Diamond of Barclays today. That would be destructive of much productive and genuinely wealth-creating activity in business services.»

That's not very centrist, and I reckon that JM Keynes would have very much approved.

Glynis Jones

I ask the same question as Jolyon Maughan - who on earth are you, and many others, OwenJones included, talking about? You seem to have decided that Centrists are pro the status quo, the structures that produced inequality,'neoliberal'etc etc, and you imply, as some on the Left often do, that anyone who doesn't share their views is by definition only out for their own self advancement. Do you have any evidence for this? Would you not agree that there is a genuine gap in UK politics today between views of Labour & Tory leadership, and that many reasonable, principled people - politicians and the general public- would prefer a more moderate approach to achieving the changes necessary social justice? This is the centre ground, surely, not this confection of the obviously spooked Left(of which I do not usually regard you as a member)

Blissex

«would prefer a more moderate approach to achieving the changes necessary social justice?»

It does not get much more moderate than Attlee, Wilson, Callaghan or Corbyn, with their "Kerensky" style pallid socialdemocracy.
Corbyn has stated many times that his model is as "extremist" as the german SPD, not quite as "far left" as the swedish socialdemocrats of old.

What "centrism" today means is the politics, sometimes indistinguishable, of Blair/Mandelson and Cameron/Osborne, which are by historical standards pretty much on the right, and in some respects not very moderate right. Even the Liberals, even V Cable, are not as right-wing as that.

A commenter on another blog reported:

Indeed indeed, and commenter "vamsas" some months ago posted this:

«Mid-1970's Conservative policies were slightly to the left of 2015 Labour. Political Compass Website: Ted Heath Tories 1970s (+3) Labour 2015 (+4) A score of (+5) is perfectly centre-right. The Scottish Socialists 2015 are in (-7), Greens 2015 are on (-3), SNP 2015 on (-1), LibDems 2015 on (+5), UKIP 2015 on (+8) and the very right-wing Tories of 2015 on (+9).»

https://www.politicalcompass.org/images/enPartiesTime.gif
https://www.politicalcompass.org/uk2017
https://www.politicalcompass.org/uk2015
https://www.politicalcompass.org/ukparties2010

Tom Griffin

"Would you not agree that there is a genuine gap in UK politics today between views of Labour & Tory leadership"

There is more than one group of people in that gap. There are peope like Ed Miliband, who tried to adjust to some of the realities that our host describes, and there is another group which hounded him precisely for departing from those centrist orthodoxies, assuming that they would be the beneficiaries.

Blissex

«achieving the changes necessary social justice»

Occasion for me to rant about a pet peeve: I despise the expression "social justice" because it is not just woolly, it is hypocritical: whatever might be "social justice" does not stop at borders, and is beyond reciprocal.

What social-democratic western parties aim to achieve in their moderate practical politics is not "social justice", but "social insurance": a fiscal compact where people are *reciprocally* insured against poverty, sickness, unemployment, disasters, wars, more because of *enlightened self interest* than "justice" or even "charity". Even if the long term aim is "today our country, tomorrow the world".
I reckon that usually the people breathlessly talking about "social justice" are inadvertently or deliberately counterproductive.

Luis e

ok, then if you look at a list of centre left policies, not historical but what you think a centre left could look like today, how much do you disagree with?

I'd support much tougher bank regs, CBI (if I thought it feasible), job guaurantees, wealth taxes, a national development bank, fiscal expansion, Bremain, and consider that a centre left platform, but perhaps I'd be wrong.

Luis Enrique

Also maybe the centre is appealing to some because the Chavez fawning non-centre are unappealing. And maybe the distinction between extremism and fanaticism isn't so great.

Ralph Musgrave

Also guilty are the significant proportion of economists who supported austerity or at least opposed full blown stimulus. Strangely there's a gaggle of them at Harvard: Kenneth Rogoff, Carmen Reinhart and Alberto Alesina.

Glynis Jones

Agree, Luis Enrique. So Blissex has decided what Centrist politics is, so we all have to agree? Never thought i would say it, but thank goodness for Twitter where plenty of sane people recognise the lazy thinking and the panic of many of those who are using this term now they are bored with "redTory'and other descriptions of those in main stream `Labour they can't stand.

Blissex

«So Blissex has decided what Centrist politics is, so we all have to agree?»

I am reporting what top political figures, like Cameron and Blair, or Clinton and Obama in the USA, and their supporters, call "centrism" or "the third way" between right and left (remember that?): it is themselves! And the "serious press" seems to agree, when they report Chuka/Blair/Cameron/Soubry thinking of creating a new "centrist" party, one example among myriad:

http://uk.businessinsider.com/anna-soubry-new-centre-party-brexit-2017-3

It is what they call the soft-neoliberalism of the Washington Consensus.

Blissex

«much tougher bank regs, CBI (if I thought it feasible), job guaurantees, wealth taxes, a national development bank, fiscal expansion, Bremain, and consider that a centre left platform,»

Indeed, but that mix of policies is usually depicted by the "serious" press and "centrist" politicians as confiscatory far left regime of venezuelan chaos, as it corresponds to scandinavian style socialdemocracy; the current Labour programme falls well short of that, and is more like german style "ordoliberal-friendly" socialdemocacy instead.

Rachel Hodge

All of the problems were identified by Adam Smith. It really gets me how the neoliberals selectively quote Adam Smith to justify a system that he would have opposed

chris

@ Jolyon, Glynis - good question. Centrism is diffuse and protean and hard to define: a centrist today, for example, is very different from one 40 years ago. I hoped to dodge this qn by looking at what people who claim to be centrists have recently done: Lib Dems call themselves centrists and New Labour claimed to be centre-left.The fact these have been in government means there must be some crossover between centrism & support for the status quo.
I'm not sure how much centrism differs from neoliberalism. Sam Bowman lists 9 features of that here, and I guess centrists would share many of them, albeit with different emphases:
https://medium.com/@s8mb/im-a-neoliberal-maybe-you-are-too-b809a2a588d6
The problem is that I too agree with most of his list.

Luis Enrique

Blissex, well maybe if you want to implement those policies without being painted loony left you need a leader that associates with Scandinavian social democrats rather than throwing Mao's little red book around and praising Chavez etc.

Or you decide screw it, can win power despite that

Blissex

«neoliberalism. Sam Bowman lists 9 features of that here»

The word "neoliberalism" is far less well defined than "centrist"/"third way".
But S Bowman's list seems to me to be "dreamy neoliberalism" expressed in doublespeak.

As to me, "actually occurring", "real neoliberalism" has a strong distinguishing characteristic, without which it is not "neoliberalism" and which overshadows most others: "labour market reform". Which of course is doublespeak for "the solution to every economic policy problem is lower wages".
The second most important characteristic is "regulation reform" especially of finance, which is doublespeak for "wealth creators are above the law" and "decriminalization of fraud".
But those are characteristics of classical liberalism, just re-expressed in doublespeak; the "neo" part is support for generous state welfare for corporations and "wealth creators", which classical neoliberals were strongly against.

Blissex

«neoliberalism. Sam Bowman lists 9 features of that here, and I guess centrists would share many of them,»

As to that, Tony Benn wrote in his diary 1993-05-19 as to what he said at a NEC meeting:

«I think, candidly, what is happening is that the party is being dismantled. The trade union link is to be broken; the economic policy statement we are considering today makes no reference to the trade unions. Clause 4 is being attacked; PR is being advocated with a view to a pact with the Liberals of a kind that Peter Mandelson worked for in Newbury, where he in fact encouraged the Liberal vote. The policy work has been subcontracted.
These so called modernisers are really Victorian Liberals, who believe in market forces, don't like the trade unions and are anti-socialist.»

Strangely enough he was not re-elected to the NEC after that :-).

Blissex

«if you want to implement those policies without being painted loony left»

By Blair, Murdoch, Cameron, Dacre? Let's be realistic: impossible.
It's not a matter of presentation or association: it's about being aligned with the aims of neoliberalism or not.

Ralph Musgrave

Actually the real problem is Owen Jones and his leftie friends whose grasp of economics is so poor that all they've done for the last ten years is ape Tory austerity policies, as pointed out over and over by Bill Mitchell (Australian economics prof).

Blissex

«ape Tory austerity policies,»

Usual comment here: the tories have not implemented *austerity* policies, as the UK has been in an overall boom for the past several years. They have implemented, as they have publicly declared, fiscal tightening and credit loosening, with credit loosening more than compensating for fiscal tightening, that is expansionary *redistribution*, not austerity.

«as pointed out over and over by Bill Mitchell»

That guy is a knowledgeable and clever guy who often writes what to me seems knowing nonsense, especially about Greece and "austerity", I guess because of fashionable ideological blinders.
What disappoints me about what he writes is that he clearly knows the "right stuff", like the difference between a general glut and a partial glut, and the actual reason why the greek economy "collapsed", but still writes as if he did not.

Blissex

«Sam Bowman lists 9 features of that here, [ ... ] The problem is that I too agree with most of his list.»

On rereading a few times, his list seems to me more like "humanist ordoliberalism", the german consensus implemented in different flavours by both SPD and CDU, than "neoliberalism", even "dreamy neoliberalism", as it is practised in anglo-american polities, which is aimed at "reforming" labour markets and "deregulating" business and finance.

But then perhaps subconsciously the picture decorating that article is of Hong Kong's harbour, and Hong Kong is a very neoliberal place, with plenty of "labour market reform" and "business and finance deregulation"; and arguably little corporate welfare, so perhaps "victorian liberal" more than "neoliberal".
The "Britannia Unchained" neoliberals indeed draw inspiration from Hong Kong.

Blissex

«his list seems to me more like "humanist ordoliberalism", [ ... ] practised in anglo-american polities, which is aimed at "reforming" labour markets and "deregulating" business and finance.»

Put another way the impression I get from the ASI director is that "dreamy neoliberalism" is bait-and-switch for the "real neoliberalism" Hong-kong style, which is a cesspit of low-pay workers in dangerous workplaces and widespread financial fraud and property rentierism. Sure a small number of upper-class Hong-Kongers get the cream, and a somewhat larger number of upper-middle class ones the crumbs, but the shiny photo of the skyline should be complemented with that of its backyard, Shenzen's industrial areas. In the heyday of victorian liberalism there was a huge development of beautiful urban palaces in Manchester, Birmingham, London, Newcastle, but the proles lived in rookeries.

As to neoliberal/centrist "bait-and-switch", talking the nice talk and then walking the nasty walk, consider GW Bush's "compassionate conservativism" and D Cameron's "big society", and Blair/Obama's equivalents: once they got into power the actual policies were about "labour market reform" and "business and finance deregulation". With the well known and celebrated results. :-)

Guano

"Centrists are being ideologues more than empiricists."

Indeed. The original post is a good one and this is the key point.

I saw that John McTiernan was saying the other day that Tony Blair was a centrist just like Wilson and Attlee. The problem with that argument is that Tony Blair went out of his way to point out, in his second term of office, that he was a very different Labour PM from Wilson and Attlee.

Wilson and Attlee were in the Keynsian tradition, Blair is a neoliberal. It may be that he doesn't understand the ideology: he appears to think that he is just doing what is inevitable (and thus his insistence on "being on the right side of history").

The neoliberal belief that globalisation would make us all richer (or that the losers would compensate the losers) no longer stands up, because there weren't mechanisms by which the winners compensated the losers - thus the high incidence of inchoate rage in politics from those who lost out. An empiricist centrist party might be useful in politics; it might bring some logic and evidence back into politics. That isn't what I am seeing though.

Blissex

«Blair is a neoliberal. It may be that he doesn't understand the ideology:»

Hard to beliveve that: a well read, highly intelligent, subtle lawyer and well briefed politician is not aware of the ideology that he is marketing, even after R Hattersley's very public denunciation of it as incompatible with the Labour party.

«he appears to think that he is just doing what is inevitable»

"There Is No Alternative" seems to fit pretty well. "The end of history" is just its high-church sermon.

gastro george

"... the tories have not implemented *austerity* policies, as the UK has been in an overall boom for the past several years."

I mean, really? On which planet?

Blissex

«the UK has been in an overall boom for the past several years."

I mean, really? On which planet?»

On the planet in which immigration, imports, asset prices have been zooming up.

Those are obvious indicators of a boom; people don't mass emigrate to countries gripped by austerity, countries that do austerity don't have large trade deficits, economies constrained by austerity don't get booming asset prices.

Of course the UK boom feels like austerity for a majority of its workers, because it is, but even if it is not a boom for everybody, it is still a boom for enough people that overall it is a boom. A pretty modest boom at the overall level, even if for a "fortunate" and fairly large minority it has been pretty big.

Blissex

«overall it is a boom. A pretty modest boom at the overall level, even if for a "fortunate" and fairly large minority it has been pretty big.»

Indirect proof: in 2015 the Conservatives absolute number of votes increased, and even more so in 2017:

2005: Labour 09.55m, Conservatives 08.78m, Liberals 5.99m
2010: Labour 08.61m, Conservatives 10.70m, Liberals 6.84m
2015: Labour 09.35m, Conservatives 11.30m, Others 6.00m
2017: Labour 12.63m, Conservatives 13.30m, Liberals 2.22m

That is compatible only with there being enough of a boom for enough people. When there was not a boom, like in 2010, Labour's vote collapsed.

Guano

""There Is No Alternative" seems to fit pretty well. "The end of history" is just its high-church sermon."


"Being on the right side of history."

"The future is our comfort zone."

gastro george

I get it. It's a boom and not austerity because you get to define what boom and austerity are.

Personally I'd prefer a little more rigour when using terms. Otherwise who knows what anybody means.

Guano

If there is a new Centre Party, it will be interesting to see what position they take on FoM and to what extent they take the fight to the Daily Mail and The Sun.

I don't see how someone can claim to be fighting Brexit be in favour of restrictions on FoM, but many of those clamouring for new party have this contradictory position. And they don't need a new party to be more critical of the government and its Brexit strategy.

Blissex

«It's a boom and not austerity because you get to define what boom and austerity are.»

Actually because "austerity" is a well defined term used for decades in its proper meaning, and that meanings has been recently redefined by the clever propagandists of the "sell side", among them I put those like B DeLong and S Wren-Lewis. While I note that C Dillow has started to use "fiscal austerity" more explicitly which is clearer even if it is a bit strange.

As it has been used and defined for the decades of the "stop-and-go" era, "austerity" was the policy to achieve the "stop" phase: it was a policy of limiting consumption and investment *for everybody*, in order as a rule to reduce pressure on the exchange rate by cutting imports and inflation.
There are two main ways to cut imports in the short term: a fall in exchange rate, which is inflationary, or a cut in consumption and investment for everybody, that does not require a fall in the exchange rate.
So "austerity" used to be achieved with both "monetarism", that is a credit policy contraction, and fiscal policy tightening.

Most of that is not happening now; the exchange rate is in free fall, actual inflation has been substantial, imports are big, the cut in consumption and investment has been highly targeted, not for everybody, credit policy is extremely loose even if fiscal policy is tight-ish.

So why the clever propagandists of the "sell side" call that "austerity" which it is not? I presume for two pretty obvious reasons:

* What is going on is not "austerity", it is "upwards redistribution" from workers to rentiers, but of course they don't want to alert the gullible working servants that while their consumption is being repressed that of their rentier masters is booming.

* The "sell-side" aligned Economists obviously would love a policy mix in which both credit policy and fiscal policy were loose, because it would push up asset prices even faster to even bigger levels. The symptom is that they usually also argue for (high) NGDP rate targeting or a higher target rate of inflation, that is to accommodate looser fiscal policy with even looser credit policy. WIN-WIN :-).

So brutally (and somewhat incorrectly) summarizing:

* When both fiscal and credit policy are loose the aim is for a "boom", the more massive the looser they are (e.g. bankruptcy fraud Greece 2004-2012).

* When fiscal policy is tight and credit policy is loose the aim is "upwards redistribution" from workers to rentiers, with a moderate boom if the credit policy is looser than the fiscal is tight.

* When both fiscal and especially credit policy are tight there is "austerity", usually with the goal of reducing consumption and investment across the board to drive down imports without cutting the exchange rate.

Why does J Corbyn talk of "austerity" and not "redistribution", even if he surely remembers well the stop-and-go decades? Well, he surely is not a "sell side" propagandist, but he still is a politician and I suppose he feels he cannot use the proper term "upwards redistribution" to avoid being labeled as an advocate of "class war" from the "sell side", who practice class war very well, by cover of euphemisms like "austerity".

Blissex

«So "austerity" used to be achieved with both "monetarism", that is a credit policy contraction, and fiscal policy tightening.»

Then Barber and Lawson discovered the "upwards redistribution" joys of "privatised keynesianism" via massively loose credit policies targeted at asset owners:

http://www.theguardian.com/commentisfree/2013/mar/25/george-osborne-britons-economic-cannon-fodder
«Massive public debt: bad. Massive private debt: excellent. Gordon Brown's bubble: economic ruin. George Osborne's potential bubble: economic salvation. Benefits for non-home-owners: unaffordable. Cash bungs for property buyers: essential.»
«As I say, the policy is new – but the strategy it's part of has been knocking around for about three decades. The postwar British state used to protect citizens against market failure through the welfare state, through government pump-priming of the economy and through rising wages. But after Thatcher, it was increasingly left to Britons to protect themselves by taking on shares in privatised utilities, by buying up council houses – and by taking on debt, with all the attendant risks. This is what the political economist Colin Crouch has dubbed "privatised Keynesianism": debt is used to reflate the economy, but it is taken on not by the public sector but by individuals, couples, families.»

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