Hopi writes:
The moderate left is aware that it's fiscal tools to tackle the immediate crisis are horribly limited. The idealist left is uncomfortably aware they don't actually have a plan to offer, other than disbelief at the way things are now. As a result, the right tells the electorate that pain is the only way forward.
This chimes with something I’ve said - that mass unemployment is here to stay and there’s little governments can do to raise growth much.
But this needn’t be a defeatist stance. Remember John Stuart Mill:
I cannot…regard the stationary state of capital and wealth with the unaffected aversion so generally manifested towards it by political economists of the old school…
[It] implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living, and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on.
Rather than think about growth policies, where politicians have little to offer, we should instead think about policies for “mental culture” - for promoting happiness, if you like. Here are some general principles:
1. Autonomy creates happiness, as well as being a virtue in itself; this is why the self-employed (pdf) and people in direct democracies (pdf) tend to be happier than others. This represents a case for giving people greater control over their working lives - through direct democracy. But it might also suggest that there is a case for some kinds of deregulation, to the extent that this increases autonomy by getting the state off people’s backs.
2. Unemployment is a big cause of unhappiness (pdf). This suggests that whilst there might not be much politicians can do to reduce aggregate unemployment, there is a case for proper active labour market policies, to ensure that the unemployed are as quickly matched to vacancies as possible. This does not, however, entail stigmatizing the unemployed as workshy. Quite the opposite. Given that unemployment is here to stay, it’s a good thing that some don’t want to work.
3. Social capital - trust and friendship (pdf) - also promote happiness. Although it’s not obvious that government policies can help people make friends, they might be able to promote trust, insofar as they demonstrate that we really are “all in this together.” Such policies might include a crackdown upon perceived rip-offs such as bankers’ bonuses and utility pricing.
So much for “big think” principles. But there might be a different way of coming at this, by using the Dave Brailsford principle of the aggregation of marginal gains. Maybe policies to improve the “art of living” don’t consist merely of top-down grand ideas, but also of many small things. Richard Layard has proposed (pdf) putting a higher priority upon mental health on the grounds that lifting the minority of people with acute depression out of their misery makes a good difference to aggregate well-being. I’d add that more should be done to encourage the growth of allotments, on the grounds that this would give people the chance of getting the “flow” happiness that comes from self-directed productive work.
Hopefully, more imaginative folk than I can think of other apparently tiny things that, together, add up to something big. And maybe these initiatives don’t require central government at all, but can be undertaken by local authorities, voluntary groups or just groups of individuals. In which case we should wonder what use national politicians are.
A perfect example might be Parkrun.
No local authority or Governmental involvement - shock horror, adults running alongside youngsters without needing to be CRB checked. Nor insurance cover required in case of injury while running.
Minimal organisation (all of which is conducted on a purely voluntary basis) and sponsorship.
Like the architecture of the internet it is both connected and scalable, without any one meeting being dependant on any other, making for a very resilient organisation.
In summary a cost free method of mixing with others, getting some exercise and the discipline of regularity which a 9am Saturday start entails.
Small consolation if you are jobless maybe but if this type of venture could be equally well replicated in other areas it could make a very valuable contribution towards combating the scourge of idleness.
As a useful side benefit it might also help some to realise that the answer to their every need doesn't always have to be satisfied through the involvement of the State in all its many guises.
Posted by: Patrick | November 17, 2011 at 04:18 PM
This chimes with something I’ve said - that mass unemployment is here to stay and there’s little governments can do to raise growth much.
There's little governments wish to do either. The volunteer racket is in full swing whereby professionals who've fallen off the wheel are picked up and kept on benefits but give their skills gratis [with travel expenses paid]. Welcome to the new workplace.
Posted by: jameshigham | November 17, 2011 at 04:26 PM
So we should all burst into "always look on the bright side of life"?
The "moderate left" have few fiscal tools because they've bought into theories that define that there are no meaningful fiscal tools. And it's those very theories that have brought us to where we are and declare TINA. Perhaps it's those theories that are just wrong?
Posted by: gastro george | November 17, 2011 at 04:32 PM
"... getting the state off people’s backs" - who are you? I read through this expecting a sudden (obligatory) kick at the right to confirm my prejudices - damn you! Good post. Think I'll read that one about Robbie Savage again...
Posted by: Phil Ruse | November 17, 2011 at 04:59 PM
How about letting people smoke, drink and eat what they like where they like without hectoring them about it? The destruction of pubs in the name of 'public health' has probably created as much unhappiness as any other single State policy in the last 10 years.
Posted by: Jim | November 17, 2011 at 05:26 PM
Chris is wrong. There is no reason that massive government borrowing and spending cannot bring GDP growth back to 6% per annum and unemployment down to normal levels.
There is no 'dearth of investment opportunities' in Britain, which desperately needs massive investment before it runs anywhere near as well as Germany, Japan, Singapore or Australia. Britain could even invest big-time in high-tech manufacturing if it adopted a weaker pound policy.
The obstacle to government borrowing and spending is badly trained economists who are scared of government deficits. The only genuine argument against massive government borrowing issue is that it may be inflationary in a booming economy - but this is not true in the current slump.
Private sector deleveraging means no crowding out. It also means low core inflation and low interest rates on government bonds. If rates go up in the face of bond issue, the BoE can step in to control rates.
There is no excuse for the current Tory policy of austerity.
Posted by: BT | November 17, 2011 at 06:33 PM
Pubs in London at least, are an order of magnitude cleaner, more welcoming and pleasant than before the ban thank you very much.
Posted by: roym | November 17, 2011 at 06:39 PM
Pubs have been destroyed more by the financialisation of the industry, whose major owners saw themselves as property companies with a never-ending queue of mug tenants willing to bankrupt themselves paying inflated "rents", rather than as businesses to develop.
Posted by: gastro george | November 17, 2011 at 08:07 PM
Again I find myself agreeing with BT, if not quite on the detail.
Mitigation of the effects on unemployment are justified in their own right. And solutions are not instantaneous.
Your points on the growth problem:
1. Increased debt.
The top have appropriated the gains, and debt, has been used to maintain lifestyles.
2. Slow recoveries from Financial Crisis.
History shows neoclassical economic policies are wrong.
3. Gravity
Export driven recovery ?
4. Failing Growth
30 years of neo-liberalism.
5. Nordhaus
It is desirable that the benefits accrue to society in general rather than the producers (consumer surplus etc).
Yet we have a market distorted by corporatism and monopoly, and outsourcing, resulting in a capture of the products of low growth by the super rich.
The problem is lack of demand, but not associated with debt, because debt has to be repaid, unless we are to roll over ever greater amounts and with compound interest, this is not a sustainable plan.
The BRIC's don't seem to have a problem sustaining growth in the new environment.
Once you understand the problems, the solutions are self-evident. (If you haven't studied neoclassical economics)
So some of us, do have a plan.
Fixing the banking system is necessary, but not sufficient, part of the solution.
The solution is not based on debt.
Posted by: aragon | November 17, 2011 at 09:38 PM
Pubs have also been battered by cheap supermarket alcohol (20 cans for £8 I remember from my Uni days), their own ridiculous prices (how much has been caused by tax increases I don't know) and a general change in taste and culture in this country. Lots of people I know who are "broke" are happy to pay £4 a pint if it's in some bar with shiny seats, pointless pictures and a shite name.
Posted by: Tom Addison | November 18, 2011 at 08:45 AM
This is just weaksauce big society guff.
Posted by: Alex | November 18, 2011 at 02:21 PM
@ Chris: Setting aside recipes for growth, I think you touch on an interesting area under the heading of the "aggregation of marginal gains" and I'd be interested by your further thoughts. And yes, as Alex points out, there may be overlap with what Cameron seems to mean by the "big society" but maybe it's only "guff" because the ideas haven't yet been worked through.
Posted by: Churm Rincewind | November 18, 2011 at 05:41 PM
I recommend charity shops for the professionals who've fallen off the wheel. You come in, sort genuinely useful - or at least sellable - items from crap; clean, polish or steam them; put them on the shop floor and sell them (or watch them walk out, occasionally). Complete process in the space of a few hours, and while nothing is actually made, not much is thrown away either as the 'rag' is recycled. Some autonomy, depending on the shop and manager, but more than in any other branch of retail or garment manufacture. I wouldn't do it as a 'paid job' on a daily basis though. I haven't worked that out yet but I think it suggests there is a big difference between work with a small w and Work, the kind that Jobcentres want you take.
Posted by: Bialik | December 07, 2011 at 07:04 PM