The irrelevant Independent Group

The Independent Group claims to value an “open, tolerant and respectful democratic society” and to oppose Brexit. It wills the ends, but not the means. It fails to see that Brexit and intolerance are the product of economic conditions, and is silent on what to do about those conditions. It looks therefore like a bunch of narcissists complaining that people are not like them whilst offering no real solutions.

As I’ve said many times, the key to understanding politics today is Ben Friedman’s book, The Moral Consequences of Economic Growth, published in 2005. He shows that economic growth begets liberal attitudes and that stagnation breeds intolerance. Subsequent events vindicate him perfectly. As Thiemo Fetzer has shown, pro-Brexit attitudes are “strongly and causally associated with an individual’s or an area’s exposure to austerity.” In a separate vein, Nick Crafts has blamed Brexit upon the banking crisis.

In this sense, economic stagnation is the cause of Brexit and of the turn away from the liberal values the IG claims to espouse. And this stagnation is still with us. Only today the ONS reported that productivity fell last year: this means it has risen only 0.2% a year since 2007 compared to 2.3% per year in the thirty years before then. Because of this, real wages are still below their pre-crisis peak.

The IG, however, is silent about this. Its statement (pdf) makes no mention of austerity or stagnation. In fact, pretty much its only substantive reference to the economy is to government’s “responsibility to ensure the sound stewardship of taxpayer’s money”, which doesn’t inspire hope of a firm rejection of austerity.

It claims that our politics is “broken”, but is blind to the fact that capitalism is broken too, and that this is a major cause – perhaps the major cause – of our broken politics. Phil says the IG has “learned nothing, nothing since 2015.” I’d question only the year here: it seems it has learned nothing since 2008.

Now, you might reply that it’s unreasonable to expect a new political grouping to have detailed policies. True enough. The problem with the IG, though, isn’t that it doesn’t have solutions: it’s that it doesn’t even see a problem. There’s a good debate to be had about how far capitalist stagnation can be fixed by fiscal and monetary policy alone, and how far it needs institutional change too. The IG shows no sign of entering this debate, though.

At least one of its members has form here. Last year Chris Leslie wrote a paper, Centre Ground (pdf), which also largely ignored the financial crisis. I criticized him then for failing to see that the crisis necessitated a rethinking of the relationship between the state and the private sector. He shows no sign of learning this lesson: his claim to believe in “evidence-based” policy-making is a sign of astounding lack of self-awareness.

Herein, for me, lies the great virtue of Corbyn (perhaps his only virtue). He at least sees the problem, that the economy is broken and that the Left needs new policies for new times – just as Blair saw this a generation ago. The IG, by contrast, is stuck in a 1990s timewarp, unaware that the world has changed.

Granted, Corbyn might be right in the same way that a stopped clock is sometimes right. For me, this is unimportant. What matters is that we have something like the right policy ideas for our changed economic times. I can’t say how much the IG will affect politics. But I do know that whilst they have no awareness of our economic problem, they will be an intellectual irrelevance.

Comments

[Dave M.]

Disappointed by this reaction. The current Labour leadership did indeed offer a solid policy platform but it has failed on so many other fronts to show that it can govern, and those things matter. From antisemitism to strong arm tactics within the party to Brexit, this leadership is utterly discredited. I care about policy too but their record on everything else can not be ignored.

[Dipper]

"In a separate vein, Nick Crafts has blamed Brexit upon the banking crisis."

Missing the point. The Banking crisis happened because the western economies were increasingly unable to generate growth and unable to compete with China and the Far East. Governments, particularly the US, allowed a massive expansion of credit to keep living standards rising despite the underlying growth not supporting it. When there was no-one left to lend to, the bubble burst. So the Banking crisis was itself cause by declining economic performance.

"productivity ... has risen only 0.2% a year since 2007"

I am shocked that a policy of allowing an almost unlimited amount of cheap labour into the country should cause flat-lining productivity. Oh hang on, no I'm not. If you want to increase the price of something, restrict the supply. I continue to be unclear how replacing, for instance, automated car washes with gangs of Rumanians hand washing cars is going to lead to productivity growth. Perhaps an economist could explain it to me.

And just your monthly reminder that EU experts forecast a UK population of 80 million by mid-century. That's a population increase equivalent to Sweden, and then Bulgaria. We are experiencing the consequences of that every day round here in traffic jams and booming waiting lists, and in housing estates appearing in every available space. I just wish it would stop.

[MikeW]

'the key to understanding politics today is Ben Friedman’s book, The Moral Consequences of Economic Growth, published in 2005.'

Chris, Thanks, I ask, you answer, I purchase Hard Back, second hand, Amazon, USA. ;)

[Graham Hill]

The political solution that these people are proposing is essentially trasformismo, which of course failed either to address the economic backwardness and regional inequalities in post-reunification Italy or to prevent the rise of Mussolini.

[Guano]

"The Independent Group claims to value an “open, tolerant and respectful democratic society” and to oppose Brexit."

The founding statement says nothing about Brexit. The Group is relying on the press to say that it is anti-Brexit without any evidence that they are. The fact that the founding statement talks about "a robust immigration policy" means that (like many other politicians) they believe in the unicorn policy of ending FoM and having the benefits of being in the EU.

One of these chancers is my MP, who claims to support "Remain" but it is impossible to get from them a commitment to supporting FoM. This is just as misleading (and dangerous) as the fantasies of the Brexiteers.

[Dipper]

@ guano

"The founding statement says nothing about Brexit"

well, quite. The problem about making a big deal about Brexit is that the party becomes a one-issue party. There is already a party which is mad keen on preventing Brexit and re-entering the EU, the Lib Dems. And it isn't working for them. So best to not put Brexit centre stage ...

... and so here comes the Tory problem. Wollaston, Soubry, possibly Grieve and a couple of others, may come over, but their reasons for leaving the tories is solely down to Brexit, nothing else, so if they were to join then TIG becomes a single issue anti-Brexit party. I would spend good money on them disappearing at the next election.

[Nanikore]

I agree with Dipper here. The GFC was a symptom, not a cause of our economic problems. I also think, although austerity problems were misguided, even expansionary policy would not have solved some of the deep problems in capitalism. The problems that led to the GFC were building up over decades before it; with or without expansionary macroeconomic policy. I would argue, however, that these problems in advanced countries (which relate to phenomenon such as deindustrlialisation) started before China and even Japan came on the scene and cannot be entirely or even mainly attributable to these countries. Angus Maddison (who could see where things were going in the 1980s, argued that the problems were becoming evident by the late 1960s. I am wary of Nicholas Craft (not because he says problems are related to high government/GNP ratios -see his IMF Working Paper 2000 - although I would disagree with him on that) but because he uses econometrics which any good historian would not touch with a barge pole.

[georgesdelatour]

“... that economic growth begets liberal attitudes and that stagnation breeds intolerance”

Asabiyyah begets abundance; abundance begets decadence; decadence over-consumes the abundance and dissolves the asabiyyah.

[Staberinde]

Corbyn claims he doesn't like a false choice between No Deal and a Bad deal, and that is precisely the principle driving the IG's creation. They refuse the choice between a bad Labour government and a Tory government.

Of course, the present system is stacked against anyone who isn't one of the two main parties.

And yet. In Scotland the SNP is dominant. UKIP has changed the entire political landscape without winning a single Westminster seat. The DUP holds the government to ransom with a handful of MPs. The SDP/Alliance almost eclipsed Labour in 1983 - and would have finished Labour if not for Kinnock. And of course, once upon a time Labour itself was a third party capitalising on the irrelevance and self-absorption of the Tories and Liberals.

In an age where the Tea Party and Trump can capture the US Republican party, and where the far right can challenge seriously for the presidency in France (and indeed, where Macron's brand-new party can win both it and parliament), betting on the status quo and against change might play more to one of Chris's cognitive biases than to a clear-eyed assessment of the IG's prospects.

Personally, I'd rather vote for any of the IG, the SNP and the LibDems than anyone on Labour or the Tories' front benches, with the possible exception of Kier Starmer.

[Daniel Elstein]

Basically the argument of this post is that the correct way to oppose racism is to focus entirely on economics and ignore racism (and indeed collaborate with racists). That's admirably contrarian, but how about giving a try to the more straightforward idea of actually standing on the basis of anti-racism and an open society? And maybe consider the idea that "it's all about economics" is an instance of confirmation bias for Marxists.

[Robert Mitchell]

The 1930s bred intolerance? The music sure swung though.

The Reagan era bred liberal attitudes? Towards markets maybe, but towards pot smokers?

[James]

I think this piece misses the point somewhat.

What is the group trying to achieve? We should not judge its effectiveness as a tool for addressing long term economic stagnation if its creators see it as a tool for addressing short term issues such as Brexit and intolerance within other parties.

Every party is a coalition and it tends to more vociferously put forwards policies and stances on the areas upon which they can agree. A grouping formed of people from both conservative and labour parties is going to be challenged when it comes to common positioning on long term economic solutions. Lambasting them for not putting forward a coherent vision on their most internally controversial topic within days of their founding seems a little unwarranted.

I would say there is an analogy with your comments on managers. There is no good manager, just one that is right for the problems an organisation is facing. Likewise the same could be said of a party policy platform. It isn't by itself good or bad but it is good only insofar as it addresses the most important challenges of the day. I imagine that this group of people things that the most important issue right now is Brexit; one this is resolved then other questions may take priority.

[georgesdelatour]

@Daniel Elstein

I don’t think your comment is fair to Chris.

Do you know the lead-crime hypothesis? It’s the idea that elevated exposure to lead in children results in increased rates of crime and delinquency when those children grow up. The theory isn’t proven, but it does a pretty good job of explaining why crime rates rose in all western countries after WW2, but then started to decline around 10 years after lead was banned from petrol.

If the hypothesis is correct, it suggests that a tougher criminal justice system and a larger police service won’t be effective at reducing crime if lead toxicity levels are rising. But even the most devoted supporters of the lead-crime hypothesis would never claim that a 100% lead-free economy could abolish its criminal justice system and retire its police service.

I think it’s very likely that a country with 7% GDP growth a year will tend to have less political extremism (including racism) than one with zero or negative growth. It doesn’t follow that the 7% a year country doesn’t need any anti-discrimination laws and can just let affluence take care of politics.

[Nyx]

You might be right about the causes of Brexit, but the facts on the ground is that Brexit is happening. Trying to stop the damage Brexit will cause is a more pressing concern than trying to address the underlying economic factors that precipitated it.