Strategic impotence

You all know a man who pretends to be unable to do basic household chores in order to avoid them and escape to his man-cave whilst his partner does the work: you might even be that man. This is a more widespread tactic than is generally appreciated. We can call it strategic impotence – using a claim to be unable to do something as means of pursuing one’s advantage or cementing privilege.

We’ve seen an example this week when Rishi Sunak claimed to be powerless on the face of rising energy prices:

No British chancellor can stop what is happening in Asia or stop a nuclear power station going offline in Germany

This is true as far as it goes. Which isn’t very far. As Sir Dieter Helm has pointed out, Chancellors could and should have spent recent years investing in greater energy capacity. And France is raising electricity prices by just 4%, in part by squeezing the profits of state-owned EDF. Sunak’s professed lack of control over prices is thus an example of strategic impotence.

There are countless others.

 - Legal defences. Claiming a lack of responsibility is a common plea of innocence or mitigation. One of the most famous uses of this was that of Ernest Saunders who, having been imprisoned for insider trading, was released early from prison after suffering dementia only to make a miraculous recovery.

 - Corporate websites. Making it difficult for customers to cancel their subscriptions looks like bad design, but it’s a way of maintaining income.

 - Lady Macbeth. Lord Ashcroft’s claim that Carrie Johnson is to blame for her husband’s misdeeds denies his agency and responsibility. This follows a tradition of imputing Lady Macbeth-type spouses to powerful men in an attempt to deflect blame from them.  

 - Playing the victim. The right claim to be victims of “wokesters” who are suppressing free speech. This serves to efface the fact that it is the Tories who are the enemies of freedom, for example in criminalizing protest. In the same way, their claim to be victims of “EU bullying” is used to escape their own incompetent negotiations.  

 - Refusing pay rises. Bosses who reject requests for better pay and conditions on the grounds that they can’t afford them are often telling the truth. But sometimes they are not. "My hands are tied" is the slogan of the strategically impotent.

 - Admitting forecasting errors. David Viniar, Goldman Sachs CFO, said during the financial crisis that “we were seeing things that were 25-standard deviation moves (pdf), several days in a row”. And in 2012 Vince Cable justified fiscal austerity in the face of low growth by pointing to the spillover effect of the euro crisis: “no one was expecting that the situation across the channel would deteriorate as much as it has done.” It’s true that nobody can accurately foretell the economic future, but claims such as Viniar’s and Cable’s are inadequate. A policy that is based upon a forecast of a particular outcome is wrong: policy must be based instead upon the range of possible outcomes. These are therefore examples of claims to impotence being used to avoid guilt and maintain power.

Perhaps the most important example of strategic impotence, however, lies in the public finances. The idea that we cannot afford increased public spending because of the state of the public finances is of course plain wrong. At current long-term interest rates, governments can borrow tens of billions and repay less in real terms. As Maynard Keynes said, “anything we can actually do, we can afford”. The constraint on public spending is a lack of sufficient labour and materials, not of money. Denying this fact is strategic impotence. The claim that we cannot do something is used to hide the fact that we choose not to do so.

(We should not here that the BBC has been complicit in this lie, as we saw in Kuenssberg’s talk of government borrowing being “absolutely maxxed out”. Which touches on another example of strategic impotence: the BBC’s claim to be impartial and a mere reporter of events is used to efface the fact that it influences public opinion.)

In speaking of strategic impotence I am of course echoing two closely related ideas. One is Lindsey McGoey’s idea of strategic ignorance, whereby a lack of knowledge – sometimes genuine, sometimes not – is mobilized for political purposes.  The other is capitalist realism, the idea that alternatives to capitalism have become unimaginable. That could be an emergent process (as much ideology is) whereas I’m thinking of instances where strategic impotence is used as a conscious strategy.

Strategic impotence, however, has a flipside. At the same time as the ruling elite deny their own power and agency, they overstate the agency of the poor. The government’s threat to withdraw benefits from people who fail to seek jobs for which they are unqualified overstates the ability of people to find work. It echoes Tebbit’s claim that the jobless could find jobs if only they got on their bike. In the same spirit, Kirstie Allsopp says young people can afford houses if only they stop going to the gym or move to where there are no jobs. (Yes, there is a contradiction there, but hey ho). That attributes to them more agency than they actually have. 

The ruling class and its shills want to deny the obvious fact that there are huge inequalities of power and influence. Strategic impotence is one of the tricks it uses to do this.  

Comments

[ltr]

The ruling class and its shills want to deny the obvious fact that there are huge inequalities of power and influence. Strategic impotence is one of the tricks it uses to do this.

[ What a brilliant essay. What is essential now is that the governing class deny agency as inequality increases from already ridiculous levels. ]

[marku52]

Tiny typo "not here" should be "note here" I'm guessing. Feel free to delete this.

Otherwise perfectly agree. "There is nothing we can do" does a lot of work these days.

[ltr]

At current long-term interest rates, governments can borrow tens of billions and repay less in real terms. As Maynard Keynes said, “anything we can actually do, we can afford”. The constraint on public spending is a lack of sufficient labour and materials, not of money. Denying this fact is strategic impotence....

[ Perfect, but the entire Conservative project is based on denying this and the current Labour leadership has been unable to respond. ] ]

[Dave Timoney]

@ltr,

Re "“anything we can actually do, we can afford” ... but the entire Conservative project is based on denying this and the current Labour leadership has been unable to respond."

I think you'll find that the Labour leadership's problem is not that it is unable to respond but that it chooses not to because it shares the same limiting belief. In other words, strategic impotence.

[Blissex]

«"There is nothing we can do" does a lot of work these days.»

Hypocrisy is not entirely new in UK politics ;-). Also our blogger has kept telling us in the past that governments cannot do much, for example they cannot significantly change the rate of growth. But I wonder whether the current economic main indicators are entirely the result of "fate":

Wage increase rate: 3.2%
Retail price inflation: 7.5%
Property price increase rate: 11.2%

BoE rate to friends: 0.5%
Mortgage teaser rate: 1.8%
Mortgage long term rate: 3.5%

Note how real interest rates to tory/whig vested interests are way negative, and how much cheaper real wages are becoming, and how wonderful property is (borrow at a real rate of -4%, get real property profits of +4%).

Is this fantastic boom something the current government wants to take credit for? It does not seem the case, as the media are constantly pushing distraction stories about Johnson's parties and Putin's invasions.

[marku52]

"There is nothing we can do" does a lot of work these days.

Meanwhile, take no notice of what it is that we *are* doing.

[ltr]

https://fred.stlouisfed.org/graph/?g=LP8H

January 30, 2018

Interest Rate on 10-Year United Kingdom Government Bonds minus percent change in Consumer Price Index, 2007-2018

(Real interest rate)

https://fred.stlouisfed.org/graph/?g=HNzX

January 30, 2018

Real Residential Property Prices for United States and United Kingdom, 2000-2021

(Indexed to 2000)

[aragon]

Every Politican claims to be a small boat cast adrift on a stormy sea.
Just lash down the tiller and ride out the storm. Events, dear boy Events!

And yes, No British Chancellors can't stop the Religious Green Fanatics from closing existing Nuclear Power Stations in Germany. But it is the same shade of Greens that have caused the UK to forego sources of Gas (It has to stay in the ground. you know - no fracking, no expantion in the North Sea etc). And the incompetence and greed of the Building Industry that turns external insulation on tall buildings into roman torches a bonfire of red tape? (I could go on...scores to settle etc).

So yes this is a very predictable supply side shock when it comes to Gas and Energy in general.

But ignoring the torrents of water under the bridge. What is the chancellor going to do now. Reach of the Volker playbook of Thatcherism, and raise interest rates? The well known policy, he is know to favour - Austerity (What did they teach at Stanford?).

Forgive me moment, while I reflect on the Schaudenfroid, Thatcherism and the Housing ponzy scheme (And finance creating money (Ex nihilo)).

So what now? Are we all Keysians now? (I am not to use the TLA begining with M and ending in T). As in the seventies the supply side shock in Energy crisis will not sort itself out, perhaps unlike the Covid related supply disruption.

A windfall tax on excess profits of the energy companies. (The 50% of UK gas extracted from the North Sea (UK) has not increased in cost). Is a given (Labour). Is the economy is to continue to be run for benefit of the one percent?
Will the worm turn?

In some ways the Asian governments looks competent by comparision, at least on economics.

What they have failed to do in the past and what they choose to do in the present is how they should be judged, and in comparision with other Governments.

They have the power of the state, just not the belief or knowledge to use it.
Just look to history (unlike FDR or Theodore Roservelt) our politians are not upto the mark. (Glass-Stegal, Sherman Act, New Deal etc)

We know the problems, Energy Supply, Finance (ex nihilo), Intellectual Property, Monopoly, Monospony etc, now who wants the ball of wax?

[Blissex]

https://fred.stlouisfed.org/graph/?g=LP8H
https://fred.stlouisfed.org/graph/?g=HNzX

As usual it is much more interesting to look at these not limited to the past few years, but since data collection began, e.g. the 1970s.

https://fred.stlouisfed.org/graph/?g=LTQC
https://fred.stlouisfed.org/graph/?g=LTQW

It would also be far more interesting to look at the disaggregated data for the house price index, as it is wildly different among the various regions, both in the UK and the USA, as in both countries housing costs collapsed in the "rust belt" areas and this obscures the fantastic rise in housing costs in the areas where there are still "good jobs" and thus a huge inflow of new tenants and buyers/upgraders.

The general conclusion is that while governing factions cannot much influence overall growth etc., they seem to able to influence a lot in the medium-long period the distribution of income and wealth among classes and regions.

[Blissex]

«As usual it is much more interesting to look at these not limited to the past few years, but since data collection began, e.g. the 1970s.
https://fred.stlouisfed.org/graph/?g=LTQC»

View that index of "real" (CPI-deflated) housing costs together with the long term graph of the UK RPI, which has a stunningly obvious feature:

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/cdko/mm23

Another graph that is stunning is the share price of Moody's:

https://www.google.com/finance/quote/MCO:NYSE?window=MAX

Or that of Pfizer:

«As usual it is much more interesting to look at these not limited to the past few years, but since data collection began, e.g. the 1970s.
https://fred.stlouisfed.org/graph/?g=LTQC»

View that index of "real" (CPI-deflated) housing costs together with the long term graph of the UK RPI, which has a stunningly obvious feature:

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/cdko/mm23

Another graph that is stunning is the share price of Moody's:

https://www.google.com/finance/quote/MCO:NYSE?window=MAX

Or that of Pfizer:

https://g.co/finance/PFE:NYSE?window=MAX

Or that of old, stable, unexciting 3M:

https://g.co/finance/MMM:NYSE?window=MAX

https://business.time.com/2007/07/10/citigroups_chuck_prince_wants/
«“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” he said in an interview with the FT in Japan.»

[Blissex]

«View that index of "real" (CPI-deflated) housing costs together with the long term graph of the UK RPI, which has a stunningly obvious feature:
https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/cdko/mm23»

Actually *two* stunning features.

«Another graph that is stunning is the share price of Moody's:
https://www.google.com/finance/quote/MCO:NYSE?window=MAX»

I mentioned also Pfizer and 3M as examples, but the really most amazing is Moody's.

[ltr]

Blissex,

This painstaking work, but a couple of introductions and summaries are needed for me to understand what the points are.

Also, when you attach >> or any other punctuation directly to a link, the link will not work. A space is needed before and after a link.

I really appreciate this work, but need help to understand where you are going with it.

[rsm]

《“When the music stops, in terms of liquidity, things will be complicated.》

Why should the liquidity stop, except for spreading panics easily fixed by central bank public liquidity injections (ex nihilo)?

[ltr]

The sense I have now is that British growth in 2021, along with the aggressive foreign policy stance of Boris Johnson, gave the Prime Minister a stronger position. Johnson strikes me as secure again, no matter a turn tighter fiscal and monetary policy to gain control of prices.

Labour strikes me as politically irrelevant for now.

[rsm]

When have they controlled prices? Didn't prices fall despite record-setting Reagan deficits in the 1980s? Didn't they fail to raise prices to target from 2008-2020? Is it time to abandon failed old mainstream economic myths about inflation and budgets, which theories are simply used by price setters as convenient expert support for unnecessarily hard policies that impose artificial scarcity on price takers, purely as a power play?