Against politics

On my first morning of retirement I switched from the Today programme to Radio 3 and these days I never watch any politics or current affairs programmes on TV; all I know of them are the clips I see on Twitter. I'm not interested in politics*.

This seems a banal statement; millions of people share my lack of interest.

But I'm perhaps unusual among these. I was sufficiently interested in politics to want to study it at university; I was an active member of a political party for years; and I write what many of you consider a political blog.

What's more, my reasons for a lack of interest are not the usual ones. I don't think politicans are "all in it for themselves": I suspect they are no more dishonest or money-motivated than the rest of us would be in a comparable environment. And, despite Starmer's efforts, I don't think "they're all the same" ; there are important differences between the Tories and Labour for example on net zero or workers' rights.

Instead, one reason for my lack of interest is that politicians and those who report on politics are not much interested in what interests me, namely the social sciences. As Phil has pointed out, there's excessive interest in the biographies of politicians to the neglect of emergent social trends such as the rise of immaterial labour which has contributed to "wokeism"; the economic stagnation that's led to illiberal reaction or the rise of an unpropertied graduate cohort. Such neglect has caused the political class to be systematically surprised by important developments such as Brexit, Corbynism or the toxicity of Boris Johnson.

One manifestation of this ignorance is the attitude to public opinion. Both main parties believe the "customer is king" (except, obviously, when the public want nationalization or wealth taxes) wherein their only objective is to discover what opinion is. This forgets that opinion can be multi-faceted, mutable by the economic environment, media or by political activity, and a poor guide to people's well-being.

Another manifestation is the inability to see what politics even is. We need politics because there are sometimes (often) collective action problems wherein what is rational for each individual is often bad for everybody - the sort of problems that cause public goods and infrastructure to be under-supplied and public bads such as pollution and carbon emissions to be over-supplied. The government, however, has often been unaware of this - for example when Cameron urged drivers to fill up on petrol in advance of a fuel drivers' strike; or in their belief that whilst one benefit claimant might be able to find work not all will be able to.

Perhaps the costliest example, though, was Osborne's austerity which failed because of the well-known (to us at least) paradox of thrift - that if we all try to save the result is a drop in incomes and hence lower savings.

Such economic illiteracy was however not confined to then. Having tightened policy when they should have loosened it in 2010 the Tories loosened it when they should have tightened it in 2022. This is neither Keynesian nor Friedmanite but Morecombeite - playing the right notes but not necessarily in the right order.

But there are other examples. We also see it in the idea that privatization is a magic money tree, ignoring the fact that if we can't afford state pensions and healthcare then we can't afford private ones either. We see it too in much of climate policy where, as Eric Lonergan has noted, politicians use the wrong chapter of the textbook in imposing taxes and restrictions on carbon emissions rather than encouraging the use of substitutes to carbon technologies. And we also see it in utility policy, where the importance of regulatory capture is largely ignored.

The sound of political discourse is as offensive to any economist as would be an out-of-tune orchestra to a sensitive musician. Why should any of us listen to that?

Such innocence of intellectual matters is not confined to economics, however. There's pitifully litte connection between politics and philosophy. Whereas Thatcher often cited Friedman, Popper and Hayek as influences her epigones of all parties make no effort at placing themselves in any intellectual tradition. In political philosophy John Rawls is dominant. But any politician applying his difference principle - that social and economic inequalities "are to be to the greatest benefit of the least advantaged members of society" - would be so far to the left they'd be accused of antisemitism.

A lack of interest in philosophy would not be so bad if it were replaced by technocratic empiricism. But it's not. As we've seen in macro policy, the economic impact of Brexit and the possible decision to have HS2 stop in the middle of nowhere the government is heedless of empirical fact. And from Labour we rarely hear Blairite talk of evidence-based policy-making or "what matters is what works", perhaps because such principles would alert us to the fact that neoliberalism has given us two decades of stagnation and dysfunctional utility and rail industries.

Instead, what we have is a descent into simple irrationalism, as evidenced by conspiracy theories about a Whitehall blob (shared by a former PM); by Telegraph drivel about "wokesters" or by the rantings of GB News or Talk TV.

Labour is also guilty here. Its claim that Truss crashed the economy is simply false: crashed the pound and gilt prices, yes, but not the economy.

But such a claim "cuts through", as the political commentators say. Which is the problem. The media fails to filter out bad and wrong ideas and claims. And not just the billionaire gimp media but also the BBC. "Too many journalists lack understanding of basic economics" found the Blastland-Dilnot report (pdf) last year:

Too often, it’s not clear from a report that fiscal policy decisions are also political choices; they’re not inevitable, it’s just that governments like to present them that way. The language of necessity takes subtle forms; if the BBC adopts it, it can sound perilously close to policy endorsement.

Since the Brexit referendum the BBC has become impartial not just between Labour and Tories but between truth and falsehood. Instead, as Patrick Howse has pointed out, it has preferred to be in a race to be first to report the Downing Street line rather than a critical reporter of that line.

Which is part of a wider problem. Our "marketplace of ideas" contains many market failures: monopoly; bad incentives; unpriced externalities; and positive feedback loops wherein lies become more powerful the more they are repeated.

It's not just in selecting ideas that politics fails, however. The important fact about Truss is not merely that she was inept but that she was elected by a big majority of Tory members and cheered on by much of the press. This shows that politics fails in selecting good people. This is partly because intelligent ones are rightly repulsed by the stupidity of politics. But it's also because political parties have become less rooted in the empirical world of business and trades unions and more dominated by narcissistic cranky fanatics who demand not competence and ability but mere agreement with them.

Even if this problem could be fixed, however, another would remain. It's that politicians are unrepresentative of the rest of us simply because wanting to go into politics even for the best of motives is associated with dubious attitudes. People are more likely to become politicians if they are over-optimistic about the potential effects of policy and so fail to see that complex systems are hard to change for the better; if they are overconfident about their knowledge and ability and so under-rate the need for policies and institutions to be flexible and resilient to error; and if they over-emphasise the potential for top-down control, thus underestimating the power of individual agency whether it be expressed through markets or worker democracy.

Of course, all professions are prone to professional deformation: economists overweight the role of financial incentives and academics overweight intellectual ability, for example. But the thing is that political journalists share these distorted perspectives with the result that the political class is insufficiently self-critical. It is as unaware of these biases as fish are that they are wet.

Which brings me to another problem. There's insufficient pressure for all this to change. Most of the people who are interested in politics are simple partisans. They regard politics as our nans saw wrestling in the 70s. They cheer the heroes and boo the heels and occasionally whack the latter with their handbags but they've no interest in how to improve the quality of the game (or even in whether it is fixed). And so important questions are neglected: how to connect politicians with rational thought; how to take money out of politics and create a proper democracy wherein everyone has an equal say; or how to improve selection mechanisms so that bad ideas and egregious incompetents are filtered out.

Of course, one might come up with answers to these. But doing so is - to paraphrase Marx - like writing recipes when you have no kitchen. Why, then, shouldn't we retreat from politics and tend our own garden?

* Note to pedants. I'm defining "politics" here as the media does - as court gossip about a handful of people in Westminster. I am interested in political matters such as how power is wielded and by whom. But "politics" is this sense is very different from "politics" in the media sense.

Comments

[Jan Wiklund]

It's probably true that politicians in "the good old days" were in a true meaning representatives, i.e. they felt responsible to a collective that had the power to discipline them. Which they don't have nowadays; today politics is a kind of profession like law or entertainment, a realm where only the commercial relations count.

But the real question is how it became that way. When, where, why and how did the political class slip away from control of their peers?

[Blissex]

«the inability to see what politics even is. We need politics because there are sometimes (often) collective action problems wherein what is rational for each individual is often bad for everybody - the sort of problems that cause public goods and infrastructure to be under-supplied and public bads such as pollution and carbon emissions to be over-supplied.»

Here our blogger after having mentioned interests in some recent posts returns gloriously to his idea of politics as a wykehamist activity, where fair and just philosopher kings ponder the "public goods" and "public bads".

But politics in reality is about irreconcilable conflicts of interests (and preventing them from becoming armed conflicts) and this is one important definition of politics, from a commenter on "The Guardian":

“I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves”

That's politics in one sentence. For a longer definition of politics:

http://www.dailymail.co.uk/money/mortgageshome/article-2105240/Stuck-rent-trap-How-middle-class-family-kept-remortgaging-home-pay-bills-longer-afford-repayments.html

«And so important questions are neglected: how to connect politicians with rational thought [...] like writing recipes when you have no kitchen. Why, then, shouldn't we retreat from politics»

Ah so in the end as it often happens the yearning for rule by wykehamist becomes quietism: since it is not feasible just shut up and bend-over.

«and tend our own garden?»

Quietism is a lot easier for those who got theirs including a nice garden in which to retreat to enjoy their comfortable retirement courtesy of the upward redistribution by Thatcher, Blair and their successors to finance and property rentiers from the servant classes.

For the others quiestism is not a good answer, and given the "hostile environment" of the formal political classes and their "sponsors" the only way is to re-create the "Labor Representation Committee" and work hard and bear the beatings and resist the blandishment, and re-create a mass movement of the servant classes.

[Blissex]

«politics is a kind of profession like law or entertainment, a realm where only the commercial relations count. But the real question is how it became that way. When, where, why and how did the political class slip away from control of their peers?»

HAHAHAHAHA! Really funny. Another wykehamist has a dream about an imaginary wykehamist past.

https://www.senate.gov/art-artifacts/historical-images/political-cartoons-caricatures/38_00392.htm

There have been over the past several decades some changes:

* Most politicians have always represented "pay-per-play" their "sponsors", but for a few decades a large chunk of politicians were "sponsored" by the labor unions and by the workers movement, and there was also more diversity of "sponsors" among the business and property rentiers that gave some opportunities for the servant classes to get some crumbs off the table.

* The organisations that "sponsored" a significant number of politicians on behalf of the the servant classes have been largely suborned as their middle and higher leaders (and many of their members too...) have become "petty bourgeoisie", with interests largely aligned with those of other finance and property rentiers, and some factions (property and finance) of the upper classes have become overly dominant over the others.

[Blissex]

«but for a few decades a large chunk of politicians were "sponsored" by the labor unions and by the workers movement»

Usual quote from an interview with Ralph Nader:

“in 1979. Tony Coelho, who was a congressman from California, and who ran the House Democratic Campaign treasure chest, convinced the Democrats that they should bid for corporate money, corporate PACs, that they could raise a lot of money. Why leave it up to Republicans and simply rely on the dwindling labor union base for money, when you had a huge honeypot in the corporate area? And they did.”

That's how politics really works.

[ltr]

“I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves...”

Bluntly stated, this is a false worry meant to fool and intimidate voters. There is no honesty is this "worry," but by repeating this supposed worry any meaningful Labour policy to bolster the general economy can be undermined as Jeremy Corbyn found out.

Enough of such falseness and deception.

[ltr]

https://fred.stlouisfed.org/graph/?g=19jqn

January 15, 2018

Real Residential Property Prices for United Kingdom, 1970-2023

(Indexed to 1970)

https://fred.stlouisfed.org/graph/?g=ofj0

January 30, 2018

Real Residential Property Prices for United States and United Kingdom, 1970-2023

(Indexed to 1970)

[Blissex]

«“I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves...”
Bluntly stated, this is a false worry meant to fool and intimidate voters.»

Unfortunately that commenter understood the situation very well: a large part of why property prices have been rising fast is that they are expected to continue to rise fast, so there is quite a lot of people putting their money in property solely to enjoy capital gains that they reckon are a one-way bet entirely paid for by renters and future buyers.

If property prices were to "stabilize", then they would in short order crash, as all those people would sell their properties as fast as they can to recover their money from something no longer delivering easy massive gains, to invest it into something else.

Note: that's what happens after what Hyman Minsky describes as the "Ponzi phase" of an instability cycle.

There are even worries that since currently UK state debt is yielding 5% then lots of property owners might soon sell as property prices are not rising as fast or are even slightly falling in many areas, to buy those 5% gilts. Many property owners are not switching from property to gilts because they are betting that soon the politicians will find a way to keep properties to yield more than 5% between capital gains and (notional or actual) rents.

Note: something like that has been described in "The Volatility Machine" by Michael Pettis.

Stabilizing a long running speculative bubble without crashing it is very difficult and very expensive, it is like having a tiger by the tail. Perhaps only states in countries with large export surpluses can do it, and that's not the UK case.

A lot of affluent "Middle England" speculators who thought "my property is my pension" have been enjoying much improved living standards thanks to spending 100% of their net income safe in the certainty that renters and future buyers were saving in their place to fund their pensions; in other words the pension of current owners is redistributed entirely from renters and future buyers

The vice-versa applies: if property prices become affordable again it is inevitable that while renters and future buyers will be able to afford to save for a pension, current owners won't be able to have that same pension.

Put another way, since (residential) property produces nothing, any change in prices/affordability is wholly zero sum *both ways*, if £100,000 don't get redistributed from a renter/buyer to an incumbent owner, the latter necessarily loses them.

[aragon]

On the whole I have to agree with Blissex:

Quietus -> Hamlet Act III Scene I

William Hogarth 1697-1764
Triumph of the Representatives 1754-1755
Emblematical print of the South Sea Scheme

However post world war II Keynesian consensus destroyed by oil shock (1973-1979), Chicago school (of economics), neoliberalism, Chile.

https://en.wikipedia.org/wiki/1970%E2%80%931979_world_oil_market_chronology.

https://en.wikipedia.org/wiki/Chicago_school_(economics)

https://en.wikipedia.org/wiki/Public_choice_theory

[aragon]

p.s
You might need to stock up on popcorn for after Minsky has his moment!

And then their is private equity...

https://www.cnbc.com/2023/09/25/private-equity-is-now-king-for-the-ultra-rich-says-tiger-21-an-exclusive-club-of-investors.html

""From a quantitative perspective, the fundamentals of sponsor-backed companies look frightening," Rasmussen said in a research note earlier this year."

And the impact on politics.

Not to mention Surveillance Capitalism, Net Zero (Greens), Bidernomics and the new world order, and the little matter of a war or two.

We live in interesting times...even if the politicians and media are not interesting (yet).

[aragon]

News flash:

UK to have an activist Government...

https://www.newstatesman.com/politics/uk-politics/2023/09/keir-starmer-power-labour-wartime-cabinet

"Is it possible for the British state to reform itself into an organisation capable of proper planning, prioritisation and long-termism? In the end, the entire promise of a Starmer government rests on the answer. It will require an inner resource-directing team, consisting perhaps of Rachel Reeves, Ed Miliband at energy and Jonathan Reynolds from business, plus Pat McFadden at the Cabinet Office, after a further Whitehall upheaval."

Inner resource directing team:
Keir Starmer - I haven't met a U-turn I couldn't make.

Rachel 'says No' Reeves

Ed 'I believe in magic and reparations' Miliband

Pat 'You must be joking' MacFaden.

Jonathan 'Whatever business wants' Reynolds.

Your dynamic team who for whom what is a women is a fundamental issue. Not a pending economic collapse, while they (don't) install heat pumps and electric charging points.

New Starmer Government, just like the old Sunnak Government.

ROFL

p.s.
How's my job application coming along?

ROFL...ROFL

[aragon]

Electricity consumers to pony up three trillion.

https://www.current-news.co.uk/reaching-net-zero-to-cost-3bn-says-national-grid-eso/

"Reaching net zero in the energy network will cost the UK £3 trillion, according to a new cost analysis from National Grid ESO."

[...]

Within the Leading the Way scenario, there are a third fewer cars on the road by 2050 than in the Steady Progression scenario thanks to many homes opting to have one or no car in the last five years of the period. That would result in 20 million cars as opposed to 33 million cars, and this alone leads to a £27 billion annual cost reduction."

Shame about that second car

[...]

"Even though this is not a total cost of Net Zero, it is evident from our analysis that the scenarios that deliver Net Zero do not result in a material increase in costs over the scenario where Net Zero is not met by 2050. Further the analysis reinforced the message that consumer engagement is critical to meeting Net Zero at lowest cost – from embracing energy efficiency technology such as heat pumps to the continued uptake in electric vehicles."

Ed Milliband has his Superman t-shirt and underpants ready.

It's the economy stupid. Not to mention the personal sacrifices and disruption, all for?

TINA (Thatcher): There is no alternative according to the ESO.

Of course there are other alternatives if you do not make the assumptions, or constraints, the ESO makes. Not to mention events.

[Blissex]

«Electricity consumers to pony up three trillion»

Time to repost the graphs that show that per-head electricity consumption in various "The West" countries started falling in 2003-2004 after rising for many decades, yet they continued to rise in "developing" countries:

https://blissex.files.wordpress.com/2018/02/dataelectrukfallbyregion2005to2015.png

https://blissex.files.wordpress.com/2018/02/dataelectreuothersconsperhead1960to2015.png

https://blissex.files.wordpress.com/2018/02/dataenergyeuuschjpperhead1960to2015.png

https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&met_y=eg_use_elec_kh_pc&idim=country:DEU:ITA:GBR:FRA:ESP:GRC:CHN:JPN:KOR:MYS:THA:BRA:MEX:URY:TUR:IRL:SGP:IND:ISR:USA

In a different situation these graphs would have generated a very interesting debate. But silence is golden.

Just as golden as silence about China-mainland inflation having been negative or close to zero in the recent past, which is surprising, as the UK imports things to use from China, and imports things to consume (food, energy, other raw materials) from the same global markets as China-mainland does.

[Jan Wiklund]

Blissex sept 26: laugh if you want, but that was really the fact in my country from the 1600s up to the 70s (about): constituencies had the power to discipline politicians. Politicians didn't have the guts to opposed their constituencies in important matters, although of course they did in less important ones.

And I am really interested in how it stopped being so.

I don't believe status quo ante is easy to reset. But without knowledge of the process you can't even dream of disciplining politicians. And if not, why not just mend your garden and stop writing stupid comments on the comments field?

[Blissex]

Posted by: Jan Wiklund | September 29, 2023 at 12:34 PM
«constituencies had the power to discipline politicians. Politicians didn't have the guts to opposed their constituencies in important matters, although of course they did in less important ones. And I am really interested in how it stopped being so.»

My usual guess is that quite simply many voters in those constituencies stopped opposing the politicians, and the politicians know it: many of them thanks to good wages and good pensions because of post-WW2 labor unions and social-democratic policies became affluent (or even rich if they worked in property or finance) and they don't object to the political system that made them affluent, and their principles are now "Don't Make Waves" and "Blow You! I Am Alright".

One of my usual english examples:

https://www.theguardian.com/society/2022/jun/29/how-right-to-buy-ruined-british-housing
«I spoke to Phil Salter, a 79-year-old retired carpenter in Cornwall, who bought his council house in Devon in the early 80s for £17,000. When it was valued at £80,000 in 1989, he sold up and used the equity to put towards a £135,000 fisherman’s cottage in St Mawes. Now it’s valued at £1.1m. “I was very grateful to Margaret Thatcher,” he said.»

«why not just mend your garden»

As they got theirs that's indeed what they do, as well as loyally and zealously vote for the "status quo" and their political benefactors.