The class base of bad government

Everybody from the centre-right leftwards agrees that we have been unusually badly governed for the last few years. As Ian Dunt tweeted.

Quite a thing, isn't it. Reading about someone of the stature of Alistair Darling while watching someone as minuscule as Matt Hancock. A testament to how far we've fallen.

But why have we so fallen?

There's a tendency among some centrists to attribute it merely to bad people doing stupid things; the word "cockwomble" occurs with worrying frequency. This is too superficial. It's what I've called schoolteacher politics, the notion that bad policy is mere intellectual or moral error that could be avoided if only we had better people in charge (where, of course, "better" means more like us).

Instead, bad government is endogenous. It's the product of dysfunctional capitalism allied to our unusually toxic class system.

Let's start with the rise of illiberal reaction and the Tories' perceived need to appeal to the far-right. This hasn't occurred because the British people had a bang on the head, or were fooled by media barons, or succumbed to the elegant wit Tommy Robinson. Instead, it's yet another example of what Ben Friedman pointed out in 2006:

The history of each of the large Western democracies – America, Britain, France and Germany – is replete with instances in which [a] turn away from openness and tolerance, and often the weakening of democratic political institutions, followed in the wake of economic stagnation.

His point has since been corroborated by many others. Thiemo Fezmer has shown that - at the margin - austerity caused Brexit. Markus Brueckner and Hans Peter Gruener have shown that "lower growth rates are associated with a significant increase in right-wing extremism." And Ana Sofia Pessoa and colleagues have shown how "fiscal consolidations lead to a significant increase in extreme parties' vote share." This could be because a weak economy breeds discontent with the incumbent parties; or because people look for somebody to blame and that somebody is often the outsiders and marginalized; or because bad times generate a yearning for a past, one in which minorities were quieter. Whatever the reason, Marx was right:

The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.

The far-right has tapped into this richer seam of reaction and illiberalism.

But why have we got stagnation? Austerity is part of the story. But austerity was endogenous - a reaction to the increased public debt caused by the financial crisis. As the late Nick Crafts said, "Brexit is a legacy of the banking crisis."

And that crisis was also endogenous.

To see why, imagine that there had been an abundance of profit-making opportunities in the early 00s. The fall in real interest rates we saw then would then have led to rising capital spending and R&D and to greater productive capacity. We'd have had faster GDP growth.

Which didn't happen. Growth was actually slowing even before the crisis. There was, as Ben Bernanke said, a "dearth" of such opportunities. That meant that lower rates fuelled not faster sustainable growth but rather a boom in housing and in illiquid mortgage derivatives and stretched bank balance sheets, which led to the crash. In this sense, that crash was a symptom (pdf) of a stagnant economy, not (just) a cause.

Exactly why the economy has been stagnating since the early 2000s is a matter of debate: an ageing population; difficulty in adapting to the rise of India and China; lack of innovation; falling profit rates; and so on. For my purposes now, however, this debate doesn't much matter. The fact is that capitalism is not working as well as it once did, and this is shaping the political climate by fuelling antipathy to migrants and benefit claimants and by stoking up culture wars.

Of course, in theory such reactionary politics could be led by politicians of substance rather than the charlatans and inadequates we've actually had. But the low calibre of politicians isn't mere bad luck. It's another effect of our class system.

One reason for this is simply that high pay in the financial sector attracts talent away from politics. If we're lucky, this leaves the profession open to those with a sense of public service. If not, it attracts second-rate egomaniacs. Also, private schools inculcate more confidence than ability - people who, in the American phrase, were born on third base but think they've hit a triple. David Cameron, for example, wanted to become PM because he thought he’d be “rather good” at it - an opinion not shared by posterity. And the Covid inquiry has heard how Johnson was "bamboozled" and "confused" by statistics. Sir Patrick Valance wrote:

Watching the PM get his head around stats is awful. He finds relative and absolute risk almost impossible to understand.

Such ignorance matters. Being Prime Minister isn't like being a newspaper columnist. It's about taking decisions under uncertainty. To do that doesn't require one to be a great statistician. But it does require that one be awake to the most common ways of misunderstanding numbers, which requires a basic statistical literacy.

That Johnson thought he could be PM without such habits of mind shows his arrogant overconfidence. And that other people thought he could is another effect of class. Like attracts like. To a media dominated by public schoolboys, Johnson seemed a familiar jovial figure ("Boris") rather than someone with profound intellectual and moral defects.

Of course, this is not to say that class is the only explanation for our bad politicians. Our mechanisms for selecting them are also dysfunctional; politicians must now appeal more to a handful of cranks be they party members or journalists; the disappearance of public intellectuals has deprived us a a benign influence on the political class; our narcissistic age demands that politicians echo our own prejudices rather than display competence or independence of mind; and so on.

Even if politicians weren't overconfident inadequates, however, there'd still be a problem. The Tories have no economic offer to make to voters because to do so requires them to address difficult questions: how do we kickstart the economy when doing so requires more than the state stepping back? What if inequality is itself a barrier to growth? How do you increase growth when so many of your supporters (financiers, nimbys, monopolists, Brexiters) are opposed to it? Faced with these questions, even the ablest of Tory politicians would struggle.

That last question brings us to a further problem. A lot of powerful people have an interest in sustaining bad and corrupt government, and the power to do so. I'm not thinking only of the media here, or those who exchange for party donations for government money. Businesses also buy MPs (and regulators) through donations or the prospect of cushy jobs after leaving office. And as Michal Kalecki noted, "everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis”: one (albeit bad) justification for fiscal austerity was the fear of a bond market sell-off if debt were not being seen to be reduced.

We can put this another way. In the post-war decades government achieved some worthwhile things: full employment; a better welfare state; and decent economic growth. This wasn't merely because politicians were of greater moral and intellectual calibre back then. It was because full employment was in the interests of much of capital - mass producers needed a market for their goods whereas financial capital require low interest rates - and because capital's more rapacious instincts were constrained by powerful trades unions. In the absence of these conditions, we have what we have now.

And as if all this were not enough, Tories have also sustained in office by simple deference - the habit of mind which leads people to atrribute merit to those in power. You don't need Marxian theories of ideology to believe this (though they help!). It was Adam Smith who wrote:

We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent…The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness.

All these things mean that the feedback mechanisms whereby bad governments are kicked out and bad policies reversed are not as strong as they might be.

My point here is simple. There's more to politics than the mere assertion of one's own moral and intellectual superiority. We must also understand why we are badly governed, and this requires us to appreciate that politics does not exist in a vacuum but instead is shaped by socio-economic conditions. You can't understand politics without understanding capitalism.

Of course, it's likely that we have only a few more months of this awful government: there are limits to how far reactionary rentiers can sustain an egregiously incompetent government in office. But many of the pressures that gave it us will still be in place: economic stagnation and the power of the media, finance, and other regressive sections of capital. And they will constrain even the most competent and best-intentioned Labour government. The idea that we can have good government if only good people were in charge is too hopeful. Centrists, at least as much as leftists, are prone to utopian fantasies.

Comments

[Ben Philliskirk]

"This could be because a weak economy breeds discontent with the incumbent parties; or because people look for somebody to blame and that somebody is often the outsiders and marginalized; or because bad times generate a yearning for a past, one in which minorities were quieter."

Come off it. The sections of the population that are the most racist or xenophobic and keenest on 'nostalgia' tend to be elderly and retired, often homeowners with a good deal of disposable income and conspicuously consuming holidays and eating out.

The idea that poverty leads to intolerance is far too simplistic and narrowly determinist. I'd suggest that the climate is much more conditioned by broader inequality than poverty, an intolerance bred on contempt for those that are different and which is fed upon by a media that sees a market for this kind of whipped-up controversy and politicians who target small resentful groups in the hope of votes. Enoch Powell's vile speech came in the midst of a long period of growth and unparallelled economic security amongst the population.

[Aaron Headly]

Chiming in here from America: The phrase "born on third base but thought he hit a triple" is in wide use here, and deservedly so.
A newer variation that has become more common since 2015 is "born on third base but thought he scored a touchdown." It has proven apt for a few of our most-public figures.

[Jan Wiklund]

As George Orwell claimed about the British ruling class in the 30s: Those in power has such a thick padding of money between them and reality so that they don't need to know anything.

On the other hand, Swedish undersecretary of state (in the 40s) Per Nyström claimed that the high quality of the legendary Swedish Social Democrat government of the 30s was an effect of the people in it sharpened by years of class struggle against capitalists and capitalist society in general. They had fought their way in and won by competition.

What we have to explain is why there is so little class struggle there to sharpen poples' abilities for politics.

[ltr]

The idea that poverty leads to intolerance is far too simplistic and narrowly determinist. I'd suggest that the climate is much more conditioned by broader inequality than poverty, an intolerance bred on contempt for those that are different...

[ An important criticism, explaining much of why and how and the way in which Jeremy Corbyn was tragically ruined politically. ]

[rsm]

Why does Friedman get to cherry-pick away the Great Depression, or was FDR's intolerance for marijuana the "turn away from openness" he is talking about?

[Blissex]

«schoolteacher politics, the notion that bad policy is mere intellectual or moral error that could be avoided if only we had better people in charge [...] high pay in the financial sector attracts talent away from politics. [...] attracts second-rate egomaniacs [...] Being Prime Minister [...] requires a basic statistical literacy [...]»

I am confused: our blogger starts by saying one thing and then the opposite by complaining that we did not have “better people in charge”.

Also how can he argue that the UK COVID-19 policy was an “intellectual or moral error that could be avoided if only we had better people in charge” than someone like Boris?

The excess death statistics of the UK are quite similar to those of most "first world" states, like the USA, France, Italy, etc.; were they all rulewd by “second-rate egomaniacs” without “basic statistical literacy”? I tend to prefer the thesis that they all had governments chosing "half-baked mass lockdowns" instead of "zero COVID" because the latter was too "collectivist".

[Blissex]

Another confusing passage here:

«The Tories have no economic offer to make to voters [...] a boom in housing and in illiquid mortgage derivatives and stretched bank balance sheets»

For 40 years the Conservative economic offer to the voters has been to enrich the 20-40% that make "Middle England" with “a boom in housing and in illiquid mortgage derivatives and stretched bank balance sheets” which has made those voters much, much richer. That to me looks like a pretty substantial economic offer, and one that is pretty much the same as the economic offer by New Labour and the LibDems.

Starmer is leading the poll, is he making an economic offer to voters different from that of the Conservatives?

Perhaps our blogger meant to write "The Tories have no [new] economic offer to make to voters", but what change something that has been so successful, something that New Labour and LibDems seem to agree as well?

«The fact is that capitalism is not working as well as it once did»

But for whom? For finance and property interests it has been working very well indeed, and it is not just that "the Tories have also sustained in office by simple deference" but by the gratefulness of their voters who have made so much money thanks to the competence of Thatcher, Blair, Cameron, May, Johnson in delivering big profits to them. Thatcherism is not supposed to work well for "losers" and "scroungers" (especially those in the "pushed behind" areas).

[aragon]

Intellectual curiosity is also useful, I include this article.

https://theconversation.com/why-the-uk-economy-is-in-such-a-state-and-even-the-labour-party-doesnt-seem-to-get-how-bad-things-are-218476

"Our book [not mine! - SOAS] concludes that the answer to stagnation in wealthy countries, including Britain, is not more growth of the service sectors – especially finance – which have a poor record in raising productivity. Rather, Britain needs a wave of public investment in its productive sector and a sustained effort to reduce inequality. In simple terms, there must be a decisive shift away from capital and towards labour.

Decrying the economic failures of the Tories is easy. But confronting the economic disaster currently facing the UK requires a complete reset. “Securonomics” offers little evidence that the Labour Party is aware of the magnitude of the challenge it hopes to face."

"When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle."
Edmund Burke 1770.

[Blissex]

«why there is so little class struggle there to sharpen poples' abilities for politics.»

My usual answer" mass rentierism, where the "aristocracy of the working class" have been pacified with good pensions and massive capital gains.

[Blissex]

«"When bad men combine, the good must associate; else they will fall, one by one, an unpitied sacrifice in a contemptible struggle." Edmund Burke 1770»

«mass rentierism, where the "aristocracy of the working class" have been pacified with good pensions and massive capital gains.»

My usual quote from a previous commenter: “I raised the problematic policy on my CLP Facebook group. I was stunned by the support for the policy from the countless landlords who were Party members! "I can't afford to give my tenants a rent holiday" "This is my pension, I'll go bust" etc etc. Absolutely stunning. I had no idea how many private landlords there were in the Party. Kinda explains a lot...”

[Ben Philliskirk]

@ Blissex

" I tend to prefer the thesis that they all had governments chosing "half-baked mass lockdowns" instead of "zero COVID" because the latter was too "collectivist"."

Strange idea that the Covid response that would involve masses of people living in isolation and dissolve society for an indefinite time in order to chase a chimera could be described as 'collectivist'.

[ltr]

Brilliant passages:

Tories have also sustained in office by simple deference - the habit of mind which leads people to atrribute merit to those in power. You don't need Marxian theories of ideology to believe this (though they help!). It was Adam Smith who wrote:

"We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent…The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness."

[ltr]

I was stunned by the support for the policy from the countless landlords who were Party members!

[ No; you were not stunned but knew exactly what you would find. Why not set down authoritative national data, and find out if the data are stunning?

https://www.nytimes.com/2023/12/11/us/politics/rent-burdens-low-income-life.html

December 11, 2023

Record Rent Burdens Batter Low-Income Life
More tenants than ever spend half or more of their income for shelter, leaving less for everything else, taking an emotional toll and leaving some without a place to call their own.
By Jason DeParle

The federal government deems shelter affordable if it takes 30 percent or less of household income, a goal that only about half of the nation’s 44 million renter households meet....

[jim]

We have the old British problem, not sure if we get into bed with America or into bed with the EU. We fell out with the EU and have yet to find where the American boyfriend's stairs are, or even which American boyfriend. As Noel would say,

we argue all night,
as to who has the right,
to do what, with which, to whom.

I do wish we'd make up our mind.

Obviously the politicians don't give a s&*t because they will make money and pension whatever happens. We see every day a new childish game being played to divert attention away from those things not being done.

Aragon above points to the difficulty of what to do as a nation. We can't all be marketing consultants, or sell guns and bombs or make millions through finance. There is some sort of Bell Curve of jobs that has to be roughly matched with the Bell Curve of available people. We don't seem to have thought much about that. Indeed we seem to have very expensively developed a mismatched system.

The notion 'The Market will provide' seems rather lazy hopeful thinking. An avoidance of thinking or attempting to match things up however loosely. At least one of the elephants in the room is housing cost. A young person has to earn an impossible amount of money to get a home. Which leads straight into the UK being uncompetitive in all but a few fields of work.

If nothing else I hope Starmer et al build plenty of council houses - close to nice places with pseudo-tudor cottages.

[ltr]

'The Market will provide' seems rather lazy hopeful thinking. An avoidance of thinking or attempting to match things up however loosely. At least one of the elephants in the room is housing cost. A young person has to earn an impossible amount of money to get a home. Which leads straight into the UK being uncompetitive in all but a few fields of work.

[ Perfect summary comment, for which I am grateful. ]

[ltr]

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

January 15, 2018

Real Residential Property Prices for United Kingdom and United States, 1980-2023

(Indexed to 1980)

Real property prices in the US are far higher than at any point since 1880, when the data begins. But, UK property prices are much higher.

[Blissex]

«We have the old British problem, not sure if we get into bed with America or into bed with the EU.»

My usual quote, Tony Benn already wrote in 1965, in his "soft left" early phase:

“Defence, colour television, Concorde, rocket development - these are all issues raising economic considerations that reveal this country's basic inability to stay in the big league. We just can’t afford it. The real choice is — do we go in with Europe or do we become an American satellite? Without a conscious decision being taken the latter course is being followed everywhere.”

Eventually the choice between 1973 and 2016 was: "become an american satellite and also go in with Europe to mess with it on behalf of the americans". Rah! Rah! :-(

[Blissex]

«'The Market will provide' seems rather lazy hopeful thinking. [...] At least one of the elephants in the room is housing cost»

Someone's cost is usually another's income, and The Market "steered" skilfully and determinedly (no laziness or hopefulness), by the BoE and the government, has indeed provide huge housing profits for decades to owner-occupiers and landlords.

My point as always is that the boom in housing profits didn't just "happen", and didn't just screw non-incumbents, it was a deliberate long term policy to make a large minority of incumbents much richer entirely at the expense of the majority.

That is something that I guess "progressives" seem to steadfastly refuse to acknowledge I guess because:

* If it is fantasized that the the thatcherite governments of the past 40 years have impoverished everybody (except perhaps billionaires) with bad policies including bad housing policies, it becomes obvious that the 43% of voters, 14 million people, who voted for the Conservatives in 2019, do not vote on self interest.

* If they don't vote on self interest then the "progressive" columnists of "The Guardian" must be right that those voters only vote on identity and culture, and therefore they must be bigoted reactionaries ("brexiters") who vote for racism, homophobia and misogyny and therefore fighting racism, homophobia and misogyny is all that being progressive ("remainer") is about.

[Blissex]

«A young person»

You means more generally a non-incumbents, that is "losers" who made the bad choices of being born in the wrong decades, in the wrong families, in the wrong areas and is thus paying the price of their bad choices.

Because older "losers" who lost their jobs in the "pushed behind" areas some decades and were too poor to afford to buy property in the right areas are in the same situation, and will live in dingy bedsits (if they are lucky) for the rest of their lives.

«has to earn an impossible amount of money to get a home»

A commenter on "The Guardian" candidly wrote some time ago:

“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 the very essence of "centrism".

[Ben Philliskirk]

As Blissex repeatedly hints, one of the problems with political discourse in this country is that it so often sticks to the idea that the right and the Tories are market fundamentalists.

In reality the Thatcher governments saw the replacement or marginalisation of real and mythical vested interests (certain professional groups, public sector bureaucrats, unions) with their own (financial interests, quangocracy, property owners, 'consultants'). This process was so successful that it was even extended under 'New Labour' (who accelerated the return of mass private landlordism) and is highly entrenched now. There's nothing 'natural' about this situation, as the current structure of the rail system and private utilities shows, means to profit from public money and rigged competition are built in.

[Jim]

Long ago I was an engineering manager. I decided to learn about management and joined a management consulting firm.

But I quickly found that management consulting had very little to do with the craft of management. At the bottom end there were strategy studies, roadmaps, market research, project management etc. Then there were 'the bas56rds' upstairs who plotted and connived.

One job was to do with water privatisation. One of our plotters (not known for ethics) was involved in negotiations and returned to declare 'what a bunch of operators'. He was impressed. They were as unethical and sinful a bunch as he had ever met and the water people were just as bad and opportunity aware.

Ministers have short horizons and limited bandwidth and need praise. On to the next job in a month or two so don't waste time on fights you will lose. The civil servants were very good, but stuck in the middle and needed the salary. The rest is history.

You never fully understand a thing until it no longer matters. And I never did learn much about management, but it is a wicked old world.

[Blissex]

«the idea that the right and the Tories are market fundamentalists. In reality the Thatcher governments saw the replacement or marginalisation of real and mythical vested interests [...] with their own»

A very good way of saying it.

Another way is that used by thatcherites is "championing consumers (often female) instead of producers" (as said by the likes of Willets and Major, for example). Now most people are both producers and consumers, as in they produce to earn the money to consume, so it would be a wash for them, up to a point.

Which categories however don't need to produce in order to consume? Well, all sorts of rentiers. So thatcherism is fundamentally about championing rentierism, and here we are...

Is that a "class base of bad government"? Not as such -- for rentiers it is a class base of very good government for their benefit.

[Blissex]

«one of the problems with political discourse in this country is that it so often sticks to the idea that the right and the Tories are market fundamentalists.»

I have come to the conclusion that the "leftoids" who connive in this weird idea are actually doing so in bad faith, because after the colossal amounts of public money spent by Treasury and BoE to intervene in "The Markets" in 2008 and subsequent decades, vastly larger than those ever spent to bailout productive businesses like BL and NCB in decades past.

Some "leftoids" actually even celebrate such enormous and enormously wasteful intervention in "The Markets" as if it were the "New Deal" trying to save the jobs of the little people instead of being just refilling the huge bonus pools of rich spivs and bailing out "Blow You! I am alright Jack" affluent property speculators.

[Jan Wiklund]

Blissex Dec 9, 11.13: So you mean that everyone is bribed? How would that be possible? If they are, everyone has got his due and there is nothing to be upset about.

If not, some people – probably a huge lot – has NOT got his due, and the big question is why they don't organize and start some fuss...

[ltr]

I have come to the conclusion that the "leftoids" who connive in this weird idea...

[ The offensive language here explains everything to me. There has never been an effort at open discussion, only repeating efforts to distort and contradict or negate all these liberal writings...

At least be honest and possibly be thoughtful. ]

[ltr]

I have come to the conclusion that the "leftoids" who connive in this weird idea...

[ No wonder I found these repeated criticisms so empty, for all the pretense. The criticisms were all and always the same. There was no effort to engage arguments, only pretense.

I am slow, but I understand now. ]

[Blissex]

“the Conservative economic offer to the voters has been to enrich the 20-40% that make "Middle England" with “a boom in housing and in illiquid mortgage derivatives and stretched bank balance sheets” which has made those voters much, much richer.”
“the "aristocracy of the working class" have been pacified with good pensions and massive capital gains.”

«Blissex Dec 9, 11.13: So you mean that everyone is bribed?»

I guess that for someone who is immersed in the middle class like fish in water, that “20-40%” constituting “the aristocracy of the working class” is “everybody” :-).

«If they are, everyone has got his due and there is nothing to be upset about.»

Even if “the aristocracy of the working class” were “everybody”, when property prices double in 10 years, a $100,000 house generates $10,000 a year in gains, a $300,000 house generates $30,000 a year in gains, and since the $200,000 price gap becomes a $400,000 price gap, that is $200,000 has been redistributed from the owner of the $100,000 house to the owner of the $200,000 house. The bribes can be very different in size, and the lower rungs of bribees get screwed by the higher ones.

«probably a huge lot – has NOT got his due, and the big question is why they don't organize and start some fuss...»

That's a big question and it is the point of my mentioning that the right-wingers love the big state when it is in their favour, for example when big state intervention and welfare benefits finance and property interests. Some answers:

* That “aristocracy of the working class” is as a rule the most politically active part of the working class, because they have the interests and the time to do politics. And they do: they have become enthusiastic "progressive" thatcherites, loving their Clinton and Blair.

* When some "populist" politics arises the upper and upper-middle classes viciously attack it, see in very different ways Trump and Corbyn.

* The lower working class is not getting uniformly shafted, the upper and upper-middle classes have been adopting the "boiling the frog" technique of gradualism, and have been often careful to preserve some of the perks of the older generations of the lower working class. While many in the lower working class are already living in slums doing jobs not much better than working the looms, other groups are still hopeful that they can retire before things go back to dickensian.

[Blissex]

«And they do: they have become enthusiastic "progressive" thatcherites, loving their Clinton and Blair.»

For someone who is not even pretending to be a "conniving" "leftoid", here is a pithy summary by the arch-mandelsonian J Cowley when editor of "The New Stateman", from 2014-11:

“Miliband’s [ ... ] might have to accept before long – or the electorate will force him to – that Europe’s social-democratic moment, if it ever existed, is fading into the past.”

"There Is No Alternative" :-(