Stumbling and Mumbling

Labour: office vs opposition

"Men make their own history, but they do not make it as they please." Marx's words should give a little encouragement to those leftists despairing of whether a Labour government could do any good.

Of course, there are reasons for despair. The abandoning of the promise to invest £28bn a year in greening the economy suggests, says Grace Blakeley, that "if current policies are maintained in office, we will see basically no changes in macroeconomic policy under a Labour government."

Which is a big problem, because we need different macroeconomic policy if not to restart growth (something best done by supply-side reforms given that we're near full employment) then at least to repair our broken public services.

And history offers us a bleak warning: there are few examples of a government being more leftist in office than in opposition. Hence Grace's words:

The relentless shift towards the right we’re seeing within the Labour Party in opposition will not slow when the Party goes into government. If anything, it will speed up.

Nevertheless, I - very warily - disagree with such pessimism. I suspect there are pressures which will force Labour to be more radical in office than it is promising to be.

One is that the Westminster environment will be very different next year if - as is possible - the Tories are reduced to a few dozen seats. Hundreds of new Labour backbenchers will not want to go to their constituencies and tell people the government is doing nothing to stop their school falling down or to help them see a doctor. They'll be yapping at ministers to do something. And at least some will have the wit to point out that the annihilation of the Tories was not just a rejection of corruption and incompetence but also as a rejection of the ideology that has given us economic stagnation and wrecked public services.

What's more, if the post-1997 precedent is any guide, the rump of the Tory party will turn inwards and focus on its pet obsessions. Gibber about wokery, cultural Marxism and the left's capture of our institutions will only remind Starmer that the Tories are simply irrelevant.

In this context there'll be no excuse for the BBC to continue to invite the Tory party's outriders onto its shows. The IEA-Telegraph-Spectator crew will be seen for what it is - a handful of cranks cosplaying at a deluded image of Thatcherism and representative only of anonymous billionaires.

The voices around Westminster will therefore be very different from what they now are. Which means the influences on Starmer will change.

Such voices will, though, merely remind him of the truth outside Westminster - that changing policy isn't some leftist pipedream but a brute necessity. As John Harris says:

Even if Labour’s belief that it can only win by staying quiet is correct, arriving in government – and remaining there – will surely demand something very different.

The demand is not merely that we must get NHS waiting lists down; save councils from bankruptcy; repair schools; fix the railways; restore the criminal justice system to some sort of functionality; and get the economy growing. Even if Starmer didn't care about any of this, he would still need to do something.

This is because failing to address these problems would foster hostility to the political system and political class. Five more years of economic stagnation and declining public services will lead people to believe that neither political party can do anything for them.

And the backlash this creates won't be an intelligent one. Back in 2006 Ben Friedman showed that economic stagnation led to illiberalism and a revolt against democracy. Subsequent events have vindicated him. Markus Brueckner and Hans Peter Gruener have described how "lower growth rates are associated with a significant increase in right-wing extremism". And Ana Sofia Pessoa and colleagures have shown that "austerity-driven recessions amplify the political costs of economic downturns considerably by increasing distrust in the political environment."

Even if Starmer wanted to do no more than preserve the legitimacy of the existing political system (and capitalism) and prevent the rise of the far-right, he would therefore need to rescue the economy and public services.

There's something else, hinted at in Starmer's recent speech to the Scottish Labour conference:

I grew up working class in the 1970s. And while I don’t plead poverty, I know what a cost of living crisis feels like. I know what it feels like, to be embarrassed to invite your friends round, because the carpet’s threadbare. There’s a hole in the window. The phone’s been cut off. Because your family can’t keep up with their payments. The cloud of anxiety that hangs over a house. The “what next” fear of the postman coming down the path. Will he bring another bill we can’t afford? I remember that....How can you talk about changing inequality, or racism, or any other structural injustice in this country, without an account of class.

No recent Tory PM could have said this. And it matters. Starmer's (and Reeves') upbringing has instilled in him a sympathy (to use Smith's word) towards working class people to a greater degree than most Tories have. It might be no accident that Labour's promise of more workers' rights has (do far?) survived the lurch to the right. 

This does more than merely increase the chances of redistributive taxation, given that revenue-raising is necessary. It also means that Labour's instincts are not on the side of the opponents of economic growth: nimbys opposing new-builds and infrastructure investment; incumbents and monopolists opposing competition policy; rentiers opposing land taxes; lawyers and accountants opposing tax simplification. And so Labour is less likely to continue with policies that favour these vested interests and stymie the economy.

The incentives and constraints facing a Labour government will therefore be very different from those now facing it in opposition. We should not therefore be confident that the party's words now are a good guide to its actions in office.

There's a recent precedent here. When Theresa May entered Downing Street in 2016 she promised to fight "burning injustices". But little progress was made in doing so, because her time in office was consumed with Brexit. Which tells us that a Prime Minister's intentions are not necessarily a guide to their actions. As the man said, people do not make history as they please.

Sadly, however, there are big caveats here. One was pointed out by Robert Cialdini:

Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment (Influence, p 57).

This, he says, can cause us "to act in ways that are clearly contrary to our best interests". Starmer and Reeves might know now that talk of "the nation's credit card" is gibberish, but they could come to believe it. There's a famous episode of Colditz in which a POW feigned madness in the hope of being sent home only to actually become insane. Labour faces the same danger.

There's also the fact that money talks. Even a small donation helped Reeves drop Labour's popular commitment to spend £28bn on decarbonization - and there'll be more where that came from.

And then there's the possibility that the causes of economic stagnation are so entrenched that even more radical policies than Labour is currently promising will not overturn them. Even if Labour does move leftwards, it might not be able or willing to move sufficiently so.

I can't say how great these dangers are: none of us can foresee the future. But I can say something. Even if a Starmer-led government offers only the small chance of sensible policies, it's a bigger chance than the Tories offer. And even out-of-the money options are worth something.

Psychopath politicians

Do politicians have psychopathic tendencies?

I ask because there's for years been talk of how companies select for psychopaths. One study by Paul Babiak and colleagues found that psychopathic traits are around five times more prevalent among senior executives than they are among the general population, and some notorious bosses have had nicknames indistinguishable from those of killers, such as "Fred the shred" and “Chainsaw Al” Dunlop. As Manfred Kets de Vries says:

Not all psychopaths are destined for prison; some may even be in top executive positions. Wherever power, status, or money is at stake, such individuals will be around.

But of course, there's power and status in politics too, so shouldn't we expect psychopaths to be around there too?

One reason to think so is that, as de Vries says, "the power games that typify organizational life come naturally to them." The psychopath’s attributes, he says, are needed in decision-takers:

Many of the qualities that indicate mental problems in other contexts may appear appropriate in senior executive positions, particularly in organizations that appreciate impression management, corporate gamesmanship, risk taking, coolness under pressure, domination, competitiveness, and assertiveness. Even those traits that reflect a severe lack of human feeling or emotional poverty (lack of remorse, guilt, and empathy) can be put into service by SOBs in situations where being ‘‘tough’’ or ‘‘strong’’ (making hard, unpopular decisions) and emotional slickness work in their favor.

Babiak and colleagues add that "some psychopathic features (e.g., callousness, grandiosity, manipulativeness) may relate to the ability to make persuasive arguments and ruthless decisions."

There's more. Psychopaths, says Babiak, have a "grandiose sense of self-worth". This too helps one succeed, simply because hirers - and we might add voters - often mistake overconfidence for actual ability. The superficial charm and glibness of the psychopath also helps in politics: people want to know that their politicians have the answers, not that the world is a complex, unmanageable place with nasty trade-offs.

What's true in corporate life, then, might also be true in politics - that psychopathic traits (or "psychopath-lite" in de Vries' words) facilitate success. As Brian Klaas has written: 

Psychologists refer to a particularly toxic set of personality traits as “The Dark Triad,” and as the name suggests, it has three components: Machiavellianism; Narcissism; and Psychopathy (being a psychopath). When you pause and consider it, it seems particularly obvious that people with these traits would excel as politicians...you’re more likely to encounter a psychopath in the halls of Congress or in Parliament than you are in your local supermarket.

In fact, there's one thing that helps psychopaths more in politics than in the corporate world - the media’s valuing of “strong leaders.” Starmer’s ruthlessness, for example, is reported as being a matter of congratulation rather than as a possible symptom of a disorder  albeit, perhaps, because it is directed towards the enemy.

We’ve reason to suspect, therefore, that politics, like business, can select for psychopathic traits. A lot of political behaviour becomes more comprehensible once we realize this.

For one thing, there’s the persistent pattern of coercive control, in the urge to restrict freedom – be it wanting to ban under-16s from social media, banning disposable vapes, restricting the right to protest, and limiting our freedom to live and work in the EU. The kneejerk attitude of our ruling class - both main parties and the media - is to say no.

Closely related is the desire to preserve status inequalities. Opposition to devolution, to worker democracy and to well-functioning markets are usually seen as three different things. But they have a connection. All three help to preserve existing inequalities of power. That betokens the psychopath’s concern with status hierarchies.

Another feature of psychopaths is their dishonesty and manipulativeness and ability to form and dissolve alliances as their interests require. As de Vries puts it, for the psychopath “after people serve their purposes, they are quickly cast aside.” This is consistent not only with Starmer’s treatment of Corbyn, being both an ally and opponent as his career required, but also with those Tories who claimed to be Thatcherite only to pursue violently anti-Thatcherite policies such as erecting trade barriers, restricting home ownership, increasing business uncertainty, complicating the tax system and generally fucking business.       

And then of course there’s the lack of empathy. George Osborne liked to speak about “tough choices” (which were of course always tough on the poor rather than rich), without caring about the deaths caused by austerity and benefit sanctions. Such callousness is another hallmark of the psychopath.

We can see the obsession with bombing countries in this context: Yemen, Afghanistan, Iraq, Libya, Syria. Given the lack of efficacy of so many of these ventures, one might wonder whether “collateral damage” is a feature rather than a bug.

You might object there that there’s another symptom of psychopathy which should disqualify people from positions of responsibility: a lack of impulse control and inability to make good long-term plans. “Should”, however, does not mean “does”, as the fact of Boris Johnson becoming Prime Minister demonstrated.

His elevation was not, however, an isolated example. Wanting to leave the EU without a plan on how to do so was a classic example of such impulsivity and a lack of planning, as were the on-off decisions about HS2. Both of which are part of a pattern noted by Sam Freedman:

[An] incredibly short-termist approach to public spending infects every area of policy-making. From endless expensive delays in defence procurement, to the refusal to invest in preventative programmes across education, health and crime that could ensure better outcomes and future savings across the public sector. The phenomenon is known across Whitehall as ‘Treasury Brain’.

Now, I know that psychiatric diagnosis at a distance is bad practice. But I’m not trying to diagnose individuals, because my point isn’t about them. It’s about the system, the structure. Its functioning is consistent with politicians being selected for psychopathic traits. This isn’t to say that all politicians are psychopaths, any more than the claim that the police are institutionally racist means that all policemen are racist. It’s merely that there are systemic forces facilitating a tendency.

It’s easy to get angry at politicians’ dishonesty and callousness. When you get to my age, however, you need to reduce your blood pressure. One way to do so is to recognize that such characteristics are not so much isolated individual failings as the nature of the system.

And this is not always a bad thing. Sometimes, we really do need someone to take tough decisions, to choose whom to throw under the bus. When Starmer says "sometimes you have to be ruthless to be a good leader" he is echoing a better man, the great Alan Sparhawk: “You may need a murderer, someone to do your dirty work.” It's true. But like many great truths, only a partial one. The question is: do we need psychopaths here, and now? And do we want the choices that they make?

How our institutions work

The post office scandal is not merely a matter of a few bad bosses. It should raise questions about the very structure of our society.

It's easy to say that Paula Vennells was corrupt and/or incompetent and that the Horizon system was faulty. But this is trivial. Anyone who has switched a computer on knows that software is buggy, and countless thousands of people are stupid and dishonest: you could throw a brick from your house and hit a dozen of them - more in some parts of London. A well-ordered society has mechanisms which prevent such people getting power or doing much damage if they do get it. The Post office scandal shows that we lack such mechanisms, in at least four respects:

 - There's good evidence that companies actually select for psychopaths. People who are unusually concerned with status and power are precisely those who aim for the top of hierarchies (whereas many others of us just want to get on with our jobs), and psychopaths' superficial charm and fluency appeals to hirers. As David Allen Green says, "the likes of Paula Vennells are always with us and will always somehow obtain senior positions." This is consistent with a finding by Luigi Zingales and colleagues, that a lot more corporate fraud occurs than is actually detected. What's more, companies also select for over-confidence as they mistake "competence cues" - the right body language or the illusion of knowledge - for actual ability. (All this might also apply to politics).

 - Ministers failed to control or to replace Post Office management, believing - in a remarkable example of not understanding the function of ownership - that it "has the commercial freedom to run its business operations without interference from the shareholder." Ed Davey distinguishes himself from the other ministers merely by being so uncouth as to have blurted this out in public.

 - Police for years did not investigate the likely fraud and perversion of the course of justice by Post Office bosses. The fact that they have begun to do so since the screening of the ITV drama reminds us that the Met is more concerned with PR than with justice. 

 - The courts failed to acquit innocent sub-postmasters, for systemic reasons discussed by David Allen Green. This was not an isolated miscarriage of justice; it occurred over 700 times.

We should think of our main social institutions - markets, the democratic process, the legal system and so on - as selection devices. What we have here is evidence that these do not operate as you might think they should, not in one or two instances but systematically and persistently. The Post Office board and government ministers did not select honest or competent bosses. The police did not choose to investigate serious crimes. And the courts failed to correctly distinguish between the guilty and the innocent.

These, however, are by no means the only selection mechanisms which don't work as one might imagine they should. Politicians are selected for fanaticism rather than competence. Financial markets often do not select the best investment opportunities, which is why we have asset price bubbles and under-performing fund managers. Product and labour markets do not eliminate the "long tail of extremely badly managed firms" described (pdf) by Bloom and Van Reenen. Peer review often does not select the best academic research. And the media does not select for informed expertise.

Society's main social institutions, then, very often do not select the best or filter out the worst. Often, they do the opposite. What should we make of this fact?

One reasonable inference is that it is just really difficult to make good decisions with limited information and so there will always be a great deal of ruin in the nation.

If this were all, though, we'd expect to see political activity and debate focusing upon how we might improve such mechanisms.

But it isn't. Instead in recent years politics has been consumed with Brexit and other culture war issues. Which is of course yet another example of a selection mechanism: politics selects to focus on irrelevancies rather than more important matters.

This is part of a pattern. It's normal for people to neglect structural and societal forces and to pay more attention instead to individual humans. Which is why public anger is focussed upon Paula Vennells rather than the mechanisms that recruited and enabled her. People like a witch-hunt and are attacking Vennells in the same way that criminals attack nonces - to remind themselves that they are morally superior to at least somebody.

Even good people can inadvertently reinforce this tendency. In exposing the detail of the Post Office scandal there's a danger of missing the big picture. Both journalism (even when done well) and drama look more at human interest stories than at social structures.

And this suits the ruling class. It has long flattered itself that the system works because "good chaps" will be in charge. The fact that "good chaps" so rarely are - and that the Post Office merely joins a list of systemic injustices such as Hillsborough, Windrush and Grenfell - doesn't seem to undermine this complacency.

Which brings me to a concern. You might have noticed that I've avoided using the word "failure" to describe all these different selection effects. This is because they might not be failures at all. The fact that the powerful can enrich themselves at the expense of the powerless; that markets permit the incompetent wealthy to stay rich; and that politics is a clownish sideshow that avoids substantive issues all suit the elite perfectly well. Prem Sikka is right to say that the Post Office affair "has once again shown the UK to be a hotbed of corruption and cronyism where in pursuit of profits and private gains innocent people are bludgeoned to silence and submission."

It has thus shown what Marxists have long known - that law and justice are veils behind which lay exploitation and cruelty. The question for the establishment is how they might bring these veils back down.

On high-wage jobs

Everybody wants to create well-paid jobs. But this is not necessarily a good thing.

To see why, imagine a simple economy comprising farmers each of whom is comfortably above subsistence, enjoying both leisure, the ability to store food, and a few luxury foods. One of our farmers  then discovers a more efficient technique allowing him to produce more food with less effort. He's better off. And if he can sell this knowledge to others, he'll become even richer. In this case, economic growth and the creation of a high-wage job are indeed the same thing: our new economy comprises a well-paid farming consultant as well as more productive farmers.

But what if he cannot sell his know-how? What if other farmers can learn his techniques simply by looking over the fence? We'll then have a transition to a high-wage economy without the creation of a new job. This isn't a fanciful case. William Nordhaus famously found that innovators capture only a "minuscule fraction" of the social benefits of their discoveries in large part because they are indeed copied.

Our innovative farmer could get a high-wage job as a teacher and consultant only if he could prevent others from learning freely - by building a high fence (erecting a paywall) or by taking out patents and copyrights. Such devices would boost his pay but at the expense of lowering others' productivity relative to what it could be. Creating or preserving high-wage jobs, therefore, isn't the same as raising productivity.

Let's take a second example. One farmer then develops musical skill, so much so that the others happily trade some of their excess product to listen to his songs. In this new economy, everybody is happier than before. Farmers are getting something they value more highly than food - music - and the musician wouldn't be performing if he didn't enjoy it more than farming.

This illustrates an important point made by Eric Beinhocker in The Origin of Wealth. Economic progress, he says, doesn't consist merely in producing more of the same but in producing greater variety - a finer division of labour with a more complex economy. We are better off than we were in the 1950s, not because we have more lard and haircurlers, but because we have things people then couldn't get at any price - colour TVs, mobile phones, the internet and so on.

Note also that GDP does not necessarily capture this fact because it doesn't accurately measure some of the things we have that our grandparents didn't: think of our visits to Youtube and Wikipedia for example.

In this example the musician's job needn't be a high-wage one. If he prefers it to farming he'd accept less remuneration than he could get as a farmer. Even so, people prefer this economy to the one they had previously. Which tells us that economic progress can happen without the creation of well-paid jobs.

Now let's take a third example. Our society suffers a breakdown in social norms and rise in crime. One farmer then charges the others to protect them from theft and violence - so much that he earns more than he did as a farmer. A high-wage job has been created. But must of us would prefer the old society in which protection was unnecessary. Which shows that high-wage jobs aren't necessarily a sign of success*.

Again, this isn't a fanciful example. It describes the guard labour discussed by Samuel Bowles and Arjun Jayadev. Some lawyers, policemen, supervisory staff and middle managers exist only because of agency failures and conflict that would be diminished under different social arrangements.

Now take another example. A clever farmer finds a loophole in the contract with the protector which allows him to enjoy the benefits of protection without paying. He then sells advice to others on how they too can exploit this loophole. He has created a high-wage job for himself. But our society in aggregate is no better off. Those who don't use the loophole must either pay higher taxes to provide protection or get less of it. Our tax advisor hasn't created wealth, but merely diverted it to himself and his clients. Society would be better off if he were to direct his talents elsewhere, as the musician and more skilled farmer do.

It should be obvious that this example is also all too realistic: many tax advisors, accountants and lobbyists fit this model.

The point of all this should be clear. Creating high-wage jobs and economic progress are different things. Sometimes, we can have progress without a new well-paid job, as in my example of the musician or farmer whose innovations get copied. And sometimes high-wage jobs do not represent progress at all, as in my examples of protection workers or tax advisors. (The example of the innovator benefiting from intellectual property laws is a mixed case: if such laws are necessary to incentivize innovation the high incomes and progress go together, but if they are not the two are separate). Yes, wages are at least sometimes equal to marginal product, but it is the marginal product to the hirer not to the wider society.

All this is not to mention other cases of high-wage jobs that are inimical to progress. These include those which exploit information asymmetries such as fund managers who are, in David Blake's words, "genuinely unskilled." And they also include those who generate unpriced negative externalities such as bankers' risk pollution, carbon producers' environmental pollution or the media's intellectual pollution.

Of course, high-wage jobs would be a good thing if they are the result of genuine improvements in productivity. But not all such jobs are. Think about this statement:

If an economy is successful it has lots of high-wage jobs. We have lots of high-wage jobs. Therefore we have a successful economy.

Sounds reasonable? It shouldn't. It has the same structure as:

If an animal is a dog, then it has four legs. My cat has four legs. Therefore, my cat is a dog.

It's the fallacy of affirming the consequent. And it's the mistake that some advocates of a high-wage economy make. High-wage jobs must be the product of a thriving economy, not a cause of one.

* Of course, one could tell a story in which the protector extorts food from others whilst failing to protect them. Whilst plausible, I don't need this to illustrate my point, that even in a free society high-wage jobs aren't necessarily a sign of success.

Another thing. I've tried not to use words such as GDP, productivity and value. In my context (and many others!) these merely introduce unnecessary complications.

Centrist utopianism

When I was a young leftist, older Tories would tell me that I would lose my idealism as I got older. Now I am old, I see that they were right. The problem is, though, that it is now the right and centre who are now the dreamy idealists and not me.

Take, for example, criticisms of the Bank of England for failing to prevent inflation. What these insufficiently appreciate is that policy errors are inevitable. This is simply because it takes two or three years for interest rates to have their full effect upon inflation, which means that rates must be set on the basis of a forecast of inflation. But forecasts will often be wrong. Which in turn means that, with hindsight, policy will be wrong - either too tight when inflation proves to be lower than expected or too loose when it proves to be higher.

The problem here is not a particular failing of the Bank of England, although it might well be the case that more cognitive diversity on the MPC would help. Instead, everybody gets forecasts wrong. My chart shows the point. It plots average private sector forecasts for CPI inflation made in December for Q4 the following year (for example, in December 2005 for Q4 2006). You can see that forecasters have generally failed to foresee big moves in inflation - such as the rises in 2008, 2011 and 2021-22 or the falls in 2014-15. Between 2004 and 2019 (that is, before the pandemic) the average error regardless of sign was 0.8 percentage points.

What's true of inflation is also true of economic growth. As Prakash Loungani has shown, forecasters have - on average - an almost unblemished record of failing to foresee recessions (pdf).

These errors* don't happen because forecasters are daft or under-incentivized. They occur because economies are complex and emergent and because shocks (such as Russia's invasion of Ukraine) happen. Economic outcomes are unpredictable, so the Bank of England is bound to make policy errors sometimes even with the best possible policy-makers. Saying that the Bank made a policy error is as insightful as saying that MPC members are human. 

The notion that we can have stable inflation is idealistic, utopian.

This, however, is not the only example of how the centre and right are too optimistic about what policy can do. Here are others:

 - NHS reform. History tells us that this is a difficult job: the last two big attempts (of many) to reform the NHS - internal markets and the Lansley reforms - were such failures that they have since been scrapped. Every addict knows that the definition of insanity is doing the same thing over and over and expecting different results. Wes Streeting, on the other hand, does not know this.

 - Benefit reform. This is motivated by an attempt to distinguish between deserving cases and the workshy. But such a distinction is very hard to make with limited information and finite administrative resources and any attempt to do so risks hurting the genuinely ill, especially those with mental health problems such as anxiety; criminals can game the system but the genuinely vulnerable cannot. The belief reform is possible without hurting the worst-off is another example of centre-right idealism**.

 - Immigration. Reducing immigration entails a loss of liberty, not just of the migrants themselves but of employers and those who want to bring a partner into the country. It also means higher taxes to attract domestic workers into public sector jobs such as care work. All these are costs we must pay to placate those who feel discomfort at social change. Which just illustrates Isaiah Berlin's point (pdf):

Some among the Great Goods cannot live together. That is a conceptual truth. We are doomed to choose, and every choice may entail an irreparable loss.

MPs - be they Labour or Tory - who promise lower immigration don't however frame it this way, as the tragic choice it is. Which is idealistic and unrealistic. As Berlin wrote:

Those who rest on such comfortable beds of dogma are victims of forms of self-induced myopia, blinkers that may make for contentment, but not for understanding of what it is to be human.

 - Boosting economic growth. The economy is large (£2.7 trillion) and complex and therefore difficult to significantly improve. Unsurprisingly, therefore, scholars such as Dietz Vollrath and John Landon-Lane and Peter Robertson have shown that reforms rarely do greatly raise GDP.

You might think this too pessimistic. Given that the UK is poorer than many of its comparators it should be easy to catch up. But this brings me to another example of centrist naivete - a failure to appreciate that politics is about power, not intellect.

Certainly, there are many policies we could try that might raise growth: tax reform; rejoining the single market; better competition policy; better vocational education; better planning policy; better financing for new and expanding businesses; and so on. Talk of these, however, omits the important fact - that boosting economic growth isn't so much an intellectual challenge as a political one. How do we face down the forces of conservatism that block growth: nimbys, landlords, financiers, incumbent monopolies and their mouthpieces in the media?

There's a common theme to many of these examples of centrist idealism - an over-optimism about how much management skill the country has, and how much top-down decision-makers can know (pdf). It is such optimism that has given us things as otherwise diverse as the Iraq war and cost over-runs on infrastructure projects.

Just as fish don't know they're wet, so centrist ideologues don't realize they have an ideology. Which is why their supporters set so much store by the "competence" of Starmer, Reeves and Cooper. True, they seem to be compared to the Tories, but that's a low bar. Instead, the actual bar is much higher: are they sufficiently competent to improve large complex structures? Just as "hire a genius" is not an effective strategy in business, nor is it in politics.

So, what's the alternative?

I'd suggest - more as a way of highlighting what I've said rather than as a concrete proposal - the need for policies and institutions that are resilient to failures of judgment. This means having strong automatic stabilizers rather than relying so much upon macroeconomic policy: I'm thinking here of a high welfare safety net, progressive taxation, a sovereign wealth fund or Shiller-style macro markets (pdf). Similarly, one argument for a universal basic income is that is removes the need and administrative burden of deciding who is deserving and who not.

By now, some of you might be shouting "tu quoque": isn't it hypocritical of a Marxist to accuse others of utopianism?

No. Marx was much more of an analyst and critic of capitalism than he was a writer of blueprints, and he was critical of those utopian socialists who tried to build "castles in the air." Instead, he said, "the emancipation of the working classes must be conquered by the working classes themselves”, in part because he didn't trust top-down plans. James Scott's Seeing Like A State is quite compatible with this strand of Marxism.

Of course, some Marxists have been idealistic utopians. But this has less to do with Marx than the human condition. Human kind cannot bear very much reality, so we retreat into dreams. Centrists and rightists are just as prone to do this as the left. The problem is that they get to inflict their dreams onto the rest of us.

 * I don't like the word "error" in this context. It carries implications that one could do better, when the point in this context is precisely that one cannot.

** I'm assuming that such reforms are motivated by good faith. In at least some cases, this is not so and hurting the unwell is a feature not a bug.

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.

Two types of politics

There's an under-appreciated division in politics. It's expressed in this tweet from the Sleaford Mods:

Don’t be asking me to pick sides for something I ain’t got any real idea about, at a gig. I’m a singer. My job is music. The only real thing I know about War is that I’m sick and tired of premature death like we all are. Of the murder of anyone, under whatever fucking belief grid.

Now, the thing is that the Sleaford Mods are a political band. So why are they loath to express a political opinion about Gaza?

It's because their politics arise from lived experience, of struggling to get by in crap towns. (Jason Williamson comes from Grantham and is thus an expert on the latter). Such a politics can be contrasted to that which arises from abstract thought, be it academic reading or, more often and much worse, the media. All most of us know about Gaza is what we get from the latter, which gives us only a partial picture even with the best journalists. Hence the Sleaford Mods saying "I ain’t got any real idea about" the conflict*. They are channelling Charlie Munger's wise words: "one skill is knowing the edge of your own competency."

The diametric opposite of their attitude is that of the talking heads on poshcuntstalkshit shows who spout off on all subjects (or at least all of those deemed acceptable by pro-capitalist ideologues) and whose views are drearily predictable: if you know their opinion on, say, Israel you know their view on austerity, "wokeism", Brexit etc**. The edge of their competency is a mystery to them.

We see the contrast between the two types of politics more broadly. The politics of lived experience arises from having bad jobs, stagnant wages, long waits for one's court case or difficulties in seeing doctors. The politics of abstraction, on the other hand, is that of "stop the boats" or fretting about "wokesters"; very few people outside coastal towns have actual experience of being inconvenienced by migrants arriving in small boats, and even fewer have lived experience of being seriously incommoded by "wokesters".

Of course, sometimes the same political position can arise from either. Hostility to trans people, for example, can be the result of being harassed in a changing room by a man in a dress or it might arise from theorizing about what it means to be a woman. And, of course, smarter people combine lived experience with theoretical learning.

Lived experience does not necessarily push one to the left. Much of Thatcher's support in the 70s and 80s came from people having personal experience of being inconvenienced and harassed by striking workers, or from them profiting from having bought their council house cheaply. Yes, most of the press supported Thatcher, but many didn't need to look at a newspaper to tell them to vote Tory; they only had to look at their bank balance.

Similarly, a good portion of support for Brexit - enough to tip the balance - wasn't based on abstract arguments about the EU but upon the lived experience that things weren't going well.

The outcome of the Brexit referendum took most of the political class by surprise. That was because much of that class was detached from individuals' lived experience and better keyed into the chatter of talking heads. The rise of Corbynism was also a surprise for the same reason: journalists, politicians and "commentators" (the fact they are a thing at all is revealing) talked among themselves and under-appreciated the lived experience of young people with high debt, unaffordable housing and bullshit jobs.

Lived experience is not always articulated, or even articulable. It can take the form of what Polanyi called "tacit knowledge", a gut feel that something is wrong. Just as successful entrepreneurs can have a hunch that a new product will sell well or investors an inarticulable sense that an asset is overvalued so too can voters have a feel that things aren't right.

Which brings me to the problem with basing politics on lived experience alone. It generates only local and circumscribed expertise: people might be experts on the performance of their local GP surgery but not that of the NHS in general, or experts in how their own business is performing, but not the economy as a whole. And so on. And of course expertise in diagnosing a condition does not mean knowing the cure.

In principle, this needn't be a problem. A sensible polity would aggregate fragmentary and sometimes inarticulated particular information into genuine knowledge in the way that Hayek supposed that a well-functioning market aggregated dispersed information. Technocrats - genuine technocrats not vacuous centrists - could then get to work on solving those problems.

But of course, we don't have such a polity, which is why we have opinion polls and not fact polls. Part of the professional deformation of the political-media class is to overvalue the mere verbal fluency of people like themselves and undervalue the dispersed tacit knowledge and local expertise of outsiders. Worse still, that class exploits people's anger at their lived experience of economic stagnation and failing public services and misdirects it into support for Brexit, hostility to migrants or antipathy to the sort of "elite" which comprises youngsters who can't afford a house but not millionaire cabinet ministers or newspaper barons.

I'm not offering solutions here; there's no point writing recipes when you don't have a kitchen. I'm just pointing out what the distorted perception of many journalists and politicians doesn't see - that there are ways of thinking about politics which are not heard in TV studios.

* You might reply that you don't need especial expertise to know that bombing children or murdering teenagers at music festivals is wrong. True. This does not, however, help us solve the more difficult problem of how to stop it.

** It needn't be so. One of my friends describes his politics as Thatcherite economics and Corbynite foreign policy. This might seem odd today, but it would have made perfect sense to, say, Richard Cobden.

Management in question

Can we rebuild public services without massive extra spending? Can we really implement the new technologies necessary to get us to net zero? Can we build infrastructure projects on budget and on time? Can we increase housebuilding quickly? How can we reverse the UK's lamentable productivity performance?

These important policy issues have something in common. They all pose the same question: do we as a country have the management ability to achieve what we'd like to?

Casual evidence suggests not. We have some of the most expensive electricity in the world; water companies cannot, it seems, make a profit without polluting our waterways; trains are unreliable and overpriced; infrastructure projects cost vastly more in the UK than elsewhere; and new-build houses are of appalling quality. All of which are signs that managers just don't deliver the goods at acceptable prices and quality.

This isn't the only evidence. Nick Bloom and colleagues have shown (pdf) that there is "a long tail of extremely badly managed firms." Staffan Canback has described how diseconomies of scale often set in quite quickly, suggesting that managers can't easily overcome the inefficiencies caused by expansion. Alex Coad has shown that there's a large random element to firm growth, implying that bosses contribute less to corporate success than they claim. And Paul Ormerod and Bridget Rosewell have shown (pdf) that "firms have very limited capacities to acquire knowledge about the likely impact of their strategies", perhaps because, as Kenneth Boulding said, there is a high chance that "top decision-makers will be operating in purely imaginary worlds."

Is it really plausible that the UK's low and stagnant productivity has nothing to do with the calibre of the people running businesses?

Maynard Keynes famously said: "Anything we can actually do, we can afford." But perhaps we cannot actually do very much because we just don't have the management skill to build things, provide decent services or increase efficiency.

Why not?

One possibility is that bosses haven't had the incentives to do so. If they can make millions even from failing businesses such as Wilko, why should they bother trying to do a good job?

There's evidence for this. The internet has become enshittified not because tech bosses lack ability but because they can make more money from ad-riddled sites than from ones pleasing to their users. And Bloom says that a big reason for that long tail of poorly managed firms (around the world) is that a lack of product market competition relieves them of the pressure to up their game.

To the extent that this is the case, the policy solution is to change incentives. In the case of utilities and transport, this requires - at least - more rigorous regulation of prices and quality. In other cases, we need that other regulator, the market. I'm not just thinking here of beefing up the Competition and Markets Authority. We need also to strengthen competition by reducing barriers to entry such as lack of finance or restrictive intellectual property laws.

In this context, we should welcome falling house prices. They send the signal that if you want to get rich you should try producing goods and services rather than relying on asset price inflation, and could therefore increase the supply of entrepreneurs and managers.

There is, however, another reason for bad management. It's that the job of senior management has ceased to be what it should be - that of humble technocrats (pdf) improving corporate engineering - but has instead become a cargo cult ideology in which wannabe heroes express "leadership" and "vision".

Managerialism has, in many places eclipsed management. And there's a big difference between the two. Managerialism has a messiah complex and belief in great leaders, whereas management looks for good fits (pdf) between bosses and roles. Managerialism tries to apply the same methods everywhere, whereas management knows it is domain-specific; what works in (say) supermarkets might not work in universities. Managerialism valorises top-down control whereas management believes in listening and feedback. And managerialism speaks of vision and strategy whilst management focuses on empirical detail and ground truth.

If we are to have better management, we need to replace managerialism with management: more worker democracy might be part of this.

Now, you might or might not agree with all this. Whether you do or not, I hope you'd agree that there is at least an important issue here. But you wouldn't guess so from Westminster politics, where this question is not on the agenda at all. How often, for example, is it discussed on those poshcuntstalkshit shows that pollute the airwaves?

Whilst the management question is not discussed in mainstream politics, however, labour issues very much are. Whether it be efforts to weaken trades unions or to "strengthen work incentives", both Labour and Tory governments have for decades seen their task as ensuring an adequate supply of quiescent labour. Ensuring an adequate supply of good management, by contrast, has barely figured as an objective. In this respect, the state not so much an empirically-based solver of genuine economic problems but rather an embodiment of Marx's point: "the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie."

In defence of Labour

There might be more to be said in defence of Labour than many on the left suppose.

True, on the face of it the party seems to be willing the ends but not the means. Rachel Reeves promises faster growth, higher investment and the creation of good new jobs around the country, but without having a detailed plan to achieve any of these and apparently oblivious to the fact that the forces of capitalist stagnation militate against faster growth. These forces aren't just the economic ones of lack of big innovations, ageing population, falling profit rates and so on but also political ones: there's a large constituency of nimbys, financiers and monopolists opposed to faster growth.

Reeves' failure to appreciate the scale of her task is however not a personal failing. Part of politicians' professional deformation is to be over-optimistic about the transformative potential of small policy tweaks, and social democrats have traditionally been over-optimistic and incurious about capitalism. We shouldn't blame Reeves for these failings any more than we should blame the elephant for having big feet: it's the nature of the beast.

She is, however, doing something right. In merely calling for faster economic growth she is facing in the right direction, which could be a preparation to moving in the right direction.

What if better planning regulations and less policy instability don't significantly improve growth? A party that is sincere about wanting this would then have to focus on other obstacles to growth. Failing high streets might require a land value tax to deter landlords from keeping premises empty. High utility bills, in light of Reeves promise to cut household bills, would require tougher regulation - perhaps to the point of driving companies into bankruptcy and the public sector. Poor transport would require harsher penalties for incompetent rail companies and more infrastructure investment. The inability of capitalism to invest might require more socialization of investment along the lines of the original green new deal. And decent trading arrangements with the EU might lead to rejoining the single market.

In these ways, simply trying to solve the problem Labour is looking at might propel the party in a sensible direction.

There's something I've left off this list - fiscal policy.

There's a good reason why the party is promising fiscal discipline. It's that it might well inherit a labour market that is quite tight - albeit not as much so as a few months ago. There's a limit, therefore, upon how much the party can fulfil its promise to create "jobs for plumbers, builders and electricians...for scientists, designers and engineers" merely by adding to demand. Beyond quite a narrow point, any attempt to do so would bid wages up which the Bank of England would see as a reason to raise interest rates. And if that happens, you can say goodbye to hopes of much more housebuilding.

"Bond vigilantes don’t exist" as a constraint on how much governments can borrow in recessionary times, such as during the pandemic, but they do exist as a constraint on how much governments can fuel inflation, as we discovered with the Truss Budget.

We all know that the question "where will the money come from?" is asinine imbecility. But "where will the workers come from?" is certainly not. More "jobs for plumbers, builders and electricians" must therefore mean fewer jobs elsewhere.

For now, Labour isn't addressing this question - understandably because it's a nasty one. Traditionally, governments have diverted labour away from some jobs is by raising taxes or interest rates. But these methods might be insufficient. Instead, we might need more radical interventions for example to reduce the bullshit jobs and guard labour arising from private sector agency failures; or the excess labour created by policy failures such as excessive tax and benefit complexity; or the jobs that owe their existence to environmental, risk or intellectual pollution; or those (such as some managers) which exist because of a mistaken ideology.

It is a crude social democratic error to identify policy radicalism with a loose fiscal stance. The truth is that fiscal conservatism is entirely compatible - at least in logic - with economic radicalism.

Again, Labour is at least facing in the direction of sensible policies. It doesn't have a coherent fully-worked economic policy. But it has a hint of a trace of the beginnings of a clue, which is more than can be said for the Tories.

It's in this context that Starmer's support for Netanyahu makes sense. As a description of events in Israel-Gaza it is indefensible. But we shouldn't regard it as that. Nothing Starmer says will make a jot of difference to the region. Instead, he is talking to a domestic audience. Any support for Palestinians would be exploited by the Tories and the media to stoke up a culture war with which to distract attention from 13 years of failure. In supporting Netanyahu Starmer is thus keeping the focus on economics. Which is where it should be, because this might lead somewhere intelligent.

Now, you might think that in saying all this I'm ignoring the advice of my previous post because I'm failing to test my ideas against the empirical evidence. And the evidence that Labour is thinking along radical lines for its third or fourth move is lacking, which is why the pro-capital, anti-welfare Anna Soubry feels comfortable supporting Labour.

This, though, isn't necessarily a clinching argument. It shows that Starmer is succeeding in marginalizing the Tories, in reducing them to a rump of deluded fanatics detached from the real world.

And we must remember that parties never enter office with fully-worked plans. The Tories' 1979 manifesto, for example, made little reference to privatization or to using mass unemployment to smash the unions. It is possible that the clash between the desire to raise economic growth and the reality of sclerotic capitalism will push Labour in the correct direction.

One thing suggests this isn't wholly fanciful. It's Starmer's and Reeves' claims to come from modest backgrounds. Such talk isn't trivial. Your upbringing influences your sympathies, to use that great Smithian idea; this is why many people from poor families remain left-leaning even after making money. Such sympathies suggest that when the chips are down, Labour will pay more heed to the needs of the working class than the Tories would. Its "new deal" for workers rights is a genuine and important difference with the Tories.

I concede that in writing all this I might well be engaging in wishful thinking and clutching at straws, and I'm underplaying the strength of the forces of rentier capitalism opposed to pro-growth policies. What Labour offers is not so much an attractive substantive platform as the possibility of one. But options, even out-of-the-money ones, have some value. Which is more than can be said for the Tories.

On reflective equilibrium

We should all be more Rawlsian, and not merely in the conventional sense.

To see what I mean, take this suggestion from Josh Hendrickson for a cost-minimizing legal system:

More specifically, when someone is accused committing a crime, they could be given the option to admit guilt and pay a fine, the magnitude of which depends on the severity of the crime. If the person is unwilling or unable to admit guilt and pay the fine, their prosecution is determined by a dice roll with the number of sides on the die inversely related to the severity of the crime. Some die might have six sides. Other die might have thousands of sides. (You don’t actually need to use dice. Just a random draw.) If the prosecutor rolls a 1, the perpetrator is sentenced to death. Otherwise, the perpetrator is set free.

Form one perspective, there's something to this: it saves on the cost of lawyers and prisons. But as Josh says:

Of course, when we look around at various modern legal systems, none of them look even remotely like the hypothetical system. What gives? Are modern legal systems just really bad at minimizing costs? Does the system just seem crazy because it is so different than our own? Or is this discussion missing something?

What Josh is doing here is moving towards what Rawls called a reflective equilibrium. This is the process whereby we go back and forth between high theory and our everyday judgments, revising either or both until they are consonant. As Rawls said:

It is obviously impossible to develop a substantive theory of justice founded solely on truth of logic and definition.

Instead, he said, logically-derived principles must be checked against facts - in his case, the facts being "our considered judgments in reflective equilibrium" - until we have a set of beliefs that hang together.

It's not just a theory of justice for which this is true. Rawls thinking applies more generally.

In financial markets, our beliefs are marked to market - in liquid ones with transparent prices, whether we like it or not. If you lose money then no matter how clever you are you have been wrong. This is one reason why I advise young people to work in financial markets. Doing so teaches you that your best ideas are often wrong and thus might imbue humility - a virtue lacking not just in Johnson's pigheaded idea that he knew more than the experts about long Covid but also in most of the contributors to the poshcuntstalkshitshows that pass for current affairs programming.

The same thing happens in science, when it is done properly. As Richard Feynman said:

It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.

Both cases require an exercise in Rawlsian reflective equilibrium. We must check both the facts (are the experimental results actually correct? Has the stock price fallen for a merely temporary reason?) and our beliefs (Were we wrong and if so why?) until we have better consonance between the two. That's just good Bayesian updating.

It's not just in the natural and social sciences that this should happen, though. It also happens in religious orders. Lorraine Daston describes how the many strict rules for Benedictine monks are tempered by the discretion of the abbot:

No precept is so rigid that it cannot be bent if the abbot judges that circumstances warrant an exception: it all depends.

In this way, an equilibrium is reached between the theory of the ideal religious community and the demands of everyday life. And, says Daston, the point holds more generally: rules must be tempered by discretion.

This is true in creative endevaours. The last of Orwell's rules for writing is: "Break any of these rules sooner than say anything outright barbarous." Writing is a process of reaching reflective equilibrium, going back and forth between rules of good writing (not necessarily Orwell's) and what sounds right.

The same's true in music. Charlie Parker advised: "First you learn the instrument, then you learn the music, then you forget all that shit and just play." But of course, you never really forget technique and scales. Instead they become part of your muscle memory; it's not good enough to have your brains only in your head. What you play is a reflective equilibrium, a consonance between instinct and technique or between the rules of harmony and your ears with each constraining and thus enhancing each other. Freedom, wrote Arnold Schoenberg "prospers best when under control."

You might think all this is trivially obvious. It's not. There are many instances of people ignoring this.

One of my favourites was when Steve Levitt and Stephen Dubner visited then-PM David Cameron to suggest reforming the NHS:

We suggested to Mr. Cameron that he consider a similar policy in a different arena. What if, for instance... everyone were allowed to go down to the car dealership whenever they wanted and pick out any new model, free of charge, and drive it home.”

Cameron, in a rare display of wisdom, showed them the door. What Levitt and Dubner failed to do was engage in reflective equilibrium, to ask: if the NHS is so theoretically absurd, why is it so popular and why so effective (before the Tories did their worst)? They didn't equilibriate between theory and big facts. They failed to see that theories of economics, just like theories of justice cannot be "founded solely on truth of logic and definition."

And that was not untypical of a lot of economics before the (arguable) "empirical turn". Many mainstream economists over-valued theory to the neglect of real world forces. They didn't ask: "this general equilibrium; is it in the room with you now?"

Not all departures from reflective equilibrium are merely absurd, though. They can be deadly. The Chilcott report said:

Senior decision‑makers – Ministers, Chiefs of Staff, senior officials – must have a flow of accurate and frank reporting...At times in Iraq, the bearers of bad tidings were not heard. On several occasions, decision‑makers visiting Iraq…found the situation on the ground to be much worse than had been reported to them.

There was not the back-and-forth between the theories of the government and the facts on the ground, and no equilibrium between the two.

That, though, was perhaps an isolated failure by Blair. Otherwise, he did achieve an equilibrium between his two big beliefs: the desire to get elected, and to be a socially democratic government. I'm not sure the same can be said of his epigones, who are pursuing "electability" to the denial of the facts of our widespread economic failure.

A more absurd example of such a failure was the Truss-Kwarteng Budget. Their enthusiasm for tax cuts was not challenged by facts: what's the evidence that tax cuts boost growth? How long does it take for them to do so? Should we be loosening fiscal policy at a time when bond markets are worrying about inflation? Again, no back-and-forth, no equilibrium.

The Tories might have learned from that episode that they must occasionally test their beliefs against the evidence. But they haven't. Instead we saw at the party conference a further retreat from any notion of having to do so. There was talk of the need for change without asking why this was necessary after 13 years of Tory government, and utter gibberish about 15 minute cities and meat taxes.

It's easy to see why the Tories should avoid trying to reach a reflective equilibrium. For years, they've had no need to do so as the media has consistently accepted their fictions, from austerity to "£350m a week for the NHS". And what's more, if you've no ideas about reality, why not escape from it?

Which in one sense is unconservative. Edmund Burke anticipated Rawls' reflective equilibrium when he demanded that high theory meets empirical evidence:

I cannot stand forward, and give praise or blame to any thing which relates to human actions, and human concerns, on a simple view of the object, as it stands stripped of every relation, in all the nakedness and solitude of metaphysical abstraction. Circumstances (which with some gentlemen pass for nothing) give in reality to every political principle its distinguishing colour, and discriminating effect. The circumstances are what render every civil and political scheme beneficial or noxious to mankind.

Now, you might have noticed that my examples of good use of reflective equilibrium come from the arts and sciences (investing is applied social science) whilst examples of its non-use come mostly from politics. Which poses the question: why is it so easy for politicians (of all parties) to sometimes be "operating in purely imaginary worlds," to use Kenneth Boulding's phrase? What must change to enable politics to be more like fulfilling, progressive and successful disciplines? Few political partisans, however, care about such questions: all that matters to them is that their side wins. Which is part of the problem.