Stumbling and Mumbling

Strong links vs weak links

The general election should rid us of one of the most vicious, corrupt and incompetent governments in our history, but it will probably not install a government able or willing to meet the huge challenges of a failing economy, wrecked public services and climate change.

With players of the quality of Saka, Foden, Rice and Bellingham, England have a great chance of winning the Euros this year, but with players like Maguire or Dunk they do not.

These two paragraphs seem very different. But they have something important in common. They illustrate the distinction between strong-link problems and weak-link ones.

A weak-link problem is where success depends upon the quality of the worst component, whereas a strong-link problem is where it depends upon the quality of the best. So, if you're looking at Foden and Saka, you're thinking in strong-link terms whereas if you're looking at Maguire and Dunk, you're seeing through a weak-link lens. Similarly, the election should solve the weak-link problem of ridding us of a terrible government, but it will not solve the strong-link one: it'll not give us the best possible government.

This distinction is ubiquitous.

If you're running an airline, oil rig or nuclear plant your focus must be on eliminating the weak-links that can cause catastrophes. Other businesses, though, have strong-link problems. It doesn't much matter if there's a lot of rubbish on Netflix as long as there's sufficient good stuff to attract customers. It has the strong-link problem of how to find good shows and can ignore the weak-link one of what to do about rubbish*.

Many growing companies face strong-link problems - how to stand out sufficiently to win new customers. Mature ones, by contrast, have weak-link problems: they must avoid doing anything which alienates existing customers.

The distinction also matters in investing. Many retired people have the weak-link problem of how not to lose money - a problem which is surprisingly easy to manage for sterling-based investors. Venture capitalists, however, have the strong-link problem: they must find one or two companies with massive payoffs to cover the inevitable losses of failing companies. This is why a state investment bank is a good idea economically speaking - because the state can better throw money around than the private sector - but a bad idea politically because the shitmedia will brand the inevitable failures as a waste of taxpayers' money.

By contrast, economic development can be a weak-link problem. Poor countries are poor often because important things are lacking - reliable electricity, roads, ports, property rights and so on. They can achieve growth therefore by improving these weaknesses. As Charles Jones puts it (pdf):

In any production process, there are many things that can go wrong that will sharply reduce the value of production. In rich countries, there are enough substitution possibilities that these things do not often go wrong. In poor countries, on the other hand, any one of several problems can doom a project. Obtaining the instruction manual (the “knowledge”) for how to produce socks is not especially useful if the import of knitting equipment is restricted, if replacement parts are not readily available, if the electricity supply is erratic, if cotton and polyester threads cannot be obtained, if legal and regulatory requirements cannot be met, if property rights are not secure, or if the market to which these socks will be sold is unknown.

It's not always the case, however, that rich countries do have enough substitution possibilities to prevent trouble when one element fails. As we saw in 2008, the collapse of banks led to big falls in GDP. The crisis taught us that when thinking about banks we have a weak-link problem: the priority is to avoid disaster.

What's true of one industry, however, isn't true of others. Whilst the collapse of NatWest triggered a crisis that of Wilko, Debenhams, Woolworths or Cazoo did not. Which tells us that in well-functioning markets we have strong-link problems: we needn't worry about the existence of bad companies because the market will - eventually - select for good ones.

This poses the question: is the impending collapse of Thames Water a weak-link problem like NatWest or a strong-link one like Wilko? I suspect the latter: it doesn't matter if Thames Water can't supply water as long as somebody can; the logo doesn't matter as long as the taps still run.

Yet another weak-link problem is monetary policy. For Milton Friedman good policy (pdf) was a weak-link problem: “a negative proposition: avoid major mistakes.” The strong-link problem - boosting economic growth - requires other policies.

By contrast, science and the arts are strong-link problems. It doesn't much matter if there's a lot of dross as long as people aren't daft enough to act upon bad research! What matters is that quality research is also done, as this is where progress occurs.

Strong-link and weak-link problems have very different solutions**. With weak links, we need risk-aversion and a focus on high minimum standards and safety. With strong-link problems, however, we need to embrace risk, diversity and competition.

This means that sometimes, solving a weak-link problem might exacerbate a strong-link problem. This is perhaps true of the US constitution. It has done a good job in solving the weak-link problem of protecting Americans from tyranny, but not perhaps so good in delivering effective active government. It might also be true in academia: managerialism has weeded out weak-links - academics who are idle drunks and sex pests - but has been less good at fostering strong-links; pressure to publish has given us shoddy research as academics have less time to focus on good work. Many free marketeers, such as Ryan Bourne in Economics in One Virus, add that regulation protects us from the weak-links of dangerous medicines (except OxyContin) but at the expense of slowing down the development of effective ones.

There are trade-offs here, and we must be aware of them.

Often, though, people are not. Sometimes, they have strong-link thinking where we need weak-link thinking.

Boris Groysberg has given some examples (pdf) of this. He's shown that when a good manager of growth companies takes over a mature business (or vice versa) the result is often poor performance; a growth manager has a strong-link mindset whereas mature businesses need weak-link thinking. What matters is not merely an individual's skills, but the match between them and the job requirement.

I saw other examples back in the day job: retail investors who claimed to be risk averse sometimes piled into (correlated!) spivvy Aim stocks.

We see it too in recruiting. Michael Housman and Dylan Minor have shown that companies spend too much time looking for "talent" when they should instead be screening out toxic workers such as the rogue traders who might lose billions, the sexual harrasser who attracts expensive compensation claims or the over-mighty CEO such as Fred Goodwin who could bring down the whole firm.

We also see it in academic publishing, where peer review selects for work that corroborates reviewers' prejudices and selects against heterodox ideas, thereby restricting the diversity upon which the development of strong links depends. Even papers that helped their authors win Nobel prizes have been rejected.

Politics gives us other examples. Sunak has recently spoken of how AI might quickly double productivity whilst Hunt has called for the creation of a "British Microsoft". These are examples of strong-link thinking. But in fact we can better improve our economic performance with weak-link thinking - by simply not doing stupid things such as having trade barriers with the EU or excessively complex taxes and planning rules. Governments should stop talking about being world leaders and instead set themselves the more challenging aspiration of rising to dull mediocrity.

Herein, however, lies a problem - incentives. Sometimes, bosses are incentivized to be strong-link thinkers when they should be weak-link ones. The more naive among you might think that they should ensure that their organizations solve a weak-link problem and eliminate egregious wrong-doing. But this did not happen with the Post Office. As long as the bonuses kept coming, Paula Vennells had no incentive to stop driving sub-postmasters to suicide. Similarly, you might think that police recruitment is a weak-link problem: because bad coppers can do huge harm it's important to weed them out. But because the costs of a Wayne Couzens or Cliff Mitchell and many others are borne by their victims much more than by Home Secretaries or Met Commissioners, such screening is inadequate.

We had the same problem in the run-up to the financial crisis. Banking should be a weak-link problem - stopping them cratering the economy by going bust. But bankers were incentivized to increase returns and take on risk - that is to chase strong links.

My story here is about selection mechanisms. All institutions - be they companies, markets, government departments, elections or whatever - are selection mechanisms: they select for some behaviours and against others. The questions are: what do we want our institutions to select for or against; how well do they do such selections? and; how might we improve them? Such questions are unlikely to be much discussed during this election campaign.

* This is why Disney's decision to withdraw some films from its platforms was so odd, and costly.

** Insofar as they have solutions at all which sometimes they don't: Gareth Southgate can't create top-quality central defenders.

Some defunct economist

"To understand the man you have to know what was happening in the world when he was twenty." Napoleon's claim helps explain one of the big problems with centre-left economic policy.

He was right. We now have strong evidence that economic conditions in our formative years shape (pdf) our outlook much later in life. People who experienced recessions when young are less likely to own risky assets when they become old and rich enough to do so. Chief executives who saw hard times in their youth run their companies more conservatively (pdf) than others; and central bankers who saw high inflation when young are likely (pdf) to be more hawkish when they are in office.

And here's the thing. For most of us over 40, our youth was characterized by mass unemployment or the threat thereof, something we know to be a cause of great misery (pdf): the jobless rate was over 11% when Starmer (and I!) turned 20, for example. This means the economic thinking of well-meaning people throughout their lives has been dominated by one question: how to create jobs. It's no surprise, therefore that despite scaling back the Green New Deal, Starmer is still promising to create tens of thousands of good new jobs.

But, but, but. The ideas of one era are not always well-suited to the next. As Maynard Keynes famously wrote:

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.

This is true today - and that "defunct economist" is Keynes himself, and in particular this:

I see no reason to suppose that the existing system seriously misemploys the factors of production which are in use...When 9,000,000 men are employed out of 10,000,000 willing and able to work, there is no evidence that the labour of these 9,000,000 men is misdirected. The complaint against the present system is not that these 9,000,000 men ought to be employed on different tasks, but that tasks should be available for the remaining 1,000,000 men. It is in determining the volume, not the direction, of actual employment that the existing system has broken down.

This passage is pretty much wholly inapplicable today. The volume of employment is satisfactory: we are not quite at full employment, but close to it, especially for skilled workers.

In this context, creating good jobs would be inflationary. Yes, vacancies at decent pay for home insulators, housebuilders, care workers, solar panel manufacturers, nuclear weapons producers and so on would attract applicants. But they'd come not so much from dole queues and the economically inactive as from workers in other jobs. In an attempt to retain their staff their employers would raise pay. The result would be inflation.

Of course, macroeconomic policy can prevent this by either raising taxes or interest rates, both of which destroy jobs as a means of curbing inflation. At near-full employment, such destruction is the necessary counterpart of shifting labour towards a Labour government's higher priorities.

There's another reason why we need job destruction. It's a necessary part of raising productivity. As Jonathan Haskel and colleagues have shown (pdf), a lot of productivity growth comes not from existing firms improving their efficiency but from inefficient plants shutting down and better-performing ones opening. This is why more market competition must be part of any strategy to raise productivity: it encourages the entry of better firms and exit of worse ones.  

Which poses another problem: which jobs do we want to destroy? Higher interest rates hit hardest the construction sector - meaning you can say goodbye to Labour's hope of "getting Britain building again." Which suggests that, as Simon says, Labour should break its commitments and raise income taxes, thereby destroying jobs in consumer-facing industries such as retail and hospitality.

These jobs, however, might not be the only ones we want to cut. Keynes was flat wrong. The existing system does seriously misemploy factors of production.

In some cases, this is because of bad policy choices. An excessively complicated tax and benefit system has created unnecessary jobs for lawyers, accountants and DWP bureaucrats. The fact that policy is up for sale has created a big lobbying industry. And our regulatory agencies have been more effective in expanding bureaucracy than in reining in the industries they nominally oversee: Ofgem and Ofcom have over 2500 employees between them.

In other cases, it's because of standard market failures. Asymmetric information means that “genuinely unskilled” fund managers stay in work at the expense of their clients. Unpriced externalities mean that polluting industries are too big - be it the environmental pollution of carbon producers, the risk polluters of the financial system or the intellectual pollution of the legacy media. And agency failures and monopoly have led to the creation of bullshit jobs and excessive workplace surveillance. Friedman was right to say that "if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get" but he should have added that this problem isn't confined to the public sector.

None of these government or market failures will be solved by the standard macro policies of higher taxes or interest rates. They require microeconomic policies which few people other than some "degrowthers"* are thinking about. As Jason Hickel has written:

What industries are already big enough and shouldn't grow any larger? What industries could be usefully scaled down? What industries do we still need to expand? We have never asked these questions. (Less is More, p220)

In this context, we encounter some more defunct economics - the notion that a high wage equals a good job. This is not necessarily the case, even in those cases where wages are equal to marginal product. For one thing, it is the private marginal product that sets wages not the social product, and the two can differ: contract killers (pdf) often have high wages (pdf) but we wouldn't want to create these "good jobs". In the same way, we should aim to reduce, not increase, jobs in socially useless finance, in advising on tax avoidance or in producing pollution.

What we need, therefore, is job destruction. Not just the creative destruction that increases productivity in well-functioning markets, but also the destruction of some jobs to shift labour to higher priorities. Right now, we need less Keynes and more Schumpeter.

Here, however, we run into an unavoidable trade-off. Rachel Reeves has rightly spoken of economic insecurity being "corrosive of individuals’ physical and mental health": those of us who spent our formative years in such insecurity are well aware of this. But such insecurity is the flipside of much-needed job reallocation. A big policy question is how to ameliorate this trade-off. A more intelligent welfare state and active labour market policies are part of the answer. What's not part of the answer is the pretence that creating jobs is the whole of the story. It's not 1982 any more.

* A bad word for a possibly good thing.

On classical music

Classical music is in crisis. Those who should be promoting it seem embarrassed to do so; some universities are closing music departments; and Alexandra Wilson and Ian Pace fear that it is being sidelined because of concerns about elitism and its associations with colonialism.

The latter, however, puzzles me. Classical music can be seen not as the ally of imperialism and capitalism but as its antithesis. Marx himself regarded it as an example of free, unalienated labour. And in the 50s and 60s its devotees thought it a pure art form in contrast to commercialized and capitalistic pop music. Anthony Burgess (himself a composer as well as author) spoke for many when he said that pop songs were "foisted on [young people] by middle-aged entrepreneurs and exploiters who should know better."

Some of its supporters have also argued that classical music is democratic. Whereas a successful pop career often (but not always) requires the backing of a big record company, anyone can make their own classical music. In the liner notes to Bach Trios by Yo-Yo Ma, Chris Thile and Edgar Meyer, Timo Andres writes of Bach's music:

That everyone has access to this trove - and can, with a little experience, will these same creations into being - is one of the most profoundly democratic facts I know of, and stands as a great equalizer in an unequal world.

Of course, it is not often seen this way. One reason for this is that state schools do not inculcate that experience, preferring to be mere ideological state apparatuses preparing us for the world of drudgery. It is for this reason that pop music, like classical (pdf), has a problem with its performers coming from a narrow demographic : as the Sutton Trust points out, pop stars are disproportionately privately educated, as it is private schools where are more likely to provide a musical education. The fault here, though, is not with the music but with our class-scarred society.

In this context, it shouldn't be surprising that many leftists have loved classical music. One of the most interesting of these was Lenin. You would expect him of all people to be alert to music being tainted by capitalism and imperialism. For him, however, the problem was the exact opposite - not that it was associated with a brutal system but rather that it was too humanizing. Here's Georg Lukacs:

Gorky recorded Lenin’s very characteristic words spoken after he listened to Beethoven’s Appassionata sonata: “I know the Appassionata inside out and yet I am willing to listen to it every day. It is wonderful, ethereal music. On hearing it I proudly, maybe somewhat naively, think: See! people are able to produce such marvels!” He then winked, laughed and added sadly: “I’m often unable to listen to music, it gets on my nerves, I would like to stroke my fellow beings and whisper sweet nothings in their ears for being able to produce such beautiful things in spite of the abominable hell they are living in. However, today one shouldn’t caress anybody - for people will only bite off your hand; strike, without pity, although theoretically we are against any kind of violence. Umph, it is, in fact, an infernally difficult task!”

Lenin's fears have of course since been refuted. The fact that Nazis murdered millions whilst listening to Schumann and Mozart showed that classical music does not humanize people. That was Burgess's point in having Alex listen to "Ludwig Van" whilst fantasizing about murder.

It's unsurprising, then, that fans of classical music are often racists, sexists and snobs, as evidenced in the risible Michael Henderson's objection to any northerners appearing on Radio 3. Such bigotry is merely highlighted by the tendency of some listeners to use it to press for their own moral superiority: "Look at ME emoting to this. Don't I have such sophisticated sensibilities?"

What we say of football, however, is also true of classical music: it has a racism problem because society has a racist problem.

It's in this context that we should interpret the claim that classical music is associated with colonialism. It could not be otherwise. Some of it, most famously Rule Brittania, is an outright celebration of that. Others are part of that mindset, such as Saint-Saens use of African rhythms or Bartok and Vaughan Williams's "cultural appropriation" of folk music. And of course, music was disproportionately written and performed by affluent white men simply because it was they who had disproprtionate access to time and opportunities.

But, but, but. When Marx said "the mode of production of material life conditions the general process of social, political and intellectual life" he did not add "except for the stuff you like." Yes, a lot of classical music arose from imperialist societies, but so too does modern music arise from neoliberal ones. Quite a bit of it celebrates hyper-individualized consumer capitalism; Beyonce advertising Lexus is perhaps not the worst example of this. If we're going to find Beethoven guilty by association with capitalism, we must also find Nicki Minaj so. Or, of course, we could just lighten up.

This does, not, however, mean we should "cancel" (ugh) it. As Edward Said noted in Culture and Imperialism (pdf), recognising that culture is "manifestly and unconcealedly a part" of the imperial process does not mean we should reject its artefacts. Instead, he said, appreciating the connections "actually and truly enhances our reading and understanding of them." You can both deplore imperialism and at the same time celebrate the greater achievements of western culture, as indeed C.L.R. James did. And we can do this whilst recognizing that these achievements are not confined to dead white men. The better talk of "decolonizing music" is merely about recognising that classical music does not have a monopoly of great music - which is surely obviously true.

Here, I'll make a personal point. I came to classical music late in life. I didn't hear it at home and school was a Gradgrindian ideological state apparatus relieved only by the incompetence that caused it to employ one or two inspirational teachers. Instead, I discovered it after I started playing the guitar, and when, to improve that playing, I learned music theory. For me, the gateways to classical music were Barrios and Villa-Lobos. This means that I don't associate the music with nostalgia, and am left cold by a lot of emoting about it: for me, music is a technical process.

It also means that I can't see a clear distinction between classical and non-classical music: I'm not sure there's an iron curtain between Max Richter and Low or Brian Eno, for example. Better men than I share this view: Chris Thile plays Bach sonatas alongside bluegrass and Richard Thompson has played Henry Purcell and Britney Spears on the same album.

Which is why I'm saying all this - because it is not often said anywhere else. There are perspectives on classical music which are neither white liberal guilt nor facile snobbery.

A case for fiscal austerity

The Labour party's talk of maxxing out the country's credit card is an obnoxious lie. But this does not mean the party is wrong to want a tight fiscal policy. There is a good case for it to do so, and it's got nothing to do with arbitrary fiscal rules or the Tories having "spent all the money."

Labour itself isn't going to make this argument, and why should it given that politics is about power and not persuasion? So I'll try.

It starts from the brute fact that unemployment is close to a 50-year low, at just 3.8% of the workforce. Granted there are another 1.9 million people (equivalent to over 5% of the workforce) out of the labour market who say they'd like a job, but many of these are unwell or have caring commitments and so are available only for lighter or more flexible work. The question "where will the money come from?" is a stupid one. But "where will the workers come from?" is certainly not.

Yes, there are some answers: immigration; some early retirees could be tempted back to work by better working conditions; and cutting NHS waiting lists would also get some back to work.

Nevertheless, the fact is that the pool of available labour is small. Yes, there are some GPs out of work, but fewer builders and skilled workers than there were a few years ago.

Which means that any significant rise in public spending and hence demand for labour is likely to bid up wages. The Bank of England will see that as potentially inflationary and would raise interest rates. This wouldn't wholly be disastrous: higher rates would help bring down house prices and reduce some of the more egregiously socially useless financial activities. But it does mean you could kiss goodbye to big housebuilding, as this is the most interest-sensitive sector of the economy.

Yes, Labour could prevent this by raising the inflation target. But nobody in politics is arguing for this. And whilst there's a case for doing so, it doesn't solve the physical constraint, of there being just not enough doctors, housebuilders or skilled workers in the green economy.

You might object that there's an obvious solution to all this: to raise taxes. The need to do this is not to raise money: governments can do that anyway by printing or borrowing. Instead, it is to free up real resources. Higher taxes would cut consumer spending thereby depressing demand for labour in retailing and hospitality, thus releasing workers to go into social care, construction, decarbonizing and the other things we want to do.

There are, however, big problems with this.

One is political. There's been no preparing of the ideological ground - no campaign to say that taxes are the "price we pay for a civilized society" or even that they are an economic necessity if we're to have good public services. From this background, tax rises would look like Labour going back on its word, being duplicitous.

And even if taxes were to rise, there'd still be issues.

One is that the mega-rich don't spend much and so higher taxes on them would not free up many real resources. Justice requires that we tax the mega-rich more and help the worst-off. But this does little to achieve the economic aim of shifting resources towards the public sector and away from the private. That requires tax rises upon those who will cut their spending as a result. If we want better public services, we must pay for them ourselves.

But there are problems with this, even aside from the unpopularity.

One is that higher taxes will cut jobs in retail and hospitality but do little to destroy the many socially unproductive but often well-paid jobs: the bullshit jobs created by managers who expand their empire (or promote an image of "wokeness"!) at the expense of shareholders; the lawyers and tax advisors who exploit an overly complicated tax system; bureaucrats who administer a repressive benefits system; fund managers who rip off investors; and producers of various forms of pollution, be they carbon emissions, financial risk which taxpayers pay for; or the intellectual pollution of the media. To destroy jobs such as these requires microeconomic policies which nobody is even thinking about.

And then there's the fact that, quite simply, reallocating labour takes time.

My chart shows this by plotting a measure of labour reallocation. To see how this works, imagine an economy of five workers in each of two sectors. If employment in both sectors grows at the same rate then net labour reallocation is zero; for any worker shifting from one sector to the other another must go in the opposite direction. If, however, the sectors grow at different rates, labour is being reallocated. If employment in one sector falls from five to four and that in another grows from five to six, net reallocation is one. My chart measures this process across 16 main sectors, with net reallocation expressed as a percentage of the labour force.

This shows that reallocation is typically small - usually not much more than 1% of total employment, or less than 400,000 people per year.

The economy, then, is sticky and slow to change. Most people prefer to stay in jobs they know; employers prefer relevant experience; it takes time for people to discover opportunities in different industries; to decide to make a radical career change; and to retrain. It is only times of distress that force many people into such change; note that the highest reallocation rates were in bad times such as the 2009 recession and 2020 Covid outbreak.

We can't therefore merely flick a switch and move tens of thousands of workers quickly from retailing to healthcare, construction or the green economy. The world just doesn't work like that. Change has to be gradual. Reeves is right to say "we’re not going to be able to turn things around straight away."

There is, therefore, a case for Labour having a tight fiscal policy.

You might object that all this seems to contradict a great point made years ago by Dan Davies: good ideas don't need lots of lies told about them.

I think there's an answer here. Dan's point applies when the audience is intelligent and informed. Which is not the audience for Labour's drivel about the credit card being maxxed out. When Jones, Reeves and Starmer use such language they are speaking not to economists but to political reporters who are institutionally stupid. The arguments they use to other audiences would, I would hope, be a little like the one I've made.

And it is emphatically not a right-wing argument. Macroeconomic policy must not be a matter of ideology but of empirical fact: you should run a loose policy when there's spare capacity in the economy and a tight one when there isn't. Truss's unforgivable error was to not appreciate this.

What's more, a tight fiscal policy is entirely compatible with radical economic policies elsewhere: land value taxes, a basic income, a maximum wage, planning reform, economic democracy, proper regulation of monopolies and so on. And don't think such measures don't address the pressing need to improve public services. They do: anything that gets the economy growing will boost tax revenues.

One of the great failings of social democracy has been think of economic policy too much in terms of public spending and not enough about other policies to foster equality and efficiency. The big failing of Starmer's Labour is not that it is offering fiscal austerity, but that it is offering nothing else.

On lazy moralizing

Politicians prefer lazy moralizing to intellectual enquiry.

I say this because of Sunak's speech last week in which he condemned far-right extremists "who are hostile to our values and have no respect for our democratic traditions." What he did not do in that speech is ask: why has right-wing extremism increased from a nuisance to something more troubling?

His opponents were quick to point out that Sunak's Tory colleagues have been promoting it. But that's only part of the answer. Anderson and Braverman have been sowing their seeds in fertile ground. We now have abundant evidence corroborating Ben Friedman's 2006 finding that economic stagnation breeds illiberalism and hostility to democracy. Ana Sofia Pessoa and colleagues have shown that "fiscal consolidations lead to a significant increase in extreme parties' vote share." Markus Brueckner and Hans Peter Gruener have described how "lower growth rates are associated with a significant increase in right-wing extremism". And other researchers have shown how deaths of despair - which are symptoms of underlying social problems - are correlated with higher support for Brexit and Trump. 

Sunak, however, like Starmer, omitted to mention all this evidence. Public opinion is not an exogenous datum. It is shaped by socio-economic conditions and political activity. Intelligent politics wouldn't merely condemn some beliefs, but inquire into their origins.

This, however, is by no means the only sign that Westminster is divorced from social science.

Another example is the demand from many Tories for tax cuts and a smaller state. What this misses is that achieving this cannot be merely a matter of ideology and will-power. A smaller state requires particular socio-economic conditions, one of which is an economy healthy enough to provide decent public services with a lower tax take*.

Yet another example was Liz Kendall telling youngsters that there'll be "no option of a life on benefits". This is mere punching down which not only begs the question of how many people actually want such an option, but also deflects attention from much bigger economic issues, such as how to end our 15 years of stagnant productivity and real wages.

What we have in all these cases is vacuous moralizing where there should be serious thinking about the social sciences. Gary Younge is dead right to say that the commentariat is "more interested in denouncing what is happening than understanding why it is happening." And Phil Burton-Cartledge is right to say that political commentary is "superficial" with no grasp of the social relations, the articulations of interests". And what's true of commentators is true too of politicians. As Lewis Goodall recently tweeted:

The Westminster (and much of the internal Conservative) conversations continues to miss everything which is driving [the collapse in Tory support] - the quietly radicalising effect of a collapsed NHS, a broken housing market, near bankrupt local government, a still sclerotic economy.

In one respect, this ignorance is unusual. Thatcher and Blair both entered office with some ideas about society and the economy - Thatcher about how we needed to curb trades union power and bring down inflation and income tax rates down and Blair about how social democracy could be updated to tackle late 20th century social problems. Starmer's Labour, by contrast, shows no similar sign of engaging with social or economic analysis. There is, in media-speak, no "narrative."

Why is this?

Partly, it's part of a general decline in intellectual standards, which has seen the expunging of intellectuals from public prominence. It's always easy to prefer lazy moralizing to serious thinking: such moralizing, of course, has as much connection to serious moral philosophy as economicky talk has to proper economics.

One reason for this decline lies in the dominance of the worst sort** of journalist, the Westminster political correspondent who views everything through the single lens of what plays well to their own tiny minds. Starmer can get away with drivel about the Tories maxxing out the nation's credit card because it is a good "attack line". The truth? Well who gives a damn about that?

The dominance of that sort of journalism has another effect. Politicians' priority is to respond to 24-hour news, and news itself has a bias in favour of salient individual events and against slower-moving trends. This means that important emergent trends - those underlying forces shaping public opinion - are neglected: the rise of immaterial labour which has contributed to liberal attitudes among the young; the economic stagnation that's led to illiberal reaction among others; or the rise of an unpropertied graduate cohort that feels alienated from politics.

Such ignorance is of course reinforced by the media's class bias: although most journalists are poorly paid the most dominant media figures are not, and come from a privileged elite (pdf) which feels little need to understand society and economics.

Such insularity and incuriosity means that the political class has been systematically surprised by important developments such as Brexit, the popularity among the young of Corbynism or the sudden collapse in support for the Tories.

But there's something else. Labour and the Tories are scared to look at the economy for fear of what they might find. It's unlikely that productivity and real wages can be raised much by mere tweaks acceptable to the forces of conservatism and their gimps in the media. Instead, thinking people who are not especially leftist now realize that promoting growth requires changes in property rights: higher taxes on landlords; less power to nimbys to block new building; the break-up of big companies; less restrictive intellectual property law; and tax simplification. All of these measures would be opposed by powerful interest groups. And that's before we even consider the possibility that inequality and even capitalism itself might be barriers to growth.

Attacking benefits claimants or migrants is easy. Attacks upon the powerful - land-owners, financiers, rentiers and monopolists - are not.

Taking the easy line, of course, runs into the dilemma: either we see public services decline even further, or taxes have to increase still more. Either risks further enflaming hostility to the political class - a hostility which will not take an intelligent or enlightened form.

You might think there's a way out of this dilemma: politicians should show some intellect and courage. But then, to call for this in the absence of socioeconomic conditions that produce such people is itself another form of lazy moralizing.

* There are other pre-conditions. Marxists would point to an absence of class struggle, whilst the right might point to a society and culture of individual or community self-help. All agree that a smaller state is the product of social conditions, not merely a moral desideratum.

** There's stiff competition, from financial journalists who can't distinguish between expertise and vested interest or from music journalists who don't know an ostinato from off stump.

You're a Marxist!

Many of you are Marxists - even though you might not realize it.

To see what I mean, consider the following:

One reason for Britain’s high costs in construction may be the result of NIMBY power. We need therefore to reduce this power, perhaps by allowing home-owners to vote (pdf) on schemes that would enable higher-density building. We also need to reform the tax system by replacing business rates with a commercial land value tax, which would be payable by the landowner, not the business. We need also to rethink intellectual property laws as the present patent system restricts growth and innovation. We must break up inefficient monopolies such as Openreach to foster more competition. And we must enforce the end-to-end and right-to-exit principles in order to weaken big tech and so foster new tech start-ups and the development of the internet.

There's a common theme behind these proposals. It's a belief that we need to restructure property rights - reducing those of patent-holders, landlords and monopolists and big tech - because existing ones constrain growth. Which is just what Marx thought happened:

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters.

Those calling for these changes, however, don't think of themselves as Marxists: I've quoted Sam Dumitriu, Sam Bowman, Ben Southwood, Stian Westlake and Cory Doctorow*. But in claiming that property relations have become fetters on growth, they are thinking in terms consistent with Marx.

And not just on this point. They presume that their proposals are feasible. They believe therefore that when there is a mismatch between what economic growth requires and actually-existing property relations it is resolved by the latter changing rather than by us having to accept stagnation**. This is what G.A. Cohen, in his Karl Marx's Theory of History: A Defence, called the primacy thesis: "the nature of a set of production relations is explained by the level of development of the productive forces".

This is historical materialism. I therefore welcome our new Marxist colleagues.

In being Marxist in this sense without knowing it they have an illustrious predecessor - Mrs Thatcher. The defining feature of her government was the belief that production relations had become a fetter on growth, and that these had to (and could) change. Hence the cuts in income tax - increasing income-recipients' property rights - and reductions in trade union power, which shifted the balance of power within production relations in favour of capital.

Thatcher was a better Marxist (and more successful politician!) than most of her Labour critics. Except for a short-lived sign of intelligence under John McDonnell, the party has not had in recent years a well-worked theory of how property relations must change to facilitate growth. Marxists and Stian and colleagues know something that social democrats often miss - that fostering economic growth sometimes requires more than merely looser fiscal policy.

Of course, accepting one Marxian proposition does not make you a Marxist, any more than my accepting Burke or Hayek's points about bounded knowledge and rationality make me a Burkean or Hayekian***. You can accept Marx's historical materialism which rejecting some of his other ideas such as alienation and reification; ideology; the labour theory of value; tendency for the profit rate to fall (pdf); and the centrality of economic class. I suspect you'd be wrong to do so, however, but then I also suspect that many non-Marxists haven't so much considered these ideas and rejected them so much as they just haven't thought about them at all.

Equally, of course, we Marxists aren't so confident that the incompatibility between the development of the forces of production and current property relations can be solved merely by moderate tweaks to the latter. It's possible that low profit rates (and expected profits) are stifling innovation and investment; that the crisis-prone nature of capitalism is also doing so (we're still living with the legacy of 2008); and that capitalist hierarchies are also inefficient. If so, more radical changes are needed than Dumitriu, Bowman, Southwood and Westlake are calling for. My view on this is merely empirical: we should go down their road and then see if we need to go further.

The fact that so many people are historical materialists in a loose sense does not of course make the theory true. Many of us would resile from its teleological element - the idea that it must inevitably lead to socialism. Others have questioned Marx's idea that production relations will change to enable the forces of production to develop on the grounds that it invokes functional explanations which can sometimes be suspiciously like just-so stories****: Wright, Levine and Sober's Reconstructing Marxism is good on this debate. And yet others might question whether we need big organizing theories at all: what's wrong, they say, with small-scale granular ideas of history or economics?

These are open questions. My point here, though, is to emphasize something that's often forgotten. Marxism is not just a normative theory of what should happen and it's certainly not, as Tories want to claim, some sinister conspiracy of loons. Instead, it is part of the western intellectual tradition - a set of ideas (many derived from Marx's predecessor's) which can help organize our ideas today. Non-Marxists shouldn't be so squeamish about borrowing his ideas or acknowledging his influence upon them.

OK then: some people distinguish between Marxians (those influenced by Marx's ideas without subscribing to revolutionary socialism) and Marxists. If you like this distinction, the Sams and Stian are Marxian. But, hey, why spoil a good title?

* I suspect, however, that Cory Doctorow, who advocates breaking up big tech firms, wouldn't be so surprised or alarmed to be called Marxist.

** Yes, dear reader, I am eliding here the distinction between what should happen and what does happen. But then, I'm not sure Marx wasn't doing the same.

*** Perhaps the difference between me and some others is that I acknowledge the fact that I think within intellectual traditions and make no claim to originality.

**** It's possible that the process is a little like natural selection in biology. "Goodish" production relations do eventually get selected for because people with an interest in developing the productive forces sooner or later get the power to change them. Such a process is consistent with there being long periods of tension between the productive relations and productive forces, just as somewhat maladapted species can survive for a while.

On unequal sympathy

It's easy to see why so many people accuse the west of hypocrisy. Joe Biden's condemnation of the murder of Alexei Navalny whilst bombing Yemen, Syria and Iraq and condoning Israel's attacks on Gaza suggests that he - like many western politicians - regards some lives as more worthy than others.

This apparent inconsistency recalls Adam Smith's idea of sympathy. "The source of our fellow-feeling for the misery of others," he wrote, is our imagination; it arises "by changing places in fancy with the sufferer."

Our imagination, however, is limited. It is easier to put ourselves in the shoes of some people than others, and so our sympathy is spread unevenly.

One source of this difference is simply that it's easier to "change places in fancy" with people like ourselves. Politicians find it easier to imagine themselves in the place of another politician than in that of a young Muslim in a poor country - hence their greater sympathy for Navalny than for the victims of Israel's attacks or western bombing raids. This tendency isn't always malign: it can be a reason for class-consciousness.

This helps explain why opinion about the Israeli government's attack on Gaza is dividing Jews and Muslims even thousands of miles away: Jews are more able to sympathize with other Jews facing antisemitic attacks, whilst Muslims are more able to sympathize with Muslims. Yes, there might be antisemitism on one side and Islamophobia on the other, but even if there were not we would still see this division.

There's another source of unequal sympathy. It's what Thomas Schelling called the identifiable victim effect. The death of a known person, he wrote, invokes “anxiety and sentiment, guilt and awe, responsibility and religion" but, he added, "most of this awesomeness disappears when we deal with statistical death.” As Dan Ariely wrote, "once we have a face, a picture, and details about a person, we feel for them.” (The Upside of Irrationality, p 241).

We have scientific evidence for this. Deborah Small and George Loewenstein gave (pdf) people $10 and offered them the chance to pass some of it onto someone else. When they were told that other person would be drawn randomly from a list, they gave an average of $2.12. But when they were told that the person had already been chosen they gave an average of $3.42 - more than half as much again even though they knew nothing else about the person. Which shows how statistical people are morally discounted.

In similar experiments James Andreoni and Justin Rao found (pdf) that when potential recipients could speak to the potential donor, the donor gave an average of 24% of the money compared to only 15% when neither party spoke. "Communication dramatically influences altruistic behaviour, and appears to largely work by heightening empathy."

Stalin might not have actually said "if only one man dies of hunger, that is a tragedy. If millions die, that’s only statistics", but if he did he was uttering a truth. We knew Navalny as an identifiable person, and this alone generates sympathy for him. By contrast the 29,000+ killed in Gaza are statistical deaths. This is why opponents of Israel's attacks want to put names and faces to the victims - because it humanizes them and so generates sympathy.

This same thing helps explain why MPs who were so relaxed about deaths caused by austerity are so agitated by death threats (assuming this to be what they are) against their colleagues. Not only are their colleagues like them and therefore easy to sympathize with, but also they are identifiable victims, whereas the victims of austerity are mere statistics: this asymmetry is reinforced by the fact that our political system actually selects for psychopathic traits.

The victims of austerity, like those of the Israeli attacks, are poor and obscure. Which was Smith's point: the rich and powerful are more visible to us, he said, and better known and so we sympathize with them more:

When we consider the condition of the great, in those delusive colours in which the imagination is apt to paint it, it seems to be almost the abstract idea of a perfect and happy state. It is the very state which, in all our waking dreams and idle reveries, we had sketched out to ourselves as the final object of all our desires. We feel, therefore, a peculiar sympathy with the satisfaction of those who are in it...Every calamity that befals them, every injury that is done them, excites in the breast of the spectator ten times more compassion and resentment than he would have felt, had the same things happened to other men....All the innocent blood that was shed in the civil wars, provoked less indignation than the death of Charles I.

The corollary of this, he said, is that:

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.

There is, therefore, a hierarchy of concern, with the rich, powerful and well-known at the top and the poor and obscure at the bottom. When John Donne wrote "Any man's death diminishes me Because I am involved in mankind" he might have added that some men's deaths diminish us more than others.

You might say all this is natural, even obvious. Maybe. But natural does not mean immutable. If there is an "expanding circle" of concern for others as Peter Singer has claimed, it's because we have learned to sympathize with more people than we did centuries ago. And our identities - and hence whom we sympathize with - vary with socioeconomic conditions and campaigning: much of bourgeois politics consists of an effort to reduce the salience of class by increasing that of anything else.

Herein lies a problem. D.D. Raphael writes that "Smith thinks of sympathy as the key to understanding moral judgment" (The Impartial Spectator, p 117). It is this that determines what and whom we condemn or condone. And yet sympathy arises from factors which, as he saw, are morally arbitrary: power and fame get more acclaim and sympathy than virtue or obscurity.

Which is why our moral judgments might seem absurd or hypocritical to outsiders.

To some extent, this is inevitable. All codes seem odd from the outside: try explaining to a non-fan why cricketers applaud a bowler aiming a 90mph projectile at a man's head but find it disgraceful if he scratches the ball.

Few people in politics, however, even try to step outside and question their own moral judgments. Moral claims often owes more to narcissistic self-righteousness than to detached thought. I've often criticized unthinking technocrats, but unthinking moralists are at least as detrimental to a healthy politics.

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.