On two subjects I shall be addressing a Conservative audience, bewildered and no doubt slighly annoyed at being presented with an entirely unknown Liberal economist:

After the Crunch: how best to beat poverty? Kate Green of the CPAG is the star turn here, though Theodore Dalrymple and Tim Montgomerie are also speaking.

TD is actually Anthony Daniels. I note in Wikipedia that

In his commentary, Daniels frequently argues that the so-called “progressive” views prevalent within Western intellectual circles minimize the responsibility of individuals for their own actions and undermine traditional mores, contributing to the formation within rich countries of an underclass afflicted by endemic violence, criminality, sexually transmitted diseases, welfare dependency, and drug abuse.

So I am not expecting from him the answer “Bung them more benefits.  If only we tax the rich 20% more, we can beat poverty”.  I will not be so bold as to say what I do expect, because I don’t really know if there is an honest Conservative answer to how best to beat poverty, except “Each person beats poverty themselves: it is not someone else beating it for them”.

Whereas from Kate, I am expecting: “Bung them more benefits.  If only we tax the rich 20% more, we can beat poverty”.  I can guess this because I have seen her in formidable action at several previous events.  Two weeks ago I was annoyed because of the fiscal indifference.  But as I was reminded by a mate, what do you expect?  CPAG to check the deficit and change their mission statement from:

to be the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.


“make child poverty a little less bothersome, if the Treasury can afford it and subject to nothing else more pressing coming up”


The only original thought I have for this blog is: should benefits per head rise in a recession?  Because in boom time, not getting a job is more a matter of choice, in a slump it’s nothing of the sort.  And the rise would add even more heft to the automatic stabilizers.  But could they instead exacerbate the swings?

The other topic is Public Services: 10% cheaper, 10% better.  The other speakers are Stephen Freer of CIPFA and John Redwood, MP.   Gulp.  I’m fairly clear I can tell what the views of the latter on public spending per se are.  No surprises there, but his generalisation between recent growth levels and public deficits is a bit lazy.  Our recession on the whole has been less than Germany’s, and the US has had a better year with a much bigger deficit.  Keynesianism in a slump is not so easily dismissed.

But the topic is delivering public services, not their fiscal-economic impact.  And here it is harder to get a clear view, beyond some straightforward maths: if we used to have 450,000 civil servants and now have 750,000, there must be waste.   This makes it seem a little too obvious:

Savage cuts are not a good idea. There is a need to administer the obvious cuts, the efficiency raising cuts, the termination of undesirable programmes, the cuts that would have many of us cheering in the streets. We want an end to the over bossy surveillance society, an end to the waste and fraud, to the needless industrial and financial subsidies, to the over regulation of local government, an end to enforced regionalisation and to national databanks. We want an end to roadworks which make the roads more congested and less safe, an end to the explosion of inspectors and thought police, an end to the consutlants gravy train and the culture that makes us pay three times over for anything the public sector attempts to do.


6 thoughts on “Off to the Conservative Conference

  1. The only original thought I have for this blog is: should benefits per head rise in a recession? Because in boom time, not getting a job is more a matter of choice, in a slump it’s nothing of the sort. And the rise would add even more heft to the automatic stabilizers. But could they instead exacerbate the swings?

    Hmm, I’m not so sure about that, even in good times a vast number of jobs are destroyed. Of course, in the good times the same or more are created. In a jobless recovery less are created than destroyed yet there remains economic growth.

    Capitalism is very much a system that creates unemployment, drawing a sharp distinction between benefit levels between “good times” and “bad times” can miss the fact that there are still individual bad times during the good too.

    It may serve also serve to differentiate slumps from capitalism proper, when they are very much a part of it.

  2. As someone with a keen interest in economic history (masters, global history, LSE), I am always slightly bemused by broad statements about what Capitalism does, as opposed to . . . what – feudalism? Cuba? Sweden? Chinese imperial economy direction? Peasant landholding?

    Yes, there are always bad times for all people – the boom years had a lot of churn. As someone who has enjoyed having several careers, I am kinda glad I was not guaranteed a job for life from 21 onwards. That’s the lucky liberal in me.

    But I think your point is right in its practical implications: having a benefit that boomed in a slump would concentrate all sorts of political lobbying on the subject of “are we having hard times yet”. It would not work.

    By the way, I find your stuff very challenging, but had real difficulties with your take on economic history vis a vis chinese growth -made me write a really overlong post:


    I’d be interested in your thoughts

    1. Yeah I saw that, didn’t realise you were the same person! I have been meaning to write a reply for a while but it totally slipped my mind of late.

      I have to admit I was definitely engaging in a little hyperbole with that statement but I do consider China’s growth fundamentally flawed. It was my dissertation subject and its a little difficult to bring the nuance necessary in just one blog post.

      I’ve started trying to serialise my dissertation, this is the first post proper http://leftoutside.wordpress.com/2009/10/01/china-at-60-misunderstood/ but all are going to be labeled under the tag The New Great Transformation, its losely based on the work of Karl Polanyi, I’d be interested in what you think,

      I’ll tie a reply in to your post when I get around to writing part three. I think the next section is going to be more theoretical.

      With regard to capitalism creating unemployment I’m referring to the destructive side of creative destruction side of things, which is appears unique to capitalism.

      A slump tends to be shorter than a boom, at least that tends to be the rythym and I hope we return to “normal” growth. All the time people lose their jobs that don’t deserve it and the cumulative total during good times is probably large than the numbers that lose jobs in the bad. That’s testable, but I don’t have the data, however, that’s where I”d see a flaw in differentiating between benefits in good and bad times.

  3. Very interesting. I never read all of Polanyi, but remember being a bit hostile to the view (axiom? Proven?) that markets did not really exist before the Industrial Revolution – I’m thinking “The Merchant of Venice, anyone? Edward III and the Florentine merchants?

    And we were given this to read
    http://www.jstor.org/pss/183139 about Dahomey Inflation

    and M. Silver, ‘Karl Polanyi and markets in the Ancient Near East: the challenge of the evidence’,

    seemed to add to this.

    I personally have less problem with the destructive side of Schumpeterian growth. Distinguishing job losses that ‘don’t deserve it’ from those that do sounds tricky. I mean, I got my first decent job in 1996, partly because 3 years before the company had shed workers who weren’t that good. If that mechanism had not been in place, I would have been denied my opportunity to work there (and a great opportunity it was). But the visible losers are always the ones who have rights.

    I also wonder about the counterfactual. Sure, you get mass unemployment under capitalism, but the other systems are either so close to subsistence or ancient and unmeasured that we don’t really know what the alternatives were. In my view, everyone was always employed in some primitive systems like feudalism because they were so close to the starvation point that they had no choice. Not because they were happily insulated from nasty free markets in satisfying permanent employment . . .

    look forward to reading more of your stuff

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