Category Archives: Political issues

Hey, why don’t we requisition the Royal Hospital Chelsea for productive workers?

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Some telegraphery from Iain Duncan Smith here. In short, IDS thinks we need to physically move people of working age on benefits to where employers want them; to make space, we need to relocate pensioners in council houses to smaller homes.

It looks as though the guy has swallowed his own rhetoric about the state sector constituting some sort of ‘command economy’: we need to shrink it, all right – he seems to be saying – but as long as it exists there’s going to be some god damn commanding going on. Is it that he was in the army once? It used to be that ‘the command economy’ meant putting vital-to-the-nation industries into the regions (like building submarines in Barrow); now we look to be working up a policy of putting the regions into the industry; specifically, that of west London and Bristol, the two places IDS seems to have on his radar.

Whatever. I think he’s basically incoherent on this one. To put things in the simplest terms, either recipients of benefits have agency – which implies that while some will ‘get on their bikes and look for work’ (or relocate, or whatever), some won’t – or they don’t have agency, in which case you can’t expect them to exercise it. If it’s the former, then benefits should come with few strings attached, should not be excessively and repeatedly assessed, conditions of receipt should not be changed at short notice, etc. In essence, benefits – within the obvious and accepted-by-everyone constraint of affordability – should be a matter of entitlement rather than grant. And it might be that one of the things IDS is missing here is a recognition that it’s not only the current recipients of benefits who take notice of what the benefit terms and conditions are, it’s just about everybody; that is, the whole of the private sector as well. We – the everybody – make our life plans accordingly. If we think that the safety net is going to be a certain way rather than another way, we plan for that. And if you – Iain Duncan Smith – relocate pensioners without warning, you’re in effect sticking two fingers up at whatever choices they’ve made in the past. How do you know they haven’t planned responsibly? Perhaps they chose to do a lower paid but socially useful job, trusting that there’d be a certain minimal support in retirement. Perhaps, if they’d thought they might risk getting booted out of their home in retirement, they might instead have chosen a less socially useful but better paid line of work. These are the sorts of counterfactuals relevant to this sort of policy-making. (You may want to question ‘socially useful’, but I’d bet that IDS himself recognises at least some occupations as socially useful. What’s more, the comparable ‘key worker’ category is one recognised in current housing policy.)

Bear in mind that IDS is no longer just some harmless former Tory leader: he’s Work And Pensions Secretary. It’s only been what – a month – but he looks to have had a full on Blunkett-style ‘machine gun the bastards’ moment.

Why should we reassure markets?

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Paul Krugman asks: does fiscal austerity reassure markets?. Well, maybe it does, maybe it doesn’t (For Krugman, it pretty much doesn’t). But why should we reassure markets? And what sort of reassurance should we give? I can’t give a very full or convincing argument by way of answering this question, but I’ll sketch out the way I think an argument might go.

For a start, it’s possible that ‘the markets’ aren’t part of our community: that is, there’s room for doubt as to whether they are or whether they aren’t. I’d suggest that it’s our coming to terms with this possibility that’s largely contributory to the sense of social obligation that we’ll develop with respect to ‘the markets’. So how do things work with this ‘coming to terms’?

On the way to answering this, we need to give ‘community’ itself some definition. What counts as a community? G. A. Cohen suggests that a characteristic of community is that ‘comprehensive justification’ can be applied to the policies of that community. Comprehensive justification takes all points of view into account: it’s a condition where any member of the community is able to defend a policy in the sight of any other member of that community. This seems to be a good fit for our intuition. Consider, says Cohen, a case where someone kidnaps your child. The police may say that it makes sense for you to pay the kidnapper, because then they’ll return your child. The police may be right; it may be sensible to pay up. But if the kidnapper were to say that it made sense for you to pay them, then, even though they too may be right – that is, it would be sensible to pay up – it’s very unlikely that we’d accept their claim as justification, with the result that we felt we ought to pay them. The only obligation you’d feel is the obligation – there all along, most likely – to try to do right by your children. There can’t be a comprehensive justification of the kidnapper’s demands; kidnap (fairly obviously) doesn’t make for community.

And this is where the notion of foreign-ness comes in. Apart from anything else, we might consider a kidnapper to be foreign to our community, simply in virtue of the fact that they’re prepared to do what they do. Now, take ‘the markets’. Harold Wilson (as Cohen reminds us) called them the ‘gnomes of Zurich’. I see three ways things might go.

(1) We assume that the gnomes are not part of our community (in Wilson’s view, the gnomes were clearly foreign). We may take account of what the gnomes say – it might be prudent to do this – but we won’t look to what they say as justificatory and we won’t feel obliged to them.

(2) We aren’t sure whether or not the gnomes are part of our community. Then, since we may believe (with Cohen) that comprehensive justification is indicative of community, we’ll look to see whether what they advocate is defensible when said by any member of our community. If it is, our belief that the gnomes are part of our community will be reinforced.

(3) Finally, let’s say we fully believe that the gnomes do belong to our community. In this situation, we’ll expect them to say things that are comprehensively justified. Further, since comprehensive justification is reflexive (in the social sense), membership of our community obliges them to engage principally in advocacy of this sort.

Needless to say, I don’t see these three situations as absolute: I think we can assume that, most of the time, we have a mix of (1) through (3).

That then, gives us one way to answer the question: why should we reassure ‘the markets’? Above and beyond simple prudence – which might, note, involve no reassurance – we should reassure them to the extent that we understand them to be part of our community, and not foreign. This understanding will be driven by the kinds of demands that are made. What would partial reassurance look like? I don’t know. I don’t have any recommendations for how to go about rationing out reassurance.

Perhaps this is all too simple to need saying. But I think it’s worth spelling out, since there are plenty of commentators on this issue (that is, politicians and a spread of pundits) who are guilty of exploiting an ambiguity. On the one hand, they’re exhorting us ‘to take account of what the markets say’ because ‘the markets’ are not foreign; on the contrary – we’re told – they form a key industry, a critical part of us. And so we’re obliged. On the other hand, they’re pleading with us ‘to take account of what the markets say’ because they are foreign; there’s no stopping them; they must be placated. They’re the gnomes of Zurich.

However, as I’ve said, if ‘the markets’ are part of us, there are standards that apply. We can expect certain things of them. If not, it doesn’t matter to us what happens to them. Given that we are capable of articulating the difference, I think it’s reasonable to expect a politician who talks ambiguously of ‘the markets’ to be able to resolve that ambiguity: they should be able to tell us which view of ‘the markets’ they intend. In default of that, feel free to ignore.

China: internal revaluation from below

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Geoff Dyer of the FT says that Chinese workers are demanding more money, and that’s nothing but a good thing – there’s even some demographics in there, if you like that sort of thing.

Instead, the salary hikes in Guangdong this week symbolise a broader shift in favour of labour that has accelerated in recent months and is likely to carry on for a number of years. They reflect powerful demographic shifts resulting from the three-decade old one child policy, with the numbers of new potential workers entering the economy dropping quickly. Economists say China has passed or is close to hitting the “Lewis turning point”, when the pool of surplus agricultural labour tapers off, sparking big rises in industrial wages….

Booming consumption will, in turn, lead to smaller external surplus, as China imports more goods from the rest of the world and helps encourage a rebalancing of the global economy. As long as potential spikes in inflation can be controlled without too much cost, China has a lot to gain from higher wages.

China Labour Bulletin has much, much about a new wave of labour activism in China; they report on a strike at a Honda supplier and a “healthy and dynamic system of labour relations”. The people involved are now following up on their success by giving the convenor of their official, and yellow, trade union the boot.

China Media Project reports on the concept of “stability preservation through exerting pressure”, which seems if I catch their meaning to imply that the Chinese authorities at the top level are willing to tolerate the strike wave as a means of imposing a policy aim of moving to broad-based growth on lower-level governments, Party agencies, and businesses that are doing rather well under current arrangements. The mountains may be high, and the Emperor far away, but that also means the troops may be a long time in coming to save you from the next Mass-Group Incident. Do you feel lucky, punk?

And then, of course, at the Davos/Martin Wolf level of these things, the grand speak to the grand. Ahead of the G20 meeting, the People’s Bank has first suggested that it might be resuming the policy of letting the RMB rise gradually, and then walked it back. Of course, a lot of this might be the typical central bankers’ Noh theatre of allusion. But then again, Renmin tielu wei renmin – the People’s Railway is the People’s.

The same may not be true of the People’s Bank. But I’m sure I’ve seen a translated document at AFOE contributor Jamie Kenny’s place which had senior Chinese officials recommending that social conflicts should be resolved by “giving the People the People’s Currency Unit”, i.e the renminbi, or in other words, by leaning on management to give in on their demands in so far as they involve pay rather than politics.

Internal revaluation in Exportland is a viable option. Especially, it’s an improvement over more bubbles.

Our boys on the x front

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Uh oh. David Cameron’s moving into the phase of his leadership career where he says stuff out loud. For instance, he now has an official view on what our attitude to the military should be:

But supporting our Armed Forces isn’t just a government responsibility – it’s a social responsibility,” he said.

In the First World War those at home didn’t just sing ‘keep the home fires burning’, they practised it. In the Second World War, the military occupied a huge place in the national consciousness, partly because everyone knew someone in uniform.

I believe as a country at war we should see the same appreciation today, with the military front and centre of our national life once again.

Of course, we now have (a) an all-volunteer military and (b) a much smaller military, in terms of numbers in uniform. It’s odd that Cameron doesn’t seem to recognise these facts: they can’t but make for a large difference in the relationship between the military and the population in general. What’s harder to explain though, is why he felt the need to say something like this in the first place. I don’t detect any antipathy to the military itself, or towards its members: on the contrary, your typical Brit turns up at Navy Day, or any time there’s an RAF air show, and we are talking of attendances of up to 100,000. That looks like enthusiasm. So is it just that ‘public should support the military more’ is a current MOD talking point and he got briefed to say it? Or does it reflect Tory nervousness about the set of foreign policies inherited from New Labour?

Why Should the UK have All the Fun?

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North Rhine-Wesphalia had state elections yesterday and returned a local parliament that shows no clear majority coalition. NRW, as it is often known in Germany, is the country’s most populous state, with roughly 18 million inhabitants (about 10 percent more than the Netherlands).

Initial returns showed dramatic losses for the Christian Democrats (CDU), less dramatic losses for the Social Democrats (SPD), comparatively big gains for the Greens and the Left, along with losses for the FDP that were minor compared with the last state elections but major compared with 2009′s national elections. These same returns projected a one-seat majority for an SPD-Green coalition. Difficult, but workable.

And then the counting continued.
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In the polling booth

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So there I was, all ready to convert my well formed pro-Liberal Democrat voting intention into a mark on the ballot paper, when this strange mist descended, and all I could think was: is there any way – any way at all – to stop this place going Tory? So I went for the Labour guy instead. Good luck, Martin.

As it happens, there’s also some local elections on around here and the single Green candidate picked up my vote, along with two randomly selected Lib Dems.

Polling continues until ten tonight. It was busy down there. Anyone else had any booth moments so far?

Only drinks water from the source of the Cherwell

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I’m still busy not following the election, but I couldn’t help noticing that the Daily Telegraph agrees with my analysis of how things work in British public life. The difference is that having a leadership caste is AOK in their book, hence their careful observance of all the appropriate hagiographic tropes. Read it here: ‘David Cameron: born to be prime minister’.

Update: Gordon unblocked. If only you’d started like this.

Aiming for best-in-class product at all times

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I’ve decided that Layla Moran, the Lib Dem candidate for Battersea, is going to get my vote next Thursday. I’m a Lib Dem voter and party member of fairly long standing, so admittedly this is nothing out of the ordinary for me. Battersea (Lab: Martin Linton) is something like number three on the Conservative target list, so I don’t expect any miracles. For a long time I was going to try to help resist the conversion to the blue team, but I no longer think a tactical vote will work and I’d rather be counted as adding to the Lib Dem vote share nationally. Also, Layla seems to be doing a decent job of campaigning, and could use the encouragement. I’ve wondered if my cognitive task here could have been eased if only I’d known just a little bit more about the intentions of the other Battersea voters: just one tiny local opinion poll, no? (Update: wish granted, sort of.) Perhaps someone who knows about game theory knows whether or not information like this would have helped, because I don’t. What I will say is that I’m very happy to have made my mind up because now – thank christ – I can stop following the election.

Further, and whether I’m justified in this or not, I’m going to conjecture that lots of other people, having similarly invested in their own decisions, are also tired of the election; and that for this reason we won’t see much movement in the opinion polls before next Thursday. Additional evidence: the percentages in the ‘who won the debate’ polls seem uncannily close to the voting intention polls. So, depending on how exactly these percentages translate to seats, we’ll see around three hundred Tory representatives in parliament come Friday: this is my belief. Even if there’s not a Tory majority, there’ll be a Tory political mass which is bound to have some effect on something. It’s not that the nation is now more Conservative – the Tory vote share won’t have increased by anything much – the problem is that only a coalition will be able to shut the Tories out. The Labour vote is collapsing and the Lib Dems can’t win enough seats to take over the job that Labour was supposed to do.

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Alternative to the ECB

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A.K.A. The Bundesbank

Just a quick note for Matthew Yglesias and the three of our readers who read both his blog and ours.

He’s rightly exercised about Greece and its implications for the eurozone. The positions of the ECB and the anti-inflationary approach of the ECB come in for particular criticism. He writes,

Rather than try to run monetary policy that would be suitable for the median European economy, the European Central Bank has insisted on trying to run monetary policy that would be suitable for Germany. And not even suitable for Germany in general, but “suitable for Germany according to hard money fanatics.” That’s probably bad for Germany, but there’s certainly no reason to think it’s appropriate for southern Europe.

The ECB is a Frankfurt-based central bank that is extremely cautious about inflation, in which all members of the eurozone have a seat at the decision-making table. The alternative to the ECB is a Frankfurt-based central bank that is extremely cautious about inflation, in which only German central bankers have a seat at the decision-making table: the Bundesbank.

In the years before the introduction of the euro, only the UK and Sweden managed marginally independent monetary policies, as they do today. (Indeed, German supremacy within European monetary policy dates as far back as 1983 with Mitterrand’s turn away from nationalizations.) Whether Greece weathers this crisis, leaves the euro, or some larger mechanism brings monetary union to an end (unlikely in the extreme), monetary policy will still be made in Frankfurt. The ECB may not be all that good for some eurozone members, but if that is true, then surely a return to the Bundesbank as Europe’s de-facto central bank would be worse.

what gordon should have said

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You’re worried about immigrants? Jesus wept woman, I had this guy shot for you. What more do you want? 

Some of this goes back to the accession of the Poles, et al to the EU, when the government desperately tried to fudge the likely numbers coming in. What they could have said at the time was “ we know that large population transfers tend to make people nervous, but frankly we’re looking forward to getting hundreds of thousands of extra taxpayers in to help pay for all the stuff you get from the government. And it also means your kids can work anywhere they please on the continent too: and what’s more they won’t be stacking shelves. British win!” And just to underscore the point they could have timed a major public spending programme to the arrival of our Eastern European fellow toilers, being experts in the dark political arts and everything. They could have at least redirected some of the extra tax receipts that our new friends have contributed to the Treasury specifically to relieving what extra pressure there has been on schools, hospitals and other public services. 

All else aside, Mrs Duffy was owed an explanation of the likely consequences of the government’s actions at the time. If she’d have been given one, Brown might not have made such an arse of himself now. 

When our kid was young and he thought that there were monsters under the bed we tried to make it clear to him that not only were there no monsters under the bed but that there were no monsters full stop: because when you’re dealing with irrational fear what you need to make clear first of all is that there is nothing to be scared of. 

What the government has done over immigration was firstly to tell people that there were no monsters coming here, thus confirming the notion that immigration is in fact something monstrous; then saying that there are monsters coming here, but don’t worry, we only let them in if we give them licenses and if we find any under your bed we’ll deport them. Sure enough, the treatment certain categories of migrant are subjected to is truly monstrous, when it’s not just foul and mean spirited. This is positive encouragement for people to see monsters where none exist. Finally, an old lady comes along and tells Gordon about the monsters under her bed and he calls her a bigot. Now the Tories are dancing about shouting WOO, MONSTERS! and Gordon’s doom is apparently sealed*. Welcome, Prime Minister, to the world you made. 

 See also Justin, from whom I have snaffled many links in the above. 

*Maybe. On the other hand this seems to rest on a conviction that the “core Labour vote” is synonymous with the “confused Granny vote”, which strikes me as a version of the same metropolitan media condescension that metropolitan media types now like to accuse other metropolitan media and political types of. Hey, ho.