Friday, October 30, 2015

Economics and education

"Most of us have long lamented the general public's lack of understanding of economics", writes Chris Dillow - before linking to a study suggesting that it is the under-development of the average human brain that lies at the core of the problem. This is exacerbated by politicians who have a vested interest in reinforcing misconceptions, such as the the notion that a nation's finances are like a household budget. I really like Chris's writing but this isn't very helpful. If you want to assume people don't get economics because they aren't able, go ahead - but I'd suggest the reason is more straightforward: they don't get it because nobody bothers to explain it to them properly. Two points here:

 1) It isn't taught in schools very widely. In Scotland it is possible to do it as a certificate subject but not only is it not compulsory, hardly any schools do it at all. I'm not sure what the situation is in England except to say that I do know it doesn't form part of the core curriculum either. Given that this is unlikely to change, not least because there isn't really anyone demanding things be otherwise, any economics education would have to come from somewhere else. Chris probably rightly rules out politicians and the MSM here, which leaves only 'public economists'. But there's a significant problem here...

 2) 'Public economists' are a rather other-worldy bunch who really need to learn the humility of a good teacher. The bad teacher assumes that the reason the class hasn't followed what he or she is saying is because they're just plain stupid. Well, they may well be - but the good teacher at least allows for the possibility that perhaps the reason the class hasn't grasped the curriculum is because it hasn't been explained to them very well.  How many public economists are good teachers in this sense?  I'd suggest not many.  There are quite a few who I won't name but are the sort of people who spend an inordinate amount of time on social media complaining, or crowing, about how unbelievably thick people who disagree with them are.

Take, for example, the idea that the government's finances are like a household budget.  This is obviously wrong.  "When I find money is tight, I just print some more".  You can't because you don't have a currency-issuing central bank in your living room.  But economists, like good teachers, should use bad analogies, work with them - and then explain why they are wrong later when understanding has developed, rather than dismissing those who use them as thickos.  Why, for example, are there so few economists (are there any?) pointing out that many of those who claim to be "living within their means" have debt in the form of mortgages that are often easily in excess of two and a half times their annual income?  And why is there no 'anti-austerity' politician making the point that when Britain emerged from the Second World War with a national debt roughly around this proportion, the government built the NHS from the ground?  Why is there no-one to say that what this present government is effectively saying is that, "Sorry kids but Christmas is cancelled this year because we're making it a priority to pay off the mortgage earlier than we have to."?

More generally, why are there absolutely no anti-austerity politicians in the British Isles, even among those who say they are?  Corbyn isn't against austerity - he just want different people to do it.  The SNP aren't either.  They actually practice austerity in the form of budget under-spends while complaining that it's the rest of the UK that should be doing the more elastic fiscal policy.  The failure is pretty comprehensive and I blame the teachers - or rather the economists that should be teachers but have for whatever reasons failed in their responsibility.

Saturday, October 24, 2015

Milne on the USSR

Like many, I thought Corbyn's decision to appoint Seamus Milne as the Labour Party's director of communications was a bad one - for me primarily because it looks like the consolidation of a faction that makes winning an election even more unlikely than it did before, rather than anything to do with his views on history.  However, following a conversation on Twitter, it is his views on history, specifically that of the Soviet Union, that this concerns.

What it relates to is the objection to the epithet 'Stalinist' to describe this journalist's views on the 'Red Terror' on the grounds that all he has insisted on is that Hitler was worse than Stalin and that attempts to equate them is a distortion of history.  The purpose of this short post is really just to explain why I don't agree that this is all he was doing.  If it was, I would find a fair bit of common ground.  That Hitler was worse than Stalin is something I agree with without equivocation and would also agree that, in as far as the Second World War is now seen by some as two totalitarianisms slugging it out on the Eastern Front, this represents a (very) vulgar interpretation of  the 'totalitarian thesis'.  (Although I think the tendency he describes is rather more commonly found among journalists than proper historians.)

There are a number of fairly well-known objections to the thesis.  Among these is that it is a static concept that cannot properly deal with what happens when some supposedly 'totalitarian' regimes succumb to the forces of routinisation.  Is it really satisfactory, for example, to describe Brezhnev's USSR as 'post-totalitarian'?  Then there's the fact that the total control of these regimes has purported to have attempted has never really been a historical reality.  Should we then describe 'totalitarianism' as an aspiration?  I'm not sure that makes much sense.  But my principle objection to the equation of Hitler and Stalin under this category is that it doesn't even properly use the concept as it was originally stated.   The thesis holds that 'totalitarian' regimes have more in common than separates them, not that they were the same thing.  The notion that Stalin was at least as bad as Hitler because he killed more people is a vulgarisation of this.  I do agree with Milne that this simple-minded interpretation does indeed seem to have gained an unjustified currency and I also agree that it shouldn't, not least because it is simply wrong.  Hitler and not Stalin started a war that led to at least 50 million dead and it is indeed right to remember that among these are included around 20 million Soviet deaths, including some three million Red Army POWs.

That Hitler was worse than Stalin is not a controversial view in my world but the objection to Milne is that it seems to me that he goes some way beyond that.  Churchill also took this view but could anyone seriously argue that you couldn't put a fag-paper between his and Milne's view of Soviet Communism?  One objection is that Milne seems to accept the vulgar terms of the debate and has produced in the past something even more vulgar.  The linked piece was from 1990.  The following year, evidence from the Soviet archives tended to suggest that Conquest's 20 million figure was more likely to be accurate than the 3.5 million he suggests.  I didn't get the impression from some of his post 1991 articles that he has taken this on board at all.  I don't think it is unreasonable to suggest that he has shown a tendency to down-play Stalin's crimes and he also seems to have an unfortunate habit of juxta-positioning this with acknowledging the USSR's considerable industrial modernisation under Stalin.  This is obviously a fact of economic history but the context in which this observation is made - and without noting the horrendous human cost of this - should, I think, make people uncomfortable.

Is it unfair to dub Milne 'Stalinist' for this?  I'm prepared to accept I could easily be wrong about this but I don't think it is.  Put it another way, if a similar process was applied to the Third Reich with someone suggesting that Hitler didn't kill as many people as is generally assumed whilst simultaneously inviting us to recognise he build some awesome roads, I don't think many people would have any difficulty in recognising that for what it was.

Saturday, September 12, 2015

Corbyn and the SNP's new playbook

"Jez we can!", they cried and Jez they've got.  Good grief!  With the results just in, I think there's already rather too many people taking the piss.  Top of the list are fans of the Labour party's most prolific rebel saying the party needs to pull together.  It goes without saying those who follow their past example rather than heeding their latest injunction are probably already being denounced for their treasonous ways.

Also near the top of the list are nationalists, like my SNP-supporting friend and colleague, who told me that he thought the Corbyn surge was a good thing for Labour.  This is really too much.  This is a party who correctly saw the Labour party as one of the key British institutions standing in their way of power in Scotland and their wider goal of independence so have done everything in their power to destroy it - and having done so in May's election, have danced on its Scottish grave with great vim and gusto.  Can't say I can really blame them but what is pretty offensive is their claim to be the guardians of the soul of the Labour party.  We had all of these people claiming that they were backing the SNP, not because they were nationalists (heaven forfend!), but because Labour was too right wing.  I don't believe for a moment that any strategist in the SNP seriously worries about losing many of these votes because I would assume any such strategist worth his or her salt understands perfectly well that the SNP's success in May would not have been possible if it had to depend on left wing votes.

Rather, I'd assume the SNP are delighted with Corbyn's victory.  I know I would be, if was in the SNP.  Their genius is that they combine triangulation with Corbynite rhetoric when it suits them, which it did in the West of Scotland.  They are the Blairite party par excellence in UK politics today and it is, to me anyway, utterly inconceivable that a Corbyn-lead Labour party will be a match for them.  Instead, the script is going to go something like this, "We disagree with Jeremy Corbyn on some things but we're both against austerity and Trident.  Look what happens to someone in England who shares these views we've been so awesomely successful with in Scotland.  Look what happens to him in his own party!  Just shows how very different our two nations are..."

Here's a preview.  This is the line we'll get on a loop.

The SNP's path to the mainstream - supporting EU and NATO membership - is now more difficult for the Corbyn Labour party, whether he comes out in favour of these or not, and that is the state the Labour party has got itself into.

Monday, July 27, 2015

Reclaim the centre

There's a post here announcing the apocalypse: "Corbyn is going to win".  Oh nos!  There will be rats - and other stuff that's bad.  It's not that I disagree - albeit for slightly different reasons than some.  Mine are more pragmatic: Corbyn is not going to be able to lead his party, and will struggle to avoid a split, especially if he pitches his lot in with the 'No' crew in the EU referendum.  He certainly isn't going to be Prime Minister.  I have no idea if any of these poll predictions bear any relation to reality but one thing I've been continually thinking during this leadership campaign is, it really doesn't take much to get you designated 'hard left' these days, does it?

I'd have to stress I don't know much about Jeremy Corbyn.  He obviously is the leftwing candidate in some respects.  I have no idea what he thinks about the IRA and Hezbollah but if I bothered to find out, I'm quite sure I probably would disagree.  In other respects, one thought that keeps re-occurring is, how leftwing is Jeremy Corbyn anyway?  Some of his ideas obviously are, like a 75%  higher rate of income tax.  Other ideas like increasing corporation tax are leftwing but strike me as a bit nostalgic for an age when pesky capital didn't move around as much as it does now.  Others I'm not sure.  Getting rid of the monarchy?  Join hands with Rupert Murdoch on that.  Free university tuition fees?  We have this already in Scotland and as a middle-class parent, I would welcome this but maybe for selfish reasons - perhaps making the point that this sort of thing, whether it's a good idea or not, is a hand-out to the median voter.  

But in as far as one can tell, the two positions he holds that are usually given as evidence that a left platform would be popular with voters are nationalisation (specifically of the railways) and an end to 'austerity'.  I would argue that these aren't leftwing policies at all.  Heath nationalised the aircraft bit of Rolls Royce in 1971 and the last Labour government nationalised Northern Rock in 2008.  In recent years, this Conservative government has nationalised schools and our Scottish Government has nationalised the police force.  Here's Peter Hitchens arguing for nationalised railways.  Do we need to provide more evidence that this is an issue that is both a mainstream opinion and cuts across the political spectrum?

It's a similar story with 'austerity'.  I appreciate this is repetition on my part but it's worth elaborating: the idea that the level of government borrowing does not impose the sort of restrictions on government spending that the Conservatives say it does is a centrist, not a 'radical left', position.  Here's Lord Sidelsky, for example, taking issue with my compatriot historian Niall Ferguson,  He argues a fairly standard Keynesian line that the history of the interwar period shows that you can't cut your way out of a recession.  Compare to the postwar period where a national debt that nearly reached 250% of GDP was reduced over time, not by slashing spending but by the economic growth of the long postwar boom (aided and abetted with an occasional bit of inflation).

Sidelsky is obviously to the left of Niall Ferguson - but that's true of most people.  The point is that his is a centrist position.  Keynes was a liberal, after all - as are most of the 'anti-austerity' economists, as far as one can tell.  Which leads me to the following suggestion: Jamie K in conversation on Twitter expressed the view that Blairism has solidified into a doctrine whereby 'capturing the centre ground' means in practice moving to the right as a default position.  (Apologies to him - I'm paraphrasing here.)  Could it be then that 'winning from the centre' might involve  Labour reoccupying this centre they've surrendered in deference to what some people have (correctly, in my view) described as 'deficit fetishism'?  It's a matter of no small importance: both in Britain and the European Union, fiscal orthodoxy is putting enormous strains on these multi-national institutions.  I would suggest in this context 'winning from the centre' might involve reclaiming 'anti-austerity' centrism from the nationalists and the supposedly 'hard-left', which would require moving a little to the left.

Sunday, July 26, 2015

Indyref v2.0?

Alex Salmond, in keeping with the new Nationalist micro-wave definition of what constitutes a 'generation', said today that a second referendum was 'inevitable', it was just a question of the timing, something he claimed was a matter for Nicola Sturgeon.

Sturgeon appeared to contradict him by saying it was in the hands of the 'Scottish people', which made me think I should have qualified the last part of this: I don't think the SNP would tolerate someone like Corbyn but obviously Salmond isn't like Jeremy Corbyn.

Anyway, regardless of whether Nicola wishes Alex would shut up, neither of these statements bear any relation to the legal reality.  There is no mechanism by which the 'people' can express a preference for another plebiscite and constitutional matters are reserved to Westminster and are not, therefore, a matter for the First Minister.  I'm assuming that people don't remind the Nationalists of this for fear of being seen as 'bullying' and 'undemocratic' but as an aside, I'm struck by how few have noted just how effective (so far, anyway) the Madrid government's preference for actually using its constitutional powers has been in dealing with its own nationalist problems.

Salmond's criteria for the 'material change' that could justify a referendum were as follows:

1) If Westminster reneges on the 'Vow'.

2) Continued 'austerity'.

3) The EU referendum, should Scotland vote to stay in but England to leave in 2016 or '17.

All of the above are also nonsense, and not just legally.  Some of us are getting particularly fed up with No. 1.  It's already clear that this stupid 'Vow' was not decisive in getting out the No vote; people who claim it promised 'devo-max', 'home rule' or 'near-federalism' are confusing what a Labour backbencher said with what Her Majesty's government said; and even if these were not true, the 'Vow' has no binding legal power because plebiscites are advisory.

I hope it doesn't need pointing out that No. 2 is drivel?  Remarkably, you do sometimes find the Government  has a different economic policy from the Opposition parties and the idea that this is grounds for constitutional change is just daft.   Rather, it's the third possibility that interests me.  It's not that this would be legal grounds for a referendum either because Scotland's membership of the EU is because we are part of the UK.  I would, however, agree that a vote for 'Brexit' would create huge problems but what interests me is, this wouldn't be just for the UK government.  I still don't think Britain will vote to exit the EU but if we did, and this generated another referendum, there are two huge problems for the SNP:

1) Particularly if, as has been reported, it's next year - this is too soon for the Nationalists.  One of the reasons I'm speculating that Sturgeon might be wishing Salmond shuts up a bit is that while she too wants another referendum, she doesn't want one quickly because she knows that there is no reason to think they would win it.  In reality, the 'material change' they are looking for is opinion polls that consistently show a 60-40 lead for independence, which as some of the more thoughtful nationalists have pointed out, we just don't have.  Having another one too early risks a future for the SNP that is Parti Quebecois-shaped.  More time would also give the Nationalists space to come up with a coherent economic policy, which everyone, apart from the most evangelical among them, accepts they did not have in the indyref.

2) While it would have been taken as justification for a referendum, I'm not sure that it would be the selling point for independence that some Nationalists think.  I wouldn't expect to see 'Independence in Europe' on SNP flyers any time soon because I would imagine that many Scots, after watching events in Greece, might conclude that you can either be independent or be part of Europe but not necessarily both.  It would also bring unwelcome focus on the unresolved currency issue.  Would an independent Scotland be compelled to join the EMS - and what are we supposed to do for a currency before that, even if we were?  The Nationalists might just revert to the tunes they played in September last year but I'm sure as many people would necessarily be listening.  "Here's some legal advice we've got", isn't going to fly - at least I would hope not - and now surely people have been disabused of the idea that the EU is the sort of institution that bends over backwards to accommodate small countries?

As regards the EU referendum and its impact on our political parties, I suspect things are going to turn out to be rather boring than some are predicting.  Corbyn isn't going to win the leadership and the Labour party are going to campaign to stay in with more or less exactly the same broad position as the Conservatives, the Liberals and the SNP.  With minor differences, they'll argue for the status quo - that we remain part of the EU but not members of the EMS - and they'll win on both sides of the border.  At least I hope that's what happens and I would suggest that the more cautious among the Nationalists are hoping for exactly the same.

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