Wednesday, 27 July 2011

Theft and blame

Most people working in a large organisation will have seen the game of ‘Credit-stealing / Blame avoidance’ being played.  When things go well, everyone wants the credit – but when they go wrong, someone else is always to blame.
There’s also a power element to the game – the higher up the tree you get, the more people there are below you from whom you can steal credit or on whom you can dump blame.  It’s not unrelated to the habit of organisations which sack the workers when things go badly, and reward the managers when things go well.  Or in some cases reward the managers when things go badly, even before they sack the workers.  (This story about a boat race between a Californian team and a Japanese team expresses the attitude at its worst.)
Governments are not above a little bit of theft/ avoidance either.  I don’t doubt that if yesterday’s figures for the past quarter’s growth had been somewhat better, it would all have been the result of the magnificent economic management of the UK Government, and would have proved that we were on track.  But they weren’t, so it’s all the fault of those royals deciding to get married at a time of the year when there are two many bank holidays already.
And if there hadn’t been a royal wedding, then no doubt it would have been down to some other special factor, or, as a last resort, the overall world economic situation.  No matter what the outcome, there was never any danger that government policies would have been responsible for poor performance, nor that poor performance could in any way suggest that the government was on the wrong track.
Given the way that globalisation and multinational capital have led us into an increasingly intermeshed economy, I’m not sure how much difference government policy – even at UK level – really has on the fundamentals of economic growth and overall performance.  It certainly has an effect on who pays the price of failure, and alternative approaches could have shared that cost out much more fairly.  But I really do doubt whether a marginally different approach to spending and taxation (which is where the political debate has centred) could ever have had a significant effect on the GVA figures.
Most of the decisions which affect the economic fundamentals are not only outside the government’s control, they are outside any democratic control at all.  They have been outsourced to the markets and the money men; the speculators and the gamblers.  Unless and until we assert control over capital, it will continue to control us – and government claims or denials about economic performance will continue to be mere froth.

7 comments:

maen_tramgwydd said...

'Given the way that globalisation and multinational capital have led us into an increasingly intermeshed economy, I’m not sure how much difference government policy – even at UK level – really has on the fundamentals of economic growth and overall performance.'

How would you then explain Germany's success, for example? Do they represent the Japanese team in the story, whilst the Californian team represents successive UK governments?

Boncath said...

John

Time to begin our memoirs of the rise and fall of the English Empire
before it all finally falls apart.

Siônnyn said...

In the days and weeks after Big Willy announced the engagement, I seem to remember being told endlessly by Cameron and the rest that this was going to be a huge boost to the economy, fuelling growth etc. etc.

Where are they now?

John Dixon said...

Maen_tramgwydd,

"How would you then explain Germany's success, for example?"

A reasonable question, but not one I'd put down to the differences in management style in the story of the rowing race!

As a starting point, my questioning of the extent to which government policy within the confines of "a marginally different approach to spending and taxation", which was the context I set, has any difference on the outcome in terms of economic growth was prompted in part by this sort of thinking. It suggests that government economic policy actually has minimal effect on the long term growth trend within any economy. Indeed, over the long run, it points out that there is a remarkable similarity in growth rates across OECD countries, despite differing economic policies pursued by different governments at different times. It's an interesting and provocative suggestion, I think.

When it comes to economic growth (as opposed to GDP per head, where there are certainly differences), there isn't actually that much difference between the UK and Germany over the long term, and in that sense, the short term differences which are apparent when the countries are in different phases of the economic cycle can be misleading.

There are examples in the world where countries have apparently been bucking that trend over recent decades, but they tend to be countries which have started from a lower base, such as India. And, whilst I wouldn't suggest emulating their economic model, it's worth noting that China probably has one of the highest sustained growth rates - not entirely sure what that tells us about the Western capitalist model...

If it is true, though, that government policy has very little effect on long term growth rates, it tends to undermine the view which has become conventional in UK politics that the answer to inequality is growth; it would instead mean that the answer to inequality is redistribution.

Glyndo said...

"China probably has one of the highest sustained growth rates - not entirely sure what that tells us about the Western capitalist model...

If it is true, though, that government policy has very little effect on long term growth rates,"

Which is it John?

John Dixon said...

Glyndo,

Both, but only in context.

Within the context that I set, I suspect that changing government policies has little effect on long term growth rates. Within a rather different context, China has achieved a much more rapid and sustained growth rate.

What happens when China gets to the same place as the OECD countries, either in terms of economic structures or in terms of GDP? None of us know for certain; but I'd expect convergence to follow naturally at that point.

Siônnyn said...

Dai Twice is not the brightest of starts to illuminate our political firmament, so it is not surprising that he has become confused. He obviously, despite himself, has identified potential benefits of devolution, but hasn't quite put two and two together yet to realise what this actually means.