Monday 26 February 2024

Painting the economy red, white and blue isn't the same as making it work better


Labour’s leader is visiting the West Midlands today, and his speech has been widely trailed in advance. Apparently, he wants to see Labour running what he calls a ‘patriotic’ economy. It’s an interesting, if essentially meaningless, turn of phrase, but like most essentially meaningless phrases, it can be interpreted to mean whatever the listener wants it to mean. Starmer will probably be happy with that – and wrapping himself in red, white and blue is a tactic to which he increasingly turns.

It would be nice to think that what he is trying to say is that the economy should work for the benefit of all citizens, rather than the wealthiest few. It’s a sentiment that many, including myself, could readily agree with, but it does imply a recognition that ‘the economy’ is not some mysterious force which controls us, like Adam Smith’s ‘invisible hand’, but a system invented by humans, run by humans and regulated by humans. There are more ways than one of doing all of that: the ‘economy’ doesn’t have to work well only for some. That isn’t quite what he is saying though. His speech talks about an economy where “…Britain’s hardworking families reap the rewards”. ‘Hardworking’ is a phrase which seems to trip off the tongue of politicians – very few of them seem to be able to make a speech without using the term. But here’s the thing: every time I hear that phrase, I hear someone who is also saying that only working people count. The sick, the disabled, the elderly – few of the people in these categories fit any rational definition of ‘hardworking families’. It’s as though they really neither count nor matter.

The speech gets worse, because he then launches into the trope of what he sees as the “…core British value of working hard and getting on”. In itself, the phrase sounds almost innocuous, but it contains within it a deeply unpleasant suggestion that anyone who doesn’t ‘get on’ is simply failing to work hard enough, with the implication that poverty is thus the fault of the poor. As Yoda almost said, “The Protestant work ethic is strong in this one”. It’s based on the idea which has become central to Labour thinking – although it’s a long way from the beliefs of the party’s pioneers – that what is important is something called ‘equality of opportunity’ rather than economic equality.

It’s true, of course, that anyone can (theoretically, at least) establish a successful business and become a multi-billionaire, or walk into a highly-paid job if they have the necessary skills and attributes, and that education, alongside other policies, can help to develop those skills and attributes and theoretically make it possible for more people to ‘work hard’ and earn their fortune as a consequence. But it’s also true that, even if they have all the necessary skills and attributes, not everybody can do that. Simple mathematics tells us that extreme wealth is concentrated wealth, and concentrated wealth for the few necessarily requires a transfer of wealth from the many. More generally, ‘getting on’ for some requires that others do not ‘get on’, no matter how hard they work (and there are many people in poorly-paid roles who work a lot harder than some of those in well-paid roles). And despite decades in which ‘equality of opportunity’ has been the stated goal of governments of all parties, one thing we know for certain is that parental income is still the best predictor of outcomes for children.

Starmer had an opportunity to say that his government will ensure that the economy works for all, but he has chosen instead to talk about a few minor tweaks to an economy which is designed and run to do the exact opposite. That’s not to say that the tweaks are completely without merit, but transformative this is most definitely not.

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