There are two economic problems in the UK. The first is that far too many politicians and members of the commentariat do not understand economics, and advocate (for the past 7 years) a fiscal policy that doesn’t work. The second is those that champion the opposing fiscal approach – what, I suppose, might be called Corbynomics – do not know how to communicate the rationale of their approach.
The issue in both regards is political narrative. Most would agree that textbook intelligence does not make one a savvy politician; it carries that the same is true in reverse, that one can be a savvy politician and academically rather ignorant. Political narrative is a broad statement, but for the purposes of this piece I say it means this: how one shapes facts, or mistakes, to suit their own political agenda at that time.
The reality is austerity is the kindred spirit of conservatism. Small government, low taxes, individual responsibility. Austerity accomplishes all those things. It also appeals to a very guttural concept of living within one’s means, running a country like a household – the Swabian housewife. It sounds so terribly sensible.
Conservatives utilise this economic strategy so well because it has a relatively low barrier to entry. It is easy for the laymen to understand, and it is hard to argue against without sounding crazy. Surely the way to reduce debt cannot be to borrow more money? That’s not how household finances work.
As an aside, the Swabian housewife strategy – known sometimes as the Swabian housewife fallacy – is what cost Mr. Milliband the 2015 election, in my opinion. (Maybe not, it’s hard to say). By running on a watered down Conservative austerity strategy, Milliband was embracing the fallacy, but doing it with a backdrop of economic discreditably (another fallacy; public debt under Labour was lower in 2008 than when they took power in 1997, it was only in 2008 when the financial crisis hit that public debt became ‘problematic’) which was never going to work. The Tories just make austerity look so much sexier.
And now enter stage right Mr. Corbyn, running on an anti-austerity economic plan. Of course, in the political narrative the Conservatives have shaped, Corbyn’s vast spending plans seem ridiculous – remember, how can you spend your way out of debt? But Corbyn’s strategy is the right one (generally speaking) because one cannot cut their way out of debt either.
Let’s return to the household analogy to explain. If you must reduce household spending to meet outgoings, you do so. But what if you get to the point where you can’t afford to eat, or heat your home, or pay the rent on your home (austerity, by its very nature, targets those that rely on the State more than those who don’t, so it will disproportionately affect renters more than home owners, so rent is, economically, a sensible barometer for this analogy)? Well, then the household no longer exists. Good job. I guess eradicating the household is kind of like securing it?
Austerity works when you have growth. In a recession – by definition – you don’t. In a stagnant economy (which, in my opinion, the UK’s is) you also don’t have growth. All cutting does, at least in the short-term, is shrink the size of the economy, reduce the level of investment, and reduce growth. When the financial sector is doing a good enough job of reducing economic growth, we don’t need the government to do the same.
Finally, if you want proof austerity doesn’t work, look at the UK economy right now. Brexit is a convenient scapegoat (or at least distraction) for many problems in the UK public sector, but it is actually a symptom of austerity. So too is the underfunded NHS, or the underfunded education system, or the underfunded police, or the underfunded armed forces, or the… You get the picture.
After 7 years of trying this economic policy, is hasn’t worked, and for some, that’s a hard pill to shallow. But if aneconomic policy is failing citizens, then it is a failed economic policy.
Most people know this – certainly Corbyn does. That’s not the point of this piece. I said before there are two economic problems in this country. I have addressed the first problem, but now I must address the second.
Corbyn does not speak in terms of economics. Neither does McDonnell, or many of the Labour inner circle. Blairites speak economics, but their brand is technocratic and pseudo-conservative. Theresa May should not win this election. Basic services required for provision by government aren’t being provided, the Tory manifesto is rather unpopular (at least the less popular of the two major parties) and she has an ever-growing reputation as a flip-flopper. But they are winning, and even though as I write that gap is shrinking, they’re still winning.
Why? Because the Conservatives set out their stall in simple ultimatums. They present their version of facts and explain their ‘plan’ calmly in simply steps, all bound (I’m sure) in a glossy ring-binder. Everything they could be saying might be wrong, or a lie, but on their shop front it doesn’t matter – they’re attracting the most punters.
Corbyn needs to learn to construct a political narrative – a shop front – that does the same thing the Conservatives do. To some Corbynites this will sound like heresy. But if your product is good, and you tell people why it is good (maybe by utilising a nice glossy ring-binder and PowerPoint presentation), they’ll buy it. And they’ll buy it even more if it’s the only alternative to the faulty product that’s been on sale for 7 years.
The issue currently is that Corbyn doesn’t seem to want to be this type of salesman, to have this type of political narrative. He’s more than happy being the guy with the megaphone shouting about unbelievable bargains that people acknowledge sound great, but also think are maybe dodgy knock offs or too good to be true. Where’s my evidence for this belief? Just look at Diane Abbott and her policing figures, or Corbyn himself and the child care costs: simple mistakes that aren’t fatal to the campaign, but are wholly unnecessary.
I despise political narratives. But they’re how the game works. So long as our democracy is universal and not Socratic, they are a sad necessity.