We on the left want make the world fairer, more equal, and happier. Then the right says, ‘Yeah, we’d love to do that too, but I’m afraid it’s not going to work.’ And when we ask why, they say, ’Er, cos of the economy?’ And we run away, terrified by their acuity.
There is often a perception that the right owns economics. Left-wing plans are idealistic and admirable, but if anyone ever tried them the economy would snap in half. We’d all like to do something for the needy, but if we did, within a week you’d all be carrying your daily wage home in cash in a wheelbarrow.
The right owns economics because the right owns everything, especially the money. The source of most of our economic punditry is large financial corporations. We ask the banks, we ask the City, we ask the markets. And these people predict doom and disaster if a left-wing agenda is proposed. Is this because left-wing policies genuinely cause economic meltdown? Or because so many economists’ employers think a left-wing agenda might make them a tiny bit less filthy rich?
There are voices in the economic world that don’t follow this relentlessly pro-business line, but not many. And not because it doesn’t have the arguments - it just doesn’t have the spokesmen. Think tanks, universities, and public sector organisations all employ economists without being owned by a financial behemoth. But they pay a lot less than a bank. So a career economist is unlikely to resist the top wages for their whole career. An economist working in the public sector was probably in the private sector in their previous job, and is probably heading straight back there once they’ve ticked the government box. Banks may not own all the economists all the time, but they own almost all of them most of the time. And any economists the banks don’t currently own either started there or will end up there - banks are their training ground, or at least their pension plan.
There are left-wing economists. Some of them have written marvellous books about the harm that the right-wing economic consensus has done the world - including, but not limited to, the financial crisis. But the market in economist employment doesn’t allow many of them to exist. And those that do exist are not accorded a regular platform. The media will talk to them about their new book, but to the media a ‘left-wing economist’ is a newsworthy oddity, like a skateboarding duck. If the media just wants an economist to be an economist, they want a right-wing one that works for a massive bank. For an economic argument you want an economist on the right, and on the left you want an environmentalist, or perhaps an aromatherapist. Anything else would confuse the viewers.
In politics, economics used to be thought of as rather a left-wing notion. When Tory prime minister Alec Douglas-Home confessed to understanding little of economics, he wasn’t just being a crusty old booby refusing to get with it. He was expressing a political idea of the time that the right held dear: the economy cannot be controlled by politicians, and it’s a damned fool that tries. Harold Wilson’s Labour government later in the 60s introduced a Department of Economic Affairs, because they had this new idea that the economy was something which could be managed by a government. A certain portion of the right will have looked on Wilson’s DEA much as global warming deniers now look upon a ‘Department of Climate Change’: a vast and costly attempt to control something which can’t be controlled and possibly doesn’t even exist.
Labour had a very good line about this a year or two ago, which they seem to have stopped using. They said that Lehman Brothers did not go bust because Labour had spent too much on schools and hospitals. Sadly, a really cracking line like that is water in the desert to Labour MPs at the moment, so suddenly everybody said it for about 48 hours. Then they realised they were sounding like over-briefed automata, so they all stopped saying it again.
But it’s right. And they should start saying it again, but perhaps with everyone using their own version of it, substituting the collapsed business and the Labour policy of their choice. (Look forward to ‘Blockbuster didn’t go bust because Labour spent too much money calling Rochdale pensioners a bigot.’)
The global crisis happened ‘during’ the Labour government, not ‘because of’. They are very different things. Labour being in government cannot be blamed for the global financial crisis, any more than Bryan Adams being at number one can be blamed for Boris Yeltsin getting sworn in, Liz McColgan winning World Athletics gold, or Vauxhall launching the third-generation Astra.
The biggest impact on the nation’s finances is the enormous bail-out Labour gave to the banks which no one, and certainly not the Tories, opposed. Nor would they oppose it now. The greatest contribution Labour did make towards the financial crisis was in over-liberalising and under-regulating financial markets. The Tories supported those moves then, and they still believe those things now. The Tory party sometimes criticises Labour for their poor regulation of the markets between 1997 and 2010, but even they never have the cheek to claim that they wouldn’t have done exactly the same themselves - or possibly gone even further.
The narrative states that Labour broke the economy, and since 2010 it’s got mended. It’s a gross simplification which conceals more than it reveals about the economic reality. The Tories have pushed this story, understandably; the media have lapped it up, predictably; and Lib Dems have backed it up, irritatingly. In fact, it’s one of the most irritating things about the Lib Dems at the moment. In a list of the most irritating things about the Lib Dems, it would easily make it into the top 300.
Traditionally, the Lib Dems have represented a kind of casting vote. Tories say X, Labour say Y - which way will the Lib Dems jump? Although they have lost any true claim to that role by siding with the Tories, some of that lives on. So when the Lib Dems join in with the Tory chorus that Labour broke the economy, it sounds a little like an independently verified fact. Whereas, of course, the Lib Dems on this subject could scarcely be less independent.
If, in 2010, Labour’s internal election rules had allowed for a swift replacement of Gordon Brown, we could be looking at a Labour-Lib Dem coalition, and the Lib Dems would never have demonised the last government’s economic record to the ludicrous extent they have. If the coalition talks had lasted a few weeks - much closer to the European norm than the hasty weekend that created this government - and if the Labour party constitution allowed a new leader to be elected that quickly, then the Lib Dems would surely have gone for the Labour option. They only opted for the Tories because there was no non-Brown Labour party as a possible partner.
Instead, the Lib Dems teamed up with the Tories, and claimed the nobility of the ‘national interest’ for their unlikely union. That story required a national crisis and a national enemy for it to stick properly - the economy and the Labour party fitted the bill perfectly.
And in so doing, they have perpetuated the myth that the left don’t do economics. This is perhaps their most harmful contribution to British politics. If you are going to shore up the right, and demonise the left, then you are indistinguishable from the right. You are the right. The danger is that when the Lib Dems are extinct, their dangerous lie might live on.
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