Thinking about God: the work of Oliver Quick

Longstanding readers of this blog will remember that I used to take Oliver Quickon aspects of religious faith sometimes, from my agnostic Christian standpoint. I have not attempted this recently as it rather distracts from my main mission of tracking the evolution of liberal politics. But it’s Christmas time, and I have recently finished reading this book about the work of the early 20th Century Anglican theologian Oliver Quick (1885-1944). He is my grandfather. Those only interested in my political musings should read no further.

Oliver Chase Quick, to give him his full name, was the son of a priest, Hebert Quick, who made a name for himself in the development of liberal education, but who died in 1891, when Oliver was but 6. His mother, Bertha, daughter of Indian Army officer Chase Parr, lived until 1934. She became an important family figure, holding together the extended family of Quicks, Parrs and Hills (the Shropshire family into which Oliver’s sister, Theodora, married), developing a family bond which has continued until my generation. Oliver went to Harrow school and then Corpus Christi Oxford, where he surprised everybody by only obtaining a third. That put an end to prospects of an immediate academic career, and he was ordained into the Church. He became curate at St Martin’s-in-the-Fields in 1914, “then a very dead and empty church,” according to my grandmother; the new vicar, who invited Quick in, was the charismatic Dick Sheppard, who started the church’s now famous outreach to the poor. In 1915 Quick became Chaplain to the Archbishop of Canterbury, based mainly at Lambeth Palace. There he met Freda Pearson, secretary to the Archbishop’s wife. They were married at St Martin’s-in-the-Fields in 1917, with the Archbishop, Randall Davidson, presiding. Quick became Canon at Newcastle in 1920, followed by Carlisle (where my mother, Julian, was born), St Paul’s, Durham and finally Christ Church Oxford, where he became Regius Professor of Divinity. He died in 1944 of a progressive heart disease – a condition that would almost certainly be readily treatable these days.

Notwithstanding the setback at the start of his academic career, Quick became probably the foremost Anglican theologian of his day. But his work is now largely forgotten. Understanding why this is the case is a central theme of the book, Oliver Quick and the Quest for a Christian Metaphysic, by Alexander Hughes, Archdeacon of Cambridge. This book is directed at an academic audience, and I do not recommend it to a general readership. Sample chapter head: Theological Prolegomena to Christology. I struggled through it from grandfilial loyalty, but I would not like to suggest that I managed to digest it properly. Still, I found it of enormous interest, and it made more sense as I progressed through it. Quick was a man of his times; his work is now of marginal interest because times have changed.

Those times, of course, where the aftershock of the scientific revolution of the 19th Century, of which Charles Darwin’s theory of evolution was only the most spectacular part. The world had previously been understood to be a divine act of will with Man at its centre. Scientific thought transformed it into an incidental speck of dust in a nearly infinite universe, coming about through the action of immutable laws of nature rather than divine caprice. What on earth was orthodox religion to do about this transformation? One important response is referred to as “liberal theology”. This accepted the basic premises of scientific materialism, and interpreted scripture to be of essentially symbolic meaning, offering a deeper understanding of the world. The historical truth of biblical stories was treated with a high degree of scepticism. To this line of reasoning there was a counter-reaction, of whom the most famous figure was the German theologian Karl Barth. He injected modern energy in to traditional ideas of divine will in a sinful world, often referred to as “dialectical theology”, because of its confrontation of paradox.

Quick’s work can be understood as plotting a middle way, by constructing a modern philosophical underpinning to orthodox belief. He accepted the “threefold cord” of scripture, tradition and reason. His aim was not to change orthodoxy, but to present it in a new light which the modern mind, with its emphasis on reasoning, could accept. A central aspect of this was framing theology in terms of classical metaphysics – the first principles of philosophy.

Quick was fascinated by the duality that runs through Christian thought from its origins. He characterised this as being between the “Hellenic” and “Hebraic” traditions. The Hellenic tradition is based on classical Greek thought, and in particular the idea of Logos. This has been translated into Latin Verbum, and English “Word”, which means much the same as the Latin. This has led to some perplexity, such as the mysterious opening of John’s Gospel (originally written in Greek): “In the beginning was the Word”. Logos actually means something much bigger than “word” – it refers to rationality and orderliness. We get some of the meaning the idea from its English derivative “logic”. Greeks believed in a pantheon of divine entities interfering with the human world. But these gods operated within a divine framework, the Logos, that lay beyond. It is an essentially passive idea. Liberal theologians equated God with this Logos, who did not therefore become a personal actor in our world. Christian doctrine was essentially symbolic in their eyes. This may be a long way from most people’s understanding of the religion, but the idea has always been there. It is associated with Christian mystics, such as the Spanish 16th Century St John of the Cross, and the 14th Century Julian of Norwich, after whom Quick named my mother. It is not that the mystics were theological liberals, but they developed a vision of divine revelation and universal divine love that is the beating heart of theological liberalism; they downplayed ideas of divine retribution and sin.

Contrast this mystical, symbolic, aesthetic and revelatory path to the Hebraic tradition. This emphasises divine will over revelation, instrumentalism (that is, concrete action) over symbolism, and ethics over aesthetics. This is, perhaps, a more familiar version of religion. It conjures up pictures of fire and brimstone, and the division of mankind between those that follow the Lord (often referred to as the “Chosen”) and those that don’t. It is the idea of religion that the liberal theologians sought to excise as no longer compatible with modern thought. But Quick could not accept this. Christianity without the Hebraic tradition would not be Christianity. But, unlike Barth, he could not reject, or demote, the Hellenic tradition either. He sought to effect a reconciliation.

The details of this need not concern us, and not just because I, without a classical philosophical training, have been unable to grasp them properly. Ultimately the project failed in the sense that there was no satisfactory reconciliation to be found – which, as Mr Hughes points out, is not to say that the effort was not worthwhile. Often the journey means more than the destination. And Quick leads our thoughts to many interesting places. His struggles help us to understand what Christianity is about, beyond the perpetuation of ancient traditions.

The bigger problem with Quick’s work, though, is not his failure to resolve the tension between Hellenic and Hebraic thought, but the way that, in the later half of the 20th Century, idealistic, classical metaphysics has fallen out of fashion. We set our sights lower these days. We feel that a single Truth is unattainable, and we are content to examine rival versions in an unresolved pluralism – we make our own choices but without the expectation that the rest of the world must follow.

Reading about Quick throws light on my own faith, or lack of it. After an Anglo-Catholic Church upbringing, and extensive engagement with Evangelical traditions at university, I came to reject anything that looks like Quick’s “Hebraic” tradition. But without it, what do you have? Scientific materialists believe in the Logos, but that leaves them a long way away from anything like a religious faith. You can layer on top the poetry of love from such mystics as Simone Weil, Quick’s contemporary, or the philosophical exploration of the I-Thou relationship from Martin Buber, another contemporary of Quick’s, of the Jewish faith. That gives you depth. But it was Barth’s highly Hebraic vision that challenged Hitler, and somehow moved things into the concrete world of action and counter action from that of mystic contemplation. I cannot resolve that tension in my soul, so I call myself an agnostic. Quick’s philosophical apparatus may be dated, but the challenge he confronted is at the heart of any attempt to reconcile a modern understanding of the world with religious faith.

 

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Why I’m sceptical about the Citizen’s Income idea

There is growing interest in the idea of a Universal Basic Income (UBI), also called Citizen’s Income, to replace means-tested benefits. This was given a lift last week by the think tank RSA. The Lib Dems are also reported to be looking at it as part their review of welfare. The idea already has some totemic value on the left – it is part of the Green Party policy pitch. It is an interesting idea, but my scepticism is growing. But it has along pedigree: I first remember it being advocated by Paddy Ashdown in the 1990s.

Why the interest? Well the benefit system has become fiendishly complex, with entitlement hedged around by all kinds of rules. Applying for benefits is often demeaning, and the bureaucracy involved is arbitrary. Although the government is trying to reduce the complexity of benefits with the introduction of Universal Credit (UC), which is phased out as income rises, this brings its own nightmare. To work, it needs up to date information on what people are earning. The systems difficulties associated with this have led to repeated delays in its introduction. Some of these problems may in the end prove insoluble; the project has borne many of the hallmarks of over-ambitious failed technology projects, though the bad press has eased over the last year.

A UBI would replace these benefits, including the old age pension, child benefit, unemployment pay and the tax free allowance on income, with a single system of payments to everybody. This would doubtless have to be age-related. The RSA version suggests a low rate for children (payable to parents), and a high one for the elderly. Extra allowances would need to be made for those with certain types of disability. This cuts through the current complexity.

Of course the first big design issue is affordability. How high would taxes have be to pay for it? Consider the basic maths. If the allowance was set at the mean level of earned income (spreading the income from those that work across those that don’t) across the economy, then tax on income would have to be 100%. On top of that you would have to pay for the NHS, defence, schools, the police, and so on.  If it was set at 50% of average income, tax would have to be 50% just to pay for it, and so on. So any design has to push the boundaries of how low can you get away with. But how low can the entitlement be and still be able to realistically provide a sole income for the unlucky? The RSA version can only get through this conundrum by sidestepping the rather central question of housing costs.

After you have navigated that rather central problem of scale, more problems await:

  • Incentives to work. If the income is going to be sufficient to sustain people through unemployment, might it not encourage a frugal lifestyle of people who never work (legally, anyway), reducing the tax base? This would be parasitic, and surely seen as such. Which then leads to the toxic politics of people who suspect that this is the case of their neighbours, minorities, and the like. The experience of places where something like the UBI currently works (Native American reservations with gambling or natural resources income, for example) is not particularly encouraging: too many people can lapse into a hopeless, dependent lifestyle.
  • Housing is a harder problem than just affordability, as it varies so much from place to place. But, to be fair, this is a problem with the current system too. A whole new approach is needed to housing policy, and that would need to work alongside this reform. This encompasses such issues as the availability of social housing, regulated the private rental sector, and the access to housing finance which seems to be too easy, so pushing up prices needlessly). This, for my money, is a more urgent problem.
  • Who is an isn’t entitled? At what point do people coming to live in the country become entitled? At want point do people choosing to move overseas lose entitlement? This is one area where being in the EU, with its multiplicity of benefits systems and no-discrimination rules, makes things harder.
  • Enforcement. There is an invitation to fraud here, as people will be tempted to create claims for fictitious people, or the deceased, etc.,and that points to the use of some kind of central registration. The RSA suggests linking to the electoral register. This sits uneasily with British traditions of keeping the state at arms length.
  • Taxes. There is a need to roll in personal tax free Income Tax and National Insurance allowances to make it pay. That means all income is taxable. This could involve quite a lot of extra administration as more people are brought into the scope of taxation.

There are no doubt many more design issues. The problem is not so much that these difficulties are insuperable, but that the idea is revolutionary. And revolutions usually fail, because it is impossible to foresee consequences. All the modelling is based on the idea that behaviours will not change very much – when they are bound to. If possible change should be in smaller, evolutionary steps.

But I have a deeper, philosophical problem. This all reeks of a Big Idea to be dropped from a great height on people by central government. Liberals are rather prone to this. They love the idea of universal righst and entitlements, because they think they are empowering. But the alternative view is that such grand, centrally designed systems are dehumanising and create dependency.

My view is that instead of such systems of legal rights and entitlements, we need to give the state a human face. That means that individuals in difficulty have access to intermediated services and support which tie together, physical health, mental health, social support, housing and so on. These would in packages that are designed to move people onto a sustainable path, and also conditional on to some extent on how the individual engages. Universal income is based on a heartless idea of “Take the money and you’re on your own.” Of course intermediated services might be considered illiberal, because they place considerable discretionary power in the hands of agents of the state.  I think that can be managed through stronger local accountability. And I think that current British society has the civic strengths to pull it off. Though even here, I must beware of my own Big Idea to be dumped on an unknowing public.

But Citizen’s Income is supported by a lot people I respect. No doubt the idea is worth exploring further. But I will take a lot of convincing that this is the best way forward for welfare reform.

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The tide is turning against Heathrow expansion

Last week the British government decided to defer its decision on whether to expand London’s Heathrow airport. This has been roundly condemned by people the media calls “business”,  referring to self-appointed lobby groups of large companies. But what is all this about? Now it could be what the lobbyists claim, which is weak government pure and simple. Or it could be a straw in the wind for a much more interesting change in attitudes in the political economy.

The story so far. Heathrow has long been operating at near capacity. London’s second airport, Gatwick, is approaching capacity too. If you believe that air travel must increase for a healthy economy, then something must be done to expand capacity. In the long view this conventional wisdom is open to question: but as a good liberal I must accept that the freely made choices of my fellow citizens point to further growth in air travel. The politics, however, are toxic. Airports in the prosperous south east of England are not popular with those that live nearby, whatever benefits they bring. Since Heathrow is quite close to the London conurbation, that adds up to an awful lot of people. Many of these people live in marginal constituencies.

Nevertheless the Labour government prior to 2010 supported an extra runway at Heathrow. But both the Conservatives and the Liberal Democrats, spying opportunities in these south west London seats, were vehemently opposed. The Conservative leader, David Cameron, went as far as to say: “No ifs, no buts, there will be no third runway at Heathrow” (or something like it). When these two parties turned Labour out in 2010 and formed a coalition, the existing expansion plan was thrown out. Instead the government set up an Airports Commission to evaluate the alternatives, to conveniently report after the next General Election, in 2015. It duly reported in the summer, recommending a new runway at Heathrow, in a different place to the previous plan. By then the Conservatives had crushed the Lib Dems and were in government on their own. It would have been a good moment to show decisive leadership and accept the Commission’s results. They would have been able to steamroller opposition from their London MPs.

But Mr Cameron didn’t. He dithered. Why? There seem to be two nakedly political factors. The first is that Zac Goldsmith, the Tory MP for Richmond Park, had threatened to resign and cause a by election if the government supported Heathrow expansion. That ordinarily would be a little local difficulty – but he is the Conservatives’ candidate for London Mayor in 2016. A split would be messy. The second is that Mr Cameron’s “No ifs, no buts” promise is weighing on him. He fears a “Nick Clegg moment”, referring to the collapse in the Lib Dem’s leader’s public standing when he decided to reverse a pledge on student tuition fees after 2010. And Mr Cameron needs all his political capital to carry through his referendum on the European Union. Perhaps this is enough to explain last week’s announcement to defer the final decision until next summer, after further reviews of the implications for air pollution. By then the Mayoral election will have happened, and so might the EU referendum.

But there may be something deeper. It could be that the tide of conventional wisdom is moving against Heathrow expansion, recognising that the terms of reference of the Airports Commission were flawed. If that is the case then the delay is a process of gathering more evidence against Heathrow, so that a decision to expand Gatwick instead will be better proofed against judicial review.

Why might the tide be turning? Well, the case for Heathrow is based on 20th Century economics. The idea is that to make a big airport even bigger is more efficient that building up smaller airports. Time was when the concept of economies of scale was so baked into the conventional wisdom that this logic would not have to be seriously examined. But for airports it does have to be questioned. For a start, any air traveller knows that larger airports are less efficient for point to point travel. Every stage of the process takes longer than for a smaller airport. I remember vividly that taxiing to the terminal after landing at Schiphol airport took as long as the flight itself.

But there is a clear benefit of a running a large airport: that of making connections. This is referred to as being a “hub”. There are two aspects to this. The first is that hub airports can consolidate short distance flights into long distance ones, in a configuration that allows demand for long haul journeys to be met more efficiently. The second is that the presence of a lot of people waiting around in hub airports is an economic opportunity for the host country: it can sell them things. It is on the benefits of the hub operation that the Airports Commission’s recommendation is based: expanding Heathrow will generate bigger benefits to the British economy as a whole than would expanding Gatwick. This can be challenged, however.

The first point of challenge is on the efficiency of the hub model as the best way of managing long haul traffic – or of a hub based in London. One argument is that technology is moving against this. Smaller, efficient long haul aircraft are being developed that allow the alternative, point to point model to be more viable. The second is that the Arabian Gulf is emerging as an alternative airport hub location, and one which has a clear comparative advantage, if not an out and out absolute advantage. Pumping up a London hub is fighting the laws of global economics.

The second point of challenge is on the business of running a hub: the shops and restaurants. The London economy is already overheated, as shown by very high property prices. There really is no need for the extra income. If the hub was in the north of England, that might be a very different matter. The fact that the airport is so unpopular locally gives a clue to this.

And on top of these direct challenges there is a strategic tide. Politicians and economists are worried that economic growth in developed countries like Britain is bypassing most people, and ending up in the pockets of large multinationals and a tiny elitesof people that run them and provide supporting services such as tax avoidance advice and banking. The penny is dropping that this may largely be down to the excessive market power of large businesses, extracting monopolistic profits. And yet the Heathrow business case seems to be a paean to this form of monopolistic capitalism. And those business lobbyists provide an unwitting confirmation of this.

Before the Commission reported, it was arguments such as these that induced me to predict that Gatwick would win over Heathrow. The Airports Commission was a blow; but I am holding to my prediction yet.

 

 

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The left is failing. It must confront reality

Pity the French Socialists. Last weekend they managed to stall the Front National at regional elections – but only by supporting the centre-right Republicans. The collapse of the left and centre-left in France offers lessons to the British left – in the Labour, Liberal Democrat and Green parties. But they are not listening.

Now remember that only three years ago the French Socialists were triumphant. François Hollande won the presidency, and parliamentary elections confirmed the party’s ascendancy, along with left wing allies, including the French Greens. France was in an anti-capitalist mood; this was no victory of the centre ground. The Socialists promised tax hikes on the very rich, and the reversal of many of the centre-right’s reforms on public services. It is probably as close as we will see in Europe to a triumph of the British Labour Party under Jeremy Corbyn – right down to a leader that did not follow the conventions of personal charisma.

But the Socialists lost their way almost immediately. They put through a few token left wing changes, but have been following the political centre ever since. The left wing programme proved unworkable. The electorate could not see the point of the party. Working class voters defected to the Front National, offering another mix of un-keepable promises, alongside its defining xenophobia. That France’s fractious centre-right was able to recover and provide the main challenge to the FN completed the humiliation of the left.

The problem for the left is that it is happier protesting and airing their “values” rather than governing. And a lot of its protest turns out to be very conservative. Many on the left seem to see their mission, not as improving the lot of the disadvantaged, but as protecting (“defending”) this or that public institution from attempts to reform them. Alongside this they protest at “injustice”.  But there is no clear and consistent picture of how to make things better. There is an idea that you can raise taxes harmlessly by aiming at the wealthy, and then using the money to pump up public services and benefits without asking whether they are doing the job they are meant to be doing.  And as for foreign affairs, it seem to be largely making a noise about various victim groups, and then doing practically nothing about it.

One example of political failure is dealing with racism. Look at this article from Kehinde Andrews in the Guardian. He is commenting on the 50th anniversary of the Race Relations Act. He points out how some forms of racism have been driven back in the 50 years, but then points at the racial minorities still suffer discrimination, and are disadvantaged on a wide variety of measures. The failure is clear, but what to do? All Mr Andrews can say is this: “Britain must acknowledge the uncomfortable history and reality of racial discrimination and be prepared to consider solutions that transform the conditions faced by oppressed groups”. Note that he has moved to language of victimhood and oppression. And the complete absence of thinking about how on earth to solve this intractable problem. To be fair, Mr Andrews is not a politician. But I hear all too often the language of victimhood and difference amongst leftist politicians who address ethnic minority issues. Everything is always somebody else’s fault.

As Tony Blair put it in a recent article in the Spectator:

Right now we’re in danger of not asking the right questions never mind failing to get the right answers. All of it is about applying values with an open mind; not boasting of our values as a way of avoiding the hard thinking the changing world insists upon

This leaves the left with two big problems. First is trying to present themselves as a convincing party of government. This is what Labour failed to do in this year’s General Election. But the French Socialists showed that you can still win, if your opponents are even more distrusted than you are. Then comes the second problem: what do you do when the left achieves power.  Does it “stay true to its principles” and push through a populist left-wing programme, attacking independent businesses, and cosseting public sector workers, including an expanded nationalised industry. Recent examples of this approach are Argentina under the Kirchners, Brazil under Dilma Rousseff, and Venezuela under Hugo Chavez. In the end the government cannot escape economic reality, and the economy turns sour. Interestingly this approach seems to be much more difficult in Europe than in South America. No doubt European institutions are stronger – making wilful suicide much harder. France cannot print its own currency, for example. The other choice is simply to U-turn, as the French did, and implement policies that most people cannot distinguish from those of the centre-right. This leads to an existential crisis for the governing party.

In Britain we can see that with the second party of the left, the Liberal Democrats. They entered coalition with the centre-right, the Conservatives, in 2010. Activists and members fled; the party felt as if it was imploding. It was vilified from across the political spectrum for selling out. Mostly this was because they dared to face up to the compromises of government – although it was also tangled with the toxicity of working with the Conservatives.

Rather than confront the realities of government, the left indulges itself with the language of protest, usually constructed in abstract terms (“austerity”, etc.) that means little to people they are supposed to be helping. And that leads to two problems. The first is losing working class voters to the populist right. British leftists have had some luck here. Ukip is the only credible party fishing in these waters, and they are not adept. But the popularity of movements like Britain First shows that there is a ready group of white working class (and not a few middle class) voters who are ready to take this direction. The second threat is the centre-right. If this group has an organising philosophy, it is economic liberalism, using a conventional wisdom that has built up since the 1980s. It is well past its sell-by date, and yet it is more credible than the non-offering of the left.

To reverse this, I think the left will need to do three things:

  1. Develop a new policy framework that addresses the challenges of the current world. That is the main focus of this blog, so readers should have some idea of what I mean. It needs to focus on sustainability, local networks and public services coordinated around the needs of users, not providers.
  2. Develop a better language with which to frame its ideas to those currently disillusioned with politics. I suspect this is better done through local, community politics than clever brand building by Westminster operatives.
  3. Develop alliances across the parties of the left, and move away from destructive tribalism. This will need to be underpinned by political reforms that make such collaboration easier (proportional representation, for example). There are some good ideas bubbling up across all the parties, alongside the nonsense.

There is, alas, almost no sign of progress on any of these three lines. But I will not give up hope.

 

 

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Success in Oldham deepens denial among Labour left

Featured on Liberal Democrat Voice

Last week BBC Radio 4’s Thinking Aloud ran a piece on research showing how people assume that most other people think like them. This is, apparently, particularly strong at the political extremes. We don’t need academics to tell us this, of course – it explains many of history’s major political misjudgements.  Prime candidates at the moment are supporters of the Labour leader Jeremy Corbyn, who are in deep denial about how difficult it will be for their party to win elections. In this, if nothing else, they resemble the supporters of Donald Trump in the US.

Of course, being in denial is something that, as a Liberal Democrat supporter, I know something about. Throughout the Coalition years we were told that our party faced oblivion at the next election. We refused to accept this, but alas we were wrong. Denial is always easier to see in others. The main problem on the Labour left is that they assume that most Britons share their view that the Conservatives are out only to line the pockets of the rich, and that “austerity” is evil. Now I’ve written before that this outlook will doom the Labour Party to failure, and that one of the first tests of the Corbyn leadership would be the Oldham by election. Well that election was last week, and it was a triumph for Labour. They increased their percentage share of the vote, though with less votes overall. A challenge from Ukip failed to materialise: they increased their vote (by 3%), but by much less than the Conservative vote fell (over 9%). Is this vindication for the Corbynistas?

Up to a point it is. It shows that all the chatter that Labour’s lurch to the left has affected the party’s electoral standing is just that. There is little decent data on this result, analysing who did and didn’t support each party, so we can’t say for certain what happened. But as Alistair Meeks points out in politicalbetting,com, the result is completely consistent with previous by elections in the area. Nothing much has changed. There is much for Labour supporters to take heart from here.

The first point is that Ukip look like a busted flush.  The party was supposed to be picking up disillusioned white working class votes, and presenting a major threat to Labour in the north of England. They nearly won one of those previous nearby by elections. If Mr Corbyn did not play well on Oldham’s doorsteps, as the chatter suggested, Ukip’s Nigel Farage played no better. He used to be a media star, and regarded as “authentic”, but he seems to have lost his credibility. The Ukip result in the May General Election was disappointing, as they were mugged by the ruthless Tory election machine. Mr Farage’s shenanigans over whether he was resigning as leader may have had the same sort of effect on his public standing as Nick Clegg’s U-turn on university tuition fees. The party needs to dump him, but probably won’t. The transition from a Tory breakaway in the shires to being a party of working class protest is too much for it.

The second cheering point for Labour is that their challengers to the left are thoroughly neutralised. The Greens achieved barely 1% of the vote. The Lib Dems put in a major effort and still lost their deposit, and tried, unconvincingly, to draw comfort from the fact that their vote did not actually fall from a mere 3.7%. In this environment at least, these parties are treated as a complete irrelevance. In living memory the Lib Dems were capable of pulling off a stunning wins almost anywhere. There are some signs in local by elections of a Lib Dem bounce back, but it is highly localised and bypassed Oldham.

All this bodes well for Labour’s prospects in May 2016, the next big local polling date, when there are also elections to the Scots and Welsh parliaments, and London’s Mayor. Labour’s candidate for London Mayor, Sadiq Khan, has every chance of wresting the position back from the Conservatives. In Scotland, though, prospects look dire for Labour as the SNP machine looks dominant. It is even possible that the party will drop to third place behind the Conservatives. But London’s political class seems to have written Scotland off.

So why am I suggesting that Labour activists are in denial? Because May’s result in the General Election was terrible for them and there is not the faintest sign of it getting better – only that it is not getting worse. Their prospects in Scotland are not the sort of irrelevance that Londoners seem to assume. Scotland is one of the most important battlegrounds in British politics; it has been for at least five years. If Labour can’t engineer a recovery there, they will be locked out of politics in Westminster. Interestingly, the success of the SNP was a key piece of evidence for the Corbynista thesis – that the public was really angry about austerity, and Labour’s big mistake was not to be angry enough.  But Scots voters turned on Labour because they thought they were incompetent, and did not stick up for Scotland. Mr Corbyn’s election does not improve their standing on either count, to put it generously.

Labour may be standing up well enough in the north of England, in spite of a cheeky challenge by the Conservatives to win back support there, but there is no sign that Labour can win back those politically sceptical middle-England voters that they progressively lost after Tony Blair stepped down as party leader.  To do that Labour activists must break free of the notion that most people share their political outlook, deep down. Meanwhile a dangerous rift between the parliamentary party and the leadership reinforce a general air of incompetence, the most fatal thing in politics.

I have heard a number of people suggest that the real winners of Oldham are the Conservatives. It is hard to disagree.

 

 

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Osborne uses an accounting trick to implement People’s QE

When Jeremy Corbyn, was running his successful campaign for the leadership of Britain’s Labour Party, he floated the idea of “People’s QE”. “QE” stands for Quantitative Easing, the means by which central banks try to loosen monetary policy in an economy without reducing interest rates – handy when interest rates are near zero. It attracted quite a bit of attention from economists, much of it quite approving. That is because the idea touches on one of the most important aspects of modern economic policy: the suggestion that governments can sustain quite big deficits simply by “printing” money. In the end we find, not for the first time, that the current Conservative government acts much further to the political left than it talks, as did its Conservative-Liberal Democrat predecessor.

Back in the 1980s, when monetary policy first became the height of fashion, we had uncomplicated views about what it was about. Although most money was in bank accounts, economists painted a picture as though it was all in notes and coins, and the various actors behaved as if they were kids spending pocket money (and even then was probably too simplistic…). They talked of a “money supply”, which could be manipulated, and the size of which affected spending behaviour. We are older and wiser now, though many economists and journalists still talk about “printing money”, even though physical money has almost no role to play, and bank accounts are different in very important ways. Even trained economists who should know better sometimes trip themselves up in this way. For example there is much excited talk about how commercial banks create money rather than the central bank – which turns out to be a red herring on reflection [That link from Paul Krugman includes a broken link to a masterful essay from James Tobin in 1963, read it here]. It is better to look on monetary policy as a series of policy instruments under the control of the central bank, which have not entirely knowable effects on the economy at large.

The most important of these instruments is the short-term interest rate the central bank charges to commercial banks in their interactions with it. These ripple right through the economy. But when they are very low, as they are now in the UK, it is very hard to lower them further. Some European banks are using negative interest rates without the sky having fallen in, but these negative rates aren’t very high – fractions of a percentage point. So how to “loosen” policy – that is encourage a greater level of economic activity? Here the invention of QE comes in, pioneered, as so much of modern policy, by Japan in the 1990s and early 2000s. This is often talked of as if it means printing physical money and handing it out to the kids to spend on sweeties. What it actually means is that the central bank goes into the market and buys bonds, usually government bonds, like British gilts.

How does that help? Well the people who held the bonds now hold cash instead, which they should spend on something else – which might include new capital investment, after it has changed hands a few times. And it might reduce bond yields, which will reduce long term interest rates right across the economy, and increase asset prices. This creates a “wealth effect” that might encourage the mass affluent to spend a bit more money on stuff that people make. Or all that could happen is that there is a merry-go-round of money chasing various flavours of pre-existing asset to create an asset price bubble. It’s not very clear what has happened to the Bank of England’s QE over the years. The bank produces various statistical associations as evidence that it has helped stimulate the wider economy. Others are sceptical.

Which is where People’s QE comes in. What if, instead of buying government bonds in the market, the money went into extra government spending, such as infrastructure investment, or even current spending. Because the Bank controls the currency in the UK, it can fund the government’s deficit without the need to borrow money from investors. It borrows money from itself. This amounts to supporting looser fiscal policy (i.e. government tax and spend), which should provide a more predictable stimulus to the wider economy.

Mr Corbyn’s advisers developed the idea with the suggestion of administrative structures to channel the extra money into infrastructural investment. This puzzled some economists. There is no need for such engineering. All the government has to do is spend the money, increasing its deficit, issue bonds as normal, which the Bank of England then buys in the existing QE programme. If the Bank is buying bonds, the government is less beholden to the bond markets. In Japan, which has been practising QE on a massive scale, the government now issues little net debt to the bond markets, making large deficits sustainable.

But how does this work? Surely it is something for nothing? The answer to that is that it only works if there is slack in the economy, and the government steps in to create demand because businesses are investing less than the public is saving, creating an imbalance. If this is not the case, you can get inflation, which is what happened to Germany and Austria in the 1920s, Zimbabwe more recently, and is happening in Argentina now. Alternatively you get a asset price bubble. Which in the modern, globalised financial and trading system is in fact more likely for developed economies – though this seems to be a blind spot for many economists, who think that asset markets are too efficient for that.

But in the developed economies, including the US, the Eurozone and Japan, as well as the UK, there does seem to be scope to do this kind of stimulus. There is a lack of business investment, while, it appears, too much money ends up in the hands of rich people, who don’t spend it. Nobody knows how long-term this problem is, but it does look as if large government deficits are much easier to sustain than before. If the bond markets refuse to fund all of the deficit, then central banks can simply “print the money” as the popularisers would put it. Prominent British economist (Lord) Adair Turner (whom I am something of a fan of) suggested that this could be a long term policy in a recent book.

In Britain there is an accounting wrinkle which is having an important impact. The Bank buys government bonds, but it holds them rather than cancelling them, so that it can sell them should it want to tighten policy. So the government still pays interest on the gilts the Bank holds, and this used to count towards the publicly declared deficit. But the Coalition government changed the rules, so that it does not count the interest on the Bank’s holdings against the deficit. That reduces the fiscal deficit and allows the government to spend money on other things instead. Also the effects of QE on longer term gilt yields reduces the deficit projected by the Office for Budget Responsibility (OBR), which plays such a pivotal role in longer term government spending plans. According to the FT’s Chris Giles £22.4bn of the £27bn that the Chancellor, George Osborne, “found” to allow him to loosen austerity measures in the Autumn Statement resulted from these accounting tricks. This boils down to People’s QE, and Mr Osborne used it to fund his U-turn on tax credit cuts, amongst other things.

The problem, as Mr Giles points out, is what happens when the Bank feels the need to tighten policy in, say, a year or two’s time? Then the whole thing goes into reverse. Politicians have seen gain in blurring the distinction between fiscal and monetary policy. That could return to haunt them, at both ends of the political spectrum.

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Tim Farron comes of age as Lib Dem leader

The honeymoon is over. For the last few months Liberal Democrats have been able to project their hopeful expectations onto Tim Farron, their new leader. And he skilfully avoided disappointing them. But his decision to back the government in last night’s vote to involve British forces in attacks on Islamic State in Syria has changed all that. Now, alongside the traumas of the Labour Party, we are asking what political parties are for, and how politics should work.

I was surprised at Tim’s decision. As my last posting shows, I was personally inching towards that view – but I consider myself to be something of an outlier in Lib Dem circles. The party at large is clearly against intervention, as a recent online poll showed. My Facebook timeline showed strong opinions against. And he had given himself plenty of cover. He had set five tests against which to judge any proposal to intervene. This is usually a political tactic to oppose something. And, to put it kindly, it is stretch to say that all five tests have been met – though it is also true that there has been movement in the right direction.

My doubts over intervention were not helped by David Cameron, the Prime Minister in today’s parliamentary debate. First he suggested that the attacks were needed to prevent IS activity in Britain. They will make very little difference; that is just not how these things work. Then he tried to suggest that there were about 70,000 “moderate” fighters who might act as the ground spearhead to defeat IS, without invoking the Syrian government under Bashar al-Assad. Even if the numbers are right, they do not form a coherent fighting force with the military skill to take on the highly effective IS army. And thirdly, it came out that he had smeared some of his opponents as terrorist sympathisers. That was the previous night in a “private” meeting with his party’s MPs – and it alludes to some of the new Labour leadership’s apparent sympathy for “freedom struggles” in the past. He might have graciously apologised, but he did not. As Jeremy Corbyn, Labour’s leader, said, it diminishes the office of Prime Minister. But it is a foretaste of Conservative tactics against the new model Labour party.

Mr Corbyn, on the other hand, was a model of dignity. There was no high-flown rhetoric, but at least what he said was clearly true. And if it was also beside the point, the same can be said of Mr Cameron. The reason why there is a momentum in favour of intervention, at least in parliament, is that there is s strong public mood to “do something” after the Paris attacks, that a gesture of solidarity with France will have diplomatic benefits, and that with Syria creating a massive refugee crisis, it is not a political topic we can turn our back on. Inaction seems to pose just as big problems as action. If it is good enough for the Germans, whose government is planning to commit forces to the same campaign, almost without precedent, that surely it is good enough for the UK? The fact that the proposed British contribution is small scale is actually in its favour – a lot of diplomatic bang for quite a small buck. Iraq this is not.

This is what politics is about. Weighty issues for which there are no obvious solutions, and where messy compromises are needed. It is about politicians from across the country and different political persuasions, working out what the country as a whole should do. The trouble is that there seems to be a new politics about, where political representatives are seen as figureheads for wider movements of like-minded people, for whom compromise is betraying your principles. The Labour Party is being overwhelmed by this conception of politics. Labour activists oppose intervention in Syria, and have turned it into a totem issue. They have been harassing any MPs and their staffs who take a different view. Some talk of rooting them out as “scum”.

Such are the death throws of a party that once aspired to govern. After being hammered for entering coalition, the Lib Dems can safely put such aspirations to one side. The behaviour of their MPs is more of a puzzle – though Tim’s leadership opponent Norman Lamb, and one other of the eight MPs voted against. Many of the party’s members have similar views to those Labour activists, though standards of behaviour and language are infinitely better. There has been much talk of rebuilding a core vote – which seems to be code for ignoring messy compromises and attracting the support of more motivated, middle class liberals.  But Tim Farron and his fellow MPs seem to have an older view of what MPs are for. They seem to have considered the vote on its merits, rather on any wider political impact. (I will say the same for Norman, incidentally. The differences between the two men are a complete reversal of what was said about them in the leadership contest, when Tim was portrayed as being to Norman’s left).

That wider political impact is hard to judge. Coming out in favour of intervention is the sort of thing that will play well with floating voters. But it will be hard for the party to get any credit for it. They famously opposed the Iraq war, so people will expect them to oppose all military interventions. They will just get confused when they do something different. And the party’s members and activists will not be happy. Some could leave, others just drift away.

It may too much to hope that the party will take this as a lesson on what successful politics must look like. Political representatives are responsible to their voters first, and party membership second. It is not “democratic” for a bunch of self selected activists to agree something using voting procedures, and then impose this on people elected in proper, public elections. Getting things done means compromise and lending support to policies that are second best or worse.  This is why we use a system of representative democracy. Political movements not prepared to engage fully with the real business politics ultimately get nowhere. – or if they do get somewhere, end up by forcing their views on others and suffocating political debate.

Unlike what the Labour Party is becoming (and, it has to be said, a lot of what it was of old, for different reasons), the SNP or the Greens I hope the Liberal Democrats will understand this and give their leader some slack. But this will prove a painful coming of age for him.

 

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High morals v low pragmatism: what on earth to do about Syria?

Do we let British forces join their US and French allies and intervene in Syria against the forces of Islamic State (IS)?This is now the biggest issue in British politics.  it is not an easy question.

So often we are urged to take such important decisions based on high moral principle. In this case, do we attack those who have, in effect, declared war on us on principle? This seems to be the French view. Or do we rule out the use of violence, outside strict self-defence, on principle? If such moral principles are your guide, then deciding about foreign interventions becomes much easier. Take your moral stand, and if it doesn’t go well, then it is somebody else’s fault. And if the place of the intervention is remote it is somebody else’s problem too. Such reasoning is commonplace amongst the politically engaged – but it is a cop out. Actions (and non actions for that matter) have consequences, and we can’t escape responsibility for them as far as they are foreseeable.

And, of course, the closer we get to the place of intervention, the muddier it all seems. For us the big issue in Syria is the progress of IS. And yet, with the exception of the government of Iraq, this is not top of anybody else’s agenda. This can be seen from last week’s episode with the shooting down by Turkish forces of a Russian bomber aircraft. The story presented by neither side is convincing. The Russian bomber looks as if it was attacking a Turkomen force that is nothing to do with IS, but which is resisting the official Syrian government of President Assad. The Turkomens seem to have the covert support of the Turkish government. Russian actions have been high-handed and directed at supporting the Assad regime, under the cover of fighting “terrorism”. The Turks seem to be telling them to keep away from their protégés in the only language the current Russian regime seems to respond to.

To my mind it is the conflicting agendas of the local middle-ranking powers that is the most frustrating aspect of the Syrian situation: Turkey, Iran and Saudi Arabia in particular. To them IS seems to be of rather tangential importance, whose main use is as a hook to draw in Western powers on their side, taking the pressure off them to resolve the conflict. The West still suffers from a post imperialist idea that it is the world’s policeman, and that the local powers should be treated as unruly children rather than accept responsibility for the maintenance of peace and order in their neighbourhood.

It doesn’t get much better when you look at IS itself. For some reason this organisation likes to project an image of undiluted evil. It seems to help it draw in foreign recruits to its cause – who see moral clarity where we see evil. But its support base is clearly much wider than that. The local Sunni populations, in both Syria and Iraq, have lost faith in their official governments, and with good reason. Rule by IS seems preferable, and nobody is offering a credible alternative. Remember that the standard Western answer that you set up a democratic government has been tried in Iraq – only for it to be abused by unscrupulous power brokers intent on their own enrichment. Why should it work better next time?

All this fog points against the high moral case for Western intervention, and so against further British involvement. How can it be effective? And arguments of this type are seized on by opponents of intervention. But they too strike a high moral tone. They organise protest rallies; Jeremy Corbyn justifies his stance on the basis of the opinion of political activists, and urges these activists to lobby their MPs. Such tactics can only be driven by high moral purpose, not by a pragmatic weighing of the options.

This high moral purpose seems to be driven by a loathing of two things. The loathing of the use of military force in pretty much any capacity. And the loathing of Western capitalist governments, and especially that of the US, and all their foreign interventions. How these two loathings balance varies widely between individuals. But such moral arguments are clearly suspect. In Syria we have had years of non-intervention, or limited intervention, by Western powers. That has left the country in an appalling stalemate, which has now created a refugee crisis that is placing huge strains on European civic society. Surely this threatens Western interests sufficiently for some kind of intervention? Are we being too dismissive of intervention, and using the clear practical difficulties as cover irresponsible inaction?

Building a pragmatic case for intervention runs something like this. The US and France are already heavily engaged. By joining them as a full member of that alliance (Britain already provides  support in Iraq) may not make a huge difference to that joint effort immediately, but a three country alliance would have considerably more diplomatic weight than the current incomplete one. Britain’s current half-hearted contribution is almost useless on that basis. This alliance of Western nations, which joins up with local Kurdish forces, would then be able to bring pressure on other actors to work towards a new settlement of the Greater Syria region (i.e. Syria, Iraq, Lebanon and Jordan) than can form the basis of future peaceful development.

But any such settlement must face up to the central challenge of what can replace the current IS regime? Neither the Assad regime, nor the Iraqi one looks up to the job, though changes in leadership might help. Trying to create new government institutions from nothing is what went wrong in Iraq. Everybody says that it would be impossible or immoral to negotiate with the IS regime, and looks a fair judgement based on its current leadership. But might a successor emerge from within, amongst its clearly highly competent military leadership, with whom negotiation might be possible?

So there you. The pragmatic arguments against intervention have real weight. There is no clear game plan to bring matters to resolution. But the Syrian war is causing damage at continental level. Can we really just walk away and hope for the best?

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