Book Review: Austerity: the history of a dangerous idea

Mark Blyth delivers a masterful, blistering, devastating, and totally convincing critique of austerity in his book Austerity: the history of a dangerous idea. It’s impossible to read this book and still believe that austerity is the right policy. Blyth writes engaging, powerful economic history of economies applying austerity, including the US, UK, Sweden, Germany, Japan and France in the 1920s and 1930s, Denmark and Ireland in the 1980s, and the Baltic states in 2008, demonstrating in each case that austerity does not work. It does not generate growth or reduce debt. He shows that the current hot spot crises in Greece, Spain, Ireland, Portugal and Italy are not due to profligate government expenditure, but to more differentiated specific factors. He makes the point that other economies cannot follow the German example of high savings and high exports, as the UK and EU seem to expect, since the whole world cannot be a net exporter.

He sets out the intellectual claim for austerity argued by the Bocconi University of Milan economists Alberto Alesina and Francesco Ardanga. Their core argument is that ‘when spending cuts are perceived as permanent, consumers anticipate a reduction in the tax burden and a permanent increase in their lifetime disposable income’ (p172). Alesina delivered this diagnostic to the ECOFIN meeting in Madrid in 2010, labelled by Bloomberg as ‘Alesina’s Hour’. The claim is very weak theoretically, and Blyth shows that the country economy data Alesina and Ardanga quote rejects rather than confirms their austerity hypothesis. So far, so good, in fact very good.

Blyth’s weakness is that his diagnostic does not go far enough. He is content to prove that austerity doesn’t work and then rather lamely propose forced government bonds and high tax as the alternative remedy. He places partial blame for the crisis on the Euro, which makes little sense, since the US and UK economies with sovereign currencies experienced exactly the same crisis. Beyond this he blames the banks, and claims that the taxpayer is paying for their errors. This is the well rehearsed standard view and is where Blyth needs to go further and dig deeper.

The missing diagnostic which he hints at, but doesn’t develop, is that the crisis was caused by demand deficiency. In the UK economy between 2001 and 2007, real GDP grew by 19.5% but real disposable consumer income by only 11.5% (Office of National Statistics Blue Book data). This is the gap that led to unsustainable consumer credit and government deficit. We need to ask why this gap arose, and what better remedy can apply. Rising productivity is bound to reduce the income element of output, reducing demand for the output supply. The only effective solution is a citizen income. Allied to this, a new understanding of money is needed. Blyth follows financial orthodoxy in insisting that money issued by government either has to be supported by gold, or if not, has to be matched by a debt incurred as a government bond sold to the market. Neither is true. Money is entirely virtual. To secure its value, it has to match output GDP, and that alone. The crisis has been funded by such virtual money and has not at all been charged to the taxpayer – the amounts involved render this impossible. Until we face the intellectual challenge of a virtual theory of money which delinks money from the issue of government bonds, we will be faced by the unsolvable crisis of insufficient demand which we regard as unfundable. As Blyth writes ‘postwar economics never put all that much thought into money’ (p145). It’s time to correct that oversight, because herein lies our mistake, and it’s one which Blyth ultimately perpetuates.

* Geoff Crocker is a professional economist whose book A Managerial Philosophy of Technology is published by Palgrave Macmillan.

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45 Comments

  • david thorpe 2nd Jun '13 - 1:56pm

    Either this article or the book it pru[ports to review-or both-is a pile of ill researched piffle.

    Firstly-the current fiscal policy is not the same as the ‘austerity’ of the 1930’s-twhat we have now is a period of counter cyclical fiscal contraction which follows on froma fiscal stimulus-there was no fiscal stimulus in the 1930’s because keynes hadnmt invented it yet-so the very premise of the book is a malignant falsehod.
    Thats wehy the Tory right advocate yet me cuts-they dont believe in stimulus-and want to use 1930’s methods insetad-and thats why they are so angry witht he coalition.

    Secondly-Ireland’s policy in the 1980’s was hugely successful-laying the groundwork for the 1990’s and the largest period of growth and prosperity in that nation’s hisotry-

    really and trluly this book is a waste of tress

  • Relating this crisis to monetary policy and theory totally misses the point. It’s fundamentally a crisis of competition over limited global resources between first world and emerging economies.

    The reason why living standards have fallen since 2008 rather than recovering is because the cost of basic items – food, energy, petrol etc. – rather than falling in response to crisis in developed economies as has happened in the past, has carried on rising. Why is this? Because prices have been kept high as demand has surged in the BRICs and other emerging economies. Under these circumstances, you can have all the nominal demand you like, but it is going to be dissipated in inflation because the real resources aren’t there to supply demand. In effect, the resources supply curve has become “kinked” in that demand increases induce price rises, but demand falls don’t declines in price.

    Anyone who explains the duration of this crisis as being the fault of policy response is tilting at ideological windmills.

  • David Evans 2nd Jun '13 - 2:43pm

    And add to the two comments above the simple question of “How, When and By Who are our debts going to be repaid?” and the self-justifying shallowness of the intellectual contortions being put forward are truly staggering.

  • mike cobley 2nd Jun '13 - 2:59pm

    And aren’t we, ie the public, entitled to ask why we should be paying off the financial sector’s debts in the first place? Why is the bottom 50% of society being strong-armed into complying with a draconian downgrade in our standard of living while the wealthy sectors remain unaffected, corporate sectors get a tax cut, and the number of milionaires grows? It seems to me that liberal answers to these valid and pressing questions offer neither hope nor compassion.

  • Helen Dudden 2nd Jun '13 - 3:24pm

    Look to the problems in Greece and the EU, and to the great unhappiness produced with the cuts the coalition is making.

    I think the way they were put into place, was for me, the most degrading situation of our time.

    To give anyone the feeling that all is lost , there is nothing other than this existence for as long as takes, is asking for problems.

  • Geoff,

    I have not read Mark Blyth’s book, but have come across two short videos. In the first he is explaning the fallacy of composition http://www.youtube.com/watch?feature=player_embedded&v=go2bVGi0ReE “>Austerity and the second is a guardian interview on his book Austerity: the History of a Dangerous Idea – video interview with author Mark Blyth.

    I think you are right to point to the growth of unsustainable consumer credit (as a means of absorbing excess supply in an environment where real wage increases lag productivity increases) as a key factor in the development of the financial instability we have experienced.

    You comment, rising productivity is bound to reduce the income element of output, reducing demand for the output supply. This presupposes that the wage element of the GDP will not keep pace with technological advance. However, past experience with motor cars, domestic appliances, pesonal computers, mobile phones ect., indicate that prices/costs adjust over time to enable mass distribution of such output.

    RC’s point that the cost of basic items – food, energy, petrol etc. – rather than falling in response to crisis in developed economies as has happened in the past, has carried on rising because demand has surged in the BRICs and other emerging economies, is well made.

    I do agree with your conclusions that a new understanding of money is needed and to secure its value, it has to match output GDP. I do not however believe that solving that issue alone will not resolve the issue of falling living standards

    A more rational understanding of the virtual nature of money and a basic Citizens Income coupled with an effective job guarantee program can aid in both putting a floor under aggregate demand and mitigating, in part, the rising inequalities in income and wealth we have seen in recent decades.

    However, while necessary and desirable, these measures alone do not eliminate (although they may facilitate) the need for longterm sustained investment in education and skills, altenative energy sources, housing, infrastructure and industrial and International trade strategy.

  • Tony Greaves 2nd Jun '13 - 3:55pm

    Hurray. At last a sensible contribution to the austerity problem (and austerity is a problem not a solution) in LDV.

    Tony Greaves

  • Can over-spending ever be a dangerous idea? – At least according to the author of the book and those who applaud him. If the answer is no, then we need to know why and how (Tony Greaves – over to you).

    Personally, I find the idea that Greece was not profligate and did not over spend as remarkable. I can understand why austerity does not lead to growth and that may not reduce debt, but I can also understand why not cutting back can have worse consequences, including high interest rates and high inflation.

  • Tony Greaves 2nd Jun '13 - 4:49pm

    Does anyone seriously beleive that a reasonable level of reflation would lead to dangerously greater inflation and higher interest rates in the current environment?

    Tony

    (I did not say that over-spending was /never/ dangerous – why do supporters of austerity always assume that opponents are at teh very far opposite end of the spectrum. Economic poicy always has to find the right balance – the argument is that we are a long way from that at the moment).

  • If this book by Mark Blyth demolished the idea that austerity has ever worked and will ever work it must be a good thing even if it is weak on solutions.

    I thought with quantitative easing it was now accepted that central banks could increase the money supply without issuing government bonds.

    If the problem was “demand deficiency” then government spending could be the answer. I believe that money spent by the government on capital programs creates more growth than that created by tax cuts because the leakage is less and the frequency greater. As it was once accepted that government debt was a good thing maybe we should just accept that individual debt is OK so long as it can be serviced. Also I wonder if personal debt doesn’t equal itself out over a life time. I wonder how many people die in old age with large amounts of debt.

    If Geoff Crocker’s answer is increasing the money supply then we could return to high levels of inflation. I do not believe that increasing the money supply is an efficient way to achieve economic growth but it is a great way to increase inflation.

    @ David Thorpe – Both in 2008 and in 1929 there was a financial crisis and governments then carried out austerity and it was only once they stopped that green shoots were seen, so there are clear parallels.

    @ David Evans – Lord Soley said, “Contrary to popular opinion, the United Kingdom has on many occasions had far worse debt-to-GDP ratios—sometimes up to 225%. Britain has never defaulted and has had one of the best reputations in the world for financial management, and we still have it. … This might be a good time to remember that we finally paid off the debt for the Napoleonic wars in the late 1990s. My worries when I was at school did not include the debt which had been dumped on us during the Napoleonic wars.” Therefore government debt should not be seen as a huge problem and the debt does not need to be reduced because since 1692 our national debt has increased but its ratio to GDP has changed and over time it is likely to decrease so long as economic growth is greater than the increase in debt. However in the good times government debt can be decreased to stop the economy overheating.

    @ Joe Bourke – the money supply has to be greater than present GDP so there can be economic growth but the greater it is the greater the likelihood is that inflation will increase to meet the gap. The problem with monetarism is it has to guess what is needed to get the increase right.

    Thanks for the links Joe. In the Guardian one Mark Blyth states that the time for governments to reduce the debt is after growth has happened and I assume when private investment is growing creating more demand.

  • Simon McGrath 2nd Jun '13 - 5:49pm

    We have no idea what effect ‘austerity’ would have on our economy. We are running a deficit of £120bn a year – we aren’t trying it.

  • Paul Reynolds 2nd Jun '13 - 6:19pm

    It does indeed depend on how you define austerity. (Beware analysts who gloss over the question of defining the terms they are making sweeping assertions about !).

    Osborne is a Conservative and must argue that he is implementing anti-Keynesian austerity (in the form of spending reductions rather than tax increases) in order to reduce the annual deficit and reduce aggregate state debt. However if the Chancellor were Ed Balls, implementing exactly the same fiscal policies and with the same overall numbers, he would e arguing that he was implementing a massive Keynesian-syle stimulus in order to keep the economy from diving into a severe depression. Well, given there are some ministry-by ministry spending reductions one can argue that austerity is being implemented. But aggregate spending is rising and annual deficit reductions are planned to be modest. In addition the state has printed (monetised) hundreds of billions of pounds of spending (QE) in its bank subsidy, asset purchase programme. So this enables others to argue that there is a large stimulus programme underway.

    The fact of ‘austerity’ policy itself is not really clear enough to justify the rather tortuous and perhaps convoluted academic economic arguments discussed above, which are strongly against such a policy.

  • To Tony Greaves; Your comments on austerity often come across as binary black and white. Perhaps this is your way of putting your case. Simon Mcgrath voices the opposite side. I am much more with Paul Reynolds, whose narrative comes across as recognisably authentic. Instead of simply opposing a generic (and disputed) austerity, I would prefer to see you argue for making sure that such purse string loosening as there is to be directed to places to realistic growth (as well as maintaining basic protections, which I think you do).

  • David Evans 3rd Jun '13 - 1:03am

    Nice to get a reply Geoff.

    You mention (rather obliquely) the problem of debt, through your comment “The gap was funded by credit.” However, your comment “The gap has to be funded by another financial instrument, a citizen’s income which is funded by QE,” shows a professional economist approach that all can be solved by another intellectual quick fix, just as the problems of excess lending was fixed by developing CDOs. The fundamentals then were that people were borrowing ever more on assets that were already massively overvalued.

    The problem now is that many people can’t pay back their debts, hiding it with another financial instrument may buy us some time, but ultimately debts have to be repaid (even Napoleonic ones) and nothing I have read so far indicates that there is an understanding of that. If you can point me to something in the book on it that would be a start, but so far it just ain’t there.

  • @ Geoff Crocker

    Firstly I like it when the author of an article engages with the comments made on it. However Geoff has clearly misunderstood what I was saying:

    “Amalric repeats the mantra that stimulus will generate inflation, but this is not true if the stimulus is constrained by the ceiling of output GDP.”
    “demand deficiency clearly was evident. Amalric is also wrong – it was non-inflationary.”

    So what did I say about demand deficiency – “If the problem was “demand deficiency” then government spending could be the answer”. I would expect everyone to recognise that this means I am in favour of a stimulus. So what did I say was likely to cause inflation – increasing the money supply more than the economy can grow. The current increases in money supply are not causing inflation and they are not growing the economy either. So I recognise this is not always the case. I even stated that the money supply has to be increased above the present GDP. However I still believe that increasing the money supply can be inflationary and so there are problems with just using a monetary solution to the problem.

    Geoff is a lot clearer in his last post that he wants a citizen income funded by QE. This may increase demand however I still feel more economic growth and so more demand could be produced by increased government spending on capital projects. Also Geoff has not stated how a citizen’s income could be funded by QE and how it would be made acceptable to the general public who may just see it as a way of increasing the amount of benefits people get. He has not defined the “ceiling of output GDP”; does he mean the potential output of GDP? If so he hasn’t talked about the problems of calculating it.

  • Another problem we face in rectifying the government deficit is the interaction of international product markets and the UK labour market. While supply is seriously constrained on the product markets side, due to increasing demand from emerging economies, pushing up consumer price inflation and eroding living standards, in the UK labour market, supply is virtually unconstrained, as employers are able to call on a vast pool of labour from across the EU. As a result, workers have no ability to push for wage increases.

    This means we have the “wrong kind” of inflation as far as government finances are concerned, because low wage inflation means low revenue growth from taxation. At the same time, they are cutting corporation tax in order to compete in an international market.

    I believe blaming the slowness of the fall in the deficit on the so-called failure of austerity is to simply ignore these more important underlying forces affecting the UK economy.

  • *why do supporters of austerity always assume that opponents are at teh very far opposite end of the spectrum.*

    Because we are already running a 6-10% deficit (depending on how you count it), and opponents of austerity call this, well austerity.

    And since proponents of stimulus don’t really nail down just how much they will spend, we are left wondering, if £100ish billion deficit is called austerity, just *how much* would a stimulus be.

  • Michael Parsons 3rd Jun '13 - 2:30pm

    Well the essence is that we need an understanding of money. It seems pretty obvious that money is debt, for example bankers’ debts are money; and government debt is money; and your bills receivable is too, if you need to sell your unpaid invoices. While this is old hat, it does not seem to be taken in to consideration and we end up with conundrums about reducing government debt to pay debt, which in effect means reducing the money supply. If the Government cuts expenditure and uses the tax surplus resulting to write off debt in a bank book somewhere that money simply disappears – the book debt is cancelled.

    It is also helpful to distinguish between budget deficits and the national debt. Reducing the budget deficit by neglecting the human right to social well-being and employment (as is happening to our young people today at the very least) may slow the rate of growth of the National Debt but not reduce it; a fact that accounts for this confusion about UK not having “real austerity” because the ND is growing.
    As to arguing that all debts have to be repaid, well if they can’t be they aren’t. The UK national debt has grown steadily -mostly due to the cost of wars – and can never be paid – any attempt to do that would seem likely to obliterate the money supply totally and bring the economy to a halt still in ‘debt’.
    An excellent article which goes a long way to pricking the bubble of the money-illusion and getting our feet back onto the ground of the real economy.

  • Michael Parsons 3rd Jun '13 - 5:22pm

    Geoff
    This analysis is basic economic analysis though. Money is a a debt owed: “I promise to pay the bearer on demand the sum of £10” as every cash note says. But this is no t tied to GDP, the B of E hasn’t access to any current material asset for those notes, not even gold (which might in the past have been used to give some limitation to the expansion of credit). Money is not barter; the total of money-claims held by the global banking system exceeds by many times the total of world output at current purchasing power. Credit creation ( the expansion if money as bank-debt) existed in a gold-based banking systems anyway; and the present gold held by the banking system has it seems been re-hypothecated many times (which it seems is why Germany can’t get its gold back from the US Federal Reserve except in dribs and drabs over many years, in spite of demanding its return) It is the State that stands as regulator, guarantor and ultimate source of money. It provides services without any need for finance because they are paid for by the taxes it raises, and the taxes are paid by money it issues, unless it is decreasing the money-supply.
    Problems arise when as now the oligarchy uses its own tolerated money-creation power to suborn the State and run it in the interests of the oligarchs themselves, made possible by using various Lords and MP’s and political parties as its tools. As a first step to extend the analysis I might suggest that the answer to the need for accountability (which I think is what is at the root of your query) lies in the establishment of democracy made transparent by annually-selected inspectors chosen in the ancient manner by sortation – but that need much more discussion, in a publication proudly and properly independent of millionaires and unions.

  • Michael Parsons 3rd Jun '13 - 5:25pm

    Sorry! mistyped “sortition”.

  • I had no idea Geoff was talking about giving every adult a card with money on it and if they didn’t spend it within a certain time they wouldn’t have it any more. I expect it couldn’t be used to put into someone’s savings either. It is good that he recognises that calculating the potential output GDP would “pose some difficulty”. However assuming we wanted to increase demand by the amount of the first batch of QE of £200 billion everyone would receive about £4,000. I do however like the idea. It appears to me that if £200 billion didn’t create a huge increase of inflation in 2010 it won’t in 2013 either. Of course it could be done in £1,000 amounts every quarter. The multiplier for the UK has always been lower than for lots of other countries and if it has reduced even more recently then in these circumstances it might be a plus so the stimulus might not overheat the economy which was my fear. We would also need to ensure that the banks didn’t decided after a successful stimulus to decrease their capital reserve ratios which might again overheat the economy. While I have been convinced this is a good idea how do we convince the government or failing that the Lib Dems?

    I also found Geoff’s link to his review of Pecchi’s ‘Revisiting Keynes’ interesting as it states real wages have fallen, that Keynes predicted a reduced working week and robots would make the problem of the oversupply of labour worse, which seems to imply that the need for a “citizen’s income” may be needed long term rather than just to get out of this crisis.

  • Michael Parsons 4th Jun '13 - 10:37am

    Yes the idea of scattering money about in some way to increase Aggregate Demand is an interesting one, but I suggest we need to look at targeting it a bit more carefully. To avoid it going into savings we can target it at the lower income earners and that is the usual suggestion , because of their higher marginal propensity to consume.. But it remains difficult to target the multifarious buying decisions of consumers, so direct consumption boosts – though partly useful- would seem to be contra-indicated as the best path forward. The target should be direct physical investment, using tax to regulate the resulting monetary growth that eventuates via the investment multiplier effect. This means direct productive physical investment supported by investment in human capital (apprenticeships, training, diplomas) needed to operate that and develop future high-level research.

    What is being ducked is the need for exchange and import control to prevent this stimulus (by credit cards or more normally by investment-boosts) from being dissipated abroad, or seized by international trading oligopolies for use in low-wage territories to their profit (= rent) advantage, as this would simply increase the extent of exploitation overseas (as it does in Bangladesh clothing factories etc. already), without lowering unemployment, underemployment and general backwardness in UK. The abolition of zero-hour labour contracts would improve our estimates of under- employment as well.

  • Michael Parsons 4th Jun '13 - 11:28am

    Geoff
    Your review of “revisiting Keynes” you asked us to look at is interesting,: but might not the failure of labour to participate in economic growth via higher earnings be more simply explained by the growth of foot-loose capital able to play countries off against one another in order to extort wage reductions? Which means a change in relative bargaining-power of labour versus capital?
    Maybe too, wage comparisons in terms of $US living standards don’t make a lot of sense; since the income needed to sustain a high-energy Canadian maize producer who doesn’t want to die of cold is different from that for a Kenyan maize-grower, for example. The rake off on transport costs with improved transport technology is also perhaps a big factor rather than robots per se.

    What are the putative energy costs of new manufacture and assembly via molecular manipulation or 3D printing, or microbiological resource extraction etc.? This needs attention, if human beings are to be made partly redundant, so that democratic redistribution of income that you suggest would seem a long-run requirement, together with a sharp reduction in population perhaps.

    But the immediate need is a sharp implementation of national democratic control of capital-flows, I would think.

  • Geoff,

    Thanks for highlighting just what a total failure austerity always is and its complete lack of theoretical justification; Coalition please take note!

    Demand that was puffed up in the boom years as many people drew down credit against their houses has collapsed as the repayments weigh on their disposable income, compounded by the fact that for many jobs and/or hours have been cut in response to the weak demand plus the government is compounding the problem by cutting benefits for the very people most likely to spend any income.

    Also there are high prices for essential commodities – oil, gas, food etc. – that further suck spending power out of the economy. It’s partly true, as RC argues, that these high prices are down to competition for limited global resources but the almost everyone involved in commodity markets (except the regulators!) seems to think that speculators driving prices up is also a big factor. Speculators can do this mainly because the banks have been given almost limitless and almost free money by governments.

    And to cap it all much of the economy has fallen under the control of oligopolies – think banking, supermarkets, energy supplies etc. – which are energetically exploiting their power to extort high prices far above what are justified taking yet more spending power out of the economy. As the American multibillionaire, Warren Buffett, is supposed to have said, “This is class war – and my class are winning”.

  • Geoff,

    “… it’s very difficult to persuade the coalition, the Lib Dems or anyone of the case. People strongly resist the challenge of thinking outside the box. Maybe they don’t like the ridicule it attracts.”

    I think you need to review the experiences of Major C H Douglas Social Credit economic reform movement to fully comprehend the level of resistance that exists across society to these kind of proposals..

    Re: your comments and discussion with Michael Parsons on the nature of money you might find this (wonkish) essay of some interest Nature of Money

  • Geoff,

    thanks for the link to the Birmingham debate. It is as interesting and relevant today as it was at the time.

    The link fir the nature of money blog is http://neweconomicperspectives.org/2012/06/mmp-51-conclusion-the-nature-of-money.html

  • Michael Parsons 4th Jun '13 - 11:59pm

    Geoff
    I think capita l formation is a transformative force naturally – but it relies on the State for its certainties of demand and contract etc.. The problem is cui bono? Who gains? Here the plc blights our society by (a) putting the interests of short-run gain in the service of the shareholders first (b) givng voting power to the money i.e. the largest share holders have most votes – which makes nonsense of employee shareholding “democracy” unless the unions buy in in a big way (c) and rewarding shareholders though they are only placing bets and are supine in controlling CEO rip-offs and not involved in risk-taking operational judgements . Under these pressures firms seek to profit from low wages and exemplify the truth that money knows no loyalty. Big companies are themselves parasitic on the production process and on State enterprise and stability , eg Google operates on an algorithm developed by US Government research, Trivago on the spare-time work of a Russian state employee (unrewarded), most drug development comes from massive US State research etc. It is amusing to see the fuss made by our oligarchs now on the need for “transparency” and some ridiculous register of lobby- agents, while this very week quietly trooping off to the Bilderburger gathering for an under-the-wraps fixing session: such is “capital” in social action I fear..- the further from national social control and prying eyes the happier.

  • Michael Parsons 6th Jun '13 - 12:05am

    Really it is a question of the structure and control and use of capital accumulation – which in the global economy is running uncontrolled. Money-power is used to dominate the State and make a mockery of any pretence of democratic control. Perhaps the notion of a corporate State run by socially-conscious paternalism will be triumphant (usually called fascism?). But in advocating democratic control of the giant corporations I am of course working to change the world rather than “accept the reality” that puts Bradley Manning on trial, attacks Wikileaks, criminalises investigative journalism, sees a tiny % of the population control 50%+ of the land and wealth, a tiny private-school system’s old boys run the cabinet, sets up the billionaire-financed Presidential selection in USA as a bitter mockery of its democratic pretension etc.
    We can change this , you can change this, all you have to do is stop believing, withdraw your voluntary consent that is the foundation of the power to this tiny minority. End voluntary servitude and you are free.

  • Michael Parsons 7th Jun '13 - 9:58am

    Geoff
    In an oligarchy such as ours the political process can never be open and honest. Their methods of power are not the methods if reason. As a Lib-Dem member (just) I am too well aware of that.
    I believe it was Kafka who tells the instructive tale of Josephine mouse. Every weekend she gave a lionised song recital, and people turned up to listen and applaud. In his heart one mouse thought that she sounded just like any other mouse squeaking, loudly, but kept his thoughts to himself. There go your Cabinet performers!

  • Michael Parsons 9th Jun '13 - 11:15am

    Thanks Geoff
    My counter-proposal I will have to set out at length and elsewhere. Basically I would go for democracy in terms of total transparency, by selecting at random committees annually, charged with examining any aspect of official activity (power to summon papers and witnesses) and to do so openly, looking for corrupt and oligarchic tendencies; they themselves renewed annually and subject to similar inquiry subsequently themselves – with punishments available from exile to fines to destruction of property. A first step as a pilot would be to select such groups from the jury lists for each county or local authority area, charged to examine the conduct of officials and councillors. At the moment there is no effective check on these in my experience. Light in dark corners heals the wounded and strikes down the unjust. For example, the Hillsborough cover-up, the conduct of the West Midland police, the prosecution of tweets under the 2003 Communications Act , and the general War on Truth. The powers of Parliament to legislate would be curbed and its conduct similarly scrutinised as an Executive body lingering on from the quill pen age. You could call this the Can of Worms movement – set out crudely like this it a description but not a lengthy reasoned exposition of an alternative. But the present oligarchy needs to be thoroughly scrutinised and controlled from without if we are to give Deliberative Democracy a start (cf. James Fishkin).

  • Michael Parsons 25th Jun '13 - 6:35am

    Geoff

    Actually I am describing the constitutional procedure of democratic Athens and the general view of the ancients that elections = oligarchy because of the corruption resulting from money and influence. Elaborate precautions were taken to see that rule-by-lot operated, juries even not being allotted cases (by lots drawn) until the trials actually began . James Fishkin’s proposals about Deliberative Democracy are worth looking up for a current discussion.

    Of course the individuals involved have interests but these are served by equality and popular choices, i.e. by the rule of an equal citizenry, those guilty under the subsequent annual scrutiny of oligarchic tendencies being excluded subsequently and punished. How many of the MPs and MEPs would survive the first year’s tests today? As to cynicism, what happened to the social commitment of Cadbury and Bourneville at the hands of our friendly debt-financed leveraged buy-out chums from across the water?

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