Embed from Getty Images
It wasn’t Brexit that made me leave, but a stark realisation that there was something deeply wrong with the Tory party.
I owe my life in Britain to a Tory MP. In 1957, newly elected Keith Joseph was instrumental in persuading the government to grant sanctuary to Jews fleeing Egypt following the Suez crisis, which included my father aged 8.
My grandfather, a 32-year-old dentist at the time, was asked by Egyptian authorities why he was leaving the country. Predicting a surge in hostility towards non-Arabs inspired by President Nasser’s populist speeches, he responded “because you’re allowing me to”.
‘Conservative values’ had always rung true in my family. Hard work, self-sufficiency, aspiration. Nasser forcing my Grandad to ‘donate’ his assets to the government upon fleeing didn’t give him much faith in the nurturing power of the state. The ‘power of the individual’ mattered. Cameron’s modern diverse-looking Conservative Party appeared to be lightyears removed from the horrifying characters of Enoch Powell and Smethwick’s Pete Griffiths. Looking back at the Home Office’s hostile environment policy, I must have fallen for Cameron’s PR.
My personal political memory began with the 2008 financial crash and as I left for uni, Britain embarked on austerity measures that led to the largest squeeze in living standards since Napoleonic times. As an 18-year-old, Cameron’s argument made sense. If government budgets are like households, then in a crisis you need to cut spending. There’s no need to have greater involvement of the state in people’s lives, they’ll just make it worse.
With a privileged upbringing, it would be easy to scoff that I would never feel the brunt of austerity. But more than that, my sheltered upbringing made me think that poor government decisions affected ‘other’ people. Having been on all four anti-Brexit marches in London, it was noticeable how many admitted that “they never used to be political”. It was the first time a political change happened that they desperately didn’t want to happen.
No, it wasn’t Brexit that made me leave. But if Brexit were a protest vote, then what shocked me was the extent to which the social fabric of our country broke down because of austerity policies that I believed in. As a Remainer trying to forge a career in Brussels, Brexit was the first time that I felt that politics had affected me personally.
Having grown up hearing about the inspirational values of conservatism, Brexit has undoubtedly brought out the worst in the Conservative party. Nowhere more so than in Brussels, where I was able to witness first-hand how the Tories represented the party of the politically minded but without any political convictions.
Sifting through Cameron’s biography feels like unearthing the trail of evidence that proved he was willing to do and/or say anything to meet his short-term goals. As part of his 2005 leadership campaign, he promised to pull Tory MEPs out of the European People’s Party (EPP) the largest and most influential voting bloc in Brussels. Why? To out-Eurosceptic his rival David Davis and win over Tories who believed he wasn’t tough enough on Europe.
In the book, there’s little mention of who Cameron had to share a bed with to set up a new group, the European Conservative and Reformists (ECR). His allegiance with Polish populists, Danish nationalists and at one stage even the Alternative für Deutschland shows yet again how the Tories were prepared to compromise on their core beliefs just to achieve dubious political ends.
It strikes me as odd that Syed Kamall, who proudly proclaimed that he was the most senior elected Muslim politician in Brussels, would then join forces and even sit as co-chair alongside a member of the far right Polish Law and Justice Party, whose leader once referred to migrants as carrying “all sorts of parasites and protozoa”. I suppose it just had to be done to make a success of the ECR.
The Tory party’s brand of superficial diversity to make a point that it’s not racist has resonated for decades as Home Secretaries Michael Howard and Priti Patel have both had to justify immigration laws that would have prevented their own parents from entering the country.
My own personal point of no return happened in the summer of 2018. Hungary’s Victor Orbán had steadily been eroding civil liberties and human rights to the extent that the European Parliament was prepared to trigger the ‘nuclear option’ under Article 7 of the Treaty on the EU, to suspend Hungary’s voting rights in the European Council and European Parliament. It passed resoundingly, 448-197 with 48 abstentions. But who voted against? Not just the old school far-right European fascists, that was to be expected, but the UK Conservative Party as well.
The excuse given by the party whip Dan Dalton was haunting. “This isn’t an EU competence and would make a martyr out of Orbán”. If there were ever a time for the Tories to be on the right side of history, it would be now. When challenged in the Commons, Theresa May claimed that this wasn’t under instruction from No.10 and that MEPs act of their volition. Her sheepish expression, even more so than usual, seemed to suggest that it probably wasn’t and that she had most likely forgotten that Tory MEPs even existed.
A regime which had actively sought to dehumanise ethnic minorities and suppress press freedom and any political dissent. A leader who had openly attacked liberal values and had called on latent antisemitic tropes of world domination to demonise George Soros. What would be the point of turning up to work and claiming you believe in progressive, liberal and democratic values if you’re not prepared to call this out? How could you have the gall to condemn the Labour Party of being antisemitic? The stark reality for the Tory delegation was that however much democracy backslided in Hungary, the message “it’s not democratic for the EU to interfere with national laws”, trumped anything else.
At both a domestic and European level, the ‘politics of no conviction’ may reap short-term rewards but few longer-term solutions. The exemplar would be calling an in-out referendum based on a renegotiation with Europe to win over Eurosceptic support in the short term. It seems Cameron would say whatever it took to win an election. Under the daily parliamentary chaos of May, it seems his successor would say whatever needed to get to end of the day.
It’s no surprise that Dominic Cummings is the latest antihero to turn the Tory party into an electoral-winning machine. Cummings is the ultimate non-conviction ‘win-at-all-costs’ political figure. The Mourinho of British Politics. In Channel 4’s docudrama of the referendum campaign, Cumming’s character played by Benedict Cumberbatch has a ruthlessly efficient approach to winning over the “three million persuadables”. No one else and no morals matter. Cummings, obviously not even a Tory member, like Orbán is also prepared to dehumanise immigrants and trash the independence of the judiciary just to get the win.
The ‘no conviction philosophy’ reached its apex in last year’s General Election. The precondition for being selected as a Conservative PPC was to swear to CCHQ that you would vote for any deal that Boris Johnson agrees with Brussels. Regardless of its content, no parliamentary scrutiny, just for the sake of getting it done. No, it wasn’t Brexit that made me leave the Tories. But Brexit has lifted off the mask of the party, unveiling an army of morally vacuous MPs with no political convictions.
In his memoires, Paddy Ashdown talks of how a local canvasser made him suddenly realise that he was a Liberal all along and that Liberalism was “an old coat that had been hanging in my cupboard… just waiting to be taken down and put on”. Perhaps Brexit made me put the jacket on. Yet it wasn’t just the fact that 17.4m people voted to leave the EU. As Tory MPs peddled half-truths on EU membership and outrageous hypocrisy on the merits of the Single Market, I realised that all I had to do was put on this coat and be proud of what I believe in.
The Lib Dems are the party that reflect my political convictions and the values which I cherish. Internationalism, respect for the constitution, institutions and experts, press freedom, the separation of powers and the ‘power of the individual’, all of which the Tories have thrown overboard to pick up speed and win.
Yes, they proposed an EU referendum in 2007, but you could never convince me that the Lib Dems would turn into the party of tub-thumping nationalism, airing their grievances on migrants or indiscriminately trashing supranational institutions for short-term political gain.
I believe the Lib Dem electoral failure had been borne out of poor tactical judgement on the campaign, rather than any moral failure. The triple whammy at Autumn conference of revoking Art 50, Jo Swinson declaring herself the next PM after refusing to collaborate with Corbyn, and Guy Verhofstadt coming on stage to talk about a ‘European Empire’ come to mind. In gunning for Tory voters scared off by Corbyn, Ed Davey’s pre-election pledge to bring back ‘fiscal rectitude’ seemed half-baked and destined to backfire.
COVID-19 has debunked the ‘balancing the budget’ mantra. The Treasury is prepared to spend ten times the amount saved through austerity on combatting a healthcare crisis. The cutting of public services and squeezing of living standards is ultimately pointless and socially destructive. Yet regardless of the actual figure spent, the pandemic has shown that the state can and should intervene for the good of the country.
From Jeremy Corbyn to Andrea Leadsom, the phrase “I’ve been on journey” has been used so often by the Left and the Right that it has lost all meaning. Yet, I haven’t actually been on one, I’ve only opened my front door and exposed myself to the elements. Call me centre-left, but Brexit has showed me what it’s like to have politics affect my life, when austerity had been plaguing the lives of millions for a decade. To quote feminist pioneer Carol Hanisch, “the personal is political”. Glossing over the personal effect of politics is what fuels the ‘politics of no conviction’ and explains why the Conservative party has always been so successful.
Yet I am optimistic. The centre-left can succeed provided that both Labour and the Lib Dems work together to hold back the Tory electoral juggernaut, just as in 1997. This collaboration would be one of conviction destined to thwart any amoral single-issue around which the Tory party moulds itself.
In 1957, my Grandad saw Conservative values at their best. My family knew what the party could aspire to be. Being Jewish himself, perhaps Keith Joseph considered the Suez crisis to be one of great moral importance. Widely considered to be the intellectual father of Thatcherism, it’s telling that by the time Thatcher came around he realised that he had never truly been a Conservative at all. A man responsible for the politics of ‘no conviction’, it’s a shame he never put on that coat, opened the front door and showed his true colours.
* Blaise Baquiche ran as a candidate in the May 5 th 2022 Local Elections for Queen’s Gate ward in Kensington & Chelsea. He is his local party’s Diversity Officer and has been selected as the next PPC for Uxbridge & South Ruislip, currently held by Boris Johnson MP.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Disney child star looks unrecognizable on Cannes red carpet 32 years after hit film's debut
Hawkhill in the 1970s #dundeewestend
Are the lobbyists taking over again?
John Waller
expats
Peter Martin
Simon R
David Le Grice
35 Comments
A really good article Blaise thanks for sharing your story and welcome to our party.
I came to Liberalism from the other direction and I am old enough to remember Keith Joseph the cabinet minister. He was known as the mad monk back in the day and if it hadn’t been for a ill advised speech in 1974 viewed as attacking the poor he might have been Tory leader instead of Thatcher.
He didn’t really shine as either Industry or Education eventually leaving government to a life on the backbenches. That one speech probably finished him. In contrast Cameron’s barnstorming address to the Tory Party conference in 2005 was crucial to him defeating the early favourite David Davis.
As someone who has been involved in politics for 40 years i have also been of the view that the Conservatives are the nasty party. A conversation with some Conservative councillors who interrupted my conversation with A Labour councillor friend of mine back in the 1980s confirmed that. Don’t even get me started on the treatment of disabled people under the WCA and plenty of other examples.
You join a growing party on the up!
These are the kind of articles I like best on LDV. I’d love to read more of them.
You’re definitely in the right place now Blaise, even if it took you a little while.
Well said Blaise although my dislike of the Conservative party goes back much further than yours. I really hope your article can read by as wide an audience as possible.
Sorry did not check my name was correctly entered!!!
I saw the Tories in action at a local level, when our small Lib Dem group was part of the Tory led ‘Administration’ that controlled the Lincolnshire County Council from 2013 to 2017. Our Group Leader took on the Recycling Portfolio and another of our councillors chaired the Economic Development Scrutiny Committee, while I and our one female councillor stayed on the back benches, in my case because, at the fag end of my political career, or what passed for one, I treated those last four years as my swan song.
We used to attend Tory group meetings, along with the three Independents, who made up the majority ruling group. To be honest, I have always got on with most Tory councillors I came into contact with in my thirty years on various local councils. It was Labour councillors whose almost paranoid subservience to ideology in the face of what, with the exception of Lincoln City, was a Tory fiefdom, made them far harder to deal with. An added complication during my last four years as a councillor was the emergence of UKIP, who started the term as the second largest party before rapidly fragmenting and disappearing altogether in 2017. However, seeing the Tories operate in caucus was a very different matter. They were utterly ruthless in doing everything to cling on to power, something that had quite frankly never been much of a problem since LCC was formed in 1973. Currently they hold 58 of the 70 seats available.
The Tory Party is a machine that wins elections, largely because of FPTP but also, in places like Lincolnshire, it is part of, no, the main constituent of society here. Demographically it thrives on the fact that many people choose to retire here from elsewhere, while many younger people are forced to leave to seek a career. People come here because it reminds them of a life which used to exist, if it ever really did, back in the 1950s. They will fight tooth and nail to make sure that this way of life is CONSERVED, and there’s only one party that seeks to conserve, isn’t there, especially now that UKIP has imploded.
For Lib Dems, fighting a ‘good’ campaign appears to be of more importance than actually winning. For Tories it’s what happens AFTER the campaign that counts.
Thanks a lot everyone! Very interesting points raised and glad to know that I’m welcome
This article resonates strongly with me. Sir Keith Joseph was also one of my political heroes.
I was a Conservative Party member for 36 years, and left the Party the day Mr Johnson became its leader. He exemplifies what it has become. However I have to agree also that Blaise’s criticisms of David Cameron are valid, and that he put winning before principle too often.
The Conservative Party appears to have forsaken the principles that guided people like Sir Keith and Margaret Thatcher.
Well, after near on sixty years of politics I’ve heard (and still remember) just about everything , but now…… someone claiming to be a Liberal….. claims Sir Keith Joseph as their hero. What has this party come to ?
Yes, he was known as the ‘Mad Monk’. His Darwinian view of eugenics was one (but not the only one) of the reasons.
Here’s what he said, …… “A high and rising proportion of children are being born to mothers least fitted to bring children into the world … Some are of low intelligence, most of low educational attainment. They are unlikely to be able to give children the stable emotional background, the consistent combination of love and firmness … They are producing problem children … The balance of our human stock, is threatened”.
“The balance of our human stock is threatened ??????”.
Later on, his view of monetarist economics made George Osborne look like a dangerous lefty. As Minister of Education, he virtually paralysed the education system with an ill thought out so called – National Curriculum…. and he was generally regarded as not the full shilling.
The leading advocates of Social Darwinism (or Eugenics) were to be found among the luminaries of the Fabian and socialist left. George Bernard Shaw could insist that “the only fundamental and possible socialism is the socialisation of the selective breeding of man”, Marie Stopes promotion of abortion and birth control was driven by her views that determined that the “hordes of defectives” be reduced in number, thereby placing less of a burden on “the fit”.
Harold Laski, stellar LSE professor, co-founder of the Left Book Club and one-time chairman of the Labour party, cautioned that: “The time is surely coming … when society will look upon the production of a weakling as a crime against itself.” Meanwhile, JBS Haldane, admired scientist and socialist, warned that: “Civilisation stands in real danger from over-production of ‘undermen’.” That’s Untermenschen in German.
When a parliamentary report in 1934 backed voluntary sterilisation of the unfit, the Machester Guardian and the New Stateman offered warm support, endorsing the sterilisation campaign “the eugenists soundly urge”.
The eugenics movement’s definition of “unfit” was not limited to the physically or mentally impaired. It held, “that most of the behavioural traits that led to poverty were inherited. In short, that the poor were genetically inferior to the educated middle class.” It was not poverty that had to be reduced or even eliminated: it was the poor.
The Fabians, Sidney and Beatrice Webb and their ilk were drawn to eugenics for what they saw as good, leftwing reasons. They believed in science and progress, and nothing was more cutting edge and modern than social Darwinism. Man now had the ability to intervene in his own evolution. Instead of natural selection and the law of the jungle, there would be planned selection. And what could be more socialist than planning, the Fabian faith that the gentlemen in Whitehall really did know best? If the state was going to plan the production of motor cars in the national interest, why should it not do the same for the production of babies? The aim was to do what was best for society, and society would clearly be better off if there were more of the strong to carry fewer of the weak.
This nonsense all came to an end when British troops entered Belsen and Auschwitz. But let’s not forget where it came from. It started with the flawed logic of socialist planning and ended with National socialism.
Mrs Indira Gandhi (PM) and eldest son Sanjay had a controversial birth control policy
https://en.wikipedia.org/wiki/Sanjay_Gandhi
Margaret Thatcher MP announced that she was running for the Tory leadership when she learned that Keith Joseph was not standing, representing the Tory right and allegedly afraid of anti-Semitism in the Conservative Party.
Blaise Baquiche | Tue 28th April 2020 – 2:10 pm
Welcome.
On a minor point of information, Joe Bourke: the British did indeed enter Belsen in Northern Germany (on 15 April 1945), but it was the Russians who earlier had liberated Auschwitz in Southern Poland (on 27 January) during their Eastern offensive.
@ Joe Bourke. The colleague from Yeovil is correct about Auschwitz and Belsen. My father saw Belsen immediately after it was liberated and it haunted him for the rest of his life. He reluctantly told me of the stench and having to post guards on potato peel waste – it would have killed the inmates because of their wretched digestive systems.
Churchill sent a memo to Asquith advocating sterilisation of ‘the feeble minded’ so some of the Fabians were not unique in social Darwinianism. Asquith sensibly ignored it – though Lloyd George had a theory about the bigger the head the bigger the brain -he had a large head.
Talking of war, so extremely sad to note the death from Covid of my old friend Ken Sumner DFM of 617 Squadron – the Dambusters. It was a privilege to take Ken to Holland and Germany seven years ago next week. A very brave and courteous gentleman.
@ Joseph B,
You’ve missed out William Beveridge and John Maynard Keynes, one time Director of the British Eugenics Society, who were , er,Liberals. Was that deliberate or did you genuinely not know?
The 1913 Mental Deficiency Act proposed the mass segregation of the “feeble minded” from the rest of society. And who was in Government in 2013? Maybe you don’t know that either?
There’s lots in the Churchill’s history that doesn’t bear close scrutiny and he seems to have had no problem with his Liberal party membership.
If we wind back 100 years or so there were lots of attitudes and political opinions around that would never be tolerated now. Sure, some of the people concerned considered themselves on the left. Yes we can discuss all that But please don’t airbrush history to suit your present day political opinions. You are entitled to them but not your own facts.
@ Blaise,
“If government budgets are like households, then in a crisis you need to cut spending.”
You do seem to acknowledge that they aren’t, and therefore we don’t, with
“The cutting of public services and squeezing of living standards is ultimately pointless and socially destructive. ”
@ Blaise,
( Continued -sorry that shot off before I was ready!)
But you don’t acknowledge that the austerity imposed in the EU has been much worse than in the UK. And yes it’s even more “socially destructive” there than it is in the UK. The problem with the EU is that the austerity is hard wired into the Treaties. It’s not possible for voters to change them.
So, you want to change to a party which ignores all that, and as you say, has a leader pledged to bring back half baked ‘fiscal rectitude’?
I’m not sure I understand why.
@David Raw “Well, after near on sixty years of politics I’ve heard (and still remember) just about everything , but now…… someone claiming to be a Liberal….. claims Sir Keith Joseph as their hero. What has this party come to ?”
In which case it appears you must be getting a little forgetful, because Jo Grimond (of all people) wrote this:
It was good to be reminded by Blaise’s excellent article that the amorality of Tory leaders preceded Boris Johnson’s, exhibited by David Cameron’s formation of the ECR grouping in the European Parliament, indeed with dubious bedfellows, and the disgraceful decision of the Tory group to vote against the suspension of Hungary’s voting rights when Victor Orban’s uprooting of democracy was obvious.
Unfortunately the Conservative party is indeed guided by sophisticated predators bent on keeping power and wealth to their own kind, and no amount of apparent good intentions to prevent greater financial deprivation of working people resulting from the health crisis alters that. The economy has to be revived because Tory voters and donors require it, and northern workers have to be propitiated because they have only lent their votes to keep the Tories in power. We have to expose the underlay of this thin carpet of temporary reliefs, the real deprivation of ordinary people whose standard of living stood still from 2008 till last year, and the continuing desperation of the poorest and most disadvantaged people in our society.
And much of what they said and did wasn’t……., and towards the end of his life, Mr Grimond said lots of all sorts of things some of which it’s possible to cherry pick. Just ask Michael Meadowcroft.
Time you got your head round New Liberalism and read a bit of Hobhouse. The world didn’t stop when Gladstone went chopping down trees and shuffled off this mortal Coil.
Don’t know if you noticed, but on 29 May 2016, the UK product size of Terry’s Chocolate Orange was reduced from 175g to 157g by changing the moulded shape of each segment to leave an air gap between each piece. Despite this, the price doubled in some retail outlets. That’s what unfettered free markets can do.
@David Raw,
“Don’t know if you noticed, but on 29 May 2016, the UK product size of Terry’s Chocolate Orange was reduced from 175g to 157g by changing the moulded shape of each segment to leave an air gap between each piece. Despite this, the price doubled in some retail outlets. That’s what unfettered free markets can do.”
I don’t know if you’ve noticed, but 1) if “the price double[s] in some retail outlets”, other retail outlets are available, and 2) if consumers don’t like paying twice as much money for 90% of what they used to be able to buy, they can switch to other chocolate or similar snacks. That’s what free markets enable.
In 1987 I visited East Berlin. A condition of entry was the exchange of DMs into Ost Marks at an artificial 1:1 exchange rate. Prior to travelling back to the West, I gave the money to a shop assistant; I’d tried to find something to buy, but there was nothing apart from a couple of postcards and an ironic 5-pointed star cap badge. That’s what socialist state planning enables.
David Raw – going off-thread temporarily, I too am sorry to hear of the death of your friend from 617 Squadron; he must have been one of the last survivors from Operation Chastise. I happen to be finishing John Sweetman’s account, ‘The Dambusters Raid’ (2002), and the closest I can find to a ‘Ken Sumner DFM’ is Flt. Sgt. L. J. Sumpter DFM, who flew as the bomb-aimer in Flt. Lt. D. J. Shannon’s Lancaster AJ-L (ED929/G), which was the first to attack the Eder Dam. He devised his own bombsight for the peculiar requirements of the raid, and despite (or perhaps because of) being rebuked by Wg. Cdr. Gibson for his failure on a pre-raid exercise, he dropped his weapon accurately at the Eder, which probably weakened the structure prior to a breach being made after a third attack (the second accurate one) 10 minutes later. He must have been an intelligent man who demonstrated initiative, as well as being a courageous one.
It seems wrong to me that so many good people have been taken by this pandemic, whilst so many of the bad ones will survive relatively unscathed.
@ Katharine,
“Unfortunately the Conservative party is indeed guided by sophisticated predators bent on keeping power and wealth to their own kind……”
I seem to remember you ticking me off for being too class conscious!
“northern workers have to be propitiated because they have only lent their votes…”
Only a small minority but enough to tip the balance in many seats. It’s good that any politician does feel the need “to propitiate” those who voted for them. As they say in Australia, democracy keeps the b*st*rds honest! As Tony Benn said, democracy was more important than socialism.
A rejection of democracy isn’t just confined to the political extremes. Tracey Allen, a rightish Labour Party staffer, is reported to have said, the morning after Jeremy Corbyn won 40%:
‘We will have to suck this up. The people have spoken. B*st*rds.’
This is what many Lib Dems and many others on the Labour right think too, about the prevailing anti EU sentiment, and it’s the reason we no longer do well in many working class constituencies.
Hi Yeovil, thanks for your interest. Ken joined 617 after the Dams Raid. Here are some links for you to check him out. Dad was in 175 Squadron (Typhoons), 1942-46.
Flight Lieutenant Ken Sumner, bomb aimer whose targets …www.telegraph.co.uk › obituaries › 2020/04/19 › flight…
19 Apr 2020 – Sumner was part of the Dambusters squadron, No 617, towards the end of the war.
One of the North East’s last ‘Dam Busters’ World War Two …www.chroniclelive.co.uk › news › north-east-news › one-…
5 Apr 2020 – Kenneth Law Sumner, known as Ken to family and friends, died at Newcastle’s RVI on April 2, after a short illness and testing positive for Covid- …
Dambusters WWII hero and two bishops from same church …www.dailymail.co.uk › news › article-8189485 › Damb…
5 Apr 2020 – Kenneth Law Sumner, 96, (pictured) passed away at Newcastle’s Royal Victoria Infirmary on April 2 after suffering a short illness and testing …
A lovely kind man, one of the very best. We also managed to get him into the Lancaster at Coningsby. A wonderful memory.
Sir Keith Joseph was a complicated man. Not always politically astute, but sincere in his beliefs. His speech in 1976 https://www.margaretthatcher.org/document/110796 paved the way for what would become Thatcherism and at least initially cack-handed efforts to control the money supply in the economy. It would, however, be wrong to say it was monetarism as he was at pains to point un titling the speech “Monetarism Is Not Enough”
“‘The monetarist thesis has been caricatured as implying that if we get the flow of money spending right, everything will be right. This is not – repeat not – my belief. What I believe is that if we get the money supply wrong – too high or too low – nothing will come right. Monetary control is a pre-essential for everything else we need and want to do; an opportunity to tackle the real problems – labour shortage in one place, unemployment in another; exaggerated expectations; inefficiencies, frictions and distortions; hard-core unemployment; the hundreds of thousands who need training or retraining or persuading to move if they are to have steady, satisfactory jobs; unstable world prices. There is no magic cure for these problems; we have to cope with them as best we can.’
These points remain just as true today in this current Coronavirus health and economic crisis. Monetary stimulus and demand management are essential tools in preventing damaging debt deflation in a recession; but will not address the long-term structural problems of loss of International competitiveness, comparatively low productivity, obsession with house prices and declining share of a reduced level of world trade.
@ Joe B,
“Monetary stimulus and demand management are essential tools in preventing damaging debt deflation in a recession; but will not address the long-term structural problems of loss of International competitiveness, comparatively low productivity, obsession with house prices and declining share of a reduced level of world trade.”
You keep making this assertion without evidence. Forget about Monetary stimulus. That does create an obsession with house prices. Agreed. But constant demand management is essential. Why assume the economy is self regulating when you don’t have to?
All we hear about what will work, instead of what won’t, is a LVT. But some other countries have them and they make little overall difference.
@ Peter Martin
You’re right, I don’t touch upon the EU and should admit that their austerity measures have not worked either.
When it comes to Ed Davey, I can understand why he tried to:
1.) Justify the Tory austerity measures that he facilitated when he was in power, and
2.) Win over Tory Remainers who were scared of Corbyn
But I was making the point that I still believe that the Lib Dems are my home, even though I don’t think Ed’s tactics worked. I go on to talk about my move to the centre-leftt, which by definition is a huge shift across the political spectrum. I believe my change of opinion on austerity explains this.
In the past, the Lib Dems have been steered to the left of Blair with Chalres Kennedy and to the right with Clegg and Davey. What allows me to disagree with that is down to the shared values and convictions that I talk about in the piece.
Thanks
Peter Martin,
there is reams of studies that show the ineffectiveness of stimulus measures in addressing structural issues. It is only ideologues who ignore the evidence. Monetary stimulus cannot be ignored either, when it is a main plank of government policy and the BofE in common with other economies) is launching the largest round of quantitative easing yet undertaken, with all the attendant impact on inequality such measures have https://www.firstpost.com/business/economy/how-money-printing-has-made-the-rich-richer-1271123.html
Constant demand management at near full employment is largely ineffective and often counter-productive as has been repeatedly shown. What has proven effective in several European and Asian economies is a focus on industrial strategy and targeted investment in creating and supporting comparative advantage.
Land Value Tax (LVT) is an issue of the distribution of economic value added among the factors of production in the economy. Without LVT, the bulk of government stimulus ends up in the accounts of those who least need it as this article explains https://www.opendemocracy.net/en/oureconomy/following-coronavirus-money-trail/
@ JoeB,
“Monetary stimulus cannot be ignored either”
It can now that interest rates are ultra low. QE is just a swap of one form of Govt IOU (cash) paying zero interest rates for another form IOU ( bonds) paying almost zero interest rates. What difference is that going to make?
“Constant demand management at near full employment is largely ineffective”
No-one is saying that the Govt should put their foot on the brake or press harder on the accelerator for no good reason. But on the other hand they shouldn’t put their foot up on the dashboard either!
So which country with a LVT do you have in mind as one to copy?
Peter Martin,
Much of the existing bonds are bought by the BofE to create demand for the issue of new bonds to International investors seeking a temporary safe haven for capital from volatile stock markets around the world.
The issue with monetary and fiscal policy as implemented in the US following the financial crisis is noted in the 1st link above:
“The irony is that the American politicians helped by the Federal Reserve created a real estate bubble to address income inequality. Once that bubble blew up, they started printing money. And that, in turn, has led to more inequality. The solution has aggravated the problem.”
As the 2nd link above concludes:
“Printing money may appear almost as a “magic money tree” that can solve this crisis almost cost-free, with no one taking a big hit to their incomes. But it has very distortionary effects. That money will end up in the hands of the richest.
But that’s not all. The rich tend to use excess income to buy houses and other assets, and will likely do so at very low prices in the immediate aftermath of the crisis. This will likely push asset prices up, increasing inequality further.
Governments, meanwhile, will be left largely indebted. The likely outcome of this will be austerity and decreased consumer spending, as both individuals and governments try to balance weakened budgets. Meanwhile, house and asset prices will skyrocket as the rich put their increased net income positions to work.
A very similar dynamic to this occurred after the 2008 crisis, which also saw large scale money printing by central banks to replace lost spending by the rich in the economy. This was followed by skyrocketing asset prices, while the real economy and wages stagnated. It is important we do not make these mistakes again.
“The most pressing issue at the moment is to provide support for those who need it. In times of crisis, we should be asking the rich to help pay for this response. But instead, we are largely billing the poor, while consigning ourselves to a future of austerity, unaffordable housing, and increased inequality.”
It doesn’t need to be this way. A land value tax recoups much of the stimulus spending to fund needed public services as it should.
A while back it was ‘Frankie’ versus ‘Glenn’. Now it appears to be Joe B versus Peter Martin. That bone is getting pretty mangled, chaps. Mind you, I DO love a good argument, although, at my stage of life, I don’t have enough brain cells left to get my head, or enthusiasm, for that matter, around all of the points mentioned!
They do say, or they did, that money makes the world go round, whether governments print it or somebody earns it. Many of us appear never to have enough of it. That may be why we hide our greed and vote Tory, because they always claim to cost us less with their ‘value for money’ credo, reducing the ‘size of the state’ (whatever that actually means in practical terms) by keeping our taxes low. How times have changed. What happened to ‘private good and public bad’? As I said elsewhere, and have been saying for a while, when it’s a private sector debt we nationalise it and, once it’s making a profit, we flog it back to the private sector, like the railway franchises.
@ JoeB,
The problem with your thinking, which is very much a conventional line, is that bonds/gilts somehow lock up money and prevent it from being spent. That argument has some validity when interest rates are higher. If anyone has a sum of money they, under normal circumstances, wouldn’t want to keep it in the form of banknotes under the mattress. They’d be losing out on interest payments. Now that interest rates are so low, and apart from the security considerations, it makes little or no difference. It really doesn’t make much difference if you keep the money in a zero interest current account. In some countries, where bond interest yields are negative, it makes sense to do just that.
It’s not a difficult point to grasp, but the conventional line is that a govt issuing bonds which might have an interest rate of 0.0001% is somehow being fiscally responsible but issuing cash at an interest rate of 0% is irresponsible “money printing”. If people want to spend they’ll spend. If they want to save they’ll save. 0.0001% is going to make stuff all difference.
So is a further bout of QE going to create ” skyrocketing asset prices”. No. It did last time because QE reduced interest rates substantially. Now that they are almost zero they can’t be reduced further by QE. You’d have to eliminate paper cash completely to do that. There would, in effect, be a electronic form of cash which would be Govt IOUs with an interest rate of, say, -2%. Then QE would in theory start to have an effect again. It’s a stupid idea but it doesn’t stop some economists contemplating the possibility.
PS You’ve still not told me which country has a LVT that you might approve of.
@ John Marriott,
Apologies for all this. But it is important. It’s faulty economics that has led us to where we were at the start of the year. I’m not blaming it for COVID-19! But the eurozone is a mess. We’d had our own share of self inflicted injury with the conventional view that economic austerity was needed. It wasn’t. It was akin to blood letting a sick patient. We need to get away from all previous faulty thinking if we are to have any hope of recovering from the Pandemic and start to tackle climate change.
@Peter Martin, just above, responding to John Marriott, and to John too:
“It’s faulty economics that has led us to where we were at the start of the year. I’m not blaming it for COVID-19! But the eurozone is a mess. We’d had our own share of self inflicted injury with the conventional view that economic austerity was needed. It wasn’t. It was akin to blood letting a sick patient. We need to get away from all previous faulty thinking if we are to have any hope of recovering from the Pandemic and start to tackle climate change.”
Would I be right in thinking that the Austerity error arises from a failure to understand the difference between macro-economics and micro-economics? Thatcher’s comforting and plausible and mistaken assurance that “you don’t get out of debt by borrowing more!”?
That can even be wrong on the micro or domestic level. What is a self-employed taxi driver to do, off the road with a dodgy tyre, temporarily self-unemployed? Should he pinch and scrape for a month’s Austerity, to save up the butter money and the jam money till he can pay cash for the new tyre? Or should he buy it immediately with his credit card, and start earning again tomorrow? That would be getting out of debt by borrowing more: economists call it investment.
(And I do like your blood-letting the sick patient simile!)
@ Roger Lake,
Yes I would say it does require a little bit of lateral thinking to appreciate that the Govt of a currency issuing government isn’t like a household. It isn’t like a local council on a larger scale.
But that’s not the end of it. Many economists, who really should know better, and would claim to know the difference between macro amd microeconomics, carry on as if the pound is still on a gold standard either directly or indirectly via a peg to the American dollar. That was a valid view up until the early seventies but the end of the Bretton Woods agreement and the breaking of the link between gold and the dollar changed all that.
That change wasn’t sufficiently well recognised at the time and was possibly quite a significant factor in the high inflation rates we had shortly afterwards.
@Roger Lake all businesses borrow in some shape or form; the key issue is whether the operating profit allows ongoing servicing of the outstanding loans. In your example, if the interest payable by the taxi driver on the loan he has taken out can’t be serviced from his business profits he has a problem, so he borrows again to pay the interest, thereby creating more interest to be paid … and you have a problem.