David Cameron’s economics speech: ripping off Will Hutton
Posted on Friday 17 October, 2008
Filed Under Economics
DAVID Cameron’s speech this morning stole the standard social democratic critique of the British economy under Thatcher and Major, recalibrated it in terms of the present government, and then cynically passed it off as what the Tories have been saying for the last decade. Full marks for sheer cheek, if nothing else.
The interesting thing is, this feat of ideological legerdemain almost comes off, largely because New Labourism was always more the continuation of Thatcherism than its negation. Criticise the policies of one outlook and you criticise both, I guess.
Thus the Conservative leader chooses to single out Brown’s assumption that you could build a sustainable economy on a narrow base of housing, public spending and financial services.
Yes, sure. That is very much what Brown assumed. The question is, which government initially reconstructed the British economy on this flimsy basis? The answer – as the Keynesian left has constantly reiterated ever since – is the Tories in the period after 1979.
Thatcherism it was that pushed the notion of property ownership as a combination pension substitute cum unlimited handout cash machine, as well as the idea that anybody who preferred to work in public services when they could have become a Personal Financial Adviser instead was by definition an ambition-free two-bob loser.
Similarly, Cameron insists: We need to reverse the fundamental mistake made a decade ago that meant that the authorities took no view at all over the level of debt in the economy.
Hello? Was that decision made only a decade ago, David? Remind me again, which prime minister was it that scrapped credit controls? Oh yeah, that’s right, the only woman to have held the job so far.
Now, you can argue that Labour could and should have done something to curb the growth of the ‘whack on the plastic’ culture. The Tories can at least point to their notorious ‘inner tosser’ viral advertising campaign of 2006 as evidence of prior concern.
But if Labour had seriously tried to restrict access to free ‘n’ easy 26.7% APR and upwards loan deals, you can bet the Conservatives would have stepped in to defend such socialistic restrain on our financial freedoms as the first step towards a ten-year wait for a Trabant.
But the soundbite that topped every other piece of nonsense in Cameron’s speech was this little gem: Unlike many other countries in Europe, we can’t turn to a strong manufacturing base to provide export-led growth, because manufacturing has shrunk by more than a million jobs over the past decade.
Would that God had struck him dead on the spot for such rank disingenuity! British manufacturing was hung out to dry in the 1980s, thanks to the fixation of successive Conservative chancellors with an over-valued exchange rate.
They knew damn well that this policy was a direct cause of ever-expanding dole queues, but their class-based contempt for manufacturing workers was such that they did nothing whatsoever to save shipyards, steel plants or engineering. And once you wilfully destroy a country’s manufacturing base, you can’t get it back.
I haven’t got my reference books to hand, but I’ll try to dig out the stats for the number of manufacturing jobs lost in Thatcher period. It’s a lot more than one million, David.
And by the way, am I the only one to find the speech frighteningly light on concrete policies, beyond ‘we’ll ask bankers not to be so naughty next time’? I only hope Will Hutton sues for breach of copyright.
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”Similarly, Cameron insists: We need to reverse the fundamental mistake made a decade ago that meant that the authorities took no view at all over the level of debt in the economy”
I am currently reading Graham Turner,s book The Credit Crunch.
If I am reading him correctly because I am no economist, he seems to be saying the explosion of debt in the economy is the result of the downward pressure on wages due to weakened trade unions and globalision causing a lack of demand, thus the increase in credit was used to fill the gap.
From the book.
”The systematic tearing down of trade barriers in absence of appropiate protection and rights for ordinary workers accelerated a two-decade trend towards higher profit ratios in West.That was unsustainable.Profit ratios can only continue to rise at the expense of a further decline in the share of national income taken by labour income , or wages. And such a divergence will increase the tendancy and political pressure for consumer borrowing and house price inflation to fill the gap, between overinvestment and inadequate demand.
UK Manufacturing Jobs…(Royal Economics Society : RES Briefing 1996)
“The stagnation of British manufacturing over the past two decades has been almost total: Michael Kitson and Jonathan Michie note that between 1973 and 1992, the total increase in manufactured output was only 1.3%. In the same time, manufactured output rose 68.9% in Japan, 68.6% in Italy, 55.2% in the United States, 32.1% in West Germany and 16.5% in France. Kitson and Michie argue that poor industrial performance acts as a brake on the whole economy and is a result of a fundamental underinvestment problem.
…Between the cycles of 1964-73 and 1979-89, UK employment in manufacturing declined by a third (2.5 million jobs) compared with only 10-13% in France and Germany. The share of manufacturing in GDP fell from 32% in 1973 to 28% in 1979 and 21% in 1993.”
Turner’s book is interesting but seems to offer a simplistic (Neo-Keynes? ) variant of an “underconsumptionist” theory?
Just to add that the REGIONAL impact of the (“creative”) destruction of the UK manufacturing base was far more geographically concentrated and spatial than even the raw figures above suggest…see Bob Rowthorn’s work at Cambridge on this.
The Thatcher legacy lives on…It was Gordon Brown HIMSELF who blocked the policy implictions of the (2001) DETR Select Committee major report on “Regional Disparities in the UK” in order to safeguard the/his primacy of London (city, financial services) and the S.East.
“Change the name and the tale is of you” ~ Russian proverb.
Public school boys have just openly screwed this country’s finance system despite warnings and now they want to run the government? A spell in jail would be more appropriate for such indecency.
Lest we forget, tories on regulation
George Osborne, 2006
‘In an age that demands a light touch, [Brown] offers that clunking fist. He has clobbered business with £50bn of regulation, when we should be liberating our economy to compete.’
John Redwood, 2007
‘We see no need to continue to regulate the provision of mortgage finance, as it is the lending institutions rather than the client taking the risk’
It is quite inadequate to blame ‘public school boys’ for the current mess. The situation is not the fault of any individual or party but the inevitable consequence of a particular system – capitalism. Get rid of that and establish workers democracy and the problem will resolve itself
Is it not curious that the favoured term was “light touch”?
Since the tabloid-style discourse which prevails talks in terms of the UK being a “soft touch” on crime, immigration, etc?
Let’s face it – both Labour and the Tories were for soft touch regulation.
(The best type of regulation is that of democratic control by workers and consumers, natch. No hope of the Tories backing this!)
`Get rid of that and establish workers democracy and the problem will resolve itself’
And who, exactly, Jim L, is going to stand against such logic which has, after all, been available to anyone interested or honest for well over 150 years? You want the class struggle without the class struggle.