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Lefties should accept the failure of the state


5:26 pm - September 11th 2008

by Chris Dillow    


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Here are four related items:
1. Universities minister John Denham wants universities to do more to recruit talented students from poorer backgrounds.  Which only raises the question: why aren’t state schools doing more to bring out the talents of the poor?

2. The TUC wants an old-fashioned fiscal stimulus to forestall recession, even though any announced policy – in the Pre-Budget report – could well come after the recession has already started.

3. Centre Left says:

The left must also engage in a sustained defence of the state. Illustrating how an active and engaged state can provide for a fairer Britain, can intervene to remove inequality.

Which raises the question: if the state can provide for a fairer Britain, why hasn’t it already done so?

4. Bryan Gould wants politicians to have more control over interest rates, even though this was tried for 25 years – between the collapse of Bretton Woods and 1997 – with poor results.

There’s a common theme here. There’s a refusal to acknowledge that the state has failed. Denham refuses to face up to the failure of state education, preferring to hector universities into compensating for these failures; the TUC fails to see that overt fiscal policy has rarely played a stabilizing role in the past; and Centre Left doesn’t see that an active state has for years tried to achieve fairness, with paltry results; and Gould doesn’t see that direct control of interest rates failed to deliver low inflation or economic stability.

They all seem to think that the solution to past failures of the state is simply to try harder. What they don’t see is that there are alternatives. In order:

1. We should ask: how might schools improve the education and life chances of the poor? This requires thinking of ways of stopping the rich from grabbing the best state school places. One possibility here might for the state to issue school vouchers, with vastly more given to the poor.

2. Forget about using the state to protect  people from macroeconomic fluctuations. Instead, encourage the development of markets in GDP, industry and occupational derivatives, which allow individuals to buy insurance against shocks to their own livelihood.

3. What we need for equality is not a more active state, but a smaller, more passive one. Scrapping the complex and bureaucratic tax credit system – and abolishing corporate welfare – and replacing it with a basic income – would make the state more passive, but a greater force for equality.

4. If Gould really wants more democratic control over economic institutions, we should start by increasing workers’ control over their workplaces, as it‘s here – rather than in monetary policy – where people’s powerlessness leaves them most vulnerable.

In other words, it’s possible that leftist goals can be better achieved with a smaller state. I say “possible” because this thesis has not yet been tested. But the contrary thesis – that the state is an appropriate tool for the left – has been tested, with poor results.

Why do so many on the left fail to see this? Why are they making a fetish of the state, when so much evidence speaks against such a belief?

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Story Filed Under: Blog ,Education ,Equality ,Realpolitik

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Reader comments


“The left must also engage in a sustained defence of the state. Illustrating how an active and engaged state can provide for a fairer Britain, can intervene to remove inequality. Which raises the question: if the state can provide for a fairer Britain, why hasn’t it already done so?”

To clarify – CentreLeft says the first two sentences – not the final one.

“There’s a common theme here. There’s a refusal to acknowledge that the state has failed…What we need for equality is not a more active state, but a smaller, more passive one.”

Or it could be that the politicians who wrested control of the state have driven the state to failure. Perhaps what we need is not a more active or more passive state, or a larger or a smaller state, but a different state.

Far be it from me to disagree with that font of all knowledge of the blogospehere, Mr Dillow, but does he really know it all?

Abolish patents, tariffs, transport subsidies, R&D subsidies, state-backed monopoly powers e.g. the powers of the law society, the Bank of England and other government policies that encourage big business monopolies and wealth accumulation and you will do more for equality than state intervention has.

Whoops, amended that editor.

I think that while I agree with the broad gist of that Chris says, I have a lot of quibbles.

Firstly, the problem isn’t necessarily the failure of the ‘state’ but of people doing their jobs. After all, if a company fails we don’t say its the failure of capitalism. To that extent, the work of govt departments should be measured and evaluated fairly rigorously I think.

Secondly, I think most lefties should anti-statist anyway. We aren’t right now because a Labour govt is in power, but as soon as the Tories get in I reckon that anti-state sentiment will become the norm again.

Ideologically, being anti-statist is more a left-wing position simply because the state wants to keep a status quo where the rich and the poweful maintain their position. Governments hate change, especially change that transfers power from them to the people.

And of course the state finances agents of control such as the police and the army – which are traditionally supported more by conservatives than lefties.

Where I do want the state is for the provision of public goods, and that includes a non-partisan media outlet and healthcare provision.

Chris says:
Which only raises the question: why aren’t state schools doing more to bring out the talents of the poor?

Traditional class warfare? After all, you could also argue why the state doesn’t do more to being out the talent of black boys… but it comes down to class doesn’t it.

if the state can provide for a fairer Britain, why hasn’t it already done so?

Can argue because of the mechanisms that the Tories put into place, its very difficult to make Britain fairer again. And besides, if you want tomake Britain fairer you’d have to check the power of corporations.
This is, by anf large, something that libertarians hate, not statists.

“Ideologically, being anti-statist is more a left-wing position”

Are you having a laugh? The left-wing has always tried to either maintain or increase the power of the state and the population’s dependency upon it. This is central to their ideology. Your statement is disingenuous to say the least.

Is it because you’ve witnessed 11 years of both the increase in the power of the state under NuLabour for little or no discernable benefit that you now try to disassociate yourself from statist philosophy?

The fact is that despite the burgeoning power and interference of the state, NuLabour has clearly demonstrated, yet again, that statism is detrimental both socially and economically. Bluntly, this central tenet of left-wing ideology has left this country screwed. Again.

The left need to realise that the state is not your friend, and learn to take some personal responsibility for their lives. Fat chance though – they’re too dependent upon it. They need Nanny to tuck them up at night, poor dears.

The schools question is pretty interesting to me. I go to a Russell Group University with a pretty low state/inner city intake. Scratch that, it’s very low; even when it is state it’s almost always the middle class kids with social capital.
But at the open days there are plenty of young people from state schools, from minority ethnic backgrounds, etc, who get enthused and excited about the opportunities that might be available to them at university. But then for one reason or another they don’t make it onto the courses.
Maybe they don’t make the grades – then why is the state system failing them?
Maybe they are scared and decide not to apply – then why don’t they have mentors or guidance at their school to encourage them that they do have the ability?
But maybe also, competition for university is so great with so many A grade students, that without the social and financial capital in their teens their personal statement’s (the other key to higher education) lack the tales of school councils and volunteering, wonderful work experience and access to top quality literature that will secure them the place.
Perhaps we place too much emphasis on what has already been acheived and not enough on potential.
But what can be done about it? interviews as well as statements? positive discrimination? more NAGTY style specialist opportunities for gifted kids? … ?

Previously posted under ‘editor’ but realised that sounded sinister/pompous etc…Sorry, thank you for amending the quote.

I’m also really confused by the comment that:

“Ideologically, being anti-statist is more a left-wing position”

Firstly, it’a a liberal position, not a left-wing position. ‘Liberal’ and ‘Left’ are not synonymous terms and sometimes are too easily taken as such. Indeed, in some respects I regard the idea of creating a ‘new left-liberal’ alliance deeply problematic – but that’s another post for another day.

Secondly, I think that the problem here relates to different conceptions of the state. It strikes me that Sunny’s state (to which the left is traditionally anti) is a Conservative state – one which protects the status quo, refuses to transfer power etc. Of course this understanding of the ‘state’ will be an anathema to those on the left.

There is of course a different state which is a progressive state and quite different to what Sunny describes.

I don’t expect liberals and lefties to agree here, and I don’t (unsurprisingly) accept much of the analysis of the post. The state hasn’t failed – it’s deilvery may be in inefficient in certain areas – but that is an argument not for us on the left to abaondon the state – but rather to reform it.

Anyway I’m going to go and walk the do now (that’s not a euphemism).

I don’t think the state has failed – there have been significant and measurable improvements in areas where the state has been active and well-resourced, and in many areas where it hasn’t been, things have got worse.

To be fair to Chris, he does offer some alternatives, but it is far from compelling that any of them are better than what’s on offer at the moment:

School vouchers weighted towards the poor – requires a vast new IT system which can track and accurately allocate funding to every child of school age in the UK, on a means-tested basis. The experience of the last ten years has not exactly provided compelling evidence that large IT projects with ambitious aims are the solution to all our problems.

Basic income – sums don’t add up and is politically impossible. How much would scrapping tax credits + ‘corporate welfare’ actually raise. (It’s not as much as many people living on a low income with kids currently receives). The problem is that either basic income is supplemented by e.g. disability benefits, housing benefit etc., in which case it is vastly expensive, or it replaces them, in which case it involves severe cuts for some of the poorest people.

Markets in GDP – perhaps a link to explain how this might work?

Workers’ control over workplaces – fine, but it is not the state which is preventing this from happening more widely…

Are you having a laugh? The left-wing has always tried to either maintain or increase the power of the state and the population’s dependency upon it. This is central to their ideology. Your statement is disingenuous to say the least.

Having a laugh? Not really. We’ve seen a Republican govt in the United States, which keeps going on about the small role of the state to actually increase spending while running budget huge deficits and nationalising massive companies worth trillions of dollars.
I’d love for you lot to start branding the Republicans as socialists and start saying something about what’s going on across the pond.

Anyway, back to more substantial points.

IGC:
There is of course a different state which is a progressive state and quite different to what Sunny describes.

True, but this is what I mean by depending on which govt is in power. We believe a govt can be a progressive force if Labour and/or Libdems are in power. Would we still say that in 2 years time if the Tories get into power?

Let me put it another way (and we’ll be running a series of pieces on this soon by Mike Killingworth):

Left-wing ideology is broadly based on transferring power to the people and ensuring that they cannot be oppressed by the state, other powerful bodies, corporations, or be held back by their background (class for example). Would that be accurate?

If we rely on the state too much for pushing progressive goals forward, we not only then believe in a top-down approach, but are also reliant on a progressive govt being in power.

What we actually need our more civil society grass-roots organisations, that seek to drive progressive change within a society. Then we’re less reliant on state intervention and more in tune with our grass-roots origins.

The trade-unions are falling apart folks… who is going to represent ordinary working class and middle class people now?

I’d love for you lot to start branding the Republicans as socialists and start saying something about what’s going on across the pond.

That’s quite an impressive deflection and non-sequitur!

You made a broadly indefensible statement about British politics, so instead of trying to justify your point, you ask me to call US Republicans socialists?! That’s quite a wriggle you did there.

I wasn’t expecting much more. It’s reassuringly consistent to see you dissemble in this way.

Anyway, I’m off to insulate my loft. Apparently it’s the answer to all our economic difficulties.

Secondary school education: I am interested to see the results in five years time from the Brighton innovation: places in oversubscribed schools are allocated by ballot. An obvious consequence is that some pupils with motivated, eloquent parents will be attending lower performing schools, which is where it gets interesting. What effects will those parents have on the school that their child attends? How many “pushy parents” do you need to lift education standards in a school? Does mean achievement improve, and what about the low and high potentials?

Don Paskini rightly states that a citizen basic income does not necessarily serve families. The need for tax credits will remain. However, basic income will help many single people and reduce complexity. At the same time, I can’t see how it would work alongside minimum hourly rates: when there is a basic income, what is the motivation for an employer to increase the hourly rate, if the employee’s effective take home pay is capped by basic income?

If “Ideologically, being anti-statist is more a left-wing position” that would make the pre-Blair Labour party an anti-left party because of Clause 4 and the post war nationalisations. Even more bizarrely it would have made Thatcher part of the Left because of her de-nationalisations and transfer of state assets from the state to the people.

Lefties should accept the failure of the state

Come again?

Chris, I’m afraid I’m a leftie who really doesn’t accept the failure of the state, on what bit of evidence do you conclude the almighty whopper that the state has failed? The state is far from perfect, there are plenty of reasons to criticise it, but you need to go a lot further than that to call it a failure.

On the subjects you mention
1. Merits further investigation, I’m not convinced on the subject but I’ve really not looked at it enough to make a conclusion either way.

2. On this point, I disagree completely, the state should act to stabilize macroeconomic fluctuations, more often than not it works. Markets are simply too volatile to be left unrestricted. Making more markets seems like over complicating something that should be simple, plus I have no doubt that some clever person somewhere will find a way to make money out of them.

3. My view here is that will be too expensive, plus it’s difficult to determine what effects it will have on the wider economy. My fear is that in order for it to be up to the job of a roof over everyone’s head and food on everyone’s table will taken an age of fine tuning. It seems like you want to replace lots of little systems each addressing an individual problem and the complexities contained therein with one big system that looks nice.

4. I like workplace democracy, it’s a good thing but I also do rather like the idea of political control over macroeconomic institutions. Economists have always seemed to be pretty ideological anyway and plenty seem to move from institutional positions to high paid bank jobs, I think a little democratic accountability would be sensible.

I’m afraid Chris that I don’t accept your conclusions at all, I don’t accept the failure of the state and remain unconvinced by your arguments.

14. Marco Theodor

John Denham couldn’t care less about university students. Why else would he allow the disgraceful regime of top-up fees (ie. punishing students for wanting to learn by putting them in debt) to continue?


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