“review …what it has to do, what it can do better, and what can be done better by other people”

and this is intrinsically wrong ?

Does ‘the left’ have a choice?

The left has hitched its wagon to the Labour party, who have demonstrated manifest unfitness to govern at every available stage. Labour had a free hit in 1997, and blew it. The Tories are going to be able to do what they want next year. Let’s face it. It can’t be worse than Labour, can it?

Jackart – given you’re a Tory I expect you to say that Labour were manifestly unfit. But you’re right about not having a choice.

Unfortunately the Tories have done well to revive their brand and Labour has done very little to rescue theirs.

Exhorting lefties who abandoned Labour to support it again won’t make much difference now though I suspect…

Countdown to shitstorm from sociopathic libertarian hordes in 5, 4, 3, 2….

(Spot on though, Paul).

The ASI, I should point out, are neither Tory-affiliated nor even especially influential in the Cameroon diaspora.

That said, the Big Idea, that government should become a contracting authority rather than a service delivery mechanism, has a very large number of benefits.

Not least that most government departments are run by stodgy, incompetent chancers with no knowledge or experience of running large organisations. Which is to say, Ministers.

“the process may find that spending in some areas should be increased”

“In other words ….the Adam Smith Institute wants to see savage public spending reductions in every single government department.”

not a great start.

Personally, I would be a lot happier to call myself a left-winger, if I felt the left wing regularly asked itself “what government does, what it has to do, what it can do better, and what can be done better by other people and by the public”. This is probably going to mark me out as a right-winger to many readers of this site, but as far as I’m concerned the idea that we might be better off if the government shrunk in some areas and even (horror!) cut taxes as a result (taxes paid by the poor, naturally) is something the left winger should be quite happy with. See here for example.

Now, I suspect the answers to the questions what should the state do. etc. given by the Adam Smith Institute are going to differ from answers that I’d give and other left wingers would give, and in that sense you can say the ASI ought to be opposed in its specific policy recommendations. Fine.

“Here, perhaps, we see a glimpse of the culmination of the Mont Pelerin project”

do try not to sound like David Icke

“This neo-neo-liberalism senses now that it has largely won the public argument, not least in the way it has sold the idea that this recession was a product not of the illogicalities of capitalism, but of ‘big government’.”

What on earth are you talking about? Although there are some sensible arguments concerning how government regulations acted as a contributory factor to the crisis, the consensus is that the recession absolutely was caused by problems within capitalism (or, unregulated financial markets) – hardly any mainstream politician or economist, nor I’d imagine everybody else, has swallowed the idea the recession was caused by “big government”.

Paul, you say savage public spending reductions in every single government

The ASI say may find…some areas should be increased

Must try harder

Philip Hammond is, as you rightly identify, a rising star in the Conservative Party. Perhaps because he’s made the rather obvious leap that Gordon’s client state that keeps a large minority of this country downtrodden, trapped in poverty, and with no work-based mechanism for self-improvement all in the name of shoring up votes in Labour’s run down inner city seats is not an agenda that an equality-of-opportunity, personal responsibility-loving Tory will delight in.

There’s a reason why Tories are now more trusted than Labour on poverty: it’s because analyses like Mr Cotterrill’s above, that screech in denial that there’s nothing wrong with the benefit trap of Gordon Brown’s client state, already feel like they belong to a sad, forgotten age.

That said, the Big Idea, that government should become a contracting authority rather than a service delivery mechanism, has a very large number of benefits.

Except, of course, that most Britons aren’t quite sold on the idea:
http://www.liberalconspiracy.org/2009/11/12/reform-regulate-redistribute/

@9:

Sunny, you old dog! I had no idea you were an authoritarian populist!

When did you start supporting the death penalty?

@9

Also, Sunny, GlobeScan are not a British Polling Council-registered pollster. The sample was not politically weighted. It was a trash poll, a voodoo poll.

Every time you mention it, Mike Smithson cries another salty tear at your statistical ignorance.

If it is any consolation, I am doubtful as to whether the Tories will actually achieve these sort of aims. Margaret Thatcher ended up increasing government spending in her time, and all Ronald Reagen did was stop it for a few years in the US. There was no turning back of the tide of the state during their time and they meant to be the neo-liberal poster girl and boy. The Government expands its reach autonomously, almost regardless of who is nominally in charge.

“No work-based mechanism for self-improvement”, eh, Martin?

The Tories seemed to forget to implement that bit the last time they had 18 years to come up with one, didn’t seem to be working out how to come up with one in the years when they were busy tearfully blaming the country for not liking them any more, are unlikely to have suddenly miraculously developed one in the handful of years since Cameron took charge and some of them started belatedly realising that perhaps it was their fault they got, and are not going to invent it any time soon.

It is dishonest and insulting to pretend that they have; dishonest, because suddenly cutting benefits and expecting jobs to miraculously appear (when anyone who has a basic level of labour market literacy can tell you that a recession generally comes with a lengthy period of labour market tightening after the recover has started) is simply not going to happen. It’s insulting because we all know it isn’t, and you know it isn’t, and that’s not the reason you really want to do it, and we know it, and you know it and so you and your chums are staring us full in the face and lying to us and expecting us to swallow it.

Be honest. You want to cut benefits because you think many of the people who get them don’t deserve them.
Be honest. You’d do this even if we weren’t in financial trouble – you’d just find another excuse.
Be honest – the ‘work-based mechanism for self-improvement’ doesn’t exist in a meaningful sense. There is no practical plan of how to achieve it, the will, the vision, the talent and above all the money are not there. There are a few people in the Tories who have some ideas (Willetts, for one), but not to put too fine a point on it, it’s a bit difficult. People on benefits are not suddenly going to find jobs. They aren’t there. Entrepreneurship is not going to miraculously fluorish. There’s little market out there.
Be honest – this philosophy so damaged some parts of the country last time it was tried that two decades later they have not recovered.
Be honest – it’s just the old trick of blaming the poor for their poverty.

Be honest Martin. And pray – hard – that whatever job it is that you do that allows you to waft fresh guff in large quantities over every thread in here doesn’t deem you surplus to requirements and you get to experience these ideas first hand, because I can guarantee 100% you won’t be so enthusiastic if it’s you and not Those Other People who feel the ‘benefits’.

The problem is that there is waste in the public sector. If the left position is that the public sector, in its entirety, must be defended at all costs, then the left will always be tripped up by examples of pointless government spending. The state has suffered from ‘mission creep’ as the responsibilities granted to state bodies and quangos have expanded (not all of this expansion is fully funded either; it ends up draining money from other more useful areas of state provision).

I wonder if this is something that’s just a lot more obvious to people outside London, where the public sector share of the economy is dramatically higher. In the North-West, public spending is very visible, managed by a vast array of bodies whose responsibilities seem to change frequently and who are certainly not democratically accountable. Regional development organisations are particularly bad at this, as they seem to end up funding various subsidiary bodies which create a rather nebulous amount of value for the wider community. They are so far from democratic scrutiny that it’s impossible to control how they behave – there’s no feedback loop that links citizens in at all.

For example, in Manchester alone, you have these people:
Innovation Manchester (only a holding web page, although they’ve managed to produce a poll which unsurprisingly concludes that ‘networks’ would encourage more ‘open innovation’, and another which concludes that the way to ‘drive manchester forward’ is by the formation of ‘knowledge hubs’ (79%) and not ‘citizens and businesses who are ethical and radical’ (10%). Still, at least they’re on Twitter).

Manchester Knowledge Capital – this is a link to their partners page, which contains:

Marketing Manchester – another holding site, although there’s a PDF listing their 10-member board, chief executive and managing director (I though those two roles were interchangeable; seemingly not) and a couple of lovely org charts.

MIDAS, some kind of investment cheerleader. They’ve apparently been building links with Abu Dhabi, having recently sent a delegation including ‘civic, business and higher education leaders from bodies including Manchester City Council, Marketing Manchester, Manchester Investment and Development Agency Service (MIDAS), the University of Manchester, Manchester Airport, Manchester International Festival and a range of private sector representatives’ to visit. I can’t imagine why nobody from Abu Dhabi wanted to visit Manchester!

MIDAS, in turn, have their own list of partners, including:

Manchester Enterprises who ‘have become the Commission for the New Economy, responsible for leading on economic development, employment and skills on behalf of the Manchester city region’ yet are still in the process of ‘developing a new website to meet its needs’.

The Northern Way, which is engaged in ‘bringing together the cities and regions of the North of England to work together to improve the sustainable economic development of the North towards the level of more prosperous regions’.

New East Manchester, which seems to do an awful lot. The only part of their output I’ve seen is their glossy magazine, which we get free each month, but I’m sure they do other stuff.

And that’s just Manchester and only the bodies that I know about from being involved in a ‘creative’ industry. The same lot are duplicated in Liverpool, Preston and probably several other cities, towns and subregional administrative zones. This is before we consider the big daddy, the North-West Development Agency, and its associated organisations. My current favourite is North West Vision and Media who have recently contrived to pay real cash money for someone to produce a report on what makes iPhone apps successful. Yep, the North-West innovation scene is so hot that we need a public sector body to tell us how to make iPhone apps, because it’s so bloody difficult.

I genuinely could go on further. I know I’m probably sounding like one of those dreadful right-wing morons, raving on about the wastefulness of the state, but, well, in this case they’d be right. This is where our taxes go, not just on schools, hospitals, foreign aid, rape crisis centres and benefits. If it looks like the Tories are the only people who take this seriously, we’re fucked. Ironically, the Tories will probably boost spending on this crap and cut spending on hospitals, or something equally absurd, but from the position of a normal person the amount of state spending that we can see and detect is massive, and quite a lot of it looks pretty wasteful. Could we not just scrap the crap and increase the JSA or teachers’ salaries or something?

For me a conundrum concerning ‘the left’ ,and by extension the very identity of NuLab, has arisen because ownership of the concept has shifted from ‘working class’ men + woman, the traditional constituency of the left if you like, to a cultural intelligentsia who are very keen, perhaps even too keen, to promote certain ideals?

Both are very different animals in my book, and the muddle that is NuLab epitomises tensions that sometimes exist between the two groups (although neither are mutually exclusive of course) – the law of unintended consequences has even led to ex-labour supporters turning to the BNP, a very significant development, culturally, given that we have nominally had 13 years of a supposedly centre left government.

It seems we have reached a point (as Snatch found, and then the minor conservative placemen who followed her) that change has now become inevitable – in the short term at least we will all have to endure another bout of being pushed around by toffs and their rich mates in the city.

The fightback against toryism must begin with a re-assessment of what the left actually stands for – at the moment it is clearly failing given how much support the likes of Cameron has been able to muster?

@13:

Wow, I’ve never seen so many straw men in one rant. I admire your courage, your strength, your indefatigability.

I would quite like to hear the basis on which you call my personal motivations into question based on no evidence whatsoever.

But then I remember that “no evidence whatsoever” tends to be the basis on which lefties screw everything up. Not just welfare.

With posts like yours, it’s no wonder nobody’s listening to the left about welfare any more. It’s like a proud admission of how morally and intellectually bankrupt your entire sorry movement has become.

I think my comment just got marked as spam, probably because it had quite a few links in it. Apologies for that, but it really wasn’t spam. If someone could unspam it for me (and delete this comment here) that would be great, thanks

Well said Paul.

Instead, you need a complete review of what government does, what it has to do, what it can do better, and what can be done better by other people and by the public.

We are currently doing everything perfectly, nothing should be done in any way differently and we should not even consider the possibility of change. Bloody Tories with their radical agendas.

But don’t worry, they won’t actually change anything much…..

“Countdown to shitstorm from sociopathic libertarian hordes in 5, 4, 3, 2….”

Sorry for the delay, was out walking the dogs.

As others have pointed out, the observation that is might be sensible to raise spending in certain areas while cutting it in others does not quite lead to the conclusion that those bastards just want to slash all spending.

(Please note, I’m a Fellow at the ASI, just for disclosure, although this is personal opinion here.)

The most important misunderstanding here is that of course everyone does this sort of thinking all the time. Left, right, middle, don’t know and even frothing morons continually ask, well, what should government be doing?

Should we have Trident or not? That’s asking the question of whether government should be running a nuclear deterrent or not. I think there’s a general conclusion around here that it shouldn’t be (no, I don’t agree but so what?). But whatever the decision the question is the same: what should government be doing?

Ditto ID Cards, and on to every other damn policy there is out there. Should government be trying to reduce inequality of consumption? Should it rather (or as well) be trying to reduce inequality of market incomes: there are those out there proposing a maximum wage which is indeed arguing that government should be doing that.

Should government be running the schools or just financing them? Are LEAs a good idea if they swallow 30% of the entire education budget? What is the right balance between publicly provided, publicly financed and privately provided and financed health care? What actually is the purpose of the welfare state? Is it to provide a welfare safety net? Or is it societal engineering?

We may differ on what the answers to these and other questions are but to attack the very asking or the question “what should government be doing” is frothing idiocy.

What the hell do you think politics is is if it isn’t asking that question?

@17:

Everything is EXACTLY PERFECT AS IT IS.

Martin, I appreciate that you don’t like your certainties challenged (it’s healthy, but there you do), but here are some pointers:

- just because someone doesn’t think you really know what you’re talking about doesn’t make them ‘of the left’. Prove to me you know what you’re talking about and you win the argument.

- loudly asserting claims about ‘Gordon’s client state that keeps a large minority of this country downtrodden, trapped in poverty, and with no work-based mechanism for self-improvement all in the name of shoring up votes in Labour’s run down inner city seats’ and then meeping piteously about ’straw men’ and ‘lack of evidence’ if anyone suggests that your statement might not have a lot of substance behind it, suggests a fondness for dishing it out, and a profound unwillingness to take it.

- Where’s this ‘work-based mechanism for self-improvement’ that Labour have wilfully failed to implement out of pure ideology? If it exists and is workable, then you win the argument.

- If the Tories actually just outed with it and said ‘we can’t afford this any longer so we’re going to have to slash the welfare state. It’s going to hurt, but there you go’, that would be honest, and it would also be true. Instead telling people that ‘it’s for your own good really’ is looking people in the eye and lying to them. The Tories really don’t have the track record to claim that this plan is going to work. Why, exactly, should we believe them? If there’s a plan, you win the argument.

Sorry you don’t like it, Martin. But if you really know what you’re talking about and I was way off, it’s very easy for you to win this particular argument. Why aren’t you making those cases?

“work-based mechanism for self-improvement”

Soviet, much?

pagar,

“This is not working” is not equivalent to “so we must institute this plan instead”.

The current state of the labour market is not such that people who have benefits removed will be able to instead get the jobs they have so far refrained from doing. This is the part of Martin’s ‘analysis’ I object to.

Maybe, with two to three years of careful, competant stewardship of the economy, and a reasonably solid recovery, things will have improved to the extent that entrepreneurship can start to fluorish and companies can hire, but at the moment it is not likely to work well.

That’s not an argument for doing nothing, but an argument for not using the rhetoric that is being used. The Tories saying ‘benefits are keeping people from getting jobs’ is not currently credible. There might be some substance behind it (a little…), but it’s not the real problem.

The recession is keeping people from getting jobs. Unemployment as a result of it has not yet peaked. Once that’s done and the labour market starts to recover then we can think about those people being kept from working by a benefits trap. For the time being, the Tories would be best being honest and admitting that they concluded that they need to get the social security budget down now, end of story

Paul Sagar at 4 was, once again, very right…

‘But in another respect, what the Adam Smith Institute now proposes about HOW it should be done is deeply significant; in particular, we should read with some dread the notion that ‘you need a complete review of what government does, what it has to do, what it can do better, and what can be done better by other people and by the public’ (my emphasis).’

The Adam Smith Institute might come up with different answers from most here but in principle questioning everything the government does makes perfect sense. I don’t want my tax frittered away on Trident, an endless series of wars or the database.

I wouldn’t want those even if they were free.

@20:

I love having my certainties challenged. When you’re able to do that, rather than cast bizarre aspersions I’ll let you know.

As far as I can tell, you have no ideas what my certainties are, any more than you appear to have any idea what yours are.

So, your essential argument is that Gordon Brown’s welfare trap client state is EXACTLY PERFECT AS IT IS?

You win at the politics.

Tim @18: Ah, I haven’t been called for frothing idiocy since I came in from the pub last night.

But of course I know that you know that I didn’t say we shouldn’t question ‘what the government is doing’ at all. Indeed, on my own blog this morning I made the following comment in relation to NHS spending decisions: ‘I reject totally that the health service (and this includes the balance between preventative, primary and secondary resources) can be anything other than deeply political’ of course resource allocation.’

The problem I find with the length of LibCon threads is the development of a ‘path dependency’, whereby one comment misconstruing what the article was getting at is taken up as the main aspect for criticism, and so here from early on in the thread it’s a given that I’m suggesting there can be no valid subsantive thinking about what government does.

What I actually said in the article (though it’s more filled out in the pre-Sunny-edit version at Though Cowards Flinch) is that it’s not the resource allocation thinking that is dangerous, but the ideological basis on which it’s done. That is why I put that bit in bold, and followed up with a couple of paragraphs about the different ways in which a Labour government would set about resource allocation (on the basis of social need) and a Tory government woud do it under the heavy influence of new right thinking about doing only the minimum necessary to uphold property rights and the rule of law.

Luis @6: Ah, that’s twice I’ve been hailed as a wild-eyed conspiracy theorist on this site. If only it were true, life would be so much more fun. Are you saying the Mont Pelerin society didn’t exist? And that it’s members didn’t exert significant influence on the development of the New Right in the 1970s, including on the Thatcher government, but with a much clearer experiment in Chile post-1973?

And on the reason for the recession – yes, I know that you know that it wasn’t casued by ‘big government’, but then you’re an informed commentator. That’s not what I was saying, and why I used the phrase ‘public argument’. Why else did Cameron’s conference speech include what it did as an explanation of the current problems (big government) and exclude what it excluded (any mention of the banks/finance industry). It’s not a matter of what actually happened; it’s a question of public discourse.

Nick @12: Thatcher’s fist government wasn’t properly prepared – she wasn’t evwen a Thatcherite in 1979 – and the left was in a better position to resist. This time the right is making its plans well in advance. That’s where the ASI comes in.

Martin @8: I don’t know what you mean by a ‘client state’. I’m not convinced you do either. I do know what poverty and not being able to get a job is, though. I’m with Ken @13 on this one (and I susepct most ones).

A&E charge nurse @14: I agree that the left needs to re-evaluate etc., though as much about how the working class now manifests itself and where solidarity lies as about what the left itself is (for in answering the first question the second becomes obvious). Where I think we may (but only may) differ is that I think all this will be mich more difficult to do and then do something about under a new right government busy battering our ‘constituents’ while also busily further dividing & ruling them through the propagation of Martin @8’s ‘poverty is the fault of the poor and leftie government’s’ thesis well exposed by Ken @13). That’s why we should campaign for labour, NuLab gits though they may be, and not succumb to your ‘inevitable’

I think that covers the main themes picked up by all – sorry if i’ve missed bit, not that I suppose people are that fussed.

“That is why I put that bit in bold, and followed up with a couple of paragraphs about the different ways in which a Labour government would set about resource allocation (on the basis of social need) and a Tory government woud do it under the heavy influence of new right thinking about doing only the minimum necessary to uphold property rights and the rule of law.”

Then your use of the ASI as a poster child for your dystopia is even more mystifying. We’re Classical Liberals for goodness sake.

We agree that there are public goods, that there are times when markets unadorned do not work, that there are externalities, that there are things which government should do (things which must be done and which only government can do) beyond that minarchy you portray.

Why not look at what we’re actually proposing? On tax for example, our major policy position is that we should stop taxing the working poor. Raise the personal allowance to the full time full year minimum wage (around £12,000 a year or so). On education, we don’t say that the State should stop paying for it (it would be odd if we did for Smith himself specifically recommended it) rather that the State should stop being the exclusive provider of the service provided with taxpayer funds: that Swedish option.

Good grief, try and find out what is that we actually say rather than what Polly’s gremlins think we say.

Martin, your essential assumption is by far the least evidence-supported and most boggle-eyed on display here: it’s that “welfare trap client state” is a meaningful concept.

To get away with that, you need to show there is a substantial welfare trap effect (ie that people are long-term unemployed because they love living on £50 a week, rather than because there aren’t any jobs they can do), and that the government is deliberately maintaining this as a client state to get votes (ie that even if your first assertion is true, the reason such a poor system is being kept in place is out of gerrymandering and corruption rather than because nobody can see a way out that wouldn’t make things worse. For the avoidance of doubt, I’m classing ‘people starve on the streets’ as ‘worse’).

paul, if, when you wrote:

But in another respect, what the Adam Smith Institute now proposes about HOW it should be done is deeply significant; in particular, we should read with some dread the notion that ‘you need a complete review of what government does, what it has to do, what it can do better, and what can be done better by other people and by the public’ (my emphasis).’

you meant something other than what you actually said then perhaps you should have written something else.

The ASI quote was a small piece from a much longer article, however you referred to this extract as “Here’s the most salient part:” and you fail in your attempt to demonstrate why all propositions should not be questioned.

I’m guessing but I would have thought that most people would assume this sort of review should be ongoing and taken for granted.

I don’t believe you have been misconstrued.

“try and find out what is that we actually say”

Oh, we do that okay. My favourite was when your Top Man forgot to look where he was going and fell arse over tit.

It was all the EU’s fault, natch:
http://www.adamsmith.org/blog-archive/000834.php

Yep, it’s a real intellectual powerhouse, that ASI…

Tim @27: I’m happy to concede the point that in both intellectual and policy terms that as a body the ASI may not be focused on the reaching the ‘minarchy’ (nice term!) I have set out. There is no doubt a range of voices within the ASI fellowship (and I can’t say where Eamonn Butler, who wrote the piece) is on that range, but I know from other stuff on LibCon (or possibly at Giles’s blog) that you have a rather more nuanced view of what the state should and can be than sometimes comes out in the the necessary confines of the blogosphere.

In fact, where you see a lack of willingness to look at what the ASI actually says (my ‘dystopia) is more the product of the LobCon editing process than anything else. If you look at the longer version of this over at Though Cowards Flinch, I move from the ASI post itself to how it is being interpreted by those who I would class as on or around the Conservative right, and in particular quote one commentator (at Iain Dale’s site) who takes what Eamonn Butler says to (his) logical conclusion:

‘For this to make any sense one must start with the premise that the Government does nothing at all. Unless you do this, you are knocked flat by a bootstrapping tide of ‘wants’ puffed up to appear as ‘musts’. You end up arguing what to cut instead of making others argue what to include.’

Now, I’m not claiming that this is anything more than impressionistic, but the idea that the classic liberalism of ASI might find itself conveniently picked up and drawn towards this neoliberal interpretation does seem reasonable to me, and it’s this broader current within and around the Conservative party that I was trying to get at, rather than anything specific about the ASI, the quote from which was little more than a handy, blogospherically current jumping on point.

I think Polly is rubbish, btw.

“more the product of the LobCon editing process”

Ah, so it’s Sunny’s fault…..yes, that does make sense.

Sli @29:

As I’ve just said @31 in reply to Tim (and as I suggested further up) I did in fact write something else, in follow up to by bolding and to clarify that it was the ideological underpinning to any review process that I was focused on.

It got edited out, and not by me.

Even so, I think the generally accepted convention of making words bold in order to make clear the key focus of the enuising argument is justification for my stance that I’ve been misconstrued. So there.

To cut, or not to include, that is the question.

If I needed a radical cut in my personal budget, I think i may begin by making a list of those things that are essential and therefore unable to be cut. Of course there could be debate about what is essential, but what’s wrong with that.

Tim @32

Well, I wasn’t going to mention it, but as my honour was at stake……….though I didn’t mean to ay LobCon.

Paul @26

of course I’m not saying Mont Pelerin society didn’t exist – The Second Socialist International existed too, but I wouldn’t describe some present-day left-wing policy as “a glimpse of the culmination of the Second Socialist International project to give the state control of all aspects of our lives” because I’d sound like David Icke.

don’t bleat about being interpreted as saying “we shouldn’t question ‘what the government is doing’ at all” when the flaming article you’ve written posted on this site starts with a quotation concerning questioning what the government is doing and the proceeds with your “in other words ….” If you want to say Sunny has mangled your longer piece in editing, then ask him to edit it again, otherwise take responsibility for the words that are on the page.

on the subject of taking responsibility for what you wrote, you wrote the neo neo liberals (jesus wept!) have largely won the public argument that the recession was caused by big government, and I am saying that’s crazy talk – I’d bet my left bollock that the majority of the public blames bankers. You may have noticed a fair amount popular animosity towards them recently.

Paul

the idea that the classic liberalism of ASI might find itself conveniently picked up and drawn towards this neoliberal interpretation does seem reasonable to me

So I tell you the wheel was a good invention.

Someone puts a wheel on his car and it happens to run over your foot.

Is the wheel a good invention?

Is the car?

Hi Paul,

I’ve read both versions, here and TCF, and I think the argument is materially the same.

For what it’s worth, I agree with the argument, and find it vastly entertaining to read all these things about ‘how dare you misrepresent the Adam Smith Institute and say that they wish to create a minarchy’.

Worth noting as well that doing zero based budgeting takes an absolutely enormous amount of organisational time and effort.

Just on “This neo-neo-liberalism senses now that it has largely won the public argument, not least in the way it has sold the idea that this recession was a product not of the illogicalities of capitalism, but of ‘big government’.”

Luis @ 36 has misread this. It is arguing that these people “think they have won the argument”, not that they actually have won the argument.

For me, this is the key point – most people don’t want vast cuts in public spending, and this will become apparent as soon as anyone tries it.

Luis @26:

Blimey, Martin C’s accused me of ’screeching’ and now here I am ‘bleating’. I’m honestly not aware of doing either of those things, or that my responses can be validly read as such; what I was trying to do was clarify where I was coming from.

It’s the nature of LibCon that articles get edited down (in this case in the middle of the night by Sunny when I was asleep) so that they become bite size enough to read at one quick go, and then that the often lengthy comments threads develop the themes. That’s fair enough. There’s also an expectation from Sunny, and I think readers, that the author then engage with commenters to clarify their thinking at greater length if need be. That’s no problem, and that’s all I was doing. I still can’t see that as bleating. I’m grateful that Sunny cross-posts, and any ‘blame’ attached his way is in jest, just as Tim W has interpreted it above.

The bit of the public argument the Conservatives have won, notwithstanding the continuing hostility towards bankers (about which your’e right) is that the way to deal with the problems caused by the recession is to tackle ‘big government’, counterintuitive though that may be

The main issue with this article is not really the trend it identifies – I don’t think many would really dispute that the Tories under Cameron do still have a very clearly libertarian base ideology, tempered by pragmatism. The problem is that despite the article’s assertions, voting for Labour (with its current leadership, at any rate) is pretty much equally likely to result in these types of policies.

The Labour Party has not recently demonstrated any ideology beyond doing what people such as the CBI and Adam Smith Institute suggest (as with the Tories), but slightly more slowly, accompanied by meaningless ‘progressive’ rhetoric and grand-sounding targets that are wildly trumpeted but never met or even moved toward.

I certainly won’t be voting either Tory or Labour this time around.

ok, scratch “bleating” – @26 you wrote people reading this should know “of course you didn’t mean that” and said you have been “misconstrued”, which if not a bleat is a pretty lame response to having written X and having been interpreted as meaning X.

Don,

well, maybe … but the phrases “senses it has won the argument” and “the way it has sold the idea” are ill chosen if the author really means to say they have not won the argument and have not sold the idea

I’m all for massive reform of the organisation of Government. Just not what the ASI are proposing.

The current problems don’t lie with “big Government” but with bad Government. The expenses scandal highlighted the lack of professionalism in Parliament, and I’m always amazed how someone who is not very good at running the health service is then not very good at running the education system the following week.

We’ve been farming out branches of the public sector to private industry for years, and it invariably results in the private companies picking up all the profitable pieces and letting the taxpayers carry all the risk on the rest of it.

There is a reason that so many necessary services need to be provided by Government – because they’re intrinsically unprofitable. The idea that market forces are good for education or Sunday morning train services is risible. Yet it’s slowly happening, because Government have presented it as “public-private partnership” or “private finance initiative” – “Don’t worry, it’s not privatised, we’re still in control.”

“The idea that market forces are good for education or Sunday morning train services is risible.”

Eh?

Not many people want to travel on trains on a Sunday morning. A market system would not provide many trains on a Sunday morning. The problem with this is?

As to education: do you really want to try and claim that the current State education system provides a better education to pupils than the cuirrent private school system?

Seriously?

@22: ” . . The recession is keeping people from getting jobs. . ”

Ken, I agree but I doubt many Conservatives, Philip Hammond, the shadow treasury secretary, or the ASI see it that way.

At the end of last year and the beginning of this, the Conservatives were explicly denying the need for a fiscal boost to stop the recession, induced by the financial crisis, deepening into a depression. They have gone quiet about that denial in the face of fiscal boosts by governments in the US, Germany, France, Japan etc and the evidence of where the global economy was heading:
http://krugman.blogs.nytimes.com/2009/11/03/the-story-so-far-in-one-picture/

But there is no evidence that Conservatives have given up on the bicycle and all-unemployment is voluntary theories of employment or have understood that fiscal intervention to stabilise economies can be essential at times. A little surfing will show up the abuse heaped on the members of the BoE’s Monetary Policy Committee. Some folks really believe the Free Markets mythology.

[43] and are you suggesting that the market could meet the learning needs of EVERY child in this country, rather than the self-selecting and privileged few?

Seriously?

“and are you suggesting that the market could meet the learning needs of EVERY child in this country, rather than the self-selecting and privileged few?

Seriously?”

Depends what you mean by “market”.

“On education, we don’t say that the State should stop paying for it (it would be odd if we did for Smith himself specifically recommended it) rather that the State should stop being the exclusive provider of the service provided with taxpayer funds: that Swedish option.”

that sort of market, yes, certainly.

@43.

“Not many people want to travel on trains on a Sunday morning. A market system would not provide many trains on a Sunday morning. The problem with this is?”

The problem is clearly evident, if it’s not profitable to run any trains on a Sunday. Market forces would dictate that there would be a bare minimum of, if any, public transport in rural areas. Many people rely on this service.

“As to education: do you really want to try and claim that the current State education system provides a better education to pupils than the cuirrent private school system?”

No, but would everyone get an education if it was left up to market forces? The answer is clearly no. Do you honestly think that private schools would do a better job of educating large numbers of young boys who feel alienated by authority and enamoured by gang culture? Because that’s not something private schools currently have to deal with very much.

My main point is that private industry have been allowed to cherry pick the bits they want to buy up, with none of the risk.

Private mail companies are able to pick up the profitable transfer of bulk mail across country, while the Royal Mail are left with the rather more expensive and complicated door-to-door delivery.

National Express are allowed to keep the profit on one part of their company, and write off the debt on their East Coast Mainline at the expense of the taxpayer.

Not many people want to travel on trains on a Sunday morning. A market system would not provide many trains on a Sunday morning. The problem with this is?

Shorter: “Let them eat cake.”

[46] ‘that sort of market, yes, certainly’.

Ahh, the NuLab option – private providers competing for markets usually provided by state services?

I know a little bit about this because this is EXACTLY what has been happening in the NHS.

Cleaning contracted out – cheap tender invariably associated with grubby service.
Patient telecommunications contracted out – phone calls cost at premium rates.
ISTCs = lower productivity, higher complications and greater cost.
PFIs = more than doubled the cost of building hospitals.
Internal market – resulted in doubling of bureaucracy (6%-12% of overall cost).
http://www.guardian.co.uk/commentisfree/2009/sep/03/nhs-business-markets

And what about private (no) care homes?
These have certainly mushroomed since the state looked to cut its loses, hardly a success story are they?

Now what are the good bits associated with for-profit providers?

Why not go and find out what the Swedish system is, try reading up on whether its been a success or not?

47] My main point is that private industry have been allowed to cherry pick the bits they want to buy up, with none of the risk.

Exactly, Phil H – I would have much greater respect for those advocating market solutions if they had the honesty to admit that this is key driver to the type of activity that for-profit providers are willing to undertake.

So far, if we take health as an example, for-profit providers have targeted the worried well, or relatively uncomplicated conditions (like hernia repair, cataract surgery or hip replacements) since single pathologies, especially those involving a straight forward operation, are all amenable to a production line approach to health care.

@43: “As to education: do you really want to try and claim that the current State education system provides a better education to pupils than the cuirrent private school system?”

Less than 7% of pupils at school in Britain presently go to non-maintained schools, some of which are better than others. But that is true too of maintained schools – I’ve mentioned before that two boys grammar schools within walking distance of where I sit achieve better average A-level results for the exam candidates than Eton – and at much lower cost and with worse teacher-pupil ratios.

As for the quality of education at non-maintained schools as a category, try this report of a research study at Warwick University:

“The UK’s most expensive private schools are producing pupils who achieve the worst grades at university, according to research. An eight-year study of graduates’ results by researchers at the University of Warwick suggests that the more parents pay in school fees, the less chance their children have of getting a good degree.”
http://news.bbc.co.uk/1/hi/education/2552523.stm

For interest, this is the latest schools league table based on A-level results:
http://news.bbc.co.uk/1/hi/education/7827223.stm

We need to recognise that some local education authorities work to a formula:

maintain poor local school standards => worse job prospects for school leavers => vote Labour at local elections => entrenched Labour control of local council

Shorter: “Let them eat cake.”

So what’s wrong with everyone eating cake?

When I was a trainee teacher I was on placement at a private boarding school. Lovely school, but they didn’t push their students academically. Though I’d argue that’s not entirely a bad thing – the extra-curricular provision was outstanding.

Students generally have to work harder at state school on their own initiative to achieve the same results – it’s no surprise that those who succeed then go on to succeed when left to their own devices at university.

Private and state education have a lot to learn from each other. Private=good is not simply a massive over-simplification.

“since single pathologies, especially those involving a straight forward operation, are all amenable to a production line approach to health care.”

Excellent, so we do the simple stuff on a production line approach and then do the difficult stuff another way. And the problem with this is?

“The problem is clearly evident, if it’s not profitable to run any trains on a Sunday. ”

Forgive me for I’m missing something. Profit is simply a measure of the value to the consumer being greater than the cost of providing whatever it is. This is true of apples, medical care or Sunday morning train services.

Whether it is a private proft seeking company or a State run subsidised one, if the cost of providing Sunday morning train services is higher than the value provided by having such services then we shouldn’t be having the services. Having them means that we are destroying resources which we could use in another manner, providing something of higher value. ie, supplying things which do not make a profit, whether via the State or otherwise, makes us poorer as a whole.

Note that I’m using an expansive meaning of “profits” here: not simply the shekels the capitalist gets to count but out put valued at more than the cost of the inputs.

“Note that I’m using an expansive meaning of “profits” here: not simply the shekels the capitalist gets to count but out put valued at more than the cost of the inputs.”

Conveniently that’s not the way everyone else measures profits. People need to get around and a service should be provided for those unable to do so.

“since single pathologies, especially those involving a straight forward operation, are all amenable to a production line approach to health care.”

Excellent, so we do the simple stuff on a production line approach and then do the difficult stuff another way. And the problem with this is?

The problem is that the private companies are allowed to come in and run the bits they want to run. They walk off with all the profits from the easy procedures. All the essential but loss-making parts of the organisation are left to the taxpayer. It’s called corporate rape.

“Conveniently that’s not the way everyone else measures profits. People need to get around and a service should be provided for those unable to do so.”

No, it’s exactly the way that everyone measures “profits”.

NICE looks at new medicines and treatments and decides whether they’re worth having. Does the outcome in QUALY justify the money going in? Is the output worth more than the input?

Sunday morning train services: someone somewhere does a cost benefit analysis. Are the benefits from having them higher than the costs of providing them? Rural bus services: yes, they do a cba here too: do the social benefits (which we all agree there can be, over and above the shekel style profits) cover the cost of providing rural bus services? sometimes they do and sometimes they don’t.

But everyone, all the time, whenever they have to make a decision asks “is this worth doing?” which is exactly the same question as “is this profitable?”.

Are the outputs worth more than the inputs?

People need to get around and a service should be provided for those unable to do so

Need? Why do they need it? Why does someone else have to pay for it? What does “get around mean”, 5 miles, ten miles a hundred miles?

Where do you draw the line? I’d like cheap, heavily subsidised air travel please.

*everyone’s* measure of profit includes social benefits?

Bullshit.

“I’d like cheap, heavily subsidised air travel please.”

Luckily for you, we have that.

“The problem is that the private companies are allowed to come in and run the bits they want to run. They walk off with all the profits from the easy procedures. All the essential but loss-making parts of the organisation are left to the taxpayer. It’s called corporate rape.”

oh come on! if it is the case that private companies are better at doing some things than others, then it would be perfectly sensible to let private companies make some* profit from doing the things they’re better at, while keeping the harder stuff with the taxpayer – calling an arrangement that a sensible government may choose “rape” is a bit silly. The rape might come in if the private companies are profiteering and/or somehow leaving the others bits worse off, but if they’re just getting paid for doing something (the NHS doesn’t manufacturer its own pencils or its own drugs you know … paying private companies to do stuff is an every day thing in the private sector) and the tax payer funded bit is doing a good / better job of doing what’s best left in its hands, what on earth is your beef? If you’re saying the private sector isn’t any good, fine, it shouldn’t be used, but the problem is notthat the private companies are allowed to come in and run the bits they want to run – that’d be true too if the private sector was doing a superb job.

* just enough and no more

Tim Worstall, if you’re true measure of profit logic allows for allocating a very high value to things like allowing the rural poor to get a bus into the nearest town, hence you would advocate subsidized rural bus services because they are “profitable” in your sense, fine. I’m not sure if a similar argument would apply to letting people without cars use trains to get about on Sundays.

But if so, how are you pricing the value which is greater than the cost? Surely you’re not comfortable with letting bureaucrats decide what’s valuable and what isn’t. On the other hand, if you are measuring value by “how much people are willing to pay” i.e. market prices, then you would be shutting down rural bus services, in which case as a former car-less village dweller I’ve a mind to fly to Portugal and kick you in the shins.

@58. I agree with your point – though people will tend to use the word “value” rather than “profit” to describe what you’re saying.

I certainly don’t argue that capitalism is evil and added value has to be ignored in the pursuit of providing public services.

But that’s not (generally) how these things are measured by private enterprise – they don’t have the same motives as Government – they answer to their shareholders, not to the taxpayers.

What they’re being allowed to do is to take over the profitable parts of public service, keep profits on individual parts of the service whilst writing off losses on other parts, and leave the taxpayers to carry all of the risk whilst providing a shitty service.

Even if a good service is provided, if a private company is walking off with the profits that would once have subsidised the loss-making parts of a service, that’s not a good thing.

I don’t presume that private enterprise has no role to play, but the evidence for how it is managed in this country so far is not good. I fail to see how the ever further expansion of this is a good idea until the existing mess is sorted out.

“On the other hand, if you are measuring value by “how much people are willing to pay” ”

Of course that is our measure of value.

In this case, how much extra tax are you willing to pay so that rural dwellers get bus services?

Sum this up over the population (and yes, we do have ways of estimating such things: your post-grad economics course is full of them) and we have our measure of value.

oh sorry Phil H, I may have misunderstood you – are you talking just about situations where previously profitable bits cross-subsidised loss making bits, and the private sector was given the profitable bits and the tax payer keeps the loss making bits? Even if so, it’s quite possible for the government to say require a payment from the private sector in return for running the profitable bit that replaces the former cross-subsidy. Like, say, the govt can run its own cafes in hospitals, or it can sell the rights to do so to Costa.

#61 I’m not against PT, I travel by bus, tram & metro every day, I just don’t see any problem with asking difficult questions about spending public money on any service.

Which is what the original article is about; questioning not spending.

“The problem is that the private companies are allowed to come in and run the bits they want to run. They walk off with all the profits from the easy procedures. All the essential but loss-making parts of the organisation are left to the taxpayer. It’s called corporate rape.”

Don’t like that term – but I think “corporate welfare” sums it up perfectly.

For example, the founder of the company A4e now lives in a mansion which she bought thanks to government handouts.

“But everyone, all the time, whenever they have to make a decision asks “is this worth doing?” which is exactly the same question as “is this profitable?”.”

You really think that “is this worth doing?” is the same question as “is this profitable?” Always?

“Even if a good service is provided, if a private company is walking off with the profits that would once have subsidised the loss-making parts of a service, that’s not a good thing.”

Ahhh….you’re ignoring efficiency. Sometimes (and do understand, I really do mean sometimes: not always and quite possibly not even the majority of the time) a private firm, because they face different incentives, will be sufficiently more efficient so that provision of the service or goods, even including their profit margin, will be cheaper than having the State do it directly. So even though they are indede walking away with shekel style profits we’re not reducing the cross subsidy we’re increasing it.

Now, I think we’ll probably disagree on how often this will be true, but will you accept that it can happen and that those times that it does we want to hive off the direct provision?

“If you’re saying the private sector isn’t any good, fine, it shouldn’t be used, but the problem is notthat the private companies are allowed to come in and run the bits they want to run – that’d be true too if the private sector was doing a superb job.”

What I’ve already stated is that private companies are being allowed to run a poor service, make a loss, and then get the Government to bail them out.

Take the National Express example – made a big noise about how they were going to turn a profit on the old GNER franchise (which no one else has ever managed to do) then made a huge loss. They were bailed out by the Government. Meanwhile they made large profits on other parts of their business, but were allowed to keep all those.

I’m not saying private companies are evil – but they are being allowed to abuse a shit system.

But everyone, all the time, whenever they have to make a decision asks “is this worth doing?” which is exactly the same question as “is this profitable?”.

Only if you’re a raving, roaring lunatic.

I’m sorry Tim, but really! I gave my mum a big hug last time I saw her. I thought that was worth doing, but it’s hardly ‘profitable’ (or even if it might be, that’s not the point).

I might cook spaghetti for dinner tonight. That’d be worth doing, I reckon, but not exactly ‘profitable’ either.

Assuming that you haven’t actually gone mad, you should acknowledge that you’re using words here with technical meanings which are light years from how most people understand them.

right well if how much people are willing to pay is the only measure of value you will allow, then poor rural dwellers would be deprived of a bus service. I’m getting on a plane; look to your shins.

I am willing to pay some tax to provide loss-making buses to villages.

One of the things any undergraduate economics course* should teach you is that while market outcomes might be pareto optimal, if initial allocations are unequal then you need redistribution to maximize welfare. One corollary of this is that “how much people are willing to pay” is not “our measure of value, until that redistribution has taken place (second welfare theorem?). OK, you could do it all in cash, but in-kind (bus services) are reasonable imho – I could go on to list the circumstances in which in-kind transfers are preferable to cash, but let’s not.

* I knew I shouldn’t have mentioned that to you, and rather you didn’t

“you should acknowledge that you’re using words here with technical meanings which are light years from how most people understand them.”

Sure: I even defined it above. That the output has more value than the inputs.

@Larry – this sums it up, I feel: http://tinyurl.com/m2thqj

“oh sorry Phil H, I may have misunderstood you – are you talking just about situations where previously profitable bits cross-subsidised loss making bits, and the private sector was given the profitable bits and the tax payer keeps the loss making bits? Even if so, it’s quite possible for the government to say require a payment from the private sector in return for running the profitable bit that replaces the former cross-subsidy. Like, say, the govt can run its own cafes in hospitals, or it can sell the rights to do so to Costa.”

No problem.

The Costa in hospitals example is an interesting one. I have no huge issue with peripheral bits and pieces possibly being contracted out like this. There should be a certain standard of service though – ie what were the principles of providing a cafe in a hospital previously? Did it used to be really cheap and basic, and was there are good reason for this? Perhaps it now becomes less viable for poor relatives to stay in the hospital to go for a snack and a cup of tea and stay with their loved ones longer, because Costa provide a more expensive service.

The Royal Mail and rail franchise examples, however, are rather different – it is the core service that is being farmed out. In the case of Royal Mail, it’s only the profitable part of the core service that’s being handed over. Are the likes of UK Mail sufficiently contributing to the door-to-door-delivery provided by the Royal Mail workers? It doesn’t look that way, with the “efficiency” cuts being made in Royal Mail operations. Or are the current problems because of the phenomenal salaries received by Royal Mail bosses, or is the price of stamps too low?

Any way you look at it, it’s not a comfortable partnership.

@71 – Good point about Pareto optimal allocations – an unspeakably awful income distribution can happen to be Pareto optimal. There’s an extensive discussion of welfare criteria in IMD Little: Critique of Welfare Economics.

On bus/rail services on Sunday, service operators need to take account of demand complementaries. Low service frequency leads (eventually) to fall off in custom as prospective travellers switch to other modes. There’s a professional literature estimating demand functions with service frequencies as well as relative prices and traveller incomes among the explanatory variables.

@69, you’re simply wrong on National Express.

They agreed to pay the government a huge premium for the right to operate the franchise, briefly managed to pay the government a huge premium for the right to operate the franchise, got hit by the recession, and eventually agreed with the government to forfeit their right to run the franchise. In exchange for forfeiting this right, they also forfeited the £32 million deposit they’d left with the government.

In other words, they paid the government a hell of a lot of money, just not quite as much as they’d originally pledged.

@74, you’re hitting on the real problem here, which isn’t private provision at all – it’s poor management in the public sector.

If a plc were forced to make its monopoly services available to competitors, they would ensure that the price charged fully covered its costs (and BT is an example of a plc that has been extremely good at reducing the impact of competition by ensuring that regulated tariffs allow it to make fairly generous returns).

If the Post Office isn’t charging its private sector competitors appropriately, that’s a sign that the people running the Post Office are inept (or, if wearing a Not Entirely Ridiculous Conspiracy Theory hat, that they’re trying to make it look run-down so they can appear to rapidly turn it around after privatisation and make enormous bonuses), not that the principle of regulated access to monopoly infrastructure is wrong.

…also, ‘phenomenal salaries’? Crozier’s on £1m-ish including all bonuses, and is the highest-paid board member. That’s 0.01% of turnover, and it’s only 40x that of the average PO worker.

(admittedly, if the PO were privatised without serious restrictions on management share schemes, the opportunity for actual phenomenal pay would become significant…)

Are you seriously suggesting that £1m isn’t a phenomenal salary?

We know that the Conservative will cut public services, even if they are not as explicit as the Adam Smith Institute about the range of cuts.

We know that Labour will cut public spending, too.

From the Economist: http://www.economist.com/world/britain/displaystory.cfm?story_id=14505343

“The Treasury has pencilled in a cut in real departmental spending of 4% in 2011-12, with reductions in the ensuing two years of 1.8% and 3%—a cumulative contraction of 8.6%. These would constitute the biggest cuts since the late 1970s, when the IMF held the whip hand.”

Under the circumstances it seems to me that it would be a good idea to “review of what government does, what it has to do, what it can do better, and what can be done better by other people and by the public”.

I might add the the Labour plan will not allow it to balence the books by 2014 “it defers half the squeeze to the parliament after next: not until 2017-18 is the business done.”

If Labour really does intend to return to Keynes’s idea of running deficits in downturns, and surpluses in good times, it apparently does not expect the good times to return for a decade or so.

One puzzle over the claims made about rival spending cuts plans is that the Conservatives are explicitly pledged to protect NHS spending and increase it in real terms, because of population ageing, while Labour are reported to working to a target of making £20 billion savings on the annual NHS budget of c. £104 billion:

“The NHS may need to cut its workforce by about 10 per cent — the equivalent of 137,000 staff — to help to meet planned savings of £20 billion, according to a leaked Department of Health report.”
http://www.timesonline.co.uk/tol/life_and_style/health/article6818817.ece

@99: “If Labour really does intend to return to Keynes’s idea of running deficits in downturns, and surpluses in good times, it apparently does not expect the good times to return for a decade or so.”

Presumably, the haste with which public spending is cut and/or taxes increased in order to reduce the fiscal deficit will affect the UK’s GDP growth rate – or is that too keynesian a way of thinking?

As I recall, as a result of the turbulence of the UK economy during the 1980s and 1990s, our standardised unemployment rate didn’t fall below that of France, Germany or Italy until the final quarter of 1995.

The Government’s own bleak forecasts from September show that the Treasury expects to pay out £193.4 billion on social security benefits in 2013/14. Paying interest on the Government’s outstanding debts will cost £63.4 billion.

Total Government spending in the same year will be £758.3 billion. Welfare and debt interest will be 33.8 per cent of that total.

The welfare bill will also absorb more money than every worker in the country pays the state in income tax (and this is with the 50% top tax rate). In 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts.

Already the largest single item in the budget, by 2013/14 spending on social security will dwarf every other item of Government expenditure.

Given that the only source of revenue for the government is taxes on private sector businesses and private sector employees, how exactly do you expect the welfare state to be maintained in anything like its current size? Tax all you want but please explain to me why any entrepreneur or business abroad would come here and why those businesses already here will stay?

“how exactly do you expect the welfare state to be maintained in anything like its current size? ”

Simple answer: slash social security benefits and build local terminator stations to take care of the chronically sick and demented.

Btw remember that Cameron has committed a Conservative government to protecting the NHS budget in real terms.

Bob B, dont confuse the NHS with the welfare state. Also, dont confuse helping the vulnerable (or the sick for that matter) with creating a degenerative lifestyle option for the mass idle.

Presumably, the haste with which public spending is cut and/or taxes increased in order to reduce the fiscal deficit will affect the UK’s GDP growth rate – or is that too keynesian a way of thinking?

All parties are planning spectacular cuts in public spending, which will doubtless cause a lot of pain. Almost everything I have seen in the financial press considers this to be essential, and perhaps literally unavoidable.

So if Keynes was wrong, there will be a lot of pain, whoever is in power.

If Keynes was right, the economy will be devastated, requiring further cuts, causing vastly more pain and suffering, whoever is in power.

But it was the Labour government which borrowed at the height of the boom, and got the public finances into this mess.