Saturday 16 May 2020

The Unlikely Hegemony of 'Thatcherite' Economics

You've probably gathered that I have a hobby of observing the loose cadre of idealistic, educated Corbynist / Momentumite types, dating from the 2011 riots.  It's a serious and important social phenomenon: the evolution of an officer-class, potentially to lead the *revolution*.  This isn't going to be my magnum opus on the subject, but rather an interesting snapshot from last week.

The Corbynist in question is one Aaron Bastani: look him up for yourself, he is as wrongheaded as it is possible to imagine but transparently, ingenuously, painfully honest.   He has also (supposedly) worked up a fully-developed new vision of the future that glories in the title fully automated luxury communism (sic): needless to say his vision is revered in some leftist quarters, and scorned in others (they all despise each other cordially in best Life of Brian fashion - it's all that earnest thinking).

Anyhow, à propos of "The Treasury is modelling a potential £500 *billion* deficit for this financial year. That would be around 25% of GDP", last week he went on to tweet:
You have to suspect Tories will go for pensions if deficit is as bad as it could be. They are going to massively rise in coming decades anyway so might as well deploy some shock doctrine. I think they’ll plump for that, citing ‘generational justice’, and VAT/NI.
Now let's immediately accept that one interpretation of this, is: Bastani is merely predicting what the Tories will do next, because he assumes that they (foolishly) think "it all needs to be paid back eventually".  But that's not how I read it.  It seems to me (and others in the thread following his tweet) that young Aaron himself thinks it all does indeed have to be "paid back" - 'cept he'd do it via a wealth tax etc etc.  He's just mulling over the conventional options for doing so, and speculating on the politics around the choices available.  (I have no intention of ringing him up and finding out which is correct.)  In any event, he didn't rise to the chiding of one of his BTL commenters who retorted: 
Love the comments on here from Corbynistas implying the Govt have spent too much! Pot/Kettle.
So for now, I'm sticking with my interpretation.  Deep in the public psyche, plain vanilla grocer's-daughter Thatcherism rules, OK!



david morris said...

"The Treasury is modelling a potential £500 *billion* deficit

Using the Ferguson model, no doubt.

BlokeInBrum said...

I suppose all those Liverpudlian teachers will need paying somehow. Or at least kept in the manner that their accustomed to.
I think that most people will come to realise that the bill for this will have to be paid. And if it's not them, then it will be their kids paying it.
Unless you happen to work for the State. In which case the disparity between the pay, benefits and pension that the public sector receives and what those in the private sector get is going to become ever more starker.
I think people instinctively know that Socialism is the equal sharing of misery and the kind of crap that Bastani is pedalling only appeals to the middle class nomenklatura of the Labour Party.

Matt said...

One other option being apparently mulled by the treasury is the removal of higher rate pension tax relief which they spend £38bn per annum on. Note the way the word spend is used - not extracted with menaces which is more accurate. If future pension provision can be raided then I can see no reason the public sector can't share that pain also with a reduction in their future pension pot.

DJK said...

> removal of higher rate pension tax relief which they spend [made up number] on...

This one gets trotted out regularly.

Pension contributions are deferred salary. You should be taxed on it when you actually receive it, as a pensioner --- hence tax relief.

andrew said...

In an environment where there is too much mkney sloshing around looking for a home, i do wonder why we do not tax savings more

In the case of pensions the money is out of reach until 55 and so there is some good reason to provide some incentive go save for the long term.

For almost everything else, not so sure.

Like cgt on housing, or the whole ISA concept.

After all, the clever thing about qe is and was that it did not cause general inflation but, it did pump up asset prices and so benefit those who had assets.
Only seems fair that some of the gain is redistributed to all, many of whom have no assets.

Anonymous said...

Are the left or the right (or the centre) any different?

The government reserves itself two powers - the power to tax and the power to imprison/fine if you don't pay tax. The same a Kings before them. With that power they can influence, enrich or destroy those that they wish.

It is said that under Brown, 50% of the population benefited in some way from government (tax financed) largesse. It must be more than that now. So if you reduce tax, you in effect reduce government and which politician is going to vote to be out of a job and influence?

Perhaps Cummings may be onto something when he threatens to reimagine (as the say) the whole government structure.

andrew said...

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man

... you may say he's a dreamer
But hes not the only one...

E-K said...

It's all rice and bicycles and straw hats from here on.

Our turn, I'm afraid.

Raedwald said...

The Wuhan virus is just accelerating a process that was already underway; Niall Ferguson drawing parallels with Gibbon in Vanity Fair in 2006 was prescient indeed

A perpetual stream of strangers and provincials flowed into the capacious bosom of Rome. Whatever was strange or odious, whoever was guilty or suspected, might hope, in the obscurity of that immense capital, to elude the vigilance of the law. ...It was the just complaint of the ingenuous natives that the capital had attracted the vices of the universe and the manners of the most opposite nations.

If it's any consolation, it will probably take 20 - 30 years before we get to the coolie stage.

Nick Drew said...

Read Gore Vidal (1876) on New York in the second half of the 19th century

E-K said...

Thanks for the link.

I doubt the Romans had PC, XR and Thunbergists in deep state kicking down pillars at alarming rates.