Category: Policy and Policy-Making

13th October 2022

Here is a book that has become strangely, suddenly topical:

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It is not a bad book, and it has many merits.

The book is not a “woke” critique of the British Empire nor is it a sturdy defence.

It is more of an account of the British Empire from the perspective of those who administered it.

And of those administrators, the author is critical.

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“Officials, as I hope to show, often developed one line of policy, only for their successors to overturn it and pursue a completely different approach.  This was a source of chronic instability in many parts of the empire.”

Successors suddenly overturning policy and pursuing a completely different approach is a bad thing.

Chronic instability is also a bad thing.

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“….empires, through their lack of foresight and the wide discretion they give administrators, lead to instability and the development of chronic problems.”

Lack of foresight and instability are bad things.

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“The British Empire is a bizarre model to follow for fostering stability in today’s world.  Indeed, much of the instability in the world is a product of its legacy of individualism and haphazard policy-making.”

Haphazard policy-making is a bad thing.

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“…anarchic individualism led to instability because there was no policy coherence or strategic direction.”

A lack of policy coherence and strategic direction are also bad things

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“Often strong-minded officials and governors would, by a metaphoric sweep of the hand, reverse the policy of decades, thereby creating more confusion and instability.”

Reversing the policy of decades by a metaphoric sweep of the hand, thereby creating more confusion and instability, is a bad thing.

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Our new Chancellor of the Exchequer has suddenly sought to reverse decades of “Treasury orthodoxy” – and summarily sacked the respected Treasury permanent secretary Tom Scholar.

Without sharing the details of the “mini budget” with cabinet the new Chancellor of the Exchequer announced radical changes to established policy, thereby causing uncertainty which was foreseeable.

Off on a frolic of his own, the new Chancellor of the Exchequer single-handedly created wider systemic instability, so much so that the Bank of England is now repeatedly having to intervene so as to prevent meltdown.

Because of the new Chancellor of the Exchequer, we now have repeated U-turns, which are the very defintion of haphazard policy-making.

And because of the new Chancellor of the Exchequer we certainly now have “instability and the development of chronic problems”.

Indeed, the conduct of the new Chancellor of the Exchequer since he took office is an exercise of the “anarchic individualism” which the author of Ghosts of Empire warned us against.

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If only the new Chancellor of the Exchequer had read Ghosts of Empire before taking office.

Oh, he wrote it.

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28th September 2022

Today, it is reported, there were almost mass insolvencies of pension funds:

🚨NEW🚨
On the @bankofengland intervention:
Am told the BoE were responding to a “run dynamic” on pension funds – a wholesale equivalent of the run which destroyed Northern Rock.
Had they not intervened, there would have been mass insolvencies of pension funds by THIS AFTERNOON.

— Ed Conway (@EdConwaySky) September 28, 2022

I'm told:
– Pension funds getting hammered and losing huge amounts of capital
– Banks forcing them to make margin calls and liquidate assets – so gilts
– Some pension funds losing large amounts of their fund
– Hence BoE stepped in
/

— Sam Coates Sky (@SamCoatesSky) September 28, 2022

Pension funds – like constitutional law – should not be exciting.

Pension funds should be dull.

Something wrong is happening.

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There is a sub-genre of fantasy literature which uses the literary device of a portal.

You go though a wardrobe, or over a rainbow, or down a rabbit hole, or past the second star on the right.

And you are then in another world, where certain fundamental elements are different and strange.

Recently British politics has been unusually volatile, but at least it was within certain familiar parameters.

We had the Regency smugness of David Cameron’s administration; the misplaced Victorian earnestness of Theresa May’s; and the Edwardian charlatanship of Boris Johnson’s.

All bad in their way, but you could comprehend what was wrong about the administration and its approach to law and policy.

But the administration of Elizabeth Truss – despite some early but misleading indications of pragmatism – is of a very different type.

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It must have seemed so simple, only a few days ago.

Treasury orthodoxy could be cancelled easily – and the permanent secretary Tom Scholar was sacked.

Tax cuts could be announced.

And, at a stroke, the British economy would be “unleashed”.

The new chancellor Kwasi Kwarteng told the House of Commons that the government would “release the enormous potential of this country”.

But.

The problem with words like “release”, “unleash” and, indeed, “unchained” is that they are often mere substitutes for policy.

By using such words you are presupposing that there is a thing which is being constrained that only requires the constraints to be removed.

It is, in its way, a form of magical thinking.

And it must have seemed straightforward to the new administration that all that was needed was for tax cuts to be announced and, hey presto and abracadabra, growth would be be produced:

One suspects that even now at Ten and Eleven Downing Street, the Prime Minister and Chancellor do not understand why the Friday statement has had these consequences.

They did the magic things and said the magic words – powerful words like “release” and “unleash” – but what has actually been released and unleashed is not what they wanted.

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You could say that the problem is that Truss and Kwarteng are being ideological.

But many practical and effective politicians have ideologies: Clement Attlee and Aneurin Bevan with the creation of the National Health Service, or Margaret Thatcher (at least in her early premiership) and Norman Tebbit (whose trade union reforms are pretty much still in place forty years later).

What is different with the current administration – and this is apparent even after a few weeks – is not that it has an ideology, but that it has nothing else.

There is no engagement with the real world as it is, and no understanding that there is even a real world outside with which to engage.

The fundamental elements of their political vision are different and strange: this is Narnia, this is Oz, this is Wonderland, this is Neverland.

We can enter their world, but they have no notion of ours.

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Portal fantasies often end with the intruding hero(es) eventually coming back to this world – sometimes changed, sometimes not.

The other world usually carries on, just as before – but without the Pevensie children, or Dorothy, or Alice, or Wendy.

Sometimes, however, people from our world get stuck there, perhaps lost or disguised, unable to escape.

We are currently stuck with our fantasy government, perhaps for the next two years until a general election.

Brace, brace.

We are not in Kansas anymore.

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Thank you for reading – and now please help this blog continue providing free-to-read and independent commentary on constitutional matters and other law and policy topics.

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***

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23rd September 2022

Once upon a time I was an Economics A-Level student, and that time was 1987 to 1989.

And I remember one day sitting watching the 1988 Budget given by Nigel Lawson, and it is an indication of how I was not like other A-Level students that this was very exciting.

I even remember writing out “Medium Term Financial Strategy” into my exercise book of quotations – perhaps the dullest book of quotations ever compiled – and sitting with the Times and Financial Times spread out on the living room carpet.

But most of all I remember the triumphalism.

Socialism and the post-war consensus was over: Thatcher and Lawson had re-written the economic rules, and our reward were to be good times that would never ever end.

And all this accorded with the theories taught on the Economics A-Level course.

It was all so easy – and one had to ask why had nobody ever done this before.

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But.

The 1988 boom ended with bust, as all booms tend to do.

This was not a sound financial strategy – either for the medium term or otherwise.

And Lawson and then Thatcher lost their jobs, and a recession occurred while I was at the university into which my Economics A-level result had helped me.

(Though it was not until around 2008 that I finally dropped my free market views, when it became obvious that – left to themselves – markets tended to disequilibrium – and implosion  – rather than to equilibrium.)

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I also remember Gordon Brown as Chancellor contending that there would be “no more boom and bust”.

This was a similar triumphalism to that of Thatcher and Lawson, but from another political party that believed they had cracked how to manage the economy.

And that triumphalism was also undermined by events.

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After a while, watching governments and politicians (and pundits) come and go, one can become unimpressed, if not cynical.

The not-a-budget announced today by new Chancellor Kwasi Kwarteng is certainly something that would have fascinated my 1988 Economics A-Level student self.

It is probably even a speech that my 1988 Economics A-Level student self could have given.

The statement is a simple application of some economic theories to the complicated world of real economic activity.

Perhaps it will work.

Perhaps Kwarteng will confound his critics.

Who knows?

Economics is not an exact science – and some would say economics is not a science at all.

Perhaps this engineered boom means that we can have economic good times for ever and ever.

But.

The messy nature of human affairs means that few ambitious plans work – and especially those which are accompanied by triumphalism, the claps and cheers of the easily impressed.

Policy, like law, is hard.

This is because policy, like law, has to deal with human behaviour in complex societies.

And if policy and law were really that simple to get right, our politicians would not keep on making so many mistakes.

“Brace, brace.”

(Which I really should have written down in my exercise book in 1988 instead.)

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