Thursday, November 1, 2012

Tory policy: All narrative, no substance

Listening to Tories speak is becoming ever more infuriating. It is not just that their socio-economic policies are so bad in themselves, it is that they seem to have given up any pretence that the reasons for implementing their favoured policies should actually make sense at all. Anyone with the most basic understanding of economics, or the ability to subject statements to the crudest kind of critical analysis should be able to see that the Tories are prepared to endlessly spout absolute nonsense in defence of their political agenda.

It is as if the Tory party have decided that the minority of people that are intelligent or educated enough to spot the flaws in their simplistic narratives are so few and far between, that they can invent all kinds of absurd stories to justify their policies. They have made the assumption that the majority of British people are simply too uneducated or too intellectually lazy to ever bother to question their flawed fundamental assertions.

The Thatcherite former chief whip Richard Ryder (now a Tory Lord in the House of Lords) summed up this state of affairs when he said that "George Osborne isn't a strategist at all, he is a tactician". In other words, Tory economic strategy is all narrative and no substance.

What I mean by "all narrative and no substance" is that the stated reasons for particular Tory policies rely on simplistic justification narratives instead of making sense at any kind of analytic level (if you are not familiar with the term "justification narrative", here's a primer).

I'll provide several examples of Tory justification narratives that rely upon simple fallacies. This reliance upon justification narratives over evidence and analysis demonstrates how the Tory party operates. In an ideal political system, one would expect politicians to study the evidence and then develop political policies as a consequence, however, it is demonstrable that the Tory strategy is to select a favoured policy (privatisation, attacks on labour rights, cut tax for the wealthy, create even more tax-loopholes...) and then develop a justification narrative to support it.

To simplify this idea; Tories use narratives to justify their policies, rather than evidence to develop their policies.

 How politics should work:
Evidence then Policy
  How Tories work:
Policy then Justification Narrative. 

Labour caused the crisis
[Main article]

The full "blame Labour" narrative goes something like this:
"The Labour party caused the economic crisis and the budget deficit by recklessly overspending, therefore the only solution is to cut, cut, cut." 
This narrative is one of the most endlessly repeated Tory fallacies. It doesn't matter how many times people point out the elemental flaws in the theory that "Labour caused the crisis", the Tories will keep repeating it because they believe the majority of British people are simple minded reactionaries that can be fooled by such a transparently inaccurate narrative. Here are just a few of the gaping flaws in this oft repeated central Tory narrative:

1. The actual origin of the crisis: The credit crisis actually emanated from the United States. It was caused by huge levels of financial sector corruption and wanton recklessness, specifically in the Securitisation Food Chain. Once the banks realised that the majority of financial sector institutions were as corruption riddled and recklessly over-leveraged as they themselves were, they stopped lending to each other, causing the credit crisis. To deny the fact that the crisis actually originated in the US Securitisation Food Chain is to deny reality.

2. Historical perspective: Before the economic crisis, Labour's fiscal spending was actually reasonably conservative. The national debt was only 35.5% of GDP in 2007. To put this in perspective, this was less than half of average debt maintained by Britian throughout the 20th Century, which was 89.5% of GDP and significantly less than one sixth of the UK debt peak of 238% of GDP in 1947. With a sense of historical perspective, it is impossible to accept the claim that Labour caused the crisis by recklessly over-spending.

3. Contemporary perspective: Several countries entered the global recession with far higher %GDP debt ratios than the UK (Japan, USA, Germany), but these countries are recovering well. Other countries went into the global recession with significantly lower debt ratios (Ireland, Spain, Portugal) yet these countries are gripped in severe economic crises. To pretend that the UK's moderate borrowing rates caused the crisis is to deliberately ignore a huge wealth of economic evidence.

4. Right-wing economic policy: One way in which Gordon Brown and the Labour party can be held partially responsible for the economic crisis was their "hands off" financial sector deregulation policies, that were actually supported by the Tories. If anything, the main culpability of the Labour party was that throughout the Neo-Labour years, they failed to properly regulate the financial sector.

5 Right-wing housing policy: Another area in which Neo-Labour can be seen to have intensified the effects of the credit crisis was their refusal to properly regulate the housing market. Had they abandoned the Tory status quo and actually intervened in the housing market (with rent controls, social housing policy, or lending requirements) the effects of the housing sector meltdown would have been significantly less damaging. Instead of managing the housing market like a left-wing party should, Neo-Labour chose to ride the crest of the biggest speculative bubble in British economic history. Once again, Labour intensified the effects of the crisis by behaving like Tories.

6. Reversal of cause and effect: Perhaps the most damning criticism of the "Labour caused the crisis" fallacy is the fact that it relies upon a crude reversal of cause and effect. Before the crisis, UK borrowing was reasonably low, the global credit crunch caused a huge private sector contraction, causing a fall in GDP. Considering that government spending forecasts had been done on the assumption of growth, it is easy to see how maintaining government spending levels during a contractionary period led to increases in the national debt. The idea that excessive spending by Labour came before the private sector crisis, rather than the large deficits arising as a direct result of the private sector crisis, is absolute nonsense and a complete reversal of reality.

The bond market fallacy
 [Main article]

One of George Osborne's most commonly repeated claims is that confidence in the UK bond market can be ascribed to his fiscal austerity agenda. Here's a quote:
 "Our austerity policy has got the deficit down by 25%, it is every single day delivering in the World bond markets record low interest rates for this country, which shows that it has credibility" 
To anyone with a rudimentary understanding of economics, it shows no such thing. In order to see the flaw in this justification narrative it is necessary to understand the difference between fiscal policy and monetary policy.

The Tory "Austerity agenda" is a fiscal policy, in that it is a policy based upon government spending priorities.

The Bank of England's Quantitative Easing "money creation scam" is a monetary policy, in that it is a policy based upon the money supply.

The consequences of fiscal austerity across Europe have been low to negative economic growth (Greece, Spain, Ireland, Portugal, Italy) whilst the consequences of monetary central bank money printing schemes have been record low interest rates in the bond market (USA, Japan, Switzerland).

Osborne's assertion that low bond rates are a vindication of his ideological austerity experiment is a transparent conflation of fiscal policies and monetary outcomes. Anyone that understands the economic basics should be shocked and horrified that the Chancellor of the Exchequer could present such a misleading justification narrative in the hope that the majority of people are too economically illiterate to understand what a flawed argument he is making.

Getting tough on tax-dodging
[Main article]
[Excellent aticle by Michael Meacher]

George Osborne often presents the narrative that he is getting tough on tax-dodging. One of the most excruciating episodes was when he penned a self-congratulatory article for the Guardian newspaper in which he bragged about combating tax evasion and made this statement:
"Tax evasion is morally repugnant. It's stealing from law-abiding people who face higher taxes to make good the lost revenue. Those who evade taxes, like benefit cheats, are leeches on society.”
Just  a few months later George Osborne announced his 2012 budget, which soon became known as the millionaires budget. Osborne's "Millionaire's budget" contained so much half-arsed badly conceived legislation there was an immediate storm of criticism (pasty tax, granny tax, philanthropy tax, static caravan tax), however one very notable change got almost entirely overlooked. This was George Osborne's creation of a vast tax loophole, to allow British companies to avoid tax in Britain and abroad through the use of tax havens.

It is quite astonishing that a man that talks tough about tax evasion, calling it "stealing" and "leeching" has presented a solution whereby tax evaders can legitimise their tax-dodging activities by using UK government sanctioned tax avoidance scams. Given the evidence of his policies, it becomes clear that Osborne's attacks on tax evasion are nothing more than a smokescreen to obscure the fact that he is actually using his political power to assist tax-dodging corporations.

[Main article]

Another example of Tory politicians using facile justification narratives to defend their policies can be seen in Iain Duncan Smith's defence of mandatory unpaid Workfare schemes. Here's what he actually said:
"Those who oppose this process are actually opposed to hard work"
This statement is a remarkably transparent attempt to smear opponents of the Tory policy of forcing people to work for no pay and with no labour rights, often for corporations that benefit from the free labour without even making the slightest contribution towards the benefits their Workfare mandatory employees are living on. People that oppose Workfare don't oppose it because they are "lazy" as Iain Duncan Smith claims, they oppose it because it is pro-corporate economic illiteracy of the worst kind driven by the Tory contempt for the whole idea of labour rights.

If the work is worth doing, it is worth paying someone to do.

The government providing free labour to corporations is just another example of underhand government subsidisation of corporate profits. Not only that, by providing free labour to corporations the Tories and the DWP are actually creating a perverse incentive for corporations to avoid creating paid jobs, since they know that the Tories will provide them with a continuous stream of Workfare placements that they don't even have to pay for.

Mansion Tax

One of the most egregious Tory justification narratives is the one that was presented by George Osborne in opposition to the Liberal Democrat idea of introducing a mansion tax. Here's what Osborne said:
"We are not going to have a mansion tax, or a new tax that is a  percentage value of people’s properties. Before the election they will call it a mansion tax, but people will wake up the day after the election and discover suddenly their more modest home has been labelled a mansion."
On the surface this seems like a reasonable argument against function creep. That Osborne is "concerned" about the plight of ordinary people that would have their fairly ordinary, but extremely valuable 4/5 bedroom homes reclassified as "mansions" by a Labour government, but on closer inspection it is an incredibly vacuous piece of reality warping rhetoric.

The main problem with this statement is that many, many reasonably ordinary people do actually have their above average sized houses classified in the same council tax band as genuine mansions and castles. Under the current council tax system, a person in England with a house worth slightly more than £320,000 pays exactly the same council tax rates as someone with a house that is worth £32 million. £320,000 may seem like a huge amount of money to many people, however this sum would only fund the purchase of an extremely modest property in central London, Cheshire or rural North Yorkshire.

The fact is that under the current arrangement someone with a modest three bedroom house in a North Yorkshire village pays exactly the same property tax as someone who lives in the 12 bedroom + mansion or castle just down the road. A mansion tax would actually do something to reverse this absurd situation, but Osborne desperately tries to defend himself and other wealthy landowners from this kind of tax by fearmongering. Not only is he fearmongering, but he is positing the very iniquitousness of the current property taxation situation as the adverse consequence of any attempt to rectify this iniquitousness!

Justification narratives and the media

The most amazing thing about this Tory tactic of presenting feeble justification narratives instead of evidence based analysis in support of their policies, is that the mainstream media have simply let them get away with it. Without the complicity of the mainstream media, such a tactic would quite obviously fail.

Surely the role of the media in an open democracy is to question false assumptions and transparent propaganda narratives presented by the government. It is their responsibility to make sure this kind of misleading nonsense doesn't pass without comment, not to actually repeat it as if it were fact.

It is inevitable that a proportion of the general public are taken in by the abject nonsense the Tories spout in defence of their policies, however the complicity of the mainstream media in not explaining the glaring errors, or actually repeating Tory narratives ad nauseum makes the situation much worse.

As the mainstream media have allowed the Tories to keep trotting out these pathetic justification fantasies, without shouting "nonsense", it has become the role of independent, non-compromised bloggers and social activists to speak out.


It should be abundantly clear from the examples I've presented that the Tories have a deliberate policy of presenting simplistic post-hoc justification narratives to defend their ideologically driven socio-economic policies. It doesn't seem to matter to them that many of their favoured narratives are easily falsifiable. They seem to just rely on the fact that the majority of the population are too uneducated or too intellectually lazy to spot the glaring flaws. The Tories prefer to present simplistic narratives that seem to make sense to the majority of people, rather than presenting evidence based policies that make sense to the educated and critically aware minority, and they are fundamentally reliant upon the complicity of the mainstream media in this agenda.

If the mainstream media are unwilling to call the Tories out for presenting feeble justification narratives in lieu of facts and analysis, it becomes essential for others to speak out. That is what I have attempted to do here, and if you are intelligent enough to spot the numerous flaws in common Tory justification narratives, it is your responsibility to make sure that these distortions don't go unchallenged too.

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