Monday, 25 October 2010

George Orwell, "Politics and the English Language," 1946.

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Most people who bother with the matter at all would admit that the English language is in a bad way, but it is generally assumed that we cannot by conscious action do anything about it. Our civilization is decadent and our language -- so the argument runs -- must inevitably share in the general collapse. It follows that any struggle against the abuse of language is a sentimental archaism, like preferring candles to electric light or hansom cabs to aeroplanes. Underneath this lies the half-conscious belief that language is a natural growth and not an instrument which we shape for our own purposes.

And so begins this classic essay by George Orwell. Recently I've read some truly awful pieces of prose, especially about politics, which I have always noticed is cursed with being more densely infested by cliche than almost any other area of writing. There is nothing I could say about this that has not already been said better in this essay by George Orwell. It is piercingly intelligent, accurate and really funny. It is all about some necessary features for writing well and clearly, but should be of interest not only to anyone who writes but also to anyone who wants to think clearly in words (and that should be everybody). It also about how language is particularly abused when dealing with politics. It challenges some of our pre-conceptions about what makes good and clear writing and is not too long either. 

It is especially interesting if you have read 1984, Orwell's masterpiece, with its sections on Newspeak, because much of what George Orwell puts into Newspeak in 1984, he discusses in this essay. This is an important feature of Orwell's writing often not understood. He was mainly a journalist and campaigner, using his writing as a weapon, and only secondarily a writer of fiction. Features of his work always correlate with features of reality. And whereas Animal Farm was a parable of recent history, 1984 was a piece of prophecy, in the true sense of the word.  The prophets in the Bible did not just, or even mainly, tell what was going to happen in the future, but what would happen IF certain things continued to occur, often for the purpose of stopping them happening. Jonah prophesied Nineveh would be destroyed if the people did not repent. But he was so effective they did repent, and he then felt pretty stupid when they were then not destroyed.

George Orwell, in 1948, prophesied in 1984 what could happen if the worst trends he saw around him came to dominate society. It is a worst possible outcome but not a fantasy, in the sense that all the things he put in that book, and feared for our world, were things that he saw actually occurring or developing in the world, and had fought, spoken and written against his whole adult life. And many of those relating to the abuse of language he argues against in this essay, using real world examples. It's a fascinating bridge between the world presented in 1984 and the real world Orwell fought with in 1948.

It is also interesting because it argues a middle path between two views often subconsciously accepted in our intellectual society. Firstly, that language is something we have complete control over, an entirely neutral tool we may shape as we wish. And secondly, in the opposite direction, that the language we use defines and forces our thoughts and ideas, like a straitjacket we can't reach out of. The truth is, as almost always, somewhere in between. Like with any tool what we can do is shaped by what we have at our disposal. The language and vocabulary we have does exert pressure on our vision of the world and ourselves, subtly, and often totally outside our awareness. But, we are not slaves of our language.  We can make new words, new phrases, to match new ideas and ways of thinking, or just use different words and thoughts from the stock we already have, to change and express ourselves differently. But this requires conscious effort, to use our imagination and our knowledge to encourage ourselves in different directions. Enough of me though, I give you the words of Orwell himself, and they are well worth the read.


Now, it is clear that the decline of a language must ultimately have political and economic causes: it is not due simply to the bad influence of this or that individual writer. But an effect can become a cause, reinforcing the original cause and producing the same effect in an intensified form, and so on indefinitely. A man may take to drink because he feels himself to be a failure, and then fail all the more completely because he drinks. It is rather the same thing that is happening to the English language. It becomes ugly and inaccurate because our thoughts are foolish, but the slovenliness of our language makes it easier for us to have foolish thoughts. The point is that the process is reversible. Modern English, especially written English, is full of bad habits which spread by imitation and which can be avoided if one is willing to take the necessary trouble. If one gets rid of these habits one can think more clearly, and to think clearly is a necessary first step toward political regeneration: so that the fight against bad English is not frivolous and is not the exclusive concern of professional writers. I will come back to this presently, and I hope that by that time the meaning of what I have said here will have become clearer. Meanwhile, here are five specimens of the English language as it is now habitually written.

These five passages have not been picked out because they are especially bad -- I could have quoted far worse if I had chosen -- but because they illustrate various of the mental vices from which we now suffer. They are a little below the average, but are fairly representative examples. I number them so that i can refer back to them when necessary:

1. I am not, indeed, sure whether it is not true to say that the Milton who once seemed not unlike a seventeenth-century Shelley had not become, out of an experience ever more bitter in each year, more alien [sic] to the founder of that Jesuit sect which nothing could induce him to tolerate.

Professor Harold Laski (Essay in Freedom of Expression)

2. Above all, we cannot play ducks and drakes with a native battery of idioms which prescribes egregious collocations of vocables as the Basic put up with for tolerate, or put at a loss for bewilder .

Professor Lancelot Hogben (Interglossa)

3. On the one side we have the free personality: by definition it is not neurotic, for it has neither conflict nor dream. Its desires, such as they are, are transparent, for they are just what institutional approval keeps in the forefront of consciousness; another institutional pattern would alter their number and intensity; there is little in them that is natural, irreducible, or culturally dangerous. But on the other side, the social bond itself is nothing but the mutual reflection of these self-secure integrities. Recall the definition of love. Is not this the very picture of a small academic? Where is there a place in this hall of mirrors for either personality or fraternity?

Essay on psychology in Politics (New York)

4. All the "best people" from the gentlemen's clubs, and all the frantic fascist captains, united in common hatred of Socialism and bestial horror at the rising tide of the mass revolutionary movement, have turned to acts of provocation, to foul incendiarism, to medieval legends of poisoned wells, to legalize their own destruction of proletarian organizations, and rouse the agitated petty-bourgeoise to chauvinistic fervor on behalf of the fight against the revolutionary way out of the crisis.

Communist pamphlet

5. If a new spirit is to be infused into this old country, there is one thorny and contentious reform which must be tackled, and that is the humanization and galvanization of the B.B.C. Timidity here will bespeak canker and atrophy of the soul. The heart of Britain may be sound and of strong beat, for instance, but the British lion's roar at present is like that of Bottom in Shakespeare's Midsummer Night's Dream -- as gentle as any sucking dove. A virile new Britain cannot continue indefinitely to be traduced in the eyes or rather ears, of the world by the effete languors of Langham Place, brazenly masquerading as "standard English." When the Voice of Britain is heard at nine o'clock, better far and infinitely less ludicrous to hear aitches honestly dropped than the present priggish, inflated, inhibited, school-ma'amish arch braying of blameless bashful mewing maidens!

Letter in Tribune

Each of these passages has faults of its own, but, quite apart from avoidable ugliness, two qualities are common to all of them. The first is staleness of imagery; the other is lack of precision. The writer either has a meaning and cannot express it, or he inadvertently says something else, or he is almost indifferent as to whether his words mean anything or not. This mixture of vagueness and sheer incompetence is the most marked characteristic of modern English prose, and especially of any kind of political writing. As soon as certain topics are raised, the concrete melts into the abstract and no one seems able to think of turns of speech that are not hackneyed: prose consists less and less of words chosen for the sake of their meaning, and more and more of phrases tacked together like the sections of a prefabricated henhouse. I list below, with notes and examples, various of the tricks by means of which the work of prose construction is habitually dodged:

Dying metaphors. A newly invented metaphor assists thought by evoking a visual image, while on the other hand a metaphor which is technically "dead" (e.g. iron resolution) has in effect reverted to being an ordinary word and can generally be used without loss of vividness. But in between these two classes there is a huge dump of worn-out metaphors which have lost all evocative power and are merely used because they save people the trouble of inventing phrases for themselves. Examples are: Ring the changes on, take up the cudgel for, toe the line, ride roughshod over, stand shoulder to shoulder with, play into the hands of, no axe to grind, grist to the mill, fishing in troubled waters, on the order of the day, Achilles' heel, swan song, hotbed. Many of these are used without knowledge of their meaning (what is a "rift," for instance?), and incompatible metaphors are frequently mixed, a sure sign that the writer is not interested in what he is saying. Some metaphors now current have been twisted out of their original meaning withouth those who use them even being aware of the fact. For example, toe the line is sometimes written as tow the line. Another example is the hammer and the anvil, now always used with the implication that the anvil gets the worst of it. In real life it is always the anvil that breaks the hammer, never the other way about: a writer who stopped to think what he was saying would avoid perverting the original phrase.

Operators or verbal false limbs. These save the trouble of picking out appropriate verbs and nouns, and at the same time pad each sentence with extra syllables which give it an appearance of symmetry. Characteristic phrases are render inoperative, militate against, make contact with, be subjected to, give rise to, give grounds for, have the effect of, play a leading part (role) in, make itself felt, take effect, exhibit a tendency to, serve the purpose of, etc., etc. The keynote is the elimination of simple verbs. Instead of being a single word, such as break, stop, spoil, mend, kill, a verb becomes a phrase, made up of a noun or adjective tacked on to some general-purpose verb such as prove, serve, form, play, render. In addition, the passive voice is wherever possible used in preference to the active, and noun constructions are used instead of gerunds (by examination of instead of by examining). The range of verbs is further cut down by means of the -ize and de- formations, and the banal statements are given an appearance of profundity by means of the not un- formation. Simple conjunctions and prepositions are replaced by such phrases as with respect to, having regard to, the fact that, by dint of, in view of, in the interests of, on the hypothesis that; and the ends of sentences are saved by anticlimax by such resounding commonplaces as greatly to be desired, cannot be left out of account, a development to be expected in the near future, deserving of serious consideration, brought to a satisfactory conclusion, and so on and so forth.

Pretentious diction. Words like phenomenon, element, individual (as noun), objective, categorical, effective, virtual, basic, primary, promote, constitute, exhibit, exploit, utilize, eliminate, liquidate, are used to dress up a simple statement and give an air of scientific impartiality to biased judgements. Adjectives like epoch-making, epic, historic, unforgettable, triumphant, age-old, inevitable, inexorable, veritable, are used to dignify the sordid process of international politics, while writing that aims at glorifying war usually takes on an archaic color, its characteristic words being: realm, throne, chariot, mailed fist, trident, sword, shield, buckler, banner, jackboot, clarion. Foreign words and expressions such as cul de sac, ancien regime, deus ex machina, mutatis mutandis, status quo, gleichschaltung, weltanschauung, are used to give an air of culture and elegance. Except for the useful abbreviations i.e., e.g., and etc., there is no real need for any of the hundreds of foreign phrases now current in the English language. Bad writers, and especially scientific, political, and sociological writers, are nearly always haunted by the notion that Latin or Greek words are grander than Saxon ones, and unnecessary words like expedite, ameliorate, predict, extraneous, deracinated, clandestine, subaqueous, and hundreds of others constantly gain ground from their Anglo-Saxon numbers.* The jargon peculiar to
                                                                                                                                                                                                            
*An interesting illustration of this is the way in which English flower names were in use till very recently are being ousted by Greek ones, Snapdragon becoming antirrhinum, forget-me-not becoming myosotis, etc. It is hard to see any practical reason for this change of fashion: it is probably due to an instinctive turning away from the more homely word and a vague feeling that the Greek word is scientific.
                                                                                                                                                                                          
Marxist writing (hyena, hangman, cannibal, petty bourgeois, these gentry, lackey, flunkey, mad dog, White Guard, etc.) consists largely of words translated from Russian, German, or French; but the normal way of coining a new word is to use Latin or Greek root with the appropriate affix and, where necessary, the size formation. It is often easier to make up words of this kind (deregionalize, impermissible, extramarital, non-fragmentary and so forth) than to think up the English words that will cover one's meaning. The result, in general, is an increase in slovenliness and vagueness.

Meaningless words. In certain kinds of writing, particularly in art criticism and literary criticism, it is normal to come across long passages which are almost completely lacking in meaning.† Words like romantic, plastic, values, human, dead, sentimental, natural, vitality, as used in art criticism, are strictly meaningless, in
                                                                                                                                                                      
† Example: Comfort's catholicity of perception and image, strangely Whitmanesque in range, almost the exact opposite in aesthetic compulsion, continues to evoke that trembling atmospheric accumulative hinting at a cruel, an inexorably serene timelessness . . .Wrey Gardiner scores by aiming at simple bull's-eyes with precision. Only they are not so simple, and through this contented sadness runs more than the surface bittersweet of resignation." (Poetry Quarterly)
                                                                                                                                                                                           
the sense that they not only do not point to any discoverable object, but are hardly ever expected to do so by the reader. When one critic writes, "The outstanding feature of Mr. X's work is its living quality," while another writes, "The immediately striking thing about Mr. X's work is its peculiar deadness," the reader accepts this as a simple difference opinion. If words like black and white were involved, instead of the jargon words dead and living, he would see at once that language was being used in an improper way. Many political words are similarly abused. The word Fascism has now no meaning except in so far as it signifies "something not desirable." The words democracy, socialism, freedom, patriotic, realistic, justice have each of them several different meanings which cannot be reconciled with one another. In the case of a word like democracy, not only is there no agreed definition, but the attempt to make one is resisted from all sides. It is almost universally felt that when we call a country democratic we are praising it: consequently the defenders of every kind of regime claim that it is a democracy, and fear that they might have to stop using that word if it were tied down to any one meaning. Words of this kind are often used in a consciously dishonest way. That is, the person who uses them has his own private definition, but allows his hearer to think he means something quite different. Statements like Marshal P├ętain was a true patriot, The Soviet press is the freest in the world, The Catholic Church is opposed to persecution, are almost always made with intent to deceive. Other words used in variable meanings, in most cases more or less dishonestly, are: class, totalitarian, science, progressive, reactionary, bourgeois, equality.

Now that I have made this catalogue of swindles and perversions, let me give another example of the kind of writing that they lead to. This time it must of its nature be an imaginary one. I am going to translate a passage of good English into modern English of the worst sort. Here is a well-known verse from Ecclesiastes:

I returned and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.

Here it is in modern English:

Objective considerations of contemporary phenomena compel the conclusion that success or failure in competitive activities exhibits no tendency to be commensurate with innate capacity, but that a considerable element of the unpredictable must invariably be taken into account.

This is a parody, but not a very gross one. Exhibit (3) above, for instance, contains several patches of the same kind of English. It will be seen that I have not made a full translation. The beginning and ending of the sentence follow the original meaning fairly closely, but in the middle the concrete illustrations -- race, battle, bread -- dissolve into the vague phrases "success or failure in competitive activities." This had to be so, because no modern writer of the kind I am discussing -- no one capable of using phrases like "objective considerations of contemporary phenomena" -- would ever tabulate his thoughts in that precise and detailed way. The whole tendency of modern prose is away from concreteness. Now analyze these two sentences a little more closely. The first contains forty-nine words but only sixty syllables, and all its words are those of everyday life. The second contains thirty-eight words of ninety syllables: eighteen of those words are from Latin roots, and one from Greek. The first sentence contains six vivid images, and only one phrase ("time and chance") that could be called vague. The second contains not a single fresh, arresting phrase, and in spite of its ninety syllables it gives only a shortened version of the meaning contained in the first. Yet without a doubt it is the second kind of sentence that is gaining ground in modern English. I do not want to exaggerate. This kind of writing is not yet universal, and outcrops of simplicity will occur here and there in the worst-written page. Still, if you or I were told to write a few lines on the uncertainty of human fortunes, we should probably come much nearer to my imaginary sentence than to the one from Ecclesiastes.

As I have tried to show, modern writing at its worst does not consist in picking out words for the sake of their meaning and inventing images in order to make the meaning clearer. It consists in gumming together long strips of words which have already been set in order by someone else, and making the results presentable by sheer humbug. The attraction of this way of writing is that it is easy. It is easier -- even quicker, once you have the habit -- to say In my opinion it is not an unjustifiable assumption that than to say I think. If you use ready-made phrases, you not only don't have to hunt about for the words; you also don't have to bother with the rhythms of your sentences since these phrases are generally so arranged as to be more or less euphonious. When you are composing in a hurry -- when you are dictating to a stenographer, for instance, or making a public speech -- it is natural to fall into a pretentious, Latinized style. Tags like a consideration which we should do well to bear in mind or a conclusion to which all of us would readily assent will save many a sentence from coming down with a bump. By using stale metaphors, similes, and idioms, you save much mental effort, at the cost of leaving your meaning vague, not only for your reader but for yourself. This is the significance of mixed metaphors. The sole aim of a metaphor is to call up a visual image. When these images clash -- as in The Fascist octopus has sung its swan song, the jackboot is thrown into the melting pot -- it can be taken as certain that the writer is not seeing a mental image of the objects he is naming; in other words he is not really thinking. Look again at the examples I gave at the beginning of this essay. Professor Laski (1) uses five negatives in fifty three words. One of these is superfluous, making nonsense of the whole passage, and in addition there is the slip -- alien for akin -- making further nonsense, and several avoidable pieces of clumsiness which increase the general vagueness. Professor Hogben (2) plays ducks and drakes with a battery which is able to write prescriptions, and, while disapproving of the everyday phrase put up with, is unwilling to look egregious up in the dictionary and see what it means; (3), if one takes an uncharitable attitude towards it, is simply meaningless: probably one could work out its intended meaning by reading the whole of the article in which it occurs. In (4), the writer knows more or less what he wants to say, but an accumulation of stale phrases chokes him like tea leaves blocking a sink. In (5), words and meaning have almost parted company. People who write in this manner usually have a general emotional meaning -- they dislike one thing and want to express solidarity with another -- but they are not interested in the detail of what they are saying. A scrupulous writer, in every sentence that he writes, will ask himself at least four questions, thus: 1. What am I trying to say? 2. What words will express it? 3. What image or idiom will make it clearer? 4. Is this image fresh enough to have an effect? And he will probably ask himself two more: 1. Could I put it more shortly? 2. Have I said anything that is avoidably ugly? But you are not obliged to go to all this trouble. You can shirk it by simply throwing your mind open and letting the ready-made phrases come crowding in. They will construct your sentences for you -- even think your thoughts for you, to a certain extent -- and at need they will perform the important service of partially concealing your meaning even from yourself. It is at this point that the special connection between politics and the debasement of language becomes clear.

In our time it is broadly true that political writing is bad writing. Where it is not true, it will generally be found that the writer is some kind of rebel, expressing his private opinions and not a "party line." Orthodoxy, of whatever color, seems to demand a lifeless, imitative style. The political dialects to be found in pamphlets, leading articles, manifestoes, White papers and the speeches of undersecretaries do, of course, vary from party to party, but they are all alike in that one almost never finds in them a fresh, vivid, homemade turn of speech. When one watches some tired hack on the platform mechanically repeating the familiar phrases -- bestial atrocities, iron heel, bloodstained tyranny, free peoples of the world, stand shoulder to shoulder -- one often has a curious feeling that one is not watching a live human being but some kind of dummy: a feeling which suddenly becomes stronger at moments when the light catches the speaker's spectacles and turns them into blank discs which seem to have no eyes behind them. And this is not altogether fanciful. A speaker who uses that kind of phraseology has gone some distance toward turning himself into a machine. The appropriate noises are coming out of his larynx, but his brain is not involved as it would be if he were choosing his words for himself. If the speech he is making is one that he is accustomed to make over and over again, he may be almost unconscious of what he is saying, as one is when one utters the responses in church. And this reduced state of consciousness, if not indispensable, is at any rate favorable to political conformity.

In our time, political speech and writing are largely the defense of the indefensible. Things like the continuance of British rule in India, the Russian purges and deportations, the dropping of the atom bombs on Japan, can indeed be defended, but only by arguments which are too brutal for most people to face, and which do not square with the professed aims of the political parties. Thus political language has to consist largely of euphemism., question-begging and sheer cloudy vagueness. Defenseless villages are bombarded from the air, the inhabitants driven out into the countryside, the cattle machine-gunned, the huts set on fire with incendiary bullets: this is called pacification. Millions of peasants are robbed of their farms and sent trudging along the roads with no more than they can carry: this is called transfer of population or rectification of frontiers. People are imprisoned for years without trial, or shot in the back of the neck or sent to die of scurvy in Arctic lumber camps: this is called elimination of unreliable elements. Such phraseology is needed if one wants to name things without calling up mental pictures of them. Consider for instance some comfortable English professor defending Russian totalitarianism. He cannot say outright, "I believe in killing off your opponents when you can get good results by doing so." Probably, therefore, he will say something like this:

"While freely conceding that the Soviet regime exhibits certain features which the humanitarian may be inclined to deplore, we must, I think, agree that a certain curtailment of the right to political opposition is an unavoidable concomitant of transitional periods, and that the rigors which the Russian people have been called upon to undergo have been amply justified in the sphere of concrete achievement."

The inflated style itself is a kind of euphemism. A mass of Latin words falls upon the facts like soft snow, blurring the outline and covering up all the details. The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink. In our age there is no such thing as "keeping out of politics." All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred, and schizophrenia. When the general atmosphere is bad, language must suffer. I should expect to find -- this is a guess which I have not sufficient knowledge to verify -- that the German, Russian and Italian languages have all deteriorated in the last ten or fifteen years, as a result of dictatorship.

But if thought corrupts language, language can also corrupt thought. A bad usage can spread by tradition and imitation even among people who should and do know better. The debased language that I have been discussing is in some ways very convenient. Phrases like a not unjustifiable assumption, leaves much to be desired, would serve no good purpose, a consideration which we should do well to bear in mind, are a continuous temptation, a packet of aspirins always at one's elbow. Look back through this essay, and for certain you will find that I have again and again committed the very faults I am protesting against. By this morning's post I have received a pamphlet dealing with conditions in Germany. The author tells me that he "felt impelled" to write it. I open it at random, and here is almost the first sentence I see: "[The Allies] have an opportunity not only of achieving a radical transformation of Germany's social and political structure in such a way as to avoid a nationalistic reaction in Germany itself, but at the same time of laying the foundations of a co-operative and unified Europe." You see, he "feels impelled" to write -- feels, presumably, that he has something new to say -- and yet his words, like cavalry horses answering the bugle, group themselves automatically into the familiar dreary pattern. This invasion of one's mind by ready-made phrases (lay the foundations, achieve a radical transformation) can only be prevented if one is constantly on guard against them, and every such phrase anaesthetizes a portion of one's brain.

I said earlier that the decadence of our language is probably curable. Those who deny this would argue, if they produced an argument at all, that language merely reflects existing social conditions, and that we cannot influence its development by any direct tinkering with words and constructions. So far as the general tone or spirit of a language goes, this may be true, but it is not true in detail. Silly words and expressions have often disappeared, not through any evolutionary process but owing to the conscious action of a minority. Two recent examples were explore every avenue and leave no stone unturned, which were killed by the jeers of a few journalists. There is a long list of flyblown metaphors which could similarly be got rid of if enough people would interest themselves in the job; and it should also be possible to laugh the not un- formation out of existence*, to reduce the amount of Latin and Greek in the average sentence, to drive out foreign phrases
                                                                                                                                                                     
*One can cure oneself of the not un- formation by memorizing this sentence: A not unblack dog was chasing a not unsmall rabbit across a not ungreen field.
                                                                                                                                                                                   
and strayed scientific words, and, in general, to make pretentiousness unfashionable. But all these are minor points. The defense of the English language implies more than this, and perhaps it is best to start by saying what it does not imply.

To begin with it has nothing to do with archaism, with the salvaging of obsolete words and turns of speech, or with the setting up of a "standard English" which must never be departed from. On the contrary, it is especially concerned with the scrapping of every word or idiom which has outworn its usefulness. It has nothing to do with correct grammar and syntax, which are of no importance so long as one makes one's meaning clear, or with the avoidance of Americanisms, or with having what is called a "good prose style." On the other hand, it is not concerned with fake simplicity and the attempt to make written English colloquial. Nor does it even imply in every case preferring the Saxon word to the Latin one, though it does imply using the fewest and shortest words that will cover one's meaning. What is above all needed is to let the meaning choose the word, and not the other way around. In prose, the worst thing one can do with words is surrender to them. When you think of a concrete object, you think wordlessly, and then, if you want to describe the thing you have been visualizing you probably hunt about until you find the exact words that seem to fit it. When you think of something abstract you are more inclined to use words from the start, and unless you make a conscious effort to prevent it, the existing dialect will come rushing in and do the job for you, at the expense of blurring or even changing your meaning. Probably it is better to put off using words as long as possible and get one's meaning as clear as one can through pictures and sensations. Afterward one can choose -- not simply accept -- the phrases that will best cover the meaning, and then switch round and decide what impressions one's words are likely to make on another person. This last effort of the mind cuts out all stale or mixed images, all prefabricated phrases, needless repetitions, and humbug and vagueness generally. But one can often be in doubt about the effect of a word or a phrase, and one needs rules that one can rely on when instinct fails. I think the following rules will cover most cases:

(i) Never use a metaphor, simile, or other figure of speech which you are used to seeing in print.

(ii) Never us a long word where a short one will do.

(iii) If it is possible to cut a word out, always cut it out.

(iv) Never use the passive where you can use the active.

(v) Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.

(vi) Break any of these rules sooner than say anything outright barbarous.

These rules sound elementary, and so they are, but they demand a deep change of attitude in anyone who has grown used to writing in the style now fashionable. One could keep all of them and still write bad English, but one could not write the kind of stuff that I quoted in those five specimens at the beginning of this article.

I have not here been considering the literary use of language, but merely language as an instrument for expressing and not for concealing or preventing thought. Stuart Chase and others have come near to claiming that all abstract words are meaningless, and have used this as a pretext for advocating a kind of political quietism. Since you don't know what Fascism is, how can you struggle against Fascism? One need not swallow such absurdities as this, but one ought to recognize that the present political chaos is connected with the decay of language, and that one can probably bring about some improvement by starting at the verbal end. If you simplify your English, you are freed from the worst follies of orthodoxy. You cannot speak any of the necessary dialects, and when you make a stupid remark its stupidity will be obvious, even to yourself. Political language -- and with variations this is true of all political parties, from Conservatives to Anarchists -- is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind. One cannot change this all in a moment, but one can at least change one's own habits, and from time to time one can even, if one jeers loudly enough, send some worn-out and useless phrase -- some jackboot, Achilles' heel, hotbed, melting pot, acid test, veritable inferno, or other lump of verbal refuse -- into the dustbin, where it belongs.

Many thanks to Mount Holyoke's College, Massachusetts, Woman's Liberal Arts College, for the text of this essay  http://www.mtholyoke.edu/acad/intrel/orwell46.htm

Thursday, 14 October 2010

Dealing with the Deficit! (3) - Cutting Defence.

Of Military spending, Trident, Cuts, Cabbages and Kings (And why the sea is boiling hot and whether pigs have wings - well, not really.)

This article follows on from previous articles outlining the economic arguments around the Coalition's budget plans and introducing the structure of the public finances and the plans for reducing the deficit.  It's followed by looking at popularly proposed schemes for cutting the deficit more efficiently/morally by raising taxes and cutting ring-fenced spending and a final article on fairness and (my) opinion of the government's plans.   I've separated them out to try to keep them shorter.  

The current government's approach to cutting the deficit is to take a broad based attack on the problem, raising some money in taxes, and also taking money from across government departments (apart from ID and Health) as well as capital spending and welfare, at varying rates decided on due to various other considerations. All these choices can and have been questioned, most completely by the Labour party's plans, but also by a range of commentators and public bodies. As Polly Toynbee notes, 'What's your cut?' has become a popular game in the media, with various people suggesting their own swinging cuts of things they just don't care about, or they claim are unimportant, or of raising taxes they claim are painless or intrinsically 'fair' compared to the government's plans. These suggestions can be divided into two classes, those such as the Labour party's, which take a similarly broad approach to the coalition, though differing in detail, and those that take a narrow approach and suggest massively attacking a few narrow areas of policy, believed to be particularly unworthy by the suggester, with the belief that this could mean saving most of the pain elsewhere. (Though of course there's also a range in the middle.) These narrow suggestions seem to be uniformly based on the principle that their proposers believe there to be vast pots of money somewhere either just waiting to be painlessly taken in taxation, or being totally wastefully spent that can just be excised without much harm to our general body politic.

These suggestions seem to be largely motivated by the belief that our financial problems are not complicated, deeply based and systematic issues with our economic and political structure but rather a simple problem with an obvious and largely cosmetic solution. The problem with this idea is that it is total bunk, and with most of these ideas underwritten by faulty logic or data. A common thread with these ideas is that either the tax rises proposed could not easily raise nearly as much money as suggested, or the simple spending cuts would not save nearly as much money as their starry eyed proponents would hope, at least not without causing serious damage. These suggestions can be roughly divided into right-wing ideas and left-wing ideas, though both share similar characteristics, as they do with other similar examples of simplistic, near conspiratorial thinking.


The first category for bizarre left-wing approaches to solving the budget deficit is the stop-spending-money-on-defence school. The most bizarre and radical form of this idea comes from Simon Jenkins who proposes saving £44 billion a year by entirely eliminating the armed forces, and thus saving the entire defence budget. Yes, you heard that correctly.  But sentiments along the same lines, if a lot less precise, are expressed widely as a throwaway line by left-wing commentators.  A lot of the desire to be rid of defence spending seems to be based on an emotional dislike of funding things whose sole purpose is to wage war. This is an understandable concern. Ask any person whether they'd rather spend money on healing the sick, educating the ignorant, or purchasing new and better ways to kill people, it is pretty clear, which anyone would chose. There is also the fair criticism that post-Cold war the level of traditional military threat to the UK is unsure.

However, sadly the world is not so simple. In defence of the armed forces there are a number of serious points. Despite the progress mankind has made, we still live in a dangerous world where violence rages all around us. Although Britain itself is relatively unlikely to be invaded anytime soon there are many calls on our armed forces, whether defending British territory abroad, such as the Falklands, or in fighting threats against other peoples and innocent countries. Nor can we be sure that this state of affairs will continue. Europe enjoys unparalleled peace and prosperity, but around exists a deeply unstable world. Whether Russia, the Middle east, China, Africa or other areas the danger of violence increasing in an increasingly populated world struggling over natural resources, changes in climate and political and economic problems. And the terrifying truth is that it only requires a brief period of military unpreparedness to have terrible consequences. We maintain armed forces all the years we don't need them because the possible risk of a situation when we do need them is just so great. Also, an inability to defend ourselves is itself a temptation to less morally scrupulous groups to attack us, knowing we are not strong enough to resist. Even if one does not go as far as Simon Jenkins tentatively suggests there is a temptation to say, well, why don't we hold minimal armed forces then. But this is not a real option, there is no point having a military that cannot quite win in a conflict, considering the damage that can ensure that is hardly better than having no military at all.

Even ignoring this though,although the moral argument that we should not be spending such vast sums on what are in effect weapons of death is a powerful one, but I would say there is an equally powerful opposite argument. As far as the world is a dangerous place, and it is, and this is something we must be aware of then we have an active duty to both provide for our own defence ourselves and also to maintain capability to help others. Europe today has a habit of spending relatively little on defence and criticising the USA for spending relatively more. But this is disingenuous in as far as Europe still benefits from he implicit or explicit protection of American forces and strength, as it did to a huge extent in the Cold War and also the 2nd World War before that. More generally, even if we ourselves are not threatened we have a moral duty to help others who are. And others are most definitely threatened. Neutrality and isolation, a la, Switzerland or Ireland or Sweden, is nice for us, but it sucks for everyone else, and in the larger analysis is really an abdication in the face of evil. We no more really have a moral option of walking by on the other side of violence and military oppression than we do of poverty or sickness or ignorance, and this fact carries the corollary of we, who can afford it, maintaining the military forces to help others who cannot afford it. Whether the first world war, the 2nd world war, the Korean war, the gulf war, Sierra Leone, Kosovo, Afghanistan, the Falklands, fighting pirates off Somalia or peace keeping engagements around the world our military forces are primarily engaged in defending others, often for our own benefit as well, but significantly in defence of those who cannot defend themselves. Indeed, except for the example of Iraq, that particularly divisive conflict, then the main examples of the failure of peacekeeping efforts are examples of the western world not acting decisively enough to stop great evil, whether in Rwanda or in Srebrenica or elsewhere. Elsewhere in a more continuous example, today the security of Taiwan is probably only guaranteed by the promise of military support from the United States in the event of any conflict. Otherwise it is highly likely Communist China would have destroyed this small country. The sad truth is that in a dangerous world we must be able to defend both ourselves and all other peoples of the world, even as we work for a reduction in arms and the threat of force in international and intranational politics. And this is not to mention the central role our military has in relieving disaster zones around the world. Along with our international aid spending, our defence forces are our main ability to actively project our power around the world for the better.

That would be the moral case for military spending (as odd as that may sound), but assuming one does not go quite as far as the complete abolition idea for our armed forces there are practical issues as well. Unlike some departments, such as Health, Education, Welfare, spending on Defence held pretty much flat in real terms throughout Labour's 13 years, while public spending in total increased by around 60%. Our armed forces are already stretched thinly after years of running the forces on an effectively frozen budget. We are also still engaged in a war in Afghanistan, putting additional pressure on the military budget. On top of this defence effectively already has its own internal deficit. Military procurement is legendarily bad value for money. We sink huge sums into purchasing equipment over several years, and by the time it comes it is largely out of date for the threats we face. We are, in procurement terms, always fighting the last war. Also due to the financial pressures of War in Iraq and Afghanistan eating into the military budget the government attempted to save money by stretching out the contracts for major purchases for the armed forces. Like other instances of, effectively, borrowing money over the long term this just means that we end up paying more money in the end, than we would have originally. Talk of inefficient procurement may make it sound as though there is plenty of room for efficiency savings in the armed forces, and hence strengthening the argument for cuts, but what it does mean is that although there is considerable scope for doing things more efficiently in the future, in the present we face looming bills from prior mistakes that we cannot get out of. We would have trouble maintaining our armed forces at their present standard even were funding to remain the same due to this looming internal deficit. In the face of even relatively modest cuts (compared to other budgets, as is planned now) we are going to lose a significant part of our military capability.

That is the broad argument surrounding the inability to solve the deficit through attacking military spending. One important sub-set of this argument is the widespread argument that scrapping the Trident nuclear deterrent should be the first call in cutting the deficit, advocated in a limited sense by the Lib Dems and more strongly by the Greens, SNP, Plaid, as well as a host of organisations and commentators. This bears even greater immediate appeal than the standard cut-the-military argument. Nuclear weapons, by definition, can never be actually used except to deliberately cause massive civilian casualties. Their only legitimate purpose is deterrence. Especially in a post-Cold War world there seems relatively little purpose holding expensive nuclear weapons. There is a problem with this, though, similar to the argument above. The number of unstable countries either with nuclear weapons or seeking to gain them continues to increase: China, Russia-ish, North Korea, Iran, Pakistan and possibly others. As more countries gain nuclear weapons the possibility of an unstable future situation involving nuclear blackmail at the hands of one of these non-democratic countries increases and this is something that is deeply to be avoided as once we get in that situation there is no way we can respond. There is also a feasible argument that nuclear weapons actually reduce conventional conflict, by making it not worth people's time. Between their founding in the late 1940's and their acquiring nuclear weapons in the 1970's Israel and its Arab neighbours and India/Pakistan engaged in three wars each, but since these states acquired nuclear weapons there have been no major wars. On a grander scale the threat of Nuclear war may have contributed to the peaceful (at least in Europe) conduct of the Cold War, that could so easily have turned into a 3rd World War of immense proportions.

If we accept the importance of some respectable nation having nuclear weapons to counter the possible threat from less stable nations, soon or even in the relatively more distant future, then there comes the criticism that it is unnecessary for us to maintain nuclear weapons, as some people correctly suggest there is no conceivable situation where we would use nuclear weapons independently of America. So why not just let them pay for them and scrap our own capability? The argument is, again, moral. To push the responsibility of maintaining a nuclear capability for the "good guys" onto the USA is to abdicate a responsibility to others. It is to say that it is acceptable for American taxpayers, soldiers, politicians etc to bear the essential responsibility of defending the enlightened world in this most extreme manner, with the danger of retaliation that entails, but it is not a danger and cost that it is worth us bearing. This is an abdication of moral responsibility, and a remarkable one at that, seeing as how it explicitly places us as a strategic dependent of the United States. What is particularly odd about this is that it is generally the same people who claim to be most worried about the UK being subservient to America, or following too closely America's foreign policy, who advocate most strongly that we abandon this major independent capability for independent action and policy and effectively cede this entire area of independent strategic policy to the US in its entirety.

That is, again, the theoretical case for maintaining our nuclear deterrent. The practical issue in terms of deficit reduction is that even entirely scrapping Trident and our whole Nuclear deterrent would not save that much money. And this itself it not something that any major political party supports. Pre-election the Lib Dems went the furthest in supporting an alternative cheaper system than Trident, though they never actually said what system. This is one of those topics for which reliable statistics seem most in need. Numbers given for the actual cost of the Trident system and its renewal vary dramatically depending on the person giving them, as well as contextual factors such as whether figures given involve just the cost of purchasing the system, the cost of running it over the next parliament, over the entire lifetime of the system or something else. And of course those who give the statistics do not make this clear when they give them. Possibly depending on which of these features one takes into account or just what your ideological bias is, it is possible to read statements running from £20 billion to as high as £100 billion I read in one commentary piece, for the cost of replacing the Trident system.

 Actual official estimates for replacing the system, as opposed to whatever numbers column writers come up with, tend to be at the lower end of this continuum, with estimates in the range of around £20 billion for replacing the system and around £1.5 billion annual running costs. It is only possible to get the higher range estimates for costs should we take the possible costs over the entire life-time of the system, some 20-30 or more years. Looking at the total cost of a nuclear deterrent is a reasonable thing to do in general but in a conversation about a budget deficit it is not, since that is mainly concerned with annual cost. One could take a similar approach and produce monstrous figures that the cost of housing benefit is £400 billion, but neglect to mention that is over the next 20 years. On an annual basis, assuming the cost of purchase is spread over a 20 year period, Trident makes around a £3 billion a year contribution to the deficit. Getting rid of it is evidently not going to solve our budgetary problems or really even make more than a small dent in the hole. And these savings are for the outright scrapping of the nuclear deterrent. Trident is already assessed as one of the cheapest long term option for an independent nuclear deterrent. Any other system, even if was cheaper, would still have significant costs running in the billions of pounds and so relative savings would be even smaller.

This is not to say that some savings cannot be made in planning for the nuclear deterrent. It is possible to lengthen the lifetime of the Trident system by refitting submarines and missiles, rather than replacing the system now, as well as reducing from the current level of Continuous At Sea Deterrent (CASD). Full replacement could be put off until we don't have a desperate budget crisis and there is more money to go around. It is estimated that postponing Trident's replacement could save some £11 billion over the next 5-10 years. This is definitely worth doing in a time when money is tight, and the nuclear threat over the next few years is tight. But neither cuts to defence nor the nuclear deterrent particularly are either a wise nor useful solution to cutting the budget deficit, except as small part of a much wider program of savings and tax rises.

Wednesday, 13 October 2010

Dealing with the Deficit! (2) - Introduction

Of Public Spending, Budgets, Cuts, Cabbages and Kings (And why the sea is boiling hot and whether pigs have wings - well, not really.)

In the first part of this mini series, I looked at the economic arguments for and against the government's economic policy. Next I turn to the questions of whether the policy outlined in the Budget is 'Fair' and if we accept a broad number for the fiscal squeeze to bring down the deficit then what particular tax rises and spending cuts should be implemented. Since the Emergency Budget numerous suggestions and analyses have emerged, both for various spending cuts and tax rises and also of the expected impact of the fiscal squeeze, particularly the distributional impact, that is how it will proportionately affect the poor and the rich. These analyses and suggestions have branched from the sensible to sheer fantasy and back again. They are also, obviously, possibly as numerous as the amounts involved. There are literally, millions of potential ways of slicing up the spending cuts, and here I will only attempt to discuss a few of the more popular suggestions.

I will first discuss various plans for making up the amounts of spending cuts and tax rises mentioned in the budget before moving onto the question of the relative impact and 'fairness' of the government's own chosen approach. I am doing it this way round because, as you may have guessed from part 1 of this series, I broadly support the Coalition's approach, and I, hence, will explain the reasons for why I believe there is no sensible, substantive alternative, economically, and then move onto the question of, regardless of this practical point, how 'fair' this approach is. In this article I just introduce the problem.  Following this in subsequent parts I will look at proposed ideas of cuts to defence, raising taxes and then after that ring fencing areas of spending such as ID and Health. Followed by a final part about the question of 'fairness'.

The twin issues of the fairness and morality of a deficit reduction plan and which taxes/spending to alter are obviously linked. People's perceptions about what counts as a fair approach to the former will affect their outlook on the latter. There is a risk with this though. What is considered moral, or 'fair' in the immediate term may not be the most economically effective solution on a longer framework. Obviously there are basic standards of what we should and should not accept, but within that framework it is important to remember that in almost all cases greater economic activity and a swifter and better recovery is the surest and most sustainable way to restore the tax and spending levels we enjoyed before the economic crash, and to ensure greater prosperity in the future for all of society and other the long and even medium term in many cases these cumulative affects will significantly outweigh any advantage gained by a slighter higher degree of initial fairness. This, evidently, does not apply in all cases, each case must be considered on its own merits, but it is important to keep in mind when discussing various ideas.


Just to explain slightly how government spending is made up. Government spending can be roughly divided into capital and current government spending. Capital spending is spending on infrastructure, building schools and railways and on constructing buildings and bridges and other things. It is equivalent to the economic category of investment. It comes to about £60 billion. Current spending is everything else. It is itself can be divided into departmental spending and welfare and non-useful spending. Non useful government spending is the money the government spends on interest payments on government debt. This spending is non-useful for obvious reasons. It is mostly paid to foreign investors and is neither targeted nor spent on anything useful or decided by parliament. It is wasted money, money that we must raise in taxes but cannot spend on anything useful like infrastructure or services or welfare or all the other things the government does. In the UK today this amounted to about £30 billion before the recession, and is forecast to rise to about £70 billion by 2015. Departmental spending is all the money government departments spend running all the services the country requires such as the NHS, the Education system, the Armed Forces, the social services, street sweepers, road repairs the government itself, etc, etc. it is equivalent to the economic category of consumption and account for about £400 billion. It is this spending that politicians and commentators talk about when they discuss 25% cuts to departments or whatever. The final category is welfare or, more accurately, transfer payments. Whereas departmental spending involves the government spending money to then run some kind of service we either directly use or indirectly benefit from, transfer payments are when the government spends money just transferring it to citizens under various guises: the dole, the state pension, tax credits, incapacity benefit, etc, etc for various social reasons. This is different from departmental spending because it is a direct money transfer, rather than the government spending money itself on good and services for various purposes. It comes to about £200 billion. So government spending can be divided into the main categories of non-useful spending (debt interest), departmental spending, capital spending, welfare. With the last three being useful government spending, and welfare, departmental and debt-interest being current spending.

The government's plan is based on an 80:20 ratio of cuts in spending to tax rises with spending cuts spread across departmental spending, capital spending and welfare, with only the Health and International Development budgets entirely protected from cuts with DfID (the department for international development) seeing its funding increase significantly. This contrasts with the previous government's plan which was based on a plan of 2:1 ratio of spending cuts to tax rises with 'frontline' spending on schools and hospitals, etc, protected from all cuts, along with International Development and Welfare.

In both cases they diverged slightly from these intentions. Alistair Darling's budget plan involved 70:30 ratio of spending to taxes, whereas George Osbourne's was 77:23, so less divergent than initial impressions may suggest. The main difference in the Coalition's plan is the sheer scale. It involves an extra £40 billion of consolidation in addition to the £73 billion already planned by Labour. Both plans involve approximately halving capital spending for the next 5 years and deep cuts in departmental spending. To this the Coalition adds £11 billion of cuts to welfare, with more possibly coming. Also, although the Coalition is ring-fencing the entire health budget, whereas Labour only ringfenced areas of certain budgets, because they did this across multiple departments they actually managed to ringfence more than the Coalition. Due to this fact and the cuts in welfare, this meant that average cuts on unprotected departments under the Coalition's plans are only marginally higher than Labour's, 25% compared to 20%, despite the considerably higher over-all amount of spending reduction. Further to the complete ringfences for ID and Health, the Coalition has also committed to partially protecting Education and Defence from cuts, planning only 10-15% cuts in these areas. This in turn means that the cuts on those areas not protected at all rise to about 30% on average. It is also worth remembering that Welfare is treated separately to these figures, and although it is possibly losing as much as £15 billion it is the largest area of government spending by far, anyway, and hence this translates to only a 7.5% cut.

Beyond these categories, the actual numbers are that the Labour party planned a £73 billion consolidation consisting of £21 billion of tax rises and £52 billion of spending cuts and the Coalition plans £113 billion of consolidation consisting of £29 billion of tax rises and £83 billion of spending cuts. Just to give one last figure, all in all, these cuts amount to a 12% total cut in useful government expenditure. These are the figures that must be made up somehow, whether in terms of cuts to services people use, or taking money from people in tax rises.

Nominal government spending will actually rise over the next 5 years from just below £700 billion to around £760 billion, capital spending falls, even in cash terms, and current spending and welfare continues to rise. Taking inflation into account in real terms capital spending halves over this period, with current spending declining by 1%. This figure masks the spending cuts, because it includes debt-interest. Stripping this out, useful government spending falls by about £50 billion, with a little more than £20 billion from capital spending and £30 billion from current spending. The remaining number to make up the headline figures from cuts comes from the fact that some government spending naturally rises outside the direct control of government, such as pensions and others, and hence to maintain these levels, spending cuts must be found elsewhere to compensate for this within the over-all given numbers.



The current government's approach to cutting the deficit is to take a broad based attack on the problem, raising some money in taxes, and also taking money from across government departments (apart from ID and Health) as well as capital spending and welfare, at varying rates decided on due to various other considerations. All these choices can and have been questioned, most completely by the Labour party's plans, but also by a range of commentators and public bodies. As Polly Toynbee notes, 'What's your cut?' has become a popular game in the media, with various people suggesting their own swinging cuts of things they just don't care about, or they claim are unimportant, or of raising taxes they claim are painless or intrinsically 'fair' compared to the government's plans. These suggestions can be divided into two classes, those such as the Labour party's, which take a similarly broad approach to the coalition, though differing in detail, and those that take a narrow approach and suggest massively attacking a few narrow areas of policy, believed to be particularly unworthy by the suggester, with the belief that this could mean saving most of the pain elsewhere. (Though of course there's also a range in the middle.) These narrow suggestions seem to be uniformly based on the principle that their proposers believe there to be vast pots of money somewhere either just waiting to be painlessly taken in taxation, or being totally wastefully spent that can just be excised without much harm to our general body politic.

These suggestions seem to be largely motivated by the belief that our financial problems are not complicated, deeply based and systematic issues with our economic and political structure but rather a simple problem with an obvious and largely cosmetic solution. The problem with this idea is that it is total bunk, and with most of these ideas underwritten by faulty logic or data. A common thread with these ideas is that either the tax rises proposed could not easily raise nearly as much money as suggested, or the simple spending cuts would not save nearly as much money as their starry eyed proponents would hope, at least not without causing serious damage. These suggestions can be roughly divided into right-wing ideas and left-wing ideas, though both share similar characteristics, as they do with other similar examples of simplistic, near conspiratorial thinking.

I will look at the three most common areas of these suggestions, from both left and right wings in subsequent articles.  Starting with Defence, and then moving onto tax rises and ring-fenced spending.

Sunday, 19 September 2010

An Open Letter to the Guardian Letter Writers of 15th September and other anti-Pope visiting schmucks.

.
Dear Guardian-letter-signing, so-called, 'public intellectuals'
(and other pain-in-the-ass commentatorswho have expressed or agree with the same arguments),

The Pope's visit has brought out some of the dumbest public and political commentary I have heard for a while. Particularly from yourselves. I'd hoped with the election gone we'd be spared this level of stupid for a while, but no. Though, to be honest, the debate on public spending was already keeping the choo-choo train of opinionated ignorance firmly on the tracks.

You would actually have managed to be more coherent if you just stated you don't approve of the Pope coming to Britain, and simply do not want him to come and process through the streets to cheering crowds. That would at least have been consistent. Of course the response would have been that it was ridiculously arrogant of you to assume anyone cares whether a handful of self-appointed busybodies want him to come, and he wasn't coming to see you anyway.

You could even have said you disagreed with some official positions of the Catholic Church but saw this as a chance to open a rational dialogue and have greater public discussion of issues that are of central importance to mankind. But that would have required an adult disposition and a genuine desire for discussion and understanding, rather than childish name-calling, and that sounds like hard work, doesn't it.

However, sadly, thanks to your faux-liberal commitment you felt unable to state what is pretty obviously actually your wish, and instead claimed you were happy for him to come but merely had a few procedural problems with the form of his visit. Unfortunately these problems are total nonsense, and so you just made yourselves look dumber than otherwise, in an attempt to appear like you were expressing something more generally relevant than your own personal dislike of Catholicism.

Arguing that a generally recognised political state is not a state, just because it is momentarily politically inconvenient for you, is pretty moronic. I personally don't like the fact that Communist China is considered a state, and I wouldn't like the fact that the Soviet Union was considered a state, if it was not that collapsed when I was three years old. Before the Iraq War I was deeply irritated by people arguing that Saddam Hussein's government's held any legitimacy at all, since it was a genocidal, undemocratic, neo-Nazi tyranny. I consider all these regimes to be violent, murderous and entirely lacking in any democratic and popular legitimacy.

However, in none of these cases do my personal preferences affect, one jot, the plain facts of the world. One can only be astonished at the arrogance of a few figures (I'm looking at you Stephen Fry) who have apparently suddenly become experts in International law and early 20th Century Italian History. It is incredible you seem to think the global weight of governments, civil servants, legal scholars and peoples should bow  before your inane and often inaccurate trivia and re-assemble Inter-nationally recognised political facts and realities for your convenience.

The next most ridiculous thing has been the suddenly discovered outrage about waste in public spending, namely the £10 million cost for the Pope's visit. We spend 2/3 of that policing the Notting Hill carnival for God's sake, let alone football matches up and down the country. Not to mention the billions we waste each year on public bureaucracy, spin, pet projects, subsidies for opera and goodness knows what else. Indeed, a whole list of things of considerably less use and public interest than a chance to engage with the spiritual leader of 1/6th of the world's population, the largest popular organisation in the world, and around 2 million people in the UK at the moment. Living in a democracy means that your money gets spent on things you don't agree with, or wouldn't bother spending it on yourselves: Tough. If people don't like it they are free to leave the country, or perhaps blame Gordon Brown since he invited the Pope on a State Visit in the first place.

And let us not forget the sheer hypocrisy of making such a fuss about the Pope coming but not batting an eyelid about, say, the President of China, the King of Saudi Arabia, the President of Ghana, the President of Russia, the King of Jordan, the former President of South Africa, the President of China again a couple of times, the President of Israel. All of whom head regimes that actually officially engage in violent, human rights abuses. One can only get the impression this is more to do with the Pope's religion, and some persons' bigotry towards it (or that he represents one at all) rather than the moral record of the state he leads.

Because God forbid you actually try to open up a dialogue or engage in some adult and rational debate and discussion, instead of just ranting and raving and name-calling like children throwing a temper tantrum. But that wouldn't allow you to feel so self-righteous. Referring to him as "Pope Ratzinger" in your letter is particularly weak. I'd have thought that deliberately getting someone's name wrong to show disrespect was a childish affectation that would have been abandoned in secondary school. If you are actually that ignorant then it's 'Pope Benedict' or even 'Joseph Ratzinger', something that 30 seconds (its called Google) would have sufficed to discover, even if you'd never heard of the Pope before.

Which brings me to my last point. Even if you can not respect the Pope's positions on many of these issues, then you should be able to respect the importance he has, in part, in carrying the hopes and representing the beliefs of millions of good, honest, kind, thoughtful and decent people in this country and a billion more around the globe. But in too many of you this criticism is a poorly disguised front for sheer anti-Catholic bigotry, that comes out into the open in the de-humanising and hate-filled language employed on too many other occasions. Sometimes reaching the insane culmination of blaming Joseph Ratzinger personally for Aids, every individual act of child abuse and the devastation of the planet through over-population, among other paranoid ravings.

In summary, you're all idiots. Rarely has a part of my own country's 'cultural elite' made me want to reach so thoroughly and quickly for the sick bucket. You provide yet further proof of the wisdom of democracy: that no matter how well qualified, publicly acclaimed, or usually charming (looking at you again Mr Fry) a person may be, they are still prone to bouts of being an utter moron. How very egalitarian of you. Please stop embarrassing yourselves and your country. It's tiring.

Yours Sincerely,
Stephen Wigmore

Tuesday, 7 September 2010

It's the Budget Stupid! - Part 1

Of Balancing Budgets, Spending Cuts, Fiscal Squeezes, Cabbages and Kings (and why the sea is boiling hot, and whether pigs have wings. - Well, not really).

Whatever one may say about the new Coalition government one cannot accuse them of being lazy or timid. They have moved incredibly quickly, within the first two months of entering government announcing reforms and changes of policy on education, criminal justice and policing, civil liberties, constitutional reform, defence, health care, local government, welfare reform and, most importantly, the economy. It has been a long time since British politics has changed so much so quickly. It is weird to think that only earlier this year we were in the dying days of a Labour government, awaiting the long anticipated 2010 budget from Chancellor Alistair Darling, with the announcement of the election, let alone the actual poll, still merely on the horizon. A lot changes in only a few months. The budget, the long awaited dissolution of parliament, the campaign, the election, Brown's resignation, the formation of the coalition, a Tory and Lib Dem cabinet and then a wave of announcements of the first steps along the road to significant reform of almost every major area of government.

Many of these ideas, like the Big Society focus, are Conservative policies dating from before the recession, back in 2008 when David Cameron was still talking about "sharing the proceeds of growth". Some, like education and to a lesser extent health care, are effectively continuations and intensification of Tony Blair's attempted public service reforms. Others have come to prominence due to the dedication of a single cabinet minister, such as welfare reform. Some, like Constitutional Reform, have been added due to the mix by the addition of the Liberal Democrats. Some, like reform of Defence, have come about due to the pressures brought by the credit crunch and the coming spending cuts. And to this mix, financial radicalism has been added due to the need to respond to the affects of the recession and Britain's huge budget deficit.

Without a doubt, amidst the all of these plans for change, the question of the economy looms over everything. It is the big one, the question that most affects the lives of every voter and dictates pretty much everything else the government can do. The government has committed itself to a radical approach to Britain's financial problems, and this will either work or not. Either way it is almost certainly the issue that will determine the government's future. Right or wrong, no one will care what other changes they bring in for better or worse over the next few years. If the Coalition gets this call right, then re-election in 2015 seems almost certain. Get it wrong, and Labour will almost certainly return in 2015, if not earlier, with a working majority. This is the one issue that can't be fudged or ignored, because the effects are so massive and so widely felt.  And so there is no running away or hiding, for the government, from the decisions it has committed itself to now. Considering politicians' usual preference for avoiding blame or any possible chances for negative assessment, it is almost brave.

To be more specific, the question is: How to secure the economic recovery from the 2008-2009 recession and respond to the monumental budget deficit it left the UK with? Or, in other words, Cuts: How much and How soon?

Just for reference at this point so you definitely know what I'm talking about.  (Including minor cuts already made) the Budget deficit currently stands at 11% of GDP, some £156 billion a year, or about 22% of public spending planned for this year.  This is the money the government must borrow from international investors this year alone, in order to meet its spending commitments, and which goes onto the total National Debt we've been building up since 1700, which is currently about £900 billion pounds.

In this regard the 'emergency' budget announced by George Osbourne in June has got to be the most important act of the new government yet, setting the tone of the new government's policy for securing both the recovery and dealing with the deficit, and hence the funds available to other parts of the public sector and the entire tenor of government policy until the next general election. It is a mark of how central this issue is considered that the Coalition went to the effort of producing an entire new budget within less than two months of taken office, and only 3 months after the previous government had released its own budget for the year. It is also remarkable to compare the completely different feel of those two budgets, so close in time but which couldn't be further apart in political thrust. it is a far cry from the 1950-51 Butskellite budgets that cemented the post-war consensus, or the '97-'98 Clarke, Brown budgets that saw the acceptance by Labour of the overwhelming majority of the Thatcherite consensus. This is rather a step change in political intention, if in terms of actual measures only a deepening of the same policy.

The Budget raises a few key questions, most loudly and obviously, was it right? And, was it fair?

Though these themselves raise a whole host of questions about the direction of our politics and nature of our political discussion over the last few and next few years, the main part of these questions breaks down, quite easily, into a few political issues. Firstly, is this the correct decision to deal with the budget and support economic growth over the medium term? (which I shall deal with in this part) Secondly, does the impact of the budget fall fairly across the population? (part 2) And, thirdly, is the ratio of tax rises and cuts, and the choice of tax changes, the correct one? (Part 3)

So, what does the budget actually contain . . .

Answer: A lot.

Real Answer:

RPI, by freezing public sector pay for all workers on over £21,000 and by capping and cutting housing benefit, disability benefit and restricting tax credits to poorer workers. Departmental spending cuts are the equivalent to cutting unprotected departments by an average of 25%, as compared to 20% under labour's plans. The budget also announces extra money for pensioners and poorer children, via old-age pensions and increases to child tax credits. An additional net £8 billion in tax rises. This is a bit more complicated. The big and most controversial change is the rise in VAT from 17.5% to 20%. There will also be rises in Capital Gains Tax (18->28%) and a new tax on the Banks, along with hikes in the allowance for entrepreneurs, cuts in corporation tax (28->24%), cuts in NI for businesses outside the south, a one year freeze on council tax and a large increase on the personal allowance for income tax by £1000. The government also keeps Labour's 50p tax band and the rest of Labour's tax rises announced in March (apart from the NI rise).

That about covers most things. The net result of this is an additional £40 billion of deficit reduction, on top of Labour announced plan to halve the deficit in 4 years. The result of this is that in 2015-2016 Britain is forecasted to eliminate the structural deficit and achieve a (cyclically adjusted) balanced (current) budget for the first time since 2002. Unsurprisingly the budget has released a torrent of commentary on the wisdom of its measures. The Conservatives have welcomed it, Labour have excoriated it, and the LibDems haven't really been entirely sure what to think about it.

The Budget represents a number of dramatic moves by the government. The rise in VAT has proved perhaps the most individually controversial measure, mostly over its supposedly 'regressive' impact, and especially since all 3 major parties effectively denied pre-election that they were going to raise it. The sheer scale of the fiscal tightening announced, though, is the most remarkable thing about it. it was widely expected that the Coalition would aim to cut the deficit faster than Labour, but few expected that they would attempt to balance the budget, even in 5 years time (and only the current budget). The scale of spending cuts, totalling some £99 billion by 2016, is bad enough, a further £32 billion of spending cuts over the first 5 years and £8 billion net of tax rises. But the most eye-watering figure is the fact that this translates into 25% cuts to all government departments outside the NHS and International Development, ring-fenced under the coalition agreement (up from 20% in Labour's plans). To be quite frank, it has never been done before.

This table explains the scale of the cuts and tax rises announced to cut the deficit over the next few years, and also gives the comparison of Labour's plans announced in March with the Coalition's plans.

Total consolidation plans over the forecast period

One things that is important to note though is that these figures for spending reductions are in real-terms and compared to the totals if all departmental, welfare and capital spending was to continue at current real levels, including all plans for future expenditure already agreed and trends in aging population etc. In nominal, cash terms (i.e. the actual numbers of pounds the government will spend), government spending actually rises by £60 billion over this period, going from £697 billion in 2010-2011, up to 700, 711, 722, 738, 758 in the subsequent years. In (forecast) real terms this is equivalent to a 1% fall in current expenditure over the period. An additional £30 billion of this total is expected to be absorbed by interest payments on government debt over the period, International development will rise by around £5 billion in real terms and the NHS probably by a similar amount, an aging population makes up most of the rest of the room between these figures and the totals for cuts given above.  Nor does this mean that the government is cutting spending by 25%.  That is only the average cut in departmental spending in un-protected departments.  With the addition of welfare spending and Health, the two largest items of government expenditure, which aren't facing the same cuts (and ID and capital spending), the cuts are equivalent to a 13% cut in public spending.


So, is the coalition's plan the correct one for dealing with the economy?

One thing that the budget certainly doesn't lack is ambition. It is a remarkable statement of intent, and this intent can be read as a thread that runs through the measures announced by the chancellor. This is an aim to, not only, balance the budget, but also re-balance the UK economy in the direction of the private sector. This can be seen in his reliance on cuts, rather than tax rises to cut the deficit, as well as tax breaks on corporation tax, on allowances for entrepreneurs, on cuts in NI, especially for businesses outside the south. All these tax breaks are counter-intuitive in the context of a purist deficit cutting strategy. The Chancellor is putting his eggs in a basket, so to speak, and cutting back hard at the public sector, while simultaneously trying to incentivise the private sector. It is a 'brave' decision.

There is some evidence that the recovery is gaining strength and that the UK economy does look in increasingly good shape after the recession. Osbourne is betting that his measures will reinforce the private sector recovery just as it is gathering speed, and he can ride the up-tick all the way to a balanced budget and general prosperity for all. Now, obviously, this is a pretty optimistic plan, and if it all does goes to plan then Mr Osbourne should consider himself a very lucky politician. Realistically, though, it is no more optimistic than Alistair Darling's plan of just borrowing loads of money and hiking taxes and hoping everything magically turns out alright. Both these two plans that the respective chancellors unveiled are real commitments to a certain, possibly risky, approach, with the hope this will pay dividends. The difference in the two can be seen by the fact that Darling said that should the economic news be unexpectedly good, and tax revenues higher than expected, he would use any extra money to cut borrowing faster. Osbourne, on the other hand, said that should this occur then he would use any extra money to cut less. Both men knew they were out on a limb, with both probably inwardly praying that this 'extra revenue' would in fact emerge.

The main criticism of the budget is based on the sheer scale of the fiscal tightening planned. This is large. The extent to which it is the budget's main priority can be seen in the above table, which shows that, the above points notwithstanding, over-all the budget not only significantly increases the spending cuts planned but also puts taxes up quite a lot. This heaps more taxes on an, already, quite highly taxed economy, and one would have thought, something that a Conservative chancellor would be loathe to do. The fact that he has brought in more taxes than labour, even with the greater proportional reliance on spending cuts, demonstrates the scale of fiscal tightening. The criticism to this approach is very simple and has been widely adopted by swathes of the left-wing media and labour Party. The policy outlined by the budget involves taking a considerable amount of demand out of the economy over the next 5 years, equivalent to about 8% of GDP. It is deflationary, meaning that it removes money from the economy and reduces the flow of transactions. The risk is that with the recovery fragile and demand weak that this removal of demand will have a magnified affect, potentially tipping the economy back into recession. The counter argument to this is that the deficit itself poses a far greater danger to the economy. This danger includes crowding-out private investment and lending through pushing up interest rates, and more immediately the risk of a collapse of lender confidence, as has most dramatically occurred to Greece, and the sharp rise in the already serious cost of paying the interest on such a large quantity of borrowing.


But will it work?

There is a risk. No-one suggests that removing more than £100 billion of demand from the economy over the next 5 years does not have the possibility of going wrong. The question is, however, how likely is it to go wrong and, how does this compare with the danger of not cutting? The plight of Greece on the continent highlights the real danger of a collapse of lender confidence. In the EU this led to the necessity of the emergency announcement of a colossal €800 billion pot of funds from the EU governments to cover the debt of at risk nations such Greece, Spain, Portugal, Ireland. Partly following on from these events George Osbourne announced his austerity budget with loud cries of his measures being both "inevitable and necessary" and that he had no choice. This is, of course, not true. People always have choices. People only ever say that they has no choice as a cover for the choices they have already made. Is it a necessary choice, though, and is it a justified one? Osbourne is putting all his money (almost literally) on getting the public sector out of the way of the private sector, of balancing the budget, and betting that the boost this gives to business and international confidence, and the pressure this removes from the lending markets, will keep interest rates low and provide the space for higher growth in the long term.

Britain faces continually expanding and higher liabilities, both in terms of the national debt and the wider off-budget sheet liabilities that we are developing. With an aging population and decreasing relative economic importance, borrowing to make up the difference over the long term and even the medium term becomes a less and less sustainable strategy. Over the long term we need to see a commitment to balanced budgets, or at least borrowing below our rate of growth, to keep these liabilities down and ensure we do not drown in our own debt again and again. Furthermore, in economic terms, the less public sector debt the state is burdened with the better for the government and economy in general, all else being equal. Cutting now means that we are not reliant in the long term on higher taxes to maintain the level of spending we are engaging in until growth entirely eats away the deficit. There is also international evidence to suggest that fiscal consolidations that rely on spending cuts are healthier for the economy than those relying on tax hikes, and by supporting confidence can even be expansionary in the short term. This is due to the general, dispersed depressionary affect of tax rises during a weak economic period braking the momentum to economic recovery, whereas the benefit for maintaining spending is concentrated in only a few points. Also, the less debt, the less money we waste on interest payments, the less the government crowds out private investment by placing upward, the more room the government has to manoeuvre in any future crisis.

The question is how quickly this can be done without causing too much collateral damage to growth in an economy recovering from the recession. There are, however, other possible arguments against accelerated deficit plan the chancellor introduced. Obviously tax hikes cut very directly into people's standard of living, at a time when so many people are already suffering wage cuts, reductions in working hours or lower investment incomes. Spending cuts impact on vital services, health, education, welfare, defence, etc and undeniably impact on the poorest and most vulnerable the hardest. There is also the affect on the labour market. At a time when jobs are few, spending cuts will lead to hundreds of thousands of job losses, risking more knock on social damage and suffering in a weak job market. There is hence an argument for keeping consolidation down to an absolute minimum necessary and waiting for growth to cover the deficit, without the cuts in living standards that greater fiscal consolidation will inevitably entail.


However, it honestly does not seem that the minimum realistically necessary over the next 5 years, to avoid the serious risk of a decline in lender confidence and higher interest rates, among wider detrimental effects on the recovery, which would outweigh the benefits of marginally higher spending, is very much less than the target the coalition has set. There are a number of reasons for this.

One of the effects of the experience of Greece has been to scare numerous other countries and unease the markets, leading various other nations, including those in considerably better shape than the UK, to announce stronger action to cut their own deficits. For the UK to bring itself into a position whereby it does not stand out as a particular liability among international investors, has become harder than it was at the start of the year, and hence the need for considerably stronger action is magnified. This wider trend is an unfortunate one.

Part of the problem that caused the credit crunch and the collapse of Greece was a world economy whereby some countries were running large consistent trade surpluses and some countries large consistent trade deficits. The way this was continuing was for the surplus countries, such as China, to lend ever increasing amounts of money to the deficit countries, like the USA or the UK. This has occurred in a smaller way in Europe with Germany and Greece. Part of the reason why Greece got in so much debt was because Germany was lending them money at cheap rates, so they could then purchase German products. One of the remedies the world economy needs is for this situation to be reduced, so surplus nations, such as Germany, buy more of their own products and deficit nations such as the UK sell more products. The situation we have now though, is that the more prudent nations are continuing their prudence and slashing their own much smaller budget deficits, in a similar proportion as the more indebted nations. This means that aggregate demand is being cut across Europe, increasing the risk that cutting demand by so much within the UK will cause economic problems. Ideally, the nations that can afford to would increase, or at least maintain, their smaller deficits in order to help prop up demand to help cover the gap caused by more indebted nations slashing theirs. Behind Portugal, Ireland, Greece and Spain the UK is in the worst financial position of any European nation and, hence, it is right that it should be engaging in the greater fiscal consolidation. There is little the government can do about the fact that other countries are also slashing deficits when they do not, in fact, need to, and thus increasing the danger for us, as well as the relative need for us to take action, so as to not appear a particular liability.

Current estimate put the structural deficit at £85 billion a year. This is the part of the deficit not due to the temporary effect of the recession and which will not disappear with post-recovery growth. Any deficit reduction plan must, over the long term, entirely eliminate this figure, at the very least. Arguably this amount should be eliminated entirely through spending cuts as well, as because this is a structural problem rather than a temporary recession provoked problem, any taxes raised to help fill it will need to remain permanently as an addition to the tax burden to cover this figure. Of course this is not to suggest that there is not an argument for raising taxes generally. But if we regard any of the tax rises since 2008 as a temporary measure due to the recession we cannot use them to fill this portion of the deficit. This figure is so high for a number of reasons. Even in the boom years from 2002-2007 Labour was running a deficit that averaged about £30 billion a year, sticking a total of £160 billion extra onto the national debt. This action goes totally against Keynesian policy and doubtlessly had a role in stoking up the credit bubble and boom that led to the recession. Obviously the actions of the banks had a larger role, but it is interesting that very same people who are now claiming that withdrawing £20 billion of demand from the economy a year will cause economic disaster seem intent on claiming that £30 billion of effective stimulus a year had no serious role in pumping up the boom in the first place. Obviously this, roughly, £30 billion will not go away after the recovery from recession, as it was there before the recession. Another factor is that on top of this is that tax revenue before the crash was artificially buoyed by corporation tax from the financial sector due to the banking bubble and stamp duty from the housing bubble, as well as the wider economic affects of these. We cannot assume that this tax revenue will re-appear, and indeed it would be a dangerous sign that we were merely reflating the same bubble if it did. Quite simply, Government pre-crash was a junkie spending big on pro-cyclical borrowing and asset bubble tax receipts, in direct contravention to Keynesian policies. The last factor is the obvious fact that since the recession broke we have already borrowed some £300 billion pushing the interest we must already pay up considerably, by about another £30 billion. And all these are before we even get onto the subject that the economy has shrunk by 6% thus reducing the tax basis. For these three reasons we cannot just hope to return to the status quo ante.

These factors together contribute to the £85 billion structural deficit and the fact that it would require a considerably larger proportional tax hike than many people may think to even remotely cover the deficit. Even if we raised the tax level by 7%, to cover the 6% fall in the tax base, this would only raise around £37 billion a year, and the Coalition is almost but not quite doing this, raising taxes £29 billion a year. Though this itself takes no notice of the negative economic impact, mentioned before, of raising taxes during a period of weak economic activity. It is also not the case tax were not raised by 'New' Labour to cover increased spending (which would presumably then leave plenty of room to raise it now) though they were obviously not raised enough to cover their plans. Compared to the plans left by the Conservatives in 1997, Labour raised an extra £1 trillion in tax over the decade between 1999 and 2008, meaning that although the UK is certainly not the highest taxed economy in the world, especially after the changes announced and confirmed in the budget it is not a low tax economy at all, meaning there is comparatively little space to raises yet further.

There is also a good argument here for the necessity, in the long term, of governments pursuing a balanced budget, if not a surplus in the good times. This is not just good Keynesian policy but also because governments trying to push spending as high as possible are incapable of deflating a bubble because, as in this case, they are reliant on the taxes that bubble brings, and the borrowing it makes cheaper, in order to fund their spending plans, which means they are incapable, or at least strongly incentivised, to not look at where that bubble revenue is coming from, nor take any move to restrict it over the medium term, i.e. the period they are likely to be in office. Only a government committed to maintaining a balanced budget has the possible ability, and will, to react to control a bubble because they are not staking their reputation on raising spending as fast as possible under their tenure, as Labour was after 1999.


One way of analysing the feasibility of the various deficit plans as a course of action is to look at the end results of those plans. Under Labour's plans, outlined above, we would have £52 of cuts starting next year and spaced over the 4 years after that, with the intent of halving the deficit. Their plan marginally over-achieves this, but, including forecasts for growth, still leaves the UK with a 4% deficit in 2015. This means at the completion of the deficit reduction plan we would still be borrowing £60 billion a year. This figure is one which, in any other situation, would have been considered as cause for serious worry, and is certainly not sustainable in the long term when growth is expected to be 2.5%. Even after cuts had been completed, under this plan, it would have been necessary for public spending to be frozen (in real terms) for years more for growth to bring the deficit down to a level where it would be acceptable to start increasing public sector spending again (in real terms), possibly for an entire further 5 year parliament. Something that would have prolonged the pain of public services already smarting from the £53 billion of cuts planned by Labour. In the long term 4 years of cuts, followed by 5 years of real term freezes, followed by annual rises of 2% (or so) would probably feel like a lot more austerity than 5 years of deeper cuts followed straight away by a return to (hopefully slightly higher) real-term increases.

This is itself assuming several generous assumptions. Mainly, that such borrowing would not cause any decline in business confidence, would not place undue upward pressure on interest rates over the next few years, and would not lead to any decline in lender confidence, causing a hike in the interest costs on such borrowing, as occurred to Greece. Realistically, this is unlikely. Partially, because there is reason to doubt that the figures that the treasury based their predictions on, under this model, would have held out if labour had actually won the election and implemented this plan. Quite simply put, the interest rate on government debt and associated business confidence was partially based on the assumption that labour would lose the election and whoever won (probably the conservatives) would implement a tougher deficit reduction plan. The treasury could only base their projections on the interest rate on government debt as was in March, but there is every reason to think that this interest rate was artificially lowered by the market factoring in that a tougher deficit reduction plan was the one that would actually be implemented, and indeed when this expectation became a reality this has led to a fall in the interest rate on government debt, as well as an increase in confidence in the UK economy, shown by a rise in the pound against the euro and dollar. If Labour had managed to scrape home it seems likely that they would have been unable to implement this less ambitious plan and would have been forced into stronger action.

On the other hand, confidence in their commitment to implement even this weaker plan is questionable. The trove of post-defeat revelations by senior New labour figures have revealed, among other things, that Gordon Brown was essentially forced into this deficit plan by Alistair Darling, his less tribal chancellor, and that he himself did not believe in it. Something that can be seen by his previous insistence of lines of 'Labour investment vs Tory cuts', long after it became apparent that all parties would have to cut, the ludicrous spectacle of announcing 0% increase in departmental budgets in the House of Commons, and the fact that Ed Balls, Gordon Brown's mini-me, has now repudiated this plan as part of his pitch for labour leader. He would presumably have favoured a plan that would have left us with, perhaps, £80 billion of deficit after 5 years and would almost have certainly led to another economic crisis, or if we were really lucky just crippling long-term interest payments.

This possible idea of slowing deficit reduction down over 7 or even 10 years has a further danger, in addition to all those mentioned previously. Financial crises and recessions, of one sort or another, have a habit of coming along every ten years or so, though obviously this isn't a physical law. Between the 1976 and 1980 recessions there was only 4 years, between coming out of recession in 1982 and the next crisis in 1991 there was only 9 years. A deficit reduction plan that still has debt rising as a percentage of GDP almost a decade from now risks not having stopped paying for this crisis when the next one hits. This would inevitably leave the government at that point with very little space to further stimulate the economy, should it be needed, and could be deeply damaging by removing a future government's room to manoeuvre in a crisis, especially considering the likely very high interest payments.


Neither is it the case that there is any real evidence that increased fiscal consolidation is likely to tip us back into recession. The official response to the budget has seen cuts in expectations for growth over the current parliament, but of a few tenths of a percent, they still forecast growth of on average around 1.9% a year. The cuts are forecast to cost some 1.3 million jobs over the next 5 years, but the private sector is forecast to produce 2.5 million jobs over the same period leading to a net decrease in unemployment of 1.2 million. Now you can quibble with that figure. But even if the picture is not quite that good, it is still considerably less than a disaster. Growth over the first three quarters since leaving recession has been reasonable, totalling 1.9%. A figure boosted by the extremely good news for the recent quarter of 1.2% growth. What is more this figure came almost entirely from growth in the private sector, including a sizable figure for the construction industry, but also good performances for manufacturing and various other areas of the economy. In other good news, the money supply is growing steadily, dispersing any fears of deflation, and both banks and large businesses are well stocked with cash, making any further major bankruptcies unlikely. Also there is evidence that the government's policy has had a positive effect on international confidence in the UK economy. The Interest rate on government debt has fallen from 4% before the election to 3% now, and the pound has risen against the dollar and the euro. There has even been talk of the UK as a safe haven for investors after the troubles encountered by both the EU and the USA, talk unthinkable at the start of the year.

What is more, the package of consolidation announced is, as previously said, spread over the next 5 years. This year only a very small fiscal tightening is to occur, cancelling some of the more unfunded and unnecessary spending commitments of the previous government. The arguments about this depressingly dominated much of the election, and were generally tendentious. The argument that cutting £6 billion from a £700 billion budget, about 0.8%, would cast the economy into the abyss was always ridiculous. Not that the conservative insistence that a £6 billion national insurance hike would destroy the recovery was much more sensible. It will be 18 months after exiting recession that the fiscal squeeze really begins, giving the economy more time to get onto a stable footing. Even then, as can be seen from the above table, the majority of cuts occur during the latter stages of the parliament. Up until 2013, 3 years from now, only £42 billion of cuts are to be made, taking demand equivalent to 3% of GDP out of the economy, and the most the cuts reach in one year is £21 billion, or 1.5% of GDP in 2013. Cuts for next year are planned as £18 billion or 1.3% of GDP.

The degree of consolidation, though undoubtedly large, is also proportionately smaller than that announced for countries in even worse financial situations, though larger than that in countries in better situations. Greece has and is enacting a consolidation about twice the relative size. In Ireland, another country in a poor fiscal situation, and just across the sea, they removed 10% of GDP (worth of demand) in 3 years, including starting while still in recession and removing 6% of GDP in a single year. This is a truly extreme plan, brought on by the sheer desperation of their circumstances, whereas we are removing a relatively modest 8% of demand over 6 years, almost all starting 18 months after leaving recession, and not totally more than 1.5% of GDP in a single year.

It must be noted that removing 1.5% of GDP worth of demand from the economy does not cut GDP growth by 1.5%. Supply to a degree creates its own demand, and the balance of reduced demand is filled by lower inflation, by other purchasers who have a space due to easier borrowing, lower interest rates, lower prices etc. It is also important to remember that these are just forecasts, they can be changed as things go on, should it appear that they were unnecessarily pessimistic about the economy or the recovery is weaker than hoped, though in fairness this was also true about Labour's plan. In a way they are more like 5 day weather forecasts than necessary facts about the future. Anyone who doubts this, and feels like a laugh, should try taking a look at the 5 year forecasts of treasury plans from 2006 or 2007, and see just how precisely they panned out. What is significant about them is rather the intent and direction of policy they represent rather than the precise numbers.

There is also another interesting comparison. As the recession got going in 2008 labour introduced a deliberate stimulus package, on top of the automatic stimulus caused by rising welfare payments and falling tax receipts. This was only short-term though and wound down in early 2010, around the same time as the debate over the initial £6 billion of cuts, and in fact was one of the main reasons why that argument was so ridiculous. In other words, the Labour government effectively withdrew £23 billion of demand from the economy in early 2010, just as the economy came out of recession. This was VAT going back up to 17.5%, this was the 50% tax rate, this was a £1.2 billion hike in fuel duty. And this actually counts as a slightly larger withdrawal of demand than in any single year in the Coalition's plan. And, did fiscal Armageddon ensue? No, of course it did not, since then we have seen 1.5% growth in the following 6 months. And, this withdrawal of demand took place at the point where, arguably, the recovery was at its weakest.

One of the sublime/ridiculous aspects of this whole debate around the time of the election was the fact that the political dynamics meant that both sides had reason to hope for/fear good and bad statistics as to economic growth immediately coming out of the recession. For the Conservatives good growth meant that, on the one hand, the case was stronger for the economy being able to stand earlier spending cuts, but on the other hand it obviously made Labour's handling of the recession look better, which was bad for them. On the other side, good growth figures undermined Labour's case that it was too risky to chance early cuts, but also vindicated their handling of the recession. A heads you win, I win, you lose and I lose situation. What it came down to then was obviously who won the wider battle for public credibility for their position, which was mostly won by the Conservatives. They also seemed to get the luck on the economic growth figures though, as the first two quarters out of recession were both announced as anemic 0.1% growth, before being later revised up, the 2nd quarter on the very day that Gordon Brown resigned, precisely too late for Labour to benefit, and then the next quarter came through with significant growth figures, from a period that Labour were in charge, just in time to help support George Osbourne's case for deeper cuts. Thus Labour got the opprobrium heaped on them from the announcement of low growth under their tenure, and the Conservatives seem to have the benefit of their position being reinforced by the better than expected revised and later growth figures, almost a perfect storm. As one commentator said, maybe God is a Tory after all.


What will be likely is that over this period these measures will produce lower headline growth figures than perhaps would otherwise be projected, and since the budgets announcement we have seen a number of growth forecasts for the UK downgraded for the next few years. This is the other main argument against the economic benefit of quicker attack on the deficit and it is a serious risk. The likely affect of the accelerated cuts program is lower headline growth for the next few years. These forecasts are dependent on the above possible negative externalities on economic performance not emerging, however, that these economic bodies cannot necessarily take into account in their calculations. There is also little argument that over the longer term the potential for growth for the UK economy is enhanced by lower levels of borrowing, and the costs associated with it, which I have repeated ad naueseum above. Furthermore, like treasury forecasts, these predictions are certainly not infallible, these bodies fail to see things coming as much as anyone. Their glorious failure to see the credit crunch itself coming, for example. Another point is more subtle: Assuming these bodies are correct, for the public finances we are faced with a trade-off between the lower debt interest we are racking up with the tax income gained through higher growth. Obviously though, this does not include the wider economic benefits of higher growth, nor the social benefits of higher government spending, but neither does it include the negative possibility of the previously mentioned financial and economic externalities. Nor the fact that these figures are crude measures. They can take into account the reduction in government spending (reducing GDP) but not the underlying increase to the health of the private sector this may be supporting, which in the end supports the private and public sectors.

All this is not to claim though that the plan that the Chancellor announced is itself necessary for the economy.  It may, as it turns out, be the best plan to secure long term growth and financial health for the UK, and furthermore he may have read the financial runes perfectly and timed it with a recovering economy.  Possibly.  Like I said though, if this is the case then he will be a very lucky politician.  However, I believe there to be clear risks associated with Labour's considerably more gentle deficit reduction program, especially after both the Greek crisis and wider drive to prudence that this has launched.  An approach that would probably take ten years or so to get the UK's public finances under real order, if everything else goes as plan, just seems completely insufficient.  This is not to ignore, however, the difficulty faced with introducing large real term cuts in public spending and the difficulty this will cause many individuals and communities.

Considering all these factors I believe it is possible to consider an alternative fiscal plan that hopefully goes someway to combine these elements, or less diplomatically, just takes the middle ground between the various alternatives.  I hope to introduce and explain this idea in the final part of this little mini-series.

Sunday, 5 September 2010

My Masters Dissertation - The Philosophical Nature of Human Relation to other Human Beings

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After 2 months of solid work I have finally finished the Dissertation for my Masters.

It was one hell of a rush at the end, and during a difficult period of my life, but I'm proud of what I've done. After a month of reading, three weeks of note making and then 10 days of frantic writing, editing and referencing I have finally got 11,000 words, 4 sections and 111 references of Dissertation, all done and handed in.

That's my MA in Continental Philosophy finished. And now I only have to wait two weeks to see if I've passed. I'm hopeful, especially since I finally got some of my marks back and I got 71, 67 and 59 for the three essays I have got back so far. This is alright since a pass is 50, and I knew the 59 wasn't my best work. My dissertation is at least as good as that essay I reckon, so I should be fine.

My Dissertation is on the subject of the nature of Human Inter-Personal relation. This is the idea that the most important feature of human existence is not what we know, or what we earn, or what we think,but rather, it is the way we relate to other people, and also the rest of the world we encounter.

How and Why did Levinas consider Buber's Philosophy Insufficient as a Philosophy of Inter-Personal Encounter?

More precisely it is an investigation of the work of one Philosopher, Martin Buber, from the perspective of another, Emmanuel Levinas. Two of the great figures of 20th Century philosophy. Especially in the considering the nature of being human, and the choices in life that we all must make.

Buber and Levinas had a lot in common. They were both Jews who lived through the horrors of the middle of the 20th Century and the 2nd World War. They both held a fierce devotion to the Bible and the message of Judaism and saw their work as an attempt "to translate the Bible into Greek", meaning to express the ethical and spiritual message of Judaism, and especially the fierce call to justice of the Old Testament Prophets, in the language of Philosophy.

They share a deeply optimistic commitment to the worth and importance of the individual human being and the vital importance of considering the way we relate to other human beings for our morality and the priorities with which we structure our lives. They took the ideas of devotion and respect, of commitment with one's whole being, which the Bible described in relation to meetings with God, and daringly applied this language to meeting and interaction with God's images, human beings.

Levinas described a radical phenomenological approach to providing a philosophical justification for ethical duty while Buber concentrated on describing the two possible modes of human relation to other persons and also nature and Art. Their work is a genuinely enriching experience for anyone, challenging them to truly consider the manner in which they approach the world we all find ourselves placed in. I know I have learnt a lot from studying their ideas and the writing about them and the thinking that lays behind them.

Anyway, I can barely believe it's all over. Not just my Masters, but also my entire University career. It's been a long 4 years. I can barely say how long a time its felt. Or how different I feel than I did 4 years ago, when I first faced coming to University as an 18 year old kid, or how amazing an experience it has been thanks to many, many people. And now soon I'll be looking for a job. Scary.