Home > General Politics, Terrible Tories > Rebuttal yawn

Rebuttal yawn

I really, really don’t want to spend my allocated TCF time over the next three months rebutting Tory bollox in the cause of Labour upsetting odds in the election. 

I’ve got loads of dead interesting stuff to write about, honest, not least an open-minded response to the increasingly well-read Giles on his colleague’s no-doubt utterly parameterized bollox on wage bargaining, if he ever gets round to sending me the report in the first place.

 Oh, and a Beginners’ Guide for Strike Organizers, based on my experiences of being a surprisingly good strike organizer ages ago (though see below for initial tips if you’re keen to get going).

But heh ho, duty calls, and as it is quite likely that this utter, utter nonsense from Iain Dale will start to be used by the Tories quite a lot over the next few weeks, I feel bound to spend a few minutes rebutting it.

Daley’s claim is, in keeping with his general being, quite simple:

Every Labour government in history has left office with unemployment higher than when it took office. Fact.

Oh gawd, I’m bored already, but I must press on……

Post-war statistics are taken from the ONS tables available here. Estimates for pre-war are as per the links, though data are a bit patchy for early in the century. 

To keep it simple and consistent I’ll focus on claimant data, where that data is available, rather than the more appropriate International Labour Organization method of unemployment calculation that the Tories under Thatcher and Major refused to bring in because it would have revealed much higher levels of ‘real’ unemployment.  (My technical post on this is here if you can be arsed.  The key point is that times of low unemployment these two measure tend to diverge, and come together at times of high unemployment.  Tom has a good post on it.)

Let’s start by looking at each of the Labour governments

1924 Only formed a coalition government with the liberals because the Tories refused to form a government despite having most seats.  Coalition fell apart after nine months.  This graph (page 4) suggests unemployment down in from 1923, but we won’t quibble.

1929-31 Yup, unemployment up.  Labour came to power in June 1929.   Little thing called the Wall Street Crash, October 1929, followed by major depression in the world economy.

1945 -51 Yup, unemployment up slightly perhaps, with 1951 figure at 281,000, though a 1945 comparative figure not readily available.  In 1945 there was, as you might have guessed, a war economy with pretty damn low unemployment

1964 – 70 Unemployment up from 413,000 to 640,000.

1974 – 1979 Unemployment up from 487,000 to 1,077,000.

1997 – now  Unemployment up on where it started and won’t get back to 1997 levels in time for general election.  Small thing called massive worldwide financial crisis and biggest recession since 1930s made it happen, but unemployment now coming down at same time as GDP starts to grow.

Now let’s have a look at the Conservative record, shall we?

 1900 – 06 Records (from union membership) too patchy for accurate record, but probably up slightly according to this graph (p.25)

1922 -23 Unemployment down from around 1,900,000 to 1,600,000 according to this (p.4)

1924 -29 Unemployment up from around 1,300,000 to 1,500,000 according to this (p.4)

1931-45 Unemployment up steadily in 1930s after Wall Street Crash, exacerbated by double dip in 1937.  High unemployment stopped by external incident called World War II, which many people consider to have been worse than unemployment.

1951-64 Unemployment up from 261,000 in 1951 to 413,000 in 1964, despite MacMillan saying ‘we’ve never had it so good’.

1970-74 Unemployment down from 640,000 in 1970 to 487,000 in February 1974.

1979-97 Unemployment up from 1,077,000 in May 1979 to 1,620,000 in May 1997, with a peak of 3,300,000 in 1986.

And that’s the substance of Dale’s argument.  Technically he may be correct (save the lack of data for 1924 and comparative data for 1945), but it is utterly meaningless because since the war unemployment grew fairly steadily under both parties from a very low post-war base, and the pre-war period is largely dominated by the Wall Street crash and an inadequate policy response in a pre-Keynes era.

Since the war the two main periods of Conservative government have been marked by growing unemployment overall, and unemployment grew massively and remained high for years after what was a milder recession than the 2008-09 one.  Along the way major de-industrialisation took place and consequent long-term unemployment patterns were established. 

The only time unemployment went down under the Tories post-war, it did so from a very low base in the first place, and by less than 200,000.  This is massively outweighed by the millions of extra people on the dole, quite needlessly and long term, under the subsequent Tory government.

A much better measure of success around unemployment is how well governments have been at getting the rate down after recession.  The tables I set out here tell that story of two poor Conservative responses, and one more effective Labour one. It’s a story Dale and his ilk would prefer not to hear.

 

 

Initial strike organization tips

Initial tip 1 : don’t diss middle management when they’d really like to be on strike with you;

Initial tip 2: hide the superglue from the overly Direct Action-focused comrades;

 Initial tip 3:  if providing emergency cover, make a note of what cover’s been agreed for when you get back to work and find you’re being asked to work with less cover;

 Initial tip 4: avoid picket line romance unless you want to end up as an ageing, slightly frustrated radical with two kids and a very wonderful though not particularly revolutionary lifestyle in a small Lancashire village

 Initial tip 5: If asked to make a big speech with absolutely no preparation to a very large number of people and the TV cameras, probably best to run and hide).

Note: actual post on this will be serious.

  1. freethinkingeconomist
    February 18, 2010 at 10:08 am | #1

    I would like to apologise for the lateness of the printers of Alison Wolf’s stuff. Consider it a blessing – a few more days for you to live in ignorance of arguments that will be devastating to your political ethos…

  2. February 18, 2010 at 7:57 pm | #2

    Its actually quite unusual for the number of unemployed (however counted) not to rise over time, isn’t it. I wonder what it would look like in terms of percentages… though, as you rightly point out, comparing things in such a way is pretty useless anyway…

  3. February 18, 2010 at 8:06 pm | #3

    Unemployment goes up and down; it’s more complex than simply assuming that it goes up more regularly than it goes down – not least because the number of workers fluctuates with time, and the demands this creates on the economy don’t always balance out to justify new jobs.

    What is true is that since the end of the commitment to full employment, unemployment has had the potential to dramatically increase very quickly, while it takes a longer time to drop.

  4. Barney Stannard
    February 18, 2010 at 8:41 pm | #4

    Good work Paul in rebutting this particularly weak argument. I think the thing that leaps out really is how the party in power has little to do with how much it goes up by, which is really more to do with the general macroeconomic situation.

    As an aside, while I am critical of Labour on a number of points, I have to say that there achievement in making the labour market more flexible seems to be paying substantial dividends. Hats off to them, and I hope it continues. And lets hope we don’t double-dip…

  5. February 18, 2010 at 11:25 pm | #5

    Hmmm.

  6. February 20, 2010 at 7:16 am | #6

    Flexible labour markets eh? That neo-liberal shibboleth that translates as: ‘easy to hire/ easy to fire/ low wages/ few benefits’.

    Bad news Barney. It looks like this neo-liberal orthodoxy of the past three decades could be another victim of the economic crisis.

    Who says so? That socialist rag the Financial Times (22 January 2010), looking at the uber-flexible labour markets in the US :

    (Giving full quotes as you can’t link to FT, you have to register)

    “Something weird is happening to labour markets in the rich world. The link between depth of recession and rise in unemployment is broken. And for the first time in a generation, Europeans can bask in the knowledge that their unemployment would have to rise in order to approach US levels.

    In some countries – the US stands out – the decline in output has not been so terrible but the employment shake-out has been brutal. Many more American jobs have been lost than in other countries – and many more than in the past.”

    And this is backed up by Trots at the OECD and Harvard:

    “The failings of flexibility

    Macroeconomics has learnt the art of eating humble pie. Since the onset of the financial crisis, long-cherished predictions, theories and rules of thumb about the way whole economies work have fallen by the wayside. Is it now the turn of microeconomists to taste some of the same medicine when it comes to the labour market?

    For years, it has been the settled view in economics that, in most cases, flexible labour markets are best. More jobs might be lost in a downturn, but this cost was far outweighed by the benefits of flexible pay and the ease of reallocating jobs from dying industries to dynamic ones. No body was more closely aligned with such recommendations than the Organisation for Economic Co-operation and Development, the Paris-based club of developed nations.

    But now the OECD is modifying its view. “We have been promoting flexibility, not for the sake of it, but for economic performance and for workers to get into new jobs,” says Stefano Scarpetta, the OECD’s head of employment analysis.

    This motivation is allowing a change of view. “Judging from the outcomes so far, short-time working schemes seem to have been rather successful in containing the job haemorrhage,” he says, adding that even his organisation is “a little bit more positive on public works programmes: we argue that as part of a labour market approach, they might be worthwhile”.

    While this is not a wholesale repudiation of the OECD’s former views, it reflects the fact that, according to the organisation’s own analysis, the gains in employment flexibility of recent years have failed to protect employees from the economic crisis. “There do not appear to be any clear grounds for concluding that workers, generally, are any better or worse prepared to weather a period of weak labour markets than was the case for the past several recessions,” the OECD concluded in its latest Employment Outlook.

    Some top economists argue that the theory of superiority of flexible labour markets applies only at full employment. It will not work well when there has been a large shock to demand, output is well below potential and jobs are effectively rationed. In these circumstances, German-style institutions that cushion and spread the pain are probably superior.

    For professor Richard Freeman of Harvard University, the problem is simpler. Microeconomists and policymakers spent much too much time fiddling with the work incentives of poor people. “If the unemployed person or the welfare mother… doesn’t do quite as much work as we would like them to do, or as they should, that’s a very small cost to society; when a big banker takes excessive risks, it can bring the whole system to a disaster….so we took the eyes off the ball of the really risky part of capitalism.”

  1. April 21, 2010 at 12:56 pm | #1

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