Sunny is in triumphalist mood, and thinks Labour’s fiscal conservatism has had its day:
The UK’s AAA downgrade wasn’t just a nail in the coffin of Osbonomics, it was also a much-needed kick in the groin to those on the right of the Labour party who thought opposing austerity was political and economic madness……Let’s not forget Black Labour – who published a pamphlet in 2011 saying Labour should ‘place fiscal conservatism at the heart of its message‘. How’s that working out for you guys?
Sunny is also completely wrong.
Labour’s fiscal conservatives are not quiet now because they know they have lost the argument. They’re quiet because they came out in 2011, won the argument hands down, and have gone home, put their feet up and relaxed for a bit with a nice glass of red. They simply don’t need to engage with people like Sunny (or me) because we don’t count.
Sunny needs to take a look beyond the media-heavy environment which he now inhabits, and see what’s going on when it comes to the Labour’s policy formulation.
Progress, the real party within the Labour party, is hosting regional events around the country to debate “the options and choices the party will face” if it comes to power in 2015. But fiscal expansion is not even on the table as an option:
An incoming Labour government in 2015 will not be able to countenance such increases in spending. Instead, the challenge of closing the deficit and tackling some of the long-term fiscal pressures the country faces will require some tough choices and radical thinking if Labour is to bring about progressive change.
(When I asked Progress if they’d set up an event in my area, they declined, pleading lack of resources. But look at it from their side. Why go through the hassle of being challenged by a nobody, especially a nobody who might be able to construct a coherent case against the parameters imposed on the debate?)
Similarly, Labour’s favourite think-tank, IPPR, argues its case for childcare from a determinedly fiscal conservative perspective; there will be no overall increase in spending:
Investment in childcare will help boost the employment rate, ease living costs for families with children and reduce child poverty. But finding the necessary funding will involve some difficult calls: should Labour seek to freeze child tax credits and child benefit or reform wealth taxation to generate additional revenues?
Everywhere you look, Labour is apparently preparing its own form of austerity: a little looser round the edges than the one that emanates from the Tories’ ideological drive for a smaller state, perhaps, but still very firmly in the fiscal conservative mould.
To what extent the In the Black Labour crowd (one of whom is from the aforementioned IPPR) are the cause of Labour fiscal conservative turn, or simply a reflection of a what was already developing, is an open question. I tend to think they have been the beneficiaries of (Dowding’s) systematic luck, whereby their “social location” made it more likely that what they wrote just the right nerve at just the right time within the just right bit of the party.
As for Sunny, he needs to get out more. First, he thinks people hate him for his “nuanced” approach to interventionism, when in fact the decision-makers didn’t even notice he wanted a say. Now he thinks he’s won the argument, when the argument was won months ago without him even being there.
Geroge Eaton at the New Statesman says Labour needs an answer to Osborne’s charge that it would “borrow more”:
If [Labour] wants to continue to attack Osborne on this territory it will need a much better explanation of its own approach. Without explicitly declaring that it would borrow for growth (and explaining why), the party merely reinforces the impression that borrowing is always and everywhere an economic ill.
Fair enough, but George Eaton doesn’t go on to say what this explanation should be. So here’s my version:
George Osborne is a cretin who doesn’t understand the basics of what borrowing actually is. He thinks borrowing is something to do with some kind of international gentleman lending club, who will lend to us only at exorbitant rates unless the Tories promise to keep on bleeding the poor.
But that’s not what it is (even if the equally cretinous BBC says so).
The latest Bank of England figures show that 70% of borrowing is from ourselves.
At least Vince Cable’s Special Advisor understands the basics. Back in 2010, Giles Wilkes sought to bring some cmmon sense to the hysterical debate about borrowing:
“All we get [from increased government borrowing] is a shifting balance between private and public assets and debts, in the absence of a massive international imbalance. Which means we can always afford to resolve either private or public indebtedness with a political solution, if we are brave enough.”
Labour is brave enough. George Osborne is a coward as well a cretin, who apparently fails to understand that when he announces grand though probably unworkable plans to get pension funds to invest in infrastructure, he’s actually only talking about borrowing from the same institutions as invest in government bonds anyway.
There you go. George Eaton. Job done.
I flicked on the Radio 5 Saturday Edition earlier for a minute and heard this exchange (from around 13mins 50s secs) on the matter of the downgrade and possible implications for debt and interest rates:
When we’re talking about borrowing money, borrowing money internationally, from whom?
BBC Business Correspondent:
Well, this is borrowing from from international lenders. People will give the government money in return for a set interest rate and that money of course is used to pay off all sorts of things….
This is of course, utter rubbish. As of December 2012, overseas holding of gilts was at around 30% of the total, according to the UK Debt Management Debt Office. This is up from roughly 20% pre-crisis, on account of the UK’s continuing ‘safe haven’ status.
This is shockingly ignorant reporting by a supposed BBC expert, and is important because it fits a popular narrative that something must be done about our debts. The fact remains that most of our debt is effectively owed back to ourselves. This may or may not be a great idea*, but it’s not the same as international creditors breathing down our neck.
The only substantive issue with the downgrade is that, because some pension funds and insurance companies holding gilts may find it difficult, in terms of their fiduciary duties, to hold anything less than AAA status, demand may slacken and interest rates rise (I don’t think this will be a big issue, but time may tell).
With BBC journalism like this, I’m surprised they need any Troy spokepeople on. Anyway, I’m complaining officially. I’ll let you know how it goes.
* Maybe worth repeating what Vince Cable’s SpAD, Giles Wilkes, said on this issue:
All we get [from increased government deficit] is a shifting balance between private and public assets and debts, in the absence of a massive international imbalance. Which means we can always afford to resolve either private or public indebtedness with a political solution, if we are brave enough.
But why exactly is 75% of GDP in public debts, owned by the private sector and paying just 4-5% interest, a problem – when the private sector needs such instruments?
That is a question Conservatives bury under the term ‘burdening our children with debts’. It is just as much ‘providing our pensioners with assets’.
I hage argued on twitter tonight, with Danny Blanchflower and others, that Labour/the left should forego the short-term pleasure of goading Osborne over the Moody’s downgrade, and simply stick to the key point that Credit Rating Agencies are part of the problem and should be ignored.
The counter-argument is that Osborne set maintaining AAA status as his ‘no.1 benchmark’ and that he should be held to account againmst his own criterion for success.
I can see the argument, but I disagree. It will be much more effective long-term to disrespect Moody’s judgment, and say it is an irrelevance, as this creates a continuity as and when Labour needs to get into an aggressive, economy-saving fiscal expansion post-2015 and the cretinous, austerity-crazed credit rating agencies get touchy about it.
This is actually an important moment. I hope Labour HQ has gone over the scenario, and gets its response right, in a way which avoids it being hoist by its own petard in 2016.
Sadly, I don’t hold out much hope.
Update 23/02/13: Ed Balls got his first official reaction half right, with the starting caveat to his attack on Osborne:
It would be a big mistake to get carried away with what Moody’s or any other credit rating agency says. Tonight’s verdict does not change the fact that the credit rating agencies have made major misjudgements over recent years, not least in giving top ratings to US sub-prime mortgages before the global financial crash.
As you might expect, Schools Minster Liz Truss has jumped on the press release from the Institute of Education that “the highest-achieving pupils in England can almost match the most able children in Taiwan and Hong Kong in maths tests at the age of 10. But by the time they take their GCSEs they have fallen nearly two years behind their Far Eastern counterparts.”
This report is a damning indictment of Labour’s record on education. Based on data from between 2003 and 2009 it shows that our top pupils actually lose ground as they get older, not just with their peers in the Far East, but with those in every country studied.
“This government is clearing up Labour’s mess. Our reforms: tougher discipline, more rigorous exams, more freedom for headteachers, a more demanding curriculum and higher quality teaching, will drive up standards so our pupils have a first-class education that matches the best in the world.”
I’m not sure Truss has actually read the working paper itself (which, oddly, isn’t published in the place it was supposed to be available this morning, but is available here); this finding about the higher achievers is only one part of the report and a key recommendation is actually that there should be a focus on pre-school and primary education rather than on secondary, so that all children get closer to their East Asian counterparts at age 10, but Truss prefers to focus on discipline and exams. It is to shadow minster Kevin Brennan’s credit that he picks this up, accusing the government of having the “wrong priorities”.
Nevertheless, the report by John Jerrim and Alvao Choi does indeed say, that while for most children the gap between England and East Asia does not grow:
[The data] suggests that the gap between the highest achieving children in England and the highest achieving children in East Asia increases between the end of primary school and the end of secondary school (p.15)
This may well be a valid cause for concern (and the authors recommend the strengthening of AGT programmes), but one apparent omission from the working paper intrigues me. In 2011, in an earlier paper on the PISA 2009 results, the same author, John Jerrim, noted:
Perhaps the most important (that I am aware of) is that the month when children sat the PISA test moved from between March and May (in PISA 2000 / 2003) to roughly five months earlier (November/December) in PISA 2006 / 2009. England had special dispensation to make this change (i.e. this is not something that occurred in other countries) and although this was for good reason (the PISA 2000 and 2003 studies clashed with preparation for national exams and so was a significant burden on schools) it may have had unintended consequences. Again, I believe this is a change that has occurred only in PISA and not in TIMSS.
How might this influence the trend in England’s PISA test scores? Firstly, it is important to understand that between November/December and March‐May of year 11 is likely to be a period when children add substantially to their knowledge of the PISA subjects as it is when pupils are working towards important national exams. Consequently, one should expect the year 11 pupils in the PISA 2000/2003 cohort to out‐perform their peers taking the test in 2006/2009 due to the extra five months they have had at school. To provide an analogy, imagine that one group of children took a mock GCSE maths exam in November, and another group the following April; clearly one would expect the former to obtain lower marks (on average) than the latter. This would in turn suggest an overestimation of the decline in PISA maths scores over time of this potential bias is not easy, although it has been widely cited that one additional school year is equivalent to roughly 40 PISA test points (0.4 of an international standard deviation). See OECD (2010b page 110) for further details. This would imply that year 11 children who sat the PISA test in 2000 might be expected to outperform the 2009 cohort by roughly 15 PISA test points (0.15 of an international standard deviation) due to their additional five months at school (p.16-17).
There are two matters of particular note that do make it into the working paper, though, which might have given Liz Truss pause for thought if she’d bothered to read it.
First, there is the issue of private tuition, especially as it relates to the high achievement issue Truss is keen to focus on:
Evidence presented in this paper has suggested that the gap between the highest achieving children in England and the highest achieving children in East Asia widens between ages 10 and 16 (at least in mathematics). This is something that needs to be corrected as highly skilled individuals are likely to be important for the continuing success of certain major British industries (e.g. financial services) and to foster the technological innovation needed for long-run economic growth (Bean and Brown 2005, Toner 2011). One possible explanation for this finding is the widespread use of private tuition by East Asian families for both remedial and enrichment purposes (Ono, 2007; Sohn et al., 2010). This helps to boost the performance of all pupils, including those already performing well at school. In comparison, private tutoring in England is mainly undertaken by a relatively small selection of children from affluent backgrounds, often for remedial purposes. While a large proportion of East Asian families are willing to personally finance such activities through the private sector, the same is unlikely to hold true in the foreseeable future within England. Consequently, the state may need to intervene. Gifted and talented schemes, a shift of school and pupil incentives away from reaching floor targets (e.g. a C grade in GCSE mathematics) and enhanced tuition for children who excel in school are all possible policy responses (p.19)
For those of us involved in education, this rings true. There is little doubt that there has been too much emphasis on the C/D borderline, and the proposed changes to the league tables as a means of changing this are welcome. But this won’t be enough in itself to really make a difference for poor children who could be higher achievers. This requires resources channelled into state schools, not siphoned off for free schools or used as bribes to get schools to become academies.
Second, and more fundamentally, this isn’t just about schools. As the report notes:
Indeed, it is important for academics and policymakers to recognise that East Asian children vastly out-perform their English peers even when they have been through the English schooling system. This is perhaps the clearest indication tha it is actually what happens outside of school that is driving these countiries’ supoerior PISA and TIMSS math twst performacne (p.20)
So while Truss is busy finding reasons to blame schools for stuff which remains largely outside their control (a point well made by Chris Cook), Labour in opposition should be focusing on how it cannot not only keep on improving education, but also on improving the broader opportunities of the children being educated.
That’s serious education policy, based on evidence. Liz Truss wouldn’t understand.
The reason for the apparently ‘no-brainer’ questions to the judge is perfectly obvious to anyone with the capacity to think things through. It goes something like this in the jury room:
Jury forewoman/man: So, fellow jury member, are you still saying that you think she’s guilty/innocent because of what you saw in the paper, and that this is more important than any of the evidence you’ve heard?
Fellow jury member: Well yeah, I think she’s guilty, alright? I don’t care about the evidence.
Jury forewoman/man: [Sighs] Right, ok, how about if I ask the judge whether that’s a reasonable approach for the jury to take. If he says, yes, then fine. If he says we have to stick to the evidence and what we’ve heard in court, will you go with that?
Fellow jury member: Well, yeah, ok.
Jury forewoman/man: Ok, and while we’re at it, is there anything else we need to be absolutely certain on……
That is, the questions almost certainly emanate from the reluctance of one or a small number of members’ to engage properly with the jury process, and the attempts of the forewoman/man, perhaps at the instigation of other members, to find a way through which deals respectfully but firmly with this frustrating impasse. (In times past, I found myself using roughly the same technique with fellow magistrates whom I thought were getting the wrong end of the stick i.e. suggesting that we check for clarity with the clerk of the court, confident that s/he would back my interpretation.)
In the end, no verdict was possible in the Pryce trial, but to suggest that this reflects the stupidity of a whole jury is itself pretty stupid.
Of course, in Tom Harris’s case, his misreading fits nicely with his Burkean self-image as one of a small elite band with sufficent God-given powers of judgment whose task it is to save us all from our own stupidity.
Which kind of underlines his stupidity.
As sure as night follows day, there’s another article along from a right-winger telling us that the “Left’s cultural ascendancy” has led to the incorrect and unfair allocation of fascism to the right-hand side of the political spectrum. This time it’s Daniel Hannan MEP‘s turn:
One of the most stunning achievements of the modern Left is to have created a cultural climate where simply to recite these facts is jarring. History is reinterpreted, and it is taken as axiomatic that fascism must have been Right-wing, the logic seemingly being that Left-wing means compassionate and Right-wing means nasty and fascists were nasty. You expect this level of analysis from Twitter mobs; you shouldn’t expect it from mainstream commentators.
Hannan doesn’t actually indicate who these “mainstream commentators” may be, but he seems sure enough of his assertion, so let’s go with the flow.
A key part of this regular leftie-baiting ritual is to say that fascists are really just socialists, and that socialists trying to tar right-wingers with the fascism brush is all part of the clever plan to get away with. Cue Hannan:
‘I am a Socialist,’ Hitler told Otto Strasser in 1930, ‘and a very different kind of Socialist from your rich friend, Count Reventlow’.
No one at the time would have regarded it as a controversial statement. The Nazis could hardly have been more open in their socialism, describing themselves with the same terminology as our own SWP: National Socialist German Workers’ Party.
Almost everyone in those days accepted that fascism had emerged from the revolutionary Left. Its militants marched on May Day under red flags. Its leaders stood for collectivism, state control of industry, high tariffs, workers’ councils. Around Europe, fascists were convinced that, as Hitler told an enthusiastic Mussolini in 1934, ‘capitalism has run its course’.
It always strikes me as odd in these circumstances that Adolf Hitler, who in general doesn’t have a tremendously good reputation for rigorous self-analysis and intellectual honesty, should be seen as such a trustworthy guide to his own ideological leanings. It is, after all, just possible that the Nazis used socialism as their key descriptor in an attempt to win votes from the Social Democratic Party, much as the BNP now seek to gain votes from Labour by claiming, as Hannan indeed notes, that they represent Labour values of old*. (Possibly the best contemporary representation of this dynamic is to be found in Hans Fellada’s semi-autobiographical A Small Circus, published in 1931 before the final rise to power of the Nazis.)
Further, the idea that being opposed to capitalism, and claiming that it has had its time, automatically makes you a socialist is really quite bizarre – it’s as though other forms of social structure had never existed. Hannan’s inability/unwillingness to see beyond a simplistic historical bipolarity – if the Nazis weren’t capitalist, they must have been socialist – is precisely the error he now claims “lefties” are making when he talks about the ‘far-right’ epithet applied to the BNP (for the record, I don’t think the BNP have any particularly fascist features).
In fact, almost any basic reading about Nazi ideology will tell you that it was primarily rooted in a weird anti-modernist, anti-materialist mysticism, a jumble of 19th century Romantic yearning for a return to nature with a bit of Sun worship thrown in. As GL Mosse set out right back in 1961, the so-called ‘socialist’ elements around centralised planning, and even the growth of the military industrial complex, were a later addition, given the dawning realisation that for a glorious Aryanism, based on quasi-feudal social relations, to win out, ideal needed to be translated into action.
In his first book, H. F. K. Gunther, later to become the chief racial expert of the Third Reich, sketched such a social ideal. Human rights have today pre-empted the place of human duties. These duties, formerly expressed in the loyalty of the knightly gentleman to his king and generalized throughout society in the web of reciprocal loyalties between landlord and peasant, must once again become the cement of social organization. To Gunther, ” the community, the public good, demands that every profession fulfill the work which is its due.”
Manifestly, such a social ideal found in all these men, continued the impetus of romanticism. It was reminiscent of that Bavarian deputy who earlier in the XIXth century believed that ” Love ” would cure the tensions between laborer and employer. In an immediate sense it was a part of the ideal of an organic society which reflected organic man. Langbehn was explicit in his insistence that true individualism could only be realized in such a social order. He considered liberal individualism a part of materialism, dissolving society into incompatible units rather than knitting it together. Paul de Lagarde summarized this in one of those phrases which made him so popular: ” That man is not free who can do as he likes, but he is free who does what he should do. Free is he who is able to follow his creative principle of life; free is that man who recognizes and makes effective the innate principles which God put within him.” Such freedom led to an organic view of man and the state. Not only was liberalism mistaken, but socialism as well. Social democracy, Diederichs claimed, was mechanistic; a true people’s state was viable only if it reorganized society in a more meaningful manner, according to the aristocratic principle, the only environment in which men could unfold their real inner selves.” Langbehn concluded that this corporate structure not only fulfilled the aristocratic principle but was also in tune with the Germanic past.
Significantly, this ideal urged these men to advocate only one concrete social reform: each worker should be given his own plot of land. Again, the reform’s justification was sought not in terms of material welfare within the framework of the movement’s general ideology – factory work removed man from the all-important contact with nature. Yet these men desired the transformation of their ideology into deeds. It is of great significance that while Diederichs used the word ” theosophy ” in the first prospectus of his publishing house, he came to be critical of that movement-not because it was spiritualist, but because it was too purely speculative in nature. The feeling about infinity must lead to deeds, and to his important journal, he gave the name Die Tat, ” The Deed.” Paul de Lagarde had already made it plain that while something was accomplished through the understanding of true ideology, it was even more important to transform such ideals into serious practical action. It was an ” idealism of deeds” which such men desired, deeds which helped to create a nation resting upon this idealistic foundation. Through such a concept, ideas of force came to play an important role in this ideology. For Langbehn, art and war went hand in hand. His proof was by a method representative of his whole work. Shakespeare’s name meant, after all, shaking a spear, and this for him was proof of the connection between art and war. Moreover, in German spear (Speer) and army (Wehr) are words which rhyme. Thus in the Germanic past, true individual development had gone hand in hand with war.
The fact that Nazism as it was played out was a cocktail of bizarre belief and latterly borrowed practice may be hard for us to get our heads round at this remove, but it doesn’t make it any less real as a phase of history. For Hannan now to claim that Nazism was simply an extreme form of socialism, simply because the Nazi party bought in some centralised (though chaotic) planning and Mefo bill spend-and-lie economics to make its weird vision a reality, is quite simply wrong.
Similarly, the idea that simply because Mussolini and other Italian fascists had bought into some revolutionary socialist activity before the first world war doesn’t mean that the Italian fascism that emerged post-war was simply a continuation of that trajectory. We know that Mussolini, for example, was influenced by the turn of the century, Nietszche-influenced ‘counter-culture’, a reaction to the modernity of ‘reason’ and ‘progress’ i.e. the antithesis of Marxist thought. Further, as Philip Morgan sets out, Mussolini and his fascist colleagues (like Hitler) were heavily influenced by their experience of the trenches:
In the sublimation of the war experience was rooted one of the most powerful myths of the war, that of ‘combatantism’….[The] idealised relationship between junior officers and their men. comradely yet elitist, was the basis of the hierarchical organisation they wanted to impose on their own societies. The point was that the hierarchy was new. Based on performance, the merit earned by self-sacrificing service to the nation, it replaced the conservative hierarchy of birth and wealth (p.25).
Again, Hannan’s claim that fascism emerged as a linear consequence of socialist doctrine and pre-war practice, with no other material or ideational influence, is simply wrong.
Having got history quite wrong Hannan makes his call for reconciliation:
Whenever anyone points to the socialist roots of fascism, there are howls of outrage. Yet the people howling the loudest are often the first to claim some ideological link between fascism and conservatism. Perhaps both sides should give it a rest.
At least we can agree on this, though a call for us all to calm down a bit coming at the end of a piece dedicated to doing just the opposite does jar a little, I have to say.
When I wrote my somewhat controversial piece on the potential for the rise of a 21st century version of fascism within Hannan’s own Conservative party, I did so explicitly on the basis that fascism and Conservatism have no core ideological linkage, though there may be some operational method crossover. While Anthony Painter of the Extremis project and I disagree on many things, we both see a real danger of a nasty extremism emerging within the Conservative party post-2015 – an extremism alien to Hannan’s own liberal/free market tradition (I’d argue there’s a tendency to the exclusionary within liberalism, but that’s another blog).
Whether or not any such emerging extremism might come to be defined as fascistic – that will depend on the precise form in which it emerges, and I am not implying that Anthony agrees with me on this – any danger of its emergence, under the leadership of the Tory party’s darker forces suggests that Hannan might be better employed at home, not engaging in attacks on the Left which are both historically ignorant and hypocritically framed as calls for peace.
* I am reminded by @sohopolitico that Hitler also said in 1930: “Our adopted term ‘Socialist’ has nothing to do with Marxian Socialism. Marxism is anti-property; true Socialism is not. As noted, Hitler may not be a very reliable source on Hitler.
Last week’s announcement on the 10p tax rate was most notable for the fact that it was embedded in Labour’s fiscal conservatism: the width of the income band within which people will be eligible for the 10p rate will depend on how much can be raised from the new tax on properties valued at more than £2m.
This ‘we cannot spend what we have not saved from elsewhere’ mantra of fiscal arithmetic is now at the heart of Labour’s economic policy, and is being firmly established as something that must not be questioned. Thus all IPPR papers reflect the assumption that all initiatives must be ‘cost-neutral’, and policy seminars run by Progress and the like always work from the starting assumption that ‘tough .choices’ around spending will have to be made.
None of these papers and seminars seem to set out exactly how such fiscal conservatism policy will bring about economic growth. This is an understandable omission. Shuffling the existing quantity of money from one part of the economy to another more ‘growth-focused’ one, or through a process of ‘predistribution’ (either via tax or investment in education etc.) may have benefits in the longer term, but it does little or nothing of what Keynes put on the tin about the need to boost demand and thus investment to create a virtuous circle.
There are two explanations for Labour’s current policy speak.
First, the leadership may have a Keynesian plan up its sleeve, to be whipped out post-election, and that the toothless fiscal conservatism they now espouse is for show only, in order to demonstrate to a supposedly economically illiterate public that they are ‘responsible’ with the ‘nation’s finances’ (though these are not, as Chris points out, the same as the government’s). Given Ed Balls’ background and previous espousal of Keynesianism, there may well be something in the notion that there is some kind of pact of silence in place. If so, I can understand it, but I certainly don’t condone it; it would show a shoddy disregard not just for honest engagement with the electorate – itself a recipe for continued political disengagement as well as the continued embedding of fiscal conservatism as the policy norm – but would also reflect the almost total usurping of power by a narrow elite within the Labour party, despite all the showy promise of opening up policymaking to the wider party.
Second, the leadership may be genuinely convinced that redistribution and predistribution of existing resources is both safest (in terms of the bond vigilantes etc.) and sufficient to create growth. In essence, it seems, Labour would be opting for an ‘at least do no harm’ strategy, accepting that there can and should be no quick fixes to the austerity-made mess in which we now find ourselves.
But I also wonder if this assumption that at least no harm will done by fiscal conservatism is actually justified.
If we think through how fiscal conservatism is actually implemented, we see how disruptive it can be too how the economy works overall. If public services or investment can only initiated when sufficient money becomes available from elsewhere, and if this money only become available if the economy at least stays stable in real terms, then the risk to efficient investment becomes ever higher, and when doubts grow about whether investment (and consequent demand) will actually take place, any confidence fairies which might have been emerging gingerly from the shrubbery of austerity may soon take flight. Investment becomes perceived as ever riskier because of the unknowns ahead, and the downward spiral continues into long-term economic malaise.
In fact Friedrich Hayek, hardly a fan of major public investment, saw something of the dangers associated with a cack-handed implementation of economic policy which doesn’t take account of the real dynamics of investment and confidence. His proposals for the Denationalization of Money are primarily based, not as might be expected from later interpretation by the right, on the belief that states’ monopoly of currencies tends to lead inexorably to run-away inflation, and that inflation ruins economies by removing the value of assets. His point about inflation (any level of inflation) is rather narrower, and focused on how the real economy reacts to it:
If the value of money is so regulated that an appropriate average of prices is kept constant, the probabilities of future price movements with which all planning of future activities will have to cope can be represented……..Though in this case the unpredictability of particular future prices, inevitable in a functioning market economy, remains, the fairly high long-run chances are that for people in general the effects of the unforeseen price changes will just about cancel out. They will at least not cause a general error of expectations in one direction but on the whole make fairly successful calculations based on the assumption of the continuance of prices (where no better information is available).
Where the divergent movement of individual prices results in a rise in the average of all prices……the individual enterprise will have as little foundation for correctly foreseeing the median of all the movements as for predicting the movements of individual prices, it could also not base its calculations and decisions on a known median from which individual movements of prices were as likely to diverge in the direction as in the other. Successful calculations, or effective capital and, cost. accounting, would then become impossible…….These skewed shifts of the distribution of price changes to one side of constancy which changes in the quantity of money may cause, and the resulting difficulty of foresight, calculation and accounting, must not be confused with the merely temporary changes in the structure of relative prices the same process also brings about which will cause misdirections of production (pp 71-73).
Hayek’s concern, then, is that the tendency to inflation creates, by its very nature, investment inefficiency and risk aversion. Replace the need for businesses to be sure about price with the need for businesses to have some security around demand – whether that be higher or lower – caused by the government’s vacillation around it’s own investments – essentially it’s own reluctance to lead the way, and you have the same kind of recipe for long-term underinvestment as that set out by Hayek.
Indeed, you could argue that at least with the Coalition’s current brand of fiscal austerity – aimed as much as a long-term retrenchment of the state and the establishment of a permanent and sizeable underclass – we at least have some certainty about what to expect, and can plan accordingly – whether that be finding safe havens for corporate cash (thus maintaining low interest rates for firms which thriveon increased inequalities), the development of the foodbank industry or simply being poorer/developing survival modes on the margins.
What we seem to have with Labour’s current approach to policy is an unappetising alternative: either accept we’re being lied to for our own short-term good, or accept the consequences of Hayekian logic for our economic future. There is still, of course, time to rescue the situation, by developing a credible economic policy based on a proper understanding of what money actually is.
It does occur to me that, under the government’s proposals, it will be possible for a child to be “troubled” by poverty but not actually made poor by it.
This is how it works.
The government consultation on measuring child poverty proposes that some kind of combined measure be created to measure poverty, using indicators not related to money. The eight indicators suggested, of which just three might be said to be directly income-related, are:
Income and material deprivation
Parental skill level
Access to quality education
Yet the existing definition of a “troubled family” is of a family with five or more of the seven characteristics (of which three are also directly income-related):
No parent in the family is in work
The family lives in poor quality or overcrowded housing
No parent has any qualifications
Mother has mental health problems
At least one parent has a longstanding limiting illness, disability or infirmity
The family has low income (below 60% of the median)
The family cannot afford a number of food and clothing items
Sp depending on how child poverty measure ends up being calculated, it is perfectly conceivable that children who are poor in the obvious sense will be reclassified as “troubled”. Anyone else see what’s going on here?
Like Peter Watt (also trained as a nurse), I acknowledge readily that there are deeply embedded problems in the NHS, and that standards of care are often poor, and probably getting worse. Mid-Staffs is indeed just the tip of the iceberg.
Unlike Peter, but like Chris, I regard these problems as institutional (and therefore power-related) rather than those of a “cult” (or rather than cultural). Consequently, I believe that it is primarily through institutional change (i.e. changing power structures) that NHS care will be changed for the better, rather than through increased managerialism, or through hanging effigies.
If I were (a socialist) Lord Francis, I’d make three central recommendations on how to change the NHS to make it more ‘caring': one short-term, one longer term, and one – the main focus of this piece – to do with the physical status of the hospital institution.
1) Short term power change
Instead of loading the issue of safe staffing levels on to NICE, I’d recommend the imposition of weekly management/staff side meetings at Trust level to review the past week’s levels and trained/untrained mix, and allow staff side to argue why the levels/mix were not enough, if that’s what they think, with management side able to agree increase or defend their position. In the event of no agreement, the matter should be referred immediately to a CQC adjudicator. Repeated ‘losses’ for management side by the adjudicator would result in prompter inspection. This puts the power in the hands of frontline staff, but institutionalizes it more than the current whistleblower stuff.
2) Long term power change
2) Instead of suggesting that trade unions split their ‘terms and conditions’ function from their ‘work standards function’, which will be counterproductive, I’d recommend to the TUC and the broader union movement that it should redevelop and revitalise its existing structure of local Trades Councils, brining together all unions in a geographic area with public service users to come to their own conclusions and action plans about those services. This is obviously about more than hospital/care home, but these discussions would be a core feature. Such action plans might include use of the Foundation Trust governors (whose role Francis wants to bolster, but in an ineffective way as it stands) to push hospital management into change demanded by both staff and users, but it might also include community-wide consent to industrial action if management don’t listen or respond.
3) Physical change and nurse power
This one may seem a bit odd, but I think our hospitals are now designed wrong, and this is contributing directly to reduced quality of care.
From the early 1980s onwards, most hospitals replaced their old ‘nightingale’ wards, which were long rectangles with beds down each side, numbering 26-32 in total. Generally there’d also be two or three side rooms, reserved generally for people with infections who were being ‘barrier nursed’ or for shouty/aggressive/confused people who were really disturbing the other patients. The nurses’ desk, which was separate from the nurses’ office, was smack bang in the middle of the ward. Shift handovers generally took place in the office (though I often preferred to do it bed to bed if I was in charge).
Nightingale wards were replaced with ‘bayed’ wards, with each bay containing 4-6 beds, and the nurses’ desk moved to next to the office, somewhere between but not in the bays.
Nobody, as far as I know, has ever done any proper research into whether this major physical change to the way nurses had to go about their work changed the quality of care. Reflecting the emerging market-driven ideology of the time, anything that was done was around ‘customer experience’ and such, and there was an in-built assumption that the new wards were better because less people less meant less noise and more privacy. The anecdotal evidence – that nurses found it easier to work effectively, and that many patients felt security in numbers – was dismissed as resistance to change.
But in fact what little research there is does suggest I may have a case. Pattison and Roberston, writing in 1996, when both types of ward were still around, concluded that, even in gynaecological wards (where care needs around the ‘activities of living’ like drinking tend to be less than in medical/elderly wards) :
The aim of any ward layout at its most basic level is to provide a safe environment for patient care. This involves the nurse in charge of the ward being able to observe junior staff and monitor their activities, as well as being able to see the patients In turn the patients should be able to contact a nurse at all times. The results show that there is no doubt that patients feel these aims are better fulfilled on the Nightingale ward. On the bay ward, the lack of information on nurses’ whereabouts and the activity of the rest of the ward (e g the progress of ward rounds), is a major area of concern.
With the benefit of Mid-Staffs hindsight, the authors’ ensuing recommendation that the safety issue could be resolved by “[m]ore sophisticated information systems… for bay wards , and that “[m]ost patients (75%) expressed a preference for the bay ward layout, and on this criterion alone there appears to be no reason not to encourage their continued introduction” seems strangely glib, but this perhaps reflects how much worse things have got in the 18 or so years since the research was done. In 1995, bay wards were the way to go, standards (and staffing levels) would only increase, and a bit of concern about the new wards not being at all conducive to patient care could be dismissed in the Advanced Journal of Nursing Care.
Give this background, I do increasingly wonder if this is the nursing equivalent to the belated discovery that smoking causes cancer, caused by the continued determination of those with a vested interest to promote other possible causes, such as the early 20th century tarmac-ing of roads (this 1956 article provides a fascinating insight into the contentions of the time).
That is, are we ignoring a pretty obvious correlation between big changes in the way nurses have to carry out their work because of walls in between patients and the decline in standards, which appears to have taken place over roughly the same period of time (I nursed in the 80’s to early 90s, and again in the early 2000’s when I came back from overseas and before my back gave out, and I can attest personally to that decline, for what it’s worth)?
Are we ignoring the possible ward labour-poor care link, because, as with smoking-cancer, there are possible, though unproven explanations which fit better today’s dominant right-wing narrative: ranging from not enough ‘leadership’ to ‘too posh to wash’ and onto the more generic ‘broken society’ stuff (while this is dominant, I don’t discount the ‘leftie’ explanation that it is all to do with understaffing, though I do think this is contributory)?
I am not, I should stress, arguing that declining standards may be solely down to the ergonomics of nurses’ movements and visibility. It’s probably more complex than that, and to do with the way in which some of the feeling I used to experience when I walked onto a ward for a shift – that I was joining my team for a new day’s battle – may have been lost, and with it the inbuilt solidarity around keeping up standards. You don’t have to be a believer in the principles of the Panopticon to acknowledge that, when everyone can see what everyone else is up to for most of the whole 8 hours, then everyone’s going to stick the effort in. On an open ward, my team developed an almost telepathic understanding of when a colleague needed a quick hand – for example, when Mr Jones, the heavy left-side stroke patient, needed the two of you to pivot from bed to chair, and this sense of teamwork extended to the physios, the OTs, the cleaners, and even the odd junior doctor.
Put more simply, when I see nurses walk down a ward nowadays, they seem to do it more slowly than I did. There must be a reason for that.
So where to go with this? Of course, this may be no more than the hunch of an ex-nurse, desperate to resolve the apparently conflicting beliefs that it was better in his day and that today’s nurses are just as good as we were. But I also think, with all due humility, that it’s something worth checking out properly. It seems to be that this is absolutely the kind of thing that Ben Goldacre and his Innovation Unit mates should be developing a Randomised Control Trial for, to see if a return to the physical old days really does create significantly better care. Of course, a Trust would have to be persuaded to knock through a wall or three first, to create a new Nightingale, but I suspect that’d be much better investment than implementing some of the managerialist crap that Lord Francis has come out with.