economics

Socialism: What If The Labour Party Had Won?

Even though the Conservative Party won a comfortable majority in the December 2019 UK General Election, it’s still worth talking about what life would have been like under Jeremy Corbyn’s socialist Labour Party.

What would happen when the economic policies of nationalisation, massive spending and capital controls started yielding truly negative results? Would the Labour Party move towards the centre ground of politics again, or double down on more state ownership?

——
Please visit our website to download or stream all our previous episodes and to read our articles.
Remember, you can now subscribe on YouTube – https://www.youtube.com/channel/UCWzAT–UxzErq_UU5SCUtFg
This edition can be found here: https://youtu.be/2AAIoeDHNKo
Please reach out to us on Twitter:
You can find us at the following podcast aggregators, and more:
Please subscribe and leave a review.  We don’t want your money – just share, listen, subscribe and watch!

What have Cowperthwaite and Corbyn got in common?

If you can’t measure it you can’t manage it – so the mantra goes.

As Philip Hammond gets ready to deliver his budget speech, I’m reminded of that phrase, which I myself have used on occasion in order to justify gathering more data in business in order to be able to make decisions.

You can see the appeal of it. When you need to manage something, your instinct is to find out as much about it as you can first.

Then after you’ve instigated some changes you want to know how it’s gone so you go about getting some new measurements and probably do a comparison.

It’s in that vein that the Office for Budget Responsibility does its thing and produces a whole load of numbers and statistics for government, opposition and the media to pore over at budget time.

Some of the figures have already been trailed and leaked so that we have a sneak preview of the kinds of policies and decisions that the Chancellor will talk about.

It’s the usual politics. Can spending be increased (because that’s seen as the politically acceptable thing to do) and will the deficit be narrowed further so that the Tory party can somehow hang it’s hat on “austerity” as being a necessary evil?

It’s all about the numbers and it’s all about whether those numbers give Spreadsheet Phil the room he wants to either spend money on things or change tax policy.

MPs on the right of the Conservative party have lined up saying cut taxes, and those on the so called centre ground talk of increasing “investment”, meaning spend, spend, spend.

But they all do it based on the OBR forecasts and measurements of the economy.

Now I could start talking about the futility of “forecasts” and even try to do a study of how wrong they always are. I could also invoke the Heisenberg Uncertainty Principle: whatever you study, you change.

But actually, I’m reminded of economic hero Sir John Cowperthwaite, the financial secretary of Hong Kong in the 1960s, who was in a large part responsible for the economic miracle of this tiny colony, turning it into the powerhouse it is today while rocketing up the global league tables of wealth.

One of the things Cowperthwaite is famous for (other than the genius of positive non-interventionism) is refusing to collect macroeconomic statistics.

In his view the trouble with collecting figures, say the measuring of economic growth, then some idiot would want to try and control them.

He literally sent British government officials packing when they came from Whitehall to insist on the data collection.

His view was that you should just do what’s right to encourage growth and that other good effects would follow on.

That more money in people’s pockets would mean higher living standards all round.

Now we all know that the major political parties in the UK all have statist policies (although some are obviously worse than others).

But I think I’ve found a similarity between how Cowperthwaite treated the numbers and Corbyn-led Labour.

No I haven’t gone mad, and no, Corbyn hasn’t suddenly started espousing small state, low tax, free market economics like Cowperthwaite.

But what him and his cohort do have in common is that they so don’t care about the numbers. Oh they will use them today to try and bash the Conservative party to paint them as being bad at government and bad for the country. But that’s just politics as usual.

If Jeremy Corbyn and the socialist left come to power then they will act entirely without care for the numbers.

They might invent some forecasts of their own of course or rely on some “economists” they like so as to support their policies. But in truth they are acting on ideology. They BELIEVE they are right and so act because they know that they are on the right track. Regardless of what the evidence may ever articulate.

But this is what the other side is lacking. Ideology is gone. Replaced by what George Osborne calls “wise government intervention”.

Sir John Cowperthwaite believed in something. It happened to be economic freedom and non-interventionism. It was also massively successful, unlike the catastrophic policies of socialism in everywhere it’s been tried.

But he didn’t let the numbers get in the way. He chose not to measure and also not to manage.

It’s time for ideology again and it’s time to for someone to articulate positive non-interventionism. Something tells me Philip Hammond isn’t going to do that in his speech.