Jermey Warner right on it like a car bonnet ...
t must have been through gritted teeth that Kwasi Kwarteng, as one of his first acts as the new Business Secretary, this week published a consultation document on state aid. As an ardent free marketeer, Kwarteng belongs very much to the Ronald Reagan school of thought on such matters, or rather, he used to. “The nine most terrifying words in the English language”, Reagan opined back in the Eighties, setting the tone for the next several decades of neo-liberal policy making, “are ‘I’m from the Government and I’m here to help’”.
Coorrrr, that's music to my ears, I'd forgotten that one! And now it comes back with all its resounding glory ...
"The nine most terrifying words in the English language are: ‘I’m from the Government and I’m here to help'"
But. Why does there have to be a but? But is bad ...
But the world has changed, and Kwarteng with it. Being a free marketeer today means something quite different; following the example of Lee Kuan Yew’s Singapore – often held out as a shining example of small state capitalism in action, but in reality one of the most activist and protectionist governments on the planet – there is a sense in which we are all interventionists now.
Oh dear. Then next up he "buts the but", negate the negative, good! ...
As it happens, there is not much in the consultation that would seriously worry believers in the old ideology. “We will not, of course, return to antiquated command and control methods of economic management, or encourage wasteful use of public money by propping up failing businesses”, Kwarteng says in a foreword.
Indeed, reading this document, you wonder how it was that “level playing field” considerations came to be such a totemic issue in the Government’s negotiations with the EU, as it would seem that the UK intends to abide not just by the principles of the EU state aid regime, but also by much of its underlying detail – a case of taking back control in order not to use it.
Blimey, now a nonetheless, aka he buts the but of the but. How many negative of the negatives is that, ah, bad ...
Nonetheless, nobody could mistake the distinct shift in tone, already heavily advertised by Boris Johnson, who has described himself as a “Brexity Hezza”. Michael Heseltine, it will be recalled, wanted to intervene before breakfast, lunch and dinner.
The apparent success of the Government’s vaccine strategy seems wholly to support the new approach. By partnering with the private sector, the Government has managed to spawn a whole new industry in vaccine production. The UK has always excelled in vaccine research and development, but it has substantially relied on global supply chains for the doses themselves, as indeed for delivery of much else besides.
Necessity has changed that balance, encouraging the government to believe it can repeat the trick in multiple different industries in pursuit of its levelling up and zero carbon agenda. It would be wise to tread carefully.
The swing back to more interventionist strategies is in part merely a cyclical matter. Globalist principles are being challenged almost everywhere, not least China, which having done so well out of 40 years of explosive growth in international trade, now pursues a “dual circulation” economy which targets self sufficiency in almost everything from computer chips to aviation and bioscience.
Oh that's butty bad. Back and forth goes Jeremy, hedging this way and that, shape shifting like a fortune teller who sounds plausible but actually says nothing! These MSM pundits, how do they get away with it, imagine if I was equivocal like that! Then ...
Covid, it would seem, may end up performing much the same role as the Second World War in ushering in a new era of interventionism and deliberately pursued self sufficiency. When the pendulum swings, as it plainly is at the moment, it is hard to resist.
A less efficient economy where duplication and protectionism become the norm may be a price Western electorates are prepared to pay for a greater sense of national resilience.
The other danger is that interventionist policies end up, as they did in the UK in the years after the War, in greater welfarism, in profligate attempts to pick industrial winners, in pork barrel investment, and in state bungs to save otherwise obsolete jobs.
It’s a slippery slope once industry believes itself to be underwritten by state aid and orders. Far from catalysing economic advancement, it can have the opposite effect in holding it back.
And that's the awful butty truth. History is indeed repeating itself, as I said it would, Covid is like WWII. We are in 1944, the beast is not dead yet, but we're nearly there. And then we'll have the long slow decline and fall of a hyperactive, over-reaching state, the 1945-79 period, to follow.
I'll but you no buts.
SoD
Reagan's trope about "I’m from the Government and I’m here to help" was made in the interest of reversing the New Deal and giving control back to banks, corporations (including defense contractors), and the uppermost class. The United States now has wider disparities of wealth between rich and poor than any other major developed nation, with corresponding disparities in health, education and overall quality of life.
It's a small price to have paid to be rid of the welfare queens Ronnie claimed were living lives of luxury at taxpayer expense.
Posted by: Bob | Friday, 05 February 2021 at 19:41
Pshaw
Posted by: JK | Saturday, 06 February 2021 at 01:03
The United States now has wider disparities of wealth between rich and poor than any other major developed nation
"So long as the gap is smaller, they'd rather have the poor poorer", eh Bob? ...
https://speakola.com/political/margaret-thatcher-on-socialism-last-speech-1990
SoD
Posted by: Loz | Sunday, 07 February 2021 at 11:12
SoD, that's just as much fairy dust as Reagan's imaginary welfare queens. One characteristic common to nearly all right wingers, including those who claim to be something else, is the inability to believe people who tell you what you want to hear don't have your best interests at heart or are manipulating you.
Since the more collectivist side of the political spectrum is most concerned with fairness by definition, an argument that they really want to keep the poor poorer is idiotically convoluted; especially when the right makes the simultaneous argument the left just wants to "give people stuff". Oddly enough, they aren't concerned about giving rich people stuff, or that it might hurt their morals (e.g. Trump's tax giveaway to the rich and corporations):
"For the wealthy, banks, and other corporations, the tax reform package was considered a lopsided victory given its significant and permanent tax cuts to corporate profits, investment income, estate tax, and more. Financial services companies stood to see huge gains based on the new, lower corporate rate (21%), as well as the more preferable tax treatment of pass-through companies.4 Some banks said their effective tax rate would drop under 21%."
https://www.investopedia.com/taxes/trumps-tax-reform-plan-explained/
Posted by: Bob | Sunday, 07 February 2021 at 15:06
"Since the more collectivist side of the political spectrum is most concerned with fairness by definition"
Really?
You mean like the collectivist Soviet Union, or the, er, benevolent guiding hand of the Chinese Central Committee?
Posted by: David Duff | Sunday, 07 February 2021 at 18:53
Yes, David, anyone with any collectivist inclination at all is just like Joe Stalin. Ya got me there.
Posted by: Bob | Sunday, 07 February 2021 at 20:35