The 2020 Public Services Trust Blog

The Financial Times came out for their party of choice today in typically measured fashion.  Their editorial picked holes in all three parties’ agendas, but argued that the Conservatives were the best of the bunch.  Maybe the public will feel the same this Thursday, who knows.

The FT’s ideal-type model was what struck me as most interesting:

“We stand for a liberal agenda: a small state, social justice and open international markets. But we do have a vision of the changes needed for economic and political renewal. It is on this basis that we judge the fitness of the contenders for power.”

But is a liberal agenda, small state, social justice and open international markets a plausible mix?  I find it hard enough getting my head around Matthew Taylor’s trilemmas, but could this be a quadrilemma?  This would be a situation where three out of four objectives could be achieved, but not all four together.  Why?

• Do a small state and social justice mix?  Jury is out on that one.
• Does being economically liberal preclude corrective spending and positive discrimination?
• Who can monitor the liberal agenda when the state is small?
• Can open international markets be effectively navigated by a small state?
• And can social justice ever be achieved within this context?  Maybe within one country, but internationally?

I’m not sure whether this is actually a quadrilemma, but its certainly a bunch of big policy blocks with similarly big ideological and practical considerations.  For example, some have argued that development in some parts of the world depends upon the underdevelopment of the others.  Others have pointed to the weakness of small states within a globalised market economy.  In this country, economic liberalism and social liberalism have been difficult things for a government to achieve together.  I find it hard to imagine that the FT would ever get the government it wants given these criteria – but I guess we will find out!

Buried in the Financial Times today is an interesting piece by Quentin Peel on a row erupting in Germany over the extent and scope of the welfare state.  He writes that

“It is a classic debate between liberals, conservatives and social democrats over the right and wrongs of welfare for the long-term unemployed, and about who pays to fund Germany’s generous but over-burdened system.”

Worth a quick read, if you can tear yourself away from the Royal Rumble of letters going on between of the most prominent UK & international economists.  Two letters in the FT today (including Skidelsky & Stiglitz as signatories) to rebut one in the Sunday Times – and most remarkably, each shadowing a distinct party line on appropriate timing.  So after months of trying to convince the voters of distinct dividing lines, it looks like the economists have done the job for the parties. 

I am not an economist (big disclaimer), but after reading Shiller, Taleb etc last year I would be deeply suspicious of the ability of either side to predict with anything with certainty – though that seems to be instinctively closer to today’s position than Sunday’s.  Tim Harford has written saying something similar, but (perhaps sensibly) doesn’t take sides.  The FT leader, however, was much stronger – read here. 

hat tip: Alisdair & Becca

There’s a typically reflective piece in the FT this morning from Martin Wolf, pulling out his key themes from the World Economic Forum in Davos.  Strangely, I wasn’t invited this year, so I will have to take his word for it…

The article considers the short and the long term challenges for the global economy, and the killer question of if and when to withdraw fiscal stimulus and start cutting public spending.  The question is a global one, but is utterly relevant to our own election campaign. 

Labour accuse the Tories of wanting to ‘strangle the recovery at birth’.  The Tories accuse Labour of ignoring the ‘great bulk’ of the UK’s structural deficit.  There are risks to both strategies, but Wolf also points to the longer term challenges of financial sector reform and a rebalancing of the global economy. 

What interested me was his perspective on leadership and consensus.  An ‘impressive ability to deal with the crisis’ was shown, but now we are back to the push and pull of everyday politics, it may be much harder to generate the kind of global consensus and willingness to work together that pulled us out of the crash.    

Speaking of which, there is an interesting article in this weeks New Yorker (which can be read online) about the new Tea Party movement in the US.  Really fascinating to see how a disgust with mainstream politics (and mostly with the ‘liberal’ elite) has led to such an organised, collective set of protest movements.  This is definitely not a coalition that would make many moderates or Obama supporters (or indeed me) feel comfortable, but its fascinating to see how grass roots mobilisation is impacting on formal US politics.