The Nasty Party?

BY STEWART SLATER

“Any man who is not a socialist at age 20 has no heart. Any man who is still a socialist at age 40 has no head.”

One of those zombie phrases whose origins are obscure, and so it gets ascribed to Churchill. Your correspondent, a cradle Thatcherite, always felt that such a characterisation was unfair for, while he has enough self-awareness to realise that the phrase “bleeding heart” is unlikely ever to be applied to him with justice, he does not consider himself to be utterly uncaring.

Fair or not, the sentiment has had remarkable longevity. The left is the nice side, full of caring progressives who only want to do their best for their fellow man (woman/those whose gender identity lies somewhere between or indeed, beyond, the two). If the average Labour MP is never less than earnest, and, in many cases, always appears less than 10 seconds away from bursting into tears, it’s because they just care too much, dammit.

By contrast, the right are the nasty ones, only interested in their own benefit, merely a reform of the Human Rights Act away from re-introducing child labour and never satisfied unless they are immiserating the poor. One formerly prominent Conservative, now sadly (if profitably) reduced to touring performances of her Ted Heath tribute act, leant so far into the cliché that she described her fellows as the “Nasty Party”, although her lack of humour probably prevented her seeing the irony in her later support for the “Hostile Environment” policy.

That a sentiment has risen to the level of cliche does not, of course, make it true. None of the blows rained down on Monty Python’s Black Knight killed him, but successively lopping off his limbs, it is hard for the neutral observer to say that they made him stronger.

To those of a left-wing cast of mind, the current cost of living crisis merely provides the latest proof that those on the right are never happier than when oppressing the lower orders before repairing to an exclusive club for a cocktail made from the tears of the poor. For, with inflation heading for 10% with the rapidity of a Z-list celebrity who has seen a paparazzo, what could be more obvious than giving pay rises to all employees? What other reason could the government have for urging restraint than the deep deformity of character which marks out the right? Inflation is a problem today, and it demands a solution today. People’s purchasing power is diminishing, and it needs to be topped up. Only the morally bankrupt can fail to see that.

Even those who do not remember the stagflation of the 1970’s and who have not been paying attention to such bastions of economic good governance as Zimbabwe or Venezuela (which, as every good socialist knows, does not represent real socialism) can probably remember from their GCSE History course the hyperinflation which ravaged Weimar Germany and turned stacks of notes into toys for children. For inflation is a) dangerous and b) difficult to eradicate once it gets embedded in the system. If wages rise to match prices, demand is not reduced, and history teaches that it is only demand destruction which ultimately cures inflation.

History may well decide that Central Banks in general, and the Bank of England in particular, were too slow to act to fulfil their inflation-fighting mandate, but we are where we are. Large pay rises today raise the risk of greater pain in the future, either through an inflationary spiral, or because the authorities are forced to raise interest rates further and faster than they otherwise might.

But if the government’s position can most charitably be described as “take some pain today to avoid more pain tomorrow”, what of the opposition? Given rapidity and frequency of policy changes under Sir Keir Starmer, and the gap between my composing this and your reading it, any attempt to define Labour’s policy in writing will necessarily involve a greater hostage to fortune than your correspondent is happy to give. It appears that officially, the party is for pay rises but against the railway strikes, although, to the forensically minded, the fact that front benchers have had to be explicitly banned from attending picket lines might be taken to imply that the policy is far from unanimous. As might the seeming failure of several members to receive that particular email. While the leadership may be influenced by the government’s attempt to define the industrial action as “Labour’s strikes” – an act of such staggering chutzpah that it can only be applauded – the rank and file seem rather more convinced that the workers for pay rises are on the side of righteousness and justice.

This is doubtless well-intentioned – inflation is not fun for anyone least of all those on low incomes. People are suffering, and those on the left wish to help. In this particular case, however, there is a real risk that the proposed cure is worse than the disease. A brief inflationary blip to 10% is one thing, a sustained period of double-digit price rises is another.

Economics is, like archaeology in Raiders of the Lost Ark, “not an exact science”. Indeed, we might reasonably question whether it is a science at all – it often seems to have the predictive accuracy of a tarot-reader on a bad day and it has “schools of thought” which “hard sciences” such as physics lack – there is, for example, no “Oxford theory of gravity”. And so, in the absence of further evidence, we might ascribe the differences to alternative economic approaches.

But, time and again, we see the left pushing policies which solve an immediate problem but display little concern for the longer term. Keir Starmer seemed to call for at least five of the three Covid lockdowns the government imposed in England. The more left-leaning authorities in Wales and Scotland (lest this be thought a party political point) were much keener to impose restrictions, and much more reluctant to remove them. The situation was undoubtedly serious and, in pre-vaccine times, lockdowns were the only policy known to work, but they were not a cost free intervention. There is a huge NHS backlog. Childrens’ education and development have suffered. To reach for knee-jerk lockdowns every time the case numbers spiked was to ignore the very real longer term effects of the policy.

We might, if we were charitable, ascribe the shenanigans over Brexit to the left’s concern over the impact on the economy rather than writing it off as a multi-year middle class tantrum, perpetrated by a group of people unused to not getting what they want. But here again, those seeking to interfere whether Keir “second referendum” Starmer or Jo “just ignore it” Swinson, never seemed to consider the longer term damage done to democracy by failing to enact the result of a popular vote. Staying in might have added a couple of points to GDP but at what cost? A trip over the channel to France where the second and third largest blocs in the new Assemblee Nationale can crudely be described as “the commies and the fascists”, one led by a man regularly accused of anti-semitism, the other a woman frequently described as islamophobic suggests that voters can only be ignored for so long before bad things happen.

In truth, many of the differences in politics reduce not to a Manichaean struggle between good and evil, but to differing time horizons. Both sides generally want their constituents to lead happy, fulfilling lives. To the left, convinced by the good government (and left-wing politicians in particular) can do, that means regular interventions to solve short term problems. To the right, sceptical of the good government (and left-wing politicians in particular) can do, that means a greater focus on the longer term risks of any short term fix. One side wants to give people a fish, the other is willing for them to get a bit hungry while learning to catch them.

Stewart Slater works in Finance. He invites you to join him at his website.