A 10 o’clock Conflation
April 1, 2011
I’ve been watching 10 o’clock Live over the past few weeks, to see if Lauren Laverne will ever be trusted to talk about the news without being pre-recorded, to see if Jimmy Carr will finally catch on to the fact that one-liners don’t really work for satire, to see if David Mitchell will finally accept that he’s not John Humphreys, and to see the hunted look in Charlie Brooker’s eyes as he realises that if he wasn’t on the show he’d be taking the piss out of it. Mr Brooker has discovered too late that the way in which the British Establishment crushes dissent is by absorbing dissenters within it, like an extremely well-mannered amoeba.
To be fair, it’s got marginally better in recent weeks. Last night’s show wasn’t too bad, and it did have an interesting illustration of a conflation that’s doing the rounds of left-wing thought, which I’d like to bring out.
Each show has a panel discussion on a major topic of the day, this week focusing on the deficit as a consequence of Saturday’s protests. On the panel were Tory columnist Danny Finklestein (who was comprehensively beaten), socialist gnome Laurie Penny and an economist whose name I immediately forgot. This was intentional – she ruined her credibility by claiming that we didn’t need to deal with the deficit immediately because our debt was short-term, unlike that of Greece. This is simply wrong – over half of gilts in issue have redemption dates in 2019 and beyond. It’s also wrong in relation to her point – if there are years left before we need to refinance our debt, current interest rates are less important than long-term interest rates, so we have a little more breathing room before we need to deal with the deficit. In contrast, if our debt was short-term, we’d need to deal with it immediately. The former was an argument made by the left immediately after the election, but seems to have fallen out of favour lately – which is a shame, as it’s actually a good argument for a slight delay to the cuts.
While we can probably ignore any substantive point made by the economist on the basis that she made such a basic error, there was an interesting interplay between at least one of her points and the points made by Gnomegirl. The economist said that there was no need to tackle the deficit in the short term, as a strong investment in infrastructure like that undertaken by China and the US would help kick-start growth. As I pointed out the other day, the amount of growth this strategy would require is infeasible without also taking deficit-reduction actions. However, the economist’s point was immediately followed by Gnomegirl talking about the need to maintain spending on social issues. And herein lies the conflation.
It’s become an article of faith on the left that ‘spending’ itself can be maintained to kick-start the economy, and that this argument covers spending on social goods. It doesn’t. The economist was right to say that investment in infrastructure can stimulate demand – but this doesn’t apply to all spending on social goods.
Money spent on, say, looking after the mentally ill or the elderly is not an investment, it’s a cost to the wider economy, and it’s a cost we pay because it’s the right thing to do. Looking after people with behavioural problems or on helping disabled people into work also has a cost – an opportunity cost, as the money could be used more productively elsewhere. Nevertheless, we spend that money because everyone deserves a good chance at making the best of themselves that they can.
However, this is why cuts always hit the most vulnerable in society first – because they represent the biggest cost to the wider economy. This is something that’s not often said, but is true – and efforts by those on the left to disassociate themselves from this by asking ‘Why?’ are made in bad faith, because they know it too. Unless you think social spending should be maintained until bankruptcy, you have to accept that there’s a point when it has to be curtailed so that money can be spent on more productive activities. Attempting to conflate investment with social spending is an attempt to run away from this truth, which is why it’s so popular. But no-one who does it can be taken seriously, which is why Ed Milliband’s presence at Saturday’s rally was such a strategic mistake.
If you want to use investment to kick-start the economy and grow our way out of the deficit, you’ll need to cut social spending to pay for it. Whichever approach you take, the most vulnerable are going to suffer. The pathetic left-wing approach of hanging on and hoping for another alternative is a recipe for ensuring that the vulnerable suffer more in the longer term. In the dreadful calculus of human misery, I know which option I’d rather take.