I try to keep this blog as free from politics as possible, which may be hard to believe given its title refers to the political spectrum, but nonetheless I do try. Again having said that, a motivation to set this up was friends of mine who are Conservative voters suggesting to me it was the "Christian" thing to do, much to my consternation.
I think the main reason I try and keep away from politics and government action is that I don't think that governments should be forcing people to do "Christian" things; so I don't think abortion should be outlawed, and I think all other government actions that discriminate unfairly against people made in God's image is wrong.
I believe Christians vote Conservative because they believe that small governments better enable people to get on in life; bigger governments stifle effort and creativity, crowding out small business and entrepreneurship. But this involves a healthy level of confidence in market mechanisms to deliver, and I believe too high a view of the goodness of man - particularly too high for Christians aware of how sinful man is.
Why do I say this when from Adam Smith onwards, economists have espoused the virtues of the market in mitigating man's own greed and enabling it to contribute towards the greater good? Because there are plenty of situations in which the price mechanism fails. It doesn't need government intervention for the price mechanism to stop doing its job of revealing relative scarcity and relative abundance, it just needs unscrupulous men and women.
I've mentioned in previous posts how a "nice equilibrium" where everyone does a good honest job and hence everyone trusts everyone to do a good honest job - the incentive is there for someone to deviate and do a bad job, and get out while they can (and even if they fail, their actions will succeed in destroying the good equilibrium since now people know with non-zero probability there are some bad people about).
All this by means of an introduction to what I was planning to write about - recent Tory announcements regarding the economy. In particular repeated comments on the 50% tax band, and also recent talk about abolishing all employment protection. The bottom line of these is a trust that despite bosses being unscrupulous, the end product is a much better, clean, shining functioning economy because of competition - the bad bosses, the nasty ones, will be weeded out and left on the scrapheap if they don't become nice shiny bosses.
If I sound a little sarcastic there, it's because I don't buy it. Those proposing it probably think it has basic economics on side, but it may do: Very classical economics that hasn't considered much recent economic study into areas such as industrial organisation, game theory and behavioural economics. There's no point in me repeating what Chris Dillow writes about much more elegantly, but if you want some demolitions, here are a couple.
Now the question is, as Christians, what should we be doing? James 1:27 says "Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world."
I seriously wonder how scrapping the 50% tax rate on those earning above £150k (polluted by the world?!), and stripping away all employment rights of workers (usually pretty low paid - widows and orphans in their disress?!), counts here. The hardest of hard Tories would say "Charity should do the hard work", yet this again ignores some basic economics: If there's a positive externality (net social benefits greater than net private ones) the market (charity) will underprovide it. As was evident before the Welfare state.
Of course, I'm proposing little positive in this post, just getting some things off my chest. The main one being this idea that a small government is what we need, and that it's somehow more Christian, if that were possible.
Showing posts with label tories. Show all posts
Showing posts with label tories. Show all posts
Friday, October 28, 2011
Thursday, October 21, 2010
The Spending Review
Since I'm starting up a blog on issues regarding why Jesus was not a right winger (main premise - to show how baseless the assertions that Christians should only back right-wing policies rather than make Jesus out to have been a leftie), I should comment on yesterday's events in Parliament.
Those that know me know that I vote Labour at the last election (and the one before that, and the one before that. Before that I was too young to vote), but this doesn't mean that thus I support everything a Labour minister utters (in fact, I have issues with a lot of it), and nor does it mean I oppose Tory policies on principle.
As mentioned in previous posts, I want to have a stab at interpreting the Bible using economic theory to guide the policy implications that come out of it. Many other people, I believe, do not do this and thus arrive at assertions that all Christians should support right-wing policies (small government, etc).
The reason why I don't want to comment so much on the Spending Review is that it relates a lot to how things are done in the UK economy, which is not necessarily how they should be done - since I'm only just starting to write and think about exactly how they should be done I'm not about to start making such bold assertions.
But the small comment I will make is this - and this is consistent with what I've always said about Tory policies on deficit reduction: They are much too much, much too soon. Dress them up as you will (apparently 400,000 people leave jobs in the public sector a year anyway - but are replaced usually), they are cuts to a weak economy. There is no attempt to work ourselves out of the mess - it's entirely belt tightening.
Anyone who has had debt problems will know that you don't solve them just by belt tightening. Any start-up company will tell you they didn't pay off their initial creditors when they hadn't established themselves as going, viable entities. So why does it make sense to cut back so drastically spending in a weak economy?
You'll note: I'm not saying that some cuts will be useful - undoubtedly I'm sure I'll come across things the state is doing that I don't think it should (e.g. the Post Office). What my concern is about is the timing of these cuts.
The response from others is: We'll grow faster because of these cuts, there will be less crowding out. We'll abstract from the absence of any evidence on a strong crowding out effect and just say: Who are you kidding? The half-million and more jobs that are going, these are folk that will be spending less - and paying less in taxes, and claiming more in benefits. So it's not immediately clear how much the saving will be anyway. Then there's the multiplier effect - the jobs in small businesses reliant on local councils for contracts - small businesses that may go under as a result. I can keep on going.
It simply does not make sense to cut right now. Despite the "there's no money left" assertions that many throw out frequently, the fact is there IS money: The government is able to borrow at very cheap rates of interest (rates that are not going up either). That's not a justification for government borrowing and spending per se, but if we push the economy into recovery by a bit more borrowing that is a much better basis on which to cut than the current one.
Those that know me know that I vote Labour at the last election (and the one before that, and the one before that. Before that I was too young to vote), but this doesn't mean that thus I support everything a Labour minister utters (in fact, I have issues with a lot of it), and nor does it mean I oppose Tory policies on principle.
As mentioned in previous posts, I want to have a stab at interpreting the Bible using economic theory to guide the policy implications that come out of it. Many other people, I believe, do not do this and thus arrive at assertions that all Christians should support right-wing policies (small government, etc).
The reason why I don't want to comment so much on the Spending Review is that it relates a lot to how things are done in the UK economy, which is not necessarily how they should be done - since I'm only just starting to write and think about exactly how they should be done I'm not about to start making such bold assertions.
But the small comment I will make is this - and this is consistent with what I've always said about Tory policies on deficit reduction: They are much too much, much too soon. Dress them up as you will (apparently 400,000 people leave jobs in the public sector a year anyway - but are replaced usually), they are cuts to a weak economy. There is no attempt to work ourselves out of the mess - it's entirely belt tightening.
Anyone who has had debt problems will know that you don't solve them just by belt tightening. Any start-up company will tell you they didn't pay off their initial creditors when they hadn't established themselves as going, viable entities. So why does it make sense to cut back so drastically spending in a weak economy?
You'll note: I'm not saying that some cuts will be useful - undoubtedly I'm sure I'll come across things the state is doing that I don't think it should (e.g. the Post Office). What my concern is about is the timing of these cuts.
The response from others is: We'll grow faster because of these cuts, there will be less crowding out. We'll abstract from the absence of any evidence on a strong crowding out effect and just say: Who are you kidding? The half-million and more jobs that are going, these are folk that will be spending less - and paying less in taxes, and claiming more in benefits. So it's not immediately clear how much the saving will be anyway. Then there's the multiplier effect - the jobs in small businesses reliant on local councils for contracts - small businesses that may go under as a result. I can keep on going.
It simply does not make sense to cut right now. Despite the "there's no money left" assertions that many throw out frequently, the fact is there IS money: The government is able to borrow at very cheap rates of interest (rates that are not going up either). That's not a justification for government borrowing and spending per se, but if we push the economy into recovery by a bit more borrowing that is a much better basis on which to cut than the current one.
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