The Chancellor of the Exchequer is generally pictured as commander of the economy, driving it through a dangerous jungle at the edge of Armageddon, threatened by mortal danger on all sides. Whether he is conceived of as a hugely intelligent and skilful driver, or an ill-informed purveyor of omnishambolic damage, is a matter of political opinion. The fundamental error is in the estimation of his power to control the economy. What makes economies robust is not the wisdom of chancellors, but the industry of people, their creativity, their desire for progress and their need to eat. Their co-operative inputs to the many enterprises, private and public, which make up the economy, are what drives it forward.
At most, the Chancellor’s power extends to steering round relatively gentle corners and having some slight influence over speed in order to achieve some counter to the effects of the terrain it has to cover. More decisive action is almost invariably based on false assumption and riven with unforeseen consequences. The effectiveness of the Chancellor’s limited powers depends on the ability to see dangers far ahead and to make adjustments accordingly. But the economic ideology which drives this coalition government is a particular handicap to achieving such foresight. As Chicago Nobel laureate Professor Robert Lucas, devout Friedmanite and star of neoclassical orthodoxy, told the Queen, the best economic theory can do is predict that such events as the 2007-8 crash are unpredictable.
Lots of lessons have been relearned since Lehman’s bust, yet few substantive changes have actually been made. So it is predictable, and widely predicted, that there will in due course be another, almost certainly bigger crash than 2007-8. And after that, if no preventive actions are taken, there will be another. And another. Till the changes are made.
Those changes will have to reduce the power of the financial sector and the monopolistic predators like miner commodity trader Glencore-Xstrata, the big six energy providers, the big four auditors/accountants/management consultants, big pharma and so on. Over the past three decades the dogma of deregulation has passed control of the real economy to the banks, broadly defined, and of most mature industries to a small number of huge monopolists, which control, fix and abuse markets for the benefit of their shareholders at the cost of everyone else. Just how controlling, abusive and criminal these corporates can be is evidenced by the $20 billion or so fines being levied on J P Morgan Chase with consideration of criminal proceedings, claiming to be made, against the senior individuals responsible.
Breaking up these massive predatory corporate entities will cause major upsets in the financial-industrial complex and billions of pounds will be spent lobbying against such change. Politicians, fearing the impact on votes, will obey their plutocrat masters as long as they can. The system is well worn. MPs who are prepared to be independent thinkers and to make public challenge of government decisions will not climb the greasy pole. Parliamentary private secretaryships are offered to test out the reliability and compliance of junior MPs. Such indications of favour as a PPS role seem only to be offered on condition the recipient will not challenge the strictly top down, command and control focused leadership.
The only political dissenter from this conspiracy appears to be the Green Party which is steadfastly against this predatory monopolistic abuse and preaches fairness as worth fighting for. That is fairness not just between members of the existing population, but between this and future populations. Of course, the Greens have no power at present, so the global economy will not avoid the continuing series of financial crashes. But at some stage that change will have to come, either as a result of carefully agreed political decision based on the sort of analysis espoused by the Greens. Or by violent insurrection.