We need economic growth, regardless of climate change; and we need to rethink how to respond to climate change while maintaining growth.

I was invited yesterday to talk at a student-led conference on alternative paradigms in economics, part of the movement for Rethinking Economics.  My main subject was Basic Income, but I also had the opportunity in a panel discussion to say things about economic growth and climate change.  Half of that argument concerns growth.  I put the case that, while there is both good and bad development, development had had substantial effects in improving welfare, by tests  such as infant mortality.  Growth matters in three ways: because growth goes hand in hand with development; because large parts of local economies are concerned with primary production, and they need growth to live; and because, as Crosland argued,  it’s not politically possible to redistribute resources in a shrinking economy.

The other half concerns climate change.  I don’t claim to have any special insight into the science, but I think I know something about policy responses, and I think we can state with confidence that the way into a problem is rarely the way out of it.  The argument for ‘mitigation’ – stopping humans from generating climate change –  assumes we can reverse all trends and change all behaviours.  I see no evidence that we can.  What matters is ‘adaptation’.  If, for example, we’re going to need to relocate hundreds of millions of people, we need to start now.  And even if we don’t need to, there’s a message to be drawn from the hundreds of thousands of people currently struggling to move from unliveable environments.

 

 

 

Where the 2019 General Election is heading

There are lots of contradictory predictions being made about the forthcoming election.  Electoral Calculus interprets current polls to indicate a thumping great majority for the Conservatives, largely based on the collapse of support for Labour. They put the Conservatives on 363 seats and Labour on 186. John Curtice has commented that the numbers of seats going neither to Conservatives nor to Labour is going to be over 100, and that on that basis it’s unlikely that either Conservative or Labour will have an overall majority.

The indications are that both Conservative and Labour are going to lose seats to the SNP and the Liberal Democrats.  The implication from that is that the Conservatives can only win an absolute majority by taking seats directly from Labour.  They will need at least twenty to make up for the seats they’re going to lose to smaller parties; the Electoral Calculus figures seem to assume that the Conservatives will take a further 50 seats or so directly from Labour.  That is hard to credit.

An illuminating analysis of polls by Yougov points to a different outcome.  The Leave vote from 2016 will mainly go to the Conservatives.  The Remain vote is more fractured, and mainly split between Labour and Liberal Democrat.  The trend becomes even stronger when the base figures are taken from the 2017 election.

It is difficult to see what could shake this picture.  Labour has failed to make any inroads in several months, but even to head a minority government it would have to hold its current marginals, and then take more than forty seats directly from the Conservatives.   That would be hard to achieve even with a change of leadership.

 

The EU Withdrawal Agreement Bill

I should forbear to comment on a piece of legislation which I’ve only skimmed through and can’t claim to understand, but the European Union (Withdrawal Agreement) Bill 2019-20 ascends dizzying heights of incomprehensibility. Every page is packed with cross-references to other clauses or legislation, and following the threads through the labyrinth would take me rather more than the three days the Commons is supposed to have for the whole process.

Some things are apparent, however.  There are going to be lots of problems and snags, and the government’s answer to most of the complexities is to say: leave it to the discretion of Ministers to sort them out.  (Where there are issues relating to devolution, the same trust doesn’t extend: the standard answer seems to be that Ministers will have to consent to anything that’s being proposed.)  There are liberal references to the steps that the Minister “considers appropriate”, and to the resolution of any “matters arising” from any issue – a phrase which is loose enough to mean that almost anything the government decides to do in those areas will be fair game.   There’s a clause, for example, about social security coordination, but what’s going to happen about pensions and medical treatment for UK citizens living in the EU?  As far as I can see, the answer is that there’ll be regulations passed on this as necessary: the responsible agency will  sort something out.

It follows that the Bill represents a major transfer of power to the government.  Did ‘take back control’ really mean ‘leave it all to HM Government’?  And even if one trusts this government, would the same apply if a different government came to power?  I think Parliament needs to consider whether this kind of blanket delegation to the executive is the sort of legislation they would ever want to pass.

Further note, 26th October:  There is a superb critical analysis of the Bill by barrister Anneli Howard.  She points in particular to

  • the Bill’s complex cross-referencing to other legislation
  • the extensive ‘Henry VIII’ powers being granted to ministers, and
  • the reduction in Parliamentary scrutiny that would follow from passage of the Bill in this form.

A Nobel prize for using RCTs?

Economics as a discipline doesn’t always connect with the real world, but at least the Nobel laureates with an interest in development economics are working on something that matters.  The new laureates have apparently been selected on the basis of their ‘experimental’ approach.  I gave the subject a brief mention in my forthcoming book, The Poverty of Nations, but you’ll have to wait to next March before you can read it.  Here, as a spoiler, are the sentences in the typescript I gave over to their evidence on Randomised Control Trials.  The reference is to A Banerjee, E Duflo, 2011, Poor economics, published by Penguin.

Banerji and Duflo advocate a greater use of RCTs, but their own examples show cases where this fails. In one study they mention, it appeared that textbooks did not help education; that was misleading. In another, the evaluation was supposed to identify the influence of contraception on family size; it overlooked the importance for parental decisions of the  prospects of children surviving to adulthood. Experiments and RCTs work by screening out extraneous information; the gaps that are left are only to be expected.

 

Brexit: there are two parties to any relationship breakdown

There is no prospect of a deal being agreed between Britain and the EU before 31 October; any deal has to be agreed by the UK Parliament, the Council and the European Parliament, and there simply isn’t time.  That leaves only two options: delay or no deal.

It is easy to see the faults of the British governments, but the failures of EU diplomacy are just as strong.  The British position has been arrived at through a series of blunders:

  • giving notice without even having developed a negotiating position;
  • treating the negotiation as a question of government prerogative, rather than something subject to parliamentary scrutiny;
  • failing to engage all interested parties, and especially the political opposition;
  • establishing ‘red lines’ on immigration and trade relationships that were not part of or integral to the referendum decision
  • after the rejection of the proposed withdrawal agreement, failing to develop any other position for several months.

The problems created by the European Union, however, are no less important.  They include

  • specifying a two-stage process, when there was no time in the negotiating period to cover both stages;
  • insisting, in consequence, on a ‘backstop’ arrangement which could only have been removed by the resolution of the second stage;
  • treating the Withdrawal Agreement as if was a treaty that had been agreed, after it had been manifestly rejected;
  • refusing, despite its treaty obligations, to provide a position on the future relationship;
  • refusing to consider any arrangement when trading with the UK as a third party, that would not apply to all goods and services  – anything else was dismissed as ‘cherry picking’, when selection is in the nature of all negotiated settlements; and
  • failing to take any action relating to its declared priority – or ‘red line’ – of protecting European citizens.

The result is a shambles.  Neither party can hope to come out of this with any of the outcomes they wanted to achieve.

How democratic are the Liberal Democrats?

Not for the first time, I am perplexed by comments that have been made about ‘democracy’.  The Liberal Democrats have decided to put themselves forward for election on the basis that they will oppose Brexit, and that if they are elected into office they will seek to revoke Britain’s notice of leaving the EU.  Cue sound and fury.  Stephen Kinnock calls it ‘undemocratic’. David Starkey, never knowingly under-hyperbolized,  calls liberalism an “extremist, anti popular, undemocratic creed”, and throws in snobbery, contempt and intolerance for good measure.  Polly Toynbee, normally sensible, also describes the policy as ‘extremist’ and says this is ‘to hell with the will of the people’.   And a letter in the ‘i’ complains: “anyone who voted surely knows the principle of democracy is that whoever gains the majority in a vote is the winner! If we allow this to happen, where will it end?”

I wonder what we have wrought by not having civics lessons in schools.  First, as a matter of  general principle:

  • Democracies are systems of government that are open to argument.  The suppression of disagreement or opposition by a majority is no more consistent with democracy than the suppression of disagreement or opposition by a minority.
  • Neither majority voting nor the process of election is sufficient to produce a democratic outcome.  Many dictators in the world have been elected.  Many seek support through referenda – Mussolini, Franco, Marcos are illustrative.
  • “Winner takes all” is not a democratic principle.  That’s how you get Mugabe or Maduro.
  • The “will of the people” is not fixed.  People can change their minds.

Then, in relation specifically to the UK:

  • The UK has a system of representative democracy.  People vote for representatives, not for parties or leaders.  (Parties and leader can change.  If you voted in 2015 for a government led by David Cameron, or in 2017 for a government led by Theresa May, you were mistaken about what you were voting for.  If you voted in 2017 for Sam Gyimah, Sarah Wollaston, or anyone who joined the Independent Group, you are now represented by someone in a different party.  )
  • Referenda are not binding – the 2016 referendum was advisory.
  • Parliamentary elections, by contrast, are binding within the UK system.  Some of the advocates of Brexit believe that the referendum trumps parliamentary democracy; but the legitimacy of the parliament subsequently elected in 2017 is at least as great, if not greater, than the 2016 vote, and in due course the legitimacy of any parliament elected in 2019 or 2020 will supersede both.
  • Some  politicians work to the (debatable) principle that representatives receive a ‘mandate’ from the electorate to carry out their stated policies. The Liberal Democrat motion put the case that “the election of a Liberal Democrat majority government [would] be recognised as an unequivocal mandate to revoke Article 50 and for the UK to stay in the EU.”
  • Another view of democracy, put by Schumpeter, is that it is an institutional process where opposing parties compete for votes.  Failing all else, the Liberal Democrats are attempting to gain the votes of at least the 6 million people who signed a petition asking for revocation.

There is nothing remotely ‘undemocratic’ about standing for election on a commitment to change current government policy.  As to whether the position is popular, we’ll find out very soon.

In praise of fixed terms

The Fixed-Term Parliament Act has not had a good press, and some commentators have condemned it either for making things worse or having no effect (those things can’t both be true at the same time).  If it was intended, as Mark Elliott suggested a couple of years ago, to curb the power of governments and increase the power of Parliament, it has just done rather well.

The fundamental premise of the Act is that the business of Parliament should carry on even if no-one has a majority. The Coalition government was evidence there there was an alternative, which was government by a majority coalition.  There is another alternative, which is a minority government that limits its programme and proceeds by negotiating with opposition groups; that is what happened in February 1974, when there was no majority, and it was thought of as normal practice in Scotland, where the electoral rules were initially believed to limit the possibility of anyone ever having a majority.  Neither Theresa May, nor Boris Johnson, has seemed to be able to grasp the basic idea that “the government” is not “in charge”.   The government is a legislative leader and executive, not an autarchy. People have to be won over, and everyone has to compromise.   That style of government may be beyond the capacity or wit of the Johnson administration.

Is a Brexit deal on offer? I think it might be.

It’s been widely reported in the press that Boris Johnston has been given 30 days to come back with a solution to the Irish backstop.  This morning I was in a fascinating session, led by Mark Diffley and Steve Richards, which assumed that this was the case. I think Angela Merkel was saying something significantly different – but if the offer is not understood and acted on right away, the opportunity may be lost.

The Withdrawal Agreement is, and has always been, incomplete. It represents only the first stage of a negotiated settlement.  The backstop is an insurance policy – a red line, if you will – to cover the eventuality that there is no agreement on the second stage.  That raises the obvious  the question – why not get on with the second stage?

And that, as far as I can make it out, is the position just put by Ms Merkel.  She is well known for being careful with her words.  What she said in the recent press conference was not that she is looking for an alternative to the backstop, but that she is open to a resolution on the future relationship that would mean that the backstop will never come into effect.  This is the summary from the Guardian:

She said that the backstop had always been a “fallback position” and would only come into effect if no other solution could be agreed that would protect the “integrity of the single market”. She went on:

“If one is able to solve this conundrum, if one finds this solution, we said we would probably find it in the next two years to come but we can also maybe find it in the next 30 days to come. Then we are one step further in the right direction and we have to obviously put our all into this.”

She is not saying that Boris Johnson must offer an alternative to the backstop – if that was what she meant, she could have said so.  She is saying that the backstop is there because no other resolution has been made about the future relationship.  That is the solution which would have to be arrived at before Britain leaves.

There are three obvious problems here.  First, this is not a line agreed with the rest of the EU; it is in particular somewhat different from the line being taken by President Macron, who if I read the runes rightly just wants it all to end. Second, there is a lot to do.  But third, if the British government continues to play with alternatives to the backstop, this is not going to happen; what they need is a comprehensive agreement that will make the backstop redundant.  That could be done at speed – but for as long as the attention of the government is elsewhere, the time is being frittered away.

My own private Brexit

I have received today le Certificat de nationalité française, confirming that  I am a French citizen. I have no intention of renouncing my rights as a British citizen, but I have no intention of surrendering my rights as a European citizen either; and I do not think it reasonable to require any person to give up  the rights of citizenship, or democratic to suppose that their rights can be extinguished by the will of a majority.  My father and grandparents were refugees from France, my first wife was French and my children are dual nationals, but as we were all members of the European Union it didn’t seem important for me to do anything about my own status.  In November 2016, I realised I would have to. I obtained the necessary documents, arranged for formal translation of English documents and completed an application for the  in January 2017.  The process has taken most of three years, and I still don’t have the carte d’identité or a passport, but the question of legal status has been sorted.

I’m far from alone in taking such a step:  hundreds of thousands of British citizens have applied for citizenship from various EU countries, many from Ireland or Germany. It will protect my rights to live, work and travel in the EU – I’m more likely to work in Poland than I am in France – but the issues go much deeper than that.  I wrote this in March 2017:

There have been demonstrations over the weekend.  They’re not about tariffs. They’re about movement, contact, travel, education, work and family life.  The loss of European citizenship means that you won’t have the right to live or work across Europe without a permit, to study where you will, or to marry a European with the assurance that you’ll be able to live together.  And that directly and immediately affects the lives of millions of people – not just the 4 million already identified by Michel Barnier (that is, EU citizens in the UK and UK citizens in the EU), but anyone in a mixed family, and anyone who might be. People like me; quite possibly, people like you.

Before the referendum, I tried to flag the issue when it wasn’t on the agenda; since the referendum, I’ve raised petitions on Change.org and in the European Parliament.  This is about the right to live in Europe.  We were told that right was fundamental, not just to what the European Union was all about, but to us; and for many of us, it is.

 

 

Postscript: This was my 1000th post on this blog.

 

Brexit: there is a way to an agreement, but no-one seems ready to take it.

I dislike repeating myself, which is why I haven’t had much to say recently, but there is a way out of the current impasse – if only the UK government and the EU will take it.  The backstop protecting Ireland appears to be the primary source of contention.  It is only needed because the UK and the EU have not yet formed any agreement about Britain’s future relationship with the EU.  Indeed, in more than two years, thanks to an absurd initial decision about the sequence of the negotiating process, they’ve not agreed a single binding clause about that relationship.  An agreement on the future relationship would finalise Britain’s departure, and then there would be no need for any provisional arrangement to cover the particular circumstances of Ireland in the interim.   Yes, trade deals are complicated; but substantial existing deals are there as models, many of the points already in the withdrawal agreement are uncontentious, and Britain currently meets the acquis communautaire.  It could be done, if people wanted it to be done.

Unfortunately, I see no evidence either that the new UK government is interested in engaging in any kind of negotiation on that basis, or that the EU understands that there is a way out of the mess that doesn’t involve brinkmanship or a game of ‘chicken’.  Everyone has packed up for the summer.  In those circumstances, Brexit will happen without a deal.