In recent weeks Labour have vomited out a whole series of economic pronouncements based on nothing so much as whether they chime with the electorate’s feelings of how things should be. Rent controls, land grabs, minimum wage levels, job guarantees, energy price caps… every one couched in terms such as “Labour will [insert name of impossible/undesirable to control function here] when we get into power.“ Given their record to date the triumphal assumption of taking over the reins should send a chill down your spines. But it doesn’t, because people don’t understand; they really don’t.
- Everything costs something. For every pound you spend on one thing you have a pound less to spend on something else. Labour will happily promise to spend every pound they take in tax three times over. This seems to be a central, rotten plank of British socialism.
- The more there is of something – e.g. manual labour – the lower the price. This is ‘supply’ and it’s why New Labour opened the borders, so British industry could pay ever lower wages and kick off what they are now calling the ‘race to the bottom’.
- The more people want something the higher the price it can command. This is ‘demand’ and people’s desire for things they can’t afford – yet have been told they are entitled to – is why payday loan companies can charge the interest rates they do.
- It’s always more complicated than you think it is, but what people get paid is largely based on how their value is calculated by the industry they are in and the ease or difficulty with which that industry can replace them.
- Everything is connected, often by threads you cannot see, even in retrospect. A single small event can ripple through the system until eventually an unforeseen wave engulfs another apparently unconnected part.