Beware the numbers!

Lots of political capital (or should that be political lower-case?) has been claimed at Jeremy Corbyn’s inability to remember a made-up number on Woman’s Hour yesterday. The listening public, however, have probably forgotten the numbers already, as they should because all the numbers used by all the parties involved in this and every other general election are largely works of fiction. Nobody cares about the actual figures, their only significance is as a proxy for competence – can’t remember your own numbers, goes the logic, can’t be relied on to govern.

The Tory strategy of giving little detail in the way of numbers is both more realistic and yet just as negatively indicative of competence. What do you mean, you don’t know how much it will cost or where the money is coming from? Come on you must know! But, of course they don’t; nobody does. In the same way you don’t know what you will earn next year nor how you will spend it. You could get a substantial rise, but then your car might expensively break down. You might lose your job, but then have a horse come in on long odds. Hell you might even win the lottery, but then suffer a terminal illness. Nobody knows; the big lie of politics is that there is certainty.

So which way do you play it? Safe hands or bet the farm? Safe is boring, but then so is voting, in the eyes of many people. They may prefer a steady hand on the tiller, but placing a wager on the socialist miracle of state ‘investment’ (borrowing to the limit) might yield spectacular success in the short term, as it often appears to, but then the cold calculus of debt repayment inevitably turns up to ruin things. Ain’t credit cards a buzzkiller?

As for where the money comes from, every type of taxation is a stimulus to invent creative ways of escaping liability. Increasing corporation tax will lower company profits, either by clever accounting or by moving companies elsewhere. Land taxes and rent-capping will distort the property market still further and even fewer will be able to afford to buy, worsening the housing shortage and increasing stress levels and putting greater strains on the social care and mental health budgets, decreasing overall productivity, affecting credit rating and ability to borrow... on which plan your entire offer was made.

Making promises you can never keep is a singularly dishonest way to panhandle a vulnerable electorate, so desperate for a magic bullet they will believe anything; anything is better than being told the truth, that the only way out of poverty is hard work... and a bit of luck. Promising free stuff is effectively exploiting poor, ill-educated people. It is putting the disadvantaged at greater risk further down the line, burdening future generations with the debt of your desperation. It is everything of which Labour continually accuses the Tories. Who’s the real nasty party?

National Treasure

A Labour supporter and NHS flag-waver appearing on BBC’s The Big Questions on Sunday morning spoke enthusiastically about fiscal multipliers; the notion that government spending can stimulate the economy. Yay, spend! But this ignores the simple fact that basic economics is about how we individually and collectively allocate scarce resources with alternative uses. In this respect, money is not a resource but an exchange mechanism allowing us to avoid barter and directly trade labour and materials we possess or control for other labour and materials we desire.

His argument is that if we plough more money into the NHS this would pay more people who would then spend locally, thus stimulating other businesses, all miraculously making profits from that original injection of capital. But where do those businesses source their raw materials? And how many in the local economy are saving for their own, nobly selfish needs and how many are sending money abroad? Come to that, how much of NHS funding goes to buy goods and services from overseas? All of this is a drain on that funding, making the miracle of fiscal multiplication less likely.

Providing government assistance for an area overcome by natural disaster, or local industrial collapse, buying time for the local economy to get back on its feet is one thing, but sooner or later the assistance has to stop, or risk that society becoming dependent on the charity of others. Unfortunately, once that welfare tap has been turned on you need to keep opening it ever wider. (See whole swathes of formerly industrial regions whose old fester and whose talented young leave) Yes, but, the argument goes, the NHS is different; better health in society IS a form of profit, providing healthier workers, who live longer, with fewer end-of-life costs. This is a noble and moral belief, but is it true?

When we decide how to spend our money we effectively ration our consumption to keep within our means, foregoing one good for another where necessary. Those who use the least amount of NHS services are generally the wealthiest, opting to go private, only when they actually need to, on their own timetable. Yet they pay the most into the pot. At the other end of the scale the vast majority of those who use state-supplied medicine contribute nothing to it. Dressed up as ‘need’, those who contribute little gorge themselves on the free stuff. More free stuff, less incentive to ration its consumption.

The NHS. Doing as well as expected...

The NHS is an almost perfect model of what happens when the state tries to organise anything. There is no real price mechanism to allocate resources, just an ever-expanding need, a capacious maw that always needs feeding. For as long as there is an NHS, the Labour Party (for which it is a deity) will ceaselessly declare that we have six-hours/three-weeks/two-days, etc to ‘save’ it. But no matter how much this emotive pleading appeals to the hard-of-thinking we must never forget Mr Micawber’s sage advice.

"Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Physician, heal thyself.