On Sequels and Politics

‘Alex!’ you cry; ‘wherever have you been?’ you enquire forlornly. Rest assured that—though occupied with many an hour of math homework, courtesy to my charming math teacher—I do nevertheless have a great deal to discuss. First up: politics. Yes, it’s that time of the year.

Politics

Though an inclement beast, my school has for once been daring: it has organised a ‘mock election’ in which candidates (that is, me; and a few others) must campaign in order to win the student vote.

Presently, there are eight parties involved: moi, representing the Reason Party (of course); the Tories; the Lib Dems; Labour; along with the Communists, the Greens, the kippies (may Hell feast upon their empty souls), and a joke party called ‘4Uture’.

We firstly began with a debate. This proved a fortuitous moment in my rise to power: the kippies were promptly humiliated (claiming that an NHS policy cost us three times the entire NHS budget is bound to do that), the Tories’ policies were—despite a rather poignant appeal by the party candidate—revealed to benefit the rich at the expense of the poor (alas the Communists were instrumental in that particular coup), and Labour droned repetitively and without the slightest inkling of conviction.

Then we were asked to deliver a speech in front of the entire school. This proved a somewhat daunting proposition—the audience is 1100 strong after all—but I’m pleased to say that I and my peers delivered an excellent performance.

The kippies made another spurious claim (the EU apparently costs us £120B—the figure is closer to £12B), the Tories busied themselves with trite insults against the other parties, Labour… was Labour. The Lib Dem’s performance was more solid, along with, of course, the Reds. The winner of this particular battle will likely be between the Reds, the Lib Dems, and myself—though the Tories, Greens and unfortunately the kippies will likely remain in the game.

You, however, probably don’t read this wonderful blog of mine purely for my antics. Thus, here’s a bit of serious analysis for you.

Proposition A: ‘The Tories believe in the good of all, including the less well off, for they are the party of aspiration.’

Ironically this is actually genuinely believed by a lot of Tories. Indeed, the Tory candidate made an impassioned appeal; having lived in a council house, he said, he was not a man of the rich—but he did believe in aspiration; in aiming high rather than stooping low.

Unfortunately, while the Tories may believe this is what their party accomplishes, the truth is rather different.

Firstly, the desire to be successful is usually not what is in short supply. We would all wish to be successful; to earn well, to provide for our human wants, desires, and needs. But people are not poor—or indeed merely not particularly successful—for lack of desire. No: the problem is that people can’t fulfill their dreams. It’s all well and nilly to say that tax incentivises entrepreneurs; but no one is going to be an entrepreneur if they have to choose between eating and heating.

And that is the great contradiction in Tory thinking. People want to be successful—of course they do. And having to live in a smaller mansion or buying a Mercedes instead of a Bentley isn’t likely to make them any less keen.

But if people cannot go to a good school; if people cannot attend university, if they do not have a stable environment… if, were they to fail (and it is conveniently forgotten that 65% of small businesses go bust within 3 years, and that liquidation often leads to debt) they would be without help… then they can never succeed.

In some instances, there is a poverty of ambition. Pupils doing badly at school often do badly not because they are stupid; but because they have no hope. If you have lived a life in poverty, success seems to belong to another galaxy.

But lowering taxes won’t make these kids sit up and learn. For that matter, hiring more teachers probably won’t either. The problem is that Britain suffers from a perpetuating cycle of poverty.

Proposition B: ‘Europe is the cause of Britain’s ills.’

This is essentially the entire premise by which the kippies argue from; often they do so implicitly, but if you look at their complaints—immigration, EU funding—you’ll quickly realise this is their bête noire.

But let us examine the veracity of so grandiose a statement. Chiefly among ‘Britain’s Ills’ would be the Credit Crunch of 2007 onwards. That, however, was instigated by the collapse of the Lehman brothers (remember them?) after which much of the banking system went down with them. This of course was caused by two things: banking—particularly when it involves the trade of other debts—is a risky business; and of course, the banks lent massive mortgages to people who never had an icicle’s chance in Hell of paying them off.

That is why Britain is in a financial crisis. The problem has very little to do with bureaucrats in Brussels and everything to do with greed and irresponsibility at home.

Neither can Greece be blamed. Greece’s economy is small; bailouts, when shared among Germany, France, the UK and other EU nations amount to little; and most of these bailouts, sadly, need to be repaid. (So the creditors don’t actually lose any money.) What’s more, Greece actually suffered in no small part because of the crisis caused by the UK: Greece has a significant tourist economy, and one that was badly affected by the British credit crunch—us being the single largest nationality of visiting tourists.[1]

This is not to say that Greece is without blame for having such a tourist-dependent economy. It is also true that Greece’s tourism profits were unsustainable—since the money British tourists used to pay for those holidays was somewhat based on credit card loans that needed to be paid off eventually (and painfully, as in now).

Greece also has a major sovereign debt problem—due primarily to the corruption of former governments. That, however, is an entirely different kettle of fish. But it does lead me onto proposition three.

Proposition C: ‘Britain is in debt; we must eliminate the deficit; we must pay off the debt.’

Some of the greatest lies are half-truths, and this certainly is a half truth. (Though probably not the greatest of lies.)

Firstly, some data:

Firstly, note that we were far, far more in debt post-WW2 than we are now. The debt reached 240% of GDP in 1945, and is currently at 80% (edit: 90% as of latest figures). Thus, to state that Britain ‘must’ pay off the debt (or some terrible fate is imminent) is false: we have sustained much greater levels of debt in the past than we have now. And, if you’ll care to observe, we were able to pay all of it off. (The small increases you see post 1975 is from new debt.)

But how far are we in debt now, why are we in debt, and is this a concern?

With regards to the cause, the bank bailouts cost us £124B [2] in the immediate term (though at its peak ten times that amount was offered as guarantees) and another £5B per year in interest. A ballpark figure of around £150B may thus be derived.

The UK GDP is around £1500B as of 2014 [3] so these bailouts have added around 10% to the total debt. However, post-2007 sovereign debt increased by 40%. Where is the other 30% coming from?

That is likely due to the not-insignificant deficit the government has shored up: averaging around £90B post-2007 [4], which makes up most of the rest.

So, let’s recap: Britain is in much lower debt that in 1945, has less debt than the US and quite a lot less than Japan (neither economy is doing especially badly), and most of the debt is from a budget deficit, with some from bank bailouts. The final question remains: is this a concern?

Well, it is a concern insomuch as 80% GDP public debt is not small, and in that it is increasing—albeit less rapidly than immediately after the Great Recession (as it is misleadingly known; the 1930s one is much more accurately described as such, while this fiasco is proving to be one of long-term stagnation).

But is this an immediate, and terrible concern? No. Debt levels have been much higher previously, and it did not crush our economy (yes, France and Germany’s post-War boom was considerably more pronounced, but then they were either not as badly damaged or got more help). Indeed, Keynesians would propose—quite reasonably—that we keep borrowing to help us initiate a growth period, and pay the debt when we are more able to do so.

This is not entirely without flaw (it is unlikely, for example, that we will have the same growth as we did in the post-war period, since we are not rebuilding) but it is certainly quite misleading to portray the current debt problem as a bomb waiting to explode.

Okay: enough with the economics lesson.

Why Do People Believe This?

I believe I have bored you long enough (I have news on a sequel!) but do humour me for this last, important point.

People believe what they want to believe. The Tories ultimately act out of greed, and selfishness, but also because many are well-meaning but mislead. Frankly, lower taxation for the wealthy or even middle class will spell very bad news for the many that are less fortunate. And it won’t get them out of poverty.

The fiasco on Europe stems in part because people need a scapegoat, and are unwilling to face the truth: the growth we experienced post-WW2 happened because we were rebuilding to our pre-WW2 height, and because we had cheap hydrocarbons. There is also strong evidence to suggest that we have reached an economic state where the major breakthroughs from industrialisation that generated strong growth previously are no longer present.

But people still remember the good times. They remember when they could expect regular payrises and a better future for their children. And they tried to keep it going—through debt. That, unfortunately, is stupid. And dangerous. The hard truth is that people blame Europe because they won’t look themselves in the eye, and realise it’s their own bloody fault. (Other agents such as the banks, the landlords, etc. are far from innocent as well.)

Our final proposition does have some merit, but it is ultimately an attempt to blame Labour and our political system in general, for our own failings in the personal sphere of fiscal responsibility.

Above: private household debt as a percentage of GDP. Source: Touchstone Blog, citing OBR.

Finally! Sequels

Our tedious but hopefully informative foray into the murky realm of political economy over, I’ve got news. Specifically: a tale is a-coming. But it isn’t the one you think.

I’ve mentioned my plans for a sequel to the Necromancer. That would have been called the Deathbringer, and I had many a plan for it. But plans change. My reasons for deciding not to write the sequel now (you may be thankful to know I haven’t written it off for future endeavours) are twofold. Firstly: the Necromancer is not going to be my greatest work. This is not to say that it is bad (how can it? It’s got flying zombies!) but rather that the powers of the imagination have different tales to tell.

This leads me onto my second reason: this is a story I’ve been waiting to tell for some time.

It’s about love. You may not be surprised to learn this, if you’ve followed this blog. Inevitably, the life of a teenager (no matter how intellectually minded or capable) features love—or at least the desire for love. You may be surprised to learn that said lovers are male. But would you really?

I have many other details. It is set in a time of beautiful desperation; a time when space is salvation—and the Earth is but a sweet, decaying tomb. Its name is the Ark; and though much may be said of it—of its bitter, hopeful struggle; of its pain, and its awe and its love—the sweetest tales are those first discovered.

I shall leave you, now. You have much to dwell upon. And, alas, school never was a kind beast…