Writing in his most recent detailed article in Prospect magazine, Blond opines that “My ideas and recommendations find full and serious expression in both Cameron’s concept of a ‘big society’, and the policy ideas within the Conservatives’ manifesto. Cameron’s big society vision is the most transformative the public have been offered in a generation”. Since the fate of the Red Tory project rests somewhat upon the outcome of today’s election I thought it appropriate to post a bit about the book, even though I have a very long review in the pipes (which is part of my PhD also).
Reading Blond’s work one is struck by the manner in which he establishes his theses, a formula that can be reduced, if one is being harsh, to statement, barrages of statistics, conclusion. Between the statement and the barrage of facts there is a real explanatory gap, a gap that Blond clearly considers he has bridged, but serious scrutiny reveals this to be spurious. In the most part his statistics establish that something is wrong, but they rarely give an indication of its causes directly or why we should accept Blond’s account of these rather than other competing accounts – the two are adrift of each other. There is a breach of the basic standards of social science not at the level of statistical precision but at the vaguer levels of argumentative rigour are absent, for example, that correlation does not establish causation. Similarly, there appears to be no sifting of sources and interrogation of their validity. Blond clearly has a pre-existing story to tell and has located the sources that establish it, which is a reasonable technique, but he has not recognised if the various sources fit together coherently or if they can be trusted.
An example is in his consideration of the financial crisis. Writing about the level of public debt, Blond says that public debt is problematic because it needs to be paid for with tax revenue which will in turn ‘choke off’ the private sector recovery, decreasing tax and hence deepen the crisis. Increases in tax rates depreciate the growth of the economy as a whole, with “the standard GDP loss per tax dollar raised variously calculated at 30-50%” (54). It is difficult to establish precisely what Blond means by this statement, but the citation makes it clearer per tax dollar raised there is an economic cost of 20 to 60 cents of GDP. Two reports are cited: Wheels of Fortune: Self-funding Infrastructure and the Free Market Case for Land Tax by Fred Harrison and Living With Leviathan: Public Spending, Taxes and Economic Performance by David B. Smith (here the citation is wrong, and should be for Smith quoting Lightfoot, in addition there is an estimation of the loss of GDP to taxation in UK that is performed by in an unacceptable geographic transferal from figures established in the US to the UK), both of which are the Institute of Economic Affairs. The IEA is well know for being the most important neoliberal think tank in the United Kingdom, one whose influence on Thatcherite policy is well documented, and who gained the personal seal of approval of Friedrich Hayek and Milton Friedman. The ideological basis is quite clear when one considers the quotation from Fred Harrison’s work, which is clearly attempting to increase the costs of taxation at every stage, appealing to ‘recent’ (not good, or neccesarily correct) work in a ploy to increase the damage of taxation to the economy, and thus present a forceful case for the IEA and neoliberalism’s commitment to low taxes at all costs.
The Treasury favours a cautious 30p/£ ratio, but other economists have suggested estimates ranging from 50p to £1.50 for every £1 raised by bad taxes. If we split the difference and assume that the loss is £1 […] According to the most recent research, by Professor Nicolaus Tideman, tax-induced losses are potentially as high as £2 for every £1 raised with the aid of ‘bad’ taxes.
Let me continue with a few examples of this tendency. Blond writes “What we have at present, after thirty years of letting the market rip, would not be recognised by even the great liberal conservative economist Friedrich Hayek as a free economy” (33). Of course the description of Hayek as a “great liberal conservative economist” is remarkable, considering that Hayek wrote an essay called ‘Why I Am Not A Conservative’ where he described why he was not a conservative and claimed to an “old Whig”. Yet it is what comes next that is so surprising. It is Milton Friedman’s “bastard laissez faire inversion of it [the free economy] in which power and wealth flow upwards to the centralisers of capital” that is the problem (Blond calls New Labour a ‘the bastard child’ of Thatcherism two pages earlier – a lot of bastards about). This statement is remarkable, driving a wedge between Hayek and Friedman in order to suggest one it the purveyor of “true free markets” and the other is the creator of a heterodox form is utterly unjustified and creates monopoly. In the early 1940s, The Volker Fund, impressed with his Europe-centric The Road To Serfdom commissioned Friedrich Hayek to work on an American version. Hayek was unsure if he could conduct the project himself considering that he was at the time still in Austria, so he asked that Aaron Director take charge the Free Market Project which formed the basis on the later Chicago School of Economics and Law. Although the aptly named Director was to lead the project, the young Milton Friedman was also to be invited to take part on the personal recommendation of Hayek. In 1947, Friedman attended the first meeting of Hayek’s attempt to refound liberalism in the Mont Pelerin Society. Later Friedman was instrumental in gaining Hayek a place at the University of Chicago, despite the fact most of the department, unlike Friedman, did not take his work seriously as economics. Moreover, it was Hayek’s arguments that convinced Friedman to abandon any concept of socialism, just as von Mises arguments in his private seminars convinced Hayek a generation of economists before.The idea that the politics or policy recommendations of Hayek and Friedman diverged significantly is simply false. Their economics in terms of methodology may have, but their politics that apply it to the real world did not. Hayek himself said “[Friedman] is on most things, general market problems, sound. I want him on my side”. Hayek’s own biographer notes that “The person most influenced by Hayek who has himself most significantly influenced public opinion and policy is Milton Friedman”. Hayek is a significant blind-spot in the book. This is particularly clear during the exposition of the influence of his work on Thatcherism (122-125) the again, astounding claim that Hayek broke with “both classical economics and rebuking neoliberalism in advance”. This would have been surprising for Hayek, for whom the revival of the liberal project that was termed neoliberalism by Alexander Rustow was the central moral task of his time, indeed, there is no figure more important to the development of neoliberalism than Hayek and his Mont Pelerin, IEA chums – he is the central intellectual hub of the complex network that developed neoliberalism and brought it into reality. Thus when Blond explains that his critique to the contemporary economy draws upon Catholic and Anglician social teaching alongside the distributists and “elements of the ordoliberal and Austrian school traditions” one has to take pause. Both ordoliberalism and Austrian schools were serious contributed to the neoliberal project, despite a number of difference between the two schools. Indeed, in a later post I will show how close Blond’s vision is to ordoliberalism, even down to a specific form of theology both adopt.
If Blond can’t distinguish between neoliberalism and his own project, what hope is there for the Tories supposed new direction? Of course, the Tories project is neoliberal through and through.