October 28, 2010

THE DIFFERENCES ARE HISTORIC BUT HISTORY IS OVER:

To judge Britain's experiment, hold your breath and ignore the slogans: An economic gamble, yes. But our cut-back state will still end up as something between Sweden and America (Timothy Garton Ash, 10/27/10, guardian.co.uk)

No one knows whether Britain's private sector can lift the economy back to vigorous growth, despite this reduction of public sector demand and jobs. That will depend on factors beyond the government's control, and beyond these shores. If it does not succeed, we shall be in an even worse mess, having experienced much pain for little gain. Then plug in your iPod and listen to Joan Baez singing Heaven Help Us All.

If it does work, our public finances will be back under control. A lot of people, particularly among the poorer sections of society, and those directly dependent on the state, will have had a very rough time. With luck, some distortions, abuses and unfairnesses will have been removed. (It's surely not right that people can be worse off if they choose to work than they would be on welfare; or that people on inflated housing benefits make rented accommodation in some areas unaffordable for the working poor.) Following the universal law of unintended consequences, other unfairnesses will probably be created in their place.

The British state will be a little bit smaller, and a slightly different shape, from what it is today. Public spending will be hovering somewhere around 40% of GDP, plus or minus a few percentage points, as it has for most of the last 60 years. Most of that spending will go on health, education, welfare and pensions. The old will be a greater burden. Britain will be another variant in the extended family of advanced capitalist democracies, perhaps doing a little better than, say, Japan or America, perhaps a little worse than Germany or Sweden; or, more likely, doing better in some respects, worse in others.

Discount the hyperbole. This is the underlying reality of our time. The differences between countries in this extended family of the OECD world are much smaller than it is customary to pretend. In his book The Narcissism of Minor Differences, the historian Peter Baldwin shows with overwhelming empirical detail how this is true even of the much trumpeted contrast between Europe and America.

Forget the party rhetoric. The ideological distance between the British political parties is shorter than they will publicly admit; incomparably shorter than it was between the Conservative party of Margaret Thatcher and the Labour party of Michael Foot – who was elected Labour leader 30 years ago next Thursday.


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Posted by Orrin Judd at October 28, 2010 5:22 AM
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