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A failing marketplace for ideas and policies: parties, party governance and FPTP

Summary:
The UK system for marketing ideas for policy has failed us.  My own ‘centrist Dad’ brand of economics and politics no doubt colours this view.  But I think even if you do not subscribe to that kind of politics it’s possible to discern failures in the process.  A lot of this was prompted by a conversatoin with an old friend who, given his job, I can’t credit here. Both major parties departed in pretty serious ways from recognisably sound economics, and, in the case of the Tories, frequently veered far from fairly basic norms of honesty and rationality. On Labour’s side, the economics offences were twofold:  one faction supporting Brexit in favour of it freeing the UK economy to undertake thorough socialist intervention and/or reconnecting with an imagined and euphamistically named

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The UK system for marketing ideas for policy has failed us.  My own ‘centrist Dad’ brand of economics and politics no doubt colours this view.  But I think even if you do not subscribe to that kind of politics it’s possible to discern failures in the process.  A lot of this was prompted by a conversatoin with an old friend who, given his job, I can’t credit here.

Both major parties departed in pretty serious ways from recognisably sound economics, and, in the case of the Tories, frequently veered far from fairly basic norms of honesty and rationality.

On Labour’s side, the economics offences were twofold:  one faction supporting Brexit in favour of it freeing the UK economy to undertake thorough socialist intervention and/or reconnecting with an imagined and euphamistically named ‘traditional’ working class base.  Although boxed in by the rest of the party, the strain of ‘Lexit’ thought was there.

A second offence was the always evident ideological opposition to the operation of markets.  This manifested itself in the program of nationalization for utlities;  not itself an idea to be rejected out of hand;  but in the context of not giving any ground to the equally plausible model of continuing and reforming regulation to achieve the same ends, and the impulses to eliminate markets anywhere they felt able, the blanket disapproval of ‘contracting out’ in the NHS, the real ideological motive was clear.

The Tories rather obviously departed their previous role as the guardians of capitalism in their embrace of the nationalist project of Brexit;  the accommodation of nativist tendencies in that movement [tolerating, for example, Boris Johnson’s racist outbursts], whih we know to be economically damaging;  the preparedness to threaten great economic disruption and harm in the form of pursuing ‘No Deal’ as a way to ensure Brexit happened;  the pursual of the sovereignty abstraction at the price of free trade.

Both parties also departed previous norms of honesty and rationality in policymaking.  Labour in its cultivation and handling of the antisemitism virus;  obstructing understanding of what it wanted, and what was to be gained by being members of the Single Market [viz Corbyn and others’ comments about ‘access’;  and about state aid rules;  the ‘bollocks’ of the Six Tests.]

The Tory Party took a much more comprehensive and enthusiastic leap into the dark ages in its manipulation of the media [tricking the BBC into having Neil interview Corbyn with no Johnson interview in return, mimicking a BBC factchecking site, deliberately manipulating a Kier Starmer video clip];  its attempt to pevert constitutional law by proroguing Parliament and lying to the Queen about its purpose;  lying about the presence of border checks in the Withdrawal Agreement;  failing to embrace the economic understanding of trade, such that the freest trade was to be had by staying in the EU’s Single Market; and more.

To re-emphasise, even if you do not agree with my list of Labour and Tory failures, it is less contentious that controlling interests in both parites changed, and brought about changes in the policy program, and you can ask yourself questions about whether that process serves the wider interests of us all.

The controlling factions of both major parties are in large part products of the memberships, which have the final say over the choice of party leader.  The Conservative membership is small [191k?] and famously old.  The Labour Party membership is much larger, [580k?] but still small compared and unrepresentative of the electorate as a whole [as their views on subjects like Brexit and Jeremy Corbyn illustrate].

The problem for the rest of us comes with how this system interacts with the formidable brand and infrastructural incumbancy conferred on the major parties, and our First Past the Post system [which is of course a major part of the reason for the strength of the incumbent brands to begin with].

Individual companies represent and strive for no interests but their own.  Under benign [but rare] circumstances, competition between them encourages them to behave in our interests, rather than theirs.

Likewise, the pernicious intent of the far left and right would be of no concern if there was a geniuine competition for ideas and the plaforms needed to distribute them.  However, no such free competition exists.  There are considerable financial, organizational and media barriers to entry giving existing party brands a huge advantage over startups or breakaways.

When the benign circumstances that prevent competition from either working at all, or working and producing harm, fail to operate, the state can step in to improve matters.   This can take the form of dismantling monopolies, forcing them to divest of bits of themselves;  or regulating their activities.

Competition in the marketplace for political and economic ideas is not working.  The incumbent duopoly is currently controlled by extreme and factional interests on the left and the right.  These parties are meant to serve the collective good, by manifesting the accumulated wisdom about how to solve our collective problems in their policy programs.  They are failing to do this because of lack of competition and poor systems of governance.   Both main membership systems have shown themselves to be vulnerable to entryism, from UKIP and the Brexit Party on the right, to Momentum and other left groups in Labour.

Entryism would not be of any concern – in fact probably would not happen – if there were proper competition in the marketplace for ideas and solutions.  ‘Entryists’ would set up their own brand.  Or the parasites of an infected host would simply be killed off by  From their private perspectives, membership control makes sense via logic along the lines of ‘no taxation without representation’.

Members pay for the party, so they feel they should be deciding what the party does, in the same way as shareholders property rights makes them feel entitled to decide company strategy.  But the internal struggles and wishes of members have consequences for the rest of us.  Private financial interests, whether in politics or commerce, have to be forced to serve the rest of us, one way or another.

In politics, of course, we might predict this to be difficult.  Who decides, effectively, whether the system is working and what to do about it if it is not?  Parties do, responding selfishly to the incentives facing them.  With what legitimacy could a state intrude on the governance arrangements and policy formulation process of its major parties?   Very little.  Doing so sounds like a recipe for totalitarianism.

A referendum on Electoral reform seems to me the least contentious way to solve the problem, and break the recursive knot around how you justify reform.  Some form of PR would make smaller parties more viable, and increase the incentive for startups, and for the enlightened wings of old brand hosts that have – like ours – been taken over by intellectual parasites to break away.

But obviously the recently successful interests in our system never want it, because they see themselves [mostly correctly] as only losing from it.  And when it was put to the country, a referendum forced on the Conservatives by the Lib Dems as the price for sustaining coalition, it was easily defeated as an obscure, mad reform wanted only by nerds.

The intertia in our electoral system isn’t necessarily bad.  The restrictions imposed by the incumbent party brands and other aspects of our system could be argued to serve like the restrictions in a formal constitution.  They are a record of once widely held views considered important, and subsequently hard to change for a reason that might well be a good one, like an act of widely shared rational reflection on how certain things should be.  But in the case of the UK the restrictions on policy have proven superficial.  Behind the scenes the parties became very different things, serving different ends, both of them, in my view, failing us in ways I desribed earlier.  The brand restricts entry into the marketplace, but not an entryist takeover.

An analogy might be the subversion of a once stable interpretation of constitutional law by a newly formed coalition of constitution-interpreters in favour of something new.  Conservatives used to view the Warren Supreme Court as doing just that.  Liberals [that includes me] now view the justices assembled by Reagan, the Bushes and Trump as doing the reverse.

Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

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