Thursday, 11 December 2014

Big state, small state...on Simon Wren-Lewis's ideological obsession with big government


Sometime the careful manufacture of a straw man is a useful tool to present an argument. Indeed, the thing with a hypothesised model as the basis for criticism - even if the real world is different - is that it allows people to marshall the strengths and understand the weaknesses of their ideology.

But this is a story about the other sort of straw man. The more common one constructed in order to provide sustenance for a given position regardless of the actual truth. Perhaps the most common straw man out there is the argument against any reform of the National Health Service on the basis that the only alternative is a "US-style health system". No-one proposes such a change but the opponents of the changes that are proposed always used this straw man to frame their argument.

However, for shockingly bad straw men, this blog post from Simon Wren-Lewis is a masterpiece. The core facts are (sort of, arguably) correct but are carefully placed alongside other facts to which they do not directly relate. All this to make this point about big government:

Perhaps it reflects the power of an ideology that its protagonists want to see no evil. Perhaps it is because those hurt by austerity somehow do not count. But the claim that Osborne’s cuts have been such a success that they will cause a “deeper intellectual wound to the left than we currently understand” is simply delusional. These are fantasy ideas from those living in an imaginary world, while in reality the policies they support do serious harm.

To  arrive at this position (and I've no quarrel with people thinking big government is just grand - it's just not a viewpoint I share) Wren-Lewis has had to strangle the evidence. Because the ideological bias is revealed - the protagonists of a small state are "evil" - it is clear that this was the starting point for the construction of the straw man rather than a more considered assessment (something we'd expect from an Oxford academic but don't get here) of the arguments for and against reducing the size of government.

So let's look at Wren-Lewis's arguments:

The first one relates to the idea - widely held but wholly inaccurate - that there is no longer any constituency still arguing, on principle, for a big state. I find this odd since the majority of our public policy discourse and especially that driven by Wren-Lewis's colleagues in academia demands ever more regulation, control and direction from government.  Perhaps if he had a conversation with some sociologists this might clear up his weird belief that support for a big state "...lost all its influence with Margaret Thatcher and New Labour, and it has also lost its influence in the rest of Europe." In historical terms the state remains large - reducing the government portion of GDP to 35% from its current level approaching 50% is an argument about the size of government but doesn't fundamentally challenge the central welfarist argument of modern government - a position supported (to differing degrees) by left, centre-left and centre-right.

Wren-Lewis next claims that 'small state people' (he manages to use the preferred term of abuse 'neoliberal' as well but 'small state people' is wonderfully patronising) are not as good as him because - he claims - not to have any "fixed ideological position" about whether the state should be large or small. Whereas, of course, the sad little state people are attached to their ideology. The problem is that Wren-Lewis doth protest too much - he is absolutely wedded to the idea of big government and to the view that government actions determine the direction of the economy not the aggregated choices of private individuals. It is true that, if (for whatever reason - call it ideology if you must) government sets out to reduce its size then this will have the short term effect Wren-Lewis describes. But this is essentially an argument for the big government macroeconomy that created the very financial crisis Wren-Lewis wants to blame on 'private sector activity'. The idea that the choices of big governments had no role in wrecking the economy a decade ago is a wholly indefensible position more revealing of Wren-Lewis's ideological preferences than any assessment of the facts.

Before his final piece of ideological legerdemain, Wren-Lewis arrives at the debate over whether the reductions in government spending have had a social cost. Which he presents via this little rant about food banks:

The number of food banks in the UK has grown massively over the last five years. The Trussell Trust estimate that more than half of their clients were receiving food because of benefit delays, sanctions, and financial difficulties relating to the bedroom tax and abolition of council tax relief.

Now I'm not going to deny that changes to welfare resulted in some hardship but the frank truth was that our system was unsustainable - even in a world where big government is OK. Wren-Lewis wants to argue that the reforms have been 'duds' - yet he knows that this is not the case. It is the old methods such as the Work Programme that evolved from Labour's New Deal schemes that are duds not the use of financial incentives to drive different choices. The problem is that the system of redistribution we have in the UK is now almost entirely paid for through borrowing (or if you prefer it the other way - because so much of the money raised in taxes goes in welfare payments there isn't enough left to provide the services we actually want government to provide so we have to borrow).

Finally Wren-Lewis arrives at his intellectually-dishonest conclusion in which he calls people on the right 'evil' and argues that the polices such people propose cause 'serious harm'. What Wren-Lewis cannot admit is that not only might that supposed harm be mitigated through some welfare-enhancing private action (those food banks, for example) but also that the policies of big government might also cause 'harm'. There are a whole series of government interventions and regulations that reduce trade, undermine enterprise and limit private choices - all of which might be described as 'harm'.

Wren-Lewis built a fine straw man. Truly magnificent in its vanity. But there's no truth in the central premise that people like Wren-Lewis are not wedded to the idea of big government in the manner that others (George Osborne in the main) are wedded to the idea of small government. And Wren-Lewis clearly demonstrates his ideological commitment to big government which means his splendid straw man collapses into a shallow polemic.



Dick Puddlecote said...

Search his blog for the contortions he performs on plain packaging too. He's a comedy genius. :)

Chris Oakley said...

This man is an out and out statist who earns a living by being dogmatic and completely unproductive. He has a vested interest in maintaining a big state on the grounds that it keeps him and his economically useless friends in a job. Having read his ridiculous post on tobacco packaging I have to question why his position exists and what value it has in our society. He appears to be an intellectually challenged ideologue.