Battle of the Chancellors: hope v fear

30 October 2012

At the Spectator debate on the economic consequences of Mr Osborne last night, Andrew Neil repeated JK Galbraith’s line that ‘economic forecasters exist to make astrologers look good.’ The impressive Conservative MP Jesse Norman countered with ‘an economist is a man who knows 17 ways to make love to women – but no women’. Lord Oakeshott, I think, joined the mockery by pointing out that every forecast from the Office of Budget Responsibility had been wrong. Its consistent incompetence, its steady state of stupidity, its unerring unreliability, made it a surprisingly useful institution, however. Whatever it predicted you could be sure the opposite would occur.

How we laughed. But political commentators are no better. For we too make sweeping predictions about the result of the next general election as if we were clairvoyants who can know an unknowable future rather than mere hacks. Having denounced the sin of false foresight, allow me to play the hypocrite and commit it.


I was struck by the optimism of the left-leaning speakers in the debate — not just Oakeshott, but David Blanchflower and Alistair Darling. They were full of dynamism and hope. They wanted the Treasury to get out of the way and allow pension funds to invest in public housing projects. They warned that we can never cut back the deficit without growth, and only imaginative public action – not just direct government borrowing, incidentally – could create growth and, as a happy consequence, provide homes for the young and the power stations we need to stop the lights going out as well.

The right-wing speakers Jesse Norman, Fraser Nelson, of this parish, and Norman Lamont trumped hope with fear. I could feel and share the frisson of puritan self-disgust that ran through the audience when they described Britain’s massive personal and state debts. We went on a jag in the last decade, they said, and there was no escaping the hangover. The bond markets would no more allow us to increase debt than a doctor would allow a doctor to increase his alcohol intake.

Fear won the audience over, and it may convince the country to stick with the coalition at the next election. But Osborne ought to be worried. In their hearts, Norman, Nelson and Lamont don’t believe in his economic strategy either. They would cut spending further and lower taxes to create growth if they could. They too did not want to stick with the status quo as the longest period of recession and stagnation in 100 years drags on. Although I disagree with their solutions, it was to their credit that they did not want to just sit there and do nothing as Britain declined around them.

Everyone says that the ideal place to be in politics is in the centre ground. But unless the short run of economic good news continues, George Osborne will look like a man trapped in a motorway’s central reservation. Eventually he will have to try to escape by making a dash to his right or left. There is no guarantee that he won’t be mown down as he runs for it.

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  • Trofim

    You are familiar with depressive realism, aren’t you? Slightly depressed people are more accurate predictors of the future than optimists. Bankers and idealists are optimists.

  • Kevin

    The problem seems to be that everyone is treating this as a political rather than an economic issue. Conservatives used to have an economic policy. They used to ignore Labour’s tactic of calling them “Nazis”. Now it is as if someone has calculated that the profligate are the swing voters and one must keep their house prices propped up at all costs or there could even be civil unrest.

    Politically, they may be right. The economy will still decline but, as long as the volatile types remain on top, decent people look as though they will keep tolerating the injustice like the slaves they are “meant to be”.

  • OldSlaughter

    Hope vs Fear vs EXPERIENCE.

  • Boo80

    Snake oil Merchants believe in Hope.
    Without Hope people wont sink their hard earned money into their Miracle cure.

    The advocates of Fear may be doing us a service, in getting us to accept that we have a problem.

    Ultimately with fear and hope, it depends on whether they are true.

  • sir_graphus

    I think of Ed Balls, and I think “fear”, rather than “hope”.

  • DavidDP

    On the other hand, I was struck by the fear epoused by Blanchflower et all. Mass unemployment, economic disaster etc etc unless the government steps in and saves us all from ourselves.
    Compare that with the optimism of Lamont et al, telling us that the seeds of economic health have been planted and the we can do it if only government would get out of our way.
    I guess you pays yer money and takes yer choice.

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