The Office for National Statistics regularly adjusts the composition of the basket of goods which is used to assess inflation in the UK. This can be a controversial process because consumers buy such different items. While artisan gin may be really popular in some circles, other social groups could be more concerned with the price of iced buns.
Class and gender may impact on what we purchase. Our perception of inflation is thereby influenced by the position we occupy in society. When inflation is above the two per cent target, our emotions about it might be structured by more than our income.
This matters when interest rates are the subject of elite discussion. The Bank of England may cite inflation if it nudges up the interest rate this week. But people know that the central bank is also concerned with its credibility. Any decision of the Monetary Policy Committee will be evaluated by citizens with different spending patterns. This suggests that a broader economic debate is needed. Minor interest rate adjustment may be deemed to be tinkering if enough people think that the unbalanced UK economy requires the implementation of a robust democratic strategy.
Radio can take the listener to troubling places. The Dark Tower by Louis MacNeice is a journey worth taking. Combining the psychological and the political, the play raises existential questions. A dark humour can be discerned, but a seriousness is never absent.
It is no coincidence that Albert Camus wrote La Peste in the same historical period. Both writers were trying to come to terms with the ruin of Europe. They were concerned with what fascism had done to people. Neither thinker was dogmatic, but both individuals were unable to leave politics to politicians.
MacNeice was a poet who understood that certainty could be a terrible thing. His ambivalence was one of his strengths. And yet he could not feel isolated from the political fray. He knew that leaving history to its own devices could cost the world. His message resonates in the era of Trump, Brexit and casino capitalism.
The arguments for a rise in British interest rates have now received an abundance of media attention. It is widely anticipated that the Bank of England will nudge the rate up slightly. The recent growth figure and the length of time the rate has been low suggest that a gesture to normality is probable. At the same time, the institution may want to cement its credibility by acting on its earlier hint. With inflation up, the perceived need for a decision is clear.
There are commentators who suggest that the predicted rate rise is premature. They look beyond the headline employment figures and stress the relative overall performance of the British economy. Keeping interest rates flat for a long period would mean that policy could be made on a comprehensive assessment of the complex situation. As Brexit negotiations carry on, the central bank might develop a clearer picture of the likely outcome.
The main reason why the debate about interest rates is so prominent may not be the worrying amount of personal debt in the UK. It might well be the case that the next budget is likely to be a safety-first event. In the absence of a compelling economic strategy from the beleaguered Government, it is understandable that journalists have become preoccupied with the minor details of economic management.
Somebody was explaining the politics of British austerity economics yesterday. They were right to say that the selective and cumulative attacks on the poor by the Tories were unnecessary in economic terms. Clearly, few economists would view the international economic crisis of 2007-2009 as the consequence of the incompetence of Gordon Brown. Nor would an experienced analyst of the labour market necessarily agree that the answer to low productivity is to exploit the poorly paid.
The individual suggested that the Treasury had been influenced by public choice theory. They also pointed the finger at the initial architects of neoliberalism. Listening to them, austerity is a completely irrational response to a crisis of capitalism. Why would the ruling class pursue conscious cruelty if there was no pay off in economic terms?
The missing piece in the jigsaw is that the policy is repaying affluent holders of bonds. There are real beneficiaries of austerity measures. The ideological project may involve the shrinking of the state, but analysis has to highlight the winners from the process. It is a commonplace to suggest that quantitative easing has boosted share prices. It is straightforward to work out that low interest rates have helped those on the property ladder. But the unearned income flowing to the holders of bonds is not always highlighted by those who are keen to articulate that austerity is a political choice.
The Marxist geographer David Harvey did mention the role of prosperous holders of bonds at an earlier phase of the protracted crisis. It is not necessary to be a Marxist to admire his clarity. If ordinary people do not recognise why the system is rigged against them, they will find it hard to understand why their suffering is prolonged.
In the midst of the First World War, the imperialist power of Britain made a significant intervention for the Middle East. The Balfour Declaration of 1917 has aroused much controversy and a recent conference in Liverpool was held to debate the sensitive issues. The discourse of anti-Zionism has featured in discussions about possible racism within the current British Labour Party, but many of those who attended were unafraid to consider a troubling history.
Without assessing what is going on in the modern Labour Party, it is possible to think about what happened nearly a hundred years ago. The Balfour Declaration was typical of the imperialist mindset. European powers were unafraid of pursuing divide and rule policies around the globe, often acting in a seemingly arbitrary fashion.
For Lenin, imperialism was driven by economic imperatives. Cultural factors might have influenced specific decisions, but it was a capitalist logic which formed the basis for the majority of the territorial acquisitions and so on. While some contemporary activists are passionate about the impact of the Balfour Declaration, others may agree with the intellectual Edward Said who once wrote:
“There is not much use today in lamenting such a statement as the Balfour Declaration. It seems more valuable to see it as part of a history, of a style and set of characteristics centrally constituting the question of Palestine as it can be discussed even today.”
“So a delay of five weeks or more in paying the credit is an atrocious design fault. Charging up to 55p a minute for calls to the helpline was simply stupid, as ministers have belatedly realised.”
The built in delay associated with Universal Credit is currently a minimum of six weeks. When Rawnsley of The Observer suggests it could be five weeks, it is indicative of a problem with the mainstream media. Many UK commentators have expertise in discussing politics as a horse race between the parties. Too few of them have experience of dealing with the tragic remnants of the British welfare state.
This gap is partly responsible for an inability to understand recent electoral behaviour. However, it has wider significance. If it is fun to be part of the establishment, it is hard for its members to appreciate the complexity of the lives of people who may not have much fun at all.
It seems that the Government may alter the delay connected with the first proper payment of Universal Credit. Establishment commentators will have the skills to explain what this retreat means to the parties. However, it is unlikely that privileged journalists will ever quite comprehend what the delay means to the people.
This narrative is of great interest because Yanis Varoufakis attempted to confront the European elite with macroeconomic logic. However, there is little Marxism to be found in the work of this self-described “erratic Marxist.” Where one might expect to see examples of dialectical materialism one discovers historical anecdotes.
The book provides plenty of evidence to support the thesis that Greece has been treated unfairly. Nonetheless, it might not show that the cruel “fiscal waterboarding” was risking the stability of European capitalism. Following the international banking crisis, capitalism in several countries has proved to be highly unstable. Further, it is hard to portray capitalism as sustainable in terms of its growing impact on the natural world. Arguably, the current economic system is inherently chaotic and big profits are generated despite the lack of order.
The text does contain insights into the worlds of central banking and politics which may be entertaining for the general reader. The populist Varoufakis is prone to making sweeping statements which can make somebody suspend their critical judgement:
“The more the crucial political decisions are turned over to unelected second-rate technocrats, the fewer gifted men and women enter politics. Would the young Mitterand, I wonder, have entered politics in a Europe where questions of interest rates, taxation and social welfare were deferred to faceless bureaucrats?”