fit for purpose?
people in polite company what is the function of politics and you will get a
variety of answers. One may say that
politics is a means to exercising power. Another may say that politics is a way
to managing social progress. There are many views to describe the function of
politics. Ask, what is the function of
party politics and you will have a number of deferring views on this question
too, but they will all refer to choice and democracy somewhere in their
answers. One party may offer a much faster social progress than another.
Another may offer a different kind of social progress. All parties will want to convince you that
you will enjoy the “Promised Land” if you vote for them.
parties and governments will always claim that the reason for their existence
is to make things better for people, to help the needy, to promote health,
prosperity and happiness. In a word, to exercise power to manage the nation’s
resources for the benefit of all citizens.
There is no basis or reason why anyone should doubt their sincerity. All of the above is valid in a world of
academia. Now, compare the principle with the practice of politics. To be more precise, compare the universal
principles of politics with the practice of party politics in democratic
parties developed a belief in the population that their policies will provide a
better standard of living than that of their opponents. They have also
convinced the population that their welfare programmes will look after those of
the less fortunate and the ill and the infirm. The reason all political parties
do this is to get into power or remain there. Seemingly, they will say anything
that they think will put them into office. One could say that the electorate
deserve what they vote for. But as all parties behave in a similar way the
electorate have no chance to distinguish between any of them on any other basis
than prejudice. This was not a great problem while the nation’s wealth could
support the cost of the political “Promised Land”. That was when the value of a
nation’s currency was pegged to the value of gold which provided a natural
boundary of expenditure for governments – that is, until 1971.
politicians could promise anything they liked and could pretend that they could
afford anything they promised. If the cost turned out to be more than the
nation could afford, then, they could either borrow the difference or print
some more currency to fund their programmes. Each decade, the process of
promising more and more and borrowing more and more to fund them escalated
without the population understanding their fatal implications. We still think
that governments can produce a higher standard of living if only they implemented
the ‘right’ policies. We have forgotten that it is the wealth creating
processes that produce a better standard of living. The very wealth creating
processes that are required to pay for the welfare programmes that governments
promise to the population.
inevitable crash has happened. No, not the subprime mortgage issue and the
subsequent international banking crisis. That is only an unfortunate side issue
that serves as a convenient excuse.
referring to the country’s financial situation before the banking crisis,
during the boom years. Here are the figures authenticated by the Office of
2004, - Total government expenditure 40.1% of GDP (Gross
Domestic Product), government borrowing, 35.5% of GDP. Only 4.6% of the Gross Domestic Product was available
to government to support Government expenditure.
2005, - Total
government expenditure 40.1% of GDP, government borrowing, 37.4% of GDP. Only 2.7% of the Gross Domestic Product was available
to support Government expenditure.
2006, - Total
government expenditure 40.9% of GDP. government borrowing, 36.6% of GDP. Only 4.3%
of the Gross Domestic Product was available to support Government expenditure.
2007-8 both the expenditure as a percentage of GDP and the
borrowing requirements have grown, but they are not yet authenticated.
The absolute truth is that the Welfare State, including the
NHS, care for the elderly and state pension provisions, is bankrupt and
unsustainable. Wait, please, until one
of the politicians will inform you of that fact instead of arguing about cuts
here and there.
The desired economic solutions, such as, rebuilding the
wealth creating private economy and drastically reducing the wealth spending
public sector is politically unacceptable. That which politicians set out to do
or promised that they will do is now politically impossible to achieve. This is not
just in the UK.
The same applies in the USA and in the EU. For example, it is a commonly held view that
the euro, the common currency in the EU, is in crisis and the only way out, the
only way to stabilize it is to created a Europe
wide Finance Ministry to control its value. That necessary economic development
is totally impossible to achieve on political grounds. Is politics as practiced
in the 21st Century fit for purpose?