Thursday 4 August 2022
Oh, what a bore. I was supposed to be writing a novel, but instead I am going to have to lead a revolution.
In 1997, neither Tony Blair nor Gordon Brown took a pay cut despite having cut the responsibilities of the First Lord of the Treasury and of the Chancellor of the Exchequer by at least half when they surrendered democratic political control of monetary policy, a surrender that had been in neither main party's manifesto and which no Conservative Government had ever attempted.
By having announced in advance their intention to adhere to John Major's and Ken Clarke's tax rates and Departmental spending limits, Blair and Brown had also arbitrarily given up the fiscal means of controlling inflation, which had been readily deployed by all previous Conservative Governments. In that case, then why had there been a General Election at all? And here we are.
Rachel Reeves has already committed the Labour Party to whatever Departmental spending limits it happened to inherit. The Exchequer still has a Chancellor who is committed to a 20 per cent cut to everything. He has endorsed the clear favourite to become Prime Minister a month and a day from now, in the obvious hope, or even expectation, of being kept in post. Vote Labour, and you would be voting for that. A 20 per cent cut to everything. In a recession.
A sovereign state with its own free floating, fiat currency has as much of that currency as it chooses to issue to itself, with readily available fiscal and monetary means of controlling any inflationary effect to the politically determined extent while encouraging politically desirable, and discouraging politically undesirable, forms of behaviour. Those means therefore need to be under democratic political control.
For all the many faults of each of them, either Boris Johnson or Jeremy Corbyn would be a better Prime Minister than Liz Truss, Rishi Sunak or Keir Starmer. The Right would have to be prepared to forgive Johnson a lot, and not everyone would be able to do that. But if enough people could, then a party founded by him, even with him as its only MP, would be awash with cash, and would have a strong activist base, not least of the thousands who intended to cancel their Conservative Party membership immediately after having voted for Truss in order to punish Sunak. The Left would have to be prepared to forgive Corbyn a lot, and not everyone would be able to do that. But if enough people could, then a party founded by him, even with him as its only MP, would have trade union money coming out of its ears, and would have 100,000 or more very highly active members indeed. Each of those parties would take at least 15 per cent of the vote, deciding the outcome of scores or even hundreds of seats.