Three signs that we are in the economic endtime

I have been feeling guilty about my part in driving the rail minister Claire Perry out of her job at the Department of Transport. I did so with a series of blogs about the collapse of the Southern rail franchise, read by so many people that it began to terrify me. I even wrote a book about it.

Claire Perry was the person most accountable, but least responsible for the situation with Southern Railways and it seems unfair that she (salary: barely £100,000) sacrifices her job while those most responsible for the situation keep theirs.

Let’s just list who they are: the government’s head of rail franchising Peter Wilkinson (salary: £200,000), GTR chief executive Charles Horton (salary reported as £2m) and Go Ahead group chief executive David Brown (salary: £2.2m). Again, they may not be personally responsible, but Horton and Brown are part of the absentee landlord system of public service commissioning, extracting their salaries from customers and taxpayers, but not doing the repairs, providing the staff or running the trains on time. It may not just be their fault – it is a faulty style of contracting – but they ought to be accountable.

And, like absentee landlords, they let Claire Perry carry the can for defending them.

But this blog isn’t really about Southern except as far as the whole affair has a significance beyond itself.

Because I have been writing for some time that the new age of political and economic thinking is upon us, in time for the regular 40-year shift (1979, 1940, 1909, 1868, 1831 in the UK, and so on). What makes this time different from the others is that there has been remarkably little mainstream debate about what this new age will mean.

If you manage to engage mainstream policy-makers in debate (I don’t mean economists who are much more flexible) they tend to be wedged so much into the old thinking that they can’t extract themselves without more intellectual effort than they are prepared to put in, So how do we know the shift is coming?

My answer is that there is more than a whiff of the 1970s about economic policy now, driven by the feeling that the establishment is clinging to the old truisms beyond the point when they are useful.

Here are three examples. You know we are in the endtime of the old economics...

1.    When the middle classes can’t buy their own homes without government subsidy.

This is true mainly in London and the south east, but it is still true. One of the original purpose of Nigel Lawson and his economic reformers in the 1980s was getting rid of mortgage interest tax relief, and similar subsidies for the middle classes. Now, even with the so-called Bank of Mum and Dad, housing is unaffordable in our capital city unless you work in financial services. The fact that subsidies are back is a sign that the housing market no longer works – something else is going to be required.

2.    When public services can no longer be run without mass immigration.

This is not to criticise immigration, but the fact that the NHS is now quite impossible without major foreign labour inputs – because we can no longer afford to pay or train our own people – is another sign of the economic endtime. This will become horribly apparent unless Theresa May gets off the fence and guarantees the right of EU nationals to stay in this country, because – if she doesn’t – they are liable to get up and go.

3.    When ministers defend indefensibly bad contracted out services, you know the 1970s have returned.

This is why I began by talking about the former rail minister, who was so constrained that – when Southern Rail services unravelled thanks to indefensible incompetence – her only option was to defend GTR and their managers. Again, it reminded me of the 1970s when ministers found themselves defending bad services purely because no other option seemed available.

Taken together, all three are signs that the present assumptions about economic policy are exhausted. The establishment will continue to cling to the old dispensation, but they will increasingly be looking for something, anything, that has some chance of making sure that civilisation continues.

There is no doubt that 2016 will go down in history also as one of those watershed events which will change our economic certainties forever. Perhaps the Wall Street Crash of the new age. But it all takes time to shift.

What the Americans did in response to the first crescendo of the Great Depression was to elect the very wealthy and well-connected Herbert Hoover, who tried tentatively to adapt to the new dispensation, but was unable to think boldly enough.

It took the arrival of what was then known as the ‘new economics’, under a president who understood the right questions to ask, to see a real shift. Franklin Roosevelt also brought in people like Harry Hopkins to run his programmes, who were prepared to cut through the red tape to keep people alive through the winter.

The next new economics will be different. But there will be some parallels, and among them will be that innovative people like Hopkins will rise to the top to make things happen.

You heard it here first. In the meantime, I wanted to say: Sorry, Claire...

See my book Cancelled! on the Southern Railways disaster, now on sale for £1.99 (10p goes to Railway Benefit Fund). One of my correspondents suggests that we all buy the paperback version and leave copies on the trains...

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe