Cooking the Books 1 – The blame game

According to the media, the main issue in the election has been the state of the economy. The Labour Party has made it the central point in their campaign, seeking to blame the outgoing Conservative government for slow growth and stagnating living standards. In a typical example of their (rather overblown) propaganda Rachel Reeves, the would-be Chancellor of the Exchequer, stated:

‘The Tories have had 14 years to fix the nation’s roof. Instead, they smashed the windows, kicked the door in and burnt the house down. Here’s the honest truth about Rishi Sunak’s record in power in ten words: our country is poorer and working people are worse off’ (fundraising email to Labour supporters, 25 May).

This is to put the blame for the current state of the economy entirely on the government. It is to assume that a government can control the way the economy works. This is an assumption made not just by the Labour Party but shared by the Tories themselves and by other groups of politicians who aspire to be the government such as the Lib-Dems and the Greens. But it is mistaken.

The economy is driven by the quest for profits by private and state enterprises competing to sell the goods and services that they employ workers to produce or provide. This gives rise to impersonal economic forces which determine the level of production and employment.

Governments can only react to the economy as it goes through its never-ending cycles of expansion and contraction. They can’t control this. As far as the operation of the economy is concerned, governments just preside over what is happening; they are in office but not in power. The power that they do have to intervene in the economy, through taxation, subsidies and spending, is limited by the state the economy is in at any particular time and the permanent need to give priority to profit-making and conditions for this. It is this that leads them, when the economy is not growing, to cut spending on public services and social benefits.

In the political game played by parties competing to stay in or come into office, the ploy of the Outs, when a government is forced to cut back its spending, is to blame the Ins for what the operation of capitalism has forced them to do, which in this election the Labour Party has been playing for all its worth. On the other hand, when capitalism is in a period of expansion which a government happens to be presiding over, the ploy of the Ins is to claim credit for this even though this has nothing to do with what they have done.

While the economic policy a government pursues can’t make things better it can make them worse. The short-lived Truss government is a case in point. A government which tried to spend its way out of a period of contraction or stagnation would be another.

The Labour Party has learned this since the end of the 1970s and its current policy is based entirely on trying to encourage economic growth. It’s a gamble. They could be lucky, as the Blair government was for a time, and be in office when the capitalist economy spontaneously expands, but it doesn’t look like it. A government can no more bring about growth than it can spend its way out of a period of slow or no growth.

A Starmer government won’t be able fix the roof either. On the other hand, when the windows get smashed and the door kicked in, they won’t be to blame; capitalism will be.

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