Britain's economy and government since the financial crisis: a problem of short-termism

There is ever more evidence that Britain is a country running on "borrowed time".


Economic short-termism 

Since the financial crisis, the country has never really recovered. All the figures show an economy that has levels of productivity so bad that they haven't been seen since the 18th century, before the country's industrialisation.
The pretense of a functioning "economy" exists, but it could be argued that all changes to the economy since the financial crisis have simply given the illusion of one. The economy that exists now is one of low productivity, low investment, low skills, low wages, and low security. Put in these terms, it makes one wonder how there's any real growth at all. There is a psychology of systematic short-termism, where many companies' only aim is to make ends meet until the next quarter. There is no thought given to longer-term planning; strategic thinking has gone out of the window.
This psychology has led, on one hand, to bringing down costs in any way possible: from companies like Carillion, who ran their affairs like a huge Ponzi Scheme, to the "casualisation" of the labour market, with the proliferation of zero hours contracts and deliberate underemployment. Meanwhile, the massive use of outsourcing is another way to cut costs, which is endemic in the public and private spheres. In this way, the illusion is created of the economy becoming more "flexible", as Larry Elliott mentioned in the linked article above, where it in fact simply becomes more nakedly exploitative. So the implication is that, since the financial crisis, the only way Britain's economy can stay on its feet is to regress back to 19th-century work practices. Except that the economy is doing so badly on some measures, that it's actually regressed to the 18th century.

And in spite of all these "flexible" measures introduced, services and construction, which make up to 80% of the overall economy, are floundering. With the retail sector going through what experts call a "transition", the effect on the ground is that those companies that are slow to adapt to the rise of internet shopping are simply losing customers at a punishing rate. Again, this is simply a symptom of a lack of strategic planning; something which seems depressingly common.
The irony here is that this has been predicted for years. With the collapse of manufacturing thirty years ago, retail and services have been taking up the slack. Except that now, thirty years on, retail itself seems to going through a similarly-testing period as was once experienced by manufacturing. Having an economy with such a large trade deficit thanks to the chronic lack of exports, Britain's is a consumption-led economy. Governments of the last thirty years have thought that "services are the future" for a country like Britain, which would fill the hole in the labour market left by the collapse of manufacturing.
After thirty years of "borrowed time", technology is beginning to test that theory on the high street, with very visible effects. In short, technology for many companies has been shown to reduce costs, with a need for fewer workers. Likewise, the rise in internet shopping has reduced the need for consumers to physically go to the shops on the high street. This "double whammy" has seen the proliferation of things like "self-service" checkouts and the gradual automisation of warehouse working, and also the closure of more and more high street shops and franchises as the footfall is simply drying up. While governments of the past thought that "services are the future", the "future" has since caught up with the economy. That "borrowed time" in which the economy was able to thrive on services alone, seems to be at an end.

These technological changes have been inevitable, but Britain's economy is poorly set-up to deal with them. For all the reasons mentioned earlier about how its labour market has "restructured" since the financial crisis, Britain's captains of industry have been too short-term in their thinking to consider the effect that these technological changes would have on the insecure and exploited workforce they have created.
As this underpaid and insecure workforce simply has much less money to spend, a "vicious circle" has been set up thanks to institutional short-termism. Workers with less money will consume less; if consumption declines, so do the fortunes of the companies that employ them. Everyone loses out, with the inevitable result being less money in the economy. This is the ultimate price of short-term thinking. It is an economic model that cannot work in the long-term.


Political short-termism

At another level, all the signs are that Britain has a political culture that is intellectually incapable of leading. Sharing all the same signs of malaise and short-termism as industry, the government is literally doing nothing about most of the country's problems, which are simply getting worse through government indolence. All that happens is that difficult decisions are kicked down the road, while the country's infrastructure, institutions and social bonds slowly fall apart.
Short-termism was the ultimate cause of the government's "austerity" agenda. It was politically expedient in 2010 for the government to claim that cutting the deficit was a necessary action, with spending needing to be cut across the board. However, all the economic figures since then have shown how austerity simply makes everyone poorer, including the government.
A government that spends less on government services that are there to improve public conditions is not saving money in the long-term. Companies with strategic thinking understand the importance of investment; government is the same. Governments that cut back on investment in their own population when the economy is doing badly are not helping the economy; they are making it worse. Reducing spending on mental health reduces people's mental health. Reducing spending on those with disabilities reduces how much money those with disabilities have etc. etc.

If the government continually reduces how much money it feeds into the public sector, the ultimate result will be lower tax returns for the government. It is a self-defeating measure. The same has been true of the wider economy, where fewer well-paid jobs in the economy since the financial crisis have simply led to smaller tax returns to the government. The reason why the former Labour government got into such a huge deficit during the financial crisis was largely due to the fact the the economy's collapse resulted into catastrophic collapse in the government's tax receipts from the overall economy. Unemployed workers don't contribute to the tax system. People with less money spend less.

On a different level, while the "transition" the economy seems to be going through could act as a painful "reckoning" on corporate short-termism, Brexit could well act as a "reckoning" on the government's own pathological short-termism.
A referendum on the fate of the entire country was chosen for the short-term political gain with the government's own party. Since then, Theresa May's government has conducted the Brexit process with the sole aim of keeping the governing party together, regardless of its potentially-disastrous effect on the country in the long-term. It has made itself look both ridiculous and obstinate in the face of reality. The government seems not to care about this, as long as it is the EU who can be blamed for any problems later on.

Brexit may well be the ultimate "reckoning" for Britain's broken economy and government. As economic short-termism can only work for so long before time catches up with it, the same is true for the government and Brexit. For the government, time is running out, as the EU keeps reminding it.

Austerity and Brexit Britain: "managed decline" or destroying the state?

The term "managed decline" when referred to Britain has been banded around for decades, ever since the end of the Second World War also marked the beginning of the end of its Empire. Joining the then EEC was about banding together with other European nations as a way to recognise the reality of Britain's diminished status as its Imperial status fell away. Since then, and in the last thirty years especially, Britain has seen a "restructuring" of the economy away from those sectors that effectively relied on its Imperial status for its survival and towards a service and finance-centred economy that was more dynamic to modern demands.
That "restructuring" is what the Tory Libertarians in government see as Britain's future. They see Britain outside the UK acting as a "Singapore-On-Thames", free from the shackles of EU regulation, free to trade with developing economies around the world; a "stripped-down" state that encourages its labour force to be forward-thinking and proactive about the country's challenges.

This vision is as delusional about the future as it is dishonest about the past. Just to name one example, the environment secretary, Michael Gove, is now talking about how the government ought to in the future grant subsidies to allow fields to return to their natural, wild state. As he claims, the CAP benefits wealthy landowners to provide perverse outcomes to agriculture. Thus, "Brexit Britain" will be about returning some of the countryside to its pre-industrial state.
This kind of policy would be considered laughable, except that this is a policy recommended by the chief minister responsible for agriculture. It is certainly true that the current rules benefit landowners; but to suggest that the answer would be for the government to pay for land to left deliberately unused is, for one, financial suicide from the government's point of view, and two, an utterly inefficient use of a commodity when the country will need to make money from all the land it can get after Britain leaves the EU. This "solution" also offers nothing on the much bigger issue of how much of the land in the UK is owned by a tiny number of people.

In other words, the government identifies a problem, then recommends the worst possible "solution". This has been a trend in this government for years. Other examples include the subsidies that the government pay to the privatised train companies (some of which are owned by foreign governments); the subsides paid to the privatised energy companies (some of which are also owned by foreign governments); the money now paid to universities by government in the form of student loans (much of which will remain unpaid) to pay for its policy of hugely-increased tuition fees. Then there are the numerous companies that the government "outsource" to in various capacities, from the justice system (prisons and detention centres), to the welfare system, and so on. These companies then almost always do the job that government did in a far more incompetent manner, because they have much tighter overheads to worry about (even with government assistance).

To pay for all this corporate largess, one solution the government came up with was "austerity". In the government's (false) narrative, the financial crisis was the result of the Labour government's overspending. Therefore, the Conservative government's main priority was to reduce government spending in any way it could. This also served the wider purpose of fitting in with the Libertarian agenda close to the heart of some in government, including those also in favour of Brexit. In this way, "austerity" was a means to an end: about permanently changing the perception in society that government was a reliable "safety net".
Cameron's idea of the "Big Society", formed prior to his conversion to the "austerity" agenda, was originally about the community helping out those in trouble, in order to help government. Instead, the "Big Society" under an "austerity" government has become a sick joke: where Food Banks are established in order to help those who cannot even afford to properly feed themselves (even those in work!), thanks to the government's own policies. In this manner, the government now praising the "Big Society" during a time of government-imposed austerity is a little like being attacked on the street, to then see the attacker later visiting the hospital where you are being treated for your injuries, in order to praise the staff for their work! The "austerity agenda" has spread into the welfare state, so that thanks to changes to disability assessment and the introduction of Universal Credit, more and more people are now unable to afford simple essentials, and some are homeless as well as starving.


A "failed state"?

In this way, aspects of Britain under the Conservative government have took on the appearance of a "failed state": where the government has effectively wiped its hands clean of whole areas of civil government and social welfare. Local governments are now deliberately starved of cash, with the result that essentials like bin collection and street lighting (without even mentioning the closing of "non-essential" things like local libraries) have been downgraded due to lack of money. Parts of the country look increasingly grubby and ill-maintained precisely because central government refuses to provide the cash. Meanwhile, the nakedly-visible increase of homelessness seen on the streets is the marker of a government that is failing its citizens.
Bear in mind again, these are conscious decisions by central government: they are choosing to do this. The money could be found if it wanted it; it simply chooses not to find it, and chooses to allow these services to wither.
In other areas such as policing and the prison service, cuts to funding have a direct consequence on public safety: the increase in violence and street crime is there for all to see, while the police state openly that certain crimes (like petty theft) will go un-investigated because they simply lack the resources. In prisons, violence is reaching levels closer to those seen in the developing world, rather than those expected for a G7 country.
Meanwhile cuts to defence also have reduced the country's ability to even properly monitor its own borders, let alone its involvement in overseas engagements. Vanity projects like the huge aircraft carriers now being put into service simply act as concrete evidence that the government is more interested in vain distractions than the reality of Britain's pygmy-like status on the military front, compared to its rivals.

The "austerity agenda" has now morphed into the "Brexit Agenda" since the referendum, but the goals are almost identical, in terms of its internal impact on the country.
The Libertarians in government behind the "austerity agenda" are the same people behind "Hard Brexit". They believe in a stripped-down state because their faith in the free market comes above all else, and clouds their judgement over the positive effects that government can have on society. Because they believe that free market will always do things better than government, it follows that for their agenda to succeed, "government", by definition, must be seen to "fail". If government is seen as efficient, this hampers their agenda for the free market to take the place of government services. To give one example, the success of the temporarily re-nationalised "East Coast" train service is an "inconvenient truth" that goes against their belief that privatised rail must, by definition, be better than state-owned rail. The fact that no other countries in the world operate train services like they are done in the UK (because it is seen by outsiders as madness) is besides the point. Following this logic, only if society sees that government cannot function will society believe that the private sector is better than the public sector.
The government's agenda is to prove to society that government cannot work. As they see it, this is the only way that people at the lowest rungs of society can be pulled from their torpor of dependency - the toughest form of "tough love". If the result from this agenda is mass poverty, homelessness, an epidemic of crime and a breakdown of the social fabric, this is just a "means to an end".

Put in this light, the "Brexit Agenda's" advocates inside government are working to effectively bring down parts of the system of civil administration from within. It is about destroying faith in government by deliberately destroying government. Because its advocates are from a wealthy elite that pays for services that it does not use (such as the welfare state), the predictions of economic collapse following a "Hard Brexit" perversely work in their favour, as a trashed economy would be ripe for the picking. This also explains why, on the other hand, those in the corporate elite who are the beneficiaries of government largess (while the rest of society gets a metaphorical kicking) are tied to those in government. The corrupt connection between Westminster, Whitehall and the corporate elite, through the common thread of the establishment, explains all this.

The largess promised on the landed elite after Brexit, like the example Michael Gove has given, is another form of patronage in a broken system. The "managed decline" that was first seen after the Second World War was, for some parts of the country, not rectified by being in the EU, but was used by the Thatcher government and its successors as an excuse to "restructure" a society stripped of union power. This explains why there are parts of the country, in the North of England and South Wales, that look more like a kind of urban dystopia, plagued with under-investment, unemployment, ill health and crime.
This policy of deliberate "managed decline" is another facet of the "stripped-down" version of the state envisaged by some Brexiteers. The parts of the country (and the economy) that are dynamic should be encouraged; the parts that are not should be allowed naturally to "die". This is a form of Social Darwinism by another name.

Whether the advocates of this agenda are dangerously delusional or deliberately dishonest is unclear; but the outcome for the rest of society from this agenda is as clear as day.

Conservative ideology and Libertarian philosophy: how indifference kills society

As the well-known phrase goes, evil occurs when good men do nothing.

Put another way, we could also say that bad things happen when the government stops caring.


Reward the rich

The Conservative Party in the UK and the Republican Party in the USA effectively act as legitimised lobbying groups for the richest in society. In the USA, lobbying by corporate interests is in any case perfectly legal, and practises that in many other democratic countries would considered "bribery" are in Washington simply part of the way doing things. In other words, in the USA, and to a lesser extent in the UK, the legislature is designed to be an instrument of most powerful, best-financed, interests.
The USA and the UK have their own idiosyncrasies in how the both "reward the rich". The revelations of the Paradise Papers and the Panama Papers demonstrated how the UK's turn-a-blind-eye attitude to its various tax haven dependent territories means that it is acting as one of the world's largest facilitators of global tax avoidance. These systems are in place because they benefit the rich, who also fund the Conservative Party, and also are represented by MPs in parliament who would themselves use them. The tax system in the UK is one of the most complex and opaque in the world, and through its tax havens being legally "semi-detached" from the UK, it allows those with the means to hide their wealth as well as profit from it.
The fact that London is seen as the primary destination for oligarchs and Arab shiekhs to convert their money into capital assets (i.e. laundering their money into property) is another indication of how the rest of the world perceives the UK as a "rich person's playground". While the perception at home is fed that the UK is the mother of all democracies, the seedy reality is that the UK trades in on its reputation for integrity in order to draw foreign capital, without caring too much where it comes from. This explains why one of Britain's few remaining stable industries is arms manufacturing, and why the government is keen to remain friendly with both Saudi Arabia and Qatar, regardless of the hostility between them.
The USA has its own methods of "rewarding the rich". Apart from its own tax system that, like the UK's, is skewed is their favour, the rich in the USA do not have to worry about funding a large welfare state, unlike in the UK. And the USA has a much more visible and muscular lobbying system than in the UK to further the rich elite's interests. So while the UK still has something of a semblance of a "welfare state" (for the time being), it has other ways of making life easy for the rich, through its toleration of tax avoidance and other methods of "locking out" those lower down in the social hierarchy (see below).


Punish the poor

It has been well documented that the UK (like the USA) has some of the lowest levels of social mobility in the developed world. As mentioned above, the political system is designed to entrench the power of the richer segment of society, because it is they who are chiefly responsible for funding it. But when I say "funding" the system, I'm not talking about taxation; as already said, the tax system is that complex that there are many ways around it. I'm talking about political funding. The problem for everyone else who doesn't have that kind of influence is how to survive when your running full pelt just to prevent yourself falling further behind.
Because the system is designed by those without any experience of poverty (or even just average earnings), they make decisions based on their own prejudices. If I'm rich, it's because I'm intelligent and hard-working, they think to themselves. Therefore, those lower down in society must be there because they're feckless and stupid. This explains why many politicians seem so out of touch with everyday reality: it's because they are out of touch with reality! They simply have no understanding of what circumstances and situations occur when you're at the lowest rungs of society. They have no idea of the stress and psychological toll basic poverty has on people and families, and the many side effects and consequences that occur from that: from alcoholism, drug addiction, physical and sexual abuse, and so on. And that doesn't even cover more "mundane" issues like having trouble paying bills, or skipping meals to pay bills. The end result of all this for many is homelessness, as we can see on our streets.
These things happen in many cases because the people involved are unable to mentally cope with the stresses of living on the poverty line. This is where petty crime comes in, and the UK government's policy to reduce funding for state services for such essentials as policing and prisons means that crime is left to fester like a cancer on society, spreading bit by bit into different aspects of society: increasing numbers violent assaults through drinking, or drug addiction to give just two examples. There are many others I could give. And then there is the effect of reduced funding to UK prisons, where reduced numbers of prison officers is now causing an unprecedented rise in drug use, suicide and violent assault in prisons themselves. This is all the result of a decision by government to choose not to care. 
This is all without mentioning the "reforms" that the UK government has been making to welfare, in order to encourage more people into work (this is at a time when the UK already has what most experts would classify as close to "full employment"). These "reforms", on top of the ever-increasing trend of insecure employment, and things like the necessity for food banks, add up to a social model that seems designed to punish the poorest in society for their own misfortune.


An "anti-social" ideology

What guides the thinking of the rich elite in the USA and the UK is the Libertarian belief that government, almost by definition, is a bad thing. Of course, to the rich, government is a "bad thing" because it gets in the way of making money, and often tries to take it away from them. This is why it is necessary for them to get as much influence over government as possible, so that it works in their interest, and not against them.
In the modern era, to publicly espouse such views would be considered amoral (because they are!), so these views must instead be expressed in a way that is meant for the benefit of society as a whole. This is why "trickle-down theory" is so useful for their agenda, and why Ayn Rand was a god-send for their cause. Because Rand gave a moral argument in favour of being selfish, by saying that self-reliance was the highest virtue, it sprouted a renaissance in the form of the "greed is good" mantra. Conversely, helping others (altruism) was seen as the worst evil, as it encouraged people to rely on others. The same view was held by many in the 19th century, when "charity" was then seen as a dangerous idea that would encourage fecklessness and irresponsibility. In the form of the "Tea Party", now transformed into Donald Trump's own brand of populism, we have the same ideology today in the USA, while in the UK, it sits as unofficial government policy, also known as "The Brexit Agenda".

This ideology, now shared implicitly on both sides of the pond, is anti-social in nature, as it is against the interests of society as a whole. While the rich do what they can to avoid paying tax (and thus avoid contributing to social programs), they also do what they can to make poorer people's lives more difficult (for instance, by reducing employee rights and social benefits).
It is therefore the indifference of the richest in society to the lives of the poorest that can sometimes  be literally deadly.

"Hard Brexit": why a "no deal" scenario is a descent to madness

In a previous posting, the author looked at the potentially-sinister motivations that some high-placed figures may have for leaving the EU without a deal (and no transition). This leans towards being a "conspiracy theory", and the reality is more complex, as explained in the article. However, it's also evident that one of the key reasons that a "Hard Brexit" is being seriously considered is because decision-makers in government have been persuaded that the effect will be minimal on the British economy. In other words, a "Hard Brexit" could happen simply because people in government don't understand what they're doing.
So let's have a reminder of what the situation truly is, and what would happen automatically if Britain has a "no deal" situation with the EU by 30 March 2019.


Into a hurricane without as much as an umbrella?

As mentioned in the highlighted article, Britain has been a part of the EU for forty-odd years, and in that time, almost every aspect of the British economy (and life in general) has become intertwined with the EU. In this respect, Eurosceptics' original complaint that Britain has over this time lost its sovereignty hold some water, at least at a technical level: one of the key principles is about transfers of powers. But the trade-off in "losing sovereignty" is the vast opportunities gained for wealth creation across the open borders.
The EU is a single market, but can also be called a "single economy", given how inter-connected the methods are. Companies across Europe rely on its seamless nature: products sold across the EU are made of constituents across various countries, for example. The same is true of British companies, whose companies sell products made of ingredients purchased across the various open borders. To have a "Hard Brexit" means to sever contact with that "single economy".
Leaving the EU means to null and void not only Britain's frictionless border with the EU, but also reverting to WTO conditions would automatically apply large tariffs on a whole slew of products sold to and bought from the EU. To not do this under WTO terms would result in legal consequences for Britain, making it effectively a trade law pariah to the rest of the world. These tariffs would result in large cost increases to all British companies that trade with the EU, meaning either much higher prices or these companies soon going bust. Due to the differing tariffs, some sectors would be hit much harder (and thus much more quickly) than others. And apart from that, there are the checks that the EU would automatically impose on all such products entering the EU from Britain as a "third country". This is where the talk of huge lorry parks in Dover and miles of tailbacks of trucks in Kent comes from, as all transit from outside the EU must be checked as standard, adding time and an administrative headache to the process of entering the EU, which is currently minimal. Again, these are further costs that would have to be factored in by British companies. Put in this way, it's easy to make the case that the British economy could quickly cease to function in the sense we understand today.

Apart from all this, talk of easily setting up trade with the rest of the world is also pie-in-the-sky thinking. Again, as Britain's relations with Europe are intertwined with the EU, so are many of Britain's foreign trade agreements across the world. Many of our foreign trade treaties are courtesy of our place in the EU trading bloc. Once we leave that, we also would revert to WTO rules with all those other nations in the world that had treaties with the EU (i.e. all the important ones).
There is also the problem of the "intellectual shortage" on trade. A recent story of when Liam Fox went to discuss trade with the USA highlighted how the trade negotiators that went with him had little real experience of trade negotiations. As these had all been done as part of the EU, Britain's people took a back seat, with little of a hands-on role. Again, this is due to Britain's role as part of the EU. As we had no need for a large number of trade negotiators when in the EU, it means we have very few now. So this means the government are looking to start trade talks with all the major economies in the world, with few properly-qualified trade negotiators of their own. This is like going to war without even checking that you have a functional army. This is just one example of many demonstrating how unprepared government is for the reality of a "no deal" Brexit, due to not appreciating how much British life has become reliant on our position within the EU.
The basic point is that, if we leave the EU without a deal, many of the treaties and agreements that Britain has signed with the EU and much of the rest of the world over the last forty-odd years will simply no longer apply to Britain. On a "no deal" Brexit, Britain, from a legalistic point of view, would have unilaterally decided to null and void its part in those agreements. Without anything else in their place, Britain would be starting from scratch its relations with not only the EU, but with much of the world. While it's possible that some of these could be restarted quickly, others might take much longer. And Britain doesn't even have that many qualified negotiators.


"The ends justify the means"

Apart from those who see this all as a prime opportunity to make money, there are those that see this in more esoteric terms: as a way to psychologically "reshape" the country.
There is a school of thought, in particular from some of the older generation, that life in the EU has somehow made younger Brits "soft". This thinking harks back to the "Dunkirk Spirit" and hardships endured during the Second World War. This accepts that a "no deal" Brexit would be very difficult on the country for a period of time, but this would also act as a motivation to transform for the better the nation in the long-run, by bringing people together in a better sense of community through adversity.
This is really just another angle on the same agenda as the vulture capitalists, but seen from a social, rather than economic, perspective.
This kind of nonsense thinking is dangerous to the debate over Brexit, as it confuses the motivations of those behind it. It makes Brexit seem as a method to socially transform Britain (i.e. social engineering), and that "the ends justify the means". The advocates of this kind of social aspect to Brexit seem to argue that destroying the economy will be good for society in the long run. It's hard to know what to call this line of thought rationally, except for something dangerously-akin to Fascism. It suggests a radical "purge" of society's indolent and inefficient elements, to something more streamlined.

As a reminder of why this could be called "Fascism" by another name, let's think back to the methods and justifications used by authoritarian regimes. The rationalism for many authoritarian regimes' policies was the ultimate idea that it was for the betterment of society. Yes, they said, some people would suffer, but it would work out better for everyone: no pain, no gain. In a different manner, the neo-liberals in the Conservative Party who support Brexit, also see it in esoteric terms: to transform the nation through tumultuous revolution and return to its lost roots. It will be hard on their countrymen, but they have their best interests at heart! This logic they gained from Ayn Rand and her praise of the "Social Darwinism" of the pure free market. The methods they are using to reach their goal, however, are ultimately anti-democratic: it is the subversion of the democratic process to achieve their own radical vision of society. This manipulation of the institutions of government is what makes them akin to authoritarians; their use of esoteric language in describing their aims is what makes their rhetoric so worryingly-similar to Fascism.
In the present day, no-one in politics uses the word "Fascism" to describe what they are doing, for obvious reasons; this is why the use of euphemisms and esoteric language come in to play instead. But the end result may well be the same.

This is the "descent to madness" that we are seeing at the highest levels of government. Rationalism  has been replaced by esoteric thinking. When people in government can say "we've had enough with experts" the only logical destination to this is government ran on emotions and prejudice rather than judgement and facts. This is the real descent to madness.

The "Brexit Agenda": Immigration, the economy and the "small state"

A reminder of what Brexit really means for Britain is demonstrated in an article looking at the sharp rise in immigrant deportations.  The intent by Theresa May to create a "really hostile environment" for illegal migrants has now spilled over to mean all migrants, including those from the EU. Another article highlights how this "really hostile environment" has now seeped through to employers and landlords, with some jumping the gun on the issue (or, looking at it more charitably, creating certainty for themselves on the issue when there is none from the government). The facile response from the government to this alarming trend tells us how, deep down, many of them see this as a "win-win" situation.

While whose that voted to leave the EU may applaud this, it would also be useful to think about what it means to prospective foreign workers. Simply, they will be strongly discouraged from wanting to come.

Again, those that voted to leave the EU may applaud this too: more jobs for British workers, supposedly. So let's look at the "Brexit Agenda", and what the "Brexiteers" ultimately aim to achieve.

In my last article we looked at what is happening to British politics: in truth, the hijacking of the political agenda by a small group of extremists. We looked at "how"; now, let's look at "why".

Turning back the clock

In the previous article, I mentioned EFTA, which Britain joined in 1961, about ten years before we joined the then EEC. With the government making clear its intent to leave the EFTA as well, we can literally say that the government wishes to turn back the clock on Britain's relations with Europe; more exactly, we can say it wants Britain's trading relationship to be as it was during the days of the 1950s, when Britain had the Empire.

Since winning the referendum last year, the hard-line "Brexiteers" (perhaps better called "Brextremists") have done everything they can to take the lead on setting the agenda, not only on the terms of "Brexit" itself, but also trying to seep their ideology into other facets of political discourse. This was why what is happening could be called a kind of "soft coup" or "coup by stealth". This can be especially seen in how they have been keen to press on with their agenda in spite of the government losing its majority since the June election. In spite of being a small faction of a party without a majority in parliament, they are acting as though they have untrammeled power and a huge popular mandate.

But back to the main point. What do they want to achieve?

By turning back the clock on Britain's relations with Europe (and by implication of this new immigration regime, the world), it is about "British jobs for British workers". On the face of it, it is a harmless-sounding (even laudable) idea, until you look into the detail of what that really means.

Britain's job market is currently already running at close to "natural" levels of full employment, which, obviously, includes British workers. In other words, there is no problem with British workers finding a job. And if that is true, then it can't be true that immigrants are taking away jobs from British workers.

So this straightaway destroys the fallacy of foreign migrants taking away jobs from natives. And if this is the case, then what is the point of making it much more difficult for foreigners to live and work in Britain?

If there is no real economic case for this agenda, then it must be something else. And here we are in danger of "over-intellectualizing" a fundamentally-unintellectual agenda. Brexit was never really about economics; it couldn't be, when almost everybody who understood the economics couldn't understand the logic of leaving the EU. Brexit was about power.

One of the main reasons for leaving the EU was to "take back control". While this was said to mean returning powers from Brussels to the Westminster parliament, as mentioned in my previous article, it is clear that it is really about a government power grab. And again, this is a "power grab" by a faction of the governing party that supports UKIP's agenda. 

So while this faction is doing its best to gain quasi-autocratic control over vast areas of law previously ran by the EU, their agenda on immigration is really a red herring. Whether or not this faction really believe in their own rhetoric about immigration being the bane of the British worker's life is hard to tell. If they do believe it, then it is a sign that they are dangerously deluded; if they don't, then then are truly callous in their attitude to the fate of the British economy. The evidence points to it being a mixture of the two, with some "Brextremists" being bonkers in their "vision" for Britain, while others are simply sociopathic in their outlook. Theresa May seems to exhibit a little of both.

In this way, it becomes clear that "taking back control" was really about the "Brextremists" taking autocratic control of Britain. They were horrified of the idea that the EU could dictate law to the UK, regardless of the fact that those laws were designed to improve many aspects of life in the UK, as the UK was part of the EU. While the EU, as in any huge bureaucracy, has its problems, the benefits for most people clearly out-weigh the drawbacks. The problem for the "Brextremists" was about feeling powerless. As with any Populist movement, Brexit was driven on the idea of the "losers" of the current status quo rising up against a distant, uncaring elite. However, we have seen how this lie can be used by the real, home-grown elite that supports a return to to earlier age when they ruled the country in a much more autocratic fashion. The "Brextremists" of today are simply using time-honored strategies to turn the clock back to a time they look back on with wistful nostalgia: the Britain of the British Empire, before its disintegration, when the establishment ruled with an invisible hand.
Put in this context, the idea of turning Britain into a place hostile to immigrants may then serve a double purpose. First of all, it gives the "losers" who voted for Brexit a real sense of there being an identifiable change to the make-up of the country; of the country becoming more visibly "British". In this way, it makes them feel as though their vote truly "made a difference", and thus cements their connection (i.e. loyalty) to their "Brexiteer" rulers. This manipulative use of "culture war" then gives greater leeway for them to take their agenda to its conclusion (see below). 

If the economy thrives or fails as a result of this strategy is not a real concern for this "Brexit elite". In any case, they wouldn't be the ones that suffered. As we have already seen, some that voted for Brexit believe that an economic downturn is a price worth paying if they "take back control" (regardless of how horribly deluded they are in this). This mentality of "groupthink" makes it even easier for the "Brextremists" to charge ahead with their autocratic agenda.
Those that do suffer from any self-inflicted economic mess will be given the sinister, outside forces of "Europe" to blame. Like with the dog-whistle use of immigration, the scapegoating of "foreign powers" that don't want to see Britain succeed would be the next part of the plan. As with the earlier example of employers nowadays that are "jumping the gun" on immigration, this is a "win-win" situation for those in charge. This is simply another version of the strategy of "divide and rule". 

"A bonfire of red tape"

The other main reason given for leaving the EU was due to the stranglehold that European "red tape" was apparently having on business. Regardless of the fact that few people who supported Brexit could actually point to any particular regulations they found so onerous, the "red tape" was there to improve the conditions of life in Britain, as a member of the EU. Of course, some of the regulations led to absurdities, but the vast majority left people's lives better, such as through safer products they used or safer living and working conditions. 

The "Brextremists" resented these regulations as they reduced the amount of power they had. Using accusations of the "nanny state" is as old as the hills, and this loss of power to the EU ties in with the theme of "taking back control" that we looked at earlier. Again, the motivation of the "Brexit Agenda" is to have fewer controls on business, giving them greater powers to exploit their workers and reduce costs (such as by relaxing safety standards). In this way, "Brexit Britain" will more closely resemble the working conditions found in developing countries, with things like" Zero Hour Contracts" becoming ever more commonplace, and more and more companies compelling their workforce into being an army of the self-employed. Likewise, this "race to the bottom" would result in fewer protections for workers, leading to more and more unstable social conditions. 

This is the vision of the "small state", as the "Brextremists" see it: a kind of Libertarian dystopia. Apart from the "reforms" they would like to see to working conditions, there is the vision they have of the welfare system (and have already partially implemented thanks to Iain Duncan Smith). This is making "welfare" seem more like a punishment than a human right, where the individual is devalued and dehumanized at every opportunity, and a callous system that finds any small reason to withdraw its support, leaving them to fend for themselves. As the government only has respect for money and success, it follows that this philosophy makes the poor and the vulnerable feel like social failures. This is a system of "Social Darwinism" that punishes those on the lowest rungs of society, regardless of the reason. The government isn't there to help the weak, but to make them suffer for their weakness. The same strategy has already been applied to other areas of policy, such as immigration and the settling of the government's own subjects.

Is the ultimate aim here the destruction of social fabric of civilised society? Like with their vision for the economy post-Brexit, it is either bonkers or callously-brutal. It is like they literally do not care, and are so off-the-wall they cannot see how mad their ideas really are. Taken to its logical conclusion, such policies would result in chronic deprivation among the working class, like hasn't been seen since before the Great Depression. And with deprivation and gross inequality comes social breakdown and crime, providing the "Brexiteer" elite with yet another set of scapegoats to use.
But as we have already seen, their "Brexit Agenda" seems to be the restoration of the socio-economic order of Britain prior to 1945, regardless of its effect on society. It about the destruction of the "post-war settlement" for good; a "Counter-Reformation" of the establishment against the welfare state, masquerading as a social revolution.

Brexit is simply the way they seek to achieve it.

Narcissism, Consumerism and Capitalism

In recent years, more attention has focused on the apparent rise in narcissism in society, especially in the younger generation. Some have called this a "narcissism epidemic", and for good reason.

As mentioned in the lecture linked above, there has been a noted sharp increase in young people who identify themselves (or can be classified) as being narcissists. An article some months ago looked at the rise in narcissism in the so-called "Generation Y", the possible influence that parental guidance (or lack of) may have, and some of the wider social influences.
While these social factors may well certainly account for part of this apparent generational "attitude" changes, there has been a blind spot. We'll come to this in a moment. Elsewhere, the author has looked into the link between narcissism in modern society, and the role that economics (i.e. the type of economic system) can have.

Broadly-speaking, so-called "individualistic" societies seem to have higher levels of narcissism (and potentially psychopathy, too - more on that here). Arguably the two biggest socio-economic changes to have happened in industrialised society in the last forty years have been the rise in consumerism as a method to fund economic expansion, and the rise in narcissism in society in general. This is the blind spot referred to earlier. We'll look at the detail shortly.

Put into a historical context, consumerism as a method to grow national economies only really began to take off in the 1970s. While everyone thinks initially of the 1950s as the "Golden Age" of consumerism, the "baby boomer" generation were really the "infants" of consumerism; it only reached maturity as those born after the Second World War coincidentally began to mature themselves and begin to have more money to spend on consumer goods and property; in the UK this became known as the "Barber Boom" under the Heath government of the early 1970s. Richard Nixon's economic policies supported a similar tack. Both efforts lead to prices inexorably rising as people had more money to spend.
Wracked by a conflation of different economic factors, inflation continued soaring upwards throughout the rest of the decade, resulting in prices being massively higher by the end of 1970s compared to the start. The end of this decade also coincided with the Thatcher government coming to power in the UK, shortly followed by Reagan in the USA.
Under the policy of Monetarism enacted by both the British and American governments, the 1980s saw the restructuring of the economy away from (seemingly inefficient) manufacturing, and towards more service-based sectors (e.g. retail). At the same time, the economy was geared more towards finance, allowing banks to speculate far more easily (and with larger risks and potential profits). Credit became far easier to obtain, as banks encouraged its use as a way to extend their profits. Governments saw consumer spending as good for the economy, regardless of where the money spent actually came from. This policy has continued effectively in the same way ever since.

In short, we see the birth of credit on a mass scale being used in society, which in turn boosted the rise of consumer spending. Saving for the sake of it is seen as frumpy and old-fashioned. At the same time, even those who didn't indulge in credit were spending far more of their money on consumer goods compared to before. The same can be said for property investment, on an even grander scale.

Where does narcissism fit into all this?

A recent article looked at narcissistic personality traits. A narcissist is a fundamentally insecure person who is constantly in need of "narcissistic supply", and will do anything to get it, regardless of how he treats others and society at large. A narcissist is a child-like personality construction, in some ways comparable to a drug addict who is briefly bathed in the glow of his "fix" (i.e. a source of adulation), before quickly crashing and needing something else to fill the hole. This is an infantile, almost pathetic person who is unable to function independently without "narcissistic supply".
The psychology of the retail industry operates on the same premise towards its consumers. While what happens from the retailer's point of view is nothing innately evil, what happens towards society as a whole over time may well be. The point is this: marketing and advertising is privatized propaganda. There is no other way to describe this. Of course, this is perfectly normal in one way. The difference between society now and society sixty years ago is that ever more advanced communication methods allow companies to enhance their "exposure", targeting consumers more and more expertly. At the same time, the rise of credit  over the last thirty years has allowed individuals to easily access disposable income to spend. These two factors act as a "double pull". Advertising has created the famous phrase "Because you're worth it", which easily summarises the insidious nature of modern consumerism.

In other words, consumerism fuelled by easy credit nowadays has turned many people into "grown-up children". By creating a social environment where people are told they "are worth it", bombarded with endless messages about products they "must have", while also tempted by numerous methods to obtain credit, it is not surprising that a significant proportion of society develop the narcissistic traits mentioned earlier. By design or not, this is exactly the type of person who retailers want: an infantile and dependable "consumer" whose behaviour can be manipulated to improve retail profits.
There is plenty of anecdotal evidence for this, if we look at the change in narcissistic attitudes prevalent in "Generation Y", as mentioned earlier. It is more prevalent still if we look at the changes of today's young people (i.e. those under the age of 25), the feeling of "entitlement" that is far larger in young people today.
In darker terms, it could also be argued that the 2011 England riots - effectively an uncontrollable orgy of looting - were also a symptom of this narcissistic strain that has festered due to a rampant consumerist culture. At the risk of dismissing wider social issues, what is telling is that the spontaneous riots that occurred were used by many as an excuse for opportunistic looting. While it may have started on grounds of perceived racial prejudice, it almost instantly morphed into a chaotic orgy of consumerism. Compare this to riots in earlier years that were also triggered by race issues: looting was far less common an activity than simply "getting back" at the police. Likewise, the 2005 riots in France were characterised by an orgy of burning cars and nihilistic "revenge", not looting. This tells us a lot about the psychology of those involved, and the type of society that exists.
In this sense, we can argue that "consumerism" and the rise of narcissism are innately linked to the Anglo-Saxon economic model of Capitalism. The England riots of 2011 were distinct in the way they were an extreme manifestation of the divisive, ego-driven nature of the Anglo-Saxon economic model: after injecting its younger generation with a sense of "because you're worth it" entitlement one one hand, while divisive government policy took away their sense of control with another, the result was a build-up of narcissistic rage.

So this is the summation of modern Capitalist society: by creating the ingredients for narcissism, it "infantilises" individuals, with consequences for everybody. But also, the development of narcissism is fundamentally "useful" to an economy over-reliant on consumerism and the service sector, because it distracts people from the fundamental weaknesses in this economic model. It is a "natural by-product" of a consumerist society, and equally an essential ingredient to maintain the illusion.

For consumerism to function, consumer "need" must be created: this is where the advances in modern marketing and advertising techniques come in, using technology to make every form of consumer action appear as an "opportunity" on one hand, and a form of "individual empowerment" on the other. Thus by creating an environment where consumers are made to "need", they behave like narcissists always in search of the next source of narcissistic supply. On the one way, people are made to feel all-important and "entitled"; on the other they are equally made to feel emotionally-insecure and prone to repeated acts of "self-validation" (i.e. superficial sources of narcissistic supply, gained through consumption). This is how consumption occurs.

Indeed, it could well be argued that in a consumption-led economy, pathological levels of narcissism in society are thus necessary to ensure its continued existence and "growth": in order for consumer "need" to be guaranteed, the psychology of the consumer must be carefully calibrated - manipulated - in order to generate insecurity, dissatisfaction and entitlement. The most effective way to achieve this is to create a "consumer psychology" indistinguishable from the pathological narcissist.

By doing this, the creation of a consumer-led economy creates a self-perpetuating feedback loop, that nourishes on itself, and at the same time, becomes economically dependent on itself. A consumption-led economy quite literally eats itself. From an economic point of view, "growth" can only occur in this model if consumption occurs perpetually. Anything that causes consumption to reduce is a threat to a consumption-reliant economy. This also explains why interest rates are at historically-low levels. In this way, the creation of debt through cheap credit is in fact an essential aspect of the economic model: because debt creates dependence, and feeds the narcissistic delusion that consumers are "richer" through the possession of high-tech goods and other "must haves".
The irony is that in creating a consumption-led economy, individuals are - if anything - losing their individuality as a result of this. They are being manipulated - "infantilised" - much more insidiously in a consumer-led economy than one based on a more balanced perspective (e.g. where exports and manufacturing, rather than inward consumption, are the main sources of revenue).

Finally, it goes without saying that if a socio-economic model "infantalises" society, it also makes it easier to control.

Neo-liberalism and the Conservatives: using intellectual and moral bankruptcy to run the UK

Since the onset of neo-liberalism with the Thatcher government, successive governments of both main parties have followed fundamentally the same ideological and economic script.

Back in the 1970s, the British economy was struggling to adapt to the various crises that struck the world economy. The skyrocketing cost of living, loss of British companies' competitiveness, and inflation, all had the effect of bringing increasing demands from the unions, who sought to buffer their members from the worst of it. As we know now, the rise of Thatcherism created an "agreed consensus" that it was the unions that caused the crisis in the UK in the 1970s. Likewise, the same "agreed consensus" is at play with the Conservative government today, who successfully blamed the previous Labour government for "breaking the banks".

The "plan" that Thatcher and her successors have followed for the last thirty-five is simple: to "re-figure" the British economy from a manufacturing (production) based economy to a service (consumption) based economy. At the same time, this service-based economy has been supported by a massive expansion of the banking and financial sector, making the service-based economy - which has been designed to take up the slack of the loss of manufacturing - heavily reliant on the fate of the banking sector. Whereas a production-based economy is reliant on a competitive (i.e. relatively weak) pound to make British products attractive to buyers abroad, the kind of economy Thatcher introduced was reliant on a strong pound: this was what the financial sector was craving, and would also help consumerism (as it made imports cheap).
The result of this was the slow death of manufacturing in the UK, and a balance of payments that has been in a serious state of disrepair for years. Though no-one has seemed to care.
Following on from this, the Blair government took up the idea that young people in the UK were under-qualified for the modern world. For this reason, successive governments since then have promoted the idea that a much larger proportion of younger people should have degrees; the logic being that better-educated young people could get better-paid jobs.
The problem - as we now see plain today - is that these two plans are in many ways nonsensical, and also logically contradictory. But this is how those in government have been running the country.

Intellectually bankrupt

To the casual observer, the UK has done really quite well since the "neo-liberal" revolution has been introduced. GDP is up, and the country is self-evidently more prosperous. Except that it depends on who you are talking about.
Back in 1978, this was when "egalitarianism" was at its height: the gap between rich and poor was at its smallest. Things were only "bad" if you happened to be very rich and Conservative; for everyone else, things were - basically - fine. This all ended with Thatcher. Within a short time, unemployment had trebled. Since the "neo-liberal" revolution in Whitehall, the gap between rich and poor has successively widened, so that now while those at the top ten per cent are many times richer than they were, those at the bottom ten per cent are actually worse off. Yes, they may have some consumer goods that they can afford due to advancements in technology and cost-effectiveness. But they are still - financially - worse off than they were before. This is how this economic system works.

British governments since Thatcher have had plenty of time to make manufacturing more productive and competitive. The fundamental problem about British inefficiency stems back to the end of Empire. It may seem like a difficult point to deal with, but Britain's manufacturing and productive base was reliant on demand from the Empire to keep things afloat. This was surely shown during the Second World War, and going even further back. Once the Empire starting breaking apart, British governments never grasped the nettle about how to make British industry competitive in a real world economy, rather than in a "fake" Imperial economy. The "oil shock" of the 1970s brought that into stark relief, and the Thatcher government decided that it couldn't be bothered to try and make it work. The government would rather let the whole thing die.
As mentioned earlier, the UK has turned into a consumption-based economy, which ironically seems not far off how an Imperial Homeland would be run. Except that Britain no longer has an "empire" that can do its production for it. Instead of factories, the UK now runs on banks. Like in Switzerland. Instead of an "empire", it now runs the country like a PLC, where its citizens are treated like mere "employees", who can be hired and fired at will. Instead of colonies, the UK has "assets", which it sells off to the highest (foreign) bidder.

Which brings us to Germany.

Germany is the country that many others aspire to be, for the simple reason that it is perhaps one of the best-run countries in the world, in terms of productivity, efficiency of government, and the well-being of its people. In this sense, Germany is the "anti-Britain": a country which learned some very hard lessons before 1945 but also learned how to get the best out of its people. Germany is what Britain could have been, if the country were run intelligently.
Britain's economic system can be called intellectually bankrupt because it is a system that a con. By allowing Britain's productive assets to wither and die, though a combination of incompetence and recklessness, successive governments have put all the country's eggs in one basket. That was found out in 2008, when we suddenly realised how absurd the UK's "miracle" of banking really was.
Since then, the British government has decided to react to the greatest financial crisis since the Depression by doing...the exact same thing. Nothing has changed about how the UK economy is ran. The huge bubble that burst in 2008 is being re-inflated once more, except that this time the "recovery" is even more of an illusion than the growth that was created under New Labour. The economy now is growing only due to debt-fueled consumer spending, ever-worsening working conditions, a much greater number of low-skilled and low-paid jobs, and an out-of-control property bubble. The state of the economy is based on even more fragile foundations that before the crash, but George Osborne, the architect of this "long-term economic plan", is only motivated by short-term political gain and the harvesting of votes.
The governments of the past thirty years have all been complicit in the "asset-stripping" of the nation, leaving the taxpayer doubly worse off - in selling off national infrastructure at below-market value, and then allowing these privatised assets to fleece their customers. as mentioned earlier. For the private sector this is a win-win situation.

What has been created since the "neo-liberal" revolution has been a system of Corporate Socialism, where assets are privatised and those privatised companies are then subsidised and if need be bailed-out by the government - the worst outcome of all from the government's financial point of view. In the meantime, this amoral system creates a morally-bankrupt government as well as an intellectually-bankrupt ideology.

Morally bankrupt

The logical conclusion of this economic system is a moral system that has destroyed the essence of society.
On top of increasing inequality to levels now not seen since the Depression, those who have become the victims of this system are then demonised as the causes of its problems. This is where the idea of blaming those on welfare for the need for "austerity" comes from. Back in the 1980s, when the government started selling-off council housing, this meant that only those with the severe social and familial problems became entitled to state housing. The effect of this was creating "sink estates", and thus another "scapegoat" for the government's problems was formed.
This vicious circle is repeated time and time again: the government creates a problem, then blames the victims for the problem.

George Osborne is the architect of the current government's version of this system, where he has implemented a policy of "divide and rule" to a ruthlessly-effective degree. In reality, all his decisions are not based on what's best for the country, but what's best for his prospects. From "help-to-buy" to racking up tuition fees, Osborne implements policies that simply store up nightmares for the future. While David Cameron is the charmingly-affable front man to this game, it is Osborne who is the real "master in the shadows".

Dividing young against old, rich against poor, working poor against jobless poor, this is the morally bankrupt system that the Conservatives use to rule the UK.

George Osborne: the master tactician

Since the "omnishambles" of the 2012 budget, Osborne has become a master of using them for ruthlessly-efficient political purposes. From the "Wonga budget" of 2013, to the even more cynically-minded budget of last year, Osborne demonstrates repeatedly how he uses his control of the nation's economy to mastermind the control of the allegiance of the key segments of society he needs to retain power. This is both a complement and a damnation. It has nothing to do with economics, and everything to do with power. As the author wrote previously, Gideon Osborne is the "master of the dark arts" - the political Lord Voldemort of Westminster, with his hand behind every key decision made in government, relishing in his notoriety.

Since the (unexpected) Conservative victory in the election, it has given Osborne more freedom than had been planned for. It also made the severe swathe of cuts predicted before the election more difficult to administer, with no LibDems there to take the credit for making the cuts more politically-viable (and saving the Conservatives' frugal insanity from themselves). So what would he do?

The Machiavellian trickster

In many respects. Osborne is a terrible economist. It's now long-forgotten that Osborne's original plan when arriving at the Treasury in 2010 was to cut the deficit in one parliament. In the election campaign of that year, he opposed Alastair Darling's plan of doing the same over the period of two parliaments. Then, after two years of following his own plan and seeing that the economy was going from bad to worse, Osborne then decided to follow Darling's plan after all, and carry on as if nothing had changed. The Conservatives had spent their time in government rubbishing Labour and using snappy (if factually inaccurate) soundbites ("don't hand back the keys to the guys who crashed the car"; "paying down the debt that Labout racked up" etc. etc.). So Labour were left on the defensive and had no time to regroup and attack Osborne's blatant, massive policy U-turn.

This theme has continued through Osborne's tenure: whenever Labour came within a sniff of seriously damaging the government, Osborne was able to deflect attention elsewhere. While austerity has been the theme of the government, Osborne has implemented it in such a disproportionate and inconsistent way that it is hard to know where to see a common theme or economic purpose. While some departments face cuts of 40%, the largest outlays of all - pensions, the NHS. and education - are hardly affected at all in real terms. Likewise. while Osborne originally intended before election to have most of the cuts achieved within the first two years of this parliament, now they will be stretched out longer, to just shy of the next election, lessening the appearance of the impact. It is as clear as day to see that the real purpose of this strategy is to smooth things for "the succession", and the expected period of grace before the 2020 election that Cameron would give his successor (i.e. Osborne) to settle in.

Osborne is really enjoying himself these days, as he twists the knife into the open wound that is the post-election Labour party. With the benefit of hindsight, his electoral strategy looks to have been "destroy the Labour party, then steal their best ideas". Before the election, the Conservatives rubbished many of Labour's ideas as left-wing nonsense. Now, Osborne takes some of them as his own, such as the introduction of the "living wage". Paid for by the abolition of tax credits for many families, this is (according to the IFS) nothing less than an enormous fiddle, and one where the sums do not add up, leaving the working poor massively out of pocket. But again, Osborne the trickster has created another illusion, and one for the Labour party to work themselves into knots over.

Like the Conservative Party he represents, Osborne has few real principles that can't be sacrificed if it will help retain power. This is why he has been at times so hard to pin down in terms of real political consistency While the Conservative Party represents the establishment, it will bend over backwards and back to front to defends its self-interest. Osborne is the perfect example of this. What matters is what works for the Conservatives: if that means calling a Labour policy "Marxist" one month, then adopting it themselves the next, so be it. This is what keeps Labour on the back foot, always wondering where the next "trap" will come from. This is what makes Osborne a master at the political dark arts, even within his own party.

Divide and rule

So now the Machiavellian trickster models himself as the "workers' champion". The claim that the Conservatives are the true "workers' party" is a bold one, which requires some expansion. This goes back to another of Osborne's tactics: divide and rule.

The chancellor coined the expression "strivers versus skivers" a few years ago, as a way of explaining the economy. This is, in reality, a very old right-wing theme, where the "earners" are being used to support the "loafers" in society. It has simply been updated using 21st century terminology: it is the classic politics of Ayn Rand and her perspective of individualism and morality.
But is it a con, of course. Dividing the working poor against the unemployed poor helps neither: both are poor, for different reasons. This is simply a political tactic. And in the election, it worked.

Also, Osborne recognises who is most likely to vote at elections, and gears his economic and electoral strategy (in reality, the same thing) around them. In the UK, the older you are, the more likely you are to vote (and also, vote Conservative). It is for this reason why pensions are protected (triple-locked) and why the "help-to-buy" scheme is expanded, yet while there is no control applied to property prices, resulting in year-on-year the increasing unaffordability of housing.
But also it is the reason why tuition fees are extended (to fatten the budgets of the universities); why support for young people is cut back; and why there is no help to give young people genuine skills (a low-skill economy is also a low-wage economy i.e. better for employers). The "recovery" may not be benefitting those under thirty at all, but when they don't vote, who cares what they think? Fundamentally, this is the cynical calculation at the back of Osborne's mind.

Meanwhile, the Labour party is caught in a "triangulation" trap, where it doesn't know where to look to get its lost voters. Seen objectively, Osborne is a terrible economist, storing up problems that will only get worse with time: the low-skill nature of the economy post-2008; the housing crisis; increasingly unaffordable pensions etc. etc.

But Osborne seems to have little regard for this: his focus is only on "the prize"...

The 2015 General Election: what happened?

Politics is a brutal business, they say; but rarely has an election in modern times been so brutal. The Conservatives were the major beneficiaries to the dramatic collapse in the Lib Dems across the UK, and Labour's Scottish supporters switching en masse to the SNP.

While in the 2010 election, the Conservatives were ahead of Labour by fifty seats, now they are ahead of them by a hundred. However, this must still be put into context. Needing 323 seats for a working majority, David Cameron won 331. This is more than the bare majority that Wilson got in October 1974, but still less than what Major got in 1992 (336). And we know what happened to that "majority" over the course of five years.
In that sense, George Osborne's hope that 2015 would be like 1992 again, we was proved right, in that the Conservatives won a similar result in terms of seats (though around 4% less than 1992 in the popular vote).

However, there the comparisons end. For Labour, the number of seats won (232) was similar to what they won in 1987. But this was not because of collapse in the votes in England. Compared to 2010, they won nearly a million more votes this time around, in spite of the collapse of their support in Scotland. So something very strange - and perverse - must have happened. There were different factors (more on those in a moment) that resulted in Labour doing far worse than they were expecting in England.

Lastly, the poor Liberal Democrats - as many of their party members feared - reaped the whirlwind of working in government with the Tories. After losing nearly fifty seats, Tories seemingly voted tactically to save Nick Clegg's seat where so many other Lib Dems were ousted. This must have felt like a particularly cruel kind of mercy. No wonder that when Clegg gave his speech standing down as leader, he seemed like a broken man. Their cohort of MPs had been reduced to the kind of levels they had in the 1960s.

A perfect storm

For Labour, the election results were a stunning shock.

While the results in Scotland had been feared to an extent (if not quite believed), in reality they were caught in an unexpected "pincer" on both sides of the border.

They had been hoping that the losses they might have had to the SNP would have been offset by gains in English Tory/Labour marginals. Instead, in many marginals, Labour became victim to an unforeseen "UKIP Effect". In places like Bolton and Bury (close to this author's neck of the woods), the Tories unexpectedly won, sometimes by a margin of only hundreds of votes. This was repeated even in places like Wales, and across other towns and small cities in "Middle England". In these constituencies the common denominator was UKIP coming a strong third. What seems to have happened is that, rather than the Tories bleeding votes to UKIP and letting Labour through (as they had hoped might happen), the opposite was happening: Labour was bleeding "working class" votes by their thousands to UKIP.

This was one of the major factors that accounted for UKIP receiving nearly four million votes. And was - without doubt - the reason for Labour's biggest (and most unexpected) casualty of all - Ed Balls.
Of course, this does not explain all the results in the key Tory/Labour marginals, but it was certainly a key factor in a significant number of them. In many marginals, UKIP were the Tories "secret weapon".

The reasons why people chose to vote Conservative and not Labour in those key marginals will not be discussed here. Some of these factors have been discussed by the author before. It was also clear from anecdotal evidence that the SNP "fear factor" was playing on the minds of some key voters.

One more thing about UKIP. As UKIP themselves predicted, they came second in a number of "safe" Labour seats in the party's northern heartlands, and similarly, came second in a number of the Tories' heartland seats in the South-East. So Farage's claim as being the only "working class" party in England, was now beginning to look more and more credible, in spite of the reality.

A "lucky" Prime Minister?

As said at the start, the Conservatives won their seats due to the collapse of the Lib Dems, grabbing almost all the seats that were a toss between the Tories and the Lib Dems. Cameron claimed during the campaign that he only needed twenty more seats to govern, and he got them, from the Lib Dems. However, that presupposed that he didn't lose any seats to Labour, but as we have seen above - again - he was proved right, against all the odds. Thanks to the insurgent effect of UKIP on Labour's base, the "fear factor" of the SNP and worries over the economy on classic swing voters, the Tories emerged from the face-off in the Tory/Labour marginals relatively unscathed. Some seats were lost to Labour, but there were equally other (unexpected) gains from Labour. The losses and gains basically cancelled each other out. It was in these seats that the election was really won.

The switching of many Lib Dem seats to Tory, and the collapse of the Labour vote in Scotland meant that Labour had to rely on the English marginals mostly going their way in order to ensure that the Tories lost enough seats to bring Labour into contention as a serious alternative to form a government. In this way, Labour really were fighting against the tide. Due to the three factors mentioned - the Tories being the biggest recipient of the Lib Dem collapse, the surge of the SNP, and the UKIP "secret weapon" - the Tories really held the best set of cards to allow them to consolidate on their 2010 result.

In hindsight, these three factors should have been more obvious, in spite of all the predictions of a hung parliament and a messy politics to follow.

As things stand now, both Labour and (even more so) the Lib Dems have serious questions to ask themselves about what direction they should take their respective parties. While Labour's result in this election is comparable with 1987, this fails to take into account the loss of so many MPs in Scotland this time around. They cannot expect to gain them back any time soon. So the 1987 comparison is not truly accurate. Labour now are much more an "English" party than they were on Thursday morning.
But the political scene in Westminster is more fractured than ever before, in spjte of the gross injustices that FPTP has brought to UKIP and the Greens (while massively rewarding the SNP). In that sense, the political scene feels, if anything, like that in 1983: a divided opposition allowing the Conservatives to continue ruling from Downing Street.

David Cameron may well have felt he has dodged a bullet in this election, and been rewarded with a political bomb landing in the laps of his opponent, leaving a multitude of political carcasses.

Perhaps he's just "lucky".

The Conservatives' election strategy and "dirty tricks": how to divide your enemies and threaten people

Q: How do the Conservatives, the party that represent the interests of Britain's rich and powerful, persuade others to vote for them?

There have historically been two strands to this answer, depending on who they are trying to persuade.

To the "middle class", the Conservatives use the double-pronged "threat" of the Labour party as the party that will take away their money through taxation (and destroy the economy), as well as the "threat" that the "feckless/ undeserving/ immoral" segments of society pose to the rest.
Married with the psychological "threat" of the alternative is the "opportunity" that the Conservatives say they can bring to the middle class - that they offer the easiest (low tax) route for the the middle class to rise upwards to the golden realms of the elite. The message is fear on one hand, and greed on the other.

To the "working class", the Conservatives use the similar "threat" of the "feckless/ undeserving/ immoral", which is presumably much closer to home to them, married with the message that the Conservatives represent the "party of opportunity", allowing the "hardworking" to rise up to the middle class. Again, it is fear on one hand, and self-interest on the other.  

Over the long history of the Tories, they have been adept at masking their recurring incompetence inside an exterior shell of assured self-confidence. This may well also be a metaphor for the state of modern Britain itself: but that's another story.

Divide and rule

George Osborne's use of the "strivers versus skivers" rhetoric is the latest telling of a narrative from the Tories that has been the same for many decades, which has intensified with the coming of Thatcherism.
The psychology of politics is a science in itself, and the psychology of the Conservatives is well worth studying in detail. The author looked at some examples from the Conservative government a few years ago, and came up with some interesting results. But as the only way that the Tories can become the government is by making their enemies hate each other, divide and rule is the best way to achieve it. As said earlier, this is a strategy they've practiced over many years.

This explains why Cameron's election strategy - devised by Lynton Crosby - has been all about the negatives, which reached a particular nadir a few weeks ago. But things have hardly got much better since, and there has been the relentless promotion of the "threat" that the SNP have over a possible Labour government - about the most cast-iron example of a literal "divide and rule" strategy you could witness.
The baseness of psychology required to formulate this strategy is stark, and it tells you much about how many Conservatives view human nature: as a game of winners and losers, where those who "lose out" have done so through their own mistakes, and therefore should be deservedly punished for it. As well as mirroring the thinking of Ayn Rand, it also - alarmingly - mirrors the thinking of one of the most destructive psychological disorders.

The kind of Britain that the Tories espouse is one where the disabled and the unemployed are presumed as probable fraudsters for simply wishing some financial aid from the state.  It is a Britain where the unemployed are sometimes forced to work for their benefits (which is not only immoral, but also bad economics). People have literally died as the indirect result of government welfare policy. But under the Tories "divide and rule" strategy, those people that died were not penniless and starving because the government withdrew their benefits, but because of the choices that those people made. They were defined as "undeserving" i.e. they deserved to die.

The use of "divide and rule" provides the most important element of electioneering - creating a "scapegoat". Whether it's the SNP (or Scotland in general), "immigrants", "skivers", or whoever, the electorate - from a psychological point of view - have convincing "hate figures" in order to turn to the Tories as their saviour.

But for a cynical and immoral "divide and rule" strategy to work to its best, you also have to know how to use cynical and immoral "dirty tricks"...

How to use "The Dirty Tricks Handbook"

First and foremost, you have to control the "narrative". This is the "story" of what has happened up to the election. In short, it's propaganda - a lie - that you tell voters. It must be simple to be easily memorable, and repeated regularly.
The Tories' "narrative" about Labour - repeated by Cameron - is that they "broke the banks", and that it was "Labour overspending" that caused the crisis. Only the other day a treasury civil servant said catagorically that this "narrative" was untrue and a historical fallacy. It was a banking crisis (partly caused by lack of government regulation) that created the financial crisis. The "Labour overspending" happened as a result of the crisis; it was not the cause of it. The fact that so many people in the UK have such bad memories that they don't remember this is deeply worrying. The Tories are relying on the notion that if a smart, smooth-talking politician keeps on saying something, people believe it is true. And - horrifyingly - the evidence supports that notion.

Secondly - but probably as important - you have to have the media on your side. In this election, there is convincing evidence (also carried out by Loughborough University) that the media are solidly on the side of the Conservatives. This also seems to extend to the BBC, given the regularly tough questioning given out to Ed Miliband especially, compared to the tame (and sometimes poorly-phrased) questioning given to Cameron and other Tory figures. Given the similar educational backgrounds that many media figures have to many politicians, this shouldn't be so surprising, but it certainly puts paid to any real sense of media "freedom". Also, given that Ed Miliband had effectively declared war on a large segment of the media "establishment" following the events of Leveson, it is even less surprising.
It wasn't always like this, though. Under Tony Blair, the media "establishment" was largely on his side, but again - especially in the case of Rupert Murdoch - it was a case of currying favour in order to gain the support of the media. If the media really wasn't so influential, why did Blair (and Cameron) so obviously want to win them over?

Next, and related to the two previous ideas, is how essential it is to control the agenda. The Tories did this with ruthless duplicity. The whole "debate about the debates" was a prime example of the Tories controlling events in order to allow David Cameron to dictate to the media and the other parties precisely on what terms things would be allowed to happen. It was a disgraceful - but horribly effective - strategy.

Fourthly, apart from the "big lie" to control the "narrative", is the use of character assassination. This was alluded to earlier with the negative attacks on Miliband as someone who would "Stab Britain in The Back". In the case of this election, they seem to have been fairly ineffective (even counter-productive), but in the past had a greater chance of success - with the help of the media (see above). Related to this point is using your opponents' comments in an out-of-context manner to try to destroy their reputation.

One of the most interesting - and to your rival party, confounding - tactics is the use of "projection". This is a psychological term more commonly used as a tactic of narcissists to confound those around them when under threat. In political terms, this is when you accuse your rivals of the exact same errors that they accuse you of - "projecting" your own weaknesses onto your opponents. As this is the last thing your rivals are expecting, it leaves them confused and unclear where to go next with their argument.
An example in this campaign is Cameron's claim the other day that the Tories are for "hardworking people" and against the excesses of bankers, unlike Labour (because they bailed them out, and allowed excessive bonuses). This statement is so catagorically opposite to the Conservatives' reality that it beggars belief that Cameron can even convincingly utter it. As anyone with a brain knows, the Conservatives finances are strongly-reliant on groups and individuals in The City and offshore clients.
This kind of statement tells us more about the worrying ease with which David Cameron can spout complete nonsense from his mouth while seeming to believe every word of it. But Cameron has a track record for being a compulsive liar (or - let's be fair - possibly just a complete idiot), as well as a bully; not to mention  a coward, and an incompetent.

Lastly, you can always steal the clothes (i.e. policies) of your opponent and claim they were yours all along.