Anthony Reddie: Similar but DifferentSeptember 22, 2022
Growth growth growth: who benefits?October 15, 2022
The Chancellor of the Exchequer’s Financial Statement of 23 September has gone down badly with the financial markets, economics thinktanks and even a good few Conservative members of Parliament. There are three main criticisms: that it will leave our country with huge debts, that the giveaway overwhelmingly benefits the richest, and that its likely effects haven’t been analysed by the Office for Budget Responsibility – which is why we’re not allowed to call it a budget.
This post focuses on the motive driving it. Kwarteng endorses a well-established theory of economics. But the theory is the excuse for the values. Many of us would prefer a more equal society. But what every British government has actually achieved over the last 45 years has been a more unequal society with the rich getting ever richer.
Rich and poor
Wealth has divided us since prehistoric times. Our hunter-gatherer ancestors lived in small groups, sharing their possessions. When the agricultural revolution produced extra food, though, kings commandeered it to pay armies and tax collectors. Over time the tax take increased, leaving farmers hungry. Anthropologists calculate that in ancient agricultural empires the tax-paying peasant farmers, around 90% of the population, would be at or close to starvation.
Surviving inscriptions from ancient Mesopotamia describe how the ruling classes justified their greed. The world order was maintained by the gods. The gods had appointed the king to make sure the required sacrifices were duly offered. The peasant farmers had to provide the animals. If they weren’t adequate the gods would punish the nation with floods, droughts, plagues or military defeat. Conversely every flood, drought, plague or military defeat would generate national soul-searching. Which gods have we offended? Which sacrifices will propitiate them? How many of the peasants believed all this, we don’t know. They had no choice.
An alternative account has survived. In the ancient Persian empire the small community of Judah was allowed self-government with its own laws. Those laws were the first five books of the Bible. They don’t sound enlightened to us today, but compared with normal practice at that time they protected the interests of the peasants, echoing the egalitarian culture of their hunter-gatherer ancestors.
The Bible also contains the oracles of prophets condemning kings for not upholding those laws; histories arguing that the nation lost its independence because the kings didn’t uphold the laws; and revivals of the laws by later reformers like Nehemiah and Jesus. Put all these together and the protection of the poor against exploitation is a dominant theme of the Bible.
Today, of course, the Bible isn’t taught like this. Eighteenth century Europeans adopted a new theory: that religion and politics should be kept separate. But in that case, which values should guide government policies?
The vacuum was quickly filled with capitalist theory. If the rich worked to make themselves richer, its spokespeople argued, the nation as a whole would benefit.
This, of course, is exactly what rich people want to believe. When they have too much money they want to justify not only the excess they already have but their desire for more still.
For the last 300 years we have usually been governed on this basis. The ruling classes want to benefit themselves, not the poor. So they tell us they intend to benefit the nation as a whole. The main exception was the establishment of the Welfare State in the 1940s, but since the 1970s it has been gradually whittled away.
Ancient values in secular clothing
Thus the economic disagreement between rich and poor goes right back to the beginning of history. In its earlier forms each side appealed to how humans had been designed by the gods they believed in. Hunter-gatherer egalitarians and the Bible appealed to a god who designed us for a life of blessing, while exploitative rulers argued that we have been designed to work hard for the gods. Both sides anchored their economic theories in claims about how the gods have designed us.
Today’s secular successors don’t appeal to intentional design by a transcendent creator. It follows that each person’s values are nothing more than individual preferences. Socialists may claim that more people would live happy lives in a more equal society, but so what? In the absence of any transcendent design there are no right answers. The people governing us call the shots, and they know what they want.
Details vary but the big picture remains the same. Kwarteng is continuing what has been government policy for the last 45 years: whatever else happens, the rich must get richer. Like his predecessors, he doesn’t say it so bluntly. What he says is that he wants to maximise the total wealth of the nation.
Only in exceptional circumstances does increasing the wealth of the rich benefit the poor. According to government statistics it is a good few years since it has increased the wealth of the nation either. The consensus of economists is that it won’t work today. But Kwarteng takes this as a reason to push harder with the same policy.
So why do we need to increase the wealth of the nation at all? If it doesn’t help the poor, and you aren’t prepared to admit that you are doing it for selfish reasons, what’s the point? If there is to be a tax giveaway, why not use it to help those most in need?
It seems to me that the policy of increasing the nation’s wealth is an exact replica of those ancient Mesopotamian gods. The nation has become the supreme transcendent power demanding ever-greater sacrifices by the common people. Just like those gods it threatens chaos if it isn’t obeyed. The real beneficiaries are the ruling classes, now richer than ever and still wanting more. The public speeches are designed to dress an ancient myth in the clothes of modern economic analysis.
There is an alternative. I know I’m breaking that all-important secular taboo, but the fact is: there is a better way and it’s in the Bible.