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"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice" - Adam Smith

The economics of Christmas

Written by Chris Snowdon | Tuesday 18 December 2012

George Monbiot has cannily saved himself a few quid by flagging up his intention to scrimp on Christmas presents this year. Conveniently dropping the narrative of Austerity Britain for a moment, Monbiot has gone back to his ‘Bring on the Recession’ phase, complaining that since our “every conceivable want and need has been met” we shouldn’t waste our money buying our nearest and dearest Terry the Swearing Turtle for Christmas. “Bake them a cake,” he suggests, “write them a poem, give them a kiss, tell them a joke, but for God's sake stop trashing the planet to tell someone you care.”

So it’s a satsuma in a stocking for poor Mrs Monbiot and all the little Monbiots, as they gather environmentally sustainable winter fuel for their socialist household. But perhaps the anti-consumerism miserablists have a point. Christmas is a time when resources are misallocated and unwanted tat is exchanged. According to one study, the average recipient values their gifts at ten per cent less than their market price. That may be an underestimate. Of the roughly £8.5 billion spent on yuletide gifts in Britain last year, £2.4 billion’s worth—more than a quarter—were unwanted.

In strict economic terms, the most efficient gift is cold, hard cash, but exchanging equivalent sums of money lacks festive spirit and so people take their chance on the high street. This is where the market fails. Buyers have sub-optimal information about your wants and less incentive than you to maximise utility. They cannot always be sure that you do not already have the gift they have in mind, nor do they know if someone else is planning to give you the same thing. And since the joy is in the giving, they might be more interested in eliciting a fleeting sense of amusement when the present is opened than in providing lasting satisfaction. This is where Billy Bass comes in.

But note the reason for this inefficient spending. Resources are misallocated because one person has to decide what someone else wants without having the knowledge or incentive to spend as carefully as they would if buying for themselves. The market failure of Christmas is therefore an example of what happens when other people spend money on our behalf. The best person to buy things for you is you. Your friends and family might make a decent stab at it. Distant bureaucrats who have never met us - and who are spending other people’s money - perhaps can’t.

So when you open your presents next week and find yourself with another garish tie or an awful bottle of perfume, consider this: If your loved ones don’t know you well enough to make spending choices for you, what chance does the government have?

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Six reasons to reject minimum alcohol pricing

Written by Chris Snowdon | Wednesday 28 November 2012

The government will announce today the launch of its public consultation into minimum pricing. These consultations tend to be something of a charade—the Home Office has already said “We will introduce a minimum unit price for alcohol”—but in case you should wish to respond, here is a non-exhaustive list of reasons why minimum pricing is a terrible idea.

It is regressive

All indirect taxation is regressive, but minimum pricing is carefully calibrated to be as regressive as possible by targeting drinks that are disproportionately consumed by people on low incomes. Doctors on six figure salaries can rest assured that the champagne at the British Medical Association Christmas dinner will not be affected and the House of Commons bar will continue to be subsidised. Cheers!

Evidence is non-existent

As we reported on Monday, the excitable predictions about how many lives will be ‘saved’ by minimum pricing are based on a single computer model which uses dubious methods and false assumptions to come to a preordained conclusion. The truth is that nobody has any idea whether the policy will reduce alcohol-related harm. The only certainty is the majority of ordinary people will be out of pocket.

It’s just the start

Even minimum pricing’s most optimistic proponents admit that ratcheting up the price of drink is not a ‘silver bullet’.  What they mean is that minimum pricing will merely be the start of a sustained temperance campaign in the mould of the anti-smoking crusade. If the medical lobby is allowed to get its hands on one of the key levers of competition (price), we can expect endless demands for the minimum unit price to move upwards. David Cameron has proposed a 40p unit price but the British Medical Association are already demanding 50p. Others want it to be 60p. Whether alcohol consumption goes up or down, you can be sure that the ‘next logical step’ will be to have a minimum price escalator. Think of the children!

And why not? The same dodgy evidence can always be used to justify higher prices. The Sheffield computer model predicts that a 40p unit price will reduce the number of alcohol-related deaths by 10 per cent. At 70p, it claims the number of alcohol-related deaths will fall by more than 60 per cent! The model doesn’t go beyond 70p, alas, but presumably once it gets to 90p all alcohol harm is abolished and at 95p the dead begin to rise from the grave. What are we waiting for?

The moral panic is bogus

Since 2004, Britain has seen the sharpest and most sustained decline in alcohol consumption since the Second World War. The statistics are striking—less than half of 16-24 year olds have had even one drink each week; the proportion of young men who ‘binge-drink’ has fallen by more than 50 per cent; overall alcohol consumption is only slightly higher than it was in 1980. These facts are rather inconvenient for nanny-staters and so they have ignored them and pressed on with a narrative of ‘booze Britain’ that makes for better headlines. Trebles all round!

It is illegal

It’s rare to find the words ‘good news’ and ‘European Union’ in the same sentence, but the good news is that minimum pricing is illegal under European Union law. Previous attempts to limit the free market in this way have been rejected by the European Courts, such as in this judgement from 1978. Referring specifically to proposals to introduce minimum pricing in the UK, the European Commission has said that they “have a problem with the compatibility of the minimum pricing plans under Community law” and that it “causes problems with the compatibility with the EU Treaty”. Several wine-growing countries have already complained that minimum pricing is anti-competitive and, although David Cameron has vowed to fight the European Commission for his right to pick our pockets, if the EU does not stand for free trade between member states it stands for nothing at all.

It won’t help pubs

Winston Churchill said that "an appeaser is one who feeds the crocodile hoping it will eat him last." A few of the pub chains have formed an unlikely, unseemly and unholy alliance with the forces of temperance in the hope that higher off trade prices will drag in some of the punters that the smoking ban drove out. This is a desperate gambit. Minimum pricing will not make beer any cheaper in pubs. It will merely make everybody a little bit poorer so they have less money to spend in pubs. On this occasion, Wetherspoons’ boss Tim Martin has called it right, saying that minimum pricing is “utter bollocks, basically.

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Junk statistics on the carrier bag charge

Written by Chris Snowdon | Tuesday 25 September 2012

I was intrigued by an interview on Sky News last week with Tamsin Omond, an environmental campaigner from Climate Rush. A keen supporter of levying a 5p charge on plastic carrier bags, she claimed that in Wales—where such a law has been in force since October 2011—“use of these bags has fallen by 95 per cent.”

This is a remarkable and barely believable statistic and the Sky presenter looked suitably sceptical (see video below from 3 minutes in). “It fell by 95 per cent?!? Over how long a period?” Osmond replied that “because it’s only been in place for a quarter of the year, use fell by 22 per cent over the last quarter...” “So you extrapolate that through?” “Exactly.”

Hmm. That’s quite an extrapolation. If we look at the figures, we can see that the average number of plastic bags used in Wales fell from 9.7 per person in 2010 to 7.6 per person in 2011. This, indeed, is a drop of 22 per cent. Such declines are not unprecedented. Plastic bag use fell by 22.5% in England in 2008, for example (presumably because of the credit crunch), but since Wales was the only part of the union to record a significant fall in use in 2011, it is reasonable to assume that the plastic bag charge played a role.

But does this equate to a 95 per cent reduction overall? To reach this figure, the campaigners have assumed that there was no decline in plastic bag use until the 5p charge came in on October 1st. If so, the annual rate could only have fallen by 22 per cent if the last quarter saw plastic bag use plummet by 95 per cent. They further assume that plastic bag use will remain at a five per cent of the pre-levy rate throughout 2012 and forevermore.

This logic does not stand up to scrutiny. Firstly, the basic maths is wrong. If the levy introduced in the final quarter was responsible for the entirety of the 2011 drop, it would mean an 88 per cent decline in that quarter, not 95 per cent. This would be nit-picking if the other assumptions were sound, but they are not. There is no reason to believe that plastic bag use was not already declining in the previous quarters. In the months running up to the 5p levy, the government, shops and the supermarkets informed the public that the charge was about to be introduced and it is fair to assume that people were already being weaned off free carrier bags to some extent before October 1st.

Moreover, the last quarter of the year is not a typical retail period. The pre-Christmas period is the food and retail sector’s busiest time (see graph below from the Office for National Statistics)  and, therefore, it is the period in which a disproportionately large number of plastic bags are consumed. Doubtless, the plastic bag levy led to fewer bags being used between October and December, but it is wrong to assume that the decline in the absolute number of bags used will continue during quieter shopping months when fewer bags are used overall. That, however, is exactly what campaigners have done.


Looking at the survey data, it seems clear that the 5p levy did not lead to a 95 per cent reduction in plastic bag use, nor anything close to it. Figures from the British Retail Consortium show that “the number of shoppers [in Wales] who said they had used their own bags on their last supermarket trip rose from 61% in September 2011 to 82% by April 2012.”  In other words, the number of people who didn’t use their own bags in supermarkets fell by half. This is all well and good, but it is some distance from 95 per cent. Research from Cardiff University found that “the number of people who always take their own bags when shopping rose in Wales from 27% (42% in supermarkets) before the introduction of the charge to 43% (64% in supermarkets) afterwards”. This is an increase of about 50 per cent and many would applaud it, but it is not congruent with the claimed 95 per cent drop in plastic bag use.

None of this is intended to suggest that the Welsh policy is necessarily misguided. Clearly, there has been a marked decline in plastic bag use which many would welcome. Equally, we know that such laws have unintended consequences, such as the tenfold increase in the sale of black bin bags in Ireland after similar legislation was introduced in 2002. The point is that policy should be based on sound evidence rather than hyperbolic claims from special interest groups. It is easy to bandy impressive figures around, but when one digs a little deeper, they often turn out to be built on weak foundations. Time will tell what effect the Welsh levy has had, but the available evidence suggests that the 95 per cent figure is a junk statistic based on dodgy mathematics and unsound assumptions which should not be taken seriously.

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Review: Taft 2012, by Jason Heller

Written by Chris Snowdon | Friday 14 September 2012

Two things did I know about William Howard Taft before reading this book. Firstly, in 1903, as governor of the Philippines, he opposed a ban on the sale of opium. Secondly, in 1913, as  the 27th president of the USA, he vetoed the Webb-Kenyon Act which would have banned the transportation of alcohol from into dry states. A liberal man in age of puritanism, Taft’s resistance was in vain. Opium was banned in the Philippines in 1908 and the Senate overrode his veto of Webb-Kenyon Act, paving the way for national prohibition followed seven years later.

After reading this novel, Jason Heller’s first, I am not sure I know much more about this one-term president. He was a fat man, that much is amply emphasised. He had a moustache, like so did many gentlemen of the Gilded Age. And he would have fitted into the world of 2012 with surprising ease.

Taft died in 1930 in the bosom of his family, but that was only in real life. In ‘Taft 2012’, he mysteriously disappeared in 1913 and reappeared still more mysteriously in November 2011, just in time to bring some traditional American values to the current presidential election. His re-emergence leads to some inevitable fish-out-of-water confusions from the Crocodile Dundee school of comedy. There are various battles with technology, which Taft wins with remarkable ease for a man of 155. He enjoys some punk rock. He is unfazed by his descendent marrying a black man. He is soundly opposed to the War on Drugs.

Heller sees Taft’s main attribute as being his reluctance to hold political office. He may be right, but even if not wanting to be president is an excellent qualification for the job, having no policies is not, and Heller’s Taft has little of substance to say. He is neither appalled nor delighted to see what has happened to his country. He is just a bit confused, an affable man who is out of his depth and knows it. He sees no reason why he should run as president in 2012, and the reader has to agree, but the invitations rain in nonetheless. Thanks to the internet, a minor movement of ‘Tafties’ attempts to goad him back towards the White House. Heller’s depiction of the madness of the Twitter crowd is well-observed, gently parodying the shallowness of the medium while showing Taft to be just another celebrity freak on the social networking conveyor belt.

It may be churlish to lay the charge of unrealism at a time travel yarn, but the ease with Taft fits into modern day liberal America strains credibility. This would matter less if the novel had the teeth to fulfill its promise. Instead, it is a political satire with very little satire and hardly any politics. Taft has nothing of significance to say about American foreign policy, abortion, Obamacare, the economy or how to reunite a divided country. He is an everyman with enough wisdom to know that he doesn’t have the answers, but his reluctance to stir things up wastes an interesting premise. Heller clearly sees Taft as the kind of middle ground, third way candidate his country supposedly needs. He is, as his fictional grand-daughter tells him, “conservative yet forward-thinking, pro-business yet pro-regulation, principled yet open to compromise”, but which politician does not describe themselves in these bland terms? Certainly not Mitt Romney.

The closing pages see something of a twist in the tale, but the target Heller takes aim at is too trivial to justify the effort of resurrecting a dead president, as if Churchill came back from the dead to complain about chewing gum. In the end, Taft 2012 is a perfectly enjoyable bit of fun which is as disposable as its title destines it to be.

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Conspiracy theories: Back and to the Left?

Written by Chris Snowdon | Tuesday 04 September 2012

study claiming that climate sceptics are more likely to (a) support the free market, and (b) believe in conspiracy theories has attracted a good deal of media attention recently, leading to such headlines as “Climate change deniers ‘are either extreme free marketeers or conspiracy theorists’”. (Students of logic might like to consider how that headline diverges from the actual findings.)

This has naturally annoyed the aforementioned sceptics/deniers, who dispute the researchers’ claim that their blogs were invited to take part in the online survey that provided the study’s data. Regardless of whether or not this is true, the methodology used was about as impressive as the phrase “online survey” implies. In 2010, a questionnaire was posted on the various climate change blogs where the two sides thrash the issue out, often in forthright tones. Questions involved belief in the extent of man’s contribution to global warming as well as one’s preferred economic system, the moon landings, Princess Diana’s death, Area 51 and other wacky conspiracy theories. Since it would not be difficult to guess the purpose of the survey, it strikes me that there was a non-trivial incentive for each side to use it to discredit the other by claiming to hold the opposing view on climate science whilst pretending to believe in every tinfoil hat idea on the list.

Continue reading.

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Prohibition returns

Written by Chris Snowdon | Wednesday 29 August 2012

Contrary to some excitable headlines, Tasmania has not banned the sale of cigarettes to anyone born in the 21st century. Such a move has been proposed, but it is most unlikely that the Australian state’s Lower House will allow it to become law. Nevertheless, it is another sign that anti-smoking campaigners are ready to come out of the closet and admit that they are prohibitionists. For decades, any suggestion that advocates for a ‘smoke-free world’  secretly wanted to criminalise the sale of tobacco were met with denial and protestation. This was not a witch-hunt against smokers, they said, only a campaign for better education, or restricting advertising, or protecting bar-staff, or saving the children.

The Tasmanian ruse, which was first mooted in Singapore, retains a ‘think-of-the-children’ element by forbidding those born after the year 2000 from purchasing tobacco products. Since the eldest of these people are currently twelve years old, this is not immediately controversial, but in a few years time it will mean prohibition for the first wave of adult consumers. This crucial fact seemed to escape some Tasmanians, like the gentleman who told ABC News that the proposal "definitely has my support mate because I believe that children shouldn't be smoking." This sentiment is, of course, besides the point. The real question is whether future generations should be treated like children forevermore; the Peter Pans of tobacco control.

Continue reading.

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No war on motorists? Tell that to the world outside Central London

Written by Chris Snowdon | Friday 24 August 2012

“Left wing think tank wants higher taxes” is a bit of a “dog bites man” story, but the IPPR’s call of higher fuel duty was spiced up by some eye-catching facts about the costs of getting about. Contrary to popular perception, they found that the price of motoring has fallen slightly in real terms in the last ten years. Ipso facto, they conclude, the “war on motorists” is a myth. “Compared to users of public transport,” says the think tank’s associate director, Will Straw, “there is no war on motorists.”

This rather depends on how you define a war and who you think is the aggressor. A breakdown of the figures (see graph below) reveals that bus and train passengers have seen fares increase well above the rate of inflation since 1987, but the costs of taxing, insuring and fueling a car have gone up by even more. If average motoring costs have not risen in real terms, it is thanks to the impressive decline in the cost of buying a vehicle which has consistently beaten inflation and is now lower in both real terms and—quite remarkably—also lower in nominal terms (as of 2010). Globalisation, a genuinely competitive free market and a relative lack of state interference have reduced prices and brought some rare good cheer to drivers.

The same cannot be said of the other costs shown, all of which are dictated by the state (in the case of fuel duty and car tax), or by cartels (OPEC), or by the half-state/half-cartel hybrid of the public transport industry. Fuel and car taxes have gone through the roof by any standard, and while motorists could be forgiven for viewing cheaper cars as a small mercy to take their minds off the looting, the IPPR sees it as justification for taking a little more.

There is no doubt that the pockets of bus and rail passengers have also been systematically picked over the past 25 years, but as high as the prices of bus and train tickets are, they do not represent the true cost of public transport. Local public transport was subsidised by the taxpayer to the tune of almost £5 billion in 2010/11, and close to £8 billion was taken from the public purse to spend on the railways (IPPR, p. 14). No government has yet come to terms with the fundamental problem that public transport is inherently expensive and can only be sustained by forcing those who don’t use it to cough up while making their customers pay twice.

The IPPR helpfully points out that motorists can reduce their expenditure by driving less. As a piece of advice, this is rather like telling commuters to save money by not travelling at peak times; technically true so long as one ignores the essential nature of the journey. They appear to be of the belief that motoring is still the preserve of wealthy Mr Toads, pootling around for fun on a Sunday afternoon, whereas private cars are by some distance the nation’s primary mode of transport.

This metropolitan bias is in evidence when the report notes that 25 per cent of the population do not have access to a car. The IPPR describes this figure as “surprisingly low”. Out here in The Provinces, we might regard it as surprisingly high. A look at the numbers reveals just how marginal public transport is to much of the population outside central London. Nationally, the average household spends £21.60 a week on petrol, diesel and motor oils, but only £2.80 a week on rail and tube fares. The average household spends more on spare parts and accessories for their cars or vans (£1.80) than they do on bus and coach tickets (£1.50). To put it still more starkly, we spend more money on lease cars than we do on bus journeys. As should be obvious, this is not because bus and train fares are especially cheap, but because the average household is considerably less likely to buy them than they are to fill up their tank. (If all these figures seem low, it is because many people use only public OR private transport, and some may not use either very much.)

For the majority of the population who rely on their cars to get about, the miracle of consumer capitalism has alleviated the pain of escalating taxes by providing cheaper vehicles, but it strains credibility to suggest that they enjoy favoured status in government policy. Whether one looks at fuel tax, car tax, bus fares or train tickets, no one escapes from the squeeze. I would be tempted to say that war is being waged on us all were it not for the fact that the cost of motoring is kept artificially high while the cost of public transport is kept artificially low thanks to the way it is subsidised by everyone—motorist, cyclist and pedestrian—whether we like it or not.

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New at Shiny happy people? The madness of the Happy Planet Index

Written by Chris Snowdon | Wednesday 20 June 2012

The New Economics Foundation’s Happy Planet Index has been inspiring bemusement and mirth since it first appeared in 2006. The third installment, released last week, continues to defy parody with its glorification of lawless, poverty-stricken countries in the name of environmental sustainability.

The index is made up of three elements—self-reported well-being, life expectancy and size of ecological footprint—but is so heavily weighted towards the latter that economic basket-cases, police states and peasant societies score highly at the expense of places in which you would actually want to live. Consequently, Luxembourg, where life expectancy is 80 years and the well-being score is 7.1, finds itself 30 places behind Rwanda, where life expectancy is 55.4 years and well-being is scored at 4.0.

If the good people of Luxembourg (ranked 138th) have not already bought a one-way ticket to more desirable destinations such as Malawi (72nd), Haiti (78th) or Afghanistan (109th), they can console themselves that they are still one place ahead of Sierra Leone (139th), although that could all change if the Sierra Leoneans buy a wind turbine.

Read this article.

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Why a fat tax would be a terrible idea

Written by Chris Snowdon | Wednesday 16 May 2012

When we scheduled the release of The Wages of Sin Taxes for 15th May, we did not guess that it would be sandwiched between the announcement of a 50p minimum price for alcohol in Scotland (Monday) and a new campaign for sin taxes on food and soft drinks (today). Writing in the British Medical Journal, two academics have just called for price hikes on sugar-sweetened beverages and ‘junk food’ as a way of dealing with Britain’s alleged obesity epidemic.

Obesity rates, like drinking rates, have not actually risen for ten years, but the same decade saw the medical profession gain an uncanny grip on the nation’s political process and they are in no mood to relinquish it. Taking a break from hassling smokers and drinkers, the mandarins of public health have taken the ‘next logical step’ and moved on to the general population.

“Economists generally agree,” they write, “that government intervention, including taxation, is justified when the market fails to provide the optimum amount of a good for society’s wellbeing.” Even if this dubious statement were true, there has never been a time when the market offered more choice in what we eat than drink than today. And, contrary to popular belief, it is much cheaper for a family to subsist on fresh fruit and vegetables than it is to eat out at McDonalds three times a day. For the spokespeople of public health, the problem is not that there is a lack of options, but that we plebs are not choosing the right ones.

Defining junk food is notoriously difficult. As Rob Lyons explains in his excellent book Panic on a Plate, a portion of McDonalds fries contains a quarter of an adult’s recommended intake of Vitamin C, while middle class favourites like olive oil, parmesan and pasta are rather fattening. A tax on “sugar sweetened beverages” will presumably leave apple juice and smoothies untouched, despite the fact that fruit juices are often sweeter and more calorific than Coca-Cola.

Whichever foods and drinks fall under the spotlight, it is unlikely that the new sin taxes will do anything except make the poor slightly poorer and George Osborne slightly chirpier. The record of fat taxes and soda taxes abroad is dismal. When academics assessed the effect of soda taxes in the USA, they found no evidence of a reduction in childhood obesity and concluded that "soft drink taxes are ineffective as an 'obesity' tax." Last year, a study claimed that a 10 per cent tax on sugar-sweetened beverages would lead to a 7.5 ml reduction in daily consumption, but this equates to just three calories a day. Since adult males require 2,500 calories per day to maintain a healthy weight, the impact on obesity rates would be somewhere below negligible.

Perhaps recognising this, the authors of the BMJ article insist that these taxes would have to be set at at least 20 per cent (in addition to the 20 per cent VAT). Such a rate would hit us all in the pocket, but it would still have an imperceptible effect on British waistlines. A 2007 study found that even a 100 per cent tax on “unhealthy foods” would reduce average body mass index (BMI) by less than one per cent (a reduction in BMI of just 0.2 points).

Although there is ample evidence that sin taxes of this kind do not work, we run the risk of accepting the medical establishment’s terms of debate by even discussing it. The real argument against this kind of state interference is that what we eat and drink is simply no one’s business but our own. As I show in The Wages of Sin Taxes, the claim that obesity is an economic time-bomb which forces the slim to pay for the sins of the fat is fallacious. Without that justification, the meddlers are exposed as the ugliest brand of paternalists. It is time to call these taxes what they are - fines for living in a way that displeases the British Medical Association. But since it is clear that these doctors won’t be happy until they can issue us with ration books, perhaps it time to remind these public servants who their masters are. 

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The Bennites strike back

Written by Chris Snowdon | Friday 04 May 2012

Tim Worstall made himself (more) unpopular with Compass last week by pointing out that their idea of creating a form of national socialism rather resembled the sort of economy favoured by National Socialists. In a think piece entitled ‘Progressive Protectionism’, Colin Hines espouses a system in which countries “rebuild and re-diversify their economies by limiting what goods they let in and what finance they choose to enter or leave the country.” This happens to be much the same policy favoured by the British National Party. Hines has responded by calling this a “libellous smokescreen” and I have no wish to poke this particular hornet’s nest, other than to say that while ‘Progressive Protectionism’ is certainly unoriginal, it borrows less from Herr Hitler than from Mr Benn.

In 1976, Tony Benn came up with his ‘Alternative Economic Strategy’, of which Hines’ scheme is a virtual carbon copy. As described by Dominic Sandbrook in the latest volume of his monumental history of post-Churchillian Britain, Benn believed he could save the British economy by cutting the country off from foreign competition.

“The premise of the so-called Alternative Economic Strategy was that, in a globalized world, Britain could only reboot its stalled economy by temporarily cutting itself off from external pressures. Under this strategy, the government would introduce stringent controls on foreign imports and the flow of capital, effectively throwing up a protectionist barrier to stop too many foreign goods getting in. Behind this trade wall, they could adopt a properly socialist policy, with full employment, steadily rising wages, booming demand and hence a resurgent manufacturing sector, all under the direction of a souped-up National Enterprise Board.”

This was justifiably viewed as economic lunacy by the rest of Jim Callaghan’s Cabinet (who were hardly a band of Randian objectivists). They understood that such an anachronistic policy would lead to international retaliation on a grand scale which would further cripple British industry. In addition to violating various free trade agreements, including EEC membership, Benn’s “siege economy” was almost certain to lead to mass unemployment, severe deflation and shortages of essential imports. In the long term, it would stifle innovation and savagely curtail economic growth.

The only significant difference between Benn’s ruse and that of Hines is that the latter believes in turning the whole EU, not just the UK, into one large protectionist bloc. It is a matter of debate whether that would make the policy more or less disastrous, but disastrous it would surely be. “Benn’s alternative strategy would probably have been a catastrophe,” Sandbrook writes. “For one thing, he consistently refused to accept that a siege economy would probably annihilate what was left of British manufacturing. What was more, he seemed completely indifferent to the importance of financial discipline and international confidence, as if he could just wish away the new world of global competition and fluctuating exchange rates... in Benn’s imagination the rest of the world appeared as a sinister conspiracy of American bankers, European moneylenders and multinational corporations, plotting to undermine British socialism.” Benn, he concludes, “remained a little Englander to the last.”

After politely listening to Benn’s protectionist fantasies, Callaghan rejected the Alternative Economic Strategy in its entirety, but the scheme remained popular with many on the left of the Labour party and it was eventually incorporated into the 1983 election manifesto, famously described by Gerald Kaufman as the “longest suicide note in history”. Michael Foot’s crushing defeat in that election forced the party to abandon many of its most reactionary and economically illiterate ideas, of which the Alternative Economic Strategy was surely one. It seems that there are some who think it is time for a revival, but if resurrecting policies from Labour’s most dismal period of opposition qualifies as “progressive” then this much abused word no longer has any meaning.

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