The Observer, Sunday November 23 2008
As they prepare to confront the global crisis, members of the incoming Obama administration would not thank you for telling them that their lives will be straightforward. Intellectually, however, American liberals appear to have it easy. They know the cause of the sickness in their country and think they have the cure.
Conservatives, blinded by the dogmas of laissez faire, allowed a maniacal market to bring the roof down on the rest of society. The Bush administration waved on investment bankers as they stuffed their pockets with other people’s money, and so neglected the public sector it could not respond to the emergency of Hurricane Katrina. The liberal solution seems obvious: save the victims of the financiers’ folly from unemployment by putting them to work on public projects to rebuild America’s civic pride and neglected infrastructure.
The British centre-left cannot share the American dream of a second New Deal, and not only because Gordon Brown’s regulation of the City was as irresponsibly lax as George Bush’s regulation of Wall Street. Labour has been in power for 11 years. Britain has already had its New Deal, and experienced the disillusion which follows. We’ve seen the government spend vast sums on health, education and law and order. Not every penny was wasted – the new schools and hospitals will be an enduring monument to the 1997 Labour government – but no one bothers to pretend that the public has received value for money.
Scepticism about the public sector matches scepticism about the private. To put alongside disgraced managers of Northern Rock, HBOS, RBOS and Bradford & Bingley, the state bureaucracy can boast managers in Royal Mail, NHS, BBC, local government and Network Rail, who award each other more than the Prime Minister’s £188,000 a year.
A blind spot in leftish thinking prevents liberals from condemning them with the vigour they deserve. When a hamper company disappears with the savings of humble families, we do not need anyone to explain why it is wrong for Scrooge to stop Tiny Tim receiving a Christmas treat. Similarly, when employers exploit their workers, the left opposes them instantly and instinctively.
Yet when the state demands taxes on pain of imprisonment from those same savers and workers, and throws them at unworkable projects and avaricious executives, too many liberals feel it is somehow reactionary to repeat the same criticisms against them.
If I were advising Alistair Darling, I would urge him to tackle the double standard by promoting the old left-wing virtue of equality of sacrifice. He might make a start by ruling that no public sector manager or management consultant can take more than the Prime Minister’s salary from the taxpayers’ pockets. Not only would enforced restraint be popular, Darling would show he understood how the fast the world is changing.
For almost 30 years, we have lived with the cult of the omnipotent manager: the übermensch, the big swinging dick, the master of the universe who broke up organisations, outsourced staff and overruled the autonomy of professionals to justify his exorbitant rewards. Now that the most highly paid and overpraised managers on the planet have led the global economy to ruin, the myth of the invincible executive is as bust as the banks. Its fall has created a power vacuum, which will be filled by men and women schooled in specific skills rather than the bombast of the business schools. As the left-wing economist Chris Dillow put it to me: ‘In the past managers asked how they could do without professionals. In the future professionals will ask how they can do without managers.’
The new world is already coming to the NHS. The Department of Health has seen multiple failure. Its managers could not cope with MRSA and, as culpably, did not pass on the benefits of the lavish increases in funding to patients. Rather than carry on with a broken system, it decided to transfer power to doctors. An understandably cheerful Jonathan Fielden of the British Medical Association said it had finally grasped that giving clinicians more authority not only improved the prospects of patients, but also saved money.
Managers who have been doctors and nurses know how to stop simple conditions becoming expensive illnesses because they have medical training as well as MBAs. Executives from the business schools do not because they only have MBAs.
The underestimated Alistair Darling clearly realises how desperate Britain’s condition is. If he orders emergency tax cuts tomorrow, any adult with any sense will save the money to cover the cost of tax rises that must come to pay for the borrowing binge. As the British poor are heavily indebted, and are not always as dumb as their social superiors imagine, the prediction by middle-class economic commentators that they at least will help the high street by spending without a thought for tomorrow strikes me as fanciful.
Meanwhile, the huge increase in state borrowing may seem like a bonanza for public sector workers, but the Treasury, quite rightly, is making the limiting of mass unemployment its first concern. Funding will be concentrated on home building and road and light railway schemes that are ready to roll. I doubt Darling will have much left over for public sector pay rises. He must know that during a recession the state can help workers off the dole or give more to those already in its employment. It cannot do both. In any case, the government’s vast debts will eventually require spending cuts as well as tax rises, so what optimism there is in the public sector will soon vanish. In these grim circumstances, it strikes me as essential that the government takes a moral lead by becoming fanatical about ending waste, including the riches wasted on management.
As I said, American liberals have it easy. If they want to continue to enjoy the good life, they should learn from the mistakes of the British centre-left. The best lesson is also the simplest: never take taxpayers’ money for granted because you never know when you will need it.