Economic Theory

What the “PopCons” get wrong


I recently wrote an article for this blog reviewing the decade of the 2010s (and a little beyond), in which I argued that, even though the decade ended with the electoral defeat of Jeremy Corbyn, the Left still won in other ways.

I thought about that article again when I watched the video from the launch event of the Popular Conservatives (the “PopCons”), because the speakers picked up some of the same themes, and their conclusions overlapped quite a bit with mine. It is fair to say that the PopCons are about as dissatisfied with the status quo as I am, if not more so.

The big difference is that for them, this creates a problem which it does not create for me. Unlike me, they strongly identify with – indeed, are very much part of – the party that has been in government since 2010.

The PopCon diagnosis

The PopCons try to square that circle in the following way:

Britain, they argue, is not really run by democratically elected representatives. It is run by unelected bureaucrats in unaccountable quangos, both national and international. When democratically elected politicians try to enact policies which reflect the wishes of the majority, they run up against “Davos Man”, who stops them from making any meaningful changes. Davos Man is left-wing, woke, and green. He loves regulation, he loves government spending, he loves taxes, and he loves immigration. He loves Tony Blair, which is why he makes sure that Britain remains tied by Blair-era legislation, and he loves the EU, which is why he makes sure that Britain can never really leave. (I’m obviously oversimplifying their argument, but I don’t think I’m strawmanning it. Judge for yourself.)

I don’t want to immediately dismiss the PopCon diagnosis as an excuse, or as conspiratorial thinking. Most organisations really do experience Principal-Agent-Problems: there is often a disconnect between what the leadership of an organisation wants to achieve, and what actually happens on the ground. We would expect these problems to grow with the size and complexity of an organisation, and to be especially pronounced when there is no obvious measure of success or failure (such as profits or shareholder value). So we would expect the machinery of government to be especially prone to them.

It is also true that large parts of the public sector are dominated by people who are politically hostile to the government. For example, in 2017, 72% of secondary school teachers voted for Jeremy Corbyn’s Labour Party. It is not a huge stretch to see a connection between Corbynite teachers and wokery in the classroom.

That all being said – I still have a major issue with the PopCons. If their analysis were correct, it should be very easy to identify specific examples of the process they describe. It should be very easy to find instances where the government passed some bold reforms, which then never made it to the implementation stage, because they were derailed by the civil service, or a legal institution, or a quango. So what are those examples? Where is that graveyard of reforms that died in their infancy, and who’s buried there?

I’m not saying that this never happens. I’m saying that I struggle to think of many examples, and the PopCons haven’t done much to jog my memory.

Immigration

The closest thing to an actual example is the Rwanda Plan, which was blocked by the Supreme Court. Let’s say that that was the hand of Davos Man (although I’m sure the Court would dispute that).

Even here, though, we need to bear two things in mind.

Firstly, even if the Rwanda Plan had been fully enacted, we would still have had record numbers of net immigration. The big increases that we saw in recent years were driven by work and study visas, and the number of those is determined by rules which the government – not judges, not quangos – can, and does, control.

Secondly, the Supreme Court did not object to the principle of outsourcing asylum claims to third countries. They did not block asylum deals of this type in general; they just blocked this particular deal with this particular country.

Housing

One of the speakers, Jacob Rees-Mogg, brought up the example of Nutrient Neutrality rules. These are EU-derived environmental rules, enforced by a regulator, which prevent housebuilding in parts of the country. Last year, the government tried to reduce the power of the regulator and relax those rules, but this was blocked by the House of Lords.

Nutrient Neutrality rules are indeed a terrible idea (at least in this absolutist version). However, these rules have only become an issue in recent years. They cannot retroactively have caused Britain’s housing crisis, which has a much longer history than that.

As it happens, I could think of two conservative reformers who tried to get more houses built, and whose reform efforts were blocked: Nick Boles in the early 2010s, and Robert Jenrick in 2020/21. But it was not Davos Man who blocked them, it was not a quango, was not the EU, it was not the European Court of Human Rights, and it was not even Tony Blair. It was Conservative backbench MPs, who chose to side with their NIMBY voters.

Legacy legislation

A lot of New Labour-era legislation is still in place. In this sense, the PopCons are right to say that, in some respects, we still live in Tony Blair’s and Gordon Brown’s Britain.

One example of legacy legislation that often comes up is the 2010 Equality Act, the legislative basis for a lot of “wokery gone mad”. However, the Equality Act is not harder to change or reverse than any other piece of legislation. The reason why it is still in place unchanged is that the current government has never bothered to do anything about it. You can blame Labour for it, in the same way in which you can blame Kaiser Wilhelm II for Germany’s Sparkling Wine Tax (which he introduced in 1902 to fund his Imperial Navy, and which no government has since bothered to repeal). But at some point, if you never do anything about the policies you inherit, they become yours.

Another example, specifically singled out by Jacob Rees-Mogg at the PopCon launch, is the 2008 Climate Change Act. But this example does not work well for the argument he is trying to make.

Firstly, while this act was indeed brought in under a Labour government, almost all Conservative MPs voted for it at the time. It is as much theirs as Labour’s.

More importantly, though, the Climate Change Act has, in essence, now been superseded – but by something much worse, namely, the Net Zero agenda. Net Zero was not forced upon the government by Davos Man, the EU, or any of the PopCons’ bugbears. It was adopted when politicians from all major parties – the Conservatives very much included – started to dance around Greta Thunberg.

Conclusion

The PopCons are clearly at the more economically liberal end of the spectrum of conservatism, so I naturally sympathise with a lot of their aims. If they concentrated on specific reforms rather than grand narratives, I would probably agree with most of it. But I believe that the grand narrative on which that project is built is not just unconvincing, but actively counterproductive, including for their own aims.

There is a very simple explanation why Britain has not moved into a more economically liberal direction over the past 14 years: the dominant wing of the Conservative Party does not believe in those ideas, and most of those ideas are not electorally popular. Obscuring that fact, in the way the PopCons do, creates some major problems.

Firstly, it lets elected representatives off the hook. The flipside of the PopCon narrative, in which elected representatives are largely powerless, is that they cannot really be blamed for anything. But if you want to be hypercritical of the state of the country (and, by all means, do – because there’s lots to be critical of!), you cannot sensibly exonerate MPs, Ministers and Secretaries of State from that criticism.

Secondly, it shields proponents of economic liberalism from facing up to the uncomfortable truth that their ideas are unpopular. Telling them that Britain is full of shy Thatcherites (who, for some reason, never show up in any opinion polls) is really not helpful.

And thirdly, while everyone seems to hate “quangos” and “unelected bureaucrats”, describing them as a problem in its own right is a distraction.

It is hard to think of two people who were ideologically further apart than Friedrich Hayek, the classical liberal Austrian economist (and Godfather of the Institute of Economic Affairs), and Harold Laski, the first postwar chairman of the Labour Party, a socialist and staunch defender of the Soviet Union. But the two men agreed on one thing: once the size and scope of the state grows beyond a certain level, it is no longer possible for elected politicians to remain on top of everything. They inevitably have to outsource the more complex functions to specialised bodies. Thus, Laski already foresaw the rise of the quangocracy (although he did not call it that) in 1932:

“[T]he present parliamentary machine is quite unsuited to pass rapidly a great body of complicated legislation. The National Government […] has […] admitted this by implementing its economy […] measures not by detailed debate in the House of Commons but by a wholesale system of delegated legislation.”

Laski did not have a problem with that. Hayek very much did. But his whole point was that the quango state could not be meaningfully “democratised”. If you want a more democratic state, you need to reduce its size and scope. Only then will it, once again, become possible for elected representatives to oversee its functions.

 

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).


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