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Political inertia

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A paper which analyses the concept of Political Inertia from a number of different theoretical perspectives including Adversarial Politics, Consensus Politics, Failure to Deliver Economic Growth, Sequencing of Political Democracy, Social Acceleration, \M|ixed |Economy Models, Path Dependency, the \Winner-Takes-All-Politics thesis, Political Drift, the Political Science of Lobbying, the Off-Center Republican Revolution Thesis, the Captured Economy Model and Economic Rent Seeking, and the Decline of Nations Thesis and the Logic of Collective Action.

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Political inertia

  1. 1. Political Inertia by Ged Mirfin
  2. 2. The 2017 General Election saw the highest percentage Vote for The Conservative and Labour parties combined - 82.4% since 1979 when together they achieved 80.8%. 1945 88.1 1950 89.7 1951 96.8 1955 96.0 1959 93.1 1964 87.5 1966 89.5 1970 88.7 1974 75.0 1974 75.0 1979 80.8 1983 70.0 1987 73.0 1992 76.3 1997 73.9 2001 72.4 2005 67.6 2010 65.1 2015 67.3 2017 82.4 Some commentators questioned whether this represented a return to the Adversarial Politics of the period 1970 to 1979 and thus a situation of political inertia. I would like to offer the reverse perspective - that the General Election of 2017 was in fact the direct response to perceptions amongst the electorate that multi party electoral politics was ultimately the cause of political inertia. An additional 6,866,844 Voters voted for either the Conservatives or Labour in the hope that they could elect a government with a big enough majority to force change through parliament - either ending austerity or at least prevent it from continuing or continuing with deficit reduction. A strong single party government is something
  3. 3. which has not been present in Britain since the 2005 Parliament..The 26,548,343 Votes for the two main parties was the highest since 1951 when the Conservatives and Labour achieved 27,666,236 Votes between them. This was not a reversion to something that had gone before, reversing the trend of 1992 to 2010, when Votes for the two main parties fell from 25,653,491 to 19,313,281 - a fall of 6,340,210 Votes. it was something else. 1945 20,683,957 1950 25,720,580 1951 27,,666,236 1955 25,716,,145 1959 25,967,047 1964 24,208,450 1966 24,515,384 1970 25,353,881 1974 23,517,796 1974 21,919,644 1979 25,230,141 1983 21,469,250 1987 23,790,390 1992 25,653,491 1997 23,119,110 2001 19,092,568 2005 18,337,351 2010 19,313,281 2015 19,681,499 2017 26,548,343 Ironically, however, the desire for the smack of firm government and the completion of a successful deficit reduction plan or an increase in government spending in order to bring austerity to a juddering halt by restoring the incomes of public sector workers especially would have been regarded as a model for perpetuating political inertia rather than ending it only a decade ago. At that historical juncture the dominant party in power typically. implemented a policy programme which was
  4. 4. in contradistinction to that of the opposition. And yet vast parts of both Labour and the Conservatives programme in government up until the advent of Margaret Thatcher and the ending of the post-war consensus were remarkably similar: a mixed economy, nationalisation of state industries, tripartite economic planning as a means of delivering full employment. Consensus Politics The Neo-Liberal Consensus which replaced the post-war consensus which was based in turn on a free-market economy dominated by formerly state owned private industry, deregulation, light touch regulation of financial services and the stock market, widespread public share ownership, trade union reform and the Progressive withdrawal of the state from industrial planning and strategy and lastly but no less critically important a free floating currency and the relaxation of exchange controls allowing the movement of currency flows across borders on international markets in particular the United States. The banking crisis and the so called Great Recession which followed in its wake between 2008 and 2010, indeed, it has been argued was ultimately the product of the entrenched thinking in the majority party in Parliament – the conviction in the role played by the City of London and in particular the Major High Street and Investment Banks as the engine of economic growth in a Social Market Economy providing off balance sheet deficit funding for a burgeoning welfare spending and a growth in the size of the state and its institutions. Indeed such convictions were no less present in the small state thinking and light touch regulation of financial services that dominated the thinking of the Conservative opposition at that time. The Neo-Liberal consensus which dominated the thinking of both government and opposition had effectively become economic orthodoxy- which because of the multipolar nature of electoral politics in the country with huge third and fourth party support for both the Liberal Democrat’s and UKIP nationwide and fifth party support for the separatist SNP in Scotland - was largely unchallenged. There was an outlet for protest politics in the country but this was not reflected in the distribution of seats at Westminster. This arguably created a greater economic immobilisme - economic and political inertia - than even under an adversarial scenario. In various works Richard Rose argues that party systems undergo a process of political evolution with political parties that fail to adapt to changing political and historical circumstances being replaced by others that evolve more successfully, facing a high likelihood of political extinction. There are currently major question marks over the viability of not only UKIP but also the Liberal Democrat’s and dare one say it, the SNP as well as all struggle to adapt politically to the post-Brexit environment. History teaches us powerful lessons which are only learnt in retrospect. If the lesson learnt by the population in the months following the 1992 General Election was that Britain was powerless in the face of the huge economic forces unleashed in the wake of the collapse of the Warsaw Pact and the Soviet Union, German Re- Unification and the institutional integration that preceded moves towards the adoption of a Single European Currency then the lesson learnt in the 2017 General Election was that out of the EU Britain had a genuine opportunity to renew its national identity and assert its will on the world stage once more freed from the constraints of the EU. It is an enticing thought. It is also one that is not entirely contiguous with the evidence. It took a further 4 General Elections for the Vote for the two biggest political parties and two further critical exogenous shocks to the
  5. 5. political system: the Gulf War and the Banking Crisis to critically undermine the confidence of the electorate in the competence of the two main political parties to govern. Political |Inertia: Is it due to a failure to deliver economic growth? This raises a key question to what extent is political inertia a function of the failure of government to deliver continuous and sustained high levels of economic growth? Political inertia has been most strongly evident at critical historical junctures when it is felt by both decision makers and the general public alike that the political system has the ability to reset itself because it has been released from the forces which have propelled it in a particular historical direction.. in 1993 John Major’s Government was released from the constraints of high interest rates and the crippling high unemployment and stagnant growth that accompanied this as it was sent crashing out of the Exchange Rate Mechanism by a combination of currency speculation and an overvalued currency which was deterring exports. It is arguable that the Banking Crisis of 2008 and the economic recession which followed in its wake allowed a resetting of their respective economies in Britain and the U.S. In Britain it facilitated bringing deficit financing of Budgetary spending under control through austerity measures particularly as it effected welfare spending whilst at the same time allowing the government to introduce much tighter regulation of the financial services sector and in particular of the stock market and investment banking which was arguably out of control. In the U.S. it allowed the Federal Government to introduce a huge financial stimulus package akin to Keynesian deficit financing to directly fund growth in the economy on a scale which went far beyond the quantitative easing which allowed the government to prop up parts of the banking industry in the UK through buying up bad debt or via what was in effect covert nationalisation of large parts of the high street banking sector. The same logic can be applied to the 2017 General Election. Did the electorate see the General Election called at short notice by a Prime Minister seeking enhanced authority to negotiate a form of Brexit with harder edged parameters than the opposition and to push through Parliament Budgets which completed the deficit reduction process as an opportunity to support the former but to oppose the latter and bring an end to austerity. The result of the 2017 General Election therefore came as somewhat of a surprise to political pundits and party supporters alike. It shouldn’t have done. The electorate had given David Cameron a majority in 2015 because a significant number of Voters wanted him to deliver a referendum on Britain’s continued membership of the EU whereas Ed Milliband equivocated. In 2017 the electorate expected both parties to deliver Brexit, that was an electoral given. A significant number of Voters however: middle class public sector workers, young people, particularly university students and recently registered non-voters who had used their Vote in the Brexit referendum to deliver a political view against the political establishment and elites voted in large numbers to end austerity. Thus not only did the 2017 General Election produce no clear result but one form of political inertia has been replaced by another. An Adversarial Politics of a much more fundamental character than existed during the late 1960s to early 1980s. A much more visceral ideological confrontation now exists between a proto-Marxist
  6. 6. Labour Party and a Free-Market Conservative Party especially now that it is advocating a Back-to-the-Future version of Joseph Chamberlain’s policy of imperial preference utilising the hoped for benefits of Post-Brexit free trade deals with countries outside the EU, especially members of the Commonwealth to drive down commodity prices to benefit the vast and growing numbers of the just managing in the country. The fundamental problem is that this bitter ideological confrontation has now been overlain by an even deeper political schism in Parliament over the outcome of Brexit pitting those who favour a hard Brexit walking away from the negotiations with no deal against those who favour a soft Brexit which burgeons in some cases via continued membership of the customs union and single market to a closet Remain strategy and seeks to overturn the result of the referendum. Stuck in the middle are the constructivists seeking to negotiate the best possible outcome in Britain’s National Self-Interest but this in a situation in which there is no Parliamentary Majority either way. Brexit is the only game in town. It is a game which is excluding all others marginalising debate on all other policy issues to the very margins of political debate and thus inaugurating an era of much more profound political inertia as the government finds it unable to confront impending political issues of the day let alone Brexit. Adversarial Politics An Adversarial Political System has been regarded as one of the fundamental causes of Britain’s economic ills and long-term economic decline. Is the post-Brexit Post-2017 General Election Politics simply another manifestation or form of Adversarial Politics? Or does the politics that we are witnessing represent the fundamental transformation of a party/political system in the throes of political convulsion as it evolves into something else as it confronts and fails to overcome the dilemmas of political inertia? We must firstly understand what is Adversarial Politics. Adversarial politics takes place when one party (usually not in government) takes the opposite (or at least a different) opinion to that of the other (usually the government) even when they may personally agree with what the government is trying to do. Adversarial politics dictates that the party in power are faced by an opposition with very different ideological beliefs and one that provides a contrasting policy programme. The party not in power will try to gain political advantage from difficulties that the government faces, not from comparing policy. The idea of co-operating with the majority, except on occasional matters, was not part of an opposition party's thinking. And since the party with a majority did not need additional support, it didn't co-operate much with the opposition. In a situation of minority governments, politics and government become even more dysfunctional. Everything, every day, becomes a question of tactics and political calculation, because the adversarial instincts from the mindset of both government and opposition rule out serious co-operation. Both Labour and the Conservatives keep manoeuvring daily, and opposing each other most of the time, because they think the next election will bring a return to the status quo ante: a majority government with their side in control.They are not really interested in cooperating except very temporarily, and are "relieved" when that brief periods of
  7. 7. co-operation based on temporary so called “cross party consensus” ends so they can return to hyper-partisan, adversarial politics. Did the election result symbolise a reversion to a 2 party system therefore because it was felt that multi-party politics was leading to political inertia? British politics and politicians continue to face an overriding question: What kind of nation should Britain become? Preoccupied with short-term responses to the immediate problem of Brexit both the Conservative Government and the Labour Opposition are not ready to meet the challenge. They are both more fixated with their electoral prospects than day-to-day administration. Both the Government and Opposition are more introspective than outward looking. Little room is left open for a practical discussion of what needs to be done to refashion society and the economy. Are we therefore witnessing the birth of a new political consensus in the post financial crash era where the two main political parties are unable to adapt to the new realities? As Richard Rose reminds us the party system is evolving in a direction where we are witnessing the extinction of potentially a number of political parties: UKIP, the Liberal Democrats and the SNP all of which experienced a fall in their Vote in the first post-Brexit General Election? If this is the case then what we are also witnessing is a struggle for survival between the two major political parties pitting competing visions of the post austerity era against each other, neither of which can be implemented at the moment because Brexit is getting in the way. This is why there is such continuing disaffection with our system of Government amongst the electorate in spite of an election result which sought an end to austerity and instead resulted in a government which is avoiding the question of whether austerity should end not because it won’t answer the question but rather it can’t so preoccupied is it with the bigger question of what Britain’s future outside the European Union will look like. The electorate are becoming at the same time progressively disillusioned that the question is too big to be answered but accepting that it will take time to reframe the question that has been posed. Public attention is becoming increasingly focussed on the issue of institutional failure recently concentrated on reducing the size of the unelected and unrepresentative and anachronistic character of the House of Lords but more importantly on the sexually exploitative behaviour of MPs, Ministers and the Party Hierarchies as male members in particular seek to exploit their political power and influence for sexual gain. Institutional “failure” is key to explaining economic “failure” particularly for those left behind by the economic system. Britain’s Political Culture is founded upon maintaining consensus. This goes beyond the mixed economy model of the Butskelliism of the Post-War consensus and favours change which is both gradual and incremental in nature, a pattern of ordered change which is ultimately to the advantage of the two main political parties because it allows them to maintain power and influence even during periods when more disorderedly patterns of change are required to address crises which beset the political system, the kind of historical junctures we have witnessed recently which require the kind of dialectical change necessary to reset the foundational structures of the economy, the constitution and the party system. One may even go so far as to say that there is a culturally-determined addiction to crisis-avoidance which has prevented the emergence of “new men” and encouraged a foredoomed reliance on solutions which are either statist or market driven in nature. Perhaps this is why “the
  8. 8. permanency of institutions” that Professor Peter Henessey talks about has become so enduring. The Permanency of the institutional and governing framework however appears to be in dialectical opposition or conflict to Social Change such that one appears to becoming permanently detached from the other to the extant that one is now blocking the other. The relationship between social change and political inertia is becoming increasingly complicated – the failure of institutions to respond adequately to social, technological and environmental change – and the Social Stasis that has resulted as groups in society have become left behind by (or should that be permanently detached from?) the process of economic and technological acceleration. Fukuyama – Political Order and Political Decay Two complementary theoretical interpretations have been offered of this process of dialectical conflict. The first is by Francis Fukuyama who in his book “Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy” argues that political inertia is a result of a cognitive and institutional rigidity which is ultimately grounded in human nature, and that therefore inertia is a feature inherent in political systems. Fukuyama argues that a democratically established government has a built in tendency to decay that is quite difficult to reverse. Fukuyama further argues that the key to successful government can be reduced to three key elements: a strong state, the rule of law and institutions of democratic accountability. A successful liberal democracy, or established 'political order' to use Fukuyama's terminology, consists of three components:- (1) an established state that has legitimacy able to maintain order and provide basic services (2) rule of law, i.e an independent judiciary not beholden to the ruling powers and (3) democratic accountability. All three elements have to be held in a balance to avoid what Fukuyama describes as 'political decay’. Fukuyama charges politicians with being so preoccupied with the second and third pillars of his explanatory tripos such that they have forgotten that the first - strong government- is equally important. This is reflected, Fukuyama states, in the polarisation in American politics which is ultimately rooted within the constitutional separation of powers and multiple checks and balances which he argues makes it near impossible to achieve the bipartisanship and political consensus necessary to mobilise real political change. For Fukuyama there is a blind spot in many political systems when it comes to recognising the importance of having a strong state. Fukuyama explains that this originates in what we refer to today as 'corruption' in politics which has its roots in human nature. His analysis shows that leaders of government, unless "controlled", over the longer term appoint family members, clan members and friends to top level positions and reduce their taxes. He points out that this has always been the case. It is one of the negative tendencies in human nature that is unlikely to go away.The democratic system is designed to avoid this tendency by the regular renewal of the appointment of the members of parliament and most of the cabinet members. For Fukuyama however the 'social contract' is being undermined by the corrupting effect of professional lobbyists.
  9. 9. For Fukuyama “political decay" occurs where an economic elite uses its wealth to influence the appointment of a political leader they prefer. He refers to this decay as being based on what he dubs “reciprocal altruism”. This means that a person or group donates large sums to the candidate they prefer and expect that they will benefit if that person is appointed. The economic elite is not the only group using funds to influence the outcome; the same applies to labuor unions and other organizations that want to appoint a leader that will look after their benefits. Fukuyama suggests that a strong state is associated with a “high performance” civil service. For Fukuyama a high performing civil service does much more than execute the application of laws and regulations. They also advise the political leaders about the need for new or revised laws and in case the political leader or parliament wants to introduce new laws on what the top civil servants think is possible and how to go about it. The problem for Fukuyama and other theorists of his ilk is that developing a high performance civil service is a major challenge that takes many decades, even several generations. If Fukuyama like several theorists of elitism who have preceded him is suggesting that the best answer to overcoming the problem of political inertia is to develop a strong all powerful administrative class he is simply one in a long line of utopian theorists who believe that the most convincing normative answer to the question of democratic sequencing is to ignore it altogether. Unfortunately this isn’t a convincing answer and is the central hole in his thesis as to what is the right mixture or balance of elements for a successfully functioning state. The answer to a lack of democratic accountability or a weak state is not to make the state even less democratic by making the ruling administrative elite all powerful. Rosa – Social Acceleration The second interpretation of the process of dialectical conflict is offered by Hartmut Rosa in his book “Social Acceleration: A New Theory of Modernity”, which, by contrast, sees inertia as a specifically modern phenomenon, which is the result of the inability of political institutions to cope with the accelerating rate of change in other social systems. Rosa argues that modern technical capacities lead to an acceleration of social life in a manner that undermines the stability and well-being of individuals. Social Acceleration means that the ever increasing speed of events and activities leaves individuals with less and less free time to enjoy life. The economics of capitalism is a large driver in social acceleration, by creating a constant cycle of development, distribution, obsolescence, and re-development. The goal of this cycle is to create wealth and eliminate waste including unused time. Human nature is the underlying driver of social acceleration. As humans, we have a great desire to experience as many events, objects, locations, and relationships as possible. A capitalist economy provides ever increasing amounts of goods and services, which satisfies our human lust of materialism. Time saving technology such as dish washers, trains, cars, etc provide initial relief and free up some time to the individual, but eventually they prove more of a burden to be managed as our human nature drives us to use up our free time in some other task or project. Hence, life gets more complicated and stressful and we run ourselves ragged just to stay still. Rosa identifies three categories of change in the tempo of modern social life: technological acceleration, evident in transportation, communication, and
  10. 10. production; the acceleration of social change, reflected in cultural knowledge, social institutions, and personal relationships; and acceleration in the pace of life, which happens despite the expectation that technological change should increase an individual's free time. According to Rosa, both the structural and cultural aspects of our institutions and practices are marked by the "shrinking of the present”. When this phenomenon combines with technological acceleration and the increasing pace of life, time seems to flow ever faster, making our relationships to each other and the world fluid and problematic. The world around us does not stay the same, it changes in ever shorter intervals. And this, in turn, leads people to try to increase their pace of life. Now modern capitalist society requires growth, acceleration and increase of innovation simply in order to reproduce its structural status quo. It is true that many people feel that the frantic speed and the changes around us are only surface-phenomena, that there is total inertia underneath. It feels like we are going nowhere, but faster! In the 21st century acceleration has become a structural necessity. It does not serve progress any more. If we do not speed up, grow, and innovate, we cannot maintain social stability — we lose the status quo. For Rosa this is a very dangerous and frustrating situation: people feel that each year we have to run faster and faster just to stay in place. No matter how efficient and fast we are this year, next year we have to run a bit faster, otherwise, we lose out. We no longer believe that life gets better. On the contrary: we know that it will get harder and harder. Political theorists like Rosa devote a lot of energy to thinking about dramatic changes like the collapse of capitalism or the end of liberalism. Such changes are however extremely rare. In politics, inertia is a powerful force. Our imagination is drawn to change, but if we want to understand the world as it is, then we have to explain the prevalence of continuity as well. The international financial system suffers frequent and sometimes severe shocks but the basic structure of that system has persisted for decades. Social movements like UKIP often fail to produce lasting institutional change in the Constitutional Structures of Power. Indeed it can be argued that what they do is to solidify the institutional structures to the disadvantage of electoral change agents like the Liberal Democrats and the SNP. Perhaps therefore we should emphasise stability (or should that be stasis?) over change? Institutions are sometimes said to be “sticky,” meaning that they often persist in spite of evident flaws and available alternatives. Pierson – Active Governments The work of Paul Pierson has recently been cited as showing how an active or busy government performs more successfully than inert or inactive governments. An active government is not necessarily one with a large public sector budget or for that matter high levels of taxation. Nor is an active government one with an ambitious reform programme, ultimately it is about the successful delivery and implementation of reforms.
  11. 11. American Amnesia – the Mixed Economy Model There are three elements to Pierson’s thesis. The first is contained in the book “American Amnesia: How the War on Government Led Us to Forget What Made America Prosper” which he co-wrote with Jacob S. Hacker. This is the story of how government helped make America great and how a return to effective government is the answer the nation is looking for."American Amnesia" is more than a rhetorical phrase; elites, according to them have literally forgotten, or at least forgotten to talk about, the essential role of public authority in achieving big positive-sum bargains in advanced societies. For Pierson and Hacker America has been brainwashed by a powerful alliance of forces hostile to government: big business, especially Wall Street, spending unparalleled lobbying dollars to advance its narrow self-interest; a new wealthy elite propagating wrong headed notions that free markets are always good and government always bad; and a Republican Party using a strategy of attacking and weakening government as a way to win more power for itself. For the country’s first 200 years, Americans combined healthy skepticism about government with an acceptance of its necessity. Today conservatives, in particular, have “forgotten” that balanced view. Pierson and Hacker effectively throw a curve ball into the debate on political inertia by pointing out that political inertia is as much a consequence of the behaviour of private business as it is that of political parties. In the book they point out that public choice theory provides us with two polar opposite solutions to the problem of political inertia (political market failure) - the first is better (perfect) government or rather government acting on perfect knowledge. The second is less government (an imagined ideal market) achieved via market solutions through the size of or withdrawal of the state. The truth, according to Pierson and Hacker, is that we need both the market and the state: the market brings us prosperity and helps guarantee our liberty but there is much that is impossible without collective action through the state. For Pierson and Hacker this is best achieved within a mixed economy. They argue that a mixed economy – in which the state and markets worked together, but were also in a healthy tension with each other, existed for much of the twentieth century. A strong government helped to underpin prosperity – and did so through “extensive reliance on [its] effective political authority” (p. 97).They explain how America flourished in an era of bargains and balance between the federal government and private business. the United States developed a mixed economy that channelled the spirit of capitalism into strong growth and healthy social development. In this bargain, government and business were as much partners as rivals. It spread a previously unimaginable level of broad prosperity. It enabled steep increases in education, health, longevity, and economic security. Public investments in education, science, transportation, and technology laid the foundation for broadly based prosperity. It also enabled steep increases in education, health, longevity, and economic security. Programmes of economic security and progressive taxation provided a floor of protection and business focused on the pursuit of profit and government addressed needs business could not. In a mixed economy, government provides services and goods that will be under provided by the private sector, or perhaps not provided at all. It also regulates market actors, obliging them to behave more honestly towards the consumers of their products. As the economy becomes increasingly complex, it becomes
  12. 12. increasingly easy for private sector interests to take advantage of ordinary people. Regulators can help restrain business through regulation and antitrust legislation. Unless business is restrained by the state, it is liable to behave What Pierson and Hacker call for is not for an overweeningly powerful state – instead, they want a state and market that work together. They borrow Charles Lindblom’s analogy of markets working like the fingers of a hand to provide dexterity, while the state works like a thumb, to provide authority and to help grasp things that need to be grasped. This does not imply that the state and markets should be guided by a single will so much as that they work, when they work well, in complementary ways. Indeed, They are highly suspicious of what might happen when the state and private industry build relations that are too congenial. As they describe it (p.5), “Democracy and the market – thumbs and fingers – have to work together, but they also need to be partly independent of each other, or the thumb will seek to provide effective counter pressure to the fingers.” Path Dependency The second element of Pierson’s thesis is contained in his book, “Politics in Time: History, Institutions, and Social Analysis”. Here Pierson adopts the role of historian exploring the theory of history in particular the notion of what is known as “path dependency”. This is an explanation of why nothing changes - because history follows a particular route or prescribed path. This is the notion of the well trodden path. In other words decisions faced for any given circumstance are limited by decisions made in the past. People follow an established route because it has become etched in either the physical or indeed political landscape. So established does the route become that it becomes difficult if not impossible to deviate from the well worn track. Doing so carries with it dangers of getting lost, wandering off in the wrong direction or taking much longer to arrive at the planned destination or achieving the expected outcome. A mindset develops around following a prescribed course of action. Abandoning long established ways of doing things results not only in the breaking of long-held customs and conventions which anchor particular political practices in place but also carries with it enormous political risk because there are calculated risks involved in abandoning a particular course of action particularly when new costs and benefits come into play, especially ones that do not tally with existing levels of expectation. Pierson utilises the idea of path dependency in three different contexts. First, in the historical context to demonstrate how historians have become fixated on a particular line of argument or narrative path. By failing to step outside the boundaries of particular schools of interpretation ignore evidence which challenge the validity of their approaches. Second, is the policy context. According to Pierson (p. 165-6): ‘…there are strong arguments for thinking about policy development as something distinct from the ways in which powerful political actors select policies at a moment in time… [for] the preoccupation with moments of policy choice can often direct our attention towards the dramatic and away from the important’. In particular, he highlights how the Welfare State introduced in 1945-51 in the U.K. by the Labour Government was designed to ameliorate the impact of poverty upon the Working Class es impoverished by the large scale unemployment and chronic destitution of the 1920s
  13. 13. and 1930s by the 1990s and early 2000s in a different historical era had come to institutionalise Welfare dependency. Third, in a political constitutional context. Pierson focuses here on institutional design and development. Institutions which are designed to fulfil specific roles at particular historical junctures may well become anachronistic in later historical eras as circumstances change and they fail to adapt to the circumstances that surround them. Here, he places great emphasis on the limits to institutional design, stressing in particular that most institutions are far from malleable and that unintended consequences flow from much political action. What ties Pierson’s work together is a focus on the importance of institutions and, indeed, the past in shaping – constraining – future policy development. He expresses frustration at the response of most social scientists to this issue, suggesting that for the most part that we sweep these problems under the carpet. Instead, he argues, we need to move such issues to the fore of our analysis: to think much more about the causes of inertia, about ‘deep equilibria’ that resist change and to spend more time looking outside the path we are currently on. It is worth considering the normative aspects of Pierson’s arguments in greater detail. There has been much confusion about the notion of path dependency – some even viewing it as the claim that nothing changes. Here Pierson introduces the notion of positive feedback – the claim that each step down a particular path reinforces the likelihood of future change following the same direction because the costs of switching rise. The notion is central to his definition of path dependence which he uses to refer to ‘social processes that exhibit positive feedback and thus generate branching patterns of historical development’ (p. 21). A key intervening variable for Pierson however within the institutional context is what he dubs the potential for bureaucratic autonomy which he believes political scientists seriously underestimate because they adopt a cross-sectional approach to studying what should be understood as a long-term causal chain. Under the right conditions, ambitious and entrepreneurial bureaucrats have been able over extended periods of time to enhance their reputations for innovativeness and competence, whilst developing strong networks of support among a range of social actors. These achievements created a context in which Legislatures, facing pressure from below and deferring to the expertise of leading bureaucrats, essentially asked for what the bureaucrats wanted. For Pierson like Fukuyama timing and sequence are important. The argument here is that ‘there are instances in which we wish to know not just what the ‘value’ of some variable is, but the time at which it occurred. We want to know not just what, but when’ (p. 54). Historical context is all important. Timing of events and conjuncture relating to the impact of events need to be viewed hand-in-hand. Effects may be quite different in different time periods. Polices therefore are time delimited, Timed correctly and they sail home to their destination with ease. Timed badly and they miss the boat so to speak. This links into the third of Pierson’s themes: the long-term nature of social and political processes. Pierson (p.79) argues that ‘the time horizons of most analysts have become increasingly restricted. As political scientists we look for causes and outcomes that are both temporally contiguous and rapidly unfolding. In the process, we miss a lot’. Pierson argues that we need to be think more deeply about the time
  14. 14. frames encompassed in our research and, more particularly, to encourage work that consider history. In the longer term. The Winner-Take-All-Politics Thesis The third element of Pierson’s thesis is contained in the book Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class and the book which preceded it Off center: the Republican revolution and the erosion of American democracy both of which he co-wrote with Jacob S. Hacker. In Winner-Take-All Politics the authors argue that contrary to conventional wisdom, the dramatic increase in inequality of income in the U.S. since 1978—the richest 1% gaining 256% after inflation while the income of the lower earning 80% grew only 20%—is not the natural/inevitable result of increased competition from foreign trade and financial globalisation, technological changes in the workplace and increased education at the top but rather of the work of political forces. The Winner-Take-All Politics: thesis-foreign trade and financial globalisation. The guilty party is American politics or rather the profound role of government policy in creating a “winner-take-all” pattern. Runaway inequality and the present economic crisis reflect what government has done to aid the rich and what it has not done to safeguard the interests of the middle class. The winner-take-all economy is primarily a result of winner-take-all politics. Political scientists, they argue, givelittle attention or weight to the dramatic long-term transformation of the organisational landscape of American politics that lies behind these changes in policy. This follows the theory of path dependency. The "political cause" of inequality For Pierson and Hacker the “winner-take-all-politics” which has seen the abandoning of the middle class ultimately the result of, as they describe it, the work of "modern, efficient organizations operating in a much less modern efficient political system. Those organizations strove successfully to cut taxes and tax rates for the wealthy. They further argue that the action by corporate lobbying groups in relation to financial markets, corporate governance, industrial relations, and taxation came from both changing policy and preventing it from being changed - a deadly combination which contributed to what they dub- “drift". Drift, or preventing policy changes to keep "pace with changing economic conditions," included not updating employment laws in response to new corporate anti-trade union tactics, not enacting stock option regulations in response to escalating executive salaries and remuneration packages including share options and not updating stock market regulations in response to the growth of dangerously risky speculation in a range of unregulated financial products and services. Politics as "organized combat” Though this process came as part of what the authors describe as a "transformation of American government", it has been overlooked by the public, the media, and recent political science research projects. Political scientists they argue have tended to focus "electoral spectacle" - the more entertaining, fast-moving
  15. 15. aspects of campaigning because it is easier to follow rather than the more complex aspects of the and easy-to-follow politicians and their campaigns for office, instead of "what the government actually does" — the more complex aspects of the organization-driven making of laws and policy because it is more boring and difficult to follow despite the fact that the amount officially spent on lobbying dwarfs that of elections. Pierson and Hacker argue that the institutional conflict between private sector lobbyists and trade unions representing public workers has generated self- reinforcing dynamics which it is difficult to break the established pattern of. They argue that,”Those whose job it is to serve the public have more to do and less with which to do it. The same is not true of the private industries they are regulating….The typical public worker lives in a world of scarcity. The typical lobbyist lives in a world of abundance: lavish salaries, PR wizards, mercenary experts who can provide just the favourable finding or legislative language needed. No wonder central government across the developed western world have haemorrhaged talent which previously would have resided within the public services - the bureaucracy at one point in time provided the bulwark between the two sides. Is this explanation of political inertia “winner-takes-all-politics” which has worked to so disadvantage the middle classes not also “path dependent”? Yet the net effect of the organisational shift in institutional power relationships - the increasing organizational capacity of business, the decline of trade unions, the replacement of grass roots organisations with capital-centric managerial ones appealing to the affluent and the ever- increasing presence of big money in political life have dramatically weakened the organized political voice of ordinary citizens on a whole raft of critically important socio-economic issues. Mass-membership organizations representing the economic interests of voters from the middle to the bottom of the economic ladder, always weak, according to Pierson and Hacker have atrophied further, while the capacity of employers, other business-linked interests, and the affluent in general has greatly increased. These changes have had a substantial impact on public policy. If electoral politics is about winning elections, the politics of organised combat is about transforming what government does. This is where the real battle is fought according to Pierson and Hacker. Has the shifting balance of organised interests therefore led to major changes in the governance of first world western industrial political economies?The answer, according to Pierson and Hacker is yes. There is nothing I like better than bashing political scientists - a profession I am now a semi-detached member of - although readers will note that I started off with an explanation of the outcome of the 2017 General Election through an exploration of the concept of political inertia. Perhaps it is why I have like work of Robert Reich so much because he attempts to absorb organisational institutional and technological processes into his political economy. Highly effective lobbying and campaigning organisations in Britain would include business groups like the Chambers of Commerce,, the Confederation of Business Industries, the Institute of Directors, anti-tax groups like Tax Payers Alliance. Along
  16. 16. with them came a new generation of think tanks, such as the Institute for Fiscal Studies, Policy Exchange, the Adam Smith Institute, the Centre for Policy Studies and the Resolution Foundation. Officially non-partisan, all attempt to push policy in either a Conservative, neo-liberal or Social Democratic direction rather than being balanced and non-partisan. Off-Center the Republican Revolution In the story of a “winner-take-all Politics” the authors believe that the Republican Party – the GOP deliberately pursued and have been successful in implementing policies favouring the wealthy. Moreover they argued that the Republican Party became progressively more extreme throughout the 1990s and 2000s. Their adherence to tax cuts for the wealthiest exceeded all the other problems and priorities — deficit reduction, or tax cuts for the middle classes. In “Off-Center the Republican Revolution” Pierson and Hacker go further. Although President Bush was re-elected by a narrow margin, they argued he refashioned the conservative agenda into extreme policies that were not popular with the majority of the electorate or even with the shrinking number of moderate conservative legislators. The Republican Revolution thesis centres upon the notion that the Republican Party has ruled with the slimmest of majorities and yet have transformed the nation's governing priorities. They have strayed dramatically from the moderate middle of public opinion and yet have faced little public backlash. Again and again, they have sided with the affluent and ideologically extreme while paying little heed to the broad majority of Americans. And much more often than not, they have come out on top. Off Center tells the story of a deliberative process restricted and distorted by party chieftains, of unresponsive power brokers subverting the popular will, and of legislation written by and for powerful interests and deliberately designed to mute popular discontent. There are a number of parallels with the Conservative Party in the U.K. Democracy has generally had a leveling effect that pushes most politicians to the centre. Conventional wisdom says that to stay in power, a party must appeal to swing voters and the moderate middle. If the party veers too far right or left, the laws of political gravity should bring it down. Historically extremists in politics are squeezed out as their values and agendas diverge from the general public. So how is it that the Republican Party has managed to increasingly move further away from the centre and continue to be elected? The Republican Party has worked to become the puppet master over lobbyists demanding support and cash from lobbyists for congressional bills that have yet to be presented. Companies have to pay for a seat at the table. The authors write, "voters have proved no match for a mobilized and coordinated conservative movements capable of managing the agenda and shaping and distorting the flow of information to citizens." Pierson and Hacker explain the inordinate power of the ultraconservatives in today's political environment, and how this is possible when they espouse policies that are so far from the ideological "centre." The authors provide convincing evidence that the Republicans' true success has arisen not from connecting with voters on real issues, but by consolidating power from within the party, and by manipulating governmental rules and procedures.
  17. 17. For Pierson and Hacker the evidence for political scientists that organised interests are highly motivated, mobilised is there for all to see. For them, “there is a growing mismatch between the enormous outside pressures on government—more and more organisations...spending more and more to shape policy—and the weakened capacity of government to channel and check those pressures.” Drutman - The Business of America is Lobbying Lee Drutman in his book “The Business of America is Lobbying: How Corporations Became Politicized and Politics Became More Corporate”. argues that the political science of Lobbying is about understanding the impact of Lobbying upon Policy Change or Policy No Change. Drutman argues that prior to the 1970s, very few corporations had Washington offices. But a wave of new government regulations and declining economic conditions mobilized business leaders. Companies developed new political capacities, and managers soon began to see public policy as an opportunity, not just a threat. Ever since, corporate lobbying has become increasingly more pervasive, more proactive, and more particularistic. Drutman argues that lobbyists drove this development, helping managers to see why politics mattered, and how proactive and aggressive engagement could help companies' bottom lines. For Drutman however all this lobbying doesn't guarantee influence. Politics is a messy process and is becoming more competitive than ever. But the growth of lobbying has driven several important changes that make business more powerful. Among them: the status quo is harder to dislodge; policy is more complex. More and more of policy expertise now resides in the private sector. These and other changes, according to Drutman increasingly raise the costs of effective lobbying to a level only businesses can typically afford. Corporations now have more political power than at any time since the 1920s and are favoured by the status quo in other words political inertia. Any major policy change now generally requires mostly one-sided lobbying, which is increasingly unlikely in today’s dense and competitive lobbying environment. The need to respond to many lobbyists also makes legislation more complicated. Also, it overwhelms the limited capabilities of congressional staffers who rely on lobbyist specialists for information and drafting of bills. This imbalance is exacerbated by the siphoning off of more and more talent from the public sector by the much higher salaries in the lobbying industry. Mostly, these changes have benefited corporate interests, according to Drutman, because they increase the importance of money. Corporations have substantially more money and easily overwhelm public interests in 2012 in the U.S. corporations spent $56 for every $1 dollar spent by trade unions and $34 for every $1 spent by diffuse interest groups and unions combined. Studies have shown that the more firms lobby, the lower their effective tax rate, and that policy outcomes lean toward corporate interests and wealthy donors.
  18. 18. Major lobbying operations in Washington are mostly conducted by the very biggest companies of which 127 account for almost half of lobbying expenditures. The top 20 companies on average employ 18 full time lobbyists and contract with 28 different Washington lobbying firms. On average, they have weighed in on 17 different issue areas, before 20 agencies, and on 63 different pieces of legislation. Drutman identifies three different aspects of lobbying which he argues impact on the policy process world wide. The first is what he dubs Balance of power. The fight is not fair when corporate interests spend $34 for every $1 of unions and diffuse interests combined. The second is what he dubs, Complexity and asymmetry of information. When government actors are forced to rely on outside lobbyists, outcomes are distorted. The third is what he dubs, Particularism. Companies are increasingly oriented towards narrow, rent-seeking outcomes that crowd out the capacity of the political system to address larger problems. Teles and Lindsey – The Captured Economy A second empirical study of the political science of lobbying which deserves to be referenced is the book The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality by Steven Teles and Brink Lindsey. Teles and Lindsey are critical of the economic phenomenon of upward distributive rent-seeking identified by Drutman at the core of Lobbying. The process of lobbying government is a political process. Rent-Seeking Economists call such lobbying “rent seeking” because the objective is to secure economic rent that are higher than the normal profits obtainable by competing in the economic market place. Rent-Seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Reducing this rent-seeking therefore both increases economic growth and makes the distribution of income more equitable, by lessening the economic distortion of wealthy special interests seeking special favours for themselves instead of engaging in productive activities that spur growth. Rent seeking behaviour is a central dynamic of political inertia. There appears to be a tipping point in rent seeking behaviour when the maximum rent possible has been extracted and further rent provision by government reinforces monopoly privilege to the exclusion of those who don’t have access to the Lobbying system or are denied access to it. The value of the rents extracted have meanwhile become so enormous that they come to be seen as exploitative by the consumer because rent seeking has pushed up the cost of the production of public goods. The language of
  19. 19. economics is difficult to understand but what it describes is how a large number of the just about managing have become left behind as a direct consequence of Lobbying by Corporations. Mancur Olson has traced the historic consequences of rent seeking in his bookThe Rise and Decline of Nations. As a country becomes increasingly dominated by organized interest groups, it loses economic vitality and falls into decline. This is a point I will be returning to later. In their book Teles and Lindsey explain how over the past 40 years or so, America has been plagued by slow economic growth and increasing inequality. Yet economists have long taught that there is a trade off between equity and efficiency- that is, between making a bigger pie and dividing it more fairly. That is why the current predicament is so puzzling: today, as America is faced both with a stagnating economy and sky-high inequality. In The Captured Economy they identify a common factor behind these twin ills: breakdowns in democratic governance that allow wealthy special interests to capture the policymaking process for their own benefit. Olson – The Rise and Decline of Nations – the Logic of Collective Action As Mancur Olson famously observed in “The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities”-people, organisations, and other agents have diverse interests; action to try to produce change is costly; and the benefits of those costly actions are often diffuse. Under these circumstances, a tally of expected costs and benefits will often discourage agents from taking action, tempting them instead to forego those costs and look to free rides on the contributions of others instead. This is known as “the free rider problem”. The thesis of the book is that the longer a society enjoys political stability, the more likely it is to develop powerfully special-interest lobbies that in turn make it less efficient economically. As a society becomes more successful, advanced and stable it's institutions become more complex and invariably start to turn the favourable stability into undesirable rigidity. Legislation starts to mushroom along with the people who create and administer it and somehow the society finds that the achievements of it's youth are no longer possible. Olson identifies various strands in this process of sclerosis, the main one being the activity of special interest groups. As he puts it; "the larger the number of individuals or firms that would benefit from a collective good, the smaller the share of the gains from action in the group interest that will accrue to the individual or firm that undertakes the action." The average voter in comparison meanwhile generally feels that his voice is tiny in the sea of a wider electorate. He instinctively knows that a large personal investment in becoming aware of the details of the political and economic life of his country yields a poor individual return, and so he lets someone else do it, or trusts that the politicians will not mess it up too badly.
  20. 20. This is a limitation on the ability of the mass to govern itself in addition to the inability of that segment of the electorate that do not have enough schooling to grasp the salient issues. Unless someone is a political pundit, paid for expressing informed political opinion, he will go with the flow. On the other hand, the logic is quite different when the individuals are lobbying for a minority interest that may return direct minority benefits. There is a structural bias for those who wish to corrupt the system in the favour of narrow interests to want to invest more effort to do so. And so, in the long term, the governments of stable nations become progressively less representative. This means that somebody lobbying government for the general good is not going to get as much as somebody lobbying for a small group. This is what Olson calls “The Logic of Collective Action”. Quite simply therefore unless we are representing a minority interest group we are devoted to routine behaviour and routine behaviour contributes directly to political inertia. That is the problem with seeing change as radical. Norms of behaviour and institutions are social manifestations of an inborn and profound preference for routine and regularity. Political Scientists are no less guilty. As Political Scientists we like to privilege change over stasis and thus inertia. As alternative futures, however, the two are functionally equivalent, and stasis or inertia is actually vastly more common than change. Many political scientists choose to emphasise the dramatic over the routine. I wonder if they have chosen wrongly? Ged Mirfin 07841 729 146 ged.mirfin@gmail.com

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