Command Economies Don't Work.

The State has become the Enemy of the People - and the people have noticed.

Rachel Reeves' latest diktat in her drive for growth is that no-one must block the government's planning reform, claiming that any who challenge the Planning and Infrastructure bill would be “defying the will of the country” and “putting their own interests above those of the country.” Someone should tell the harpy from customer service that those living in glass houses shouldn't throw stones. The size of the Labour majority does not express the will of the country, of whom only 20% voted for Starmergeddon. The planning process exists to balance the needs of individuals and the state. That it sometimes fails is more an indication of rotten policies and the useless politicians who created them than of institutionalised NIMBYism.

In any case, a third runway at Heathrow won’t save this government's economic bacon, nor deliver the growth the country desperately needs. We won’t see any bulldozers in action before the next election. Quite possibly they won’t be in my lifetime.

The current planning regime seems to suit hippy turned lefty loudmouth and massive Labour donor Dale Vince. His company Ecotricity has just received a planning consent to turn some of the most productive agricultural land on the planet into an utterly useless solar park. No doubt he needs to top up his £100M fortune (made almost entirely from green energy subsidies paid by you and me) to cover his donations to Labour of over £5 million pounds (and counting).

That is helpful for Steve Reed, the environmental secretary who wants to reduce farmland by around 10% to meet the government’s net zero and nature targets. Of course, that will also reduce food production in the UK thereby increasing imports and costs, thereby undermining the Reeves’ drive for growth. Does the Prime Minister not run cabinet meetings to ensure that the government machine is working in synchronisation, not against each other? Can he not see that net zero and economic growth are incompatible? It says much for the reach of Ed Miliband that Two Tier Kier is unable to prevent our march to economic oblivion – unless they share the same goal of destroying the UK.

The worst aspect of the latest agricultural lunacy is that displacing food production from the UK means that our food must be produced elsewhere. That requires bringing more virgin land (rainforests, savannah and the like) into production, which will destroy the biodiversity there. Even an Islington intellectual, a term I use loosely, should realise that restoring some biodiversity and trees in the UK at the price of an equivalent area of biodiversity and trees elsewhere on the planet is mere sophistry, or worse. As I explained in another article, the IPCC and our government misrepresent the emissions of land use anyway.

Command economies never work for the simple reason that events wreck even the best plans. In the free(ish), capitalist West such events include fads in the public taste. The “splitting the G” trend is a clear example of how demand can change unpredictably overnight. The Guinness supply chain was placed under extreme pressure. The professional managers of Guinness got a grip of the new phenomenon and solved the supply in time for the six nations. That’s what good companies do – they adapt and survive.

As this (and countless other) example demonstrates, planning an economy in any level of detail is simply an act of hubris. God knows, the Union of Soviet Socialist Republics spent almost eight decades running on Stakhanovist five year plans, none of which ever delivered – and the USSR had the KGB to supress individualism, state ownership of everything and only two rates of pay for most workers. Ultimately the internal contradictions of a command economy tore it apart.

Free market capitalism is far from perfect. When the Soviet Union collapsed it was unlucky enough to take advice from MBA toting, Harvard educated economists on how to build a free market economy. That led to the great kleptocracy, the first oligarchs, an attempted military coup and the chaos of Yeltsin, in which pensions weren’t paid. Then came Putin and order.

In the West the great financial crash was caused by similarly over-educated people, deceiving themselves with a toxic combination of unbridled greed, short termism and pathetically week regulation. All of which was exacerbated by a system that created mega-banks that were thought “too big to fail” and, with the notable and noble exception of Gillian Tett, journalists who believed the banks’ PR hype and the BS alphabet soup of CDO, CDO² etc.

Fixing that avoidable fiasco (and the subsequent quantitative easing of the magic money tree) cost the UK taxpayer well over £500 billion. Economists will be arguing about that number for decades. The unarguable short version is that in 2007 the UK’s national debt was 36% of GDP, in 2009 it was 65%. Today it’s 100%. (Data from Trading Economics).

Rachel from customer service has worked out that growth requires a dynamic, risk taking City of London. She has therefore replaced the head of the Competition and Markets Authority with Doug Gurr, who once ran Amazon UK. His first utterance has been about the need to “nudge” companies to reduce consumption. most companies, and all those that thrive, always seek to reduce their input costs, be it raw materials, work hours or energy.

Companies don’t need “nudging” to do that – continuous improvement is what capitalism does. Reeves would do better to disband the wretched nudge unit. While she’s at it, she might enquire how the CMA thinks promoting climate mitigation policies is part of its remit.

The role of the CMA is to “help people, businesses and the UK economy by promoting competitive markets and tackling unfair behaviour.” Competitive markets, that is ones that have neither monopolies nor cartels, are fundamental to the successful creation of national wealth. Don’t take it from me; one of the key tenets of Adam Smith’s seminal work The Wealth of Nations is that monopolies are evil and act against both the national interest and the good of the individual.

“Were the officers of the army to oppose with the same zeal and unanimity any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter enflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest publick services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.”(My bold.)

The CMA should be encouraging competition and confronting cartels. It’s struggling in its primary role in the face of the supermarkets and tech giants. Is Gurr an Amazon poacher turning gamekeeper? Upon closer inspection Gurr’s last role was running the Natural History Museum, where he wittered about sustainability and suchlike to companies. Such is the game of musical chairs in the quangocracy that has destroyed this country.

How increasing energy costs will deliver growth escapes me, and anyone else who can count. Reeves (rightly) wants a streamlined and efficient CMA – Gurr has failed with his first utterance. If Reeves really wants growth she had better sack him too, and the clowns that hired him. He’s only an interim appointment, so it should not be too expensive. But she has no idea how to go about it because she is trapped in a belief system that requires a big state.

It is not her, or even this benighted government’s fault that the state has become so big. That’s what bureaucracies do unless they are kept on a tight leash. Unfortunately most modern politicians haven’t run a whelk stall and the inexorable rise of the quangocracy prevents them from seeing the trees for the wood. Compare the Post Office with Amazon, or the NHS with any vet's practice. My dog routinely gets same day appointments with a vet – I should be so lucky with my GP.

Worse for us, much of Reeve’s Labour party membership and support comes from the apparatchiks of the state machine and the academics (I use the term loosely) who teach it. The state refuses to trust individuals to act in their own best interest and lives under the delusion that it knows better. Reeves and her colleagues maintain this belief despite all the evidence.

One appalling example will suffice. There are some 107,000 children in the care of the state in the UK That’s less than 1% of the 14.5 million children in the UK. Yet 25% of the prison population were raised in the state's care. Worse, of those raised in the state’s care 52% had a criminal conviction by age 24 The national average is 13%. Being raised by the state increases a child’s chance of becoming a convict by a factor of 25 and of having a criminal conviction by a factor of four.

Yes, of course these children have had a troubled youth. But that is what the State’s welfare system is there to ameliorate. Demonstrably it doesn’t. So what does it do with £11 billion a year spent on children in care. That’s £103,000 per head, compared to the median household disposable income of £34,500. I have no idea where the money goes, although a friend who works with children in care tells me that the care home manager drives a Porsche.

And if the state machine can’t care for a single child with three times the median budget of an entire normal family, what is the point of it?

Reeves can carp that those who question planning are an obstacle to growth. She’s missed the main point, which is that the sate machine is now the enemy of the people. If Reform UK’s polling is anything to go by the people are noticing.

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