Great Expectations.
The real constraints on fairy-tale economics.
I used to be frightened of genre in story telling. From the outside genre feels like a set of limits to learn but it’s closer to dance steps. More than accuracy, you need to own each move. A great storyteller, like a great dancer, doesn’t ignore genre, they transcend it.
By “genre” I don’t mean the snobbish distinction between “high” and “low” art. Those dramas jonesing for an Oscar play just as much to conventions as superhero movies and horror flicks. “British movie”, in which working class people travel to the seaside to be miserable, is just as much a genre as “art film” in which subtitled people puzzle at modernity through a cropped aspect ratio.
All stories have a genre, the elastic but real constraint of audience expectation. Beginners counting beats beneath their breath lose our trust but once you feel the rhythm of your genre in your bones you are able to expand your audience’s horizons and go anywhere. Which is why it’s such a tragedy no one in modern politics is capable of breathing life into the story of our economy, instead stumbling through it like footballers on Strictly.
For those most of us who don’t dance macro economics, rest assured it is essentially story telling. Like astrology, or gambling, it is an attempt to predict the future, or create a future, by telling stories about the past. However our economic narrators have a problem, much the way our filmmakers are lumbered with the sense that their lead character has to experience tragedy even when a happy ending is on the cards.
Theresa May’s time in office achieved little but it did produce the phrase “there is no magic money tree”. This is the apotheosis of the long held bad habit of deliberately confusing national economic decisions with personal ones. Even the echo of Jack and The Beanstalk’s sale of his family assets for a handful of magic beans makes us feel happy to accept the constraint of not-living in a fairytale. This is an economic story that feels true. The problem is, we do live in a fairy tale. There even is a magic money tree.
Many years ago the film company whose accounts I file was given a loan. This felt like a good thing, someone was giving me money. So I was surprised when my accountant recorded the loan not as an asset but a liability. I’ve got money to turn into beer, how is that not an asset? My accountant said it was a liability because we had to pay it back. I laughed and said he didn’t know how the film industry worked and we all laughed about how one day we’ll go to Cannes in a yacht. But even accountancy, the part of economics that should be the science of what things are, is actually just the story of what things will be. We see a bank agreeing to give us money but the bank sees a person agreeing to give them back money in the future. It doesn’t matter that the future is unwritten and uncontrollable, that physics lists seeing into the future as a Class III impossibility (therefore more impossible than traveling backwards in time). For the bank, the moment a loan is agreed the future money you will pay them is magicked into existence. Pounds are the weight of promises.
For many of you this is true of your income. Are you paid for what you’ve done? Or have you sold the prospect of your future work? If you have a contract that guarantees you sums, even in the event of termination, then you don’t really earn money, you owe work. The crazy rich are crazy rich not because of the value of what they have created but rich in our hope of what they will do next. This is why when Mark Zuckerberg’s vision of the future looks less accurate he becomes substantially poorer. Crazy wealth isn’t the castle you built, it’s the beanstalk you’re going to grow to put it on.
The problem with out fairytale is twofold. Firstly, it’s not real. Secondly, we can’t tell anyone it’s not real because that’s when it stops being real. This makes life hard for those whose job it is to tell money stories. The audience aren’t stupid, we know that there’s something phoney about a financial system detached from the material world. This constrains where your economic story can go. The Kwarteng/Truss mini-budget was bad story telling, we know you can’t create growth by saying it three times in a mirror. But Hunt’s Autumn statement was a British movie. Ken Loach kills Daniel Blake to contrive a sense of outrage but it’s a deus ex machina, it’s not actually where the story was going, Daniel was set to win. Hunt has not mastered his genre, leaving him stuck with clichés.
The UK’s national debt is the highest it’s been since 1962. That sounds bad but ’62 is not a peak, it’s just the point we match on the decline from the dizzyingly high rate of debt following the war. In fact we are still in a period of historically low national debt. The only times it’s been lower are the period between ’62 and the crash of ’08 and the height of British Empire when, well, we were busy stealing everything from everyone and building up a moral debt we’re only just beginning to realise is still on the books.
Truss and Kwarteng were right, the magic of the post-war period was growth. Mainly other people’s like Germany and Japan who had a fair amount of post-war rebuilding to do. But in the UK the period is also marked by high immigration and high government spending. None of this is reflected in Harold Wilson’s “White Heat” speech from 1963 which was, really, just a rebuke to his party for sticking with a losing coalition of manual labourers. However it became the defining story of a period of economic growth and low debt and did so by linking growth to something real - the supposed white heat of technological innovation, inventing and making things.
This is the story Cummings offered Johnson though neither was a good messenger. Alternatively there’s the fight against climate change. Scary, but it need things and offers hope. Instead Hunt, Sunak, Starmer, are all cloaking the need for immigration in vicious anti-migrant rhetoric and dressing up high levels of government spending as austerity. It’s miserable, miserablist story telling and that is always bad economics.
Should you need convincing that reality has slipped out of the calculations, then this website which attempts to show the scale of Jeff Bezos’ wealth is worth a glance.
Beyond the middle of my thoughts, I’m also delighted that Chris and I are taking part in this year’s BIFA Springboard programme and it’s an honour to feel so supported.