Good for the economy?

D day draws closer for voters as we approach the 4th July General Election.  Previously, I’ve argued that:

  1. That there is no obligation on Christians either to vote for a specific party or to vote at all.
  2. That when are where we do vote, we need to be thinking in terms of Character, values/philosophy and competency as well as specific policies.

I said that I’d return to look in a little more detail at some of the big questions facing us.  At a General Election, these tend to involve:

  1. The economy/ economic well-being including growth, taxation, employment, pensions, benefits and the government’s finances
  2. Public services including health, social care, education and benefits.
  3. Security: defence, counter terrorism, crime, border control, foreign policy.
  4. The environment and energy
  5. Constitutional matters such as devolution, independence, etc

There are also the big ethical issues such as beginning of life and end of life as well as gender and sexuality.  These however tend to be treated as personal conscience issues and there is rarely much to choose between the main parties. So where possible, you may want to find out where your local candidates stand on these matters.

In the next few articles, I want to think a bit more about the economic questions.  The economic well-being of the country does matter because it affects our ability to look after and provide for our families.  It also concerns how we care for the most vulnerable in our society. 

There are two main approaches to economic policy.  The centre-right position primarily associated with the Conservatives post Margaret Thatcher prefers free markets with minimal government intervention.  Businesses and even some public services belong in the private sector, there should be light touch, minimal regulation and the State should be as small as possible with public spending controlled.

This approach also tends to be monetarist, an economic approach which emphasises the need to control inflation by restricting the supply of money into the economy, usually be keeping a tight control over interest rates in order to control borrowing.  The idea is that if people cannot easily borrow money then they are less likely to go into debt and this will reduce demand for things that we cannot afford.  This puts pressure on producers and sellers to keep prices competitive.  It is also believed that lots of market competition will encourage efficiency and lower prices. Conservatives also tend to argue that taxes should be kept as low as possible because the money you earn is your money, not the Government’s. 

On the left, the starting assumption tends to be the reverse of this.  The argument is that if the wealth of the country exists for everyone, not just a few.  Free markets are seen as favouring those who are already well off at the expense of the poor.  From this perspective, the State has a greater responsibility for economic well-being and historically this meant that left-wing governments (Labour) were more willing to intervene by subsidising or even nationalising industry and running services such as transport, water and energy as public services. 

This also means that redistribution of wealth is important for the left and taxation is seen as a means to this end both through the setting of progressive income tax rates so that the wealthy pay more  and the use of benefits to support those in need.  It is worth noting that whilst the Blair-Brown administrations seemed to make less noise about redistribution, this was happening through stealth taxes and tax-credits. Indeed, in retrospect those involved in those governments were able to argue that under their watch many people were lifted out of poverty. 

Now, as you read those descriptions, you will personally sit more comfortably with one or the other.  Personally, I lean centre right.  I believe that minimal state intervention, free markets, low inflation and low taxation are best for the overall economy and best for individuals, families and communities.  Other Christians will disagree strongly with me on those things.

So, it is important to think through our own position but also to be alert to some potential faulty assumptions.  First, there are assumptions here about what is and isn’t Biblical.  There is a tendency in the US to assume and argue that socialism is unbiblical, that the State oversteps its mark and takes away from individuals, that redistribution is a form of theft.  In the UK, the assumption tends to be the other way, that in fact the Bible has such a great concern for the poor and greed is condemned, so that this must favour socialism because conservatism is harsh, greedy and lacking in compassion.

It is vital then to deal with both assumptions.  First, there is nothing in Scripture to suggest that any of us has an outright claim to wealth or resources for our own good.  The early church of course are described as holding these things in common.  Meanwhile, the Law encouraged the regular cancellation of debt and return of land to families. There was also provision via gleaning laws to ensure that the rich took responsibility for the poor.  Finally, tithes and offerings were used to provide both for the priests and those in need so might be compared to modern taxation and the welfare state.

Meanwhile, it is true that in the 1980s especially, the Free Market approach became associated with greed and selfishness.  However, this does not mean that those of us who favour it, automatically lack compassion or are driven by selfish motives.  Biblically, whilst there is a responsibility for the poor that falls on all of us, this doesn’t presume the existence of a modern, large state responsible for benefits, tax-credits and subsidies.  Margaret Thatcher is famous for saying that “there is no such thing as society” but the phrase was taken out of context.  Her whole statement was not an argument for individualism but against the assumption that you could just look after yourself, relying on an abstract concept called “society” to look after others.  The point was that individuals existed as part of families and families as part of communities so that we all have responsibility for each other.  Perhaps David Cameron’s “There is such a thing as Society. It’s just not the same as the State” puts it better.

The question then is whether the State is best placed to manage our morals and look after the vulnerable.  The onus then of course is for those on the centre-right to show how  if, not the state, then who and how ensures that those in need are looked after properly.  My own reasoning would be first, that compassion and care happens best relationally and so within communities including through the church and charities playing a part.  Secondly, that it is things like a high tax burden and high inflation that have the greatest impact on the cost of living. Inflation erodes not only your current income but your savings for the future. 

Another assumption we need to be alert to is that parties are or have to be purist when it comes to their political philosophy.  This works both ways.  We shouldn’t presume that a Conservative Government always will cut taxes and privatise nor that a Labour Government will or must raise taxes and nationalise.  At the same time, I don’t buy into the myth that “they are all the same”.  Blair and Brown were not Conservatives in all but name.  2010-2024 has not meant the continuation of New Labour by different means.  There were pluses and minuses in both cases.

Finally, here’s the elephant in the room.  We tend to equate “good economics” with economic growth.  But where does it actually say that an economy always will be and always must be growing?  I’m of the opinion that the Biblical pattern of sabbath and jubilee laws was not just an arbitrary command but an encouragement to go with the grain, following a pattern of growth, fruitfulness, pruning and resting that we also see in John’s Gospel.  So what would be the implications of a Government that stopped chasing the holy grail of  endless boom?