Jeremy Corbyn has hit the headlines yesterday after being accused of associating with a divisive, controversial figure whose views one ought to find repellent. But that’s enough about Diane Abbott. Let's talk about important stuff.
A couple of weeks of Corbynomics has more than compounded the view that economically old Jezza is as daft as a brush full of Russell Brand's chest hairs. We've heard about his desire to reopen Britain’s coal mines; to renationalise energy companies, railways, and goodness knows what else; to end privatisation in the health sector; to scrap tuition fees; to introduce price caps; and to play Russian roulette with our international future by weakening our military and nuclear capabilities.
All this really means that he wants to take a lot more of our money through taxes and give some of it back to us in ways that are bound to make us less well off. To use an analogy, if Corbyn was managing a pizza parlour his economic policy would be to charge each customer for a 14 inch pizza, give them a 9 inch pizza, and tell them that they enjoyed a good deal on him. The analogy works equally well for his 'People’s Quantitative Easing' scheme as well - a scheme in which he wants the Bank of England mandated to invest our hiked up taxes in large scale socialist projects that would give us more of the things he thinks we need, while failing to realise that where the market isn't providing these things it is due to government interference hampering the process.
Regular readers of this blog will know precisely why renationalisation would be a horrid step backwards, why tuition fees are a good thing and should not be scrapped, why privatisation is the only thing that can save the health sector, why price caps are a terrible idea (you can read about all these things by searching on my topic sidebar to the right), and most of you already know why discontinuation of our nuclear potential makes the world less safe, not safer.
However, an awful lot of people do not understand these facts, so Corbyn will be able to run his polices by large swathes of the electorate and gather popularity in doing so.
What he really shouldn’t be able to get by anyone though, except perhaps the most dissonant out of work ex-coal miners, is even the entertaining of the idea that Britain should re-open coal mines - and nationalised ones at that. Surely such a prosperous idea can only be a vote-winning bribe designed to appeal to the most uninformed in our society - I mean, whoever is going to fall for that? Coal mines were shut down because coal could be bought cheaper from abroad. Cheaper coal is better than expensive coal for the one buying it, irrespective of the country from which it happens to come. Trade should have no national preferences, and generally coal mining in the UK is expensive compared to open cast mines in countries such as China, Russia, India, Australia, and Indonesia. It’s the old Adam Smith wisdom again - you can try to produce wine in Scotland, but much better to produce it in vineyards in sunnier countries like France and Italy.
That in a nutshell is what's wrong with Corbyn's idealistic idea of re-developing Britain's manufacturing industry - it's crazy talk, for exactly the same reason Adam Smith said - other countries are now much more efficient at manufacturing goods than us, as we have become primarily a services-based economy – and the future prosperity (as is demonstrably shown in London) involves playing to our service-industry strengths, not being stuck in the industries of the past.
The upshot is, while Blair had his WMD controversy, Corbyn has a PMD controversy – that’s Policies of Mass Destruction of our economy. Corbyn's economics is tantamount to buying votes with promises of bad policies paid for by taxpayers. It misses the key truth in all this - that supply and demand curves most efficiently balance at a particular price in the market (goods, services and labour) thanks to the freedom of the market itself, not politicians' involvement. That is, and always will be, the fact among facts that Corbyn and his supporters just won't grasp - because at heart they are, I’m sorry to say, uninformed idealists.
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