Why Burnham Will Be More Damaging Than Starmer

 

We are in the mania of a new Prime Minister who wants to meddle, fix things, make a big impression, and leave a populist legacy that could radically change the impression people have of Labour. But, alas, as ever, this comes with huge problems because, like with Starmer, Sunak, and all the recent centre-left governments before them, they remain clueless about what they are clueless about in terms of sound economic principles.

Burnham, like his predecessors, walks around announcing policy after policy, completely oblivious to most of the elementary and fundamental economic truisms that we’ve known about since before he was born. Things like; you can’t tax your way to prosperity; if you subsidise something you get more of it, and if you tax something you get less; you cannot print money or borrow excessively without eroding the real wages and savings of everyday citizens; redistributive measures are futile without economic growth, etc.

On top of that, when it comes to his so-called targets, he is oblivious to loads of very basic laws of unintended consequences, such as Goodhart’s Law (When a measure becomes a target, it ceases to be a good measure) and Campbell’s Law (The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures), and the basics of the Laffer curve (push tax rates too high and it actually reduces government revenues, causes wealthy taxpayers to leave, disincentivises foreign investors), etc.

But what should also worry us alongside this absolute medley of ineptitudes - like I addressed in another way in my blog Beware of Honest, Well-Intentioned Politicians – is that, unlike Keir Starmer, Burnham possesses a populism (if you like that sort of thing) that makes his misguided economic interventionism far easier for the public to swallow.

Consequently, most of Burnham’s further meddling and fixing is just making a bad problem worse - and much of the country seems to like him more and more for it, which means the damage will probably be greater.