The Conservative regime that came to power in 1979 – continuing without interruption through 13 years of ‘Labour’ rule – draws its political philosophy from economic theory. A theory as deeply flawed as anything emanating from Marxist sources but far more of a challenge to anyone seeking to confront it.
In this theory, all individuals are calculating machines, motivated by economic self-interest alone. This was never a serious account of economic behaviour – theoreticians assume the existence of ‘perfect markets’ that have never actually existed – but it has by degrees migrated into areas of politics that used to be detached from economics. Areas indeed where independence from the undue influence of purely economic arguments was highly valued. An example is the about-turn in planning, where a 65-year-old rule that barred financial considerations from being taken into account has now become a legal duty to weigh them in the balance. In place of the principle that planning permission may not be bought or sold we now have ‘planning by auction’. Because the Bankers’ Parliament of 2010 has made it so.
Democracy is an anomaly for the Thatcherites and their heirs, because it relies on individuals interacting and making decisions without the intervention of money as the means of exchange. The regime’s aim therefore has been to squeeze democracy away, to isolate it into smaller and smaller patches of political habitat. Through privatisation, centralisation and the replacement of politically accountable decision-making with ‘expert’ managerialism.
In 2010, David Cameron set up the ‘nudge unit’ within the Cabinet Office. A team of policy wonks tasked with using economics and psychology to change the public’s behaviour. One of the fruits of this kind of thinking emerged onto the Government’s website this week. The stated intention is to paylocal folk not to object to development, a proposal entitled ‘development benefits’:
“The Government wants to reduce the extent to which development is blocked or delayed as a result of active opposition by local residents… The aim of development benefits is therefore to reduce delays and blockages by providing a financial incentive directly to residents that would reduce the incentive for residents to actively oppose development and increase the likelihood of positive support… We want to explore, including through research and the pilots, how financial incentives may impact the attitude and behaviour of residents towards housing developments in practice.”
How does it feel to be a rat in David Cameron’s behavioural economics lab? Won’t it feel much better when we have a different system? One in which we tell politicians what to think and not the other way round.