When vital words lose their meaning, then democracy will die
Geoffrey M. Hodgson
Theresa May once told us that “Brexit means Brexit”. We were not made any wiser.
In George’s Orwell’s famous book 1984, the all-powerful Party has the slogans “War is Peace”, “Freedom is Slavery”, “Ignorance is Strength.” We are much closer to that Orwellian World of doublethink now.
In the local elections on 2 May 2019 there was a surge in the vote for the remain parties – Liberal Democrats, Greens, Scottish Nationalists and Plaid Cymru – who do not want Britain to leave the European Union. In a campaign with “Stop Brexit” as their by-line, the Liberal Democrats gained over 700 council seats, their all-time best performance.
Meanwhile, the two main parties who “respect” the illegally-gained referendum result and who are trying to get some kind of Brexit deal, suffered badly. Labour failed to make net gains against the worst government in more than a century, and the Tories themselves lost heavily.
Hence voting for Remain means voting for Brexit. The Orwellian world of doublethink has finally arrived, 35 years after the book predicted. Remarkably few media interviewers or presenters, including from the corrupted BBC and the populist ITV, have challenged this interpretation of the election results. Ignorance is strength. Remain means Brexit.
Brexit means Remain
But in this Orwellian world, Brexit means Remain too. We are now into double doublethink.
The brilliant and indefatigable Femi
Oluwole tried to put Madeley right. Femi is an expert in EU law. But it was to
no avail. The idea that remaining in a customs union means remaining in the EU
prevailed on a popular ITV programme, which boasts about 700,000 viewers daily.
Francois is an opportunist, pandering
to the ultra-Brexiteers who dominate his party. It is possible that, unlike the
poorly-briefed Madeley, he knows the truth. Hence the wily use of the “in
effect” fig-leaf here and there.
I did some polling myself. I did my best to get
Leavers to participate, but any Twitter poll of mine will have a sample bias
toward Remainers. The poll has a relatively small sample of a few hundred
responses, and the results have to be used with caution.
Amazingly, despite the likely Remainer bias, 22 per cent on my poll thought that the statement “If UK is in a customs union with the EU, then it is still a member of the EU” is true. 73 per cent thought it was false. 5 per cent of respondents did not know.
that means that over a quarter of respondents did not know that it is possible to
be in a customs union with the EU and not be in the EU. If it were possible to
compensate for the likely Remainer bias, then this figure would probably be
Turkey – already in the EU?
Turkey has a well-established customs union with the EU. This means that its trade tariffs and duties must match those of the EU. It also means that Turkey is heavily embroiled with EU agreements and EU regulations. But Turkey is not a member of the EU.
An EU member state is subject to the privileges and obligations of membership. The member states of the EU are subjected to binding EU laws in exchange for representation within the common legislative and judicial institutions. Turkey has no representation in the European Parliament, and no seat in the Council of the European Union or the European Council. Other than via op-in agreements, it is not bound by EU laws.
But, according to my poll, something around 20 per cent of the British adult population seem to believe that being in a customs union means being a member of the EU. According to them, Turkey must be a member of the EU.
So why did Boris Johnson and Vote Leave tried to scare people during the 2016 referendum by say that Turkey was “to join” the EU? If a customs union means EU membership then Turkey was already a member. But Vote Leave itself implicitly denied this.
According to the mistaken 20 per cent, if the UK stays in a customs union after declaring it has achieved Brexit, then Brexit has not truly happened. This particular Brexit means Remain. Many people, including some politicians and TV presenters, seem to believe this.
A threat to democracy
Whether these misunderstandings result from deceit
or ignorance, they are fatal for rational discourse in a democracy. If
different groups of people are using the same words to mean very different
things, then meaningful conversation is impossible.
Consequently, it cannot be claimed that the meaning of Brexit is generally clear, and it is “the will of the people”. It is no longer reasonable to say that the 2016 vote in favour of Brexit must be “respected” when there is inadequate agreement on what Brexit means, and at least one-fifth of the population misunderstand the basic facts of what being a member or non-member of the EU means. To many people, some Brexits mean Remain.
If our parliamentary system ever regains a measure
of sanity, then one of its first acts of legislation should be to place
constitutional voting thresholds in the use of referendums, especially those
that could lead to major constitutional changes or the removal of our rights.
Even a 60 per cent threshold may be unsafe as a basis for legislation, especially
when over one-fifth may not understand what the proposition in the referendum
means. A super-majority of over 60 per cent must vote for a proposition for it
to have any advisory or compelling force.
Television channels such as the BBC, ITV and
Channel Four have a public service broadcasting obligation as a condition for
the licence to broadcast. This system has clearly failed us. They have a duty
put out the facts, even if the public or the politicians do not want to hear
Television presenters that put out falsehoods such
as “being in a customs union with the EU means being a member of the EU” should
be reprimanded or sacked. A schoolteacher or lecturer that repeated similar
falsehoods would be deemed incompetent and would face a similar fate. There can
be no short measures here. Our democracy is in severe danger.
Driven to extremes
The level of public misunderstanding over what
Brexit or Remain mean puts the Tory government and its current Labour
opposition in great difficulty. To move toward Brexit, they need to agree to
the “backstop” conditions, involving a customs union with the EU, so as to
avoid a hard border between Ireland and Northern Ireland. The alternative is a no-deal
Brexit that would put the UK economy into recession, destroy the Good Friday
Agreement and threaten peace in Ireland and even on the British mainland.
Both the Labour and the Tory leaderships have edged toward a Brexit that avoids a no-deal outcome and keeps a soft border in Ireland. A group of Labour MPs led by Stephen Kinnock want to go even further: they are pushing for Norway-style status after Brexit.
But the current level of misunderstanding over the
meaning of Brexit and Remain puts all these Brexit solutions into great
difficulty. Any Brexit deal involving a customs union or Norway-style membership
of the Single Market, will be seen by around one fifth of the population as not
Brexit but Remain.
Given this confusion, many Labour and Tory voters who
support Brexit will see their parties as betraying the referendum results that
the party leaders themselves have urged everyone to “respect”. Meanwhile,
Labour and Tory voters who support Remain will see the enabling of Brexit as
contrary to the national interest and a removal of individual rights.
Any deal-bound Brexit has now become extremely
difficult and potentially unpopular. Any deal with the EU must involve some
kind of customs union with the EU. But such solutions will alienate large
numbers of Brexiters and even more Remainers. The Brexit discourse has polarised,
with supports of Remain on one side, and advocates of “no deal” on the other.
Nigel Farage understands this. Before the 2016
referendum he advocated a Norway-style Brexit model. He now says that any customs union is a betrayal
and he is pushing for no deal. Thanks to his frequent appearances on the
pro-Brexit BBC and ITV, he is piling up his electoral support and pulling over
large chunks of Tory voters.
“This was the first Electoral test of our policy of ‘constructive’ ambiguity on Tory #brexitshambles. It showed that when you cower in the middle of the road on the biggest existential crisis facing Britain for generations you get squashed.”
As a result, as Bradshaw admitted, lifelong Labour
voters were deserting to the Liberal Democrats.
The battle now is between those that are
campaigning for Remain, including the Liberal Democrats, the Green party and
Change UK, on the one side, and those campaigning for the most extreme and
damaging of all possible Brexits, on the other. The Conservatives and Labour are
piggies in the middle. They will be the losers.
Over two thousand years before Orwell, the great
Chinese philosopher Confucius wrote:
“If names are not right, words are misused. When words
are misused, affairs go wrong. When affairs go wrong, courtesy and music droop,
law and justice fail. And when law and justice fail them, a people can move neither hand nor foot.”
Today, words have been misused. Law and
justice have failed. Politicians are immobilized. A catastrophe is brewing. We must
Double doublethink – where both Remain and
Brexit are given their opposite meanings – is making meaningful dialogue impossible
in a divided country. Unlike we act firmly and quickly, our democracy could be disabled.
Difficult and dangerous times are ahead.
Although education is not a public good, there are good reasons why the state should support education services.
As leader of the UK Labour Party, Jeremy Corbyn has opined that “education is a public good” and drawn the conclusion that it should all be provided by government and funded by taxation.
All three leaders of the UK Green Party since 2012 – Nathalie Bennett, Caroline Lucas and Jonathan Bartley – have repeated the phrase “education is a public good”. They too implied that all education should be free of charge to the user and paid for out of taxation.
Jeremy Corbyn and Caroline Lucas
Similarly, Shakira Martin, who was elected President of the UK National Union of Students in 2017, remarked: “Education is a public good and should be paid for through taxation.” These influential organizations are led by people who have not learned the lessons of Econ 101.
In addition, this inaccurate rendition of the meaning of public good is common among journalists, who also have a moral responsibility to use terms accurately.
What is a public good?
The economist and Nobel Laureate Paul Samuelson established the concept of a public good in an academic paper in 1954, although some of the basic ideas involved had been formulated previously by others.
John Stuart Mill, for example, had argued in his Principles of Political Economy that lighthouses should be built and financed by governments, because their widespread benefits could not readily be financed by passing ships, and no individual had the pecuniary incentive to construct them.
The established technical definition of a public good is a good or service that is non-rivalrous and non-excludable. Non-rivalrous means that its use or consumption by any actor does not significantly reduce the amount available for others.
Non-excludable means that potential users cannot practically be excluded from the use of the good or service. This definition can be confirmed by reading any reputable economics textbook.
Consider the example of street lighting. If a town council uses local tax revenues to set up and maintain lighting on its streets, then there are widespread benefits for everyone. But it is not possible to charge people individually, according to whether they benefit from the illumination.
So when elections to the town council occur, self-interested citizens will vote for candidates proposing lower taxes, assuming that they will benefit anyway from any public good provision. Why pay more taxes when the lighting is free at the point of use? Self-interested consumers will try to hitch a free-ride. The outcome is that the street lighting will be underfunded, while everyone would prefer streets that are well-lit.
Samuelson’s argument was popularized by John Kenneth Galbraith in his 1958 book The Affluent Society. Therein Galbraith argued that vital public goods would be under-provided in a market system: there could be the coexistence of “private opulence and public squalor”. The combined efforts of a revered mainstream economic theoretician and of an astute and inventive populariser of economic wisdom helped to pave the way for a wave of interventionist policies in the US and other developed economies.
Do public goods necessitate public provision?
After this action came the reaction. In a 1974 article Ronald Coase (another Nobel Laureate) argued that many early lighthouses in England were privately constructed and financed by tolls at the ports. In fact, an emblematic example of a public good had often been financed privately. Hence “economists should not use the lighthouse as an example of a service which could only be provided by government”.
This and other interventions led to a widespread reaction against the Samuelson-Galbraith view that public goods necessarily require public provision or public financing.
It has been pointed out that radio and TV broadcasts and open-source computer software are also public goods. Yet both are often provided by private companies. Private radio and TV broadcasters finance their broadcasts by advertising.
Computer companies sometimes make software readily available to encourage use of their computers, for which the software was designed. The software is given away to help sell the hardware, or there is a charge for support services for software users.
Whether they are desirable or not, in principle there are many possibilities for private provision of public goods. In reality there are numerous cases where the state franchises out the provision of goods or services to private contractors. Such provision could include public goods. In these cases, public financing remains, but provision is private.
The claimed advantages of private franchising would include the introduction of an element of competition between potential franchisees, and the possibilities of efficiency gains through well-focused, relatively autonomous private providers. But here again the proof of the pudding is in the eating. Many public franchising operations have failed to deliver the promised gains. Others have been more successful.
Accordingly, we end up with a pragmatic rather than a doctrinaire conclusion. Economic systems are complex, with varied, interconnected components. Theory simplifies, and does not catch all the interactive effects. Theory has continuously to be appraised in the light of empirical experience. So far it is clear than the existence of a public good does not necessarily imply that it has to be provided by government, just as there is no compelling case that its private provision will also be superior.
Misunderstanding the meaning of a public good
Careful, rational discussion of the issues surrounding vital debates over public and private provision is not simply impeded by the prevalence of opposing ideological extremes. There is also a growing and prominent disrespect for the careful use of the terms that have been established by scholars in this area.
Combinations of sloppiness and ignorance threaten the utility of key terms. They engender ambiguity, degradation and ultimate uselessness. This has already happened with swear-words such as neoliberalism. It is hoped that it does not happen with cheer-words such as public good.
A prominent misunderstanding of “public good”, is that it means “a good that can only, or should only, be provided by government”. But this conflation of public good with public provision is mistaken.
Another, even cruder, misunderstanding is that “public good” means “good for the public”. While anyone who has taken Econ 101 should spot this error, it is nevertheless widespread. Speakers sometimes give their error away when they give relative stress the “good” in the phrase, as if “good” had the meaning of virtuous or worthwhile.
Yet in the correct definition of “public good” the second word takes another commonplace meaning, denoting a possession, or an item of commerce. This second meaning is found in the pledge “with all my worldly goods I thee endow” in the Book of Common Prayer or in “the goods train went through the station”. Bad things, like tobacco, heroin, cocaine, nuclear bombs and personnel mines, are also goods in this sense.
Is education a public good?
First assume that the claims of Corbyn, Lucas and others were true: education is “good for the public” and it should be funded out of taxation, and maybe even provided by a publicly-owned enterprise.
Many additional things are “good for the public”, including clothing, food and housing. By the same logic, these “goods” should all be funded out of general taxation as well, and distributed without further charge to their users. Influential politicians thus suggest that everything that serves basic needs should be financed, and possibly distributed, by the state. The market would simply be left for luxuries. Their logic implies a state-run economy of which Stalin and Mao would be envious.
Second, even if education were a public good (by the Econ 101 definition) then this would not imply that it should be paid for out of taxation. As noted above, free radio and TV broadcasting is generally a public good, but little of it is paid out of taxation, and it would be difficult to make the case that it should be (unless we fancy a totalitarian state that does all the broadcasting and curtails all private radio and TV stations).
Third, while observing the Econ 101 definition of a public good, note that education is generally a rivalrous rather than a non-rivalrous service. Education services require resources, including buildings, infrastructure, equipment and trained teachers. Additional students generally require additional resources. (Although in some cases the marginal cost is low, such as with mass-distributed online courses.) Consequently, education provision is generally rivalrous.
Fourth, again with an eye on the Econ 101 definition, note that education services are mostly (but not entirely) excludable. Schools and universities can readily prevent other people from attending, while it is much more difficult to prevent any passing mariner from observing the light from a lighthouse.
Technically, by the standard definition, most education services are private goods, because their provision is both excludable and rivalrous. But there is no necessary reason why all private goods should be privately provided. The Econ 101 distinction between public and private goods does not readily or directly correspond with public and private provision respectively.
The parts of an education system that are actually or virtually non-rivalrous, such as massive online courses, are technically club goods. Like radio and TV broadcasting they can be provided publicly or privately.
Positive externalities in education
When students receive their qualifications, they often have advantages over others on the jobs market. Hence they reap benefits. Nevertheless, with education there are strong positive spill-over effects.
Educated people help to raise the levels of public culture and discourse, and can pass on some of their skills to others. Educated people are also vital for a healthy democracy. But none of this undermines the general excludability of education services.
The spill-over effects are important, and relate to the question of public versus private provision. Another word for a spill-over is an externality: this is a cost or benefit that affects someone who did not choose to incur that cost or benefit.
Externalities can be positive or negative. Examples of negative externalities are pollution or congestion caused by motor cars. Because a driver will suffer only a fraction of the overall pollution and congestion costs of making a car journey, negative externalities impose costs on others without penalty for the car user. By standard assumptions, unless compensatory measures are taken, car use will be excessive and suboptimal.
The theory of externalities was developed by Arthur Pigou, who argued that in the presence of negative externalities some public authority should intervene to impose taxes or subsidize superior alternatives. By such measures, motor car traffic could be reduced and pollution reduced. Inversely, services such as education with positive externalities should receive subsidies or be provided free, to encourage more extensive participation in these activities.
In a famous 1960 paper, Coase dramatically changed the terms of debate with his argument that if transaction costs were zero, then all the extra costs or benefits could be subject to contractual arrangements and the externalities would disappear. For example, if the owner of every dwelling near a road had property rights in the surrounding segment of the atmosphere, then the driver of a passing and polluting car could be sued for degradation of that property. The pollution externality would be internalized.
Coase’s intention was to underline the implications of transaction costs: the existence of externalities is dependent on positive transaction costs. Coase accepted that in many cases it would be impossible to avoid the transaction burden. For example, enforcing rights in the surrounding atmosphere to curb pollution may be too expensive.
Many pro-market zealots ignored or underestimated the transaction-cost aspect of Coase’s argument. Instead, their foremost claim was that Coase had undermined the case of public intervention based on externalities.
Consider the positive externalities of education. It would be impossible or socially destructive for every educated person to charge a fee to participants in an intellectual dinner conversation, or to invoice the government for making a well-informed choice when casting his or her vote in the ballot box. The internalization of these positive externalities by such means is impossible or undesirable.
The issue of missing markets is relevant here, as I discuss in my book Conceptualizing Capitalism. There are missing markets for future employment because to introduce such complete markets would be tantamount to slavery. The prohibition of slavery means that we cannot have complete futures markets for labour. This means not simply the existence of transaction costs but the enforced absence of transactions, which would be equivalent to making the transaction costs infinite.
Consequently, because of these missing markets, education and training will be undersupplied through markets under capitalism. There is a rationale for some kind of public intervention. Of course, government intervention has its problems too. We must experiment, and compare real-world cases, not idealized models.
Mixtures of public and private provision
There are mixtures of public and private provision of education in most countries. The majority of schools in most countries are run by local government. At the other extreme, most on-the-job training is done by private companies.
The US has a mixture of private and state universities, although both types receive substantial public funds. In the UK most universities receive public money for teaching and research, and in return they are obliged to conform to a myriad of government regulations. They also receive student fees and research grants from the private sector.
Technically all UK universities are private (corporate) entities: they have a legal status equivalent to charities (which are also not-for-profit private corporations). By contrast, in several major countries in Continental Europe and elsewhere, most universities are integrated into the state machinery and all their employees are civil servants. This is not the case in the US or the UK. This international diversity of models provides the opportunity to compare different systems and determine what works best, taking account of the different contexts in which they operate.
This growing disrespect for science and expertise is moving democracies toward an extremely dangerous place, where the general public have increasing difficulty segregating lies from truth. This danger could be called Trumpism.
I do not put Jeremy Corbyn or Caroline Lucas in the same box as Trump. Far from it. For example, they share none of his obnoxious racism and sexism. But Corbyn and Lucas are disrespecting experts and ignoring bits of science nevertheless.
We need a well-informed public conversation concerning the best arrangements for the (public or private) provision of basic needs and services, including education, health, housing and transport. Such a debate is much more difficult if leading public figures, including the leaders of major political parties, promote incorrect and misleading versions of highly relevant analytical terms.
Donc, je les accuse – of abetting the Trumpist degeneration of public discourse with their false claim that “education is a public good”. They should acknowledge the error and make a correction.
11 January 2018
Minor edits: 12-13 January 2018
Published January 2018
Note 1: As with many such definitions, there are few, if any, pure cases. So a public good refers to a good or service where consumption by one person does not significantly reduce the amount available for others, and where potential users cannot practically or generally be excluded from the use of the good or service.
Note 2: There is a widespread assumption that actors act wholly out of self-interest. But from evidence with humans in laboratory experiments and elsewhere, we know now that this is untrue. People will often agree to pay for public goods, even if they know that they have the alternative of free-riding on the contributions of others. One can conjecture, however, that numbers of people are important. We know from the work of Nobel Laureate Elinor Ostrom (1990) and others that cooperation is possible over the use of non-excludable resources, even when usage is rivalrous and it can degrade the resource. (Non-excludable resources that have rivalrous usage are defined as common-pool resources: they are not public goods.) But Ostrom’s examples highlight the role of face-to-face interaction and the building of trust. But it is doubtful that these mechanisms can be expanded to large-scale societies, at least without additional systems of control and enforcement.
Samuelson, Paul A. (1954) “The Pure Theory of Public Expenditure”, Review of Economics and Statistics. 36(4), pp. 387-9.
Stretton, Hugh and Orchard, Lionel (1994) Public Goods, Public Enterprise, Public Choice: Theoretical Foundations of the Contemporary Attack on Government (London and New York: Macmillan and St Martin’s Press).