They need to talk about Boris

# 55

   We once heard tell of an African tribe whom their neighbours called ‘The Fekarwi’.  They were a people of limited stature who dwelt on an endless plain, densely covered by tall grasses. Their curse was that the average height of a fully grown adult was less than 150cm [59 inches] and most of the grass that surrounded them grew to heights exceeding 180cm [71 inches]. The only way they could travel was in single file behind their leaders, one of whom would have to jump as high as possible after every few paces, just to see over the otherwise impenetrable wall of greenery. They had acquired their name because, with every strenuous leap, the followers would be heard to chant, as with one voice, “Where the fek are we?...Where the fek are we?” For a fraction of a second the jumper’s head would appear above the waving grasses, frantically seeking clues about which way to go. Sadly, none of the jumpers was ever heard to report, “Grass. I just see grass and still more grass; it goes all the way to the edge of the world.”

   We were reminded of this unfortunate tribe several times this week when listening to excerpts from speeches being made at the Conservative Party’s annual conference in Birmingham. The economic recession in which the UK is still so deeply mired is having the same effect on the Tories as the grassland had on the Fekarwi. The leadership of neither tribe can glimpse where they are going for long enough to give any convincing description of the way ahead to their frustrated followers.

   The Labour Party, it must be said, did scarcely any better at their gathering in Manchester the previous week. Ed Miliband, in fact, seemed able to do no better than to reach back into the nineteenth century and purloin the idea of ‘One Nation’ from the Tories' own original arch-smoothie, Benjamin Disraeli. Still, at least that cuts him free from the burden of having any proper policies. It also leaves Ed leading a party which is clearly no longer either ‘New’ or possibly even ‘Labour’.

   On Monday, Boris Johnson arrived in Birmingham bouncing through the long grass on the pogo-stick of his own ego. Unconstrained by reality or the burden of having to implement anything he might promise, Boris broke records for the number of silly ideas and empty gestures per sound-bite that could be received by the faithful with rapturous applause.

The Night Mayor of London

But, Boris not withstanding, still they went on chanting “Where the fek are we?” and will doubtless continue to do so until the truth finally dawns on them that the cause of the recession is the abysmal failure of their own belove'ed free market capitalism.

   Arguably, one of the greatest of all Victorian inventions was the joint stock company, with limited liability for shareholders. When this was applied to the banking system, it was eventually made to work by the addition of two other elements – both supplied by government. One was the application to public spending of Keynesian ideas concerning demand management and the other was the careful regulation of all banking activities, and especially of their capital and liquidity ratios. It seemed like a rocky road at the time, but the financial system thus evolved brought unprecedented stability to the British economy for four decades after 1945. It wasn’t perfect by any means and the prosperity it generated wasn’t evenly spread but it worked a whole lot better than anything ever seen before (or since).

   Then we came to the 1980s and everyone became seriously bored with economics and with economists. Too many people looked the other way while the advocates of laissez-faire applied their brilliant ideas to the financial system. De-regulation was all the rage and suddenly everyone could borrow almost as much as they’d ever dreamed they might want. Government borrowing was no longer restrained by the effect that a rising PSBR would have on the banks’ ability to create credit and private lending was only vaguely and half-heartedly linked to the bank’s own liquidity. Surprise, surprise, after less than two decades, the free market system went ‘pop’! Or – to be more accurate – it went ‘BANG!’

"Oh cripes! Oh lor! I say you chaps, crikey!"

   The system we once had is broken and has either to be fixed or replaced by something better. Some very silly ideas will have to thrown away before we can find our way out of the long grass. So, if you’re travelling in The Bus Lane anywhere near Birmingham and happen to hear plumy voices in the distance chanting, “Where the fek are we? Where the fek are we?”  - those will be the Tory faithful trying to wend their way homeward. If you’re feeling generous, you might tell them roughly where they are and exactly where they can go. If you’re feeling worried, you might also remind them that they’re supposed to be the ruddy government.