Paul Mason doesn’t understand uncertainty

The tragedy is that industrial strategy problem is solvable – but only if you have three things. First, strategic certainty: what does the country want to be in the world; what industries does it favour? Second, a powerful economics ministry and a government investment bank. Third, private money looking for long-term projects backed by a government guarantee. Brexit and internal warfare in the Conservative party have combined to make these conditions impossible.

The real point about all of this is simply that we know fuck all about the future.

We don’t know what problems technology advancing will enable us to solve. We don’t know what problems people want solved among those that technology might enable. This is the most basic point about the market, not planned economy. We’ve not a scoobie, thus we must use the experimentation machine which is the market to find out. Try stuff, throw it at the wall, see what sticks. Who knew we all wanted to send cat pictures to each other?

We cannot plan the future because we know fuck all about the future.

64 comments on “Paul Mason doesn’t understand uncertainty

  1. I plan in my future to have as little to do with Paul Mason as possible.

    Who would have thought that being a music teacher would be such poor preparation for pontificating on political economy? Almost as poor as being an accountant.

  2. Cast your mind back to the heady days of the 60’s and 70’s. What did the great planners of the day think they wanted 2017 to look like?

    Are we better or worse off than if they’d had 100% success?

    I think we know the answer to this one…

  3. I’m thinking that people of that mindset are scared of change and fret over their abilities to cope.
    Big government with ministries of everything stop innovation and are a comfort to the dull witted.

  4. Oh but if you are using a smartphone then you have the state to thank.

    Check and Mate planning atheists……

  5. Are lefties cosmically stupid? Do they have Tommy as a role model?

    He’s just described Venezuela. That’s going well, isn’t it?

    Oh, I see, it would be if YOU were in charge.

  6. I’m sure this obsession with planned economies must have some deep psychological rooting in a person’s upbringing. There must be a reason they are desperate to organise everything. Maybe their parents were terribly disorganised or something.

  7. The problem here is not that we don’t know the future, but rather that some in Government think they can.

  8. Jim,
    i think its how people react to what is somewhat of a paradox. You do need to plan stuff to get anything done. If you don’t you tend to fail. That applies to individuals it applies to small and big companies. It applies to government. It just doesn’t apply to economies.

  9. Mason’s first two points are boilerplate communism: a planning ministry, a ministry of the economy, an industry ministry and that thing that everyone from Murphy to Varoufakis drools for – a national investment bank.

    It’s the thid point:

    private money looking for long-term projects backed by a government guarantee.

    that’s the corker. “Look, there’s a role for the private sector here”, it says but doesn’t question whether potential private sector participants exist or whether they could refinance themselves long-term.

    He probably has in mind something like Hinkley Point C because foreign state-owned investors are private sector for Mason because they are not owned by the state here.

    So no role then for a home-grown private sector. Stock up on bog-roll while you still can.

  10. @TMB

    The quote about private projects backed by government guarantee seems particularly muddleheaded: is the guarantee by government not removing the risk for the private company? Hasn’t history alr Andy proven that this is the best way to make something expensive and poor quality?

  11. Don’t lets worry about the future. That’s so BORING. Lets destroy our mixed economy and REJOICE that on TV John McDonnell can produce a cleaner from Barts’ pay slip and explain, between interruptions from Andrew Marr, “This woman, full time worker, earns £297 a week. At the moment the median rent in London is nearly £1500.To buy a house in London is half a million pounds.”
    Pipe down lefties ! Everything is so much better when left to blind chance and the Conservative Party.
    Their record is so much better than that other lot who worked out a system that got us through the war, managed a post-war revival, with full employment , built a motor way system new towns etc.

  12. Paul Mason, despite living in the UK, sounds very much like the Soviet technocrat of the possibly apocryphal anecdote who asks “who is responsible for bread supplies for London?” And then can’t fathom how, actually, no bugger is. And yet there’s better bread supplies than in any planned economy.

    DBC seems to fall into this category too.

  13. “Paul Mason doesn’t understand uncertainty” – He doesn’t understand anything does he??

    He’s just a bogstandard lefty pontificator spouting shite, which if anybody were so fuckwitted as to implement would ruin the country in short order.

    Most people realise that perfectly well, but these memes like industrial strategy govt investment bank refuse to die.

    We cannot give up the good fight.

  14. Back to the 1950s with DBCREED.

    As once again our hero shows us that socialism plundering a market system–the “mixed economy” –can enjoy a brief Wonderland moment where it looks like the leftist shite might actually work.

    DBC’s time on this Earth is brief. It ends at midnight on December 31st 1959.

    He reappears 60 years later bellyaching about the consequences his socialist bullshit have wrought on society long after his Golden Age ended but the stale stench of the left remained and fucked everything up. He loves to groan on about how all of this is BluLabour’s fault as if they have not been peddling socialism for 50 odd years themselves.

    DBC needs to star in a new version of “Brigadoon” in which he disappears and just never returns.

    The way the 1950s already have.

  15. Great – a return to 5 Year Plans, and no doubt tractor factories.

    The problem has never been politicians deciding what people should have – it’s been recognising what people want.

    Neither Paul Mason, Jeremy Corbyn or John McDonnell is a Steve Jobs, and I’d prefer not to have them decide the best way to invest my money.

  16. Socialism always works to start with because it’s spending the capital of the previous non socialist system, both economic and social. A generation later, not so much. 1945 plus a generation, and hello, seventies!

  17. @roué le jour

    Indeed – when your system is about redistributing existing wealth but has little interest in creation of wealth, and wealth is destroyed constantly during consumption, you rapidly run out of wealth to redistribute.

    Empirical evidence – 100% of “actually-existing socialist” systems, 1917 to present day.

  18. @John²

    Well quite – he’s remarkably unspecific. Is the government guarantee one that governs the return to the investor or one that guarantees solely against default? Will the investment be tradeable or will it be locked in for a given long-term period?

    The range of possibilities here stretches from something akin to a gilt to something astronmoically speculative and thus meaningless or bonkers depending on your point of view or Mason’s mood at the time.

    @DNR

    A cleaner works 40 hours at minimum wage so not competing with the BBC’s “talent” in terms of pay though providing a greater service than most of them, I dare say.

    Is the cleaner in receipt of other benefits in cash or in kind?

    How is the median rent (per week, month or year?) in London relevant to this case?

    […the Labour Party] who worked out a system that got us through the war, managed a post-war revival, with full employment , built a motor way system new towns etc.

    For a throw-back to the 1917 Revolution, you’re remarkably weak on history and you forget one of the great achievements which was to unleash a tsunami of immigration which is partly responsible for the pressure on house prices and rentals which you moan about,

  19. TMB

    “How is the median rent (per week, month or year?) in London relevant to this case?”

    It’s quite a common trick to pull out an example of how hard-done-by someone is by comparing their income to some kind of average expenditure, and asking how they are meant to live on it. Or even just to compare their income to the average income. After all, “Nobody should earn less than average”. But where does that take you in terms of practical policy, rather than mere outrage?

  20. “This woman, full time worker, earns £297 a week”

    Can we see her post benefit system income too please? Just waving a payslip about says nothing about here eventual weekly income, or indeed if she is married to a Tube Driver on £50k/yr.

  21. “What do a Japanese robot and the world’s first tidal turbine have in common? They are not in Britain. While the British government destroys itself over Brexit, the parts for a third industrial revolution are being assembled elsewhere.”

    These are the two things governments always back: sexy technofuture nonsense and stuff that’s basically done. No-one needs to interfere in the robotics market. It’s been going for 40 years. It’s getting a bukkake party of yen spunked on it because it’s always made money, in the same way that we keep thinking about investment in the car industry, even though it peaked 15 years ago.

    “In robots for nursing care, for example, the strategy spells out a detailed five-year plan – from supporting manufacturers and changing International Organization for Standardization regulations to new health regulations and the creation of a marketplace between healthcare providers and robotics firms.”

    what? Changing standards? There’s ISO standards for this stuff, but they can’t just change them without everyone else.

    But none of this needs state involvement. There are robots that allow a bed to become a wheelchair and robots that pick people up and this is good stuff, but it’s not exactly high tech innovation.

  22. “First, strategic certainty: what does the country want to be in the world…”

    ‘The Country’ – 52% want actually to be in the World; 48% want to be in a cordoned off corner of it.

    Strategy that.

  23. Abacab,
    Yes but the social part is equally important. You start off with people who don’t like to be a burden, have always paid their own way, etc. The next generation has no problems claiming the dole when out of work, and the generation after that think it’s their right to spend their whole life on welfare.

  24. Another reason why central planning is unlikely to succeed is the lack of good timely data to use when planning and reviewing actual performance. We’ve just had a new ONS business survey come through and it is utter gibbering bollocks. It’s not even the type where you can adjust for methodological errors over time and so devine something useful. Thank god this one is not compulsory and so it is going in the bin.

    Compare that to google who can track the spread of flu and such things in real time or Walmart’s ability to be more prepared to restock shops in the wake of a disaster compared to FEMA’s response. Of course the government’s response will be we must now have access to Google and Walmart’s data.

  25. Hayek etc….

    We also know sod all about the present. At least the central planner does especially. Because knowledge is tacit and local. To solve this we have the price mechanism. But as Mises pointed out, for that to work and reflect preferences you need private enterprise and free markets. So that’s not going to work if yer central planner is dominating. Which is why North Korea is starving and South Korea is thriving.

    How come Mason gets to write about economics when anyone who understands what I just wrote, or even suspected as much from looking around them, is an infinitely better economist?

  26. “We cannot plan the future because we know fuck all about the future.”

    As Hayek (and many others) said, using a few more words.

  27. ‘First, strategic certainty: what does the country want to be in the world; what industries does it favour?’

    See, the people exist to support the government. The government will decide what it wants, and compel the people to support it.

    Sig Heil!

  28. On the contrary, Rocco, I think government planners draw inspiration from your videos.

  29. Also:
    @abacab

    “PARKLIFE!”

    Made me giggle, but DBC bought to mind the “Choose life” monologue from Trainspotting more than Blur.

    And Mr Reed’s contention that not adopting a government-heavy, centrally planned path through life is leaving stuff to ‘blind chance’…

    Well, words fail.

  30. Government may be no better or worse than the private sector at picking winners. That’s not the problem, which is that Government is useless at canning losers, especially if they are in marginals and it’s election time.

    They would never produce the iPhone because they’d be too busy insisting that they make the old Rabbit system work rather than shutting it down and moving on, as an example.

  31. It’s fairly obvious some of the commentators & Tim himself would be taking straight past Mason & our own DCB. As they would be talking past you
    Mason’s “planned economy” is planned. The future in Masonworld is known because the future is planned. So there’s no problem planning for it.

    That no instance of planning on this scale has succeeded can be simply dismissed as the interference of outside, unplanned events. Thus, North Korea or Venezuela would be planned paradises but for the interference (often malicious & therefore planned) of other players in the World upsetting the planning.

  32. Good old socialist thinking. Nothing screams “economic growth” like a geriatric old man with 2 Es at A Level who has never had any responsibility pissing away billions of pounds he did not earn on things he does not understand.

    Compared to that letting individuals try, on their own accord, with their own money, in areas they understand, and accepting that some will succeed and some will fail sounds downright frightful

  33. Third, private money looking for long-term projects backed by a government guarantee.

    If it requires a government guarantee it’s not longer “private money” – it’s government borrowing, even if structured to remain off-balance sheet. Usually that structuring is deliberate, and no matter what the bankers say, the purpose is to obfuscate government finances.

  34. Third, private money looking for long-term projects backed by a government guarantee

    Who is going to trust a government ‘guarantee’ when that future government is run by Corbyn and is full of people like Mason? People who want to cancel PFI contracts? You’d be mad.

  35. ‘The tragedy is that industrial strategy problem is solvable’

    He first failed to prove there is an industrial strategy problem.

    ‘A more strategic factor is, again, our absence of industrial or economic strategies.’

    A tidal lagoon project is perfect evidence that it is good that there are no such strategies. More proof: The Guardian likes it.

    ‘Electricity from world-first tidal lagoon would be more expensive than that from any other major UK green energy project to date, consumer charity warns’ – Telegraph

  36. As I have said on these pages before:

    “Businesses make business decisions. Governments make political decisions. That’s why government can run businesses.” – GC

  37. Let’s look at the bits of the economy that the government does plan. The NHS for example. They know how many doctors and nurses they need; they know (and control) how many are in training and when they will qualify; they know how many are retiring each year; they have a pretty good estimate (based on long-term data) how many others will leave. Unlike planning for a broad future economy, they know what is happening.

    And what happens? Shortages of qualified staff. And they sound surprised.

    And this is how lefties want the whole economy to be run.

  38. “What does the country want to be in the world”
    Suppose the answer is “Switzerland”, or one of the richer countries than that.
    Then the response is “keep government and, especially, government as far away as possible from the economy” and “stuff a sock in Paul Mason’s mouth”

  39. The party of economic freedom has just announced that they will raise the age of retirement twenty years in advance.Bad show chaps for not trying hard enough to avoid planning.If you try hard enough and fuck everything up as usual, a way round even simple planning can be found. They should, of course, be abolishing the national pension altogether because everybody that matters will soon be able to live off property income (and there are incineration arrangements for everybody forced to rely on work.)

  40. WTF now Reedy?

    67 to 68 –in 2037? What fucking horror. Truly Reedy you’d be better off in North Korea.

    Please go there.

  41. This blog and most commenters completely lack substance or any sense of nuance.

    All modern economies are mixed economies, where the market does what it is particularly good at (innovating and selling stuff) and the state deals with infrastructure and the stuff the market isn’t good at.

    The market cannot, and will not ever, solve all our problems. To believe it can is as idiotically utopian as communism. We don’t let the market build our road network, because if it did it would be horribly unbalanced and you wouldn’t be able to drive to the Scottish Highlands, or if you did it would cost a small fortune. Every advanced country in the world leaves road-building to the state (bar a few heavily used motorways in France etc..), because the market simply cannot deliver that kind of infrastructure.

    And of course even state entrepreneurship can have beneficial but unintended consequences. The GPS in our phones being an obvious example – not something the market could have delivered on its own.

    People bleat Venezuela and USSR, but the US put a man on the moon using the power of the state and central planning, with myriad side benefits to the marketplace in the process.

    Market fundamentalism is as much of a dystopia as any form of communist totalitarianism, and the viewpoint just as extreme.

  42. It is you missing the nuance I’m afraid. We all entirely agree that markets don’t do some things well. Even, that there are some things which must be done and which only the state can do. The argument is over which things, not whether the divide exists.

  43. I’m really not seeing the nuance – maybe you should make it more obvious, because all I see is bluster.

  44. “All modern economies are mixed economies, where the market does what it is particularly good at (innovating and selling stuff) and the state deals with infrastructure and the stuff the market isn’t good at.”

    The market is not only good at innovating its also good at just getting shit done. The boring sort of shit like bread, and petrol and electricity. Stuff that isn’t exciting, but you can still make a dollar supplying it to the masses, and is pretty important that it works time after time. The State wasn’t very good at all that sort of boring stuff when it ran the commanding heights of the economy, remember?

    There’s actually not much that the State can do that the market can’t do. Mostly the non excludable stuff like (as you rightly point out) roads, and defence, and justice,and police and fire brigades and some infrastructure. It can also run welfare systems to redistribute income as people see fit, both as pensions and working age benefits. Thats it. There really is no reason why people’s practical needs/wants in life cannot be supplied by private businesses, even if (for social reasons) the State may pay for those goods and services on behalf of the those who are unable to pay. Health services do not need to be State owned and run, neither education. Those neoliberal bastards in France manage to have a significant private medical sector, as do the Germans and many other European countries. Those hippy dippy Swedes have education vouchers. There is no compelling evidence that the State is better at providing either of those social goods, and indeed plenty of evidence that they are worse at it than the private sector.

  45. @Richard Yot – you should read some of the immigrant threads. Half the pundits here think the State should form Committees to decide who gets a work permit ( and usually it’s fairy worshippers who wouldn’t get in even if they are identifiable and not criminals ). Hardly market fundamentalism.

  46. ‘The market cannot, and will not ever, solve all our problems.’

    What fvcking problems?

    It is not free enterprise’s job to fix “problems.” I buy a loaf of bread from someone – how is that to fix a problem? Who decides what is a problem? Who decides which problem will be fixed?

    “the US put a man on the moon using the power of the state and central planning”

    Bullshit. They paid Boeing, North American, Douglas, etc., to put a man on the moon.

    But even so, so what? Where is the moon base they created? Oh, they declared victory and left. Now they pay Putin to put up satellites.

    Is your theory that one success makes up for 150,000,000 murdered people?

    The state doesn’t build roads: it contracts the jobs out to people who can build roads.

  47. @ Jim
    The *only* thing that must be done by the state is Justice. The private sector can do anything else (yes, even defence).

  48. Boeing ran the Apollo mission? And there was no central planning involved? Haha. Blinkered ideologues.

  49. @RY
    Notwithstanding that the UK ran a successful enough mixed economy from the 1930’s to the advent of the austistic Thatcher, this site is dedicated to making everything private sector for the sake of completeness. Royal Mail in public ownership from the beginning? That had to be forced into the private sector and don’t talk about efficiency. If you have a public service running on shoestring margins just send in private management to carve out a profit margin on top , the bigger the better.You know it makes sense. Just look at all the prosperity!
    People forget that the most successful practitioner of the mixed economy with the full array of nationalised industries (two State airlines) , collective bargaining, new towns etc was the Conservative Harold Macmillan. As a bit of a lefty I find that hard to come to terms with ,but not to worry: the headbangers aren’t well informed enough to notice.
    NB Will Hutton wrote a very though defence of the mixed economy in last week’s Observer.

  50. “It is not free enterprise’s job to fix “problems.” I buy a loaf of bread from someone – how is that to fix a problem? Who decides what is a problem? Who decides which problem will be fixed?”

    Isn’t the problem that you need to eat? And the solution, the loaf of bread, is delivered via a mix of the market and the state. Most farming is subsidised, and of course the market has to make use of the infrastructure provided by the state to deliver its goods to you.

    Your argument simply isn’t cogent. It’s an angry and partisan defense of an illogically binary world view.

    The minute you assert that everything the state does is bad, and everything the market does is good you lose the argument. Because this view is extreme and denies the evidence. Both the state and the market are human constructs, and as such are as fallible as the people who create them. Both the state and the market are capable of delivering good and bad outcomes, but the market is accountable to profit and the state to the electorate. Which is better is not binary, but nuanced, and to deny this is to bury your head in the ideological sand.

  51. “Those neoliberal bastards in France manage to have a significant private medical sector, as do the Germans and many other European countries. Those hippy dippy Swedes have education vouchers. There is no compelling evidence that the State is better at providing either of those social goods, and indeed plenty of evidence that they are worse at it than the private sector.”

    At least this is an actual argument 🙂 Personally if there is evidence to prove that one approach gives better overall outcomes than another, I don’t care whether it’s the state or the market that provides the solution.

    The advantages that a state run system offers is that it pools risks over the entire population, which is more efficient, and that the state has deep pockets and can command more resources than the private sector.

    As to whether the French or German health systems provide better overall care and outcomes than the NHS isn’t actually cut and dried, but it’s not the method that matters it’s the outcome. If you can persuade enough of the electorate that following the example of France or Germany would deliver better outcomes then you can implement it.

  52. “Boeing ran the Apollo mission? And there was no central planning involved? Haha. Blinkered ideologues.”

    Boeing made the first stage rockets; government did not. North American made the second stage rockets; government did not.

    Government provided the project management; most everything that was used was made by private companies, not the government.

    So, Mr Genius, what we have here is the leap from managing a project – one – to “central planning.”

    By the way . . . that great success . . . let’s ask Gus Grissom about how good a job government did.

  53. I was a senior in high school in January, 1967.

    Gus Grissom was a national hero, one of the original Mercury astronauts.

    NASA put him in a space capsule with a 100% oxygen atmosphere. The obvious happened.

    You piss me off, richard yot. Government kills people, and you want them in charge of everything. Are you stupid, or evil?

    It’s not a false dichotomy, you are either stupid or evil.

  54. Alan Shephard first American, therefore second person in space ( and something of a wit) said of government contractors.
    “It’s a very sobering feeling to be up in space and realise that’s one safety factor was determined by the lowest bidder on a government contract.”
    Of course, you don’t have to be that high up.You could be sitting in a tower block now wondering what costs private contractors have cut on fireproofing to edge up the profit margin.
    For those with over-competitiveness problems, this exchange is interesting: newcomer Richard Yot has wiped the floor with the dozy incumbents too used to repeating a restricted number of “ideas” back to each other. The slightest bit of radical criticism and the above reaction (an admission of failure) automatically ensues.

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