Treasury mindset

You know when you sing the wrong words of a song for years. We’ve all done it. Once you think it’s right, you stop checking.

What if it isn’t song lyrics, but the overarching assumptions about macroeconomics and public finance? When we make our small corrections, what do we calibrate against? Those around us, those with more experience, the mainstream journals.

In political science there’s a word for it: hegemony. Not a conspiracy – just the set of assumptions that have become so ordinary that testing them doesn’t occur to anyone. And it answers the question you’ve probably already asked. If it is possible to rebuild Britain, the money is there, and the legal powers are there, why have all these Oxbridge PhDs and PPEs not figured it out?

It takes a lot of bravery to challenge the status quo. It takes a lot of time to research alternatives. And it often takes an outsider’s perspective to spot the subtle inconsistencies in what has become hegemonic.

Risk aversion gets cemented into the structures. If you want a long career, avoid a project that promises a lot. It’s safer not to innovate: a project never started is no career risk at all: no inquiry, no headline, no post mortem. Anyone who sees multiple structural bottlenecks at once concludes this will take years; the average tenure of a departmental minister is comparable to a professional football manager. Both systems treat complex, systemic challenges as problems solved by simply swapping the person sitting at the top.

“So real ambition for change gets displaced by personal ambition for status and office holding. Ministers find their grand plans mired in incrementalism, and settle for photo ops and ribbon cutting instead.”

The tragedy is that everybody knows the system is flawed. No less august a body than the Institute for Fiscal Studies said that fiscal rules are “patently ridiculous,” and described the way some policy is decided as “almost literally mad.”

But political parties seeking mainstream approval are trapped in a Mexican stand-off. Suggest that fiscal rules might not be the best idea, and the others will open fire on you. Broadcast producers face a similar dynamic. You’ve got a four-minute interview. Your audience is one thumb swipe away from watching a video of a cat. Do you ask for a patient explanation of the reasoning behind this policy? Or home in on why this is marginally different from what their party leader said, and ask if this is a leadership challenge?

None of us questions all of our long-held assumptions. But the wrong lyrics only last for as long as nobody sings them out loud.