“If socialists understood economics, they would not be socialists.” - Friedrich August von Hayek.
*Readers may enjoy our latest State of the Markets podcast with the legendary IFA Alan Steel of Alan Steel Asset Management, recorded on Sunday 22 September 2019*
Matthew Arnold published Dover Beach in his collection New Poems in 1867, but it seems likely that it was written at around the time of his honeymoon, taken at the Strait of Dover in 1851. The full text is published below.
The sea is calm tonight.
The tide is full, the moon lies fair
Upon the straits; on the French coast the light
Gleams and is gone; the cliffs of England stand,
Glimmering and vast, out in the tranquil bay.
Come to the window, sweet is the night-air!
Only, from the long line of spray
Where the sea meets the moon-blanched land,
Listen! you hear the grating roar
Of pebbles which the waves draw back, and fling,
At their return, up the high strand,
Begin, and cease, and then again begin,
With tremulous cadence slow, and bring
The eternal note of sadness in.
Sophocles long ago
Heard it on the Ægean, and it brought
Into his mind the turbid ebb and flow
Of human misery; we
Find also in the sound a thought,
Hearing it by this distant northern sea.
The Sea of Faith
Was once, too, at the full, and round earth’s shore
Lay like the folds of a bright girdle furled.
But now I only hear
Its melancholy, long, withdrawing roar,
Retreating, to the breath
Of the night-wind, down the vast edges drear
And naked shingles of the world.
Ah, love, let us be true
To one another! for the world, which seems
To lie before us like a land of dreams,
So various, so beautiful, so new,
Hath really neither joy, nor love, nor light,
Nor certitude, nor peace, nor help for pain;
And we are here as on a darkling plain
Swept with confused alarms of struggle and flight,
Where ignorant armies clash by night.
Arnold in Dover Beach was clearly wrestling with weighty issues, such as the decline of (Christian) faith and the rise of science and alternative theologies. But at the time of its assumed composition, the likes of both On the Origin of Species (1859) and Das Kapital (1867) were yet to come..
Two events are currently dominating the headlines – for those who choose to pay attention to the diversions and inevitable less-than-whole-truths of the mainstream media. One is the “sudden” failure of the Thomas Cook travel business, the world’s oldest. The other is the Labour Party conference at Brighton.
The failure of Thomas Cook is undoubtedly sad for its staff and customers, but in and of itself it amounts to nothing more than business as usual in the Sturm und Drang of the free market. Businesses evolve and grow, and some of them fail. Capitalism works that way. Adam Smith called it the market’s “invisible hand”; Joseph Schumpeter, influenced by Marx, referred to it as “schöpferische Zerstörung”, or “Schumpeter’s Gale” of creative destruction.
Predictably, Labour treated the Thomas Cook collapse as an opportunity to score cheap political points. Shadow chancellor John McDonnell blamed the government’s “ideological bias” for its decision not to intervene:
To just stand to one side and watch this number of jobs go and so many holidaymakers have their holiday ruined, I just don’t think that’s wise government.
A lecture on wise government from John McDonnell: days of miracle and wonder, indeed. Rebecca Long-Bailey, the shadow business secretary, never knowingly accused of being a deep thinker, described the government’s position as “reckless” and said it should have stepped in to take an equity stake.
This is all rich talk from a shadow cabinet bereft of coherent economic ideas but fuelled, seemingly almost entirely, by self-loathing, confusion over Brexit, messianic delusions of relevance, and class envy. The harsh reality, as Mrs. Thatcher realised, is that socialist administrations always run out of other people’s money (see the failure of Labour in 1979 and 2010 for more on this inexhaustible and timeless theme). And although the Brexit psychodrama has been wearing in the extreme to all observers, it has, perversely, done the British economy a power of good by distracting the incumbent government from too many footling “ideological” economic interventions of its own. The columnist Matthew Lynn:
The government has lost its majority. The constitution has fallen apart. The country no longer has any idea whether it is leaving the European Union or not. Historians and political commentators are queuing up to tell us this is the lowest point in the country’s history since the Suez Crisis/Civil War/Dissolution of the Monasteries (delete as applicable).
And yet, amid all this chaos and confusion, something else is happening. The economy, slightly surprisingly, is purring along quite smoothly. The explanation? In truth, the EU doesn’t make much difference to the economy anymore. And insofar as it does, leaving is a marginal improvement.
The City expected the economic data released this week to make grim reading. Global trade is slowing, with central banks in the US and the eurozone cutting rates to try and stave off recession. Add in a slowdown in investment as companies understandably fret about our potentially chaotic departure from the EU and the British economy should be slowing down sharply.
Except that is not quite what happened. First, we learnt that the economy overall expanded by 0.3 per cent in July, significantly faster than the 0.1 per cent expected, and better than most of our main rivals. Next, we found out that the trade deficit narrowed slightly as imports fell. Finally, we learned that employment was at record highs and that wages were still growing at record rates. Add in a Chancellor who is about to start spending money with carefree abandon and there is no reason why it shouldn’t improve from here. It isn’t fantastic. But it is a decent performance from a mature economy facing what is meant to be its biggest economic challenge in a generation.
In fact, there are two explanations for that. The first and simplest is that membership of the EU, and all the political drama around it, doesn’t make a lot of difference to business one way or another. They have made their preparations and can live with either outcome. Sure, there might be some disruption around no deal if that is what happens. But demographics, demand, skills, tax rates and levels of entrepreneurship, innovation and infrastructure are what actually determine growth. Membership of a big – but not terribly successful – trade bloc isn’t that crucial one way or another.
Matthew Arnold, in addition to being a poet and cultural critic, was also an inspector of schools. One notes that at its current party conference, Labour has proposed scrapping Ofsted, the education watchdog, along with abolishing private education altogether. Christopher Snowdon, for The Spectator:
Forcing taxpayers to spend billions of pounds a year to give hundreds of thousands of children a worse education does not, on the face of it, seem wise. Laura Parker, Momentum’s National Coordinator, claims that the policy ‘is a huge step forward in dismantling the privilege of a tiny, Eton-educated elite who are running our country into the ground. Every child deserves a world class education, not only those who are able (to) pay for it.’
And yet the mechanism by which abolishing some of the best schools in the world will lead to all children having a world-class education is far from obvious.
Perhaps this is where Labour’s proposed abolition of Ofsted comes in. Without an independent agency to inspect schools, the government could simply assert that every British school is world class. Who will be able to prove otherwise?
Unlike many Labour MPs, I do not have a dog in this fight. I didn’t go a private school and it is most unlikely that I will ever have the means to send my offspring to one, but as I am not consumed with bitter envy, I do not begrudge those who do. These schools are, in the main, sound institutions which provide a fine education. Many state schools, including free schools and grammar schools, also do a fine job, but parents wouldn’t pay large sums of money to the private sector if it wasn’t appreciably better.
The excellence of independent schools puts the state sector in the shade, and the state sector hates it. They show that a better way is possible. It is true that the private sector has more money per pupil, but the state sector has economies of scale, and much of the independent sector’s success comes from ignoring the batty ideas of progressive educationalists, which costs nothing. The state sector could learn from the independent sector. Instead, the uber-egalitarians of Momentum, Abolish Eton and – as of yesterday – the Labour party want to close the gap by chopping the tall poppies. In the name of equality, quality must be sacrificed.
(You can listen to our interview from earlier this year with Christopher here.)
Dover Beach has a special relevance to your correspondent, as it comprised part of the Oxford University English entrance paper he took just over 30 years ago. Your correspondent is one of three siblings who attended either Oxford or Cambridge universities during the 1980s. One of us had previously received a state education; two of us had been privately educated. Our parents did not have the opportunity or support that we enjoyed to attend university; they left school to begin work at 16. Before Tony Blair debased the university system by insisting on dumping half of the population of sixth form colleges into it, it was clearly possible for good comprehensive schools and good independent schools to happily co-exist. You might even call it competition.
Matthew Arnold’s poem speaks of a world in which the ‘Sea of Faith’ withdraws from the ‘darkling plain’, leaving ignorant armies to ‘clash by night’. Your correspondent has no specific religious beliefs, but he does possess an abiding belief in the power of democracy, free markets and the rule of law to do more to deliver wealth generation and wealth creation than any form of government redistribution of other people’s capital or efforts. Faced with the asinine and dangerously retrograde economic and cultural policies pouring out of Labour this past week, we feel obligated to adapt the words of a more recent English poet, Philip Larkin, from his most notorious text, This Be The Verse. Larkin could easily have been speaking of the Hard Left in his (and our) mournful conclusion:
Man hands on ignorance to man.
It deepens like a coastal shelf.
Get out as early as you can,
And don’t vote socialist yourself.
The Labour party conference did not take place this week at Dover Beach, but it might as well have done.
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