THE BLOG

Mann Is No Homo Economicus

25/04/2013 15:22 BST | Updated 25/06/2013 10:12 BST

John Mann MP's comments in response to Thursday's UK GDP figures, for the first quarter of 2013, display a sort of unhelpful ignorance that is not conducive to any meaningful discussion on economic policy, or constructing a worthwhile criticism of the government's economic policy.

There are hundreds upon hundreds of possible lines available to take on this release of data. One is the very simple observation that GDP is not a sacred number, it is fraught with inaccuracies and potential observation problems to the point that a number as low as 0.3% doesn't really mean anything. Once errors in forecasting inflation are factored in, 0.3% really doesn't say much about where our economy is.

However when one is simply comparing the best figures immediately available; for the purposes of brevity the criticisms can be ascribed a degree of meaning. In addition arguing that the figure could be revised leads to a reductio ad absurdum whereby no GDP figures can ever be trusted because they could be revised in the future.

A second potential line is that the growth may not have directly contributed to well-being. A lot of it seems to come from North Sea oil and gas revenue, meaning that UK consumers have had to pay higher prices. At least some of these transactions equate to transfers from UK households to energy and oil companies then, for example.

Another is that construction fell in the first quarter of 2013. Construction is generally a leading indicator of the economy and so this may spell difficulties for the economy later in time.

Then of course there is the line that this level of growth is too low, the UK could be growing at the level of say, the United States, whose 2012 Q4 growth of 0.4% was its lowest increase since the start of 2011 - Q3 of 2012 saw a 3.1% expansion. This could be considered a fair criticism, the US and UK have quite similar economies in a number of ways, and have pursued different policies recently. In fact this is probably exactly the sort of criticism the Labour Party should be making, as those policies, carried out by the Obama administration, are similar in character to ones it did, and continues to, advocate.

Instead, John Mann, MP for Bassetlaw, who sits on the House of Commons treasury select committee, chose to respond to George Osborne's slavish cheerleading of the figures with this absolute dross:

"We're falling further and further behind our competitors and of course the big emerging economies - the Chinas, the Indias - they're galloping ahead of us. They're worrying if they're down to eight, nine per cent - they're seeing that as a crisis."

This is stupid. Comparing the UK economy to that of China or India in terms of growth figures is absolutely ridiculous. The UK is an incredibly advanced economy that either leads the world or sits very close to the front in most technological metrics; it has been enjoying modern economic growth for over 200 years - being the first country to do so. China and India are enjoying enormous strides in economic growth because their countries are so behind in the per capita GDP and in technology outside of the big cities. China and India still have mass poverty, famines in living memory, and enormous shares of economic activity in the agricultural sector, to list just a few differences in a category with a membership of thousands.

China and India can provide very little insight into how to grow the UK economy now. The UK possesses no enormous rivers to dam, no mass of agricultural workers to move into cities, no cheap labour force to manufacture cigarette lighters or iPads.

This common, simplistic, anti-intellectual argument appears to the very lowest nationalist sentiment, if even that, and adds nothing to a mature debate on economic policy. Either John Mann knows better than to waste time and press coverage which he could be using to make articulate responses, adding to mature debate on economic policy - in which case he should be somewhat upset with himself. Or he genuinely doesn't know any better, in which case he should be replaced with someone who understands something about economics on the Treasury select committee.

Mann did, to his credit, add a qualifier at the end that was sloppy, but at least gave some direction to his otherwise crass comparison:

"We're in danger of celebrating 0.3%. That's the perspective we need to have. We are falling behind and we need some major shift in policy to turn that round"

Regardless, meaningless comparisons between dis-similar economies on growth figures add next to nothing to the economic debate that Her Majesty's loyal opposition should be driving forward intellectually. They also, by making the debate so unfocused and erratic, create the danger of allowing the political right to make meaningless comparisons to countries growing in austerity which have next to nothing in common with the UK - such as Estonia.

On an issue as technical as the economy, it is important that populist concerns, motivated by poor political rhetoric do not dominate genuine discussion of policy.