Sun, Aug 18, 2013 - Page 9 News List

Economic competence counts for votes; policy counts for society

By Martin Kettle  /  The Guardian, LONDON

All this adds up to a disjunction that needs explaining. On the one hand, the economic performance and prospects of Europe are fragile. As in the UK, recovery is modest, marginal and contingent. There is no evidence yet of a sustained upward trend of recovery, let alone of a return to the levels of annual postwar economic growth to which Europeans and their parents all became accustomed for most of the past half-century. The region — and in this sense we are just as much a part of it as though we had been in the eurozone from day one — remains in very much the same economic crisis that has gripped us since the financial crash of 2008.

Cameron and Osborne are heading for the beach buoyed by genuinely strong economic competence ratings, while Merkel is serenely on course to be rewarded with a hugely important electoral victory next month. This could mean two things — and possibly both at the same time.

First, in grim economic conditions and with public opinion persuaded that deficit cuts take priority over protecting the public sector, even a marginal piece of “good news” wins a disproportionate political reward for the center-right.

However, second, these figures are flimsy by any standards. In reality, this is neither an economic recovery, nor is it proof of economic competence. Such claims are there to be taken apart by skilful oppositions who know what they want.

Economic competence, as Andrew Gamble wrote in an important recent essay, is not fixed or tangible. There is right-wing competence and left-wing competence, and some other shades in between. Competence is made up of perceptions, including those of the media, as well as economic indicators. These perceptions are not fixed, either. They adapt in all kinds of different circumstances. Competence is more easily displayed in good times than bad. And governments have to navigate these in an international, as well as a national, context.

Cameron and Osborne have thus been able to throw the blame for Britain’s troubles on the eurozone, while Merkel can blame Germany’s tough times on the Greeks. This makes voters thankful for small mercies.

What can a center-left opposition offer instead? This is the question that Miliband tried to answer on Wednesday by focusing on the “cost of living crisis” — before an egg hit him. It is the same question that Germany’s SPD, with its program of higher taxes, has just six weeks to answer, and the one that also faces all the center-left parties in Europe. The question is the moral one that Gamble poses. What kind of society and what kind of economy does the center-left value, and what are its policies for achieving them in current circumstances?

These are difficult questions, not the easy ones that some pretend. The answers do not lie in the past. However, until there are answers that respond both to the current crisis and to the lessons of past failures, the current evidence suggests that both economic competence and the political rewards which flow from that reputation will remain an elusive dream for the European left.

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