Read the rest of our big ideas of 2015
Who’d want to be a politician now? This is a tough time to run a government in a western democracy. Politics in the coming year amounts to the management of disappointments. Some of that task is the result of austerity, recession, and the attempt to pay down deficits. It isn’t new that many of the older democracies have high levels of debt. The drama of debt runs through the history of the 20th century. But it is a new strain to try to pay down those debts and close the budget deficit—the gap between what the government takes in revenue and what it spends—with an ageing population and so a shrinking base of working people to tax. What is more, people have built up—through election promises, manifestos, Budgets, in sedimentary layers since the Second World War—very high expectations of what they will receive from the state in pensions, healthcare and education. Confounding those expectations means telling voters “that bargain you thought existed between you and the state, well, it’s being redrawn, and not in your favour.”
Yet governments have fewer levers to pull than in the past. Moisés Naím, the Venezuelan economist, in 2013 achieved a bestseller with The End of Power. Power had dissipated, he argued, away from governments and other traditional institutions, to individuals through the internet, to companies, to non-governmental organisations. Globalisation and technology are subjecting countries and their citizens to a blast of competition, which extends now to services, not just manufacturing. It’s more difficult for governments to raise tax, from people or companies (see below, our prediction about the move to asset taxes). It’s harder for them to compensate those who have lost out from globalisation.
What can they offer people in return for accepting these new disappointments? The ability to migrate away from austerity is one bleak compensation; the freedom of movement in the EU is most popular, no surprise, in those countries which are struggling economically. Another is continued membership of international clubs that defray the costs and risks of defence—that’s the idea of Nato, at least. Most of all, though, they can offer them more power at a local level. See our next idea—politics goes local as economics goes global.
Who’d want to be a politician now? This is a tough time to run a government in a western democracy. Politics in the coming year amounts to the management of disappointments. Some of that task is the result of austerity, recession, and the attempt to pay down deficits. It isn’t new that many of the older democracies have high levels of debt. The drama of debt runs through the history of the 20th century. But it is a new strain to try to pay down those debts and close the budget deficit—the gap between what the government takes in revenue and what it spends—with an ageing population and so a shrinking base of working people to tax. What is more, people have built up—through election promises, manifestos, Budgets, in sedimentary layers since the Second World War—very high expectations of what they will receive from the state in pensions, healthcare and education. Confounding those expectations means telling voters “that bargain you thought existed between you and the state, well, it’s being redrawn, and not in your favour.”
Yet governments have fewer levers to pull than in the past. Moisés Naím, the Venezuelan economist, in 2013 achieved a bestseller with The End of Power. Power had dissipated, he argued, away from governments and other traditional institutions, to individuals through the internet, to companies, to non-governmental organisations. Globalisation and technology are subjecting countries and their citizens to a blast of competition, which extends now to services, not just manufacturing. It’s more difficult for governments to raise tax, from people or companies (see below, our prediction about the move to asset taxes). It’s harder for them to compensate those who have lost out from globalisation.
What can they offer people in return for accepting these new disappointments? The ability to migrate away from austerity is one bleak compensation; the freedom of movement in the EU is most popular, no surprise, in those countries which are struggling economically. Another is continued membership of international clubs that defray the costs and risks of defence—that’s the idea of Nato, at least. Most of all, though, they can offer them more power at a local level. See our next idea—politics goes local as economics goes global.
