Friday, April 24, 2009

Money - 7. The Budget 2009

A Caveat to the unfamiliar: I think money is a force. For me, price is to money, as weight is to gravity.

The Budget delivered by Alistair Darling, our chancellor of the exchequer, on Wednesday 22rd April 2009 was historic; apparently.

It must be good to be an economic or financial journalist right now. A normal budget would keep journalists busy enough, but an historic one ! That has to be the highlight of a financial journalist's career. Personally, I've always found Budget Day extremely dull. Even the wittiest, most engaging writer would find it difficult to hold my interest. Like the majority of people, I want two pieces of information. One; how much is booze going up? Two; how much are fags going up? And, as I no longer smoke tobacco, I'm not really interested in number two, any more.

Are people genuinely interested in what the Budget says? I reckon that they're faking it. They feel that they need to be seen to care. They'll watch the news, read a paper, and maybe they'll get a letter from their accountants outlining the key measures and their likely impact - enough to allow them to appear to their colleagues that they know their stuff, but that's about it. In truth, they're likely to be more concerned about their current cash crisis, or the one looming, or the one they've just got over (although 'getting over' a cash crisis is becoming rarer). Two percent on this, or three percent on that after such and such a date, probably means no more to them than it does to me.

The Budget isn't really about money at all. Its about politics. Its one battle in an ongoing war. Both sides want us to believe that it is they, not their foe, who can best control the State's money-power.

The rules of engagement for the Budget day battle are as follows. The incumbent power must declare their tactics for the next year's custodianship of money-power; their strategy for dealing with money-power being set in their election manifesto. Once declared, the opposition can then criticise both the tactics and the strategy of the incumbent. The opposition often focus on any inconsistencies between them. Like when the government has achieved political power on the promise of not raising taxes, and then it does. However, such discussions can quickly numb the mind. So, both sides eventually revert to making direct attacks on the capacities and capabilities of the people involved. Like they really matter !

Attacking people for their failings is reassuring. It helps to convince us that it was someone's fault. It's nice to believe that people count. But do you really believe that if a different man or woman had been Prime Minister, or Chancellor, things would be that different? I don't. Most of us have enough trouble being custodian to our own money-power. Can you imagine quite how impossible it would be to look after the money-power of the British State?

The British State's claim on the money-force is determined by an infinite number of possibilities, the vast majority (if not all) of which are not under anyone's direct control. There is little real agreement about what's happened to British money-power in the past because one's view of the past is so dependant upon one's current political and ideological sensibilities. Predicting the future of British money-power is a highly suspect activity. You might as well read tea leaves. Our relationship to the money-force is in trouble because we fail to recognise our own limitations. The Budget serves to reinforce this failure year after year.

A persuasive argument for the value of the political ritual of the Budget is that it replaces the conflicts of earlier times; as to a certain extent all political rituals do. Instead of rich barons squaring up to the King over his demands, or vice versa, be-suited politicians glare and shout at each other across the floor of the house of commons. People keep their heads. But it is our choice of peace over war, of non-violence over bloodshed, of national politics over tribal conflict, that has created our history. The Budget is just an argument about our circumstances today. Its hard to imagine a Budget - even an historic one - changing the course of history. Ideas do that, budgets don't.

That's what I reckon. Here's what a very clever Welshman says about the money battle: 
We shall see as our history of money unfolds that there is an unceasing conflict between the interests of debtors, who seek to enlarge the quantity of money and who seek busily to find acceptable substitutes, and the interests of creditors, who seek to maintain or increase the value of money by limiting its supply, by refusing substitutes or accepting them with great reluctance, and generally trying in all sorts of ways to safeguard the quality of money.
Glyn Davies - A History of Money (p. 29)

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