Dissing “The Establishment”, Owen Jones style

With his new book on "The Establishment" in mind, the tortured writing of Leftist poster-boy Owen Jones is a cocktail of misperception, ignorance and prejudice. His supporters will love it for that

Owen Jones on a rant
Andrew Gibson
On 4 September 2014 06:37

Left wing polemicist Owen Jones has written a full book The Establishment based on a single tortured syllogism, which runs thus: “People at the top are selfishly conniving; Joe Bloggs is at the top; therefore Joe Bloggs is selfishly conniving.” 

Readers of The Commentator most likely would not want to give Jones money for his book – life and cash are too short – so we review his arguments based on the excerpts published in Jones’ newspaper, The Guardian.

Jones’ thesis is:

“Today's establishment is made up – as it has always been – of powerful groups that need to protect their position in a democracy in which almost the entire adult population has the right to vote. The establishment represents an attempt on behalf of these groups to "manage" democracy, to make sure that it does not threaten their own interests.”

Jones acknowledges that the concept is not new. What Jones adds to the mix is a cocktail of misperception, ignorance and prejudice.

Jones notes that the Establishment is disparate, has within it conflicting interests, and changes over time. So his definition is meaningless. Whoever is doing well in modern Britain, Owen has got them sussed as a morally shady character. Tens of thousands of words to say, “It’s not fair!”

But is it fair?

Jones says that:

“(The Establishment) is unified by a common mentality, which holds that those at the top deserve their power and their ever-growing fortunes.”

But in competitive markets the successful “do” deserve their rewards.

I cannot make my own clothes, so I am grateful to the staff of, say, Next or Marks & Spencers and their suppliers, who enable me to clothe myself. If they do it well, they (managers, workers, investors, etc.) should be rewarded. When others see “excess” profits, they move in and get a piece of the action, driving up quality and / or cutting prices.

I support this profit making not because I am blind to my own interests, but because I perceive my own interests in a way that Jones apparently does not. I am not “of” this amorphous Establishment but I benefit from “it” and support it, if by “it” one means specialisation, free trade, and the right to accumulate private property under the rule of law.

South Korea is richer than North Korea and West Germany was richer than East Germany. Competitive markets are not perfect but over time they are very creative, and those who make them work deserve their rewards.

Jones's taxonomy is wrong. The issue is not The Establishment versus The Masses. The key divides are competitive markets versus restricted (by monopolies or the state) markets. Jones fails to identify that most of his endless grievances derive from the fact that people are prospering or failing in the “political” market. The cure is to reduce the political (state) sector.

Let’s examine Jones’ prejudices to tease out his error. One of his bugbears is Corporate Welfare; the government’s bailing out or subsidising of corporations, while cutting benefits for the poor.

In a second article he writes,

“… when the financial system went into meltdown in 2008, it was not expected to stand on its own two feet, or to pull itself up by its bootstraps. Instead, it was saved by the state, becoming Britain's most lavished benefit claimant. More than £1tn of public money was poured into the banks following the financial collapse. The emergency package came with few government-imposed conditions and with little calling to account.”

He is wrong on every count.

The bubble was created by poor Governmental policy responses to imbalances in the financial markets. These imbalances were caused by a number of factors, not least Chinese manipulation of their currency, and a failure of state actors to cut deficits and raise interest rates.

Meanwhile, toxic loans were fed into the system thanks to US Government rules outlawing “zoning” within the mortgage market. These toxic loans were fed into the system in large part by (the quasi state banks) Fannie Mae and Freddie Mac.

State failure after state failure after state failure.

Yet when the bubble burst, Lehman Brothers and others went bust, shareholders lost much of their equity, leading failed bankers were sacked and likely will never work again, and huge burdens were placed on banks regarding their reserves and their procedures. Miscreants went to jail.

Justice was not dished out perfectly, but it is wrong to say that the powerful were protected en masse and it is wrong to say that the crash was a market failing.

Naturally, Jones does not like the “high salaries” of the bankers. Yet it is huge remuneration of the banks, popular sports, and entertainment that allow the working class to rise high into the moneyed classes. One gets the sense that Jones thinks that that will never do. 

On and on Jones complains about the usual stage villains of the left. He thinks the media does not hold The Establishment to account. But the Telegraph caused some waves over the MPs’ expenses scandal, and The Times spoke for the dispossessed in Rotherham.

Jones aims at the “Tory press”, ignoring (at least in the excerpts) the BBC. As well he might, as that organisation is in a state of permanent outrage on behalf of left-wing constituencies.

The impracticality of Jones’ demands reflects his lack of broad work experience. For example, he is snide about rich (Tory) landlords who receive large amounts of Housing Benefit money from the state via their tenants (in return for housing, let it be noted). But some of the country’s largest landlords are councils and Housing Associations, many of whom have borrowed against future rental income. How do we get from here to Eden, without major disruption and the undermining of property rights and business plans?

Jones fails to distinguish between competitive markets versus monopolies and (especially) monopsonies. He complains:

“In 2012, £4bn of taxpayers' money was shovelled into the accounts of the biggest private contractors: Serco, G4S, Atos and Capita…  Margaret Hodge, chair of the Public Accounts Committee, summed up: this outsourcing, she concluded, had created "quasi-monopolies", the "inhibiting of whistleblowers", the trapping of taxpayers into lengthy contracts, and a "number of contracts that are not subject to proper competition".

Jones misses the point that it is the absence of competition that is the failing, not the jobbery of a self selecting elite. It was Adam Smith, after all, who warned us about the dangers of tradesmen getting together and acting against the public good.

It is probably futile to put these points to Jones. If the left (such as New Labour or the BBC) were the source of the problem, that is because in Jones’ world review “they” were the Establishment. If the state agents in Rotherham screwed up, no doubt “they” were the localised Establishment. It is a hypothesis that cannot be refuted: everyone who fails is “them”.

Essentially, hr lives in a Scooby Doo fantasy land, where the janitor is always guilty and would have got away with it if it wasn’t for that meddling Owen Jones.

But what about all the prominent figures that do good? The UK is a rich country. It gets richer generation by generation. Not every country can say the same.

Our system “on balance” works well, and those who defend its institutions are right.

Jones seemingly cannot praise the entrepreneurs and the creators for the financial and cultural benefits that flow from their work to others – the positive externalities of free enterprise, if you will. Little travelled and essentially devoid of commercial or large-project experience, Jones cannot or will not recognise the intended and unintended munificence of others.  

When Jones burst on to the scene with his first book, “Chavs”, he was a new voice speaking to the issue of the moment. But he is moving into his fourth decade now and he will soon be judged on his merits, not his novelty.

He will need to do better than “The Establishment”, essentially an extended whine against those who are more successful than he is.

Andrew Gibson is an occasional contributor to The Commentator

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