Why is anyone surprised? You can’t lock up an economy and a society, pay millions of people to do nothing, spend, borrow and print tens of billions of pounds and expect no consequences, no payday, no bill to pay.
The inflationary tsunami in the UK, rail strikes, airport chaos, incompetence, disintegration and decline, all can be traced directly to Covid and the blockade. Even before Vladimir Putin’s invasion of Ukraine, inflation had already risen uncontrollably, with the consumer price index reaching 6.2% by February.
Remember when Boris Johnson promised to embrace every single worker by funding 80 percent of their salaries? Or when Rishi Sunak subsidizes our lunches this absurd summer? We are now paying for this through a vicious covert reduction in wages of 5-10 percent in real terms and a multi-year decline of 15-20 percent in the value of money.
What would have happened to the blocking support if voters had known that the repayment would be so quick that Johnson’s handouts were an extortionate loan, not a gift?
A major World Health Organization study on excessive mortality shows that Britain has performed much better than previously thought, beating Germany, Italy and America. Our percentage of 109 per 100,000 would put us in 15th place out of 28 EU Member States if we were still part of this terrible body.
Yet Sweden, which has imposed drastically fewer restrictions, has suffered only 56 deaths per 100,000 people, slightly worse than its northern neighbors, but much better than us. For most of the world, it would be difficult to find a link between the speed and severity of blockages and excessive mortality. (Australia, New Zealand, Japan and China are separate, but in at least three of the four cases blocking them has come at an indecent cost).
The blockades had some benefits, but the network was a disaster of historic proportions. Some lives were saved, especially thanks to the speed with which the vaccines were released. But this came at a disproportionate price, which was neither acceptable nor moral. The Swedish volunteer approach would be highly preferable, even if more people died. The stain on our national policy is that we have never done a proper analysis of the costs and benefits of blocking at the time and that the institution refuses to reassess the issue honestly today.
Yet those of us who warned about the economic costs of the blockade were dismissed at best as naive ideologues and at worst as mass murderers. Why could we not understand that exactly the same reduction in GDP would occur in the absence of mandatory restrictions on activity, we were asked. The only economic impact of the blockade and the accompanying economic support would be an increase in national debt by about 10-15% of GDP, establishment economists will insist. We could easily take this, they argued: interest rates were low and we would pay off the debt for many decades and we would not even notice.
The offenders even claimed that Covid had allowed a breakthrough in economic engineering: officials had figured out how to put free market economies into hibernation, pausing activity at will. This was the economy of Sleeping Beauty: the private sector would recover as soon as Dishi Rishi chose to kiss her again. The Hayektsians, who believed that capitalism was a complex, fragile spontaneous order that could not be broken with impunity, finally turned out to be wrong. Even if the economy finds it difficult to continue exactly where it left off, we could simply free up more QE or Joe Biden-style public spending to fix everything.
It was dangerous, insane nonsense. Everything that could go wrong went wrong, starting with rising inflation and countless other unintended consequences. Insane amounts of money pumped into the economy from zero rates, printing money, rescheduling, testing and tracking, and subsidized loans haunted too few goods, services, housing, stocks, and cryptocurrencies, pushing drastically higher prices and destroying the confidence of central bankers.
Supply chains have not yet recovered globally, labor supply has collapsed in many countries, many industries, such as airlines, remain non-functioning, there is a huge cultural change in favor of working from home, even when bosses believe that is inappropriate, customer service has fallen by 20 years and all the hard work to reduce the number of those receiving unemployment benefits has been reversed decades ago. To add insult to injury, the blockade was intended to protect many adults at the expense of young people – and now wages are falling in real terms, while pensions are rising by about 10 per cent.
Covid and the blockade destroyed that government, erasing the greatest opportunity for center-right figures in 40 years to rebuild Britain. The energy that could have been invested in reforming the public sector, or alleviating the housing crisis, or making the country more competitive after Brexit, has tried to survive a pandemic. Johnson became seriously ill. Operation № 10 broke and the government’s heart lost its moral compass, partying while the country was socially isolated. Sunak, a brilliant technician, restored the entire welfare system in just a few weeks to take time off instead of focusing on tax reform or many of the other great free market ideas he loved to discuss. The Tories embraced the great government, statism and paternalism.
In the absence of a full restart of the Tories, Labor is now on the verge of taking power. This would be considered another heavy price to block, especially given that the party has also been completely discredited by its approach to Covid. A false, destructive ideology had taken hold of much of the left: they believed in modern monetary theory, which argued that budget deficits did not matter and that the state should simply print money to pay for what it wanted. Well, we tried this during Covid and now we have inflation that is expected to reach 11 percent.
If Labor wins, they will either provoke a sterling crisis and demand rescue aid from the IMF, or they will have to rediscover austerity, high interest rates and caution. Given how fanatically Sir Keir Starmer and his supporters defended extreme blockades, this would at least add an ironic twist to an otherwise nightmarish prospect.
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