The failure of politics? You can't fix what you can't see

Policymakers are far too stuck in their own bubble to properly understand how their policies impact on people. Unless they learn to count what matters to real people rather than corporations, the fraying of democracy will continue.

I have a friend who is a primary school teacher and she told me a story that stuck in my mind. She had a pupil in her P1 class who was a model of good behaviour. This girl wore glasses and had a lazy eye, so she had to do the standard thing and get a patch over her good eye to force her bad eye to work harder (an experience I still remember from my childhood – and not fondly).

On the first day this pupil wore her eye patch, her behaviour nose-dived. She was disruptive, didn't concentrate and wouldn't do her work. My friend took her aside for a chat. What emerged was that this little girl could barely see – and she thought that if she couldn't see something, it couldn't see her. She drew the inference thatched become invisible, that the world ended where her sight of it did.

I've been thinking about that story as I read commentary on the economic prospects ahead for 2026. One of the dominant arguments is that 'now that inflation is tamed and the cost of living crisis is over…'. Because what I thought to myself was 'just because you can't see it doesn't mean it isn't there'. The political implications of this are enormous.

Let me explain why policymakers can't see the cost of living crisis. The first thing to know about them is that they are all wealthy. No-one who has any real say in shaping public policy is not in the ten per cent wealthiest people in society. Policy is created by an economic elite (though they think they're on 'normal' professional salaries, another distinction they struggle to see).

And when you're in the top ten per cent of earners you don't see prices very clearly. There is a category of person who has to check the price of everything they put in their shopping basket – and another category of people who will barely pay attention to the total at the checkout before they tap and go.

I know – I've been both. I used to have a high salary and, looking back, I wasted an awful lot of money by not paying attention because I didn't have to. But since I started Common Weal I've not even had a cost of living increase. I'm on the same cash salary now as I was in 2014 (donate people...) and so I very much notice inflation.

I therefore also know that while wealthier me couldn't really see what the people who had to count the pennies saw, poorer me most certainly sees how the wealthier class live. Why? Because they make a lot of television about themselves and they spend a lot of time on news programmes lecturing people like me.

This asymmetry is greatly reinforced because it is the wealthier group who decide what does and doesn't get counted. They take inflation very seriously indeed, but they never really think about affordability. I find it really funny that since Mamdani won in New York, centrists all over the place are running around saying 'it's about affordability'.

I stare in bemusement – is this news to you? It's capitalism guys, it's all about affordability. That's the whole basis of free markets. They were supposed to be about bringing prices down to affordable levels. That is the whole theory in a nutshell; sellers need to keep goods affordable or people will go elsewhere.

That's also why Picket and Wilkinson wrote The Spirit Level. It was an attempt to show you the implications of increasing inequality. It also bemuses me that to this day people don't understand that inequality isn't equal. The whole point of inequality is that there is a winners group and there is a losers group and the former gets smaller and smaller while the latter gets larger and larger.

Yet despite this highly available knowledge the policy class still use averages which mean nothing for the above reason. Consumer spending in the US looks healthy until you discover that 50 per cent of it is accounted for by the richest ten per cent of people. Averages don't mean anything in that context.

The cleverer commentators understand this. They have been patiently explaining that the gulf between how policymakers and the public view this economy is exactly because they are talking about completely separate things. The policymakers see snapshot statistics at any given moment whereas the rest of us live with the accumulation of these snapshots.

To put it really simply, the fact that inflation has dropped to about three per cent only means that the rate at which affordability is getting worse is slowing down a bit. It's still getting worse, and those years of prices skyrocketing are all baked in, but, you know, all contemporary politics cares about is making that three turn into a two and they are done.

“The people who can’t see the problem and who therefore can’t see what is causing the problem certainly can’t see the solutions to the problem”

Or not quite all, because there is also a 1.5 (real rate of GDP growth) that they want to turn into a 2.5 (their target growth rate). Everything else is secondary to this reality – three down to two, one and a half up to two and a half, job done.

And you know a good way to push that 1.5 upwards? Inflate housing prices to enable housing speculation. Which ought to make the three go up, but doesn't because inflation calculations mortgage interest is not counted and renting is weighted to make it less important.

But you know who rents? Young people and poor people. And you know who doesn't have a house as an asset? Them. So do you see how three can go down, 1.5 can go up, and a lot of people get poorer and can afford less?

In its way it is all quite remarkable. It is almost certainly the case that the fundamental driver of the breakdown in European politics is economic inequality. It's not just about affordability but respect; when politicians tell you things are all going well but you're experiencing things getting worse it is a pretty blunt message that you don't matter to them.

This one-two of increasing financial duress and seeming increasing political disrespect for those feeling it is a pretty solid way to understand the scale of anger at politics. But this is still not all that the policymakers can't see.

The fact that they can't see the problem means they can't see the cause of the problem. They remain convinced that if they can just turn that 1.5 into a 2.5 then these problems go away. They simply do not understand that there are measures which boost GDP which have the opposite effect, as we've seen with housing.

In fact if you want to see where the biggest boost to corporate profits (and thus a GDP boost) then look at the price gouging in the inflation economy from a couple of years ago. Rising GDP didn't fix affordability, it caused it.

Richard Murphy explained a lot of it in this excellent article – it's about regulation more than any other single issue, and for me particularly the policing of monopolies. Markets only work if those in the market can't use market power to bully consumers. Regulation is what forces markets to respond to consumer behaviour and stops corporations forming monopolies or exploiting customers where they have no options.

The mad thing is that to solve the affordability crisis politicians always want to cut regulation, but cutting regulation was what cause the affordability crisis in the first place. It is exactly as if someone persuaded a fire fighter that the best way to put out flames is to use petrol.

Which means that the people who can't see the problem and who therefore can't see what is causing the problem certainly can't see the solutions to the problem. There is precisely one political leader in recent years who has a proper understanding of this and it was Ed Milliband, not Corbyn.

He recognised that we can't sort this situation by fixing inequality after it happens but that we need to challenge the structural reasons it is occurring in the first place. Unfortunately he described this with the term 'predistribution', a name so geek that no-one paid any attention.

Policymakers are reaching new levels of solipsism, a group of people entirely preoccupied with each other, lobbyists and journalists. All three groups live in a parallel universe where making three become two and one and a half become two and a half is a legitimate primary goal, and that deregulation is how to go about it. No-one is challenging this.

Then separately they write pained thought pieces on why the failure of democracy is everyone else's fault. The Herald columnist and professional corporate lobbyist Andy Maciver is nothing if not a reliable fountain of Tory cliché. He believes that to save our democracy politicians need to be paid a lot more.

Well there is a much more persuasive case that politicians and policymakers should all be made to live on median salary so that they are forced to live the life of an actually representative member of the people they are supposed to be working for. They'd start to see a lot of things they're blind to right now.

Because they are blundering around like a kid with one good eye and a patch over it – but without a kindly teacher to take them aside and explain why their behaviour is unacceptable.