Thursday , October 19 2017
Home / EconLog Library / The tragedy of Grenfell Tower and some Internet demagogues

The tragedy of Grenfell Tower and some Internet demagogues

Summary:
Last week, Grenfell Tower in North Kensington, London went up in flames. At least 58 people died, including two young Italian architects. In my own country, therefore, the story was quickly picked up in the media - and it is a tremendously sad one. The young couple called their respective families when the fire began and assured them of their safety, but eventually the young woman, Gloria, when she understood she was about to die, called her mother to thank her for all she did for her in her 27 years of life. This is heart-breaking. If you're human at all, you can't but feel sympathy for the casualties of such a disastrous event, for their family, and for the other tenants who saw their holdings

Topics:
Alberto Mingardi considers the following as important:

This could be interesting, too:

Scott Sumner writes Are most Americans radical libertarians?

Alberto Mingardi writes Rajan on inequalities and the rise of populism

Scott Sumner writes The economic news is not good

Scott Sumner writes Does tribalism breed extremism?

Last week, Grenfell Tower in North Kensington, London went up in flames. At least 58 people died, including two young Italian architects. In my own country, therefore, the story was quickly picked up in the media - and it is a tremendously sad one. The young couple called their respective families when the fire began and assured them of their safety, but eventually the young woman, Gloria, when she understood she was about to die, called her mother to thank her for all she did for her in her 27 years of life. This is heart-breaking.

If you're human at all, you can't but feel sympathy for the casualties of such a disastrous event, for their family, and for the other tenants who saw their holdings destroyed. Several crowdfunding campaigns are being set up to provide these people with much needed help.

Politics is a quintessentially human activity, but sometimes may well be dehumanising. Galvanised by recent elections, the British left is trying to exploit the fire politically. A Labour MP, Clive Lewis, tweeted: "Burn Neoliberalism, not people". His understanding of neoliberalism is quite limited. (For example, he tweets about a "Montepellier set", thinking, I suppose, of the Mont Pelerin Society.)

Economist Mariana Mazzucato didn't miss a chance to play her part: "Grenfell Tower = microcosm of 3 very bad economic ideas 1. De-regulation; 2. Outsourcing (public service for private profit); 3. Austerity".

I confess that, while I fancy myself having at least a broad understanding of what people mean when they say "neoliberalism," I don't know enough about Grenfell Tower to express more than grief on the subject. Be aware, therefore, that what follows is based on Wikipedia, articles I've read in these last few days, and conversations with British friends.

I will try to read Mariana Mazzucato charitably. Grenfell Tower is in fact an example of social housing: it is owned by the Kensington and Chelsea London Borough Council. The building was managed by a tenant management organisation, Kensington and Chelsea TMO. Their own website explains the structure and nature of such an organisation. The building was thus owned by the Council, which refurbished it in 2012. One residents' group had issued multiple warnings about the safety of the building.

I think Mazzucato wants to say that: (a) Thatcherite deregulation weakened safety and fire regulation (a point made also by London mayor Sadiq Khan); (b) organisations like Kensington and Chelsea TMO weaken political oversight over buildings like this; and (c) austerity forced the council to go for a less expensive renovation plan rather than for the more expensive one.

These criticisms only seem to be appropriate.

First, deregulation is hardly such a widespread phenomenon as socialists believe. It is one thing to say that British fire regulations are "old" or "inadequate" and quite another to maintain that the British government actually deregulated in this case. This would be news to me. It is safe to assume, I'd maintain, that newer (say: 1990s and 2000s) buildings in London are safer than those built in the 1960s and 1970s. Better standards have emerged. I don't know if this happened because of regulation or because of technological advances. But either way it seems to be incompatible with the idea that developers have been given a blank cheque to build unsafe buildings. On top of that, rule-making involves making trade-offs. Megan McArdle has pointed out that while "People who died in the Grenfell fire might be alive today if regulators had required sprinkler systems," "it's possible that by allowing large residential buildings to operate without sprinkler systems, the British government has prevented untold thousands of people from being driven into homelessness by higher housing costs." Her piece is thoughtful and well worth reading.

Second, I suppose that a council could take one of these two routes: create a specific body to manage properties or manage them by committees and subcommittees. This is the same rationale by which public corporations and independent agencies are created by Parliaments. Is there evidence that the latter are better managers than the first? I can hardly see that.

Third, austerity. Government is enjoined to spend less, and thereby jeopardises its citizens. I don't know the details of the renovation of Grenfell Tower. Probably Mazzucato has a deeper knowledge than I have. But governments and local councils deal with scarce resources too, just like like private individuals. As in her work on The Entrepreneurial State, Mazzucato seems to believe that having a bottomless pocket makes government the kind of investors we need - for fostering innovation, entrepreneurship, growth, and now, even safety. But whenever you are choosing between projects, budgetary considerations enter the picture, even if you're the most social democratic-minded of mayors. On top of that, if we see a general tendency in government, it is not to spend less for realising a certain project than the private sector would. Big checks from governments are also tainted with the shadow of corruption, which means private interests interfering and lobbying to get hold of them. This is not a phenomenon that is inversely correlated with the size of government, though I'm afraid Mazzucato may genuinely think, contrary to theory and fact, that the bigger the government, the less corrupt it is. For this reason, of course, she doesn't even consider the possibility that there might be problems inherent in public property that misalign the interests of tenants and owners even more so than with private ownership.

I think that ideally in moments like this we should be silent, honor the memory of those who died, and simply be human. But the acrobatic building of a narrative by which anything bad that happens in this world is due to "neoliberalism" doesn't stop for anything, including tragedy. For that reason, sadly, I feel the need to opine also.



Alberto Mingardi
Mingardi, one of the rising stars of European libertarianism, is the founder and Director General of the Italian free-market think tank, Instituto Bruno Leoni. His areas of interest include the history of economic thought and antitrust and healthcare systems. He is particularly well known for popularizing the work of past scholars under-appreciated by today’s libertarians. Currently an adjunct scholar at the Cato Institute, Mingardi has also worked with the Heritage Foundation, the Atlas Economic Research Foundation, the Acton Institute, and the Centre for a New Europe.

Leave a Reply

Your email address will not be published. Required fields are marked *