The Euro Zone - Opinion
Barking loudly
Columnist Mark Nayler examines Spain's economic success and the government's role in it
Mark Nayler
Friday, 13 December 2024, 17:49
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Mark Nayler
Friday, 13 December 2024, 17:49
This week, while reading an essay by the Victorian biologist and agnostic T.H. Huxley (grandfather of the author of Brave New World and inventor of the term 'agnosticism'), I encountered, for the first time, the 'coach-dog theory of premiership'. It's a superb ... analogy, and provides an illuminating way of analysing the relationship between a country's economic performance and its government. It's particularly relevant given that the UK's Economist magazine has just ranked Spain's economy as the best in the world for 2024.
Huxley explained the theory as follows: '...The whole duty of a political chief is to look sharp for the way the social coach is driving, and then run in front and bark loud - as if being the leading noise-maker and guiding were the same things'. In other words, societal trends shape politicians' actions and rhetoric, not the other way around. The 'coach-dog theory' of leadership also captures what happens every time a country's economy is booming, as Spain's is right now.
The Economist grades the economies of OECD countries according to five criteria: GDP, stock market growth, inflation, unemployment and fiscal balances. Spain's finance minister María Jesús Montero stated that its ranking of Spain as number one proves that 'the policies of PM Pedro Sánchez are a success: we are growing, creating jobs, expanding rights and reducing our public deficit'.
As I've had cause to observe many times in this column, Spain's economy has continued to grow even when no government occupies Moncloa: the ten-month power vacuum during 2016, for example, had no discernible effect on Spanish GDP. We have to ask, then, whether the current administration is guiding the world's healthiest economy, or merely barking very loudly in front of it.
Sánchez's government can't take much, if any, credit for stock market growth or the bumper tourist year that is coming to an end, the latter of which has been the main engine of GDP expansion throughout 2024. It's the opposite: if the deeply unpopular 'Big Brother' law has any effect at all on Spanish tourism next year, it's likely to be negative.
The Economist noted that a 'strong labour market and high levels of immigration' were also key factors in Spain's economic performance this year. Here, perhaps, the Socialist-led government guides a little more than it yelps: Yolanda Díaz has taken on the temporary contract culture with some success and Sánchez is strongly pro-immigration (although he seems terrified of tackling the problems posed by illegal migration flows across the Atlantic). It's hard not to suspect, though, that Spain's economy coach would have continued with much the same momentum had the PP, or nobody at all, been sitting in the driver's seat. Sánchez's festive bout of barking shouldn't be too loud.
This week, while reading an essay by the Victorian biologist and agnostic T.H. Huxley (grandfather of the author of Brave New World and inventor of the term 'agnosticism'), I encountered, for the first time, the 'coach-dog theory of premiership'. It's a superb analogy, and provides an illuminating way of analysing the relationship between a country's economic performance and its government. It's particularly relevant given that the UK's Economist magazine has just ranked Spain's economy as the best in the world for 2024.
Huxley explained the theory as follows: '...The whole duty of a political chief is to look sharp for the way the social coach is driving, and then run in front and bark loud - as if being the leading noise-maker and guiding were the same things'. In other words, societal trends shape politicians' actions and rhetoric, not the other way around. The 'coach-dog theory' of leadership also captures what happens every time a country's economy is booming, as Spain's is right now.
The Economist grades the economies of OECD countries according to five criteria: GDP, stock market growth, inflation, unemployment and fiscal balances. Spain's finance minister María Jesús Montero stated that its ranking of Spain as number one proves that 'the policies of PM Pedro Sánchez are a success: we are growing, creating jobs, expanding rights and reducing our public deficit'.
As I've had cause to observe many times in this column, Spain's economy has continued to grow even when no government occupies Moncloa: the ten-month power vacuum during 2016, for example, had no discernible effect on Spanish GDP. We have to ask, then, whether the current administration is guiding the world's healthiest economy, or merely barking very loudly in front of it.
Sánchez's government can't take much, if any, credit for stock market growth or the bumper tourist year that is coming to an end, the latter of which has been the main engine of GDP expansion throughout 2024. It's the opposite: if the deeply unpopular 'Big Brother' law has any effect at all on Spanish tourism next year, it's likely to be negative.
The Economist noted that a 'strong labour market and high levels of immigration' were also key factors in Spain's economic performance this year. Here, perhaps, the Socialist-led government guides a little more than it yelps: Yolanda Díaz has taken on the temporary contract culture with some success and Sánchez is strongly pro-immigration (although he seems terrified of tackling the problems posed by illegal migration flows across the Atlantic). It's hard not to suspect, though, that Spain's economy coach would have continued with much the same momentum had the PP, or nobody at all, been sitting in the driver's seat. Sánchez's festive bout of barking shouldn't be too loud.
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