My new book, the Courageous State is now available, and will be on sale from Amazon and such sites within days in both print and electronic versions
To give an idea of what it is about (and I admit, this is a book that seeks to cover a lot of ground), I reproduce the first few pages of the introduction here in which I argue that we have a cowardly state but need a Courageous State.
The crisis we're in
In October 2008 the world's economy nearly fell over. It didn't just suffer a problem from which it has since recovered a little, although that has happened, as we all know. I mean it nearly fell over. To put it another way, it nearly collapsed.
Over the weekend of 4—5 October 2008 emergency meetings took place in the Treasury in London because the managers of Royal Bank of Scotland knew they could not open for business on the following Monday morning. They were for all practical purposes bust. They had reached the point where they weren't sure they could put money in their cashpoint machines: they were no longer sure that they had any.[i]
That wasn't a minor embarrassment, or even a serious economic crisis: that was risk at level 10 on the economic Richter scale. To explain the seriousness of the situation, on average it is reckoned that most households in the UK have three days' meals in their store cupboards. After that their food begins to run out. As a result we are nine meals from the breakdown of society at any moment.[ii] If as a result of a bank's failure there was sudden inability on the part of large numbers of people to pay for food, or inability on the part of a major supermarket to take people's cards, or inability on the supermarket's part to pay for new supplies then any one or all of these things could have brought the food chain crashing down, with all the resulting massive social consequences that would have followed. That's how close we got to major civil disruption; to the mass breakdown of law and order and to the end of the current structure of the economy.
The day was saved: Alastair Darling may one day get the credit he deserves for his cool action in the face of this potential calamity. Gordon Brown also deserves a fair share of credit. And yet, after a brief renaissance of Keynesian economics in the aftermath of the crisis when it seemed just possible that a combination of sound thinking in the UK and strong action in the US might prevent global meltdown, everything has gone wrong again. Across Europe governments have abandoned intervention in the economy. David Cameron and George Osborne led the way in the UK when, without an electoral mandate, they secured power and declared to the surprise of the followers of their coalition partners that the only way to deal with the economic crisis was for government to walk away from the problem.
That is precisely what Cameron and Osborne, with their allies Nick Clegg and Danny Alexander, have done since then. These two have become the apotheosis of something that has been thirty years in the making: they are the personification of what I call the cowardly state. The cowardly state in the UK is the creation of Margaret Thatcher, although its US version is of course the creation of Ronald Reagan. It was these two politicians who swept neoliberalism into the political arena in 1979 and 1980 respectively following the first neoliberal revolution in Chile in 1973 that saw the overthrow of the democratically elected Allende government by General Pinochet. Since then its progress has been continual: now it forms the consensus of thinking across the political divide within the UK, Europe and the US.
The creation of the cowardly state
The economic crisis we are now facing is the legacy of Thatcher and Reagan because they introduced into government the neoliberal[iii] idea that whatever a politician does, however well-intentioned that action might be, they will always make matters worse in the economy. This is because government is never able, according to neoliberal thinking, to outperform the market, which will always, it says, allocate resources better and so increase human well-being more than government can.
That thinking is the reason why we have ended up with cowardly government. That is why in August 2011, when we had riots on streets of London we also had Conservative politicians on holiday, reluctant to return because they were quite sure that nothing they could do and no action they could take would make any difference to the outcome of the situation. What began as an economic idea has now swept across government as a whole: we have got a class of politicians who think that the only useful function for the power that they hold is to dismantle the state they have been elected to govern while transferring as many of its functions as possible to unelected businesses that have bankrolled their path to power.
This, it should be said, has not just been an issue within the Conservative party. Thatcher arrived in power with what was, in retrospect, a remarkably timid manifesto for change, and although she became bolder as her career as Prime Minister progressed she retained a strong belief in the power of government regulation over the businesses that she privatised. Her legacy was regulated capitalism: ownership in private hands, with some power to control those sold-off enterprises retained by state-appointed regulators that were one stage removed from the ministers who appointed them.
John Major oversaw a collapse in the credibility of government, and something more besides. It was on his watch that the Private Finance Initiative (PFI) began, and it was on his watch that some of the more absurd privatisations, such as that of the railways, were undertaken. It was John Major who began the process of outsourcing. A weak Prime Minister ran away from his responsibilities: the cowardly state was by now in full flow.
Tony Blair continued the process. It was he who promised the ‘The Third Way', not that anyone knew what it was, any more than anybody now knows what David Cameron's ‘Big Society' might be. Both, however, have a hallmark in common: they meant ‘anyone but government', and that was the intention. These were prime ministers in common in that they believed that whatever one asked for it was not the state's role to supply it.
Based on this belief, Blair pursued outsourcing as if it was the solution to all the government's problems. Despite having opposed PFI when in opposition PFI became Labour's favoured form of government finance until we have ended up in the absurd situation that the building in which the Treasury is located is now owned by an offshore company.[iv] And everywhere the message was given that light touch regulation of finance was to be the Labour mantra, ‘liberated' as it had been by Thatcher from the constraints that had previously made it responsible in her ‘Big Bang' reforms in 1986. This was perhaps the most cowardly act of all, for from that ‘liberation' and subsequent failure to regulate sprang a finance sector that has now dragged us to our knees. Gordon Brown may have saved the day in 2008 and had a moment of glory in the April 2009 G20 summit, but for his role in allowing finance to take over the UK economy he too takes his share of the blame for creating the cowardly state.
What the cowardly state represents
- This is the state that now argues that in the face of mass unemployment the government's only choice is to sack more people.
- And this is the state that says when there is no hope of the market generating new jobs, new investment, new innovation, new skills and new prospects then the government must cuts its spending and so remove any prospect of recovery from the economy.
- This is the state that says that those who never created this crisis must pay for it while the rich and powerful who did create it from within the banks must have tax cuts.
- This is the state that failed to stand up to bullying and abuse from the media.
- This is the state that is failing its young by putting them in debt for what may be the rest of their working lives to secure an education that previous generations enjoyed for nothing.
- And this is a state that does not have the courage to provide its young people with jobs, its old people with secure care, its population with protection against unemployment and the unforeseen and its children with decent schools.
This is a cowardly state: a state that sees responsibility and runs away from it. This is a state that now exists solely to facilitate the looting of its power to tax for the benefit of an elite who want to own its assets through the PFI scheme, and be guaranteed a high and risk-free income for doing so. It is a state that wants to privatise its education system through ‘free schools' — free only because yet more tax goes to the private sector in the process. And it is a state that wants to hand control of one of the UK's greatest achievements — the National Health Service — to the market so that we can copy the US healthcare model and double the cost of provision in exchange for worse healthcare outcomes — all so that a few can cream off from the tax revenues a wholly undeserved and excessive risk-free return for being in the right place at the right time, somewhere near their old school friends who might now be in power in Westminster.
No wonder we're in a mess. And no wonder the world's markets are teetering on the brink of collapse. After all, why invest in businesses when something so much more attractive — the outsourced tax income stream of a government as anxious as possible to give it away — is waiting to be claimed just around the corner?
The result is that private industry has discovered that rather than trying to innovate new products in an uncertain consumer marketplace it is much easier to make profits from the certain commodities that people are always going to need, such as health, education, local government services, the utilities and so on that were once the preserve of government. So not only are these services now more costly because a profit margin has been or is being added into their cost structure, it can also be argued that their transfer into the private sector via outsourcing actually weakens the incentive for companies to invest in new technologies which might be useful to meeting people's needs.
Meanwhile, in the financial markets speculation has replaced real investment. This is logical because investing in new technologies in manufacturing or services is a much less safe bet for individual businesses than just getting on one of two gravy trains, the first being public sector outsourcing and the second financial derivatives.
In that case no wonder faith in government itself — and its ability to control anything — has been shattered, as recent rioting has shown.
As commentator after commentator has said, we now have weak governments led by weak politicians who are bereft of any idea apart from dismantling the mechanisms of state that they have been elected to manage for the benefit of the private sector.
This is what neoliberalism has brought us to. This is the legacy that Thatcher has delivered to us. This is what happens when government is run by cowards who believe that there is nothing they can do but acquiesce to the demands of the market.
The need for a Courageous State
And yet it need not be this way. As I argue in this book, we could have a Courageous State. A Courageous State is populated by politicians who believe in government. They believe in the power of the office they hold. They believe that office exists for the sake of the public good. They know what that public good is. They think it is their job to help each and every person in their country to achieve their potential — something that is unique to each person and which at the same time is a characteristic we all have in common. And they believe they can command the resources to fulfil this task — whether through tax or other means — and that they should command those resources so that we as a country can each achieve, both individually and collectively.
We have not had politicians like that for a long time. These are politicians with the courage to work out when the market is absolutely the right mechanism for delivering what society needs — and which backs those who wish to partake in that market openly, honestly and accountably by providing them with the environment they need so that they can flourish, while delivering all the resources required to curtail those intent on market abuse.
And they are politicians who are as capable of deciding when the market can never deliver — because it is wholly unsuitable for the task in hand — meaning that it is the job of the state to ensure that what society needs and wants society shall get, at the lowest possible cost for the highest possible outcome for the benefit of all involved.
These are politicians of integrity. Who will carry their conviction with pride. Who will stand up to those who get in their way, not by ignoring them and not by bullying them but by presenting them with reasoned argument that shows that these politicians have worked out what they are doing, and why, and how they mean to achieve it.
I suspect a great many of us want such politicians. Politicians who are strong and effective; people we can believe in and who inspire but who we know we can hold to account through the democratic process. Politicians we can hold up as examples. Politicians with the ability to admit mistakes and move on. Politicians who we are willing to follow. Politicians of the stature of those who built the post-war consensus in the UK, for example, which proves that such people can exist.
But that's the problem with this vision. That consensus was built on the basis of a very different political viewpoint to that which now prevails. It was built on the political logic of John Maynard Keynes. Keynes was a Cambridge professor of economics and a former civil servant. He realised that markets do not work as most economists, including the neoliberal economists who dominate current thinking, argue they do. He had a profound insight that neoliberal economists do not share. He realised that markets, just like the rest of us, often have little or no clue at all about what is going on. That might sound like a statement of the obvious, but as I will explore in this book, neoliberal economics — and all that follows on from it, including the crashes we have had and are facing — is built on a very different logic. Neoliberal economics assumes that there is nothing markets do not know, and therefore nothing they have not already built into the prices that they charge. Neoliberal economists assume — quite extraordinarily — that markets know everything but that as mere human beings politicians are error prone and therefore are bound to get things wrong.[v] Which is why, neoliberals say we must trust markets and not politicians. And despite the absurdity of this claim — for that's all it is — the politicians of the cowardly state think this is true.
This, at its core, is the difference between a Courageous and a cowardly politician. A Courageous politician knows that there is a great deal that he or she does not know, and knows that despite that they will have to act. A cowardly politician believes that the market knows everything and that in that case they had better do nothing. But of course, as Keynes realised, for reasons that I will explore, markets cannot know everything. In that case they're not infallible and to be followed on all occasions as the likes of George Osborne following in the wake of Margaret Thatcher believe to be the case. Markets actually get things profoundly wrong.
[i] Paul Mason's Book ‘Meltdown: The End of the Age of Greed' provides perhaps the best account of this period , Verso, London, 2nd Edition, 2010
[ii] This idea was first explored by Andrew Simms of the New Economics Foundation — see http://www.neweconomics.org/publications/nine-meals-anarchy
[iii] I am aware that the terms neoliberal and neoclassical are technically the same in economic theory — but neoliberal does clearly imply a particular political approach to the issue which explains my preference for the term
[v] I am aware that many economists will argue that this is not what they think and technically they may be right. The problem for them is that they assume that the form that uncertainty takes is always predictable and that markets price on this basis. Add these together and you get back to the assumption that they assume perfect foresight.
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When it gets to the point that we read the kind or report I post below from today’s Guardian, Richard, we can be assured that courageous politicians are certainly one aspect of the courageous state that we need. What I see with the Eurozone crisis is yet another example of ‘crisis capitalism’ being used as a cover to circumvent democracy. In short, this is a coup but without the military (yet).
‘Italian yields had been falling since Silvio Berlusconi agreed to resign, so why are they going up now? One factor is that prime minister designate Mario Monti is still struggling to finalise his cabinet — partly because he wants to include some elected politicians among the technocrats (how quaint!).’
Looking forward to recieving your book.
It is not entirely correct to say the world’s economy almost fell over, but it is true the UK economy almost fell over. Most other countries were in a far better position to weather the crisis than we were, due to far better banking system and better banking regulations (both the actual regulations and the regulators)
Also the problem with RBS that weekend was liquidity not capital, in fact even with the massively discounted rights issue and forced write-downs of assets,the original shareholders capital was not wiped out. The problem in the UK system was that in order to support the massive lendign into the housing market, UK banks had relied on huge amounts of wholesale funding from overseas, which suddenly didn’t want to roll over the funding and then the interbank market dried up, with HSBC and Barclays not wanting to lend to the rest of the sector. The risk of this had been evident in the sector for probably 5 years and the Bank of England and FSA had done nothing to control it. That is not to say that most of the bank managements were deluded idiots, but that the regulators (and I suppose both political parties) were too.
How can you make such crass comments?
Banks failed more spectacularly in the US and right across Europe
Do you live with blinkers or a tiny mind?
“Banks failed more spectacularly in the US and right across Europe”
Wrong, the banking crisis was almost exclusively Anglo/US in nature. It had much less impact on mainland European economies and almost none at all in Asia/Pacific Rim/Oceana. That is why UK’s recession was far deeper than most other European economies’ recessions.
So what part of Paul’s comments are crass? That regulation was laxer in the US/UK than other parts of the world? The reliance on wholesale overseas funding? That regulation failed in the UK? Or is this another case of insults and no reasoning?
So why did so many banks in Europe require rescuing
And why do so many need recapitalising now?
Your claims are simply utterly untrue – there’s no insult at all – I’m just saying you’re spinning a lie – as all the evidence confirms
I am not sure my comments are crass. You need to seperate the global financial crisis and what happened to the UK, and then ask why was it so bad here.
The US was where the crisis started, so of course it had a significant impact there, given their housing market collapsed. But across Europe, the impact was far less and was driven purely by banks exposure to US assets through securitisations. The UK (together with Ireland and Iceland) had their own crisises, initated by the US crisis, but ultimately it was home grown credit bubble fueled by a lack of regulation and poor political decisions that caused the meltdown. Did other European banking systems come as close to total shutdown as ours. The answer is no. The UK banks were forced to raise £150bn and govt guarantee £650bn in funding, but Germany needed under £50bn (and that was due to non-german holdings), France under £35bn, Switzerland under £30bn. The big difference was that the European banks generally were deposit funded and didn’t lend at ridiculous LTVs.
I am sorry but I think you’re on another planet to me
Have you not noted Belgian banks collapsing, Frech banks collapsing, US banks collapsing, Swiss banks in dire trouble, Greece, Portugal, Ireland, Spain and Italy collapsing, etc etc etc
How the heck was it worse here?
I have no idea what on earth you are talking about
Due to the strength of our economy and not just because Gordon Brown kept us out of the Euro we have done better than most – and Labour ensured that
When you engage with reality we can debate. When you recant myth we can’t
What is worse? We have the largest budget deficit in Europe and we came closer to total collapse than any other major country.
I am not saying that other European banks didn’t ned rescuing, but they generally failed from the direct effects of holding US related ABS. Our banks failed from over use of wholesale funding and high risk lending into the UK property market. Northern Rock, A&L, B&B were not stuffed full of US ABS but were full of buy to let mortgages, self cert mortgages and over 100% LTVs mortgages. They would have failed at some point anyway, the US crisis was just the trigger. I mean how can you have a regulator that allows Northern Rock to not check income on over half its mortgages. That is why our domestic banks sit with non-performing loans as a % of total loans of around 8%, with the US at below 3% and even Spain only at 5.5%
By the same token the Irish banks would have failed at some point as would have the Spanish community banks.
As for Gordon Brown and Labour keeping our economy strong, that is just not true, they failed to understand the true nature of our growth. Do you know how much manufacturing grew between 2002 and 2008. 3% nominal, so actually fell in real terms! Luckily finance and insurance grew 80%, construction grew 46%, real estate 36% and government spending 43%, all fueled by a massive credit boom.
Sure we have a deficit – but by no means the biggest debt
And we also have manageable debt – because it was under control for so long, and low
So you’re still utterly failing to make any valid points
And if you’re so right – why were the Tories, CBI, IoD and markets so happy with things until 2008? And who shouted stop, unlike some, like me, on the left?
The only other country forecast to have a deficit over 10% is Ireland, the US is 8.9% (OECD figures). Of the PIGS, Portugal is 5.6%, Italy 5%, Greece 7.1% and Spain 7%.
Although debt at the beginning of the crisis was low, it is the annual increase of over £150bn that is quite startling given Greece’s total debt is only £250bn! So far most of the financial crisis related increase has been taken up by QE, so we have effectively printed the money to fund the deficit so far (as you have been suggesting we do). Thank goodness we control our own currency unlike the eurozone countries, but we can’t do the QE trick forever without destroying Sterling and creating imported inflation, so at some point we are goign to have to worry about foreign investors being happy to hold our debt.
You are totally right about the Tories, CBI, IoD and markets, but not everyone was blind to it. Some of the banks refused to play in the risky lending products here like HSBC and Barclays and actually got criticised by investors for it. But regardless of the fact that the Tories would have done same, they weren’t in power so avoid the blame.
Of course I am saying all this with the benefit of perfect hindsight, even if GB had been aware of the underlying issues in the economy, it would have been very difficult politically for him to say that spending needs to be held back as tax revenues were based on a bubble.
Capacity to pay is what matters
We have that
They don’t
It’s really not hard to see that
And so far our rates have fallen – we’re now the safe haven
As ever your logics remain solidly wrong
we’re now the safe haven.
And yet you accuse the current government of financial mismangment?
You can’t have it both ways.
We have the capacity to rpint our own money, that is the difference, not capacity to pay. If our debt were in dollars, it would be a very different situation.
We’re the safe heaven because Brown made sure we would be
There is always hope, as is evidenced by what the South African government is undertaking to ‘reinvent’ the vital compact between taxpaying-citizens and the government of the day. http://www.npconline.co.za/medialib/downloads/home/NPC%20National%20Development%20Plan%20Vision%202030%20-lo-res.pdf
“David Cameron and George Osborne led the way in the UK when, without an electoral mandate, they secured power”
You seem to lack an understanding of how the UK parliamentary system works. Is it really sensible to make out that the UK has somehow suffered a coup? You lose credibility right at the start of the book.
And besides, Labour’s Alistair Darling said that Labour would make cuts “deeper than Thatcher’s”. The Lib Dems promised “savage cuts”. 18 months into the coalition, we haven’t had either.
I stated a truth – is there a problem in that?
And as for cuts – you’re clearly very deluded
I expected such comments from the right – but I stick to the facts
Jonathon –
From what you say, you either have poor reading comprehension or don’t really know what an electoral mandate is. Allow me to help.
A mandate is the authority given by the country through a ballot to carry out a proposed manifesto. In the last election, no clear mandate was provided – hence the need for the coalition. Since the electorate failed to provide a mandate to govern to any single party, I suggest to you that “without electoral mandate” is an entirely reasonable commentary.
I fail to see how, in any reasonable mind, stating that simple truth equates to a claim that there has been a coup. Again, perhaps you’re not quite clear on the meaning of that word… to be clear, a coup is the (usually) forceful deposition of an elected government by persons without an electoral mandate to govern. Since the current coalition assumed government following a general election – when there was no government to depose – there cannot by definition have been a coup.
Mind you, chucking words like ‘coup’ around do fire those little emotive synapses, don’t they? You know, the dangerous ones that make otherwise reasonable people believe the Daily Mail? For the good of all, we should really try to avoid that. So, stop it.
Regarding cuts – are you really not aware of any? Really?? Because I’m pretty sure around half a million people didn’t go marching through central London on 26th March of this year for the good of their health, you know. And when Labour stand up in the Commons arguing that the cuts have gone “too deep too soon”, surely (if you’re right) the Government bench could just say “What cuts? Jonathon Hallows says there aren’t any!”
Thanks – your comment is appreciated
I think what I wrote entirely logical and factual
“The Lib Dems promised “savage cuts”.” did they? Check this.
http://www.minghella.com/embarrassing-nick-clegg-video/
Within a few minutes, Worstall has managed to excrete a week’s worth of ‘words; driven by this post.
Apart from the ad hominems (don’t they get bored?), so far the criticism is pedantry.
We’re talking about the sharpest minds of the neoliberal blogosphere.
What a portugese based metal speculator with broad sociopathic, especially misogynistic streaks, has to get so worked up about, I don’t know. He must feel repressed within his free-thinking little head.
What you are talking about is trying to change human nature – or make us more self aware – which is a bigger task, and are we up to it?
I think we are all up to it
Neoliberalism has pulled us down from it
It is human nature to be co-operative – work together. This is surely something to concentrate on rather than negative traits like greed and selfishness.
Should you really be selling this through Amazon?
Their tax-avoidance shenanigans are pretty well known, after all. Eg:~
http://www.nytimes.com/2009/12/27/business/27digi.html
Now you may not live in the real world but I do, and engage with it, and want to reform it
I could try reform as a monk
Or I could be out in the world of argument and ideas, living with the messy compromises of reality
I can live with reality
Why can’t you? Or rather why do you think anyone of principle shouldn’t? Is it all some rather odd desire that we might go away? If so, dream on
Yes, living in the real world can be a pain. But as you spend so much time and effort arguing against that bit of the real world that involves commercial interests using legal tax avoidance methods to maximise profits, it seems more than a bit odd for you to be promoting an outlet for your publication which does precisely that.
Well, you’re free to use others. I’m not stopping you
You can even buy straight from the publisher
But I’m only suggesting Amazon because yes, I do use them
And I won’t be beating myself up about it – I want to change the whole system and sweating the small stuff won’t do that
I’m a supporter of what you’re trying to do but this time your two-faced hypocritical attitude stinks. Not only do Amazon use tax havens but they also use LVCR through the Channel Islands thus making thousands of people poorer. If by selling your book through Amazon is not supporting companies using tax havens, I don’t know what is. Shame on you! Now post this if you dare?
[…] Richard Murphy’s new book The Courageous State is out this week […]
Geearkay,
If you re-read what I wrote, I said that I recognised no “savage cuts” nor the “deepest cuts since Thatcher”. I did not say there had been no cuts at all – clearly there have been some – but in fact public spending is higher now than in May 2010. And you have failed to answer my point about those two quotes – all parties went into the last election promising deep cuts, so I fail to see how there is no mandate to cut public spending.
As for the question of mandate, I was referring to the point (which you have plainly missed) that so long as a government can command a majority of the House of Commons then it has a mandate. We do not elect individuals to executive positions in the UK so saying that Cameron and Osborne have no electoral mandate is meaningless.
But I guess if you don’t believe that coalitions can deliver mandates (on the grounds that it necessarily involves two parties neither of whom won an election outright), then presumably you think that no government formed as a result of PR can ever have a mandate, except in the extremely unlikely case that they win an absolute majority of votes?
There was no mandate for this Coalition
And we are having the deepest cuts attempted ever by a government in the UK
Those are facts
The rest is your fiction
For “deepest cuts” substitute “greatest movement of public money for private profit” ?
Even the collapse of the public service pension scheme is edged with gold, for private pensions…..
Jonathon –
You cannot equate being able to sway the commons with a mandate from the people. I’ll try to explain it again – no single party won a mandate to govern. You might have noticed all of thes crambled dealings that went on shortly after the results came in? You know, the negotiations that took place between political parties which resulted in the coalition we are currently ‘enjoying’? Well, that happened because there was no mandate for a single party to govern. It wouldn’t have happened if the Conservatives or Labour or the Lib-Dems had a clear authority from the people to form a Government… but it did happen, therefore there was no mandate. Do you get it at last? Madate = returned government. No mandate = cobbled together solution, in this case, the coalition. I really can’t make it any clearer than that.
Now, to the cuts. Frankly, it staggers me that you don’t think the cuts that have been imposed and further cuts being proposed are savage. a blanket 25% from the budgets of all government departments? That’s not only deep and savage, it’s downright lazy and, in some cases, outrageously stupid! The budget for HMRC is being cut by 25% like every other department, for example. Nevermind that HMRC is the department that actually brings money into the government coffers and by slashing its budget you inevitably slash its capability to continue bringing said money in. When your rationale for making any cuts is the Governments immediate need for cash, hobbling HMRC seems not only counter intuitive, it’s killing the goose that lays the golden egg! So, the suts are savage in nature even if you don’t agree they’re deep in quantum.
BUT! They ARE deep in terms of quantity too! But don’t take my word for it… Tory MP Greg Baker said in April of this year – (are you sitting down for this?) “We are making cuts that Margaret Thatcher in the 1980s could only have dreamt of” Source – The New Statesman, go to http://www.newstatesman.com/blogs/the-staggers/2011/04/cuts-minister-dreamt-spending.
And that’s from the horses mouth – I’m afraid you are simply wrong. Now you’re better informed, perhaps you might like to revise your position?
What you are basically saying is that no coalition government can ever be democratic.
I’ll try again – every party went into the last election promising cuts “deeper than Thatcher” and “savage cuts”. Given that 88% of the electorate voted for the main 3 parties, that is a clear mandate. Please tell me how there is no mandate?
And I woudln’t take Greg Baker (Barker?) too seriously – the idea that there will be 25% cuts is nonsense – it’s politically impossible.
And Paul, the fact that no alternative (except for the cranks of the SWP, Green Party etc who got very few votes) is offered shows the necessity of the cuts.
Jonathan
We have rising unemployment
We have one million young people unemployed
The deficit is not being tackled
The economy has seen growth disappear
And you say there is no alternative?
You either either a masochist or you really do need to read the book
What you’re saying is so obviously wrong that I wrote the book to address the point
Now will you but a copy?
Richard
“And Paul, the fact that no alternative (except for the cranks of the SWP, Green Party etc who got very few votes) is offered shows the necessity of the cuts.”
No alternative? Oh, you’d like to think so, wouldn’t you? The fact is, there are plenty of alternatives. In fact, this government is still having to borrow record amounts of money. It won’t put much needed money into social housing and infrastructure and jobs while at the same time making hundreds of thousands of public sector employees redundant.
These employees stop paying income tax and national insurance and the government is then obliged to start paying out in the form of benefits and redundancy payments. This obviously adds up to the government having less revenue coming in and a bigger drop in the economy as fewer people have more money to spend in an economy that almost totally relies on consumer confidence for growth.
The government is paying out money in benefits and redundancy payments and getting far less tax and NI revenue coming in so how do the government balance the books?
1) They either make more cuts, but they are then eventually back where they started.
2) They sell off national assets to raise the necessary money which again eventually takes away much needed revenue.
…or 3) Much more likely, they have to borrow the money to balance the books and add it to the national debt. Crazy!
There are loads of alternatives. firstly they could severely beef up the tax laws and re-introduce progressive taxation in wihich those who can afford it pay the most. There is the Green New Deal, in which any new QE money, instead of being thrown at the banks can be invested into the real economy to create much needed jobs without costing the taxpayer a penny. We could introduce sensible capital controls which keep money here for investment. We could strongly regulate and tax banking profits. We could strongly tax and regulate the financial sector; for instance, if they want to keep derivatives and their casino culture, then they have to pay for the privilege.
There is also debt-free money, in which a government simply creates the money rather than handing the banking sector billions to borrow it. They can simply create the credit money as they already do with notes and coins, which unfortunately now only makes up 3% of the money supply.
Don’t try and kid yourself there isn’t alternatives. There is!
all parties went into the last election promising deep cuts, so I fail to see how there is no mandate to cut public spending
I don’t see how you can grant a mandate when no alternative is offered.
There is no mechanism to determine if a particular coalition is mandated by the electorate. The nature of it was decided by party political footsie. The conservatives could quite rightly have served as a minority government.
Instead, the coalition has delivered a conservative majority government.
And Paul, the fact that no alternative (except for the cranks of the SWP, Green Party etc who got very few votes) is offered shows the necessity of the cuts.
No it doesn’t, all it shows is that no alternatives were on offer from the three main parties. Braod,fearful consensus got in copernicus and gallileo’s way for quite a while.
I learned about thirty years ago to be very sceptical of people who claim there are no alternatives.
It’s very sad that you try to criticise the present government, even though they are trying to do something about the problems which they had inherited from Labour.
It’s sad that you blame Labour for what was a global financial crisis, not of its making
And it’s sad you’ve bought the line that this government is sorting out a mess inherited from Labour, when in fact Labour was not responsible for it, and was sorting it out
And it’s sad you think that pouring petrol on the fire as the Tories are doing puts it out
That’s what’s sad
“It’s sad that you blame Labour for what was a global financial crisis, not of its making”
Labour presided over some of the laxest regulation in the world. How the hell can you sit there and say it wasn’t of Labour’s making? This led to a financial services sector that was too big. Hence why our recession was deeper than most other European economies.
I’m not saying Labour got it all right
But in the face of fierce opposition from City and Tories they provided much tighter regulation than Osborne et al wanted
Will you acknowledge that truth?
The problem with your notion of cowardly politicians being in thrall to “neoliberalism” is that it fails the most simple of observational tests. Love her or loathe her, there is no denying that Thatcher was an incredibly courageous politican, probably the most courageous of the last century. You even acknowledge her increasing boldness above. She took one form of society and fundamentally transformed it into another, taking her people with it.It is also difficult to call Blair cowardly. Again, whatever you think of him, taking one party and fundamentally transforming it, being distrusted at best all the time by its members, is not cowardly. Iraq, agree with it or not, was not a cowardly venture. He can hardly be accused of going into Iraq for popularity. And therein lies the inherent contradiction of your book: being courageous involves taking difficult, unpopular decisions. If you are right in claiming that most people in this country are sick of “neoliberalism” then it doesn’t seem very courageous to implement alternative polciies.If anything it seems populist.
There might be a better case for describing Cameron/Miliband/Clegg as cowardly, although he even then I think vain, careerist, nobodies might be a better description.
But she was from a pervious era
Now doubt she adopted neoliberalism
But she wasn’t schooled in it and behaved as if from the previous era
So I do not agree with your logic
Can I comment on two quotes:
Quote number 1:
“A Courageous State is populated by politicians who believe in government. They believe in the power of the office they hold. They believe that office exists for the sake of the public good. They know what that public good is.”
Quote no. 2, six paragraphs later:
“A Courageous politician knows that there is a great deal that he or she does not know, and knows that despite that they will have to act.”
Conceivably that might mean they don’t actually know what the public good is, but they will act for the sake of it anyway. Or is the idea that politicians MUST know what the public good is, even if they know nothing at all about anything else?
I can’t help feeling that logical inconsistencies like this should have been ironed out in the proof-reading process.
I am also a little concerned by the quasi-religious language. Beliefs abound, but on what are they based? Not much, it seems, except your definitions. What exactly qualifies you to define what politicians should believe?