Larry Elliott has said for the Guardian today that 'the laissez-faire economic model has proved a complete dud'.
Is there an alternative? I'd beg to suggest so. Try The Courageous State:
This was my 2011 book, which I summarised as follows:
Courageous States are driven by principles. Of course they'll also be pragmatic sometimes — politics always is, and has to be an exercise in pragmatism. But principles matter in a Courageous State. This will be a fundamental change that will differentiate them from the neoliberal states they will replace.
Those principles are reflected in the following beliefs:
- People come first;
- People must have the opportunity to achieve their potential;
- Poverty is unacceptable;
- Sustainability is essential;
- Balance is best for human well-being;
- Government has to work well;
- Real business deserves strong support.
These are joined by concerns about issues that undermine well-being which the Courageous State will have to tackle:
- Financial speculation is always secondary to real business, the community and society at large and can harm the prospect of society achieving its potential;
- The payment of interest is the cause of considerable stress within the economy;
- Advertising seriously distorts behaviour in the economy and reduces the chance of people achieving their potential by encouraging over-consumption.
Concerns not dissimilar to these have, admittedly, been at the forefront of thinking before now: the Beveridge Report settled the five priorities on which in very many ways the post-war consensus was built, saying they were:
- Want;
- Idleness;
- Ignorance;
- Squalor;
- Disease.
As a result, growth, full employment, education, housing and health became the focus of social policy post-1945, and rightly so. They would also be priorities for the Courageous State. They were, however, the goals from an era when poverty was so widespread that what now seems pejorative language could be used to describe the objectives the state set when seeking to improve the conditions of a great many people. Of course they remain relevant: absolute and relative poverty remain pressing issues in the UK, and yet the Courageous State needs to aim for more than their relief. The Courageous State has to set itself the goal of ensuring people's potential can be achieved. That can only happen if the following are available:
- Rewarding work;
- Safe banking;
- A sustainable environment;
- Affordable homes;
- Security in old age;
- Nurturing environments;
- Communities where we belong;
- Healthcare;
- A work—life balance;
- Opportunity for meaningful leisure.
These are the objectives, but objectives require practical policies if they are to be fulfilled. The result is that the Courageous State needs to have policies to:
- Constrain the world of feral finance that has so dominated the economies of the world in the last thirty years;
- Rebuild the role of the state in supporting real business activity;
- Encouraged a balanced, sustainable economy;
- Support the broader goals of family, community and society and the achievement of purpose through identity;
- Cooperate internationally to support the rights of Courageous States.
These are the issues that would drive policy in the Courageous State.
We would not have had a steel crisis if we had enjoyed a Courageous State.
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Agree completely Richard. The state has a vital role to play in the mixed economy, where the strong (or Courageous) state provides the environment and framework where the private sector can then flourish.
Linked to your post an interesting pamphlet by Bryan Gould has just been published by the Fabian Society. I’ve got a lot of time for Gould, and it is a crying shame he saw which way the wind was blowing after Blair was elected Labour leader and decided to head off back to New Zealand and a vice-chancellorship of Waikato university
http://www.fabians.org.uk/wp-content/uploads/2016/04/FABJ4254_Bryan_Gould_Ideas_Pamphlet_WEB_03-16-1.pdf
Stewart
He looks like he is borrowed a great deal from me
And the Fabians have published it after criticising all Corbyn did!
That’s what happens to a good idea
I won’t complain
I am not too sure about Bryan Gould’s pamphlet.
I was a fan of his when I was young, as he wanted to reverse Thatchers’ awful legacy, renationalise what she privatised, and reverse neoliberalism.
I think on close inspection that there are a few things that I disagree with in the bullet points of his paper. They are not all what Richard advised Corbyn to do.
I noticed from his blog that he is a supporter of Positive money in New Zealand, and so his statement to “restore credit creation” to the government, is the Positive money idea that government should build 100% reserves for banks, I believe, and not let them create credit themselves.
http://www.bryangould.com/i-have-become-patron-of-positive-money-new-zealand-heres-why/
This is not really necessary as Government is a sovereign currency issuer and can just spend directly for any project it wants using a national investment bank. Some economists do not believe that this would stop private credit creation either, even if the sentiments are noble.
He states that only if the banks were unable to fulfil the roles desired, would a national investment bank be considered.
He recommends that “The task (of industrial planning), could be entrusted to a new Economic Planning Agency which would be responsible for bringing these elements together and advise government on implementing the new strategy.
Why would government need and economic planning agency? What is wrong with an elected committee being addressed by experts? He does not sound too democratic, let alone socialist any more.
Then he says — we should have once again a policy of full employment. I like that, yes. But he follows it up with the neoliberal nonsense that we must cut the deficit and eventually eliminate it. Note also the limp desire to reduce inequality within limits.
Eliminating the deficit cannot happen if the goal is the the socialist desire for households to save and prosper, especially if it takes a long time to improve the trade deficit, probably not even then. Sectorial balances show that this is not desirable as the result is increases in private debt, which according to progressive economists is causing debt deflation, as well as having caused the GFC. (Michael Hudson and Thomas Palley).
His last statement says all this would bring change without departing from mainstream economics.
Well I for one find this all rather like Thamas Palleys Gattopardo economics. Rather shocking coming from someone who was a full bloodied socialist. Like Gattopardo, it changes things but keeps them the same, but maybe in Gould’s case it is because he has not studied the post Keynesians and MMT economists?
Those were my concerns
I read it last night but then Panama swept over me
Richard
As usual you get to the heart of the matter in a few words. Quaker plain speaking?
I was at Meeting this morning
Just to let you know that I am in the throes of finishing The Joy of Tax.
It is very well written and eminently sensible. Your conclusion – written as an imaginary budget speech to the House of Commons – is rousing and full of hope and gladdened my heart as they say.
Then I read Nick Cohen who has reviewed Piketty’s latest book in today’s Observer – did you read it? His lament about why these alternative good ideas about running the economy is genuine and heartfelt – full of frustration and hopelessness (or is it anger?) – and could easily be applied to the ideas in The Joy of Tax or The Courageous State.
For once Cohen’s cynicism is put aside; Peter Hitchen says he’s had enough; Tories unite with Labour and Lib Dems to decry forced academies; and colleagues in the public sector whom I know voted for Cameron are really hacked off with their new pension arrangements and are not in a forgiving mood.
Could this be the turning of the tide?
2016 as pivotal a year for the Tories who are over-reaching themselves as was 1943 for an earlier band of cold blooded idealist dreamers?
I hope so.
I might share that hope
And thanks for your kind words
Now off to read Nick Cohen
Got a link for that review?
Sorry this took so long. Had a busy morning.
How about this:
http://www.theguardian.com/books/2016/apr/04/chronicles-on-our-troubled-times-thomas-piketty-review
“and colleagues in the public sector whom I know voted for Cameron are really hacked off with their new pension arrangements and are not in a forgiving mood”
Perhaps these turkeys have finally been forced to realise the stupidity of anybody (other than the utterly self-centred rich or market fundamentalists or forlock tugging idiots) who votes for the current Conservative party.
It seems like it to me this time. which is why it is so important that the opposition is ready and waiting for the next election.
Timely piece, just about to order drill bits but now ‘buy a book dad’ will be duly honoured as I redeem my Amazon gift voucher. I get a broad sense of what Keynes could have come up with if he could have shifted left(and still been allowed a pen)instead of keeping a cling-film lid on capitalism for a few decades, for which of course we must be and are extremely grateful. Anyway, I digress, in hopeful anticipation of McDonnell signifcantly cranking up the proactive vision soon I enthusiastically boost Amazon with a few more quid.
I hope you enjoy it
I confess the middle third is hard going: if you find it so skip it. The last third is the best
Sorry – just to add – the only thing I don’t like about this article Richard is the emphasis on just Picketty’s ideas.
It’s not just Picketty who wants to deal with these problems. It is you too, plus Michael Hudson, Joseph Stiglitz, Anne Pettifor, the people like Ivan Horrocks and Andrew Dickie, the Tax Justice Network all who have supported your writing.
Even though there are differences in approaches there is a lot of homogeneity about the alternatives you and others put forward.
Yet this is put across as ‘one man (Picketty) against the world’ when in fact there is a chorus of disapproval which also includes the Steve Keens, Bill Mitchells, Yanis Varoufakis and other notables which the media does not accurately portray leading to the voice of Picketty looking more isolated then he actually is.
The same goes for you – you are wheeled out in isolation it seems as just another well-meaning bloke – even though your record as an effective campaigner is overlooked.
The media seldom expands on this ‘alternative chorus’ when really you could portray it as a ‘movement’ – ultimately it is just poor journalism and woeful editing. And it is letting the public down something rotten in my view.
One day there will be a tipping point
I am quite sure of it
It is not just at state level where courage needs to exist.
Yet a further twist to the Greek tragedy courtesy of the IMF
https://www.socialeurope.eu/2016/04/imf-plots-new-credit-event-greece/