In 2011, I finally did something that I had been planning to do for many years: I wrote a book on economics that brought together much of my thinking at that time. It was called The Courageous State.
I suspect few readers here now know of the book, but it is still available on Amazon and some second-hand and specialist book sellers, via AbeBooks, for example, although rather bizarrely it appears to be more expensive there.
The book should have been better edited. It piled too many ideas - especially in the section on theory, which I still like, but I don't think anyone else understood, although it pre-dated Doughnut Economics in many ways - into one book, but I am not apologising for that. Instead, I would suggest that these ideas remain as relevant now as they were then. This post is a summary of what I had to say.
The Courageous State
When I wrote The Courageous State in 2011, the context was stark. The global financial crisis had exposed the fragility of neoliberal economics. Governments had bailed out banks, but they were unwilling to confront the underlying failures of markets or the ideology that had left society exposed to such a calamity. Instead, they turned to austerity — cutting public spending, dismantling services, and pushing the costs of crisis onto the very people least responsible for it.
Against that background, I asked a simple but urgent question: what would it mean for the state to act with courage rather than cowardice?
The cowardly state
First, we need to understand the problem. For decades, neoliberal thought has promoted the idea that governments should be small, markets should rule, and individuals should be left to fend for themselves. This ideology was embraced by Thatcher and Reagan in the 1980s, reinforced by Blair, Clinton, and others in the 1990s, and became the unspoken consensus of mainstream politics.
What resulted was a cowardly state:
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A state that outsourced decision-making to markets, claiming they were more efficient and more legitimate than democracy.
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A state that deferred to corporate interests and the financial sector, insisting that what was good for big business must be good for society.
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A state that reduced itself to the role of accountant, obsessed with balancing budgets and cutting deficits, rather than serving people.
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A state that claimed there was “no alternative” whenever people demanded change.
Cowardice, in this sense, was not about individual politicians lacking backbone. It was systemic. It was the deliberate refusal of governments to use the powers they undeniably possess to direct economic life towards the common good.
The courageous alternative
Against this, I argued for the courageous state. A courageous state is one that recognises its authority, accepts its responsibilities, and dares to act in the interests of the majority rather than the wealthy few.
The foundations of a courageous state are simple:
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It knows its purpose. Government is not there to shrink itself out of existence but to build a society where all can flourish. That requires security, fairness, opportunity, and sustainability.
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It understands money. Far from being dependent on taxes or borrowing before it can spend, a sovereign government that issues its own currency has the power to create money. Its real constraints are not financial but physical and ecological. The courageous state rejects the household analogy and recognises its monetary sovereignty.
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It values taxation. Taxes are not about “funding” spending. They give value to money, shape behaviour, tackle inequality, and manage inflation. The courageous state uses taxation to redistribute resources, restrain harmful activity, and underpin democracy.
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It provides essential services. Health, education, social care, housing, and security are not commodities to be bought and sold. They are rights, and the state must guarantee them. Outsourcing these responsibilities to markets is an abdication of duty.
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It regulates capital. Left to itself, capital accumulates in the hands of the few, creating instability and inequality. A courageous state uses regulation, tax, and democratic institutions to bring markets under control.
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It plans for the future. Markets are short-termist. They discount the interests of future generations. The courageous state must invest in infrastructure, green transition, and social resilience.
Courage and democracy
One of the most important arguments in The Courageous State is that democracy itself is at stake. If governments pretend they are powerless — if they always defer to markets, corporations, or fiscal “rules” — then citizens rightly begin to ask what democracy is for.
That loss of faith is dangerous. It creates the conditions for authoritarianism and populism, as we have seen in the years since the book was published. The courageous state, by contrast, restores the meaning of democracy. It shows that collective action through government can change lives, protect communities, and make the future better.
The false idol of austerity
In 2011, austerity was the political orthodoxy in the UK. I argued then, and maintain now, that austerity is both economically destructive and morally indefensible.
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Economically, cutting public spending during a downturn deepens recession, destroys jobs, and shrinks the tax base. It is the equivalent of bleeding a patient who is already weakened.
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Morally, austerity punishes the vulnerable, widens inequality, and abandons the state's duty of care.
The courageous alternative is investment: using the state's capacity to create money to put people to work, to build infrastructure, to strengthen services, and to foster confidence. Spending creates income. Investment creates prosperity. This is the multiplier effect that cowardly states deny.
Courage and taxation
In The Courageous State I also developed arguments that continue to underpin my work on tax justice. Tax is not about balancing the books of the government. It is about shaping society.
The courageous state:
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Taxes wealth to prevent dangerous concentrations of power.
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Taxes harmful activities — from pollution to financial speculation — to align private incentives with social goals.
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Ensures corporations pay their fair share by closing loopholes and ending the game of tax havens and secrecy jurisdictions.
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Uses progressive taxation to reduce inequality and strengthen the social contract.
Courage in economics
Behind the argument for a courageous state lies a deeper critique of economics itself. The neoliberal model reduces human beings to “rational actors” in efficient markets. It treats society as a by-product of individual choices. It ignores care, community, ecology, and interdependence.
A courageous state does not accept that reductionism. It insists that economics is a social science, that markets are embedded in society, and that government must play a guiding role.
Courage and sustainability
Even in 2011, the climate crisis was already urgent. Today, it is existential. The cowardly state defers action, makes token commitments, or leaves everything to “green markets.”
The courageous state acts. It invests in renewable energy, public transport, insulation, and re-engineering the economy for sustainability. It recognises that the costs of transition are real but manageable — and that the costs of inaction are catastrophic.
What courage requires
So what does courage look like in practice? In the book, I suggested several tests:
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Speaking honestly. A courageous state does not hide behind myths about “running out of money” or “maxing out the credit card.”
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Taking responsibility. It does not outsource decisions to unelected technocrats or markets.
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Standing up to wealth. It recognises that concentrated wealth corrodes democracy and must be challenged.
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Planning long-term. It invests in future generations rather than chasing short-term approval from financial markets.
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Trusting people. It builds public services and social security systems that empower citizens rather than treating them with suspicion.
Why it matters now
Looking back from 2025, much has changed, but the basic argument of The Courageous State has only grown more relevant. The cowardly state has not gone away. If anything, it has deepened: outsourcing, fiscal rules, and deference to corporate power still dominate political life.
But the crises we face — ecological collapse, inequality, geopolitical instability, the rise of authoritarian populism — demand courage. They demand governments that accept responsibility for shaping the economy, redistributing resources, and planning for the future.
The book was a call to action, and it remains one.
Conclusion
A courageous state is not a utopia. It is a choice. It is the choice for governments to govern, rather than abdicate. It is the choice to face down wealth and privilege in the name of the common good. It is the choice to invest, to tax fairly, to regulate markets, and to plan for sustainability.
Above all, it is the choice to restore meaning to democracy. If a government will not govern, then people will lose faith. If a government acts with courage, then democracy can thrive.
That is why The Courageous State matters. It is not about one policy or another. It is about the spirit of politics itself. Do we live in a cowardly state that hides behind myths, or a courageous state that dares to build a better future?
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Libertarianism/Neoliberalism/Thatcherism call it what you will has had its day. It fails to recognise that reliance on market capitalism is often inimical to both the well-being of all and the planet. It’s the equivalent of wearing a tin-foil hat to ward off the mind controlling beams of aliens from outer space! Engaging with reality means making use of democratically agreed checks and balances to greater regulate a market capitalism that’s often adversative. It’s not to do away with it since the collapse of sole reliance on central and local state capitalism in both Russia, Europe and China shows we do receive benefit from the freedom to exercise individual initiative in the marketplace. Balance is all !!!
final words from my AI synopsis & critique of ‘The Courageous State’ –
Conclusion: A Vital Political Bridge
Through an MMT lens, The Courageous State is not a flawless economic treatise, but it is something perhaps more important: a potent political and moral manifesto built on sound monetary realities.
Murphy takes the technically correct but politically dormant insights of MMT—about sovereignty, currency, and taxes—and breathes fire into them.
He provides the essential “why” and the bold policy “what,” framing them in the compelling narrative of courage versus cowardice.
The critique from MMT is not that he is wrong, but that he could be even more robust.
By more explicitly adopting the inflation constraint as the new boundary of debate, deepening the macroeconomic case for the Job Guarantee, and leveraging frameworks like sectoral balances, the “Courageous State” could be made intellectually impregnable.
In essence, Richard Murphy built a magnificent political cathedral for a new political economy.
Modern Monetary Theory provides the reinforced concrete and steel beams that ensure it can withstand any storm of neoliberal criticism.
The two are not just compatible; they are symbiotic.
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I write it before I had ever heard of MMT!
Wat I wrote was worked out for myself.
It would make a brilliant,stirring speech for any honest politicians with the power to change things and be courageous.
🙂
I bought the Courageous State back in 2017, and have re-read it several times since. I am cheered by how your solutions, which seemed way-out then, are moving towards general knowledge and a degree of acceptance. Still a way to go, but I think the book was important, and part of a pivot.
Thanks
It is clear that Rachel Reeves has not read your book, is fundamentally a neoliberal (and doesn’t understand economics) and will drive us further towards being a cowardly state.
Today’s Guardian article https://www.theguardian.com/politics/2025/oct/02/rachel-reeves-could-raise-45bn-in-taxes-and-keep-promises-report-says?CMP=Share_iOSApp_Other demonstrates why we have to keep trying to get the message across…even though it feels like talking to a brick wall. It is taken wholly from the neoliberal playbook including flooding the media with false narratives.
On the bright side, the Greens seem to be drifting towards a courageous state with their comments on reducing the interest payable to the Commercial Reserve banks.
A nostalgic post Richard!
Maybe we are not many here now, but I for one not only know about The Courageous State but still have my copy, bought when it came out. As you know, it was my own experience of the 2008 bank crisis that brought me to your blog and the start of my journey to a better understanding of the underlying causes.
Indeed the Cowardly State has definitely not gone away – rather the opposite.
Thanks
The cowardly state, endorsed by a cowardly electorate, merely facilitates fascism. The time to stand up and be counted and resist has arrived. We must act before it is too late.
Agreed, again
Found a secondhand copy earlier this year. I found the diagrams very helpful in supporting the text. You were ahead of the field.
Thanks
Bizarrely, could it be that Donald Trump proves your point?
However terrible his actions and motives (Tariffs, ICE, Troops to cities etc) he DOES prove that governments CAN do things.
We just need those with better ideas to realize what is possible and get on with it.
In a weird way that is true.
Dictators, authoritarians ‘get things done’ 🙁
A former colleague talked about the Duty of Management to Manage, so lets rephrase it as the Duty of Government to Govern.
Following on from a quote a poster made about DeGaulle earlier in the week, I found what was either the original quote or a related one
“A word about the Stock Exchange since you mentioned it… The Stock Exchange, in 1962, was excessively good, in 1966, it is excessively bad, but you know, French policy is not made in the trash.”
Well said!
I think I wrote an Amazon review. I do remember you declaring you had embraced MMT.
Now I feel old.
Actually I am.
Richard, I remember my discovery of your work and writings as I followed a yellow brick road of how to fix the USA economy for ordinary people (or as a Brit told me inside Buckingham Palace, while on a tour there, “commoners.” I’ve read The Courageous State several times and been so disappointed and discouraged that those who represent we “commoners” seem to have no interest in us here in the USA or the UK. Thank you for your work then, now, and always.
Many thanks, Bill
In applying the courageous tag to the requirements of a state you condemn the Labour Party for its timidity.
It seems to be part of its history . 1926 , 1976 and now 2025 it seems that every fifty years or so the key questions are asked and the Labour Party bottle it every time.
The fact that a substantial number no longer have any time for them , or the other mainstream parties , is a disaster for the country as who knows what will happen next .
Farage like Trump is all over the place , only really concerned with being in power than using it for good. And all parties apart from the greens seem possessed of the economic consensus which thinks economic growth appears by magic from low tax, low regulation, and low public spending.
Is it time for us all to join the Greens? Are they Corageous enough?
and 1931 when they accepted the bankers’ version of economics and even cut the dole.
It interests me that Lloyd George and Oswald Mosley had a reflationary strategy.
I have quoted this before but it is a telling phrase. Many in the Labour party had forecast a crisis for capitalism and when it came, wrote Mosley, ‘ they were like a bunch of Salvationists who, at the Second Coming, turned tail and fled.’
When thinking of the timidity of Labour I always look back to 1931.
Ramsey McDonald resigned on 24th August because a large part of the Labour Party could not accept the cuts required to maintain the Gold Standard. There followed a National Government (still with Ramsey McDonald as PM but expelled from Labour) which, less than a month later (with Tory and Liberal support), went off the Gold Standard.
McDonald is reputed to have said (wrt to ditching the gold standard “….but, but, nobody said we could do that”.
Rachel Reeves and Keir Starmer should read their history; yesterday’s Gold Standard is today’s Fiscal Rule.
Much to agree with
I must admit, your book has been hanging about in my saved for letter in a certain shop for a while… A must read soon, by the sounds of things.
Regarding wether Starmer etc will get courageous… Well I listened to the Its Bloody Complicated podcast yesterday ‘Labours Autumn of Discontent’ featuring Rachael Maskell and Jeremy Gilbert. Superb discussion and the insight from Jeremy Gilbert about Starmer – how he got there, what his intentions are and what else is going on in the Labour party were illuminating. Both he and Rachael Maskell are deeply unhappy.
Question is – what can we do?
It’s our job to work that out
I heard that George Osborne got the gist of some Courageous State argumentd and it helped him pull back from the whirlpool of cutting public budgets at a time when private investment was also shrinking. However, he couldn’t and wouldn’t give up on the idea that Government could only be financed at the pleasure of wealth holders, the underlying reason Britain has been locked into decline. Time to break the bonds. Courage!