Saturday 31 October, 10.30am until 12.00pm, Courtyard Gallery
The current crisis has been welcomed by some as heralding the end of ‘neoliberalism’: the free market, free trade agenda that supported light touch regulation, tax cuts, privatisation, foreign direct investment and fiscal discipline. In its place are calls for a return to progressive taxation, government spending and subsidies and ever-tighter regulation of banks: the state is back and, commanding nearly 50 per cent of the UK economy, it’s big.
Despite Hayek, Friedman and the rhetoric of neo-liberalism - rolling back the state, trickle-down, consumer choice and market efficiencies in the public sector - the state has actually never gone away. Public spending under Margaret Thatcher continued to grow and social protection expenditure in particular has nearly doubled in size in the last 20 years to some £170bn. Now, with UK public sector net debt standing at some 55% of GDP and tax revenues at only 38%, there is a huge annual deficit to fill on top of the massive public debt already incurred by Labour’s fiscal stimulus package.
Keynes once noted that “It is often said by wiseacres that we cannot spend more than we earn ... It would be much truer to say that we cannot earn more than we spend”. So are public sector cuts and swingeing tax rises really the only solution? There could be a case for state investment in support of productive growth: the same state that built Docklands and the financial sector could be building super-fast trains and leading the world in aerospace. Must the state serve to regulate against capitalist excess, greed and exploitation? Will the state lead us out of recession, the vanguard of a new fairer capitalism, or is it nothing more than yesterday’s solution to what are much deeper problems?
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|Dr Vince Cable|
deputy leader and shadow chancellor, Liberal Democrats; author, The Storm: the world economic crisis and what it means
economist and business manager; author, Creative Destruction: How to start an economic renaissance
associate editor and chief economics commentator, Financial Times; author, Fixing Global Finance
convenor, The Academy; author, Being Cultured: in defence of discrimination
Retrenchment must go hand in hand with reform in Britain to make the state fitter as well as leanerLeader, Economist, 24 September 2009
Politicians are competing to see who can make the severest cuts — only because they have no broader vision for the economy.Rob Lyons, spiked, 21 September 2009
The central issue emerging now in the UK – and the one which will dominate politics for the next few years – is the size of the UK government budget borrowing and deficits, and government debt.Vince Cable, Reform, September 2009
Projections of national debt in the US and UK have triggered panic – yet investment in the future is crucial to recoveryRobert Reich, Guardian Comment is Free, 31 August 2009
Reagan was wrong. State spending is all that has stopped America's slump becoming catastrophic.Paul Krugman, Guardian Comment is Free, 11 August 2009
Despite the State being the main investor in the UK's national economy, the official rhetoric of private sector productivity is alive and well. James Heartfield takes a look at Labour's failed strategy of privatising public services and the rise of ‘corporate welfare'James Heartfield, Mute magazine, 25 June 2009
Instead of having arid debates about the state versus the market, we must create institutions and policies that can restructure the economy.Frank Furedi, spiked, 18 June 2009
Although the downturn is global, the complacency of the British government towards the huge 'bubble' in property prices and high levels of personal debt, combined with increasingly exotic and opaque trading within the financial markets, has left Britain badly exposed.
Vince Cable, Atlantic Books, 1 April 2009
The key is to acknowledge that, in a world of adjustable currencies, international lending must be denominated in the currency of borrowers, not just in that of a few dominant advanced economies. Only by tackling imbalances in the international financial system is there a chance of global financial stability.
Martin Wolf, Yale University Press, 30 January 2009
“Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick named Hyman P. Minsky maintained a more negative view of Wall Street; in fact, he noted that bankers, traders, and other financiers periodically played the role of arsonists, setting the entire economy ablaze.”
Hyman P. Minsky, McGraw-Hill Professional, 1 May 2008
Far from the market having a voracious capacity to extend its influence over all aspects of contemporary social and economic life in the UK; the state is directly engaged in propping up an un-dynamic private corporate sector and ensuring employment for many of those working within it.Gavin Poynter, University of East London, 13 April 2007