The neoliberal road to autocracy – a response to criticism

The major point I was trying to make in my article was that the real improvements in poverty reduction, as well as in life expectancy and many other fields, do not depend wholly on  economic policies, but also on the role of fossil fuels, and on scientific, medical and other advances, which, other things being equal, should accelerate in impact across time and space. Hence the fact that the rate of improvement is in the form of a curve, not a purely linear effect. These improvements have taken place under different economic systems, and are not a function of neoliberalism or “global markets”. 

The collapse of social democracy

Disillusionment with democracy is fuelled by the belief that social democratic politicians could not, and would not protect populations from the catastrophic impact of market forces after the 2007-9 financial crises. The political class appeared unwilling to restrain or tackle (through regulation) the sustained rise, and then implosion, of excessive private debt-creation by bankers and financiers, which in turn was used for reckless property speculation.

10 years after: Neoliberalism - the Break-Up Tour

Neoliberalism’s finance-driven model, beset by rising crises since the 1970s, properly derailed in the crash of 2007 – 08. Then, the greatest exponent, Alan Greenspan, chairman of the US Federal Reserve, had a brief moment of enlightenment and appeared to renounce his faith in the invisible hand of self-interest, saying he’d, ‘discovered a flaw in the model that I perceived is the critical functioning structure that defines how the world works.’ Private finance was revealed as a froth that sat on the foundations of public guarantee. I tell this story and the tale of alternatives in a new collaboration with the playwright, Sarah Woods, in Neoliberalism - the Break-Up Tour.

10 years after: a series reflecting on the Great Financial Crisis

PRIME (working with the New Weather Institute) organised an event at the TUC to commemorate the day - 9th August, 2007 - that inter-bank lending froze, central banks came to the rescue, and the Global Financial Crisis began in earnest. We will be publishing transcripts and notes from that event, chaired by Ann Pettifor and with contributions by Frances Coppola, Professor Daniela Gabor and Andrew Simms of the New Weather Institute.  We will shortly publish articles written before August, 2007 that warned of the forthcoming crisis. To begin the series, we are posting a longer version of an article written by Ann Pettifor and published in Red Pepper on 8 August, 2017 - The economic crash, ten years on

The best UK/EU transition plan? If we can, extend the Article 50 period

On 30th June 2016, just one week after the EU Referendum, I wrote this:

It has swiftly become clear, if it were not already so, that neither the government nor the leaders of the Brexit campaigns had anything resembling a plan for what to do if the people voted in favour of leaving the EU. 

Alas, over a year later, there is still no plan – and awareness that the Conservative government has simply dumped us here without any idea what to do next is becoming overwhelming.

So we badly need a transitional deal - but what kind?

The decline and fall of real pay under the UK's "flexible labour market" system

Publication this week of the Taylor Review of Modern Working Practices was followed on Wednesday by the latest monthly employment stats from the Office for National Statistics (ONS).  These tell us that the number of those in work continues to rise significantly, but that real wages are falling at their fastest rate for nearly 3 years. Yet the CBI claimed in its submission to Taylor that over decades, the UK's flexible labour market has given rise to strong growth in real wages.  In fact, the opposite is true. 

The Bank of England and the growing credit bubble - a piecemeal response to a systemic problem

In June, the Bank of England dictated to the banks in its jurisdiction that they must hold more capital - £11.4 billion more – in reserve in preparation for the anticipated bursting of the growing consumer credit bubble that is undoubtedly forming. In light of this, this post seeks to answer a question posed in the British media recently – can the Bank get Britain to kick its cheap credit habit? – by discussing the societal issues that are affecting the expansion of the bubble.

Can Britain afford a pay rise of 3% for 5 million public sector workers?

If all five million public sector workers were granted a pay rise of 3%, the EXTRA cost to the Treasury - over and above the government's already-promised 1% - would be just over £3 billion a year. This is not a generous pay rise. It would enable public sector workers to just keep up with inflation. In other words, it would prevent inflation eating into the real value of their pay rise. It would not compensate for years of cuts in real wages.  

Single Market Mythologies

Last week a cross-party group of MPs tabled an amendment to the Queen’s Speech calling on the government to commit to staying in the EU single market.  As a result of their support for the unsuccessful amendment, three Labour shadow cabinet members were forced to resign.

The amendment revealed a possible confusion by its supporters about the nature of the single market and the European Union.  

The gaping contradictions in EU bank bail-out law and policy

The EU’s hugely complex banking resolution framework is generally supposed to have one key goal – to ensure that failing banks are ‘resolved’ without recourse to public bail-outs, thereby breaking the link between banks and sovereigns…  The reality, we have seen today, is quite different – and, it seems, legal. 

The EU can just about argue that technically, the rules have not been broken - but overall, the appearance is of a policy in logical disarray once again.

Economic dogma, George Osborne and Grenfell Tower

What has the horror at Grenfell Tower to do with economists? And what have the lives lost at Grenfell Tower to do with the government’s budget deficit? A great deal, I will argue here. When on Twitter a few days ago I raised the issue of the shared responsibility that economists have for this ghastly tragedy, I was attacked. So let me explain.

"Bribing voters" and all that: neoliberal contempt for democracy?  

Labour’s shock success in the “snap” general election left poll takers more than slightly embarrassed (except YouGov and Survation), and political commentators scrambling to cover their backsides. In their struggle to adjust to a resurgent Labour Party led by the “unelectable” Jeremy Corbyn, the nominal progressives among the pundits provided a textbook guide to the difference between centrist neoliberalism and social democracy.

An Open Letter to Jeremy Corbyn: Labour needs to act fast

After an exhausting and successful national campaign, it is hard for campaign strategists to think of next steps. But we are at a critical historical juncture, and a range of opportunities present themselves. Choosing the right political and economic strategy now is vital. 

If the aspirations of the British people, as expressed in the election result are to be fulfilled by Labour, and to avoid the dissipation of the momentum and energy generated by the campaign, it is urgent that Labour lays out a viable and popular political and economic strategy. We believe that the ideas outlined in this article would attract substantial political and popular support.

Strong and stable? The Conservatives' economic record since 2010

In a recent interview, Theresa May was asked by Andrew Neil how the Conservatives would fund their manifesto commitments on NHS spending. Given that the Conservatives chose not to cost their manifesto pledges, May was unable to answer. Instead she simply repeated that the Conservatives are the only party that can deliver the economic growth and stability required to pay for essential public services.  When pressed, May’s response was simple: ‘our economic credibility is not in doubt’.

But does the record of the last seven years support May’s claim?

OECD ignores deficit hawks, backs higher public investment in infrastructure & people

This morning, the OECD has published its latest Economic Outlook, which includes individual country forecasts. It is pretty downbeat about the UK’s near term prospects, and implicitly critical of the Conservative government’s policy plans. It argues that there is "fiscal space", and that higher public investment should be considered

The policies supported by the OECD, in the context of Brexit, are in essence the same as those which the 130 economists have backed in their letter to the Observer – and whom the FT's economics editor Chris Giles thinks should be “disregarded”.

Observer letter: 130 economists express support for Labour's plans for the economy

Today's Observer newspaper (4th June), publishes a letter signed by 130 economists, under the heading "Labour’s manifesto proposals could be just what the economy needs".  We felt it important to reproduce the contents of the letter here, together with the full list of signatories).  

The Observer letter contends that Labour's Manifesto proposals are much more likely to strengthen and develop the economy, as against the Conservatives commitment to maintaining austerity. 

The letter, together with the full list of signatories, is available online from the Guardian website.