What I think about when I think about the economy

18 05 2009

This was the focus of my opening speech at the Battle for the Economy conference on May16. 

Battle for the Economy

During the course of this recession we have all become familiar with the concept of zombie banks, that is banks which are technically bankrupt but which are kept afloat by government support. It has now become clear that we also have zombie governments and zombie political parties, brain dead organisations which have only remained upright through support from the various financial bubbles over the past ten years. Recently, these bubbles have burst and the living dead are falling around our feet.

Austerity or innovation?

What kind of society do we want to live in? In Britain we have reached a crossroads. One path is the one that most politicians seemingly want to take us down, the road to austerity, public spending cuts, wage restraint, the sharing out of misery. At the moment these are the loudest voices. The other, less mentioned path, is the path of economic growth, innovation, technical and scientific progress, and rising living standards.

We have been preparing for the path to austerity for some time. Even during the boom years loud and influential voices proclaimed the pointlessness, misery and environmental damage created by materialism. In the process reality has been turned on its head. The truth is that all human progress, in health, education, science, technology and democracy is built on rising living standards. The poorest countries in the world are not paradises , they are inflicted with disease, despotism, ignorance and the desperate routine tragedy of the needless death of their children.

The new politics of austerity are the politics of low expectations. Such politics do not expect us to lift ourselves out of a recession through hard work and application. It does not inspire us to have a positive sense of where we are going as a society, nor does it challenge us to put the pursuit of science and innovation at the core of what we do.

The alternative

What is the alternative?  Politics and politicians have shrunk to insignificance and to levels of humiliation unknown in the modern era.  At this point it is vital that those of us who believe in the potential of humans to fix things and to change our circumstances for the better, should raise our voices louder than ever and act wherever possible to influence an agenda of change.

I would say there are three big issues facing us which are both economic and political and how we act on them will determine the future:

1) any western economies, with the UK at the forefront, have become relatively less and less productive and more dependent on financial services, credit and state spending. What can we do to encourage innovation and an increase in productive activity, and what are the barriers to this? Societies which are economically sluggish are rarely vibrant or dynamic in other ways and our culture of risk aversion is holding back the future.

2) China and other developing countries are demanding (and rightly so) to reshape the world order. This will create enormous tensions at a global level.

3) the lack of any contestation to managerial capitalism has shrunk the worlds’ options and led to the diminishing of politics and human aspirations in general. Anti economic growth sentiments have become rife in response to the perceived failures of the market.

So, I think it is important to remember that when we talk about the economy, we are not just discussing numbers and statistics, but the substance of our lives and the future of our people.

Have a productive day!

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12 01 2010
2010-the year of living uncertainly « UK After The Recession

[…] view is one of foreboding. The underlying problems facing western capitalism, which have been extensively debated in this blog over the past year, have not even begun to be addressed. The lack of a plan means they will fall […]

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