The cuts ‘debate’, dumb, dumber and dumberer

22 09 2009

A4PFSW8CAUKKZTSCA6U26I5CAOIW9TQCA7JXEVACAUDPMGWCAZGBJLQCAF8443HCA2LH38PCASMAT7FCA6NTCQ9CAC0J7EACAFICEB6CA8BB0GACAZNP1EJCA25DXN8CA6PNK19CA06HHYVCA4H06MZCA09WITTOn October 31st I shall be debating with Lord Skidelsky and others on the subject of economic growth at this Conference. It will be a great relief to be having a discussion about the key question of the times with Keynes’s main biographer rather than listening to the so called ‘debate’ on cuts in public spending which is now dominating politics.

After a long period in which all parties were in a state of denial about the public spending deficit, each is now desperate to show they are more fiscally virtuous than the last. The ridiculous Nick Clegg has now called for ‘savage’ cuts and I am sure that the Tories are browsing the lexicon of violence to find a suitably bloodthirsty description for their own cutting plans. This bravura posturing on cuts is just as useless as the period of denial which preceded it. Neither addresses the real issues at the heart of the crisis of the UK economy.

As I and others have pointed out on this blog before, there are no doubt areas of the state we can do without-the latest being the Independent Safeguarding Authority which would vet all contact between adults and children not their own. In other words there are sometimes good political reasons why some public spending programmes should be cut.

On the other hand there are areas of the state which we need and which should be doing their job much better with the funding they have. Education and health are the two most obvious areas. These require more effective leadership and execution, not less spending, in order to make them more satisfactory.

The recession has created a massive public spending deficit, which is likely to get worse. Tax revenues are falling as unemployment rises and the unemployed become a burden on the state. This is an indictment of the market economy which renders many millions of people surplus to requirements at regular intervals. This is the real problem we face, how to create an economy which fully utilises the productive energies of its people.

There are many things that politicians could be doing to encourage future economic growth. But these would require a hard look at the nation we are and what we want to become. It would mean planning where we want to be in 25 or so years time and then making the necessary investments needed to get there. It would mean, amongst other things, challenging current anti-growth and anti-science sentiments to push through nuclear power station building programmes and road and rail building.

When ‘Dave’ Cameron talks about a broken Britain he believes he is talking about other people, the underclass in particular. But the part of Britain which is most broken is the political class and its ability to lead. For the past ten years it has been allowed to coast because of the financial bubble, all the hard choices could be put off. Now it is faced with a problem which will not go away, it owes money to people who will want it back. Nothing in the experience of modern day politicians has prepared them for this. One can even be sceptical about whether the rhetoric on cutting public spending could ever be turned into reality because of this weakness and lack of conviction.

All the bluster about ‘savage’ cuts does not remove the fact that the British elite has no real plan for the UK economy which goes beyond hoping the financial sector will revive. The debate which should be taking place is about how we can grow our economy out of recession. This is the one we will be having on October 31st.