Shell Out to Help Out

A good sidebar piece by Mariana Mazzucato in the New Statesman this week, under the portmanteau article titled "How to Fix a Nation": a series of short essays by commentators various. The byline is titled 'Britain is stuck in a cycle of underinvestment. The next government has to break it'. It encapsulates for me the essential truths that lie at the heart of our economic and societal woes presently, and emphasises the lies that are at the heart of them all. Lies that have been consistently propagated and continually reinforced by the right wing for the last forty-odd years.

The main plank of course is the bilateral mantra of increasing economic growth and reducing public debt, which was infantilised by Margaret Thatcher with her domestic budgeting simile. The ultimate corollary of this childish notion is austerity and the strict application of fiscal rules. OK to an extent on the micro level, but applied at the macro? - the results can tragically be seen in the effective breakdown in society that we've unfortunately been forced to witness these last fourteen, miserable years, as each Tory government pans out worse than the last, forcing more and more people into poverty and destroying the institutions at the heart of the social contract that made this country truly great, post 1948.

As Mazzucato rightly frames it: '... debt sustainability depends on what the government is investing in. In other words, how debt is being used is more important than the level of debt.' [my italics]. As the author quite rightly points out, growth follows from a healthy society, with decent jobs paying proper wages; a social system that functions to the good of the population; which in its turn, will contribute more to society as a whole, creating more wealth for all. The concentration of wealth in ever-decreasingly tiny pockets of society, and the resulting shrinkage in the value of the social contract through underinvestment in it, ultimately damages society as a whole. It is essentially a death spiral, which desperately needs to be checked.

Mazzucato finishes the piece with I think the only logical conclusion one could make in the light of the last forty-odd years of crass politics & economics in the UK: 'Escaping this cycle [of underinvestment] requires a government brave enough to part ways with old assumptions about how the economy functions and how the rôle of the government is shaping its trajectory.' Couldn't agree more, and I join Professor Mazzucato in the view that it's to be hoped that July the fourth sees a new government strong enough and brave enough to effect the radical changes necessary to save the day.