EC Meeting Papers January 2018

George Osborne, claimed that the public sector was "crowding out" the private sector, taking resources and workers away from businesses. Particularly influential was a paper by two US- based economists, Ken Rogoff and Carmen Reinhart, arguing that once a country’s total public borrowing rose above 90% of its national income, or GDP, growth would slow sharply.

Did austerity get unanimous backing?

Critics argued that austerity would stop economies recovering from the shock of the banking meltdown and would make teachers and nurses and people with disabilities pay for the excesses of bankers and chief executives. In his book Austerity: The History of a Dangerous Idea, political economist Mark Blyth showed that austerity had been tried before in the 20th century – everywhere from Weimar Germany to 1930s America – and failed, often with politically disastrous consequences.

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Britain in 2018 is stalked by zombie ideas, zombie politicians, zombie institutions – stripped of credibility and authority, yet somehow still presiding over our lives. Nowhere is this more true than in the way we run our economy. This September marks the 10th anniversary of the death of Lehman Brothers . In autumn 2008, the banks broke, the governments stepped in – and the cast-iron premises that underpin our economic system were exposed as fiction for all to see on the Ten O’Clock News. Yet a decade later, those dead ideas still walk among us.

They form what John Quiggin at the University of Queensland terms zombie economics – dogmas now cracked beyond repair, but which continue to shape British society.

Austerity – the policy that more than any other will define this decade – was lifted by George Osborne straight out of Margaret Thatcher’s handbag. He justified it with zombie rhetoric about how business was being “ crowded out ” by childcare centres and the rest of the public sector, and how 21st-century sovereign countries could be run just like household budgets . Tax cuts for “ wealth creators ” and privatisations of the few remaining national assets: all utter zombie-ism. xmlns="http://www.w3.org/2000/svg"> A Labour council attacking its own people? This is regeneration gone bad

Aditya Chakrabortty

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