Austerity has failed: What are the
alternatives?
Taxation & public spending
Ownership
3 ways
governments
can influence
the economy
Laws & regulation
Austerity
The neoliberal
triangle of
doom
Privatisation
Deregulation
2008: A catastrophic failure of
neoliberalism…
... used to justify more neoliberalism
Austerity: ‘Basic economics’ – or a
strategy for the 1%?
“The austerity ideology that
dominated elite discourse
five years ago has collapsed,
to the point where hardly
anyone still believes it. Hardly
anyone, that is, except the
coalition that still rules Britain
– and most of the British
media.”
- Paul Krugman (economist)
What happened next?
Cyclically-adjusted net borrowing, 2008-2019
9
8
7
6
5
4
3
2
1
0
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
-1
-2
Actual
Forecast Summer 2010
2016-17
2017-18
2018-19
Labour didn’t rack up debt by
overspending
Labour didn’t rack up debt by
overspending
UK debt, 1987-2012
120
100
80
60
40
20
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Public
It’s private debt that’s the big
problem….
UK debt, 1987-2012
600
500
%GDP
400
300
200
100
0
Public
Private
Source: ONS Blue Book
… and austerity’s making it worse
Privatisation
Individual share ownership, 1963-2010
‘Balancing the books’ with a firesale
of public assets
Deregulation
“…puts driving the
reform of regulatory
enforcement in the
hands of business”
- Department for
Business, Innovation &
Skills
… So why austerity?
• Ideological: an excuse to shrink the state and
harden public attitudes to welfare (even if it
doesn’t actually bring the deficit down)
• A political choice: we need ‘fiscal space’ to
bail out the banks next time they fail
• A political strategy: ‘permanent austerity’
creates fear, insecurity and makes people
believe we ‘can’t afford’ progressive policies
“Let's be clear austerity is a
political choice,
not an economic
necessity”
- Jeremy Corbyn, 15
September 2015
“Big arguments have
returned to British politics”
- George Osborne, 15 September
2015
Telling a new story:
From ‘anti austerity’ to ‘pro investment’
Austerity can only be beaten by a politics of
hope and a positive vision – ‘we deserve better
than this’
• It makes sense to invest in the future
• Government is like a business, not a
household
• Economic security comes from fixing our
broken banks – not cutting public services
Finding Common Ground amongst
progressives
What we’ve found:
principles for a new economy?
•
•
•
•
•
Common ownership of public goods
Collective provision of basic needs
Co-operation and sharing
Redistributing power (economic democracy)
Control over our work and time – paid and
unpaid
• Respecting environmental limits
www.neweconomics.org
@NEF