If Borrowing is Up, But Services Are Being Cut….Where is Our Money Going?


UK Chancellor George Osborne’s Budget yesterday informed the nation that by 2018 national debt will have doubled since 2010, whilst the welfare state and living standards have been crushed.  If debt is going up, and services are being cut, where is the money actually going?

 Short History of UK National Debt


National Debt was a facility created by the development of bills and bonds on the 17th century.  It provided a way for governments to finance wars. It is recorded in £’s but it is also important to see it as a percentage of GDP.  This is important because debt is not significant without understanding how it relates to our income.

Funding World War I meant the debt shooting up to £7.4bn (127% of GDP) between 1914 and 1919. The following two decades saw the Wall Street crash in the 20’s, followed by the recession of the 30’s yet by 1939 national debt had only increased by 10% of GDP, to 137%.

Another World War saw the debt sky rocket again to £21.4bn (225% of GDP).  Now, here’s where it gets really interesting.

After World War II, the electorate voted in a Labour government who had promised to create a welfare state based on the ideas of William Beveridge.  Beveridge wanted to tackle what he called the “five giants” – want, disease, squalor, ignorance, and idleness – through a universal welfare state which would provide a comprehensive health service, vastly expanded public housing, free and universal secondary education, and full employment, as well as benefits for the poor and family allowances.  Clement Attlee’s post war Labour government built over a million new homes, 80% of which were social housing.  The period of 1945 to 1970 saw an average of 170,000 council homes built every year.

One might imagine that amount of investment would have cost rather a lot.  However, between 1945 and 1980 national debt had fallen to just 45% of GDP.

Here’s where it starts to get a little weird.  In the thirty years since, the neoliberal era of deregulation and denationalisation the national debt has risen to 138% of GDP.

This means the debt has trebled as a percentage of GDP during the neoliberal period, espoused by each and every government since Thatcher.

Denationalisation and the Rise in the Cost of Living


During the period that this debt bomb has gone off, the principals of a collectivist view of our lives has also been eroded.  This saw a move away from public spaces and services, and towards the privatisation of services, utilities and space.

A great sell off occurred under the Thatcher government from 1979; British Aerospace, Cable & Wireless, Jaguar, British Telecom, British Steel, British Petroleum, Rolls Royce, British Airways,  and utilities such as water and electricity all went up for sale.  The state-built, subsidised housing stock was put up for sale.  Prior to Thatcher, all services and industry listed above were state owned, with wages and prices controlled by a democratically elected government.

These policies have been continues since, and the result has been a dramatic rise of the cost of living.

In the ten years between 1999 and 2009, the annual salary rose 13.6%.  During the same period, house prices went up 130%, a loaf of bread went up 147%, a litre of petrol went up 42%.  This goes some way to accounting for the fact that personal debt rose during this period by 158% as access to credit created consumer demand which concealed the gap between wage and cost of living inflation.

Sadly, under the Coalition government things are getting worse – the Consumer Price Index (which tracks inflation in prices of the good we buy) hit 5.2% during 2012, the highest rate of inflation in the UK since in recorded history.  Energy prices have continued to rise at three times the rate of inflation despite record profits by the energy companies.

It is clear and beyond doubt: it simply costs more to live in a state where the basics we need to survive are handed over to private interests to profit from.  We had it better when we shared.

Privatised Profits, Socialised Losses


So, the privatisation of our public services has seen a rise in personal debt; that makes sense.  But one would think that there would have been a corresponding fall in public debt.  Instead, as we have seen, the debt has risen.  So what are they spending all this money on?

The truth is, they never really privatised as they said they did.  They privatised profit, and they socialised investment and losses.

It doesn’t matter which sector you choose, the role of the state has become handing out tax breaks and subsidies whilst acting as a guarantor against losses.  This is the role of tax payer money which successive governments have prioritised above social utility – or making life better.

Socialised Losses

The most obvious recent example was the Bankers Bailout.   In the bailout of 2008/9, the UK government had to guarantee funding to the banking sector, of 101% of GDP.  That is, the UK diverted over £2trn of tax payer money from public expenditure, to a handful of banks.

This is equivalent to almost 3 times its entire annual budgettwenty years of NHS spending (£106.7bn a year); forty years of education spending (£48.2bn); or five hundred years of job seekers allowance (£4.9bn a year).

In yesterday’s budget, George Osborne offered another £130bn to banks in the form of mortgage guarantees, effectively making it so banks can grant mortgages to people, reap the profits, but never fear a default as the government (you and me) will pick up the tab.

Private Finance Initiatives (PFI)

Our hospitals and schools have been built under private loans called Private Finance Initiatives, rather than government borrowing.  These loans are at least twice the rate of interest that government loans would have been.  These loans are then repaid over 25-30 years.

Today, 22 of the 103 NHS trusts to enter PFI are facing difficulty due to the exorbitant repayments required to pay back the so-called NHS Mortgage (paying back the company for building the hospital).  Some hospitals are having to handover a fifth of their annual budget on paying for the PFI deal.

In Education, it was revealed that we are due to have a shortfall of 250,000 school places for our children by 2014, whilst the tax payer has picked up a £70m bill for PFI schools which had to close.

Overall, for a capital investment of £54.7bn (that’s how much money we actually borrowed to build stuff), the tax payer will pay back an astounding £301bn in just twenty five years.  Given the disasters of debt witnessed so far, many of the 771 PFI projects currently running will bust the budget of these schools and hospitals long before then, leaving us with the debt but not the service.


There has been massive outsourcing of the provision of public services, effectively leaving many services as public sector branded, tax payer funded private interests.  I covered this extensively in an article last year so please see that for the full detail.  Here I will use just one example, our courts.

The cost of running a court room has increased to £110 a minute due to the rapid rise on private contractors high costs for security, language services, cleaning, transport, and so on.  Companies such as G4S and Serco are making enormous profits, where once that money would have been used to pay staff, improve services, or simply never charged. G4S provide 800 staff to the Old Bailey. They charge £11.49 per security guard, while paying the guard just £6.45 – that’s just under £42m a year they make from this one court.

This has been replicated in the health service, education, prisons, probation, the police force…everywhere.  The result? The costs of the service rise exponentially, the service quality declines and the service itself becomes less and less accountable to us.

Subsidies, Tax Breaks and Tax Avoidance

While we have privatised rail, energy, utilities and energy – we continue to pay massive subsidies to the private companies running them now. When we aren’t handing money over directly, the government is letting them off paying their dues.

The UK government made £5.3bn by selling British Rail.  This equates to a mere 3 years in the increased, yes increased, state subsidy agreed by the UK government.  This means, the companies gave us £5.3bn in 1996, and we gave that back in subsidies in the following three years.  Not only that, but we continue to pay the subsidy.  In fact, today, the rail subsidy stands at £5.2bn per year.  Fare-payers contribute £6.2bn per year.  Therefore, we sold a service for £5.3bn in 1996, which we now rent for £11.5bn per year.

Gas and Oil prices were subsidised to the tune of £3.6bn in 2010, whilst renewable energy projects received just a third of that.  And with the exception of the first two years of the financial crisis, this figure has risen consistently over time.  Yesterday’s budget announced more of the same, with shale gas exploration receiving massive tax breaks.

And finally, taxation.  Only one in four of the UK’s top companies pay their taxes, meanwhile they were receiving tax credits to the tune of hundreds of millions of pounds by people who did pay their taxes.

Company taxes now constitute only 12.5% (Corporation Tax is just 7%) of the tax revenues of the UK.  In comparison, the people’s taxes, (income tax and VAT) make up more than 60% of the tax income.

Corporation Tax is lower today than at any time in its history.  UK Corporation Tax in 1984 was 52%.  By 1986 it was 36%.  In 1999 it dropped to 30% and in the most recent budget it was cut to 20%.

Meanwhile, tax avoidance is costing us almost £70bn each year.

Never Have So Many Given So Few So Much


David Cameron lamented in a June 2012 speech “Today, almost one pound in every three spent by the Government goes on welfare.” The truth is Cameron wants that pound joining the other three, funding a tax payer subsidised corporate state.

Every budget, every policy, every sound bite is designed to promote the ideas that have us facing spiralling debt, rising unemployment, crumbling infrastructure, bankrupt schools and hospitals and a rapidly eroding welfare state to mop up the mess.

It is time for us to share the proceeds of our industrious, innovative, caring society with each other.  It is time to end this parasitic relationship where the state is ever more simply the vehicle by which the few are delivered the profits of the endeavours of the many.

48 thoughts on “If Borrowing is Up, But Services Are Being Cut….Where is Our Money Going?

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  4. Great article. Of course the security guards at the Old Bailey on £6.45 will probably receive housing benefit and tax credits – would be good to see some number crunching on the cost of propping up the poverty wages of outsourced public sector workers…

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  7. Reblogged this on paul8ar and commented:
    Chris says:
    March 21, 2013 at 6:39 pm
    How do we make this change? Who do we vote for? …or do we need guns and a revolution? It seems that all of our politicians are cut from the same parasitic cloth.

  8. You know it’s not rocket science everyone. We used to have ‘nationalised services’ – regardless of how good or bad these services were, they were services. They were not designed to be profit making entities.
    Now we have private companies running these services – ask yourselves what the added factor is that these companies bring with them ?

    Yes, thats right, a healthy profit margin.

    Your common sense isn’t flawed and don’t be put off thinking for yourselves – it really is a simple choice, do you want, say a ‘National Health Service’ or a ‘National Health Business’

  9. In response to the article itself, it uses unreferenced facts and figures and holds them up to be ‘true’, any statistic can be interpreted to fit a particular point of view. The overall argument seems to be private companies/government links bad, a government (whether that be national or local) distributing resources good. Historically, has the latter not been shown to fail itself? (Monolithic social democratic government). With regards to the historical context, creating a national debt to fund wars is terrible (although there might have been a lack of choice with WW2), I’m no historian and I dare say the article writer isn’t, to convincingly link this to the present situation. However, the aftermath of WW2 saw an endeavour to make British society more egalitarian and fair and came more under the control of government, taking in taxes and making decisions as to where resources should go to build and upkeep the infrastructure of society. The days of ‘We had it better when we shared’, (quoted from the article) came to an end in the 1970s, because a series of democratically elected governments were unable to administer the building of cars, aeroplanes, schools, hospitals, and all the other innumerable things it tried to do with taxpayers’ money and so Britain, along with other governments in the Western world embarked on a project to resolve this problem (with all the upheavals and issues this entails). Many of the issues I’m not informed enough to comment on, but the issue of subsidy is surely as a result of a government making an attempt to help business flourish and provide employment. There is clearly problems with this, it is not simply a government spending public money to help rich people get richer. One of the main criticisms of the article is to do with ‘outsourcing’, giving the example of private companies running court security. I don’t see any problem with that as long as the company and staff do it properly and it’s value for money. The writer uses lots of ‘facts and figures’ and criticises what governments have done over generations, but provides no alternative apart from a shared, ‘collectivist’ ideal. In this Utopia, it would still require a body of people to decide how resources are distributed, this is not intrinsically better. Is it not more ‘collectivist’ for a government to make it easier for an individual or group to set up a business and make a living? This might initially require some sort of subsidy or tax break. On the issue of tax avoidance, of course it needs to be clamped down on. Perhaps saying that people are ‘whinging’ was provocative, however, I feel there is a genuine need for a cultural shift, for more people to become entrepreneurial and have a sense that they can get on in the world. The shifts that are taking place are very difficult and it is affecting many people (including people close to me), but they are needed because the way things have been done previously are not working. This is with a sense of pragmatism and not in support of any particular political party. Perhaps, governments in the past have been afraid to make the decisions that are happening now. It has been a set of unprecedented circumstances.

    • Hi Steve,

      Thanks for your comment.

      1. The piece is painstakingly referenced. Not a single unsourced point. If you have a counter argument do bring it, but you’ll need to reference it yourself. Not a single source in your comment or a specific error challenged. If you disagree with it that’s great but I ask that you demonstrated a counter argument, backed up. Then we can have a debate. It’s clear to anyone reading that there is a link to source on every fact in the piece.

      2. You’re placing an interpretation on the reasons neloberalism arose “the state couldn’t build cars etc”. I put no such assertion that they state was great at making cars. I simply discuss the roll out of the welfare state, the responsibilities and services we used to share and that we more than halved the national debt while doing it. Make of that what you will.

      3. The rest of the comment descends into just the neoliberal fairy tale. Can I ask, do you think you came up with those phrases yourself? You describe a simple idea, to base our socio economic model on sharing as “utopian”, subsidies to “help business flourish and employ people” and cutting the welfare state (that is the social safety nets that were put in place to absorb the inneffectiveness of capitalism) as “difficult decisions” that the government is tough/brave to make.
      This is the neoliberal playbook. It’s not pragmatic, it’s absorbed mythology. It’s not economically and socially illiterate.

      Open your mind up Steve. I don’t argue I have a replacement system fully designed. But that’s because I believe you are as responsible as me for that. I like working with others, creating ideas, and being part of creating something new that works better than this system.

      Consider this: I said to you that the current method of cancer treatment was inefficient cos people kept dying so doctors were researching a new method. You say, ah nah those people are dying because its just how it is, you can’t improve the mortality rate. This government are really taking the tough, pragmatic decision by lowering taxes on funeral directors so at least more people are employed and the funerals might cost less.
      If you took this approach on science then you’d be considered a lunatic. Yet, if you take that unscientific, incurious approach to socio economics? You just did. And you think you’re a realist probably. Not ideological at all, just dealing with things as they are. It’s economic flat earth theory….

  10. I am not an expert in economics, or anything really; it just seems to me that our time has come and that we have been fooling ourselves, living above our means and trusting our power-hungry politicians to look after our interests for far too long. Now we’re screwed!

    Isn’t the truth of the matter that the entire Western capitalist system has finally started to crack up – a fact not lost, I am sure, on our friends in the middle east and China.

  11. So, if this national debt malarky all started when nations borrowed money to fund wars, who did they borrow it off? Roschild bankers perchance?

    • Correct. At 3.6% p.a. Hence the £7.4bn debt by 1919. The Government were told that it would be the only way they would be allowed to finance WW1.

  12. Good post. I think it can be summed up as ‘all we’ve thought was held in common is being stolen.’
    It’s important to remember though, that a government deficit is very different from household debt, where the government in question can either directly print money to spend into the economy (the reasonable option), or perform the convoluted magic trick which is QE, where the government creates bonds and then borrows against them from the banks at interest.
    Yet we still think of money – a man-made conceptual tool, therefore physically unlimited – as a scarce ‘thing’, while the current economic/political system treats actual finite things like resources and people as though these are inexhaustible objects of exploitation.
    The immediate cash handout to banks (not the loan guarantees which you rightly point out still tie up large chunks of the government budget), was reported in the first two years (2008-10) as £124billion (Guardian). If given to the people, this would have netted every man woman and child over £2000. When we’ve given this much to the banks with no conditions, and no discernible improvement to the economy – I’m wondering why unconditional basic income for all, which would do so much more to get the economy moving, is often dismissed as pie in the sky.
    Access to the means to live is a human right – and this is what is being stolen from people across the world. The cuts and privatisation we’re experiencing here is what has been suffered in Africa and Latin America since the 1970s, all due to ‘debts’ which really should be outlawed as odious. If anything, the banks and governments pursuing these policies owe us, and yet we put up with the charade. In the ridiculous ‘debate’ over so-called scroungers, where are the sanctions for bankers and politicians not doing as promised?
    There is now a petition to get the EU to consider an unconditional Basic Income for all, which can be signed here: https://ec.europa.eu/citizens-initiative/REQ-ECI-2012-000028/public/index.do

    • Absolutely yes to all of that. The reason that adopting the same policies of QE with public beneficiaries, rather than privte is because despite all reality they still see the 1% as the wealth creators. Neolclassical economic money multiplier models say that a pound given to a bank will multiply at a rate higher than one given to a person as the bank will give out loans etc. This has been comprehensively debunked by Steve Keen in Debunking Economics and a bunch of other new economists.

      • Agreed, actually banks spend around £8 to make £1 in society, giving us one ninth of all new money to begin with, much of that clawed back in interest and bank charges. Then we have to bear with underwriting the arms trade, giving money back to bankers in QE, funds to the EU, £50 billion in interest, plus all the subsidies you mention above, not to mention the old boys network of false company fronts picking up government investments… The whole principle of national borrowing from banks started with William of Orange and the Bank of England, engineered by the Vatican/Jesuit Cabal, the originators of banking via the Templars and handed to the Jesuits on their demise… The moment we stop allowing private interest to create currency and return it to each sovereign treasury, is the moment we begin to thrive. Which also coincides with ousting the covert Jesuit from every nation.

  13. How many factual inaccuracies are there in this article? 1. “5.2% inflation in 2012, the highest since recording began” – It was up to over 24% ’75-’76, averaging about 15% over the whole decade of the 1970’s, the last of his idolised state-run glory years!! G4S charge £11.49 yet pay only £6.45 per security guard. Why? Because like every company they have other fixed & variable costs to cover – Insurance, offices, accounts, HR, employer NI contributions, uniforms. His accounting for his rail cost comparison is shocking. He includes “Fare-payer” contribution of £6.2bn to the current “rent” of £11.5bn but excludes “Fare-payer” contributions under BR (It was never free or indeed even cheap) and doesn’t mention the annual cost to the Govt in the state-owned days (equivalent to a subsidy as it was always a loss maker) in his ‘comparison’. Pointless.
    As for the bank bailout…..That happened under a Labour govt due to not just a lack of Labour control of the financial sector but an actual loosening of legislation. Sadly we have no choice but to pay that off. Thanks Tony. We have inherited the biggest debt in history and yet the Blairite public want us to spend, spend, spend because they personally have run out of money.
    And as for Tax avoidance, what did Labour do in their 13 years to tackle it? NOTHING, they closed their eyes and told everyone how great and happy they all should be. At least the current Govt have brought it to the public’s attention and are actually doing something positive to change that. Labour did NOTHING, no wonder our inherited coffers were empty.

    • Nick,
      1. I refer to CPI and reference on inflation.
      2. We’re all aware of servicing costs, my assertion is that whatever these are, adding a profit motive means an efficiently run private service will always cost more than an equally effectively run public service.
      3. Rail price inflation has been astronomical since privatisation which entirely undermines your point here.
      4. This article clearly condemns Labour for their role in this crisis. ALL the main parties are neoliberal. It’s somewhat petulant however to claim that because Labour’s neoliberal policies failed, somehow the Coalition’s won’t.
      5. Your final point is utter madness, defined as ‘doing the same thing and expecting a differnt result’…debt is rising with this government, not falling. That is not positive, that is negative.

      I sincerely hope that, if you do care about having an economy that works, you withdraw your support for a government that’s policies do the exact opposite.

      That said, welcome to the blog, and a frank and full exchange of views never hurt anyone! I’m playing the ball not the man. Which incidentally, I am not.

      • 1. Aside from your quote referring to 5.2% being the highest since inflation recording began, using solely CPI is wholly invalid. If making a comparison over any period of time, (your argument going back as far as WW1), then the same, or a weighted historical index must be used. If you want to use CPI, fine, but then weight the previous RPI to reflect that and then compare or vice versa. Using the CPI definition, only valid post 1996, makes not only the argument invalid but the observation nothing more than inaccurate sensationalism.
        2. Your comment re. point 2 would be valid if state-run prisons were as efficient as privately run prisons. The problem is that they aren’t, historically, globally, never have been. Hence they have been opened up to the private sector where unless they can be made to be efficient, there is no incentive to invest. As the budget is fixed they have to find efficiency. Apply the same to British Leyland and the abysmal British motor industry of the 70’s, producing substandard cars, state financed and subsidised to create an artificially maintained market of cheap crap cars. Now that Jaguar has been privatized, exports of that producer are at a record high. The same applies to Land Rover. After Thatcher closed the mines, she incentivized private investment in the North East, Nissan being one, and that is now the biggest producer of cars that the UK has ever had and the vast majority are exported.
        3. Rail price inflation was RPI+3% under Labour, itself a cap, not an astronomical increase. BUT under the current Govt, price increases have been REDUCED to RPI+1%. My personal experience is that post-privitisation the journey time to my home town from London has halved and pricing has become more competitive offering various pricing levels and the fares I use fallen 50% cf.9 years ago. That’s market forces justifying investment and competitiveness. This didn’t happen under BR.
        4. & 5. It’s somewhat petulant to classify the current govt’s policies as being under the same umbrella as Labour’s. They are doing the opposite to Labour – cutting expenditure, reducing the deficit (the only way to accumulate capital to pay off the inherited debt and resultant interest), tightening monetary control. Borrowing has increased because Labour left zero money or assets in the coffers. Labour left the largest debt in history. It would be impossible to reduce simply because a new Govt has gained power the next day. They are succeeding in building the path to achieve that, but Rome wasn’t built in a day. Unemployment, whilst risen this month, has fallen since the new Govt came to power.

        • This is such a strange argument.
          The cost of living has risen, fact.
          The national debt has trebled, fact.
          The coalition promised austerity on the basis that they would eradicate the deficit by 2014, and they not only missed that target but now have imsply made the same promise again ‘give us another four years until 2018’, fact. Labour, Tories and Liberal Democracts are neoliberals, fact.
          Unemployment has not risen, there has been a rise in part time and temporary work as a share of employment, and people in workfare (unwaged, tax payer funded labour) are not classed as unemployed….and it still went up this month.
          Rail prices are more today than under British Rail, by incredible degrees, and this is variable across season tickets/singles/geography, Since June 1995, Rail Price inflation by RPI has been 66%, while a single from London to Manchester has gone up 208% http://www.bbc.co.uk/news/magazine-21056703
          You’re mistaking assertions for facts.
          Now we are told, another four years, another round of privatisations, more support for dirty energy, the financial services sector and the housing market bubble. You might well want to continue to plough that furrow, but many of us do not.

          • Going to start with your own quote “You’re mistaking assertions for facts.” Labour, Tories and Liberal Democracts are neoliberals, this is not a FACT!! this is an assertion, not even than. In politics there are no clear lines and this kind of grouping is not a fact, at best this is your personal opinion. Even if party states that they are neo-liberals, their policies can be portraying a different picture.
            The BBC article that you posted is just taken out of context. First of all, this is not BBC position and the article actually argues that these calculations that are actually done by a guy are wrong. You argument about the rail prices are just a mess of facts, personal opinions of you and other people. Just nonsense and textbook case of cherry picking. Read the whole article before quoting it, please. In addition, whats the point in comparing the rises in prices with the rate of inflation? British Rail was sold as a huge mess demanding a lot of investment – new trains dont come cheap.
            Getting back to the main article, I think it is as bad as the comment section. There are no boundaries between real facts, assertions and simple opinions. Every argument has a hole and the whole article is constructed as if UK is not a part of the rest of the world. Corporate taxes, tax evasion, price changes have to be looked at from a global perspective. The example with courts was simply just irrelevant and simply wrong and I could go on and on about the article that you linked to. Finally, the bailout. It seems that people just dont understand that nobody gave away the money. The losses as you say we not “socialized”in this case. Government provided liquidity to banks to jump start the system and thats it. It wasn’t a check that banks asked us to pay, we borrowed the money and we were repaid in full. Some of the banks in US repaid in less than a year.
            I agree with the general cause of the article. The system is rotten and we need some serious changes to be made as soon as possible. Unfortunately, this article is a poor attempt to advocate the cause.

            • If you do not know that there is a neoliberal consensus, I’d recommend a drains up on neoliberalism.

              I read the article in full, my poiny stands. I took the data, not the BBC spin on it. Unless ofcourse you think they are an entirely balanced media platform with no agenda?

              New trains don’t come cheap, but investment has been woeful, late, unbalanced across the regions and poor value for money.

              The Bailout categorically has not been paid back. The bailout continues everyday in quantitative easing and further subsidies, tax breaks, the supression of interest rates and so on. If you fail to grasp this then yes, it looks like we’re all moaning about nothing. I’d suggest looking at the impact of the policies I’ve mentioned on the economy, check out the Steve Keens and Nouriel Rubinis of economics for some fresh info and then we can have a decent conversation.

              Your comment seems to amount to ‘I agree with you that the system is rotten…except it’s not, look, everything is fine!’

              If you’d like to advocate the case better, set up a blog and do it.

    • The problem is that one party blames the other – and we have no credible alternative to a centre right or centre left government run by plutocrats

  14. When mad Maggie privatised all the stuff which belonged to the nation she committed treason and all the politicians who have come after have also done the same – if private Gas, Electric, Telephone etc. can make a profit for the shareholders then the treasury could be making that profit and out tax bills would go down and energy prices would not be so expensive, universities could be funded and the NHS would be something to be proud of not as it is now run like a profit making company

  15. How do we make this change? Who do we vote for? …or do we need guns and a revolution? It seems that all of our politicians are cut from the same parasitic cloth.

    • I think that we need to get behind the Occupy movement and others which actually say…hang on, we need to reorganise this whole thing from core principles. So long we continue to vote neoliberal parties into power, consume as without conscience (ethics of production, labour etc), and remain disengaged and passive in the face of this stuff…nothing will change. It’s not going to be a simple process, but the thing will collapse. The only question is do we design a workable alternative now, or in the ashes?

    • Perhaps a revolution would not be a bad idea – the politicians are all out to line their own pockets – there is not a single statesman among the lot of them – not a single one in touch with the people in this country the ones who pay them – use your vote when the opportunity arises and vote against them.

      • I’m inclined to agree. The whole system has been so thoroughly corrupted that a wholesale upheaval is required. As I say above, we need to work on redesigning the whole thing from core principles.

        • A revolution s how it will end. Unfortunately. They are messy and painful. The oligarchy hold the power, they have the police and are prepared to use them.

          Great article. Keep up the good work. To (reluctantly) quote Milton Friedman:-

          “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

          • Thank you. Great quote from Friedman…perhaps the one and only thing he’s ever said that I agree with :) It’s true, we need to be designing ideas which will be ready to roll when this thing comes crashing down, which it will…let’s make the great ones!

  16. The difference being that in the postwar period we had a boom in construction and full employment, because two World Wars and a few influenza plagues had culled our surplus population. Plus we ha a huge investment in low-cost capital investment via the Marshall Plan, and cheap unregulated immigrant labour. The trouble now is that we have far more people than jobs, a creaking old infrastructure, worldwide fuel shortages, and borrowing which is only getting more expensive. The trouble with modern capitalism is that its just not capitaist enough: bad businesses are helped to creak along inefficiently, bailed out with public money, rather than going to the wall and being replaced. We should be throwing money at growth and building new ventures, not propping up rotten old vampire institutions.

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