Friday, October 30, 2015

If only it were true ...

According to Owen Jones, Guardianista journalist and high priest of Corbynism, we live in a world dominated by "neoliberalism."

Jones wrote in his recent book The Establishment that a commitment to "neoliberalism" is the ideology that dominates our elites and politics. According to him, the last three decades have seen an unprecedented experiment in a radical slashing of state spending, an erosion of the welfare state, privatisation, outsourcing and deregulation.

My reaction is to wish that if only this were true - not, incidentally because I would want the Welfare state to cease to be there as a safety net for those who need it, but because it should not be a lifestyle choice for those who would be far better off looking after themselves.

As Ryan Bourne points out on CAPX here, the idea that we live in a world dominated by neoliberalism or any other form of liberalism is, unfortunately, laughable.

On the positive side, since the 1980s global trade has become freer and capital more mobile, while Britain has removed controls on prices and incomes, privatised the old nationalised industries, reduced the power of trade unions and allowed resources to flow freely into and out of the UK.

But sadly despite these moves in the right direction, the a long-term trend over the past century of greater government control – of politicians and civil servants centralising power and spending, and taking decisions away from individuals, families, civil society institutions and local government. As a proportion of total output, government spending is as big as it ever was.

As a proportion of GDP at factor cost (to allow accurate long-term comparisons given changed tax regimes) government spending has increased from around 10 per cent of GDP at the beginning of the 20th century to 47 per cent last year. This was higher than in any year between 1947 and 1979.

In the 1920s and 1930s, local government accounted for 45 per cent of total government spending. Now it is just 25 per cent and much of that is effectively ring-fenced or controlled by national government policy.

The best measure of the degree of legislative control is probably the combined number of pages of acts and statutory instruments. This has increased by a factor of 20.

13 per cent of all UK jobs now require some form of licensing, registration or certification from government – a proportion that has doubled in the last decade or so.

Far from living in a world dominated by neo-Liberalism, we live in a society where the all-pervasive activities of central government has increased, is increasing, and ought to be diminished.

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