Reading Robert Colvile Sunday Times essay titled ‘In case no one has told you yet, debt’s piling up and there’s only one way out — growth’ of November 22, 2020 demonstrates the Thaterism isn’t quite dead yet.
As Mr. Colvile ‘runs’ , his own words, the Centre for Policy Studies, which declares itself ‘Center Right‘. Its ‘as if ‘ the Economic Collapse of the Neo-Liberal Swindle of 2008 had not occured, nor a devastating Pandemic and the near total closing of Capitalist enterprises, and its newest iteration chronicled by Capitalism without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake. Here part of an interview with co-author Westlake by James Pethokoukis of AEI :
“The right should be unashamed of the fact that it wants to make Britain boom again — to create good jobs, to enrich people in the places they live, and to give them the freedom and opportunity to lead better lives. Informed by the principles we’ve identified – the importance of productivity growth, agglomeration effects, intangible capital, and Britain’s persistently low levels of investment – the policies we set out below are a plan for creating prosperity in the UK.”
Mr. Colvile’s unalloyed enthusiasm for ‘growth’ in the Age of Global Warming, and its various expressions, like melting glaciers, rising seas, out of control wild fires and other phenomenon. Is about the fact that Thatcherism, and its epigones, are a destructive political anachronism, still mired in the Economic Romanticism of Hayek, and his ‘Road to Serfdom’! This coterie has been eclipsed by the cumulative effects of that Free Market toxicity, since 1976: the immiseration of the working and middle classes. A quote from Westlake is instructive about that ‘Capitalism’:
Westlake: This big change that’s been going on in the economies of the rich world is about the nature of capital. The nature of what businesses invest in.
Once upon a time, what businesses invested in was mostly physical things — machines, factory buildings, vehicles, computer hardware — things that, if you hit it with your foot, you’d stub your toe. That’s been gradually changing for at least 40 years, and each year, businesses gradually invest less in that physical stuff and more in what we would call “intangible assets.”
These are things that, like physical capital, have a long term value. But they’re immaterial. Things like research and development, designs, organizational capability, and even brands, marketing, and artistic originals.
The reader need only look to the Financial Times of November 18, 2020, by Jonathan Wheatley, for a panoramic perspective on the effect of The Pandemic on debt levels
Headline: Pandemic fuels global ‘debt tsunami’
Sub-headline: Governments and companies took on $15tn more borrowing in first nine months of 2020, says IIF
The rise in emerging market debt was driven by a surge in non-financial corporate debt in China, bringing total emerging market indebtedness to $76tn. Excluding China, the US dollar value of debts in other emerging markets declined this year, reflecting the falling value of local currencies against the dollar.
Mr Tiftik said financial institutions had tried to “build buffers against the Covid shock”. “A significant proportion of their new debts has been directed to clients, which has been very useful in absorbing the initial shock of the crisis,” he said.
Debts in advanced economies rose by more than 50 percentage points this year to hit 432 per cent of GDP by the end of September. The US accounted for nearly half of this; its debts are set to reach $80tn this year, from $71tn at the end of 2019.
Mr. Colvile is just another Political Technocrat, and newspaper pundit, in either case, with a product to sell. Though the vexing, many layered political/economic crisis, renders his notion of ‘growth’ into a convenient reductivism. That is in fact propaganda, with Boris Johnson acting as it’s spendthrift villain. The reader can only wonder what Mr. Colvile would write, had Corbyn been elected?