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How Osbornism failed His vision for Britain was an acceptance of defeat

"Osbornism was a phantasm."(Luke MacGregor/Bloomberg via Getty Images)

"Osbornism was a phantasm."(Luke MacGregor/Bloomberg via Getty Images)


October 23, 2024   9 mins

That American authority is shot. That an accord and relationship will have to be established with illiberal governments. That the dominance of the dollar is over. That the world will be defined from here on out by “multipolarity”, with Britain as a slightly villainous clearing house, bolthole and broker to all sides.

This, in its broad outlines, is now the unifying worldview of the Brics powers: a loose pact of frenemies  — currently assembled in the city of Kazan — with whom, according to General Sir Patrick Sanders, we are on the brink of war.

But 10 years ago, this was also nothing less than the official policy of the British government. Britain was the first country — not Russia — to follow multipolar world theory as a guiding principle: the term Brics was coined by the British economist Jim O’Neill, and the country would also produce When China Rules The World, the smash-hit prophecy of American decline. America may have started to “decouple” from China almost a decade ago, but Britain still looks to Beijing as its natural source of foreign investment, as David Lammy’s visit this week proves. To Britain’s governing classes, the collapse of Lehman Brothers in 2008 was decisive proof that American hegemony was finished, and that Britain could no longer live off the fat of its dividends. This global system had now crashed, and it wasn’t at all certain that the country would now be able to maintain the lifestyle to which it had grown accustomed.

The times called for a new savvy. Concessions to changing global conditions would have to be made. Some scruples, such as the precise domestic arrangements of trading partners, or rules on foreign ownership, would have to be put aside.

This was the political economy of Cameronism. Everyone agreed that Britain, especially now, was a genteel legacy power; and it would have to traffic in this legacy to eke out first-world living standards.

It would mean selling off the last of the stored imperial wealth. It would mean, still more, the relentless merchandising of British heritage brands abroad. If Britain could not win the new Brics powers for liberal democracy, then it might yet win them for Dulwich College, the House of Windsor, and Macallan single malt. The new oligarchs would stash their wealth at British banks; British lawyers and law courts would handle their commercial disputes. They would hunt its fields, fish its rivers, buy its townhouses, and educate their young at its ancient schools — so many of them, in fact, that by 2016 St Paul’s School, George Osborne’s alma mater, would have to introduce a special bursary for the upper-middle classes as fees ballooned.

Few could see any alternative. Niall Ferguson, then something of a house historian to the Cameronite project, glibly predicted in 2011 that 10 years hence, Britain would be coasting off of Chinese foreign investment; Chinese purchases of Chelsea townhouses; and Chinese ownership of Scottish shooting estates.

But above all, this analysis was the making of George Osborne, Chancellor of the Exchequer between 2010 and 2016. Osborne lives in history as the austerity chancellor. Getting on for a decade after his fall, cuts to public expenditure are still held as an example of ‘Osbornomics’, and people like Rachel Reeves still feel the need to distance themselves from his legacy. But what really animated George Osborne was this diagnosis of Britain’s place in a post-Lehman world, of which David Lammy’s recent reset of relations with China is a faint echo.

At every turn, Osborne sought to sharpen the lines that Cameron hoped would stay pleasingly blurred. As his early biographer, Janan Ganesh, notes, those Conservative colleagues who held to pre-1997 cultural views were for Osborne not merely old-fashioned but troglodytic. For someone such as David Cameron, for whom the Conservative Party is a kind of social forum, the eventual apostasy of Michael Gove and Boris Johnson over the European issue came as a genuine shock. It did not shock Osborne.

He, too, carried furthest the Cameronite idea of Britain’s place in a post-American age. When it came to business-like relations with China, it was the “Osborne Doctrine” that The Economist wrote of, not the Cameron Doctrine. For him, competition in a multipolar world demanded that Cameronism be carried to its logical conclusion: that Britain really become a svelte, socially liberal entrepôt, open for business with anyone and everyone. This was the conceit. And it forms part of an emerging folk history of the 2010s as a period of liberal oligarchy; a never-ending party for dodgy donors and Brics influence-peddlers in which nothing was sacred and all was for sale. This glittering world, as the narrative goes, was eventually brought to an end by Brexit, lockdown, and the de-globalisation that they imply.

It isn’t hard to see why. Osbornism, as a positive economic vision beyond the simple fiscal retrenchment known as austerity, quickly became associated with the fire sale of cherished national assets to overseas buyers. The beloved chocolatier Cadbury was bought by Kraft in 2010; the Chinese firm Geely acquired London’s fleet of black cabs in 2013. By 2016, up to a third of the student body of the ancient boarding schools was drawn from overseas. In a bid to attract further Chinese investment, Cameron and Osborne declined to support anti-dumping measures, sending British Steel into a tailspin that ended with its acquisition by a Shijiazhuang-based industrial concern in 2019.

Osbornism was also supposed to mean the economic dominance of London. Much was made of the idea that Osborne had enjoyed a metropolitan upbringing, and that the squirearch milieu of Chipping Norton meant little to him. For Osborne, it was said, London was Britain’s real proposition to the world: as a discreet provider of professional services, and as a global playground for Brics oligarchs. Osbornism had ostensibly created the tax and visa conditions for just this. Canary Wharf, the Shard, and a 20% stake in the London Stock Exchange were bought up by the Qataris, and the growth of a “Moscow-on-Thames” was watched with smiling equanimity. This was held to be an example of the new ruthless national accounting post-crash, funded at the expense of the luckless provinces in the country’s north.

Capstone to the system of Osborne was the “Golden Era” of relations with China. Again, Osborne took this idea further than most. Engagement with China did not simply mean investment, but a full economic partnership. This had a logic. Before the decade was out, the European Union and the United States were once again making threatening noises about Britain’s position in Northern Ireland. In these circumstances, would it have been so bad to have in China an economic and diplomatic counterweight? The announcement, in March 2015, that Britain would be joining the Chinese-run Asian Infrastructure Investment Bank (AIIB) was a real coup, one that shocked and angered Washington. As one of the first practitioners of “multipolar world” theory, George Osborne had — perhaps by accident — produced a twitch of something like real strategic independence. If nothing else, Osbornism on the world stage hinted, however briefly, that there might be some alternative for Britain to the thankless enforcement of a rules-based international order, an order which, in the 2020s, does not permit Britain to control its own sea border.

These were cultural events more than they were economic ones. According to the tropes of the time, they spoke to a nation adjusting to stately poverty, whose traditional patterns of life were now sustained only by foreign money. But for Osborne, this was only what the moment demanded. Britain required a brute lesson of its place in the new world — a lesson which Osborne would administer, and of which the sale of flagship national assets was a symbol.

But there was always more theatre than reality to Osbornism. His public image was one of ruthlessness and hard choices, and so went the black cabs, the public schools, the legacy steelworks, along with other marquee national real estate like the Old War Office and the Admiralty Arch, which were both flogged on the cheap. So too was the practice — recently revealed — of selling cheese-tasting courses, magic lessons, and tennis matches with Conservative ministers to wealthy investors like Mohamed Amersi. Fiscal trifles by themselves, but seen by all as a sign of the moral compromises that Britain would now have to make. The fixation on curios like a direct flight from Manchester to China or a special visa for Chinese businessmen furnish two more examples.

All this could be presented as a kind of necessary stooping to conquer in the new Brics world, but none of them even made much money in the first place. Needless to say, no new era of svelte globalism resulted. In 2015, at the height of Osborne’s political fortunes, foreign investment stood at 1.54% of GDP — less than in France, that economic clamshell, where the figure was 1.76%. For all the talk of a “global race”, Britain left the first half of the 2010s no more globalised than it had previously been.

What Osbornism represented, in unconscious terms, was the anxiety felt by a governing class convinced of national decline after 2008, but which baulked at the possible solutions. By 2015, there was no entrepôt and no global playground, but there was much of the attendant seaminess. This was a system that had all the trappings of an oligarchy, but none of its possible enjoyments. And this pretend oligarchy began to decompose almost as soon as it was assembled. As the British economy flickered back to life, Osborne embarked on a reversal of course that would undo much of his own work. First to be walked back on was the idea of Britain as a bolthole for the global plutocrats of tomorrow. In 2015, Osborne levied an “oligarch tax” on sales of homes by non-UK residents, and called for action against the financial networks that had been exposed in the Panama Papers. Boris Johnson, then the Mayor of London, publicly opposed both of these ideas. Barely a year before the Brexit referendum, then, it was Johnson who was cast as the defender of liberal globalisation, and Osborne who criticised its excesses — the complete opposite of later alignments.

Osborne was also the first to call time on the dominance of London. As soon as the capital began once more to turn a surplus, George Osborne cast around for ways to cream it off and spread it elsewhere. Osborne was the great sponsor of northern devolution, and patronised the idea of a directly elected Manchester mayor. And it was Osborne, not Theresa May, who first played the card of the regions, of London against the “left-behind”. Years before anyone had heard of Levelling Up, George Osborne was the champion of a Northern Powerhouse — such a champion, indeed, that the idea began to dominate talks with the Chinese during his last year in power. These kinds of hang-ups are not usually the subjects of international trade and diplomacy. It was a strange kind of myopia, and it spoke much more to a Little England self-involvement than Brexit ever did.

Flushed with victory after the election of 2015, Osborne was already putting together an agenda for his own premiership, which, among other things, would have seen state expenditure further reduced to around 35% of GDP. This, after the previous five years of cuts, was justified again and again with reference to the international situation — the need for a leaner and possibly meaner Britain in a post-American world. Had this plan succeeded, something like real economic liberalism would have been created in Britain. To accomplish it, Osborne planned to strengthen the party’s ties with those former Liberal Democrats who had delivered the victory of 2015: asset-rich, rural, generally older, either retired or disproportionately employed in the public sector.

A strange choice. Such a group, flushed with assets and state pensions, were the current economy’s main beneficiaries, and had no interest in overturning it. Osborne was attempting to carry out a programme of economic liberalism through the agency of some of the most reactionary classes in England. But as an ideology, Osbornism became evermore reliant on these places so that, in 2024, the two — by a strange twist — are now treated as virtually synonymous. In practice, Osborne’s plan to slash the size of the state was a demagogic one, and it required a demagogic course. It would have meant a popular appeal to the lower-middle classes — the only reliable constituency for economic liberalism. As with so much else, Osborne shrank from the means, and he left it to rivals Boris Johnson and Michael Gove to make such an appeal.

“In 2024, London is manifestly not the global playground it was meant to be.”

Osbornism, as a distinct ideology, has left almost no material legacy. It was always a politics of phrase and image, and it vanished at a word. In 2024, London is manifestly not the global playground it was meant to be. It is shifty candy stores that now set the tone of its main streets, not the scions of sheiks and the CCP. With furlough in March 2020, the six years of budgetary austerity that compromised the domestic side of this agenda were undone at a stroke, and ideas of a leaner, more competitive Britain were all but forgotten. The Emirati bid for The Spectator and the Telegraph — for which Osborne acted as a consultant — failed, and the door is now to be closed on any future such acquisitions. The Chinese investment is now largely gone, and “Moscow-on-Thames” was quickly rolled up, with old Cameronite retainers like Evgeny Lebedev now figures of suspicion. Osborne is the only national figure on the centre-right who still makes the case for a ‘Northern Powerhouse’, his old party colleagues having now soured on devolution. In 2024, the sole physical marker of Osbornism is a folly: a fairly miserable English leg of the Chinese “One Belt One Road” initiative, a rail line that shudders to a halt in a field near Barking. Far from being a vein of commerce, it is only used once a week, to ship 34 wagons of tourist merchandise to the city of Yiwu. It’s a symbol of a future that never was; an oligarchy that never was; a strange personal affect dreamt up in a moment of panic, and soon dropped.

Instead, Osbornism’s true legacy lies in its phrases, which are still with us today. It can be found in the idea that there exists a popular force of Cameron Ultras in the shires: a “Blue Wall”, whose salient characteristic is social liberalism, rather than being very rich. Whenever we are told that this entirely hallucinated demographic would have no truck with action on illegal migration or a moderation on Net Zero, we are hearing the echo of Osbornism.

As an actual agenda, though, Osbornism was a phantasm; a devilish idea that flickered briefly across the national consciousness and disappeared. What if England really was run to make money? We have yet to find out.


Travis Aaroe is a freelance writer


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Paddy Taylor
Paddy Taylor
15 days ago

Excellent analysis – that I’m not qualified to rebut.
Rather that focus on the failure of Osbornism, I’d just make a comment on the problem of having characters like Osborne – and too many other unqualified insiders like him – in charge of Govt departments and making decisions that affect this country for years after their tenure.
George Osborne is a classic example of the modern career politician, who spent his youth and adolescence already planning his climb up the greasy pole. That is not a normal person, that isn’t someone who has the grounding in real life that politicians used to have. No ‘Hinterland’ as Denis Healey described it.
If one chooses to go into public life later on in one’s career it is likely to be driven by ideas of service or a wish to tackle specific issues in which one has an interest or expertise. A desire to enter politics straight from university is likely to be only about one’s own advancement, as a stepping stone to vastly well remunerated positions of influence.
Osborne was no more qualified to be Chancellor than he was to be Editor of the Evening Standard, or Chairman of the British Museum.
Look at his track record at the British Museum …. Not only are we likely to lose the Elgin Marbles, thanks to his generous “loan” of them to the Greek people, a fair chunk of the museum’s inventory was stolen and ended up on ebay! But no fall-out from that scandal was going to touch George, of course. How could he be expected to notice the thefts, or even heed the warnings? He was much too busy at his £650k gig advising BlackRock one-day-a-week, or his Robey Warshaw role that saw him pocket several millions in bonuses last year, or any one of his other plum, vastly-well-rewarded positions.
But honestly, should we really have expected anything different? Osborne’s entire tenure as Chancellor unfolded on the BBC News like an episode of Mr Benn, where our hero appeared each day in a new costume, visiting yet another business for yet another job-sampling photo-op. Hard-hatted and hi-vis-ed one day, hair-netted and lab-coated the next. By the time wee Gideon left Govt he’d tried his hand at almost every job in the country at one time or other – and always with that grin of creamy self-satisfaction, forever impressed by his own performance in whatever role he was cos-playing for the cameras that day.
He’s merely carried this on into his post-political career. Who could imagine that he was any more adept at, or suited to, brick-laying than he is at editing a newspaper?
For years this country has been blighted by the endless merry-go-round of quangos and grace-and-favour appointments for the same parade of frightfully well-connected, though far less well-qualified, people. Osborne is different from the rest of that cohort in one respect – Every one of those others are sub-Blairite, fashionably metropolitan-left in their outlook. Any of the “Conservatives” who’ve been granted such posts seem to have been lib-dems at heart. So, of course George was going to have to atone, was going to have to make some obvious propitiation to fit in with that crowd, who no doubt would otherwise see him as heartless Tory scum, the architect of “vicious Tory Austerity” – (by which they mean those merciless and savage cuts that saw public spending wantonly slashed from £617 billion in 2010 to only £842 billion pre-Covid.)
The long-ago promised ‘bonfire of the Quangos’ would have been a start, but it never happened. What this country actually needs is a clear-out of these Fauxialist placemen on a scale that would make the cleaning of the Augean stables look like a spot of light dusting.
Despite the hugely generous pay deals such people invariably snaffle up, none of these grace and favour appointees appear to take any personal responsibility for failures in the organisations they are given to run.
On the very rare occasions when their failures are too public, too egregious for them to remain in post, they’ll leave, but only to resurface moments later in another position – like an unflushable türd bobbing about in the bowl of British public life.

Peter B
Peter B
15 days ago

I’m starting to wonder now if I despise Osborne even more than Blair (though doubt that’s possible).
Osborne, of course, was the economic genius behind “Help to Buy” – a state-funded scheme to create even more house price inflation and make property even harder to buy for those without inherited or family wealth.
I also recall Osborne touting for Chinese investment for British nuclear power stations (still none built guys !). If this were a good investment, why on earth not make it ourselves ? We firehosed £10bns – or was it £100bns – on Covid and got nothing in return. No good claiming we didn’t have the money …
The only good thing Osborne ever did was his pre-emptive inheritance tax announcement that killed Gordon Brown’s early election plan.
One of the great pleasures of the 2016 EU referendum, was the realisation that Osborne would never become PM.

0 0
0 0
15 days ago

A strange salad of things worth remembering if not necessarily for the reasons suggested here. The very idea of ‘Osbornism’ fades away in any adequate historical perspective. Globalism was already old hat when George arrived at Number 11, and the idea that it was in some way at odds with Washington’s rules based order didn’t emerge in London but when caps began to be set differently in the Beltway. The crucial event here is the forced resignation of Rand’s Asia Head William Overholt in 2008, yet to be blamed on the financial crisis. While it is true and interesting that Osborne courted Chinese investment in ways that had the potential to become controversial among Atlanticists, it’s anachronistic to credit him will enacting a multi polar world for just doing what others had done before. Nor is it appropriate to praise or blame him for raffling British anything off to the highest bidder. That honour belongs to Maggie and she will reach out to maintain her IPR there even now.

Charlie Two
Charlie Two
14 days ago

Coke and hookers. sums up a complete bellend. born rich , connected, arrogant and thick, he left his mark alright; rather like a skidmark on boxer shorts.

Gordon Arta
Gordon Arta
14 days ago

Enjoyable read. But I think that ‘Osbornism’ was much simpler than suggested. With the Labour government certain to lose, and financial stringency needed, Osborne was put in by Tory grandees to protect his chumocracy from any tax rises, however much austerity cost the rest of the country, and open the door to making shedloads more money irrespective of where it came from. Dim and malleable Call Me Dave was merely the figurehead. Job done, Osborne stepped back to spend more time with his millions, and enjoy the accolades of family and chums.

Brian Kneebone
Brian Kneebone
16 days ago

Osborne was only one of a long line predecessors. The British Establishment has been floundering for generations. Whomever controls the levers of power and influence are always flogging an exhausted, if not quite dead yet horse.

Christopher Barclay
Christopher Barclay
15 days ago

Osborne’s failure was in not analysing why Britain produced so little the world wanted. He probably knew the answer but didn’t want to hear it: economic policy since 1997 and probably earlier was designed for the benefit of financial services and not manufacturing.
As stated Osborne also marketed Britain’s ‘legacy’ products: private schools, whisky, the Royal Family etc. This created a mindset amongst foreign investors that Britain was a country of the past and not worthy of investment for the future.

John Riordan
John Riordan
15 days ago

The idea that a nation can either be financialised or industrialised is a fallacy. It can also be neither or both, depending upon the extent to which markets are free and/or energy is cheap – and, of course, the relative intelligence of public policy.

The main reason Britain is not the 21st century industrial power that it could have become is down to the cost of energy. In the 20th century it was unionised labour combined with state ownership that wrecked the old industrial base, but there was no reason once Thatcher had defeated the unions why Britain could not have developed the more automated, high-value manufacturing base that characterises modern industrial nations. There is a reason we can’t do it now: prohibitive energy costs.

Susan Grabston
Susan Grabston
15 days ago
Reply to  John Riordan

Indeed. And Miliband’s blackout programme can only disimprove that situation. Energy is life.

Caradog Wiliams
Caradog Wiliams
15 days ago
Reply to  Susan Grabston

Yes I agree with a ‘but’. We have to be self-sufficient in energy and in food production. Wind and solar power is not the answer and neither are car batteries coming from China.
We really need our own oil for transport and nuclear power for electricity. But there is a huge, ginormous anti-nuclear lobby. Add to that the point that the green SE of England is a major user of electricity but would prefer the nuclear power stations to be on one of the Scottish islands. Somehow, we have to build the power stations near to where the power is used, for security and for efficiency of electrical transmission.

Stephen Barnard
Stephen Barnard
15 days ago

LOL – have you been to the “green” SE of England? It’s one giant traffic jam, even before the JSO idiots get involved

Steve Houseman
Steve Houseman
15 days ago

Build them where your current or mothballed generating plants are. That’s where your grid is. Yes small and lots of are good. Nuclear that is.

Peter B
Peter B
15 days ago
Reply to  John Riordan

Britain did actually develop more automated manufacturing after Thatcher defeated the unions. Several Japanese car companies set up in the UK (Toyota, Nissan and Honda) and with better [Japanese derived] management and less unionisation were highly successful.
So some opportunities were taken and were successful.
Though arguably not enough.
You’re absolutely correct about the energy costs. It’s so unbelievably stupid. “Unforced errors” aren’t only a tennis thing.

mike flynn
mike flynn
15 days ago
Reply to  Peter B

Unforced errors? Actually energy policy is deliberate.

0 0
0 0
14 days ago
Reply to  mike flynn

Especially Washington’s war on Russia, nordstream , etc. VonderLiar and Baerbock were inveigled into that but we didn’t have to join in. A Russian trade deal would have rescued Brexit, and still could.

0 0
0 0
14 days ago
Reply to  Peter B

For those Japanese the UK being in the EU and working to bend its regs in their interest was an essential part of the deal. The would be nationalists who pulled the plug on that sank the ship.

Dennis Roberts
Dennis Roberts
15 days ago
Reply to  John Riordan

“The idea that a nation can either be financialised or industrialised is a fallacy.”

Perhaps so, but that doesn’t contradict what CB said, which was that the UK chose financial services (London) over manufacturing (the north). Perhaps it could have chosen both, but the fact is it didn’t, and chose to focus on services. It made this decision long before higher energy costs arrived.

Charlie Two
Charlie Two
14 days ago
Reply to  John Riordan

you hit the nail on the head. energy.

Caradog Wiliams
Caradog Wiliams
15 days ago

Manufacturing was on its last legs in 1997, mainly because of the EU. When we first joined, the EU was presented as an unquenchable market for our goods but, in fact, we were too far away from the centre of the market – based around Germany. Then Germany copied us, sending a lot of its manufacturing offshore to countries like Slovakia. Of course, those cheap labour countries (now like Poland) began to take over.
So the idea of focussing on financial services was partly born of necessity. But the big downside of the financial service ‘industry’ is that it only concerns London. So today we have this big divide between London and the rest of the UK.
Today people say that we should concentrate on manufacturing. But what should we manufacture and where? We are further limited by having only one container port, Felixstowe, so heavy goods have to be trucked to the east and then go all around Britain to enter the open water of the Atlantic.
The point is that Britain is a country of the past and has no real future on a global scale. This makes it very important to become self-sufficient in food and energy. Reducing numbers in the country would help but things are going in the opposite direction -and fast.

Steve Houseman
Steve Houseman
15 days ago

There’s Moscow and then there’s Russia.
There’s London and then there’s England.

Edward Hamer
Edward Hamer
15 days ago

It’s very interesting to read this kind of high-level summary of essentially where the money comes from, because that’s what we don’t tend to actually hear (at least those of us who are more interested in cultural and social trends than economic ones). Is this what people mean by “political economy”?

Susan Grabston
Susan Grabston
15 days ago
Reply to  Edward Hamer

I agree that iwas nicely laid down.pulking the strands togethwr. We are living in an increasingly political economy. A failure to grow the pie will always increase tension over the size of the remaining slices and that has been our fate since 2008 complicated by money printing to excess (exacerbating inequality and thus slice sizes). For my money we are in the 1940s (in terms of debt scale) with 1970s characteristics (stagflation). State capitalism (allocation of credit by the govt towards favoured aectors) and financial repression (forcing funds to hold bonds providing lower than market rates of interest and – possibly- forced investment into UK plc which Hunt/Reeves are playing with irrespective of fiduciary duty) – these are now an emerging reality. Sadly it doesn’t end well. The years between 1945 and 1975 led us to the IMF, British Leyland and Concorde. But these things tend to be cyclical and, of.course, history only ever rhymes. My thoights – doesn’t make them right :).

Pedro the Exile
Pedro the Exile
15 days ago
Reply to  Susan Grabston

Excellent analysis althouugh I would add that its 1940/70/75 on steroids-compounded by debt>100% financed by Gilt Yields>4% and GDP “Growth”-such that it is probably 2% at best so a debt death spiral a mathematical uncertainty at some point-a welfare budget that is both escalating and out of control (7million on disability benefit of some sort?)-a deliberate policy of high energy costs and so de industrialisation-excessive regulation slowly killing London as a financial centre-and demographics that mean we have an increasingly ageing work force.None of these were prevalent to this extent 50 years ago.
Oh-and add in political and bureaucratic incompetence as icing on the cake.

Susan Grabston
Susan Grabston
15 days ago

Agree entirely on debt death spiral – there are not enough upside factors to stop it.
Europe and New York’s determination to kill London I understand. The FCA’s determination to do the same is more puzzling, unless they are under instruction.
Hard to believe Ockham’s razor applies?

John Riordan
John Riordan
15 days ago

The post-2010 austerity, such as it was, was borne almost completely by the private sector. The squeals of confected outrage from the public sector related to nothing more than a modest reduction in the rate at which Gordon Brown had projected public spending to rise post-2010.

Meanwhile in the private sector, genuine wage compression following the 2008 banking crisis was extended not only through the resulting 2009 recession, but was maintained for a full decade in most sectors. For millions of people in the private sector, we have been in a recessionary economy since the financial crisis and this hasn’t gone away.

The reason is simply that the banking crisis required that the failing institutions of the global banking system, and the bloated governments living off the cheap credit it made possible, needed to be allowed to fail. They were instead bailed out, and their failure now lives with all of us in the form of sclerotic growth, uncontrolled public debt, stupidly-high asset prices including that of housing, and persistently-sub-inflation wages.

Supply side reform was the only answer to the 2009 banking crisis but the chance wasn’t taken, and future historians will likely identify that failure as the point at which the decay of the West’s hegemony became unstoppable.

0 0
0 0
15 days ago
Reply to  John Riordan

Strange notion here. Supply side reform was exactly what Osborne tried and it failed as it always will because the adverse macro dynamics bury the productive forces supposedly liberated.

John Riordan
John Riordan
14 days ago
Reply to  0 0

With respect, the only supply-side reform the Coalition even attempted was to deregulate employment law, and it worked so well that it not only produced full employment in the UK, it mean that Britain for a brief period created new jobs at 10x the rate of the entire Eurozone, which led to the second wave of EU migration, during the Eurozone recession. Admittedly this also contributed to a low-wage economy which is bad, but you cannot blame employment policy for the consequences of bad immigration policy.

No reform of the State was even attempted, let alone carried to any sort of conclusion.

Lastly, the context of my comment was the banking crisis, and it was the job of Gordon Brown to impose supply-side reform on the failed banking sector: Labour was in power at the time of the banking crisis, not the Coalition. Instead he bailed out the broken banking system with taxpayers money. You cannot blame Cameron and Osborne for this failure when it was a Labour mistake.

Paddy Taylor
Paddy Taylor
15 days ago

……

Paddy Taylor
Paddy Taylor
15 days ago

…….

Paddy Taylor
Paddy Taylor
15 days ago

I’ve tried posting several times throughout the day – without success. It just never appears.
Anyone else having the same problem?

Steve Houseman
Steve Houseman
15 days ago

Yes a great and refreshing take on things. Don’t recognize the author from unHerd? Nice to read a bunch of great comments and not rants. Learned a lot but will need to reread. Now need to prove I’m not a robot.

Milton Gibbon
Milton Gibbon
15 days ago

His legacy culminated in 2019 – wages rising faster than inflation for the first time in years, the national debt (not just the deficit) being reduced, the state pruned back and people happy about it being further reduced (see the stonking Tory majority it had just won against someone claiming to want to “end austerity”). The figures are all there much as some would like to overlook them. As a sceptic of austerity myself for a long time while it was happening the pre-Covid path we were on was, in hindsight, probably the best I’ll see in my lifetime. Good article but would have liked more links for the disparate claims made. More please Unherd.

Lancashire Lad
Lancashire Lad
15 days ago
Reply to  Milton Gibbon

Whilst the “austerity” claims were always overblown by the opposition and media, the 2019 Tory majority was almost entirely due to the need to get the Brexit impasse sorted.