GFTU BGCM Minutes 2017
shock budget to take money out of the economy and that the economy would
be plunged into immediate recession if we had the temerity to vote for leaving
the EU and, of course, it was complete nonsense, the economy did not go into
meltdown after we left the EU and the explanation now is that, “Oh well, we
didn’t actually feature into our calculations that the Treasury might do
something and the Bank of England might do something”, but actually, of
course, everybody knew that the Bank of England would not just sit there and
allow the economy to plunge into recession and the Treasury would not do so
either. So Project Fear was a totally silly explanation really. It really was not
down to political miscalculation, in my view, and there was something more
fundamental going on.
The third explanation is that it was all down to the impact of the recession in
2008/09, that actually quite a lot of what has happened to British politics and
economics since then and not just to Britain but to the whole of the world
economy since then has been driven by what happened in 2008/09 and I think
now we are starting to get into more plausible reasons for why the vote turned
out the way it did. I think it is blatantly obvious that the world has changed
since the financial crisis of 2008/09, not really in the way that people on the left
like me, good old fashioned Keynesians, thought it would change, but it has
changed. My general belief was that 2008/09 would be for the free market,
neoliberal right what the oil shocks of the 1970s were to the social democratic
left, a major profound shock to the global economy which would lead to a
political and economic reorientation. In the mid-1970s what happened as a
result of the oil shocks was that a completely different view of how the
economy should be run became the prevailing view. Up until that point the
economy had been run on the grounds that full employment was the main
objective of economic policy, that there should be balanced growth between
the private sector and the public sector, that taxes should be used to build up
the welfare state and there should be a progressive taxation system and that
generally a rising tide lifted all boats.
When the world economy went into deep recession in the mid-1970s the free
market right which had been waiting for that opportunity came in with a
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