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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