GFTU BGCM Minutes 2017

completely different view of how the world should be run and it was based

around the idea that instead of full employment the main objective of economic

policy should be low inflation, that you should cut taxes on the rich, because

that would allow a trickledown economics to work, wealth would cascade down

from rich to poor, that you should free finance more the constraints that had

been put on it in the 1930s after the Wall Street Crash and the whole objective

of economic policy was to shrink the size of the state and just allow free

markets to work. That model actually ruled economic and political thinking for

35 years thereafter, but in 2008 that model hit the buffers. That model proved

to be completely and utterly unsustainable, as people on the social democratic

left had always said it would. If you take the example of the UK, manufacturing

had been supplanted as the prime driving force of the economy by finance in

the City of London, that trade union power had been eroded drastically and,

therefore, pay bargaining became more difficult, workers found it much harder

to get their fair share of a growing economy, so any productivity gains that the

economy generated by and large to a small elite and to capital rather than to

labour and for many years before the crisis broke I was writing stories saying

that there was a deeply worrying build up in personal debt and it is quite

obvious why that was, because if people are not getting wage increases

commensurate with their productivity improvements and they want to see their

living standards go up, there are only one or two ways they can do it. Either

they can work harder, do more jobs, which some people did, or they can take

on more debt, they can try and take on more debt to increase the value of their

assets, their house and then use their houses essentially as ATM machines

and extract money that way to keep their living standards up and that was

totally, totally unsustainable. The model broke down in 2007. Speculation

became so rampant across the global economy that even with quite easy

monetary policy from central banks the model just completely broke down.

My feeling, and I am sure this is true of a lot of people on the centre left, was

that this was the moment when there would be a renaissance of social

democratic, left wing analysis would arise and the new world order that we put

into place from the wreckage of this neoliberal system would be different, but

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