Austerity: here to stay?

Sunday 21 October, 10.30am until 12.00pm, Conservatory

The election of François Hollande as president of France at the same time as the Greek elections in May acted as a rallying call for many eager to reject the politics and economics of austerity, to which Europeans have been long told there is no alternative. Almost overnight ‘growth’, rather than austerity, seemed to be on everyone lips. Plan A for Austerity was ripped up, and Plan B was on. Although the subsequent elections in Greece returned a coalition headed by the pro-bailout New Democracy party, the anti-austerity Syriza seemed to gain the moral victory.

European burdens of debt, massive levels of youth unemployment, uncompetitive exports and low growth are real and demand stern and serious, grown-up answers. Should we be posing the question though in terms of either austerity or growth? Hard labour or holidays? Maybe it needs to get worse before it gets better. Austerity now, growth tomorrow? When William Hague said something so seemingly uncontentious and commonsense as ‘there’s only one growth strategy – hard work’, he roused little more than a chorus of businessmen protesting they were already flat out and the government should be doing more to help. But maybe we need to create the conditions for growth by working harder now, cutting out dead wood, being unsentimental about clapped-out industries? After all, real growth means more than just more government spending. It means producing more goods that can be sold at a profit. It means raising productivity through investment in technology, energy and infrastructure. It also often means a wrenching dislocation, even the end of the line, for workers made surplus to requirements. Have we the stomach for that?

Many of the rejections of austerity across Europe today seem to have something of a ‘stop-the-world-I-want-to-get-off’ character to them. A saying ‘no’ loudly more than saying ‘yes’ to something. After all, just what and where is Plan B? Dreams of sequestering Apple’s coffers to save the world aside, it is notable that Germany and France are committed to ridding themselves of nuclear power at a time when more cheap energy is just the kind of thing that could boost the economy. Hollande arrived at the Elyseés Palace in a sober part-electric car promising a ‘scrupulous sobriety of behaviour’, more teachers and higher taxes. Is that enough? Is it right to say that debt reduction should go hand in hand with economic growth? Is it irresponsible or just ambitious to argue that we should worry about growth first and (relatively smaller) debts later?

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Speakers
Dan Atkinson
economics editor, Mail on Sunday; co-author, Going South: why Britain will have a third world economy by 2014

Daniel Ben-Ami
journalist and author, Ferraris for All: in defence of economic progress and Cowardly Capitalism

Philippe Legrain
visiting senior fellow, LSE’s European Institute; author, Immigrants: your country needs them and European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right

David Smith
economics editor, The Sunday Times; author, The Age of Instability

Chair:
Para Mullan
senior project manager, Chartered Institute of Personnel and Development; FCIPD

Produced by
Angus Kennedy convenor, The Academy; author, Being Cultured: in defence of discrimination
Para Mullan senior project manager, Chartered Institute of Personnel and Development; FCIPD
Recommended readings
Paul Krugman:

To save the single currency beset by difficulties that stem from its initial design, Economics Nobel Prize laureate Paul Krugman argues that Europe should set its sights on low inflation but forget about implementing uniform austerity measures.

Philippe Coste, presseurop, 6 September 2012

Public money spent on 'digging ditches' won't stimulate the economy

State spending to boost growth needs to go beyond mere investment – it must transform the economy.

Mariana Mazzucato, Observer, 2 September 2012

Greeks voting in anger cannot expect anything different from Syriza

If the leftwing coalition were to win Greece's election, it would still have to follow more or less the same policy as other parties

Paschos Mandravelis, Guardian, 15 June 2012

Going South: why Britain will have a third world economy by 2014

With a second recession looming, Britain is facing a moment of truth. This book examines how the leader of the industrial revolution came to exhibit the features of a 'developing country'; chronic debt, volatile growth and vulnerability to external events.

Larry Elliott and Dan Atkinson, Palgrave Macmillan, 14 June 2012

Even if he wins the election, Antonis Samaras will not be prime minister or leader of the

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Anastasia Balezdrova, GR Reporter, 13 June 2012

Sorry, but SYRIZA won’t save Europe

The radical Greek leftists, along with Hollande in France, pose as anti-austerity yet promote ideas which will condemn Europe to long-term penury.

Brendan O'Neill, spiked, 16 May 2012

Ferraris for All: In Defence of Economic Progress

The growth of the economy and the spread of prosperity are increasingly seen as problematic rather than positive - a trend Daniel Ben-Ami has termed 'growth scepticism'. Prosperity is accused of encouraging greed, damaging the environment, causing unhappiness and widening social inequalities. Ferraris for all is a rejoinder to the growth sceptics.

Daniel Ben-Ami, Policy Press, 14 March 2012

Greek sovereign debt crisis and Ecuador

The Greek drama has shown that every solution that is based in the compromise and the negotiations with the creditors and the international financial organisations leads to unemployment, poverty, neocolonial loan agreements, police brutality, constitutional coup d’etats and finally at default.

Leonidas Vatikiotis, contramee, 15 February 2012

Delivering growth while reducing deficits: lessons from the 1930s

In the Great Depression of the 1930s Britain grew strongly despite significant cuts in the government’s deficit, shortterm interest rates which were already as low as possible, and the international economy being in disarray. That is exactly what policymakers need to achieve today. This paper sets out what happened in the 1930s and what we can learn from that experience.

Nicholas Crafts, CentreForum, 2011

Aftershock: Reshaping the World Economy After the Crisis

The financial crisis brought the world to the brink of economic breakdown. Now bankers' bonuses are back, house prices are rising again and politicians promise recovery while unemployment rises, frictions with China grow and the planet overheats. Is this really sustainable?

Philippe Legrain, Little, Brown, 6 May 2010


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