Austerity

I listened to an interesting conversation on Radio 4 this morning between Conservative politician Malcolm Rifkind, and French political commentator Agnès Poirier, discussing the French presidential elections.

 

During the talk Rifkind made the point that, in both France and the United Kingdom, there is no longer an ideological divide between the major parties. As he sees it, since the collapse of communism, and disillusion with socialism as an alternative, “we are all capitalists now”. While many would dispute that, when you have two alternatives and one is demonstrably unworkable, then you have no choice but to adopt the other. I’m not aware of anywhere other than North Korea where a state controlled, centrally planned economy is the order of the day, and if you don’t have that you must have some form of market economy. 

 

Poirier then made the point that the divide may well have been replaced by those in favour of austerity measures, and those against. Austerity is the new ideology. The alternative to this has to be a role for the state, where it is not anti-business, but can reassert itself against the markets and mitigate the worst effects of the harsh impact of market forces on ordinary people. As Will Hutton said in his Guardian piece the other day, we need a new kind of state, a smart state.