The anti-austerity protest which is getting under way on 20th June, is not just a politically motivated objection to a policy of the governing Party. It is a protest with deep foundations in both theory and common sense.
For successive governments GDP growth has been the holy-grail. Despite misgivings over its validity (https://gordonpearson.co.uk/2015/02/19/the-great-gdp-deception/#more-1278), it is accepted that balancing a budget with a growing GDP is a whole lot easier than doing so in recession. But imposing austerity on the economy only stifles GDP growth. So why do governments of both main Parties – assuming Labour takes the suicidal Blairite route – accept austerity as the necessary medicine for our economic ills?
The economy is a complex of many different sectors, public and private, that relate to each other in all sorts of different ways, and it is continually on the move with some sectors growing and some shrinking, some dying off altogether and new ones emerging. That dynamic is the result of millions of people striving to make progress. Politicians don’t control the economy; the best they can aim for is to do the people no harm.
Continue reading The Common Sense of Austerity and GDP growth