The cost-of-living crisis has been decades in the making

The soaring cost of living, aggravated now by the fallout from the war in Ukraine, is bringing dreadful difficulties and hardship for huge numbers of people. This is the latest in a long series of economic crises which successive governments have been unable to manage effectively. How can Britain stop stumbling from one crisis to the next? By escaping from the sustained underinvestment and rising borrowing that have left Britain trapped in the Long Depression and that have robbed governments of the slack they should have to help people get through such challenges.

Read the full article here.

Why is America playing war games with China?

Aukus, the new security partnership between the US, Britain and Australia, is being widely viewed as a ‘paradigm shift in strategy and policy’ for the Asia-Pacific region.

The pact’s significance goes well beyond sharing various advanced military technologies, including nuclear-powered attack submarines. It amplifies three existing trends in international relations that have been building up for over a decade.

First, it continues America’s targeting of China. Second, it intensifies the militarising of America’s strategy towards China. And third, it accelerates the unravelling of friendly relations between Western nations. These three trends together threaten geopolitical stability and peace.

Read the full article here.

Shutdown: the end of an economic era?

Particular crises rarely change everything by themselves, but they can amplify what was already underway. This is how economic historian Adam Tooze approaches the Covid crisis in Shutdown: How Covid Shook the World’s Economy. He presents it as an event that brought pre-existing trends to the surface.

Shutdown is one of the first extended economic histories of the pandemic. It covers a single year, from Chinese president Xi Jinping’s public acknowledgment of the outbreak of a novel coronavirus in January 2020 to US president Joe Biden’s inauguration exactly 12 months later. The bulk of Shutdown is a comprehensive month-by-month commentary on the progression of the pandemic, the varied government responses to it and the economic, financial and political fallout.

Read the full review here of Adam Tooze’s new book Shutdown: How Covid Shook the World’s Economy.

The G7 is not all it’s cracked up to be

UK chancellor Rishi Sunak has hailed the Group of Seven (G7) finance ministers’ cross-border tax proposals as ‘truly historic’ and ‘seismic’. These proposals, which would establish a minimum global corporate tax, are to be targeted at multinational companies.

You can understand why Sunak was making noise about this. For years the largest international corporations, including the iconic Big Tech firms, have been adept at minimising their global tax bills. Making them stump up more lucre allows the UK government to pose as a global leader, and to give substance to its ill-defined ‘Global Britain’ slogan. No doubt there will be more of this from Boris Johnson this weekend, given it is Britain’s turn to host the G7.

Leaving aside the hyperbole from British ministers, what might the G7 tax agreement tell us about the state of international relations? In particular, does it represent the historic revival of ‘multilateral co-operation’, as many commentators have claimed? No, not really, is the short answer. Read the full article here.

Don’t blame Covid for economic devastation

It is unhelpful to present the economic disruptions over 2020 as costs of the pandemic itself. Claims that it is the virus, and not the restrictions, that is causing today’s devastating economic damage to production and jobs are misleading.

Understanding better how the economy is being hit is important for several reasons. A firmer grasp of all the costs arising from lockdowns and other official social restrictions is necessary for sound policymaking. Making decisions based on epidemiological models without a broader assessment of the costs – social, health and economic – and of how they have arisen is a reckless approach from political leaders.

Moreover, these other impacts from the pandemic measures are helpful in assessing the lessons to be learned in preparing for and managing future pandemics.

Read the full article here.