State intervention

Trade wars cause real wars? It’s not that simple

philmullan Politics, State intervention, Trade

President Trump’s imposition of steel and aluminium tariffs is counterproductive for the US economy in several ways. It will increase import costs and hit US businesses and consumers. It will cause tariff retaliation from other countries, thus restricting America’s export sales. But, more importantly, it will inhibit economic advancement. Tariffs are anti-growth and hold back economic renewal at home. They shield domestic companies from engaging in the long-term investments needed to grow productivity. And in today’s depressed conditions, they act to reinforce stagnation.

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Making sense of the stock-market turmoil

philmullan Economic policy, State intervention, The longest depression

The stock-market turmoil this February has prompted a huge amount of financial media analysis. If you’ve been following it all, there’s a possibility that you may have been less enlightened than you had been hoping for.

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After Carillion: we need to end zombie capitalism

philmullan Creative destruction, Economic policy, State intervention, Zombie economy

The liquidation of Carillion, Britain’s second largest construction company, is extremely worrying for its 43,000 workers and their families worldwide, of whom 20,000 live in Britain. This big government contractor going bust means damaging disruption not just to its own employees, but also to its many suppliers and their employees. And it is bad news, too, for the many more thousands relying on Carillion for their pensions. Unfortunately, though, much of the initial political and media reaction has been too narrow to learn the lessons from this calamity. The state has been propping up business and making life more precarious for workers.

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Free market vs nationalisation? It’s a delusional divide

philmullan Economic policy, Investment, Politics, State intervention

This autumn’s UK party conferences triggered reminiscences about the old political debates from the 1970s and 1980s. Jeremy Corbyn wowed his new Labour Party supporters with a call for full-scale nationalisation, including of the rail, mail, water and energy companies. In response, senior Tories used their conference speeches to assert the merits of the ‘free market’, under the inspiring mantra of ‘no return to the 1970s’. Theresa May used her infamous leader’s speech to declare that ‘the free-market economy, for so long the basis of our prosperity’, is under threat, and needs defending.

As a great 19th-century thinker remarked, history repeats itself: the first time as tragedy, and second as farce.

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