How does a liberal approach differ from a neo-liberal one that still distinguishes it from socialism? I need educating!

GDP per capita 2010(excluding Singapore and Norway,tiny countries).In first place,THE USA(46.8),further down the list THE UK(35.6),ahead of Japan,Italy,and France,despite the disastrous mis management of the economy,1974-1979, and 2001-2010,by Labour administrations.If you took Scotland and Wales out of the picture(socialist paradises),you would see that the USA/England model works.

As posted here before, it tends to get overlooked that Adam Smith set out clear rationales for government intervention in market economies – in respect of competition policy and the “third duties” of the sovereign.

Early in the 19th century, Parliaments started to pass a long succession of factory acts, initially to protect children and women from gross exploitation, with the clear ideological implication that self-regulation could lead to unacceptable social consequences. The 1870 education act was passed belatedly recognising that basic schooling couldn’t be left to charities and the churches. Churchill, as trade minister, introduced the trade boards act in 1909 to regulate minimum wages in sweated trades.

The mainstream professional economics literature included rationales for governments to introduce taxes and subsidies to correct for spillover distortions in the writings of Marshall and Pigou going back more than a century.

Quite where that leaves the Anglo-Saxon model is unclear but try Andre Sapir on: Globalization and the Reform of European Social Models:
http://www.ulb.ac.be/cours/delaet/econ076/docs/sapir.pdf

The standard development model is that newly industrialising countries tend initially to grow much faster than Britain did in the course of its pioneering industrialisation starting towards the end of the 18th century because of newcomers learning from the past and because of available “surplus”, low-productivity labour in agriculture which migrates internally to fill the growing numbers of industrial jobs.

There are several reasons to account for Britain’s relatively slow post-WW2 growth compared with west European peers. In particular: (a) Britain’s greater spending on military defence as a percentage of national GDP than west European peers; (b) Britain emerged from WW2 with about 4% of the labour force working in agriculture, compared with c. 25% in the case of France and Germany, which meant those latter countries had relatively more surplus labour to draw on for employment in industry, as farming methods improved, before generating inflationary pressures in domestic labour markets. West Germany also had the benefit of an inflow of about 4m skilled refugees from Eastern Europe.

In short, the Anglo-Saxon model, whatever it was, wasn’t the only factor affecting growth performance.

For a heavyweight reference, try Crafts and Toniolo (eds): Economic Growth in Europe Since 1945 (Cambridge UP)

Some individual chapters in that are available online, including: Charles Bean and Nicholas Crafts: British economic growth since 1945 – relative economic decline . . and renaissance?

1
liberalism in markets tends to mean ‘laissez-faire’ but in reality this has never happened, not least because of the necessity for uniformity for ‘fair’ competition.
Neo-liberalism, to some extent, acknowledges that states need to intervene in markets to ensure certain environments don’t work against markets, such as monopoly, cartels and, of course, property rights.
Corporatism (state intervention targetting the demand side of markets) acknowledges that markets cannot achieve the appropriate distribution of social goods, therefore, the state intervenes to ensure that all have access to education, health and, latterly, consumption of essentials eg. means-tested benefits such as housing, tax-credits, child allowance. Sometimes (for good reason) referred to as socialism, but it isn’t socialism.
So, both neoliberalism and corporatism requires that the state intervenes in markets, but the former looks at the process of markets the latter, the outcome of markets. Also, neoliberalism is associated with middle-to-to right wing politics and corporatism with middle to left.
Socialism is an economic system in which individuals to not own the means-of-production, there are several models of socialism eg state socialism or co-operatives based on localism
I’ve attempted to be simplistic here, but the main thing is that neoliberalism and corporatism are capitalist models whereas socialism is not.

Neo-liberals don’t assume the anglo-saxon model is best. They say the neo-liberal model is best, which different countries embody to a greater or lesser extent and in different ways. Anglo-saxon countries have tended to have more flexible labour markets, while European countries have managed to avoid runaway military spending and going to war with every damn thing that moves.

This clarifies the way neo-liberals interpret the historical evidence: http://www.econlib.org/library/Columns/y2010/Sumnerneoliberalism.html

Substance matters more than labels. Try Hobbes:

“For words are wise men’s counters; they do but reckon by them: but they are the money of fools, that value them by the authority of an Aristotle, a Cicero, or a Thomas, or any other doctor whatsoever”
Leviathan (1660) Bk.1 Chp.4
http://etext.library.adelaide.edu.au/h/hobbes/thomas/h68l/chapter4.html

We need to be very clear about the connotations of labels for a meaningful discussion.

The ‘free market’ line is that we all benefit from a growing ‘cake’, but that has happened despite rather than because of liberal economic doctrines/myths (as Ha-Joon Chang has demonstrated).Without intervention many of those things we have taken for granted as being the benefits of capitalism – education, healthcare, a basic pension, some kind of safety net in the event of disability, unemployment, etc. would never have materialized. But now the proceeds of what growth there has been are being appropriated by the top 10% – most particularly the top 1% that no longer holds. Instead of earning a share of growth in income, the profits accruing have been loaned back, masking the true extent of accelerating inequality. With the collapse of debt-finance the mask is being ripped away. So now we see top CEOs walking off with 30% ruses in income while the severely disabled are told they must sit in their own sh*t due to lack of funds for social care.

Neoliberals like to pretend that it’s ‘all or nothing’ – no holds barred laissez-faire or some kind of Stalinist equalisation, but the lesson of history is that neither of these options is sustainable in the long run.

” More importantly, this table shows how less rich countries have caught up with the countries that were rich in 1960. That’s especially true of the Asian countries, but it’s also true to a lesser extent for the European and North American countries.”

Yes, it is called catch-up growth. Economies will converge unless fly-by-night politicians prevent them converging. You either misunderstand the argument or you are deliberately cherry picking. We in the UK were growing and getting richer in the 1960s and 1970s, but everyone else even in similar mature economies was growing faster. Why? Because statism was running amok in the UK.

Guess what? When we dumped statism we started to outperform the sclerotic European economies. So what you want to do is not look at a 1960-2010 chart, but look at a 1990-2010 and you will see the difference between economies who reformed and those who did nothing.

” But that isn’t the point. The neo-liberal line has been that the superior performance of the Anglo-Saxon model is blindingly obvious and only those of us with left-wing blinkers can’t see it. ”

I don’t about the Anglo-Saxon model. However, Denmark and Sweden are in Scandinavia and their economies are more neo-liberal than the UK. Chile are more neo-liberal than? Just picking some country in the region at random, er, Venezuela. How do you think they would compare with each other over the last twenty years?

The wider point is that all the developed world slowed down around the middle of the 1970s. No one knows for sure why. Tyler Cowen has written a book about it and said that we are in the midst of a great stagnation where we are getting diminished returns on everything. However, the argument is that those who applied neo-liberal reforms to their economy have slowed the least. Therefore, the 1960-2010 chart is useless.

My quarrel with self-styled “interventionists” is not about the principle of intervention – whatever that might amount to – but the arrogant assumption that some particular intervention is necessarily the best course.

Frankly, there are too many outstanding examples of state intervention in Britain which have produced down-right adverse consequences. And too often, there has been that parochial fixation against adopting foreign notions or even against looking around to see whether other governments had better ideas.

Memorably, JCR Dow’s study: The Management of the British Economy 1946-60 (CUP) concluded that demand management by governments had, on balance, been destabilising.

Because of state intervention, Britain was an early pioneer of nuclear power – and we are talking big money. Because of state intervention, we then opted for the costly advanced gas-cooled reactors of British design whereas the French, very sensibly, went for the pressure water reactors. Today, France generates about 80% of electricity from nuclear power. Apart from hydro power sources, it provides the French with one of the cheapest sources of electricity in western Europe. Even we buy French electricity for the national grid.

Then there was state support for ICL, which was going to be Britain’s answer to IBM. What was left of it was bought up by Fujitsu.

The decision by the Thatcher government to put the Pound into the European Exchange Rate Mechanism in October 1990 was cheered on by the Labour front bench. In the late 1990s, John Monks, as General Secretary of the TUC, kept telling us why we really had to join the Eurozone – which only goes to show that he really didn’t understand the implications of currency unions.

Before it was finally privatised in 1988, governments had poured £3.4 billions of taxpayers’ money into propping up British-Leyland, renamed the Rover Group. It went down the proverbial in 2005 with Patricia Hewitt as industry minister firmly at the helm of Britain’s industrial policy.

Whatever happened to Marconi?
http://news.bbc.co.uk/1/hi/in_depth/uk/2000/newsmakers/1527551.stm

For comparison, an example of sensible state intervention was that of the Conservative government’s nationalisation of Rolls Royce in 1971 to save the company from collapse. After turning the company around, it was privatised in 1988. It is now one of the few leading global producers of jet engines for airliners.

Neoliberalism is an ideological construct with a less than tenuous link to reality, which seeks to ‘prove’ via the empirically suspect notion of Ricardian equivalence, the circular reasoning of the panglossian Efficient Market Hypothesis and the infamous napkin-inspired Laffer Curve that government ‘interference’ in markets is either ineffectual or counter-productive.

Of course, a moment’s reflection on economic development in the real world suggests that the growth of capitalism alongside the growth of the state reveals a symbiotic relationship that undermines any idea that a low-tax, small government approach can lead to greater growth. Without the billions spent by government on infrastructure and research (albeit often defence-inspired) we would still be living in the stone-age – no integrated road system, no shipping or aircraft industry, no computer technology, no mobile phones, satellite TV, etc., etc.

Just about every advance in markets and technology has been dependent on government. Indeed, the US – that paragon of the market system is living on borrowed time – relying on an infrastructure designed and funded in an era of big government. As the levies crumble, bridges collapse, roads fall into disrepair and broadband access stagnates, even as the banking system effectively collapses, the ideologues, with their economic modelling and pseudo-mathematical equations pretend that 30 years of stripping away government regulations and lowering taxes on the richest Americans has improved economic efficiency!

The real motive is to strip away all those advances that made the lives of the majority more tolerable by protecting them from the rapacious excesses of the market – and saving capitalism from itself into the bargain – in favour of a Randian dystopia.

@10: “Just about every advance in markets and technology has been dependent on government. Indeed, the US – that paragon of the market system is living on borrowed time . . ”

The early technical and market risks of private sector businesses in America developing semiconductors were underpinned by military spending. This was motivated by the fears arising from the Soviet Sputnik, launched in October 1957, because, at that time, America had no ballistic missile with a comparable payload – or throw-weight. The minaturisation made possible by semiconductors was seen as a fruitful way of improving missile payload.

President Kennedy’s commitment to a national “goal of landing a man on the Moon and returning him safely to the Earth”, made in October 1961, was a hugely effective way of mobilising American public and political opinion behand the state spending necessary to accomplish that goal, including the development of the Apollo’s electronic systems.

It is patently obvious that the term neo-liberal has lost all meaning. To those on the left the term just means ‘ things I do not like so I will call them neo-liberal. ‘ Charles Wheeler, It may have escaped your notice but the Scandinavian economies are neo-liberal and high-tax. Greece is one of the least neo-liberal economies in the developed world and are low-tax. WTF has the Laffer Curve got to do with interference in markets? I have never heard any neo-liberal say government should not spend money maintaining and building infrastructure. Maybe if they spent less money on the useless things, they would have more money to fix the bloody pot holes on the roads. Give every home a fibre optic broadband connection and build a public transport network fit for the 21st century. I doubt whether many neo-liberals would disparage those things. You are exiting the reality-based community when you accuse neo-liberals of being Randroids.

This political game of “up neo-liberalism” or two-hate minutes for “neo-liberalism” is too reminiscent of the slogan wars in Orwell’s 1984:
http://www.youtube.com/watch?v=OdyKJ1xXph8&feature=related

As the demonised and reviled Goldstein had observed in his officially censored seminal work: The theory and practice of oligarchial collectism:

“Even the humblest Party member is expected to be competent, industrious, and even intelligent within narrow limits, but it is also necessary that he should be a credulous and ignorant fanatic whose prevailing moods are fear, hatred, adulation, and orgiastic triumph. In other words it is necessary that he should have the mentality appropriate to a state of war. It does not matter whether the war is actually happening, and, since no decisive victory is possible, it does not matter whether the war is going well or badly. All that is needed is that a state of war should exist.” [1984, Part 2, chapter 9]

What really matters is not the vague generalities of this phoney war between abstractions, where the connotations are none too clear, but whether specific proposals for intervention make sense in the context in which they are made.

One of the many problems in resolving disputed policy issues is when one group of advisers or officials seize ownership of specific proposals for intervention because they perceive that as a means of career advancement. OTOH private sector decisions are more likely to be profit focused – regardless of wider social costs.

True enough, but although a return to social democracy would be nice, the real goal is not to improve capitalism but to replace it with a socialist commonwealth. You know, like our predecessors wanted to do before we betrayed their principles?

@Andrew Boff

A liberal approach reinvests a portion of the value that society generates into the society.

A neoliberal approach does not.

“Socialism” is a word that has been so thoroughly abused by the people who are currently destroying America that it is little more than an emotional red-button, and is fairly meaningless.

–

Look at it this way – When a rainforest is cut down the soil that is left is particularly poor – because all of the nutrients etc are up in the canopy – they are “in-flow”.

Now – a liberal system aims to have as much value “in-flow” as possible. A neoliberal system aims to suck it all out into foreign bank-vaults.

So the Obama/Bush stimulus packages… which were supposed to boost the amount of value in-flow, failed because the banks just sat on the money. Corporations are now sitting on trillions in cash.

So that’s it really.

Some conservative forces in rural areas and on the edges of urban areas want effective market intervention to prevent more houses being built on undeveloped land, not less regulation of development:

The director-general of the National Trust, urges ministers to stop the insults and start listening to the widespread concerns about the planning reforms that are putting the countryside at risk.
http://www.telegraph.co.uk/earth/countryside/8739284/The-Government-must-stop-the-insults-and-listen-to-our-concerns.html

What’s the Anglo-Saxon or the neo-liberal policy prescription on this? Is there any difference?

Championing vague abstractions really doesn’t help to resolve real policy dilemmas which one way or another can affect the quality of life for real people.

@2 – Oh look, the Nordic Countries, and the Nordic Model, and their growth prove you’re mouthing off against the evidence. Shush, the adults are talking…

Richard

Am I being incredibly stupid and misinterpreting the table, or are all your numbers badly messed up?

Taking the UK line, I don’t see how a jump from 13,610 to 35,621 represents an increase of 62%. My calculator says that’s an increase of 161%. You’ve subtracted 2 not 1 from the all the ratios in your spreadsheet.

Does no one check these things?

Your Belgium / Italy / UK comparison – far from being 127% / 120% / 62% is actually 227% / 220% / 162%. Far less dramatic.

I think that others on the thread have demonstrated that your analysis has far too many assumptions, but let me add a couple of other things that can account for much of the differences.

The top 3 are starting from incomes of less than $20 a day in 2010 terms. An easy place from where to grow; Korea in particular has gone through its industrial revolution and is difficult to compare with mature economies.

Belgium gets a benefit of perhaps £3-4bn a year from having EU headquarters there. That’s roughly an extra 1% of the whole economy. Plus NATO plus all the others.

The UK paid down national debt equivalent to 50% of GDP between 1960 and 1970.

And so on.

It is a bit worrying that this appears to be the only internationalist post exant on Lib Con.

Why is that? I gthought we were supposed to be connected?

Anyway, there seems to be a bit of a stushie over paperwork from Lybia. CIA and MI5 acting like tits?

Anyone know anything more?

Off topic but, well, I think it is important and relevant.

We are led to believe that both the UKs MI5 and the US CIA have both rendered folk to Libya. To a regieme we allegedly detest.

Would someone tell me how that works?

I don’t know about you, but I find it disgusting. It makes me more interested than ever in the release of anything that the Scottish Government has on the Megrahi affair.

I suspect we have been lied to by our betters, y’know MI5 and such.

@8 Richard W

Yes, it is called catch-up growth. Economies will converge unless fly-by-night politicians prevent them converging. You either misunderstand the argument or you are deliberately cherry picking. We in the UK were growing and getting richer in the 1960s and 1970s, but everyone else even in similar mature economies was growing faster. Why? Because statism was running amok in the UK.

Guess what? When we dumped statism we started to outperform the sclerotic European economies. So what you want to do is not look at a 1960-2010 chart, but look at a 1990-2010 and you will see the difference between economies who reformed and those who did nothing.

Utter nonsense. France, Italy and Germany etc from the 40s to the 70s were at least equally or more statist than we were, and all had higher growth rates than us. In fact even the economy of the Soviet Union grew faster than us during the 1950s and 60s before stagnating.

Looking at the performance of neo-liberal capitalism from 1990-2008 tells us very little because it is rather like looking at a mirage. It is now clear that the alleged superior performance of those years was based upon an unsustainable credit boom which went bust spectacularly three years ago.

Bob B: “Some conservative forces in rural areas and on the edges of urban areas want effective market intervention to prevent more houses being built on undeveloped land, not less regulation of development.”

True. In recent decades Conservatives have fiercely promoted the unleashing of market forces – but only really things that do not affect their voters (or which their voters stand to profit from) and which they do not care about. See the contrasting attitude to privatising Radio 1 and Radio 4, for instance. Anyone who claims privatisation could damage Radio 1 is clearly a leftist throwback; but anyone who tries to privatise Radio 4 is the enemy of all decent people.

Conservatives are very happy indeed to see the private rented sector totally deregulated to the extent that many private tenants dare not complain to their landlords about anything for fear of eviction or retaliatory rent rises (myself included in that number); apparently this promotes a dynamic and efficient market and could only be opposed by leftists who don’t understand that it benefits tenants. However, their feelings are very different about the even more market-defying regulations on the building of new housing on their beautiful country view.

Cameron’s government may be about to find this out.

“Germany etc from the 40s to the 70s ”

Seriously?

“Ludwig Wilhelm Erhard (German pronunciation: [?lu?dv?k ???ha?t]; 4 February 1897–5 May 1977) was a German politician affiliated with the CDU and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery (“Wirtschaftswunder”, German for “economic miracle”), particularly in his role as Minister of Economics under Chancellor Konrad Adenauer in 1949 to his own ascension to the Chancellorship in 1963.”

And what was it that he did?

“A staunch believer in economic liberalism, Erhard joined the Mont Pelerin Society in 1950 and used this influential body of neoliberal economic and political thinkers to test his ideas for the reorganization of the West German economy. Some of the society’s members were members of the Allied High Commission and Erhard was able to make his case directly to them. The Mont Pélerin Society welcomed Erhard because this gave its members the opportunity to have their ideas tested in real life, something that had been lacking.”

Mont Pelerin Society….you know, Hayek and all the neo-liberals like Eamonn Butler at the ASI? The actual definition of neo-liberals?

“Erhard’s decision, as economics director for the British and American occupation zones, to lift many price controls in 1948, despite opposition from both the social democratic opposition and Allied authorities, and his consistent advocacy of free markets, helped set the Federal Republic on its phenomenal growth path. Erhard’s financial and economic policies soon proved widely popular as the German economy made a “miracle” recovery to rapid growth and widespread prosperity in the 1950s, overcoming wartime destruction and successfully integrating millions of refugees from the east.[3]”

Look, if you want to play games about economic history I’m up for it. But while you’re entirely free to have your own opinions you’re not allowed your own facts.

‘I don’t about the Anglo-Saxon model. However, Denmark and Sweden are in Scandinavia and their economies are more neo-liberal than the UK. Chile are more neo-liberal than? Just picking some country in the region at random, er, Venezuela. How do you think they would compare with each other over the last twenty years?’

Actually the slightest glimpse of the performance of all latin american economies since 1960 will show a period of abject disaster whilst neoliberal dogma was imposed and good growth the rest of the time….

(of course, gdp on its own means very little anyway. if the gdp has grown massively but noone but a corrupt 0.5% has seen any of it, it cannot be considered a success by any normal – i.e. not sociopathic internet rightist – human)

Isn’t the key part of neo-liberalism based on the starting point “assume that markets never fail and clear instantly”?

This explains a lot of its failures in stimulating growth – markets often fail and sometimes do not clear instantly…

@22 Jungle:

The Conservatives are deeply split on how far to deregulate town and country planning to allow building on previously undeveloped land. And btw I notice that the Neo-liberal flag wavers are keeping low and dodging this tricky question.

The issue is more complicated by far than whether to allow development in the designated Greenbelt, bringing loss of visual amenity for those fortunates with Greenbelt vistas.

There is the issue of development in flood planes and the social costs of preventing flooding. Development of some Greenbelt land will impose higher downstream social costs than other Greenbelt land in providing for drainage, sewage, utility supplies, expanding the capacity of the road network, schooling and healthcare because there is existing spare capacity in some cases but not others. How much of those costs will developers pay for?

In the London boroughs around where I live, most brown land sites have already been built on for residential developments in the last few years. What I don’t know is how far new housing development is really constrained by the land banks of builders and how far by the more stringent deposit conditions that mortgage lenders are setting for first-time buyers.

The neo-liberal silence on this is deafening and competitive flag-waving by the Neo-libs and the SocDems goes nowhere near resolving the complex policy dilemmas before we get to issues of how much government intervention there needs to be.

The discussion has to be lifted above that of a shouting match between rival fan clubs.

21. Graham

” Utter nonsense. France, Italy and Germany etc from the 40s to the 70s were at least equally or more statist than we were, and all had higher growth rates than us. In fact even the economy of the Soviet Union grew faster than us during the 1950s and 60s before stagnating.

Looking at the performance of neo-liberal capitalism from 1990-2008 tells us very little because it is rather like looking at a mirage. It is now clear that the alleged superior performance of those years was based upon an unsustainable credit boom which went bust spectacularly three years ago. ”

They really were not more statist than us. Even where their governments did try to direct the economy, they were better at statism than us. These Brad DeLong charts demonstrate how bad our post-WW2 politicians were at statism. http://www.j-bradford-delong.net/econ_articles/ucla/ucla_marshall2.html

The key thing is if you are not very good at something, er, stop doing it. Moreover, the Europeans got a lot of growth in this period through openness to international trade. However, we were already relatively open to trade. Therefore, they were starting from a lower base. However, by the 1970s the German growth miracle was over and they began to stagnate. Only the reforms over the last decade coinciding with the adoption of the euro has seen an improved German performance. France was stagnating so much that even the liberal economist, Paul Krugman wrote this column in 1997, mocking their hubris and perpetual sense of victimhood. It was obvious to everyone but the French where the problems lay and that was in stark contrast to the UK who had improved their performance. After underperforming in the postWW2 period why did the UK begin to outperform Germany, France and Italy as they stagnated? We reformed labour markets and stopped propping up failing industries through industrial intervention.
http://www.slate.com/id/1921/

Yes, the Soviet Union had impressive rapid growth rates during the 1950s and into the 1960s. However, it was based on expansion of inputs, rather than on growth in output per unit of input i.e. mainly capital and labour. Any schoolboy should have been able to work out that such growth will inevitably be subject to diminishing returns. For example, £1 billion of capital invested in an economy such as China will generate a higher GDP growth than the same billion of capital invested in a mature economy like the UK. Diminishing returns and the ‘ Lewis Turning Point ‘ means that such growth comes to and end. It did not stop people declaring it an economic miracle just like they do with China today. In fact, such was the delusion that Krushchev told the West that the Soviet Union would “be there at your funeral.” Yet, it was the West that watched with barely contained glee the Soviet Union collapse under the weight of its own hubris, inefficiencies and contradictions. I guess Total Factor Productivity matters after all.

Unsustainable credit booms would mostly affect NGDP and not so much RGDP. We had massive NGDP growth rates in the 1970s set off by credit expansion and the ‘ Barber Boom. ‘ However, the growth was mostly inflation. Our improved economic performance over the last twenty years cannot be put down to inflation and credit expansion.

23
And if you want to play games about economic history it’s a good idea not to leave-out relevant facts. Germany had massive benefit from the Marshall Aid Plan.
But this is a trait of neoliberalism, don’t admit that economic success had anything to do with anything else but the companies/individuals. Some are still talking about the Thatcher years in those terms too. It borders on delusional.

“Isn’t the key part of neo-liberalism based on the starting point “assume that markets never fail and clear instantly”?”

No, that’s the New Classicals.

I’ve been called a neo-liberal often enough that I think I can fairly claim to be one and we admit that markets can fail. That they often fail in certain circumstances and rarely do in others for example. We even spend quite a lot of time trying to work out what those times and places where markets fail have in common with each other and what those times and places where they work just fine have in common with each other. Why, we even go as far as to try and work out the differrences between those two sets so that we can finally mark out places on the map where we can write “here be markets” and other places where we have “hmm, bit of intervention needed here” and even “no markets please”.

To give examples, just for fun, group one might be “how should a pub be decorated?”, group two might be “yes, we need a carbon tax to deal with the pollution externality” and group three might be ” no, a free market in armies isn’t a good idea. Tried that, Wars of the Roses, definitely a bad idea”.

Now, if you want to argue against what we actually do and believe then carry on: but your arguing against some phantasmal straw man would just be a waste of everyone’s time really, wouldn’t it?

@28: “Germany had massive benefit from the Marshall Aid Plan.”

That’s dog-eared leftist mythology – which I’ve heard many times before. The UK had the largest slice of Marshall Aid by far, which our government then proceeded to squander on maintaining military bases around the world and other global postering.

“Britain actually received more than a third more Marshall Aid than West Germany – $2.7 billion as against $1.7 billion. She in fact pocketed the largest share of any European nation. The truth is that the post-war Labour Government, advised by its resident economic pundits, freely chose not to make industrial modernisation the central theme in her use of Marshall Aid.”
http://www.bbc.co.uk/history/british/modern/marshall_01.shtml

Many other respected reference sources make the same point.

The fact is that Labour governments and trade unions love armaments manufactuers because they pay their workers well as they sell exclusively to governments in negotiated deals where the competition is usually strictly limited.

BAE Systems, the armaments manufacturers, is currently Britain’s largest manufacturing company. Britain’s regular wars are good business for Britain’s armament manufacturers.

So much for interventionism.

30
The fact that Britain also received Marshall Aid doesn’t make the fact that Germany received it ‘dog-eared leftist mythology’.
If I receive a free £10 and you also receive the same, and I squander mine, but you invest yours and make double, it still doesn’t change the fact that you were assisted in making £10.

For a professional assessment of West Germany’s growth post-war, try this chapter from Crafts + Toniolo (eds): Economic Growth in Europe Since 1945 (CUP)

Wendy Carlin: West German Growth and Institutions 1945-90
http://www.ucl.ac.uk/~uctpa36/west%20germany%20in%20crafts%20toniolo.pdf

An advanced warning is that the paper by Wendy Carlin is technical and could prove challenging for those without economics priors.

Discussing the merits or otherwise of interventionism in Britain will probably prove more fruitful. I would dearly love to know the Neo-Lib position on allowing housing developments in the Greenbelt.

A thought on the West Germany’s economy is that for obvious reasons there wasn’t much spending on military defence and it didn’t have much of a defence industry.

This meant that its engineering companies, unlike Britain’s, had to make products that sold in real markets against international competition. Some companies, like AEG were bought up, but Siemens, Bosch and Braun are currently doing well in export markets with record sales. Sadly, much of Britain’s indigenous electrical engineering and electronics industry became too dependent on public sector purchasing and went down the tubes. But some of us can still remember names like Alfred Herbert, which made machine tools, and GEC, before what was left of it got absorbed into BAE Systems.

A worrying thought on the relatively strong perfomance of Britain’s economy prior to the financial crisis, how much of that was due to the booming financial services sector before the bust? Any improvement in Britain’s industrial competitiveness certainly didn’t show up in Britain’s trade figures, which stayed solidly in deficit.

GDP figures and league tables are little more than porn for the free-market economic apologists and have no relivence to how well a Nation is doing or how the population in that Nation is living.

America shows a rise of 70% since 1960, sounds good but then the reality is that it has raised it’s National Debt limit over 60 times since 1960, Bush raised it 5 times himself. The American labor market has been devistated since 1960, same as here in Britain where we have seen a rise of 62% at the same time as all our industry has been devistated and our Social, health and welfare bill skyrocket, just as in America, massive welfare and health bills all paid for by massive National debt. Throw in some long term wars and alls good for the GDP figures and the free-market apologists wet themselves with glee at how good we are doing.

S. Korea shows massive GDP improvment since 1960, but in 1960 it was just starting to recover from a major war, so up was the only way it could go plus the massive investment from America, which also went to improve their own GDP figures. Mathimatical and statistical nonscence.

The only ones who care and have any interest in GDP figures are the Bankers who rub their hands because they know good GDP figures mean massive interest payments for them to share among themselves in bonus’s and wages or as they like to call it, compensation for their time and intelligence.

GDP figures are economists way of selling us a gilded turd.

I’ve posted many times about how happy the Danes are with a high per capita GDP in the EU league table, one of the highest tax burdens for the affluent OECD countries and with one of the most equally distributed post-tax income distributions among countries for which data are available.

GDP is a convenient measure to compare national incomes and their growth performance but most economists have long since recognised its limitations as a measure of national well-being. Many other indicators are also relevant – such as the size of per capita prison populations, life expectancy, infant mortality rates, employment rates as well as unemployment rates, accessibility to healthcare and many more.

This isn’t news.