A group of leading economists and social scientists have said austerians are guilty of “bad economics, bad arithmetic and ignoring the lessons of history”.
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A group of leading economists and social scientists have warned Europe’s leaders that ever-more austerity – as proven by today’s abysmal GDP figures – will not work, describing those pushing such solutions as guilty of “bad economics, bad arithmetic and ignoring the lessons of history”.
The warnings are contained in a new Oxfam pamphlet, “Be Outraged: There are Alternatives” (pdf), published this week.
The report’s authors include Sir Richard Jolly, a former UN Assistant Secretary General; Professor Stephany Griffith-Jones, Financial Markets Director at Columbia University’s Initiative for Policy Dialogue; and Professor Frances Stewart of Oxford University.
The publication calls for a new economic approach including government action to promote growth and transform the financial sector from a “bad master to good servant”, and makes the case for a Financial Transactions Tax to control speculation and act as a valuable source of revenue.
“Be Outraged” further warns that the austerity approach to reducing deficits and debt is “counterproductive” – leading to a “downward spiral of incomes and government revenues” and making it more difficult to reduce the debt and undermining growth prospects.
The main related problems that need urgent action, the pamphlet says, are:
Unemployment: More than 10 per cent of European adults are unemployed, up by 50 per cent since 2008 – more than one in five (22%) of under-25s are unemployed and in some countries above 40%;
Impact on women: Cuts in public spending usually leave women to pick up the pieces and children to bear the brunt – it is counter-productive to sacrifice their rights and support in the name of credibility in financial markets;
Inequality: Top incomes have soared in the UK and US especially – the globe’s richest 1 per cent (61 million people) earn the same as the poorest 56 per cent (3.5 billion);
Lack of international support for a global recovery: Action, including the fiscal stimulus, agreed at the 2009 G20 in London restored recovery for a year, helping global growth reach 4 per cent in 2010 – a new stimulus and renewed coordination is badly needed now;
Finance: The sector should serve the needs of the real economy and help manage and mitigate risk – for the past two decades it has done neither.
• Balls: “Complacent and out of touch” Cameron and Osborne to blame for deeper double-dip 26 May 2012
• With Plan B, we can have a good economy for a good society 31 Oct 2011
• There is an alternative 20 Oct 2010
• The Coalition’s £100bn gamble on growth without the state 21 Sep 2010
• The alternative to “Osborne’s bombshell” 9 Jun 2010
The publication (pdf) concludes that policies to deal with each of these problems are illustrated by examples of successful action – mostly taken from emerging and developing countries.
It says Europe’s leaders should now “learn from developing and emerging economies”, in particular the responses by Korea, Indonesia, Thailand and China to the 1997-2000 East Asian crisis and the recent successes of countries such as Brazil, Argentina and Thailand in reducing inequality.
Whether Messieurs Cameron, Clegg and Osborne will listen, however, is anyone’s guess.
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18 Responses to “Oxfam: Austerians guilty of “bad economics, bad arithmetic and ignoring the lessons of history””
Roger Spackman
Oxfam: Austerians guilty of “bad economics, bad arithmetic and ignoring the lessons of history” http://t.co/uqGjXHSB
Christopher Snowdon
How long before we can take Oxfam's charitable status away? http://t.co/WqgwExVz
Pat Potter
How long before we can take Oxfam's charitable status away? http://t.co/WqgwExVz
blind cyclists union
How long before we can take Oxfam's charitable status away? http://t.co/WqgwExVz
Lord Blagger
Piling on more and more debt at 500 bn a year when the off the book debts are included isn’t going to work either.
So its going to be forced austerity, massive defaults on those debts, and taxation for the sake of taxation.