[lbo-talk] Britain's failed experiment

[James Heartfield]

No, after inflation it is still an increase, though only just. Of course you are right to say that investors anticipate some substantial cuts and that has a consequence on their future investment decisions, but investors expectations are more based on the poor state of the private economy in Britain (and Europe), with the government only reflecting that. 

On the whole, it strikes me as a Keynesian bugbear that government expenditure is the driving force, and investment levels reflecting that, rather than the other way around. To put it in the context of the original article, Britain’s failed experiment is capitalism. And after all, the Blair and Brown governments expanded public expenditure and employment a great deal, but industrial growth was very weak. So you could add, Britain’s failed experiment was Keynesianism.

I prefer Lenin’s line on government expenditure, in his assault on the Russian finance minister Witte, showing that the spending all went on armies, police and the Tsars. http://www.marxists.org/archive/lenin/works/1902/jan/15.htm Or when Lenin quotes Marx in State and Revolution: 'The Commune made that catchword of bourgeois revolutions, cheap government, a reality, by destroying the two greatest sources of expenditure - the standing army and State functionalism.'