For a number of decades our economy has failed to work for ordinary citizens. Stagnant wages have been combined with underemployment and rising costs of basic goods like healthcare, education and housing. At the same time, a small minority of the population make obscene profits, while in the background we continue to hurtle headlong into an environmental emergency. However, despite there being no shortage of anger and anti-elite sentiment expressed in what is often referred to as the ‘culture wars’, no significant challenge to the dominant economic model has broken into the mainstream. The pound and the fury argues that behind this failure of imagination are a set of taken-for-granted myths about how the economy works – myths that stifle debate and block change. The book analyses these myths, explores their origin, how they circulate and how they might be dispelled at a time when, away from the public gaze, economic theory is opening up new possibilities of economic action. Possibilities that, as we emerge from the chaos of Covid-19, could lead to the radical structural changes we desperately need.
important stimulus to the emergence and
growth of the UK software industry, this trajectory of growth has had its limits. Firms are constrained both by the growth of demand and by the lack of
marketing skills that might re-invent market boundaries so necessary for the
development of software products. The absence of a large commodity software market has meant a less radical impact of the software industry upon
industrial growth in the UKeconomy.
Thus, in this chapter, we describe the evolution of an industry driven
by the need for outsourcing and limited by the
From the Bank of Scotland’s origins to HBOS and crisis
those that actually struck deals (stock
jobbers). This greatly liberalised trading practice and strengthened both London’s
role as a global financial capital and the City of London’s dominant position in the
Finally, 1986 also saw the Building Societies Act, which paved the way for
the demutualisation of many building societies as they transformed into jointstock companies in which former members of the mutual organisation became
corporate shareholders. In this way the two largest UK building societies became
the new banks, Abbey National and Halifax
avoided, it was almost business as usual. No political, economic or intellectual paradigm shift emerged. And, arguably, the UKeconomy has been floundering ever since.
The real question driving this chapter is why did nothing really change? What accounted for ‘the strange non-death of neoliberalism’ and everything associated with an economy driven by financial markets, internationalization and debt?
One part of the answer supplied here is that much of the result came down to the technocrats in
the Exchequer and successive chancellors have reshaped the UKeconomy from a nation that secures economic advantage through foreign exploitation, to a country that attempts to profit by selling its assets, services and people to others.
How did this come about? As this chapter explains, following the dismantling of state economic management and controls in the early Thatcher years, the Treasury strongly embraced the older free-trade Gladstonian philosophy that had once served the empire-based model of the British economy so well. Similarly
The Treasury is one of Britain’s oldest, most powerful and secretive institutions. But all too frequently it has escaped public scrutiny when it comes to investigating the ups and downs of the UK economy. More often, it is depicted as a saviour, repeatedly rescuing the nation’s finances from the hands of posturing Prime Ministers, powerful special interests, and the combustions of world financial markets. It is a bedrock of government stability in times of crisis. However, there is another side to the story. The Exchequer, more than any other institution, has shaped modern Britain’s economic system. In between the highs there have been many lows, from botched privatizations to dubious private finance initiatives, from failing to spot the great financial crisis to contributing to ever-growing regional imbalances and economic inequalities. Davis’s book goes behind the scenes to offer an inside history of the Treasury, in the words of the chancellors, officials and civil servants themselves. It shows the failings as well as the successes, the personalities and the thinking which have shaped Britain’s economy since the 1970s. Based on interviews with over fifty key figures from the last five decades of Treasury life, it offers a fascinating, alternative insight on how and why the UK economy came to function as it does today, and why a paradigm shift and institutional rethink is long overdue.
UK’s population density varies widely, as
one might expect, but on average it was 255 people per km 2 in
The UKeconomy is open, with a ratio of trade to gross
domestic product of 61% in 2019, and is one of the world’s most
financialised economies. The Irish economy, however, is one of the most
open in the world, with a ratio of trade to gross domestic product of
thereafter. Which makes one wonder how it can possibly be absolved of all responsibility for the debacles of the UKeconomy during that time.
Of course, there have been highs but also many lows, from botched privatizations to the mass sell-off of social housing, from favouring international finance over national industry to building up vast off-balance-sheet debts, from facilitating huge income inequalities to regional and generational inequalities. And don't forget all those market bubbles that it either ignored or fuelled
and the right of the political spectrum.
What does the UK trade with the rest of the EU?
During the Brexit referendum debates, prominent figures in the Leave campaigns argued that the size of the UK’s market and its international importance meant that other countries would have to prioritize negotiating new trade deals with an independent Britain or risk damaging their economic growth. Pro-Brexiteers expressed supreme confidence that other states would be lining up to seal deals with an independent UK, and that these deals would be better for the UKeconomy
An institutional perspective on UK economic history
One of this book's key objectives was to document the part played by the Treasury in the evolution of the UK's economy. Political and economic histories tend to focus on big ideas and leading political actors or dramatic events and shifting global economic forces. Somewhere in between lie institutions, linking actors and forces and facilitating more enduring changes. The Treasury is the most significant economic institution in the UK, far more powerful than its public visibility suggests. As such, whether destabilizing or defending the status