Monday, June 4, 2012

The Courageous State: Rethinking economics, society and the role of government

By Richard Murphy, reviewed by Heather Blakey
June 2012

The Courageous State is an indictment of the behaviour and agendas of contemporary politicians. Richard Murphy argues that we have ‘a government ... run by cowards who believe that there is nothing they can do but acquiesce to the demands of the market’ (p6). He juxtaposes the cowardly state, whose politicians have swallowed the lie that market outcomes are always better than state-designed outcomes and run away from their responsibilities by leaving everything to the market, with the Courageous State, whose politicians have integrity, who know that the future is uncertain and that there is a great deal they do not know, but also know that they must take responsibility, must choose and must act. He asks how we can expect people to have faith in politics and politicians when our politicians themselves have no faith in themselves but only in ‘the market’.

This is a book bristling not only with indignation, but with disbelief at the thinness and absurdity of the claims of neoliberalism: for example, that markets know everything but people make mistakes, that people are always selfish, always rational, always motivated by financial gain, and that transactions or exchanges are irrelevant unless they are cash-measurable (Murphy recognises that there are more nuanced neoliberal arguments, but makes a case that politicians act on the meta-narrative). The book shines a strong light on the narrowness of the economic vision that informs UK policy from Thatcher onwards.

Murphy wholeheartedly rejects neoliberal economics as the framework for thinking which got us into our current troubles, and makes a passionate and compelling case for a new framework which might get us out of them.

Part 1 of The Courageous State refutes the neoliberal analysis of the state and demonstrates how and why the state is not simply important but the very bedrock of a healthy and sustainable economy. However, Murphy does not simply offer a critique, though he does this with useful factual detail and conviction, but in Part 2 proposes an alternative model of economics. Running through the book are two conceptions of human nature: the grasping homo economicus of neoliberalism is displaced by an empathic, relational being who can only flourish, perhaps only exist, in society and in community. The former is motivated by acquisitiveness, the latter by the drive to maximise human potential (both individually and collectively). Murphy recognises that these are not new ideas; simply that they are new to mainstream economics.

The main aim of The Courageous State is to explore the kind of economics we need if this is who we are. Murphy proposes an alternative framework for thinking (he rejects the scientific connotations inherent in the word model) in which the goal of economics is to help us maximise our potential in four areas: material well-being, emotional well-being, intellectual well-being and our sense of purpose (which he judges a central human need). For me, this is one of the central charms of the book. The collective aspects of human identity are placed centre-stage as a human need and as a motivating force.

Murphy’s vision is clearly communicated, and The Courageous Stateoffers us practical and conceptual tools for rejecting the neoliberal ideology which has underpinned government policy for the last thirty years. He distinguishes the cash economy of ‘feral finance’ from the real economy, and argues that the Courageous State should reduce and limit the former while promoting the latter. Part 3 of the book offers an exhaustive wealth of ideas on policies, including with regard to tax as a central right and power of government, that politicians couldchoose if they were guided by the broader vision of economics that Murphy proposes. In the bicentenary year of the Luddite Rebellion, I feel compelled to make the point that when Murphy says he is a not a Luddite but that we should provide tax relief to encourage employing people instead of machines, he is indeed making a proudly Luddite argument: that technology should not harm people and communities.

Murphy’s policy proposals are a key strength of the book. They overwhelmingly demonstrate, in very specific and concrete detail, that There Is An Alternative. Yet whilst Murphy invokes democracy throughout the book, both as necessary to the Courageous State and as threatened by the cowardly state and the reality of feral finance, I found there to be a central question which the book does not answer: how do we – as democratic citizens – act to create a Courageous State and not a cowardly one? Murphy’s perspective is powerful and compelling; it would only be strengthened by a more central analysis of power. Neoliberal politicians are not merely cowardly – by and large, they are themselves amongst the elite who benefit from the appropriation of resources by a tiny wealthy minority. They will not simply choose to be courageous. It is we, as active democratic citizens, who must demand it. This book is, however, a significant resource in that campaign.

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