Canada has now been governed for some time by conservatives who allegedly care about deficits and debt, yet when the implosion of American banks dragged Canada into a recession, our government started spending far more, not less. Years later, we continue to spend into the red and our debt lurches ever higher. By contrast, even since the ascent of the Conservative Party in London, the U.K. has been biting a fiscal bullet. They have chosen to trim government spending in the hope of jump-starting future economic growth—in a word, austerity. According to Mark Blyth, this is a bad idea: “Austerity doesn’t work. Period.” Believing it only persists due to “epistemic arrogance and ideological insistence,” he sets out to trace the intellectual history of austerity, going back to its roots, from Adam Smith, David Hume and John Locke to more recent proponents like Joseph Schumpeter, Friedrich Hayek and current German leader Angela Merkel. Then Blyth gives us a decidedly discouraging historical tour of austerity in action, which among other things makes us feel sorry for Great Britain’s prospects.
Blyth, a professor at Brown University, is an unusually gifted communicator of complex economic ideas. But though he pens such colloquial sentences—“Iceland, in many ways, was Ireland on crack”—this book is most suitable for readers with at least an intermediate familiarity with macroeconomics. Blyth does not pause long to explain the importance of bond yields. Yet his book provides a rich background for understanding the policy options facing those who would solve the ongoing Euro-crisis. Blyth also revisits the momentous American decision to bail out its banks, which continues to prompt Republican murmurings about the necessity for belt-tightening. Insofar as the United States and Europe have a debt crisis, it is partly the result of a banking crisis. Bank bailouts created much of the debt that we hear so much hyperventilating about. As for puny Iceland, it chose to let its toxic banks go bust, and its economy is now doing rather well.
Blyth is too rigorous to be an ideologue. He thinks austerity measures have their place, but only under the right conditions. Now, apparently, is not such a time.
Ministers are still mulling how they can collect communications data, and while quite rightly the debate about the ‘Snooper’s Charter’ centres on the threat to individual privacy, opponents also forget the threat such legislation would post for the UK’s economic recovery.
With good reason this Government has prided itself on being the most technologically friendly ever. Be it via the development of Tech City, the Future Fifty, the Enterprise Investment Scheme, reforming intellectual property or even the Entrepreneur Visa – the Government is ensuring that the UK becomes a place where internet-based start ups and established technology companies want to come and do business.
However, there is a risk that all of this good work would unwittingly be undone if we continue to proceed down a route full of unexpected costs and consequences. As successive governments have clamoured to get their hands on citizens’ communications data – it appears little considerations has been given as to how this will adversely affect the blossoming technology and electronic communications sector in the UK which is already worth nearly £55 billion and employs over 460,000 people.
The Comms Data plan — until it was vetoed by Nick Clegg — would have insisted that companies of a certain size collect and store all their customers’ data for a number of years — just in case the police or security services want to access it. This would be at their own expense.
By default the Government will almost certainly prescribe how these large volumes of data are to be collected and stored; which is effectively dictating the architecture which drives so many online companies.
Given the risks of starting up a business, who could blame tech entrepreneurs for re-thinking their decision to base themselves in the UK if these proposals do make it into law, as ministers still hope?
Which free-spirited entrepreneur will want government telling them how to fundamentally structure a key element of their business? Before entering Parliament I started and ran an exhibition and events design company – the parallel would be like the Government dictating to me which tools I could use to design with. Had that been the case, I would have set the company up elsewhere.
The Government has taken significant steps to build the UK’s international reputation for supporting the technology sector; yet risks undermining that by following a set of policies which won’t achieve their intended aims, will cost a significant sum of money, and will put off potential investors and entrepreneurs.
Any Government’s proposals have unforeseen unintended consequences. With the Comms Data proposals, the consequences are all too clear: they will hurt our economic recovery, as well as threaten our privacy.