Paul Krugman (How the ‘unforced error’ of austerity wrecked Britain, 28 June) hits the nail on the head when he says that there was no economic case for the austerity that the coalition government foisted on us in 2010, the effects of which are still with us. It was a political choice on the part of George Osborne and David Cameron to advance their class interest, cleverly camouflaged by stories of Labour profligacy when the economic crisis to which it was the alleged response was caused by a surfeit of financial deregulation advocated by Osborne and Cameron and supinely accepted by Labour.
The American political economist Clara E Mattei, in her 2022 book, The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism, showed how similar policies were applied in Britain and Italy after the first world war, essentially to keep workers in their place, and how in Italy they led to the rise of Mussolini and fascism. Let us be warned.
Prof Roger Brown
Southampton
Paul Krugman is right about the impact of austerity on the UK economy – here are a couple of reasons why. First, those who advocate the shrinking of the state fail to appreciate how the economy is interdependent. Most public authorities require tendering for services. Generally, the private or voluntary sectors get the tender. So if the public sector is starved of finance and catches a cold, the private and voluntary sectors start to sneeze too.
Second, the assumption is that if the public sector is smaller, the private sector will take up the slack. This ignores the fact that the private sector’s bottom line is its profitability and ability to satisfy its shareholders, not the public interest. In practice, this means that the private sector will cherry-pick the easy and profitable tasks, as with the failed privatisation of the probation service, while leaving anything difficult or unprofitable to the public sector.
Alternatively, as with the failed privatisation of the railways, the private sector demands subsidies out of our taxes so that it can pay a dividend to its shareholders, thereby taking money out of the system that could otherwise be used to improve the infrastructure, reduce fares, or both.
Austerity was an ideological choice by the coalition government. While I would have expected little better from the Conservatives, I would have hoped that their Liberal Democrat coalition partners would have drawn enough red lines to prevent the government from following through on its economic illiteracy and choking off the first signs of recovery from the 2007-08 crash. As it is, we’ve suffered from the consequences ever since.
Dave Pollard
Leicester
Paul Krugman does an excellent job of exposing the disastrous consequences of 14 years of austerity for both society and the economy. But in solely blaming the Tories, he neglects to acknowledge the role of the Liberal Democrats in both enabling austerity and even co-authoring the genesis of the policy through the key role played by the then chief secretary to the Treasury David Laws.
Although in post for only a short time, his role was pivotal in developing the first drastic cuts in public expenditure. We now live with the consequences of 14 years of monetarist dogma ruthlessly, pitilessly and unfairly applied.
Alan Beynon
Barmby Moor, East Yorkshire
