The return of the state by Graeme Garrard’s critique – why big government is back | Political books
LLessons will be learned, says everyone trying to glean some wisdom from the calamitous pandemic that has befallen us in 2020. But looking back on lockdowns and deaths, unseen family and friends, the seismic social lesson was the shocking reminder that everyone needs the state. There is no other saviour. Businesses large and small, alongside every citizen, have rediscovered how much they rely on government to protect them. Here ends the long Thatcher era which cast its shadow over four decades. Its small-state message about the primacy of the individual and autonomous brutalism is also a Covid casualty, intellectually dead in the water.
The title of this book comes as a timely reminder that The Return of the State is already here. Its inevitability is perfectly proven when it was introduced not by a socialist party, but by a stubbornly reluctant conservative government. Anti-state in its marrow and in all its nerves, it found itself forced to borrow, tax and spend with Keynesian panache. Of course they continue to oppose it as they continue to try to cut and cut again, impoverishing the already poor people, but economically, socially and politically they find that small state austerity is now a proven loser.
Tolerance for state downsizing was already ending in 2019, so Boris Johnson only won by declaring it over. Neither his Chancellor nor his party intended to deliver on the lavish promises involved in the leveling, until Covid forced the Treasury vaults to be opened to borrow and tax more than ever since the war. The state did not appear as an enemy of business, but as its only salvation.
Graeme Garrard, a Canadian political theorist at Cardiff University, brings together the moral, economic and political reasons why the world of the privatized and outsourced state is over. It takes us back to the delirious dawn of pre-1979 when Thatcher, along with Nicholas Ridley, Keith Joseph and other ardent believers, planned a grassroots capitalism and property democracy that would liberate all that belonged to the state and that is not actually grounded. They were revolutionaries, intoxicated by the idea that the invisible hand of the magic market uses self-interest to bring more good than any state enterprise.
People’s capitalism never existed, but instead ownership declined. The released shares were quickly gobbled up, ironically often by foreign state-owned companies making handsome profits. Utilities such as water have enriched their shareholders at the expense of consumers. Weak and underfunded regulators are easily captured by their industries.
No wonder people now strongly support public ownership of things that squandered our oil wealth on tax cuts while Norway scrupulously saved theirs for future investment. Garrard wants them all to be renationalized to shift the economy into the hands of the public, criticizing Blair and Brown for not doing so. But he doesn’t address the hard question: If he were Chancellor, would he really prioritize spending billions to buy them back before spending a dime to improve them, let alone arid public services, from the NHS to schools and everything else in the worst case. need?
As the state retreated, mega-corporations began to usurp the strength of governments. They are gigantic oligopolies beyond the control of simple democracies, which have become more powerful and richer than states, like the modern East India Companies. These Googles and Amazons dominate our lives, fewer and fewer, dangerously indispensable and irresponsible giants. While politicians and civil servants are under intense media scrutiny, these mighty titans are impervious to outside gazes, their “corporate responsibility” thin disguise for the unbridled pursuit of profit. Further down the pecking order, the crash of 2008 showed how many companies rely on this ultimate and inevitable state guarantee if things go wrong.
Garrard disregards the romantics who imagine that large society and community organizations can compensate for the withdrawal of state support. There is no substitute for a big government, a public interest state ready to do whatever the people need. While he acknowledges that there is no ideal balance between the size of the state and that of private enterprise, it is clear that the scale has moved too far away from public control.
Garrard’s book neatly sums up the case with a helpful gallop through the history of the growing and then shrinking state. His evidence is familiar, drawn from the economist Mariana Mazzucato, who showed how private success has always been entirely dependent on state investment and research. No state means no business either. But he doesn’t insist enough on the one winning argument: that civilization will die without governments to control global warming.
It also makes little sense for electoral politics. He attempts no guide on how to get a country that voted Conservative for more than two-thirds of the Queen’s reign to embrace social democracy. Surely the crash of 2008 with taxpayers bailing out bankers should have done the trick, but it didn’t. Instead, rebellion erupted over Brexit. The hope must be that the savior state’s Covid experiment has flipped the switch.