The
International Monetary Fund is amongst the most influential institutions on the
planet. It has a membership of 188 countries and employs 2,400 staff. Half
of them are economists. If anyone should know about the state of the global economy and its likely trajectory, you might
think it was the IMF.
But you’d be
wrong. The IMF has just had to “revise” its growth forecasts downwards, not for
the first time. Fear not, Britain
The Office
for Budget Responsibility was created by the Coalition in 2010 to provide as
its website proclaims “independent and authoritative analysis of the UK
It too got
it’s forecast wrong. Badly. And now it’s own up time.
In its
latest Forecast
Evaluation Report, the OBR says: “Following the Coalition’s
first Budget in June 2010 we forecast that the recovery would be slower than
its predecessors, but nowhere near as slow as it has been. We forecast that GDP
would rise by 5.7% from the first quarter of 2010 to the second quarter of
2012, but the latest data suggest it has grown by only 0.9%.”
Ask
virtually anyone on the street whether the economy is going to improve and
they’d give it the thumbs down. Nothing could be more obvious.
How is it
that these highly paid experts got it so wrong?
Are they,
perhaps, living in cloud
cuckoo land, in “an unrealistically
idealistic state where everything is perfect”? Are they perhaps unaware of
reality or deranged in holding such an optimistic belief’?
The truth is
the OBR, like the IMF, is collectively blinded to reality by the views held by
all in common and expressed recently by an eminent political figure, who said: “21st-century
politics is, in fact, increasingly post-ideological. The biggest challenges we
face are similar in most countries: growing our economies in a way that
creates opportunities for everyone, providing high-quality health and education
services, ensuring safety and security.”
[my emphasis]
This was
former New Labour prime minister Tony Blair in a collection of essays
on "Government for New Times”. The
extract is from the first of five lessons Blair claims to have learnt from his
period as PM. It’s not surprising that Blair remains wedded to the growth that
has brought the planet’s ecological systems to the limits of their ability to
support life.
But you
might find his second lesson a bit of a shocker: "The second lesson is that
you have to aim for systemic change. The pace of change in the modern world is
incredible, with the emergence of new powers, such as China , India ,
and Brazil
Has Blair
suddenly become a revolutionary?
We might
even agree with his third lesson that “the best systemic change and delivery
begins with the right conceptual analysis”. But Blair, the IMF and the OBR
share the same foundational concept held by the 1% – there is no alternative to
the capitalist system of production.
And they’ll
do anything to preserve it. Like destroying the productive infrastructure of Iraq
Or driving
down living standards, cutting public services and reducing real wages in Europe and North
America to compete with emerging powers.
These are
the kinds of things that Blair and his co-thinkers mean by “systemic change”.
Real system
change requires new forms of democratic ownership and control, a switch from
production for profit to sustainable production to meet socially-determined
priorities and the removal of the political elites that act as proxies for
corporate power. We need, therefore, an Agreement of the People, a constitution
that puts the majority in charge. Please come to the assembly on
November 17 to work on this very strategy.
Gerry Gold
Economics editor
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