The fantasy of the Left about the revival of the State

August 26th, 2011

So once again the State is being called upon today, even by a former MPC hawk Martin Weale, to rally a depressed private sector in incipient slump and to protect it from a worsening sovereign debt crisis in the eurozone with a further large dose of QE (printing perhaps another £50bn of electronic money).   No doubt this will be seen in some quarters as further evidence of the resurgent role of the State in the face of the inability of ultra-free markets to solve the problems they themselves created.   It is nothing of the kind.   Along with the massive bank bail-outs, the return of Keynesian deficit spending, a withdrawal from light-touch regulation, and even the revival of some State intervention in industry – the ultimate taboo in the neoliberal canon – it is rather the exact opposite: the harnessing of State resources as a temporary convenience before the return of market triumphalism.   An ideological shift back to the security and power of the State?   That’s not what the evidence tells. (more…)