With Brexit, everything from the economy to the union is under threat. Do the Conservatives know what they have done?A party committed to defending the economic interests of rich elites could never win by saying so. After the advent of working-class suffrage, Conservatives had to have an offer for everyone. There would be room at the top for those who laboured hard, they promised. We will keep out the foreigners and harshly punish the criminals. We will be uncompromising in our defence of the union. We will be defiant against external foes. But a mainstay of Tory propaganda was always this: we are a bulwark against chaos, the custodians of economic security. Scare-mongering about Labour’s chilling threat to the economy was even deployed against Tony Blair, a man who posed no serious threat to Thatcher’s consensus: the Tories’ 1997 slogan was “Britain’s booming – don’t let Labour ruin it”. So look now as the Tories prepare the biggest economic shock imposed by a British government in modern history. How can they ever deliver their finger-wagging lectures on economic credibility ever again?Related: Gina Miller launches campaign to 'end the Brexit chaos'Related: Brexit has created chaos in Britain – nobody voted for this | Zoe Williams Continue reading...

Results likely to frustrate chancellor as he prepares to fund pledge for £20bn annual rise in NHS spending by 2023-24

The US president blames China but even a basic understanding of economics shows it’s his own policies that bloat the dollarNext month, the US Department of the Treasury is due to submit to Congress its biannual report detailing which countries, if any, are manipulating their currencies to gain an unfair trade advantage. For his part, President Donald Trump is already accusing China of doing so, as he did throughout the 2016 election campaign. And he is reportedly trying to influence the Treasury Department’s deliberations.What has changed since the last report in April? That document, like similar reports written during the previous two administrations, did not find China guilty of manipulation. In fact, the last time the Treasury Department declared China (or anyone else) a manipulator was in 1994.China and the US officially launched a trade war on 6 July. After months of threats and negotiations, the US implemented tariffs of 25% on $34bn in Chinese goods. Within minutes, China’s ministry of commerce said Beijing was being “forced to fight back”. Continue reading...

Susan Hawley of Corruption Watch and Rachel Teka Davies of Transparency International UK say banks will act with impunity until our corporate liability laws are changedAlex Bailin’s article (Gordon Brown is wrong to say British banking is still a free-for-all, 16 September) is extraordinarily complacent. The fact is that the UK’s record on prosecuting the wrongdoing behind the financial crisis is extremely poor, with no senior executives charged (only lower-level employees) and no bank successfully prosecuted. Just in May this year, a judge dismissed charges in the only prosecution ever brought against a bank for financial-crisis wrongdoing. The arcane corporate liability rules in this country make it impossible to prosecute large financial institutions. Until the government brings forward legislation to change the law and replace those rules, banks will continue to operate with impunity in the UK.

What lessons have been learned a decade on from the financial crisis?A decade on from the financial crisis and Britain is still counting the economic and political costs. Have lessons been learned? Culprits punished? Mistakes put right? Or are we doomed to repeat the great crash?Joining Heather Stewart is Adam Tooze, author of Crashed: How a Decade of Financial Crises Changed the World. Continue reading...

President boasts of growth and suggests workers who don’t like their jobs should move elsewhere ‘in our great economy’Donald Trump urged Americans to “start looking” for new jobs if they were unhappy with their situation as he boasted of economic growth in tweets Thursday.“Financial and jobs numbers are fantastic. There are plenty of new, high paying jobs available in our great and very vibrant economy,” Trump wrote. “If you are not happy where you are, start looking - but also remember, our economy is only getting better. Vote in Midterms!”Related: The Democratic party went awol in 2016 – and is still missing | Cas MuddeFinancial and jobs numbers are fantastic. There are plenty of new, high paying jobs available in our great and very vibrant economy. If you are not happy where you are, start looking - but also remember, our economy is only getting better. Vote in Midterms! Continue reading...

Leading thinktank scales back forecasts and warns escalating trade war is denting investmentThe west’s leading economic thinktank has warned that the expansion in the global economy may have peaked after cutting its growth forecasts for an array of rich and developing countries.In its latest update on the health of the world economy, the Organisation for Economic Cooperation and Development said the outlook for both 2018 and 2019 was less good than it had predicted in May.Related: China vows not to launch currency war against 'insincere' US over tariffs – business liveRelated: The US-China trade war is unlikely to be settled soon | Nils Pratley Continue reading...

Roberto Azevêdo is determined to get the two countries talking and defuse the growing conflictThe head of the World Trade Organization has pledged to mediate between the US and China as fears grow that the escalating trade conflict between the world’s two biggest economies could lead to a full-scale global trade war.Related: China hits back at US with $60bn of new tariffs Continue reading...

The privileged access of British and EU citizens to each other’s countries has a value that economic statistics cannot measureIt is impossible to imagine Brexit without debate over immigration. So it is remarkable that the final report by the Migration Advisory Committee (MAC), established to inform post-Brexit policy, presumes that immigration will not be covered by the UK’s final deal with the EU. The report, published earlier this week, does not recommend the exclusion of migration from talks in Brussels. The MAC’s working timetable meant it had to imagine a world without special access of EU and UK citizens to each other’s labour markets. But that loss is not a foregone conclusion, nor is it desirable.Related: Theresa May urges EU crackdown on 'travel agents' for migrants Continue reading...

Businesses are busy stockpiling materials, from car parts to chocolate ingredients. This could cause a recessionA lettuce is a useless candidate for stockpiling ahead of a possible no-deal Brexit. A tin of soup is better. What else could be on the list of things to hoard is a question every household and business manager will ask themselves in the next few months.The government has shown the way with plans to order enough medicines to see the NHS through the worst that Brexit has to offer.Is this yet another anti-Brexit salvo from the team that brought you project fear? Not reallyRelated: A no-deal Brexit survival guide: what food to stockpile Continue reading...

The cost of living in Britain has jumped, as consumers pay more for clothing and transport.

Syrian war and population growth in parts of Africa hit drive to improve poverty ratesThe war in Syria and a population surge in sub-Saharan Africa have undermined efforts to reduce the number of people living in extreme poverty, the World Bank has said.In its annual report, the Washington-based development agency said the proportion of people living in such conditions had fallen to a new low of 10% in 2015 – the latest number available – down from 11% in 2013. It meant that the number of people living on less than $1.90 a day fell by 68 million to 736 million.Related: UK households face squeeze after surprise inflation jump to 2.7% Continue reading...

Dearer autumn clothing ranges boost CPI to six-month high despite a forecast fallUK inflation unexpectedly rose to the highest level in six months in August, pushed up by the rising cost of items including theatre tickets, package holidays, and high street shops launching their new-season autumn clothing ranges.The Office for National Statistics said the consumer price index (CPI) jumped to 2.7% last month from 2.5% in July, confounding economists’ forecasts for the rate to fall to 2.4%.Inflation is when prices rise. Deflation is the opposite – price decreases over time – but inflation is far more common. Continue reading...

Industry body warns tariffs would add £5bn to cost of 2.7m vehicles, with average price rising as much as £2,700 in EUThe average cost of a car from an EU country could rise by £1,500 in the event of a no-deal Brexit, the UK’s automotive trade body has predicted.The Society of Motor Manufacturers and Traders warned that leaving without a deal was “not an option” for the automotive sector, which supports more than 800,000 jobs in the UK. Continue reading...

Trump needs a quick result but is unlikely to get one without drawing in other nationsJack Ma’s prediction that the US-China trade war could last 20 years sounds plausible. At the very least, the Alibaba billionaire’s opening analysis is surely correct: “If you want a short-term solution, there is no solution.”First, an immediate climbdown by either side is out of the question. Donald Trump’s imposition of 10% tariffs on $200bn of Chinese imports was quickly followed by China’s retaliation – duties of up to 10% on $60bn worth of US goods travelling in the other direction. Beijing’s response was weaker than some had expected but could not be described as a step backwards. China seems to be saying that it has been drawn reluctantly into this tit-for-tat exchange but is prepared to keep going if necessary.Related: Donald Trump's reliance on Chinese restraint is riskyRelated: Time to regulate bitcoin, says Treasury committee report Continue reading...

Economists and politicians warn Australia is exposed to both economies and their tariff blowsAustralia’s economic growth could suffer a serious setback as the country’s exporters risk being caught up in the mounting trade war between the United States and China.As Beijing retaliated with tariffs on $60bn of US goods following the Trump administration’s $200bn hit on Chinese imports, a closely watched index on Australia’s economic prospects pointed to a slowing in momentum for the remainder of the year and into 2019.Related: US casts doubt on Australia's claim of permanent exemption from Trump's tariffsRelated: Australian house values fall by $13bn in three months as capital city prices slide Continue reading...

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China has announced a levy on $60bn of US goods, hours after Donald Trump imposed new tariffs on $200bn of Chinese products

Response to Donald Trump’s imposition of $200bn tariffs further escalates trade warChina is to slap tariffs on an additional $60bn (£46bn) of imports from the US in retaliation against $200bn of new trade sanctions on Chinese goods announced by Donald Trump.The latest moves represent a new step towards a full-scale trade war between the world’s two biggest economies. Further escalation is deemed likely because Trump is facing low approval ratings ahead of the US midterm elections in November, while China will not want to be seen to back down.Related: The Guardian view on US-China trade wars: careful what you start | EditorialRelated: Donald Trump's reliance on Chinese restraint is risky Continue reading...

Xi Jinping may grow tired of role as ‘adult in the room’ in dealings with US presidentChina’s response to Donald Trump’s escalating trade war has been relatively restrained so far. But Tuesday’s latest $200bn (£152bn) increase in US tariffs, with the threat of more to come, may provoke tougher, asymmetrical retaliation as Xi Jinping, China’s president, comes under pressure to stand up to perceived American bullying.Mildly criticising Trump’s actions as “incorrect”, China has until now confined itself to reciprocal tariff rises – on Tuesday hitting the US back with $60bn of new tariffs. But indications that Beijing will boycott scheduled talks on the dispute, due in Washington next week, suggest a more robust, possibly wide-ranging response may be under consideration.Related: Trump hits China with $200bn of new tariffs as trade war escalates Continue reading...

President imposes import tariffs that will affect US consumers as he criticises ‘unfair practices’Donald Trump has intensified his trade war with China by imposing new tariffs of $200bn on Chinese goods arriving in the US from next week.The US president announced the tariffs in a statement, saying: “If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267bn of additional imports.”Related: Markets wary as US-China trade talks end without breakthrough - as it happenedTariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”Related: American farmers fear being caught up in Trump's trade wars Continue reading...

The Obama administration’s refusal to write down mortgage debts led to the rise of TrumpThe recent exchange between Joe Stiglitz and Larry Summers about “secular stagnation” and its relation to the tepid economic recovery after the 2008-09 financial crisis is an important one. History does not repeat itself, but it rhymes, Mark Twain reportedly once said. But, to paraphrase Bob Dylan, in light of our recent economic history, history doesn’t rhyme, it swears.Stiglitz and Summers appear to agree that policy was inadequate to address the structural challenges that the crisis revealed and intensified. Their debate addresses the size of the fiscal stimulus, the role of financial regulation and the importance of income distribution. But additional issues need to be explored in depth.Related: Lehman collapse: what has happened to the markets since?Related: Ten years after the crash: have the lessons of Lehman been learned? | Yanis Varoufakis and othersRelated: What became of the G20 leaders who met in 2008 to avert financial crisis?Related: We are due a recession in 2020 – and we will lack the tools to fight it | Nouriel Roubini Continue reading...

Christine Lagarde says tackling gender inequality will boost growth and productivityThe head of the International Monetary Fund has said it should be “politically incorrect” for companies not to have a woman in a senior position.Christine Lagarde said even companies with “no moral compass” should recognise they can boost their profits through promoting women to senior and boardroom positions.Related: Sustainable development goals: changing the world in 17 steps – interactive Continue reading...

Michael Jacobs, Bill Hughes, Carolyn Jones, Nick Mayer and Richard Stallman offer ideas for a fairer BritainSurveying the legacy of the 2008 financial crisis (A decade on, rethink the relationship between the state and the market, Editorial, 15 September), you rightly call for the vacuum created by the collapse of free-market economics to be filled. But you wrongly imply that no one has done this.In fact, there has been huge progress in building an alternative. Economists have a better analysis of how sustainable growth and innovation occur, and how the state can co-invest with industry to meet challenges such as climate change and an ageing society. It is clear that the decline in bargaining power in an overly casualised labour market has held down wages, and that both stronger trade unions and regulation are needed to raise low-income earnings and productivity. Continue reading...

The International Monetary Fund warns that Brexit is hurting UK growth, and things could get a lot worse...

Christine Lagarde warns of ‘dire consequences’ if UK has disorderly exit from EU

Rise of machines could lead to 133m jobs globally in next decade – WEF reportThe rise of machines, robots and algorithms in the workplace stands to create almost double the number of jobs for the global economy by the middle of the next decade than it puts at risk of being replaced.According to the World Economic Forum (WEF), about 133m jobs globally could be created with the help of rapid technological advances in the workplace over the next decade, compared with 75m that could be displaced.Related: Meet Eva, the workplace robot that won’t necessarily steal your job Continue reading...

BCC predicts fall to 1.1% this year and 1.3% in 2019 amid Brexit uncertaintyThe British Chambers of Commerce (BCC) has downgraded its prediction for UK growth this year and the following, joining a growing number of forecasters that warn Brexit uncertainty has sapped the economy’s strength.Related: The Brexit economy: things are starting to deteriorateRelated: 'Brexit is a disaster' – experts debate the latest economic data Continue reading...

Readers respond to Simon Jenkins’ article on the archbishop of Canterbury’s criticism of the gig economyMight it have occurred to Simon Jenkins (God aside, for whom does Welby speak?, 14 September) and others that a possible reason for decline in Church of England attendance might have something to do with the church not being radical enough? By such it would expose itself to the risk of relevance in the world in which we actually live rather than the world we might eventually wish to be.Justin Welby is right to examine economic issues (about which he is competent to speak) and taxation and benefit policies that adversely affect often the poor and most vulnerable. It is unfortunate that he failed to check the current church commissioners’ investment portfolio, which now presents the church with the opportunity to disinvest from the likes of Amazon. It ought to be noted, too, that the church follows the life and teachings of Jesus of Nazareth, who violently turned over the tables of the moneychangers in the temple (Matthew 21: 12-13 et al), who quite simply were defrauding the ordinary worshippers, rather like tax evaders and avoiders today. Continue reading...

238 academics call on the European Union and its member states to plan for a post-growth future in which human and ecological wellbeing is prioritised over GDPThis week, scientists, politicians, and policymakers are gathering in Brussels for a landmark conference. The aim of this event, organised by members of the European parliament from five different political groups, alongside trade unions and NGOs, is to explore possibilities for a “post-growth economy” in Europe.For the past seven decades, GDP growth has stood as the primary economic objective of European nations. But as our economies have grown, so has our negative impact on the environment. We are now exceeding the safe operating space for humanity on this planet, and there is no sign that economic activity is being decoupled from resource use or pollution at anything like the scale required. Today, solving social problems within European nations does not require more growth. It requires a fairer distribution of the income and wealth that we already have.Dr Dan O’Neill, Associate Professor, University of Leeds, UKDr Federico Demaria, Researcher, Universitat Autònoma de Barcelona, SpainDr Giorgos Kallis, Professor, Universitat Autònoma de Barcelona, SpainDr Kate Raworth, Author of ‘Doughnut Economics’, UKDr Tim Jackson, Professor, University of Surrey, UKDr Jason Hickel, Lecturer, Goldsmiths, University of London, UKDr Lorenzo Fioramonti, Professor, University of Pretoria, South AfricaDr Marta Conde, President of Research & Degrowth, SpainDr Kevin Anderson, Deputy Director, Tyndall Centre for Climate Change Research, UKDr Steve Keen, Professor, Kingston University, UKDr Saskia Sassen, Professor of Sociology, Columbia University, USADr Ann Pettifor, Director, Policy Research in Macroeconomics (PRIME), UKDr Serge Latouche, Université Paris Sud, FranceDr Kate Pickett, Professor, University of York, UKDr Susan George, President of the Transnational Institute-TNI, NetherlandsDr Joan Martinez Alier, Professor, Universitat Autònoma de Barcelona, CataloniaDr David Graeber, Professor, London School of Economics, UKDr Juan Carlos Monedero Fernández, Universidad Complutense de Madrid, SpainDr Dominique Méda, Professor, University Paris Dauphine, FranceDr Lourdes Beneria, Professor Emerita, Cornell University, USADr Inge Røpke, Professor, Aalborg University, DenmarkDr Niko Paech, Professor, University of Siegen, GermanyDr Jean Gadrey, Professor, University of Lille, FranceDr Nadia Johanisova, Lecturer, Masaryk University, Brno, Czech RepublicDr Wolfgang Sachs, Research Director Emeritus, Wuppertal Institut, GermanyDr Stefania Barca, Senior Researcher, Centre for Social Studies, University of Coimbra, PortugalDr Gilbert Rist, Emeritus Professor, Graduate Institute of International and Development Studies, SwitzerlandDr György Pataki, Professor, Corvinus University of Budapest, HungaryDr Simone D’Alessandro, Professor, University of Pisa, ItalyDr Ian Gough, Visiting Professor, London School of Economics, UKDr Iñigo Capellán-Pérez, Researcher, University of Valladolid, SpainDr Amaia Pérez Orozco, Researcher, Colectiva XXK, SpainDr Max Koch, Professor, Lund University, SwedenDr Fabrice Flipo, Professor, Institut Mines Télécom-BS et LCSP Paris 7 Diderot, FranceDr Matthias Schmelzer, Researcher, University of Jena and Konzeptwerk Neue Ökonomie, GermanyDr Óscar Carpintero, Associate Professor, University of Valladolid, SpainDr Hubert Buch-Hansen, Associate Professor, Copenhagen Business School, DenmarkDr Christos Zografos, Pompeu Fabra University, SpainDr Tereza Stöckelová, Associate Professor, Institute of Sociology of the Czech Academy of Sciences, Czech RepublicDr Alf Hornborg, Professor, Lund University, SwedenDr Eric Clark, Professor, Lund University, SwedenDr Miklós Antal, Researcher, University of Leeds, UKDr Jordi Roca Jusmet, Professor, Universitat de Barcelona, SpainDr Philippe Defeyt, Chairman, Institute for Sustainable Development, BelgiumDr Erik Swyngedouw, Professor, University of Manchester, UKDr Christian Kerschner, Assistant Professor, Modul University Vienna, AustriaDr Agata Hummel, Assistant Professor, University of Adam Mickiewicz, PolandDr Frank Moulaert, Emeritus Professor, Katholieke Universiteit Leuven, BelgiumDr Frank Adler, Researcher, Brandenburg-Berlin Institute for Social Scientific Research, GermanyDr Janne I. Hukkinen, Professor, University of Helsinki, FinlandDr Jorge Riechmann, Professor, Universidad Autónoma de Madrid, SpainSamuel Martín-Sosa Rodríguez, Responsable de Internacional, Ecologistas en Acción, SpainDr John Barry, Professor, Queen’s University Belfast, Northern IrelandDr Linda Nierling, Senior Scientist, Karlsruhe Institute of Technology, GermanyDr Ines Omann, Senior Researcher, Austrian Foundation for Development Research, AustriaDr Hug March, Associate Professor, Universitat Oberta de Catalunya, SpainDr Jakub Kronenberg, Associate Professor, University of Lodz, PolandYayo Herrero, Miembro del Foro de Transiciones, SpainDr Isabelle Anguelovski, Professor, Universitat Autònoma de Barcelona, SpainDr François Schneider, Researcher, Research & Degrowth, FranceDr Vasilis Kostakis, Senior Researcher, Tallinn University of Technology, EstoniaDr Enric Tello, Professor, University of Barcelona, SpainDr Andrew Sayer, Professor, Lancaster University, UKDr Kate Soper, Emerita Professor, London Metropolitan University, UKDr Klaus Hubacek, Professor, International Institute for Applied Systems Analysis, AustriaDr Brent Bleys, Assistant Professor, Ghent University, BelgiumDr Jill Jäger, Independent Scholar, Vienna, AustriaDr Mauro Gallegati, Professor, Università Politecnica delle Marche, ItalyDr Peadar Kirby, Professor Emeritus, University of Limerick, IrelandDr Inés Marco, Researcher, University of Barcelona, SpainDr Ivan Murray Mas, Assistant Lecturer, Universitat de les Illes Balears, SpainDr Alexandros Kioupkiolis, Assistant Professor, Aristotle University of Thessaloniki, GreeceDr Aurore Lalucq, Co-Director, Veblen Institute, FranceDr Gaël Plumecocq, Researcher, French National Institute for Agricultural Research (INRA), FranceDr David Soto Fernández, Associate Professor, Universidad Pablo de Olavide, SpainDr Christian Kimmich, Researcher, Masaryk University Brno, Czech RepublicDr Giacomo D’Alisa, Researcher, Centre for Social Studies, University of Coimbra, PortugalDr Seth Schindler, Senior Lecturer, University of Manchester, UKDr Philippe Roman, Researcher, ICHEC Brussels Management School, BelgiumDr Lorenzo Pellegrini, Associate Professor, Erasmus University Rotterdam, NetherlandsDr Erik Gómez-Baggethun, Professor, Norwegian University of Life Sciences, NorwayDr Tommaso Luzzati, Assistant Professor, University of Pisa, ItalyDr Christoph Gran, ZOE Institute for Future Fit Economies, GermanyDr Tor A. Benjaminsen, Professor, Norwegian University of Life Sciences, NorwayDr Barry McMullin, Professor, Dublin City University, IrelandDr Edwin Zaccai, Professor, Université Libre de Bruxelles, BelgiumDr Jens Friis Lund, Professor, University of Copenhagen, DenmarkDr Pierre Ozer, Researcher, Université de Liège, BelgiumDr Louison Cahen-Fourot, Researcher, Institute for Ecological Economics, Wirtschaftsuniversität Vienna, AustriaDr Tommaso Rondinella, Researcher, Italian National Institute of Statistics, ItalyDr Julia Steinberger, Associate Professor, University of Leeds, UKDr Andrew Fanning, Marie Curie Research Fellow, University of Leeds, UKJose Luis Fdez Casadevante Kois, Miembro del Foro Transiciones, SpainDr Seema Arora-Jonsson, Professor, Swedish University of Agricultural Sciences, SwedenDr Astrid Agenjo Calderón, Lecturer, Universidad Pablo de Olavide, SpainDr Tom Bauler, Professor, Université Libre de Bruxelles, BelgiumDr Gregers Andersen, Independent Researcher, DenmarkDr Peter Söderbaum, Professor Emeritus, Mälardalen University, SwedenDr Lourenzo Fernandez Priero, Professor, Universidade de Santiago de Compostela, SpainDr John R Porter, Emeritus Professor, University of Copenhagen, DenmarkDr François Thoreau, Senior Researcher, University of Liege, FranceMariagiulia Costanzo Talarico, Researcher, Universidad Pablo de Olavide, SpainDr Maria Nikolaidi, Senior Lecturer, University of Greenwich, UKDr Ekaterina Chertkovskaya, Lecturer, Lund University, SwedenDr Stefan Gaarsmand Jacobsen, Assistant Professor, University of Roskilde, DenmarkDimitar Sabev, Researcher, University of National and World Economy, BulgariaDr Mladen Domazet, Research Director, Institute for Political Ecology, CroatiaDr Hans Diefenbacher, Professor, University of Heidelberg, GermanyDr Marco Armiero, Director of the Environmental Humanities Laboratory, Royal Institute of Technology, SwedenDr Irene Ring, Professor, Technische Universität Dresden, GermanyDr Christine Bauhardt, Professor, Humboldt-Universität zu Berlin, GermanyDr Dominique Bourg, Professor, University of Lausanne, SwitzerlandDr Tomas Ryska, Lecturer, University of Economics, Czech RepublicDr Filka Sekulova, Researcher, Universitat Autònoma de Barcelona, SpainDr Andrej Lukšič, Associate Professor, University of Ljubljana, SloveniaDr Adrian Smith, Professor, University of Sussex, UK

In 1989, the economist’s essay The End of History? asked whether liberalism had triumphed over ideology. History, however, had other ideas and his new book responds to the return of extremismEvery “thought-leader” needs a catchy leading thought. Francis Fukuyama made his name and fortune with the definitive “one-liner” political meme The End of History?, which in the early 1990s seemed a smart way of describing the collapse of communism, and the “triumph” of the west. Since then, in the years in which history has clearly refused to end, Fukuyama, a senior fellow at Stanford University, has had various stabs at repeating that initial success. His new book, Identity, proposes the term “thymos” as the key to understanding our unnerving political moment.“Thymos” (it does no harm, for credibility or book sales if the crucial thought-leading term is best understood by Ancient Greeks) comes from Plato’s Republic.It represents a kind of third way for a soul instinctively divided into two competing impulses – reason and appetite – by Socrates. If the former of those two made us human and the latter kept us animal, thymos fell somewhere in between. Most translations of The Republic suggest its sense for Plato as “passion”. For his purposes, Fukuyama takes it to mean “the seat of judgements of worth”, a kind of eternal status thermostat.The disturbing thing is the support Trump gets, despite these racist things he does(October 27, 1952) Continue reading...

The big winners of post-crisis politics have been the insurgent populists who have fed on and amplified the injustice felt by many votersGod moves in mysterious ways. The Archbishop of Canterbury is of mortal flesh. Justin Welby’s hellfire sermon about the “evils” of capitalism, which won him repeated ovations from his congregation of trade unionists, was a speech very much of its time. In both its content and its contradictions, the Church of England’s senior prelate was channelling not so much the infinite divine as a highly contemporary and earthly mood about what has happened over the past decade.The Great Crash exposed things that were very wrong with the way the economy is organised and those ills – sins, to an archbishop – have still not been fixed. This argument is now so pervasive that you sometimes even hear it from senior Conservatives.Related: Ten years after the crash: have the lessons of Lehman been learned? | Yanis Varoufakis and others Continue reading...

Investment is low, growth is slow and crisis in China would leave central banks with little firepower to stave off declineTen years after the collapse of Lehman Brothers and the financial crisis that followed, it is clear that far from being safer, the world is a more unstable and worrisome place. In the UK, average wages remain below pre-crisis levels and inequality is high. Investment in equipment and hi-tech processes, the cornerstone of future growth, is low.Not surprisingly, given the emphasis on extracting funds from companies rather than investing them, the productivity of the average worker, as measured by their output per hour, is well behind that of comparable developed nations.Lehman Brothers filed for bankruptcy on 15 September 2008. With $639bn in assets, it was the biggest bankruptcy filing in history – 10 times the failure of the fraud-riddled energy company Enron. Continue reading...

The grim scenarios presented to No 10 only arise because the Bank proposes to raise rates in a crisis. Why would it do that?The case for staying inside the EU remains solid, but reinventions of project fear are wrecking the chances of ever persuading Leave voters, possibly in a second referendum, that quitting the single market and customs union would harm the economy irrevocably.That’s because project fear – as first put forward by the Treasury before the referendum vote and supported by the likes of the International Monetary Fund – is full of almost as many barmy assumptions as are held true by Jacob Rees-Mogg and his European Research Group (ERG). Continue reading...

Shadow chancellor will say ordinary people are still paying the price of 2008 crisisLondon’s vast financial services industry must never again be the “master of the economy”, the shadow chancellor, John McDonnell, will say on Saturday in a speech accusing bankers of profiting from speculation at the expense of ordinary people.The veteran socialist who is now seeking to reassure business, promises higher taxes and tougher regulation on banks on the 10th anniversary of the collapse of Lehman Brothers – the pivotal moment in the global financial crisis.Related: Britain is locked in a low-wage, low-skill economy. This is a job for the unions | Larry Elliott Continue reading...

Politicians have failed to come up with a transformation in how we view the role of the state and marketTen years ago tomorrow, the US government allowed the Wall Street bank Lehman Brothers to go bust, an event that seemed to mark a historical denouement: the end of an American century culminating in humiliating failure of its economic policy. In the days that followed, the shock waves crippled other major institutions, petrified money markets and ultimately destroyed millions of jobs. The banking crisis was transatlantic: German lenders were bailed out, in Ireland the state stood behind bank liabilities three times the size of the nation’s GDP, and in Britain one of the biggest banks in the world, RBS, was nationalised. The only comparable event was the great depression of the 1930s. As the historian Adam Tooze, in his magisterial work Crashed: How a Decade of Financial Crises Changed the World, points out, “global industrial output, stock markets and trade were all falling at least as fast in 2008-2009 as they had in 1929”.The economic consequences of events a decade ago are still reverberating through politics. While ordinary workers in advanced economies saw public services cut, wages stagnate and living standards fall, the state saved the collapsing financial system by creating money and cutting interest rates. In the US, while the banks and lenders were bailed out, more than 9 million American families lost their homes to banks or were forced to sell up. In Britain, bankers’ bonuses are almost back to pre-crisis levels, while the nation endures the longest period of wage stagnation since the 1860s. The 2008 financial crash exposed the US Federal Reserve as the vital link in a global chain of a few dozen banks. According to Mr Tooze, the Fed’s unpublicised role was to bail out the world. It provided about $5tn in liquidity and loan guarantees to large non-American banks. It also sent $10tn to foreign central banks through currency swaps. All this money was eventually repaid, with interest, but it was nevertheless made available to the banks, their shareholders and their outrageously remunerated staff who had, through acts of commission or acts of omission, brought the world to its knees. Continue reading...

Letters from David Purdy, David Beake, Martin London, Bernard Watson, DBC Reed and Adrian BerridgeGordon Brown is right to lambast the architects of fiscal austerity for killing off the recovery brought about by the prompt and coordinated efforts of the G20 governments to prevent a rerun of the Great Depression (World is ‘sleepwalking to a new financial crisis’, says Brown, 13 September). But why did the progressive left in Britain fail to repel the fiscal conservative backlash? One contributory factor was Brown’s ill-judged decision to step down as leader of the Labour party when he resigned as prime minister after the 2010 election.This unforced error precipitated a Labour leadership election that left the incoming coalition government unchallenged at a critical time and was compounded when Brown’s successor, Ed Miliband, appointed Alan Johnson as shadow chancellor, instead of the better qualified Ed Balls. By the time that mistake had been corrected, it was too late: the public had accepted the case for fiscal austerity.

Tory council latest casualty of drastic austerity measures imposed on local governmentOn Wednesday the eight-person cabinet of Somerset county council voted through £28m of spending cuts, spread over the next two years. Over the previous six months, speculation had raged about whether Somerset would become the next Conservative-run council to join Northamptonshire in effectively going bankrupt and to call in government commissioners to sort out its mess.And here was the answer, delivered at not much more than a week’s notice. To avoid a final disastrous plunge into the red, there would be a hacking down of help for vulnerable families and children with special educational needs, youth services, road gritting, flood prevention and much more.Related: Austerity kills: this week’s figures show its devastating toll | Owen JonesWhat is austerity?Related: Northamptonshire forced to pay the price of a reckless half-decade | Patrick ButlerRelated: Austerity, outsourcing and English councils in crisis | Letters Continue reading...

Our panel of writers considers what has changed – and what still needs to Continue reading...

Steelmaker blames weak pound and euro but pledges not to close plantsBritish Steel is cutting 400 jobs at its sites in the UK and elsewhere in Europe as it blamed a weak pound and euro for driving up costs.The firm said it was shedding almost 10% of its 5,000-strong workforce in a bid to “streamline” its operations and secure a long-term future.Related: British Steel plans 400 job cuts and blames weak pound – business live Continue reading...

Monetary policy committee sticks with 0.75% and hints of rise if recovery continues

Rolling coverage of the day’s political developments as they happen, including the latest batch of government no-deal Brexit planning papers

With Labour moving left and the Tories turning right, there ought to be room in the centre of British politics. Yet the Liberal Democrats are struggling to appear relevantOne side-effect of the ideological mania gripping the Conservatives is to put a retrospective gloss on the 2010-15 coalition government. There is not much to cherish in the legacy of the administration that set Britain on an ill-judged course of austerity. But the unleashing of a more fanatical rightwing Tory impulse since 2015 testifies, in hindsight, to the restraining, if limited, influence of the Liberal Democrats in government. That isn’t much use to Vince Cable, a coalition cabinet minister three years ago, now leading a party parked on the margins. A reconfiguration of British politics – with Jeremy Corbyn’s Labour moving leftward and a radical rightwing Tory agenda – ought, perhaps, to leave room for a third-way English party. Yet the Lib Dems haven’t expanded into the space.Their desultory performance has many causes. To protest against New Labour governments from a liberal-left position, only to then join forces with the Conservatives, was too violent a lurch for many of the party’s natural supporters. It looked craven in pursuit of power and the brand never recovered. Britain’s electoral system doesn’t help, squeezing smaller parties. The Lib Dems find themselves defined more by what they are not (neither Labour nor Tory) than by what they are. To articulate a positive identity will be Mr Cable’s most challenging task at his party’s annual conference next week. It should be added that the task is the same one that faced his predecessors, Tim Farron and Nick Clegg. When a mission goes unaccomplished for so long the question arises as to whether it can be done at all. The Lib Dems have been written off in the past and recovered. They are a resilient bunch, but no party has an inalienable right to be relevant. Continue reading...

All the day’s economic and financial news, as UK central bank leaves interest rates on hold and Turkey announces a whopping rate hike

Central bank ignores Recep Tayyip Erdoğan’s calls for restraint and sees lira recoveryTurkey‘s central bank has raised its key interest rate to 24% in a dramatic bid to control rocketing inflation and prevent a currency crisis.Ignoring calls for restraint from President Recep Tayyip Erdoğan, the bank raised its main short-term rate from 17.5% following weeks of pressure from international investors. Financial markets have grown increasingly concerned that Turkey is in danger of adding its name to the list of countries seeking a rescue loan from the International Monetary Fund. Continue reading...

Downing Street says UK has reformed City regulation in an ‘incredibly robust system’Downing Street has rejected Gordon Brown’s warning that the UK is at risk from a worldwide drift towards a new financial crash, insisting that a revamped UK regulatory regime would properly insulate the country.Brown, who was prime minister at the time of the 2008 crash, said that after a decade of stagnation the global economy was now moving into a decade of vulnerability.Related: Gordon Brown’s tragedy is not his flaws, but his failure to admit them | Deborah Orr Continue reading...

Credit ratings agency says failing to agree deal will lead to weaker pound, higher inflation and pay squeezeBritish households would face a renewed squeeze on living standards from a no-deal Brexit that could tip the country into recession, according to a report.Issuing a stark warning for Britain that crashing out of the EU without a deal next year would have widespread ramifications, the credit ratings agency Moody’s said the risks to the British economy had “risen materially” in recent months.Related: Government publishes latest round of no-deal Brexit planning documents - Politics liveRelated: Driving licences may be invalid in EU if no Brexit deal, UK warns Continue reading...

Conditions will soon be ripe for a financial crisis, but governments will have their hands tiedAs we mark the 10th anniversary of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more relevant question is what actually will trigger the next global recession and crisis, and when.The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession.Related: Lehman collapse: what has happened to the markets since?Related: What became of the G20 leaders who met in 2008 to avert financial crisis?Related: Ten years on from the crash, we need to get ready for another one | Robert Skidelsky Continue reading...

Annual earnings more than 3% lower than in 2008 with millenials worst hitThe financial crisis has had a lasting impact on the UK economy and people’s incomes, with annual wages still £760 lower than they were a decade ago , according to the Institute for Fiscal Studies.The institute’s analysis shows median annual earnings fell to £23,327 last year, 3.2% lower than in 2008 when the average wage was £24,088. Continue reading...

All the day’s economic and financial news, as Chinese leader calls for Asian states to unite against US protectionist trade policies