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Wednesday 12 December 2012 Letters
The economy
What's the role of the state?

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Letters responding to: How we’re all being seduced by the state, by Rob Lyons

In Lyons’ conclusion, he suggests that there are plenty of opportunities for the state to help kickstart the economy but he offers no explanation as to where the economic problems originate from.

As has occasionally been hinted at in other pieces on spiked, there has been no significant restructuring of the economy since the start of our current difficulties at the end of the postwar boom in the 1970s. It therefore would require something much more savage than state measures of ‘building roads to support innovation’ in order to restore conditions of profitability. And it is the historic legacy of a low level of profitability that is at the heart of Britain’s economic difficulties.

If restoring conditions of profitability is the aim then it means allowing any struggling business to go under, increasing unemployment without too much of ‘a safety net for when people lose their jobs’ and to force down the real value wages and salaries of those still in work. The state can of course facilitate this process; it is not really withdrawing from the economy but it will certainly improve conditions for the businesses that survive the shakeout.

These are the classic measures of dealing with an economic crisis. If Lyons has a different set of ideas, don’t simply castigate Osborne for not providing measures that encourage ‘personal and commercial’ initiative, let’s hear them.

I’m of the belief that restoring conditions of profitability requires a sacrifice that is simply not in the interest of most people, either in the short term or the long term.

Ravi Bali, UK


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