“Small state” government with a large state #Budget – Oops!

The budget showed how capitalism doesn’t work in the way that even Conservative Chancellors would like it to. The Tories said they wanted an economy which includes low taxation, a reduced benefits bill and higher wages. It isn’t working like that. So they had to produce this nudge budget.

Many of the measures are about nudging people and corporations into action. This was a point raised on the BBC’s Today programme amongst others. People nudged into having less kids, young people nudged so that they either earn or learn, corporations nudged into hiring more people off the back of reductions in corporation tax. For small state capitalists it must have been a tough day when to top it all the government announced a ‘living wage’ as well.

Of course this is a long game which they’re winning and they will milk the living wage stuff, despite it being rather paltry and likely to be offset for many by a reduction in hours. The tensions between desiring a small state and capitalism not actually producing the economy the government want was laid bare. They couldn’t do anything but meddle and they will likely always have to. From quantitative easing to taxes that nudge us away from carbon emissions, they will probably always play this balancing act.

It won’t stop them marketising as much as they can get away with and that will add organisations to the frankly massive state in terms of regulatory bodies and others to rank service providers and all the other trimmings which come with this contradictory ideology.

The result of the budget for many people will be further hardship for many more years but for a while the government will paint it as ‘one nation’ and a budget for ‘working people’. Dream on.


2 thoughts on ““Small state” government with a large state #Budget – Oops!

  1. I still want to know why the incoming Chancellor needed to produce an Emergency Budget. Those are, I believed, for a new incoming Chancellor to deal with their sudden knowledge of the actual state of the country’s finances… is Osborne saying that he didn’t know what state the Treasury was in prior to the election? Is Osborne saying that he had to make massive budgetary changes to deal with unforeseen situation? Is he saying that the budget he provided only a few months ago was inadequate, improvident… or simply wrong?

    1. They claimed that it was a change of government which allows them to do such a thing. Presumably the Lib Dems were stopping them from introducing a Living Wage a few months back.

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