Tuesday, November 13, 2007

Reinventing the State Chapter 11: Globalisation and the Role of the British State

David Hall-Matthews revisits and refers approvingly to the topic of Chris Huhne's chapter of the Orange Book. He makes many very good points that globalisation's detractors ought to be aware of. For instance, globalisation is largely enabled by governments, not imposed upon them.
...anti globalisers' fears about the loss of state control are exaggerated, but have political significance. On the other hand, the far more serious threat of future global recession, as part of normal - if unpredictable - economic cycles is arguably not discussed enough in political treatises on globalisation.
This is an important point. We must not let fear of the political consequences blind us to the benefits of trade. Nonetheless Hall-Matthews has some suggestions for achieving a balance between the promotion of trade and protecting people and the environment. Largely, they are familiar Liberal Democrat ideas: democracy, transparency, localism, protection of the vulnerable and so forth.

Only occasionally is the neck stuck out...
As Nicholas Stern showed in his analysis of the impact of climate change, it is possible - and politically necessary - to estimate the economic costs of failing to spend now to prevent future calamity. Calculating what is needed to maintain a motivated and adaptable workforce should therefore take priority over the desire to cap public spending as proposed by Vince Cable.
A slightly odd example, perhaps, since the production and exchange of more expensive low-carbon energy might all happen in the private sector, and not impact the size of the public sector at all. Let's not slip into the lazy error that good can only be done by the state. In any case Hall-Matthews is not addressing Cable's argument. Of course there are a great many compelling demands on public money - if there weren't we could talk about reducing taxes. Listing them does not address the need for discipline, if not at 40% then at some (what?) higher figure.

I am a little unsure of the tone of this chapter, that maybe it talks up the power of governments a little too much in distinguishing globalisation from anarchy. Perhaps there are some good ways in which governments are less powerful too. Still, the thrust is correct, that we do not need to surrender the good things that governments do.

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