The return of Stephanomics

 

In case you missed it, Stephanomics returned to Radio 4 on Tuesday morning.

I brought three distinguished economists round a table to debate a crucial economic commodity we talk about most when it's not there: growth.

Nick Crafts, the economic historian, had some interesting light to shed on the 1930s experience, and what we could learn from it right now. He reminded us how important house building was in helping the UK avoid a truly Great Depression.

Kate Barker, an ex-member if the Monetary Policy Committee who has spent more time than most thinking about UK housing supply and planning rules, wasn't sure we could repeat that experience today. She had her own ideas about spurring growth - starting with the banks.

But the grandest - but also perhaps the most depressing - vision of future growth in Britain came from the Oxford academic, Dieter Helm, who has spent many years advising the government and businesses on UK energy and infrastructure issues.

He thinks there are at least £500bn worth of crucial infrastructure investments that the UK needs, to raise its productivity and achieve more durable growth. But that cannot come from another government borrowing spree, in his view, and it cannot come quickly.

So it was a realistic debate - no magic bullets on offer, I'm afraid. But the debate was lively, and I think we did get past some of the tired old arguments about "austerity versus growth". What they said might also help you understand what the Chancellor George Osborne is on about on Wednesday morning, when he unveils his plans to encourage private infrastructure investment in the next few years.

If Dr Helm is right, transforming Britain's growth prospects is going to be difficult - and it won't be quick. But to paraphrase the young George Washington, if growth is going to take that long to cultivate in Britain you might say there was no time to waste.

The programme is repeated on Radio 4 at 21.30. Or you can catch it on the iPlayer.

 
Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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    Comment number 36.

    Did any of the economists have anything to say about how many lecturers from university economics departments had been sacked for teaching neo-liberal, Thatcherite nonsense?
    Even Alan Greenspan the doyen of free market dogma has said it was all a big con-trick.
    Was it true that Friedman 'manipulated' his research?

  • rate this
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    Comment number 35.

    'No magic bullet' sounds like realism to me.

    Building houses that are unaffordable to most is useless unless prices i.e. bank assets fall to wages parity

    e.g. First new build home cost £3900.in 1975. Salaryx 2.5 times + 5% deposit. Now they were the good times. What's inflation they say?

  • rate this
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    Comment number 34.

    I was taught that the revival of the economy in the 1930's reflected the growth of new industries - e.g. consumer electrics, motor vehicles, aviation - in the SE and Midlands, away from the old centres of heavy industry. Therefore I ask where the housebuilding referred to was, and whether it was an effect rather than a cause. Also, growth may be the norm, but not everywhere nor at all times.

  • rate this
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    Comment number 33.

    Thanks "Up2snuff" for your support.
    1. in mixed economy choice must be present, but brainwashing must go; our choice doesn't have to agree or compete with everyone else's choice. We fear public opprobrium?
    2. we need to build houses. Maybe, have we assessed the inventory, have we created "choiceful" options for buying?
    We disenfranchise no one, but ourselves.

  • rate this
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    Comment number 32.

    Return of Stephanomics, where you are surrounded by 3 distinguished economists, and you talk about : growth. I'm sorry to say, amongst the 3, even with your usual excellent moderation, you could not squeeze one original, exciting, or even probable solution. Economists have dreadful trouble climbing out of the box; that's why they are so very dull. Next time, try new blood - like commoners.

 

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