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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  • rate this

    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

    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 £ 1975. Salaryx 2.5 times + 5% deposit. Now they were the good times. What's inflation they say?

  • rate this

    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

    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

    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.

  • rate this

    Comment number 31.

    @27 Blues B
    You make good point except that 1. in mixed economy choice should be present, and 2. in growing country - even if no migrants came to UK ever again - we would need at present to build houses.

    We have disenfranchised millions from the market choice - that must change.

  • rate this

    Comment number 30.

    'I brought 3 distinguished economists around the table'. No you didn't. Your producer did.

  • rate this

    Comment number 29.

    Just last night Bernanke was shown saying he told the BoE about Libor manipulation 4 YEARS ago.
    By this morning the usual Brit Oxbridge cover-up is in place. King's Kings-St Johns PR machine dances on the head of a pin. Last week King was a political genius this week charminly naive

  • rate this

    Comment number 28.

    Well, you could start with how come you got a first class Oxbridge economics degree without reading any Keynes or Marx (In a radio prog 7 years ago you told us they were both completely new to you)
    That's a blindness that affects Mervyn King too
    The economy has FAILED. The finance industry publicly owned is the first step to a socially just economy, probably without gdp growth

  • rate this

    Comment number 27.

    A BIG part of what needs changing is us - the public. We have been brainwashed: We must learn that homeownership is not "the" ideal; it's just an option. We need to understand that credit cards are not easy ways of getting what we want impulsively - instead, they are high-interest lending traps. Build houses, BUILD HOUSES, then what? Will people buy? Have we assessed need & financing?

  • rate this

    Comment number 26.

    Reinstatement Glass-Steagall would have been too late without tweeks. Why? Bear Stearns & Lehmans had already stepped around the act to become STRICTLY investment banks. The biggest bailout member, AIG was an insurance company - not mentioned in Glass-Steagall. These financial institutions are slicker than a greased ducks & just as hard to catch.

  • rate this

    Comment number 25.

    I listened to Radio 4, but didn't find your guests particularly imaginative, or even historical. There was hardly a mention of Glass-Steagall Act, 1933 - created to ensure citizens' savings were not lost in INVESTMENT BANK MISTAKES. Act lasted decades, repealed in '90s. Why? WALL STREET PRESSURE! President Clinton declared Glass-Steagall Act "no longer relevant."

  • rate this

    Comment number 24.

    The return of Stephanomics - so what. Isn't that what you're supposed to do?

  • rate this

    Comment number 23.

    A later programme is to deal with whether growth is necessarily a good thing. Someone yesterday said that we must all 'live sustainably'. I hope the later programme defines this. 3-bed semi, hatchback and no smartphone (no copper left)? Two acres and a cow (not enough space)? We can't go on as we are, consuming, in Europe, 3.5 times what the Earth can provide, in the US 5 times sustainable.

  • rate this

    Comment number 22.

    I listened with interest to the discussion last night: I find the idea of house-building as a driver of economic growth quite problematic. Investment in a factory of other production facility creates jobs. A home is merely for the private benefit of its occupant/owner. quite fit for habitation. I can see no great need to build many new homes.

  • rate this

    Comment number 21.

    Seconding the request for podcast. Last series you piggy-backed onto The Bottom Line.

  • rate this

    Comment number 20.

    Any chance of Stephanomics being available on podcast (can't listen to the radio in the day and iplayer while driving isn't the best!).

    Thanks (he says hopefully)

  • rate this

    Comment number 19.

    No Blogs for days, Steffie, then four come along at once ... bit like buses! ;-)

    I was struck & have already posted on your 1st Blog yesterday how skilled, reputable economists were considering important things in isolation from other impacting factors.

    Vision & awareness too narrow?

  • rate this

    Comment number 18.

    richer countries have lower birthrates
    if females have access to family planning education careers
    they chose less babies
    fossil fuels will run out
    nuclear fission waves and sun will keep us going for a while
    food production has grown
    starvation has fallen as population has grown
    yes there are limits to growth
    we don't know what they are
    infrastructure investment and full employment will help us

  • rate this

    Comment number 17.

    Now, we all know the real problem still hasn't been addressed, yet. All the fixes up to date have had a negative effect on the economy. So, you have to ask why. Could it be that the 'coalition' are not repairing the part that is actually broken? Looks very much like it. A full judicial investigation then trials and prosecutions now. Asset strip them and re-distribute their ill gotten gains.


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