What is being challenged is nothing less than the most basic premise of the politics of the centre ground: that you can have free market economics and a democratic socialist welfare system at the same time. The magic formula in which the wealth produced by the market economy is redistributed by the state – from those who produce it to those whom the government believes deserve it – has gone bust. The crash of 2008 exposed a devastating truth that went much deeper than the discovery of a generation of delinquent bankers, or a transitory property bubble. It has become apparent to anyone with a grip on economic reality that free markets simply cannot produce enough wealth to support the sort of universal entitlement programmes which the populations of democratic countries have been led to expect.
I\’m not yet convinced that it is wrong: but nor am I convinced that it is true.
My general thought being that it is ppossible, but only if you pay a very large amount of attention to the details of where you\’re going to get the money from. And also a very large amount of attention to where the money is being generated.
Essentially, the trick is possible: but only if you have a near vicious classically liberal economy underneath is there enough growth generation that you can skim the money flows to finance that welfare state.
That is, you can have a near socialist welfare state as long as you don\’t have anything like a socoialist economy.
As I say, not sure I\’m right, but that\’s the way I\’m leaning.