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The Courageous State: Rethinking Economics, Society and the Role of Government

Friday, 07 October 2011 13:43

by Richard Murphy

 

Murphy-CourageousState-FinalVisual-2In The Courageous State, Richard Murphy argues that neoliberalism has bred weak governments led by weak politicians who believe implicitly in the supremacy of the market. It has created a cowardly state: a state that sees responsibility and then runs away from it. Worse, the weak politicians who run our cowardly state want power solely to ensure that as much tax revenue as possible is used to benefit the private sector that they idolise. But neoliberal theory is wrong – it has created the crises we’re suffering. And it has no solution to them.

 

The Courageous State argues powerfully for a new economic model. That model is based on a very different idea of what the role of the state is. The Courageous State is driven by its desire to work on behalf of the people of this country.  And that means a Courageous State is populated by politicians who believe in government and in the power of the office they hold. They believe that office exists for the sake of the public good. They know what that public good is. They think it is their job to help each and every person in their country to achieve their potential, sustainably, in a strong mixed economy. And they believe they can command the resources to fulfil this task – whether through tax or other means.

 

A Courageous State offers hope; our existing, cowardly, state does not. Which is why building a Courageous State is essential if we want to both solve our current problems and build a sustainable future.

 

The question is, are you willing to be that Courageous?

Publication date November 2011
ISBN 978-1-907720-28-4
Paperback: £14.99/EUR17.50/$24 plus p&p

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Contents


Chapter 1    Introduction
The creation of the cowardly state
What the cowardly state represents
The need for a Courageous State
Where markets go wrong
The cappuccino economy
Why this book needed to be written
A new economic model
The way to achieve our potential
An approach to poverty
The effect of money on well-being
The right of the state to intervene
Finding solutions to the challenges
Creating a state of hope

Part 1    Why we need the state

Chapter 2    The crisis of confidence in the state
The development of the cowardly state
The consequences of the cowardly state
How did we get a cowardly state?

Chapter 3    The economic myths
The fundamental flaws in neoliberal thinking
Putting this in context – or why we’re in a mess right now
Some excuses and some other flaws
The consequences

Chapter 4    The myth of the market
The role of the state
State regulation
The state as market overseer
The state as service provider
Accounting for externalities
The Courageous State and society

Chapter 5    The cappuccino economy
The ingredients
The correct mix
The final component
Assembling the mix
Getting the most out of the final product

Chapter 6  Where only the state may venture
Where the private sector does not always work best
Why markets are inefficient in practice
Why we can’t afford markets in essential services
Where the markets don’t meet needs
The pensions dilemma
Where the market failed
Market constraints
The need for real capital investment
The custodian of hope

Chapter 7  Financing government activity
The right to tax
The power of taxation
Redistribution of wealth

Part 2 The theory of the Courageous State

Chapter 8 A new economic model
The existing model
The basis for a new model
The economic dilemma
Recognising potential
Defining potential
Making sense of these ideas
Putting potential on the map
The limit to potential
Our different needs
Absolute poverty
Relative poverty
Achievement
Understanding the area of achievement
Working within our limits

Chapter 9  The problem is caused by other people
How to achieve our potential
Choosing what to achieve

Chapter 10 Cash ain’t king
The value of money
Money and the real economy
Over-consumption relative to capacity
The influence of advertising
Corporate motivation
Borrowing to fund current consumption
The consequences of borrowing
Borrowing for asset acquisition
The lender’s viewpoint
What happens when cash is king
Types of financial flow
The consequences of the cash relationships in society

Chapter 11 Delivering the Courageous State
Extremes of wealth and democracy are incompatible
The goal of social democratic government
So how is the courageous state delivered?
The role of tax in the economy
Empathy and redistribution
Tax and redistribution
The five Rs of taxation
Fiscal policy – and why it’s so much more useful than monetary policy
The other tools of macroeconomic management
The attributes of a good tax system
Capital controls

Chapter 12 – Summary of Part 2 arguments

Part 3

Chapter 13  Identifying the Courageous State

Recognising the Courageous State

Chapter 14 Constraining the world of feral finance
Create Financial Transaction Taxes
A Spahn tax
A ban on short selling
Loan of shares
Splitting banks
State ownership of the payment platforms used by clearing banks
Taxing banks
Stopping tax relief on the excess incomes of those speculating
Taming tax havens
Capital controls
Tax on investment income
Equal taxation of capital gains
Close the tax loopholes that encourage excess saving
Restrictions on buy-to-let speculation
Treasury Deposit Receipts

Chapter 15  Rebuilding the role of the state
Close the tax gap
Regulate business properly
Stop privatisation of natural monopolies
Create country-by-country reporting so multinational corporations are accountable
Only procure from companies with acceptable business policies
Create a Green Investment Bank
Funding the new economy

Chapter 16    Building a balanced, sustainable economy
Progressive taxation
Simpler taxation
Wealth taxes
Redistribution
Tax and interest
Taxes on advertising
Ban on advertising to children
Multiple rates of VAT
Promote repair and recycling
Increasing the minimum wage
Protecting union rights
Industry wages boards
Apprenticeships
Industrial training boards
Extra tax relief for employing people
Reorganising the structure of the workplace

Chapter 17    Supporting the broader goals of the Courageous State
Reforming education
Higher education should be free
Lifelong learning
Maximum working hours
Local democracy
Social housing
Health care
Pensions
Care for elderly
Youth services
Relocating work
 
Chapter 18    Cooperating internationally
Closing down tax havens    
Country-by-country reporting
International tax agreements – unitary taxation
Fair trade
Capital controls
Peace keeping – not war

Reviews


“Since the 2008 crash conventional economists have run out of ideas. But Richard Murphy abounds with them. He writes with electric clarity about what went wrong and what could be done to put things right. He is a new economic thinker, no mere theoretician but guided by a sharp and practical accountant's eye. He knows where the money is hidden, who has it and how to release it. Murphy is the closest thing to a one-man think tank and he is as courageous as he says our politicians should be." Polly Toynbee, The Guardian newspaper columnist and economics commentator

"Richard Murphy is a rare voice of sanity at a time of economic madness. We desperately need an alternative to austerity - and with a few more Murphys, we'll get it." Owen Jones, author of Chavs: the Demonisation of the Working Class

"Richard Murphy is an incendiary device thrown into the heart of the economic policy establishment. The Courageous State explodes off the page with a blistering critique of the status quo, a startling new take on economic theory and a set of recommendations which could improve our lives in very short order if only our politicians had the conviction to apply them." Howard Reed, founder of Landman Ecomomics, fomerly Chief Economist at the Instutute for Public Policy Research and the Institute of Fiscal Studies



"Rich individuals, corporations, well-funded special interest groups and much of Fleet Street is on one (the wrong) side and then there is Richard Murphy..the heroic figure. Tireless and forensic, driven by an admirable moral fervour, I take my hat off to a campaigner with Duracell batteries." Kevin Maguire, Sunday Mirror

About Richard Murphy


Richard Murphy is a chartered accountant and economist. He has been described by the Guardian newspaper as an “anti-poverty campaigner and tax expert”. Keven Maguire, associate editor of the Daily Mirror has said:

"We’ve got to take sides on tax. Rich individuals, corporations, well-funded special interest groups and much of Fleet Street is on one (the wrong) side and then there is Richard Murphy plus a few others, including yours truly. But it is Murphy who is the heroic figure. Tireless and forensic, driven by an admirable moral fervour, I take my hat off to a campaigner with Duracell batteries."

A graduate in Economics and Accountancy from Southampton University he was articled to Peat Marwick Mitchell & Co in London. He subsequently founded a firm of accountants in London which he and his partners sold in 2000. In parallel with his practice career Richard was chairman, chief executive or finance director of more than 10 SMEs.

Since 2003 Richard has been increasingly involved in economic and taxation policy issues. He was a founder of the Tax Justice Network and is director of Tax Research LLP which undertakes work on taxation policy, advocacy and research for aid agencies, unions, NGOs and others in the UK and abroad.

Richard Murphy has been responsible for introducing many new issues into debates on tax policy. In particular he created the entirely new accounting concept of Country-by-Country reporting that is now being considered for adoption by the European Union, Organisation for Economic Cooperation and Development, International Accounting Standards Board and others. Country-by-Country reporting  requires a multinational company to publish a proper loss account each and every jurisdiction in which it trades, without exception,  and is seen as as a mechanism for holding multinational corporations to account for their activities in developing countries, the extractive industries and tax havens.  It will also assist the monitoring of  corporate transfer mispricing  and is believed to cost developing countries tens and maybe hundreds of billions of dollars a year as well as corporate tax and governance risk  in multinational corporations.

As principal researcher of the Tax Justice Network from its inception until 2009 Richard helped put the tax haven issue on the international agenda as principal author of such works as ‘Tax Us If You Can’, ‘Closing the Floodgates’, ‘Creating Turmoil’ and the extensive analysis underpinning TJN’s Secrecy Jurisdictions website and its Financial Secrecy Index.  During the course of this work he defined  what a secrecy jurisdiction is and this term has as a result been widely used in  international dialogue on  tackling tax  abuse through  what were previously known as tax havens.  The practical consequences of this work can be seen in changes imposed upon the tax systems of locations such as Jersey, Guernsey and the Isle of Man, all resulting from his exposure of their failure to comply with international requirements.

Richard’s work for the TUC, PCS and others on the tax gap in the United Kingdom has also put this issue on the UK tax agenda.  It was not part of taxation debate until the TUC published his report ‘The Missing Billions’ in 2008. It is now the main priority of H M Revenue & Customs’ business plan.

Richard is also a principal author of many of the proposals made by the Green New Deal group in the UK, which has had a significant influence on political debate in the UK and beyond. He has written extensively on tackling the UK’s deficit without imposing cuts on the most vulnerable in society.

Richard has written widely, and blogs frequently. He has appeared in many radio and television documentaries on taxation issues.  He has also presented written and oral evidence to select committee committees of the House of Commons and House of Lords.

Richard has been a visiting fellow at Portsmouth University Business School, the Centre for Global Political Economy at the University of Sussex and at the Tax Research Institute, University of Nottingham.

Richard was voted the seventh most influential left wing thinker in 2010/11 in a Left Foot Forward poll, making him the highest ranked UK based economist on the list.

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