Winner of the New Statesman SPERI Prize in Political Economy 2016

Monday 15 September 2014

David Cameron (from Wikipedia 2100)

Prime Minister of UK (including Scotland until 2014) from 2010 to 2017. Widely seen as the catalyst behind the renewed decline of the UK, after a brief respite in the 30 years previously (see entries for Margaret Thatcher and Gordon Brown). On becoming Prime Minister in 2010, embarked on a fiscal austerity programme which delayed a recovery from the Great Recession until 2013, accelerated the privatisation of public services and encouraged social hostility to immigration and the poor.

This proved to be a decisive factor in Scotland narrowly voting Yes to independence in 2014. (The other was his decision not to allow a third option for greater devolution.) His administration was then bogged down in negotiations with Scotland for the next two years, which caused increasing bitterness between the two countries. In the UK election of 2015 the SNP captured many Scottish Labour seats, but refused to form a coalition government with Labour, allowing Cameron to continue to lead a minority government with tacit support from the LibDems and (initially) UKIP.

Most analysts naturally point to his promise of a referendum on EU membership as his biggest mistake. In the short term this meant that UKIP’s success in the 2015 election was as much at the expense of Labour as his own party. But his decision to recommend voting Yes to continued membership in the EU referendum in 2017 led to an attempt to unseat him as leader which narrowly failed (see entry on Boris Johnson), and then large scale defections of MPs from his party to UKIP. Campaigning under the slogan ‘If Scotland can do it, so can we’, and with the support of large sections of the press, UKIP leader Nigel Farage achieved a very narrow majority to leave the EU, forcing Cameron to resign. Some argue that the Scottish independence decision was critical here, as he would have won the referendum vote if Scotland had stayed part of the UK. A few argue that the decision to break up the BBC and allow partisan broadcasting, and in particular the rebranding of ITV into FOX-UK, was a more important factor in losing the EU vote.

There is some dispute as to how much Cameron himself is to blame for these events, or how much was the work of his Chancellor (and his successor as Prime Minister) George Osborne. There also remains some controversy over whether the inability of the economy to make up the ground it lost during the recession was due to the initial austerity plan, renewed austerity after 2015, controls on immigration or the uncertainty created by the referendum itself and subsequent EU exit.

It is a great irony that the only leader of this period whose current reputation is lower than Cameron’s is his opponent in the Scottish independence debate Alex Salmond, now widely known in Scotland as the Great Deceiver. Scotland’s own economic decline following independence was far greater, following a collapse in oil prices and the loss in UK markets when Scotland joined the EU.



  1. Jamie Squacquerone15 September 2014 at 09:36

    Except this assumes he survives as PM after a yes vote. Is it intended or a typo that Farage has a referendum to leave the UK, I wonder.

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  2. All very spookily accurate, I'm sure, except I'll be amazed if we are still using Wikipedia in 2100.

    1. Everyone is so afraid... it's not like London City is going for independence!

    2. "Everyone is so afraid... it's not like London City is going for independence!:

      That would solve everyone's problems.

  3. Nice. I'd just add this:

    "Whilst widely seen as a disaster for the UK as a whole, the actions of the Cameron-Osborne axis created the conditions for largely unopposed Conservative rule of English politics for many decades through the elimination of Scottish Labour “safe seat” MPs from the London Parliament, and support from UKIP. This led inexorably to the "Great Unwinding" of the Welfare State, and the return to Imperial measurements such as stones and pounds, feet and inches, and pints, quarts and gallons.

    With competition from Brazil and the US in the Americas, China in Africa and Asia, and new barriers to entry for exports to the EU, English Trade fell. The Pound Sterling began its gradual decline which increased food and energy costs. Companies that hadn’t moved production to the Far East or Headquarters to Scotland became less competitive, and unemployment rose. Productivity plummeted.

    As living standards amongst the poor fell, strikes returned to haunt the economy, and food riots became commonplace as the social net no longer supported them. Mass emigration counted in the millions and a second “Brain Drain” pushed a panicky 2051 Tory government to apply for membership of NAFTA. Imperial measurements were realigned with US equivalents and US spelling was introduced to reduce barriers to cross-border trade and the Pound was locked to the Dollar at a rate of 4 to 1.

    Improvements were short lived, and the Great Food Riots of 2061 resulted in England having to restablish law and order with the help of the US National Guard, which was asked to remain to support American commercial interests, but which was paid for by the English.

    Under the banner of “No taxation without representation!” the political right, led by the new Atlantic Alliance party, pushed for England to become a full State of the US, which was achieved in fifteen years after the Great Food Riots.

    Ironically, after Scotland gained independence, it successfully negotiated membership of the EU and invested the subsequent regional aid wisely to promote higher education and scientific research and IT companies, alowing its economy to grow steadily in importance within the EU. In 2027, ten years after England left, Scotland left the Sterling zone and joined the reformed Euro, a move widely seen to have been the turning point for the Scottish economy which then grew to be one of the richest per capita in the EU.

  4. Here is a genuine BBC response 1 February 2013 when I challenged them that they didn't know what 'liquidity trap' meant (you may want to download 'The Liquidity Trap: A Lesson from Macroeconomic History for Today' by Richard Sutch for a better account):

    'Although the term “liquidity trap” was not coined by Keynes, the term is used by modern economists to refer to a state of affairs described by Keynes in his General Theory. The liquidity trap is not the same thing as Keynes’ “liquidity preference”, as it encompasses a specific set of circumstances in which investors’ liquidity preference plays a key role. In the General Theory, Keynes explains that decisions by households to increase their savings can lead to a loss of effective demand – and therefore a recession with generalised unemployment - unless investors and businessmen choose to recycle the resulting foregone spending into investment spending. In chapter 12, in explaining the motivation behind business investment decisions, Keynes points out the importance of “animal spirits”: “This means, unfortunately, not only that slumps and depressions are exaggerated in degree, but that economic prosperity is excessively dependent on a political and social atmosphere which is congenial to the average business man. If the fear of a Labour Government or a New Deal depresses enterprise, this need not be the result either of a reasonable calculation or of a plot with political intent; — it is the mere consequence of upsetting the delicate balance of spontaneous optimism. In estimating the prospects of investment, we must have regard, therefore, to the nerves and hysteria and even the digestions and reactions to the weather of those upon whose spontaneous activity it largely depends.” His point is that generalised and potentially irrational nervousness by the business community during periods of high uncertainty can cause them to cut back on their investment spending, thereby failing to recycle savings into effective demand, leading to a generalised slump. In chapter 15, Keynes then goes on to explain the potential risk posed by unlimited investor “liquidity preference” at low interest rates: “There is the possibility, for the reasons discussed above, that, after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest.” Keynes’ point is that there are circumstances – such as the Great Depression - in which investors (including banks) cannot be induced to loan out their money at an interest rate below a certain minimum level close to zero, because the return on offer is not sufficiently attractive compared with the alternative of earning zero interest on short-term cash balances. This combined set of circumstances was later dubbed a “liquidity trap” by Dennis Robertson. It is a situation in which the combination of increased savings by households, loss of confidence by businesses, and the collapse of the risk-free rate of interest (best approximated by the government bond yield curve) to a minimum irreducible level close to zero, result in a prolonged slump that cannot be solved by the central bank increasing the quantity of money. Hicks formalised the liquidity trap, along with most of Keynes’ General Theory, in the ISLM framework.'

    A nice wiki footnote to a state broadcaster limping itself into desuetude.

  5. Thus my - ironical - question a few days ago on whether rUK stood for Rump UK...

    I've seen lots about the expected - likely poor - future of an independent Scotland, very little about the likely - expected - decline of rUK.

  6. .
    The last sentence may be semi-prophetic.

    It may not yet be widely apparent that we are only one scientific breakthrough away from the obsolescence of oil as a widely sought after commodity.

    Interestingly, the University of Glasgow is hard at work at making that happen: . Scotland may be one patent away from great wealth.

  7. I think I'll wait until after Thursday before proposing a redraft.

    He won't be remembered for much by 2100. By then, nobody at all will have any interest in the very mild fiscal tightening in 2010-12.

    1. We'll pretty much all be dead by then, not just the poor and disabled, you think ?
      Long live Social Darwinism, barbarians unite.

  8. Scaremongering (you must have been Alistair Darlings economic adviser)

    Why not paint a more optimistic picture:

    (1) Scots decided they could stay with what they know, or try something else. They choose the latter;
    (2) Scottish policy concentrates on income distribution and getting people back to work. This means
    (3) solving fundamental imbalances and distortions in the labour market - not with the old solutions of import of cheap labour or light touch regulation that favours owners of capital based on failed new-liberal/neo-classical ideology promoting globalisation based on naive win-win assumptions from comparative advantage advantage - but with Post-Keynesian style unconventional direct measures that concentrate on the grassroots: apprentice schemes for the unskilled that (that ensure that when recovery takes place, this work is performed by local workers). Wage moderation is created through German stye cooperative arrangements between government, firms and unions who all feel they have a stake in the rejuvenated democracy. Instead of having downward competitive wage pressure at the lower end, a broad income base takes hold, creating a broader tax base and new markets arising from their increased purchasing power and demand. Macro-economic policy expansion does not create distortions like it did in the past, but because wealth is now better distributed, the economy is more balanced, and multiplier effects reemerge and growth is sustained, not creating a future crisis.

    The result: a healthier economy and healthier democracy where people feel they have, for the first time in living memory for under 40 year olds, a stake.

    Something like this is worth a try, don't you think?

  9. Good Lord - don't worry so much - It's going to be still 'Great Britain' after thursday.

  10. Nationalism is a huge hypocrisy. UK nationalists condemn Scottish nationalists for wanting independence. Both groups are motivated by the same primitive emotion. They are just different sides of the same coin.

    As a Canadian I see the same thing happening all the time. The Quebec separatists are demonized in the "Rest of Canada" for wanting to "destroy the country." Given our head of state is the Queen of England, who Quebec politicians are forced to swear an oath to, I don't blame them one bit. (I consider myself a Canadian separatist...)

    Why do nationalists have such an irrational fear of losing a piece of their territory? I guess the answer to that is that humans are not the only territory animal.

    In any case I wish Scottish nationalists and Quebec nationalists all the best. Democracy is about the people determining their own fate. Given Canada and the UK have the most corrupt implementations of democracy in the developed world (doling out absolute power to minority parities on 40% of the vote because of primitive First-Past-the-Post voting and undemocratic senates) Scotland and Quebec would do well to break free from these aristocratic barbarous relics.

    1. This is very different to Canada/Quebec. Scots overwhelmingly want to keep the monarchy. Not is this is not driven by anti-English nationalism.

      This is a rejection of the Westminster/City elite - that means a system (and economic theories) that have for many decades now worked for the interests of global capital and that have let people down.

    2. Correction of typo above

      This is not driven by anti-English nationalism.

  11. Excellent - a bit of good fun coupled with some very serious macro issues!

  12. David Cameron (from Wikipedia 2100)

    Prime Minister of UK from 2010 to 2014. Principally remembered today as the husband of Samantha Cameron, the clothing accessories designer. Cameron was Prime Minister during the Long Consensus: the period from the fall of Margaret Thatcher in 1990 until 2050, when no ideological differences separated the governing parties.

    Cameron came to power in 2010 in coalition with the Liberal Democrats. This government continued the policies of the previous Labour legislation.

    In social policy Cameron was a champion of Gay Marriage, ending centuries of barbaric treatment of Lesbian and Gay people.

    In foreign policy, Cameron personally favoured the policy of 'liberal interventionism' that had been championed by his great predecessor Tony Blair, but the aftermath of the Iraq War meant that there was no stomach for its continuation. This enforced isolationism had disastrous consequences when...

    In economic terms, Cameron continued the policy of the previous Labour administration, with some slight changes of emphasis. Cameron inherited a large deficit, and his Chancellor George Osborne continued the policy of slow gradual reduction, whilst adopting harsher 'austerity' rhetoric. A sharp rise in commodity prices and the early years of the collapse of the eurozone led to an initial slowing of the pace of recovery following the Great Recession. By the end of the Parliament the lost ground had been recovered, with no longer term hysterisis affects. By 2015 unemployment had fallen to levels not seen since the 1970s.

    Cameron had no majority, and Ed Miliband the leader of the Labour party had emphasised the continuing fall in living standards (a feature of every country in the western world at this time). Labour was returned to power with a small majority in 2015.

    One unexpected impact of the Cameron era was the referendum on Scottish Independence in 2014. Although defeated by a clear margin, further devolution to Scotland led to irresistible calls for Scottish MPs to be excluded from voting on devolved matters. Cameron championed this successful campaign for 'English Laws for English Votes.'

    Upon losing the 2015 election, Cameron resigned as leader of the Conservative Party, but still played a prominent role in its opposition to the new Labour regime. The Labour government proved unstable for two reasons. First its promises to end the earlier period of 'austerity' proved impossible to deliver. Further cuts to public services disillusioned the voters. Second, Labour's majority of 20 proved unable to pass legislation in England and Wales without Scottish support. English legislation, such as the Health and Social Care Act remained on the statute books unchanged.

    By 2020 an exhausted Labour government was defeated, and a majority Conservative government returned to power for the first time for 23 years. Cameron served as Foreign Secretary from 2020-2025, when he retied to the backbenches as an elder statesman.


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