Friday's Letters: We can't rely on the markets to rebalance the economy

It was Margaret Thatcher, under the influence of the free-market ideas of the monetarist economist Milton Friedman and his British apostle Keith Joseph, who began the love-in with the City. It was also she who, in the guise of letting the markets decide, indulged her personal hostility to the unionised workforces of British industry. Thatcher set about privatising the state-owned industries and then sat by as they disappeared into foreign hands or withered on the vine.

The Cameroons may have distanced themselves from the harshest aspects of Thatcherism, but they continue to worship at the altar of the free market. Recent policy announcements offer little evidence of any desire to break with neoliberalism and 30 years of Tory mythology. So is it possible to embrace the free markets and at the same time reverse the trend they began? I think not. Here's why.

Neoclassical economics treats markets as equilibrium systems which are most efficient when unregulated, leading neoliberals to conclude that governments should not intervene in them. But the evidence of the banking crisis flatly refutes this orthodoxy. The deregulated banks didn't behave at all like idealised neoclassical entities. Light-touch regulation allowed them to get away with outrageous risk-taking. When the crunch came, it was only state intervention that prevented a financial apocalypse.

Economics claims to be a rigorous science. Oddly though, the science most relevant to economics – chaos theory – has largely passed economists by. Just like complex systems in the natural world, markets and economies turn out to be inherently unpredictable.

We cannot escape the markets. They have been a fact of life for millennia. But if we cannot, even in principle, forecast the long-term behaviour of unregulated markets, it would be foolish to think that they are the means to rebalance the economy.

If we want to steer the economy in a particular direction, we must be prepared to regulate the markets and to stimulate and suppress them when necessary.

The Tories show no sign of having absorbed these lessons. Perhaps the truth is that the only economic rebalancing they are really interested in is one that lifts the weight of the public services from the state and hands it to the private sector. And no matter how the Government dresses it up, the electorate did not vote for that.

From: Martin Smith, Bondgate, Selby.

Let's give more thought to welfare reform

From: Ian Laidlaw Wilson, Wharfe Bank Terrace, Tadcaster, Leeds.

FOR the past 30 years or so much has been talked about welfare reform. Endless chains of humans, some of whom had just lost their jobs, are suddenly stigmatised, derided by some shabby tabloids and when anyone falls from employment as long as it is not you, no-one speaks out (Yorkshire Post, August 11).

I do not believe it is a lifestyle anyone really likes or that the benefits received are anything like those suggested or that the Tories are right in any way to call people passive recipients.

The coalition's proposals to streamline the welfare system will do little to help matters as the systems now in place, albeit complicated, generally pick up what is needed to know and public sector employees are trained to deal with this.

What no political party has done is set up a new scheme of public works projects much in the spirit of the 1980s' community programmes, where individuals would work on projects, receive training advice, socialise and maybe even start a business up or find the confidence which many did after one year, on a scheme to re-enter a regular position of work.

Most of this was done without stigmatisation, probably 27 hours per week and a nudge or two up in remuneration from the standard out of work benefit. So why is this not done now or is the Government trying to start public services on the cheap as tried with the American workforce under Bill Clinton?

Lessons for Labour

From: Don Burslam, Elm Road, Dewsbury Moor, Dewsbury, West Yorkshire.

AS a keen Labour supporter in my younger, more idealistic days, we are now at a crossroads politically and the future of the country, no less, depends on a root and branch reassessment of their position on the part of the Labour Party.

The traditional pattern has always been that Labour looks after the poor, the working classes, the unions and the vulnerable, then the Conservatives bring a more businesslike and less compassionate attitude to affairs and perhaps get the economy back on an even keel.

The parlous state in which we find ourselves after another large dose of Labour leads me to suggest the country cannot afford yet another repetition. After, we hope, some recovery has been achieved, voters may be relaxed enough to flirt with another giveaway government.

Unfortunately, we just cannot afford risking a further debacle. The next time we may really be looking at a Greece-type situation.

My advice to Labour is reject yet another reversion to tax and spend, hoping the revival of the economy will float us off the sandbank. A dose of reality and a determination to live within the country's means would make a refreshing change, but I fear the siren voices of office and power may seduce them yet again. Will they ever learn?

True nature of coalition

From: Coun James Alexander, Leader of City of York Council's Labour Opposition Group.

IN 1946, the great Attlee Government provided free milk to children. In 1971, Margaret Thatcher, as Education Secretary, withdrew it from the over-sevens (Yorkshire Post, August 9). This brought her the title of "milk-snatcher".

It is now reported that Con-Dem coalition Government Health Minister, Anne Milton, wrote to her Scottish counterpart outlining Con-Dem coalition plans to scrap the scheme by April 2011 as part of their cuts programme. She even said in the letter, "Abolition of the scheme is likely to be highly controversial, particularly as this will affect some children in low-income families".

This shows the true nature of the Conservative and Liberal Democrat Government – Right-wing and callous. Bankers caused the international economic crisis – not young children.

Why should children pay for their mistakes? Due to fear of the how the public would perceive his true nature, David Cameron undermined his Health Minister and out of political pragmatism overruled the Minister's plans.

I am pleased he did but where were the Liberal Democrats to stop the Conservatives? I thought they were supposed to be there to restrain the Conservatives? Instead, they remained silent and allowed the Con-Dem Government to attempt to go further than Thatcher.

Yorkshire dialect that's not lost in translation

From: Howard Peach, St Margaret's Avenue, Cottingham, East Yorkshire.

IN connection with your intriguing feature on dialect (Yorkshire Post, July 28), I offer these thoughts.

We like plain speaking in Yorkshire. But for the benefit o' nesh folk, or less savvy – or southerners – translations are offered.

Thoddy an' Wag were feeatin' i' staggarth ower that canny lahtle lass fre Bolliton.

Third horselad and the wagoner descended to fisticuffs in the stackyard over the affections of that attractive young Bridlington lady.

If thoo's etten ower monny o'them bullaces an' rhubarb cuts, nooa wonder thoo's gotten bellywark.

I fear that your stomach ache may be attributed to an excess of wild plum and rhubarb pie.

What wi' this 'ere roaky weather ti-deea, an' they reckon it'll sile doon ti-morn, tatie scrattin's off whahl Thosda.

In view of today's mist and prospects of rain tomorrow, potato picking has had to be postponed.

Deean't git me gannin' od weetless bairns. They deean't lon 'em nowt jannock at skeeal nooadeeas.

Changes in the school curriculum have resulted in pupils remaining ignorant of learning of practical value.

Thoo niver claps ees od bogeys an' boolers an' taws same as yance. It's all onlahne wi' dotty devils i' them chat reeams.

The familiar games of our childhood with home made carts, hoops and marbles have been replaced by certain unsavoury computer challenges.

Gi'ower gawpin' an' gaspin' aback o' them net cottins, lass, an' let's get mashed.

Instead of wasting time peering and expostulating at the neighbours, darling, could I suggest we make a pot of tea?

Sin me Anty med sike a mullock o'looasin' lottery tally, Uncle Albert's bin fratchy as a ferret.

Uncle has not quite forgiven my aunt for losing our winning ticket.

We mun mack on an' ger ageeate if we mean ti fettle owt afore oppenin' tahme at Sweaty Jenny's.

It would pay us to arise now if we are to accomplish any tasks before repairing to the local hostelry.

n For more Yorkshire dialect, see Country Week on Saturday.

Problems for a new team

From: David M Adams, Huddersfield Road, Barnsley.

YOUR correspondent Duncan Anderson (Yorkshire Post, August 11) does not seem to know how business operates.

The first task of any incoming chairman or managing director of a failing company is to heap blame on the previous incumbents. For this, the most compelling evidence of abject mismanagement by the previous administration is the letter left by Liam Bryne, former Chief Secretary to the Treasury, that "there was no money left".

Both David Cameron and Nick Clegg are politicians who must possess some form of masochistic streak by attempting to stabilise and then improve our country's abject financial situation.

To make criticism of their performance after three months in office for simply alerting the public to the facts is unfair and unreasonable.

Implications of poll results

From: Judy Dalton, Sitwell Labour Party, Nursery Road, Dinnington, Sheffield.

IN response to your report on the Sitwell by-election in Rotherham (Yorkshire Post, August 7), I wish to point out that Labour came within 349 votes of winning on a 28 per cent turnout in the safest Tory seat in South Yorkshire.

Crucially, on 2008 election results taking into account the change in turnout, the Labour support should have reduced (we increased it), and the Tories should have improved their vote (theirs decreased).

The Liberal Democrat support totally collapsed with under 100 votes.

The swing is certainly a positive for the Labour Party and a huge rejection of the coalition Government's policies which are particularly damaging to South Yorkshire.