The news that the economy has either shrunk or is shrinking should come as no surprise to the casual student of British economic history, and I am as casual a student of that discipline as they come.
The feral, backward, primitive economic ideology now held by the British Conservative Party declared that if public services were slashed, the private sector would immediately jumpstart itself in a blue fit of spontaneous order, the beer would be warm again, the lion would lie down with the lamb and the leopard with the kid, and, pretty soon thereafter, while there might not be a chicken in every pot we'd certainly be off the chicken nuggets.
Problem is, it hasn't happened; for the simple bloody reason that it has never happened. Anywhere.
I can think of two previous examples of this policy's failure right off the top of my head. The first was recounted by Professor Eric Richards in his wonderful book 'Patrick Sellar And The Highland Clearances'. The Sutherlands and the agents did a wonderful job of getting the people out of the glens and down to the coast, but Sellar's obsessive faith in 'The Wealth of Nations' led him to believe that the relocated would gain prosperity merely by dividing their labour. It didn't happen, because it can't happen.
The second instance is more much more recent, yet no less tragic. In the aftermath of the invasion of Iraq in 2003, the shower of ideologically brainwashed wallies who were running Iraq policy at the State Department seemed to have much the same very limited understanding of what you have to do to grow an economy as early 19th Century Anglo-Scottish aristocrats and their agents. As drunk as power as many of them were, I do not do them the discourtesy of thinking they were out to pillage the country. They weren't bright enough for that. Instead, they decided to let the market work its magic. Nearly eight years later, the Iraqis are still suffering suicide bombings, and everyone is petrified of The Eighteenth Brumaire of Moqtada al-Sadr.
In ancient times, and in recent times, the policy of 'let's allow the market to do its thing' hasn't worked. There may be a time and a place where it can work, but it hasn't worked then, and it's not working now. We all face what to me is the terrifying prospect of the effect of interest rate rises on low and stagnant private sector incomes, particularly when the cause of inflation is some juju called 'globalisation', and its impact on commodity prices (we now know that the soundtrack to the end of our civilisation will not be Patrick Allen announcing the four minute warning, but it still might be the voice of a goombah economist, raving in the ruins that globalisation makes us all richer). Globalisation and our coalition government share one overwhelmingly important characteristic. Nobody has ever voted for either of them to come into existence. While I await the advent of all those new energy sources that the economists declare will suddenly come into being as soon it becomes economically viable for them to be developed, I sometimes ponder which is the more fruitless pastime; standing on top of a hillock waiting for the end of the world, or believing that economics is not a zero sum game. Both require more faith in the belief than I can muster.
And all the while wage restraint has been so restrained it might as well have been bound, gagged and drugged.
So let's see how it all turns out. What we can guess is that it's very probably going to turn out badly. How badly should not be guessed. We should all pray that it doesn't. If it should come to it, I, for one, will go down singing 'Nearer My God To Thee'. Somehow, it seems appropriate for the occasion.