book review: after the storm: the world economy and britain’s …eprints.lse.ac.uk/64930/1/book...
TRANSCRIPT
Explore the latest social science book reviews by academics and experts
Book Review: After the Storm: The WorldEconomy and Britain’s Economic Future byVince Cable
In After the Storm: The World Economy and Britain’sEconomic Future, Vince Cable, former Secretary of State forBusiness, Innovation and Skills (201015), reflects on the state ofthe British economy since the financial crisis. The book explainsthe policies introduced to restore the economy during thecoalition years and offers recommendations to ensure futurelongterm growth and to stimulate productivity. LSE academicSwati Dhingra welcomes the book as an illuminating behindthescenes account of Cable’s experiences in government with policyinsights that will be of relevance for many years to come.
On Wednesday 2 December 2015, Vince Cable will be speakingat the official launch event of the LSE Business Review blog aspart of a panel of economists discussing the question of ‘HowCan the UK Improve Productivity and Still Build the Workforce?’ .
After the Storm: The World Economy and Britain’s EconomicFuture. Vince Cable. Atlantic Books. 2015.
This has been a selfcongratulatory year for the British economy.
Home About Latest Books by Discipline Books by Region Bookshop Guides
Upcoming Events Features
90 1 1
Recent
BookReview:ContentiousPoliticsbyCharles
On 1 January2015, TheFinancial Timesannounced thatBritain’s recoveryis ‘secure’ andwill ‘continue at agood pace’.There is reasonfor relief in Britain– unemploymentis low and GDPisn’t shrinking:healthy statisticscompared tomany Europeanneighbours. Butthe celebratorycheers aremisplaced. This isthe slowest recovery for a century. The unemployment numbershide the fact that real wages are at least 8% lower than precrisislevels and per capita GDP is 16% lower than what we wouldexpect from precrisis trends. A sunny view of the situation is thatthis could all turn around if the economy continues to recover at agood pace. But productivity growth – rise in output per worker –has failed to recover after the crisis. So where will the good jobscome from? Few politicians are willing to dampen the mood bybringing up the question of longterm growth. This is why VinceCable’s After the Storm: The World Economy and Britain’sEconomic Future is a book that pushes the public debateforward. It acknowledges the systemic sources of low productivityand discusses policy directions to address them.
Vince Cable was the Secretary of State for Business, Innovationand Skills from 2010 to 2015 in the coalition government of theTories and the Liberal Democrats. At the start of their term, theeconomy was still fragile and recovery from the financial crisiswas tenuous. The government soon introduced policies designed
Tilly andSidneyTarrow
January 5th, 2016
BookReview:NetworksofOutrageandHope:SocialMovementsin theInternetAge byManuelCastells
January 4th, 2016
TheMonthlyRoundup:WhatHaveYouBeenReadinginDecember2015?
January 4th, 2016
WhatHaveYouBeenReadingin 2015on LSEReviewofBooks?
December 22nd,2015
RecommendedFestiveReadsfrom LSEReview
to kickstart economic growth while keeping public spending incheck, including setting up a British Business Bank to cater tosmaller enterprises, hiking tuition fees for higher education andexpanding apprenticeships. This is a tall order for anygovernment, let alone a coalition government stepping in after thegreatest financial crisis in postwar history. It is no surprise thenthat Vince Cable has been given many different names – a voiceof reason; a ‘semiacademic lofty lefty antiTory whimsy’; theworst business secretary; a true friend of British business. Whatis remarkable is that he has been called all these names by allpolitical groups – left and right.
Cable had an important job at an important time, manoeuvringpolicy in a coalition government at an economically pressingmoment in history. The book provides his overview of the Britisheconomy since the crisis and identifies areas for policy action topromote growth. It offers a small window into the divisions withinthe government over policies. But it is not a Sunday afternoonread – there are no tantalising scandals here, no house of cardsor even wild criticisms. The book is written with a vision forBritain’s economic future. It is a selfcontained sequel to TheStorm: The World Economic Crisis and What it Means (2009),which described Britain during the financial crisis. After the Stormexplains the policy choices that were made to restore the Britisheconomy during the coalition years.
Image Credit: Rush Hour, Liverpool Street (Katy Walters)
Cable is not afraid of championing himself as an architect ofBritain’s postcrisis industrial strategy. Industrial strategy is a
ofBooks!(PartTwo)
December 22nd,2015
Log In To use Facebook's social plugins,you must switch from using
Facebook as LSE Review of Books to usingFacebook as Rosie Dealer.
sullied phrase in economics, reminiscent of political meddling andselfaggrandisement in inefficient statecontrolled economies. Hissemiacademic lefty point is that governments all over the worldhave active industrial policies that aim to overcome the shorttermism of markets, and many pathbreaking innovations are adirect result of government intervention through support for R&D(Research and Development).
This vision is embodied in the policies recommended by thebook, which include doubling the innovation budget, promotingapprenticeships instead of ‘graduate factories’, picking sectors forspecific policy support and checking house price inflationbecause it crowds out productive investments. These ideas haveeconomic backing, and take on board the recommendations ofnonpartisan bodies such as the LSE Growth Commission. Thecoalition government introduced many of these policies in smalldegrees. The legacy has persisted, although in evolving andintermittent ways. And there is no doubt that Cable contributed toturning industrial policy from a lofty lefty ideal into a fashionableplan that appeals even to the new fiscally conservativegovernment. Industrial policies are sustainable and equitable onlyif they deliver on raising productivity. So a vital part of industrialpolicy is to build in checks and corrections to ensure efficacy.This is where the book is low on details, and we might have towait until Cable writes Many Years After the Storm to learn moreabout this.
While Cable’s view on industrial strategy is unconventional, hestrongly advocates the conventional view of the economic gainsfrom openness. Most trade economists agree that globalisationbrings economic gains, but there is a growing recognition that itcan also hurt certain segments of the population. The US is thebest example, where recent work finds that import competitionfrom Chinese firms contributed towards a decline inmanufacturing employment, leading to many displaced workersresorting to disability benefit programmes. Britain would be lesslikely to suffer from such inequities if productivity growth were tocreate new jobs. But Cable’s reasoning for maintaining opennessis more nuanced. His insight is that globalisation based on clear
Democratic Dashboard are hiring apart‐time Comms Officer for theFeb‐May 2016 elections ‐ deadline18 Jan ow.ly/WGUgk
LSE Review of Books @LSEReviewBooks
Review: Contentious Politics byCharles Tilly and Sidney Tarrow @OUPAcademic ow.ly/WE6Rh pic.twitter.com/hRRpXNaoCt
LSE Review of Books @LSEReviewBooks
Tweets
Tweet to @LSEReviewBooks
Funded by HEIF 5
Archives
ArchivesSelect Month
rules is being undermined by the politics of identity. High emotionand divisive politics determine crossborder policies. In thesetimes of Brexit and immigration fears, the chapter on globalisationprovides a cautionary tale that identity politics could make Britaina closed society. It is easy to see why Cable evokes divergentnamecalling by all parties – he recognises the need for a strongcompetition policy in an open economy. The crossborder policiesin the book, though, do not anticipate the challenges that willemerge for industrial policymaking as economies pursue deepintegration through behindtheborder rules, which are alreadypart of big trade agreements.
After the Storm is a synopsis of the state of the British economytoday. Productivity in Britain remains 30% below the US, Franceand Germany. So the problems the book highlights will stay withus for the foreseeable future. This behindthescenes account ofCable’s experiences in policymaking and future evidence on theperformance of the policies will keep the book relevant for manymore years to come.
Swati Dhingra is an Assistant Professor at the Department ofEconomics at LSE. Before joining LSE, Swati completed a PhDat the University of WisconsinMadison and was a fellow atPrinceton University. Her research interests are internationaleconomics, globalisation and industrial policy. Her work has beenpublished in top economic journals including The AmericanEconomic Review. She is Associate Editor of the Journal ofInternational Economics, and was awarded the FIW YoungEconomist Award and the Chair Jacquemin Award by theEuropean Trade Study Group for her work on firms andglobalisation. Swati is a member of the Globalisation group at theLSE’s Centre for Economic Performance, and has made regularcontributions to work on economic policy.
90 1 1
Related
December 1st, 2015 | Atlantic, Britain and Ireland, Contributions
from LSE Staff and Students, Economics book reviews, Politics book
reviews, Swati Dhingra | 1 Comment
One Comment
Leave A Comment
Name (required) Email (required) Website
Previous post Next post
LSE Business Review – After the Storm: The World Economy and Britain’sEconomic Future – Book Review 12/02/2015 at 9:00 am Reply
[…] This article is copied from the LSE Review of Books blog. […]
The Monthly
Roundup: What
Have You Been
Reading in
December 2015?In "Alice Evans"
The Monthly
Roundup: What
Have You Been
Reading in
November 2015?In "Asia"
Book Review:
Myths, Politicians,
and Money: The
Truth Behind the
Free Market by
Bryan GouldIn "Britain andIreland"
Comment...
POST COMMENT
Notify me of followup comments by email.
Notify me of new posts by email.
Visit our sisterblog: the LSEBritish Politicsand Policy Blog
Visit our sisterblog: the LSE USAPolitics and Policyblog
Visit our sisterblog: the LSEImpact of SocialSciences Blog
Copyright 2013 LSE Review of Books
This work by LSE Review of Books is licensed under a Creative Commons AttributionNonCommercialNoDerivs 2.0 UK: England & Wales.