Review: The Courageous State by Richard Murphy

Richard Murphy tells us that he felt an urgent need to write ‘The Courageous State’ and that he wrote it in a hurry. This is because a neoliberal (free market libertarian) agenda has infected public discourse and is becoming more and more dominant in public policy circles; it appears to be the only game in town. It will take a courageous state with courageous state to arrest this unfortunate slide, and with this I agree. As with tax havens, Murphy has correctly identified and diagnosed the problem. Fortunately, his urgency has not stilted his clear writing and explanations of what he takes to be a new approach to economic thinking. Unfortunately, he does not show awareness of the many others who have been making similar points in fields like political philosophy, and that it is not necessary to take his approach in order to attack libertarian ideas.

The book begins with an attack on basic “neoliberal” economic thinking. On this front, I think that sophisticated economists would claim that they do not do what he takes them to. However, Murphy has a valid response to this in insisting that the problem is the simplified notion of economics that has an impact upon policy debates, which insists that the market is always right and government intervention in markets always wrong. I would refer to this line of thought as “libertarian” rather than neoliberal, but Murphy is certainly right that this view is pernicious and wrong. Murphy explains why and how the market goes wrong and needs correction. Murphy rightly criticises the neoliberal approach for enabling material interests to dominate (most particularly those of the well off and corporations over the interests of the less well off) and for encouraging unsustainable overconsumption. In chapter seven, he explains why states have a right to tax, which is very similar to that provided in the Myth of Ownership by Thomas Nagel and Liam Murphy. These points are certainly very important, and I agree with Murphy that it there is an urgent need to attack the unfounded libertarian views that appear overly dominant in politics.

In part two, Murphy presents his alternative approach to economic thinking, about which I have various worries. It is not clear what motivates the view aside from the values that Murphy himself has. Now, I personally agree with a lot of his values, but it is illiberal and unscientific—as well as seeming a bit presumptuous—to base analysis of the world on a set of potentially controversial values. It is at this point that my main concern about the book comes in. The book is largely engaging in issues of political philosophy, but is presented as a work of economics. I have attempted to reconstruct the political philosophy within the work in a previous blog. However, the work of prominent political philosophers such as John Rawls, Ronald Dworkin and Amartya Sen has also attacked the neoliberal approach on a clear normative basis.

I share a lot of the values that Murphy presents (such as that conspicuous "show-off" consumption is a bad thing). However, I do not think it is right for a state to align itself with a particular set of values. I fear that the author’s own values and obsessions permeate the work, with little justification for these in terms that all could accept. I therefore find an illiberal paternalist and perfectionist streak in the work, as evinced with the circular depiction of human economic life (which I discuss in my previous post). The valuation of the various incommensurable goods found in these circles are going to subjective, and are therefore no basis for public policy.

Part three presents Murphy’s practical proposals. Some of these I agree with, such as those regarding tax havens (or secrecy jurisdictions). A lot of his domestic proposals involve state intervention, unionisation, and nationalised industries. However, it is not necessary to take a state led approach in response to the libertarian worldview. It seems equally adequate to simply ensure that everyone (including the disabled and those without natural talents to earn money in a competitive job market) has access to resources on fair terms. Personally, I would wish to do this through a negative income tax to those with a low hourly wage. This alternative would solve the de-legitimising aspects of free market capitalism, and do so in a more liberal way. The advantage of Murphy’s approach is presumably that if you give poor people more money they might waste it instead of using it to improve their non-material lives. This is perhaps true, but at the same time people should be free to choose their own values in life, and be held responsible for what they do with their resources.

Richard Murphy has clearly put a lot of thought into the way that the economy works, and has very strong and laudable values. He is right to attack the unfounded libertarian views that seem so dominant (partly no doubt because wealthy people fund patsies to spread them), and that it is urgently important to challenge these views. He is also right that GDP and material growth are not the most important thing for governments to concern themselves with, as material goods are only means to other things. He is also right that we need a Courageous State to stand up to corporate and financial interests in the name of everyone else. I have mentioned my worries about the illiberal aspects of the book, and have discussed Murphy's political philosophy in a previous post. However, liberal egalitarian political philosophers would readily agree with Murphy that there is a need for a Courageous State to stand up to libertarian economic assumptions. However, it is not necessary to take Murphy’s problematic economic approach in order to do so.