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The 2008 crash was no blip, but a complete change in trajectory for the British economy

Real GDP per capitaRichard Murphy this morning draws attention to a quite startling graph comes from an academic paper by Prof Richard Jones of Sheffield University on the need to invest in innovation As Richard says, “what the graph shows is something anyone interested in political economy needs to understand: 2008 was not a blip; it was a complete change in trajectory for economic growth.”

The questions what we do about it and how we react to it are addressed in his paper by Professor Jones. A flavour of the answer can be derived from the following two graphs from the same paper on research & development, showing a dramatic fall under Tory governments and nothing better than stagnation under New Labour:



These graphs are reproduced from a new paper by Prof Richard Jones of Sheffield University. The sources for the data on real per capita GDP since 1948 are 2012 National Accounts (dotted line) and March 2013 OBR forecasts corrected for rising population using ONS population projections. 


  1. Rod says:

    Thanks for this that Jon.

    On a related note, I read Stewart Lansley’s ‘The Cost of Inequality’ last year and was surprised to find that as many manufacturing jobs were lost under New Labour as were lost under Thatcher.

    I suppose, for the UK, it’s all evidence of how the blind have led and are still leading the blind. And to top it all, what’s Labour’s latest wheeze? Matching Tory spending plans in order to win economic credibility…

  2. Syzygy says:

    Private sector businesses are on strike and are not investing their hoarded £700bn in R&D or the real economy. Their search for profits means that they are investing in the financial sector. Many companies have followed General Motors example, in that ‘making things’ like cars, has become a sideline because their real money comes from fictitious capital.

    As Michael Burke writes: ‘This hoarded store of capital is both the main impediment to recovery and the potential source of resolving the current phase of the crisis.’

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