Activists keep riot police at bay standing on makeshift barricades on the Maidan, Kyiv, in January. Photo: Espen Rasmussen/Panon
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Ukraine: Rebirth of a nation

Bullied and humiliated by Russia, seen as a strategic buffer by the US, Ukraine is riven by corruption and deeply divided. Can it rise and free itself?

The revolution in Ukraine and the celebration, grief and apprehension it has inspired mask a fundamental misunderstanding. The country has released itself from the larcenous grip of a bullying dictator and his venal friends – but Ukraine has been a surreally corrupt parliamentary democracy, run by a lineage of serially corrupt presidents, for 23 years. So why now? And it has risen up only to fall foul of yet another bully. But why President Putin’s wildly aggressive reaction? And will it snuff out the hopeful revolt begun in Kyiv? To answer those questions, we need to acknowledge that the events of the past three months in and around the bloody crucible of Maidan Nezalezhnosti (Independence Square) in Kyiv have been only secondarily about power – though Putin’s illegal occupation of Crimea is about nothing else. And to explain that, we need to recognise that the nation of Ukraine has been misunderstood, not for months but for decades, possibly for centuries.

The historical source of the misunderstanding is the assumption that Ukraine was not a nation at all, but always a province, an administrative region, a westerly satrapy of an eastern empire whose ideology, language and aspirations were so uniform that you couldn’t get a papiros paper between Moscow, the boiler room of that ideology, and the country Russia called its “little brother”.

That attitude, expressed sometimes paternally, sometimes viciously in the tsarist period, and patronisingly and with violence throughout the Communist era – Stalin was the arch-exponent of “little brother” politics – conditioned generation upon generation of Ukrainians to see their lives in permanent thrall to an overlord. To some degree that is what Putin, a relic of that era, is still counting on to secure his ends, whatever precisely they turn out to be. In 1991 independence came: a largely romantic gesture, because romance or sentiment are all that is left when a country is reduced to folkloric subservience, as Ukraine was under communism. Afterwards Ukrainians’ historical sense of subordination, resignation and quietism persisted, as did Russia’s belief that, deep down, Ukraine was still its indivisible property. It persisted through four corrupt presidencies, increasingly weary but intact until last November, when the Maidan protests started. It was bred in the bone.

The justification for Ukraine’s sibling relationship with Russia, that Kievan Rus’ was the cradle of Russian nationhood (the Slavic population of this early-medieval state then migrated north to safer, forested regions under pressure from incursions by Turkic tribes), is a thousand years old. Later history nevertheless puts it into a less dominant perspective. Since the 12th century large parts of what is now Ukraine have been invaded or settled by Mongols, Lithuanians, Poles and Tatars and the territory has been gathered up by an array of rulers, from the Grand Duchy of Lithuania to the Crimean Khans. In 1654, foreshadowing what some have already assumed will be the eventual outcome of events on the Maidan, the leader of the Zaporozhian Cossacks, Bohdan Khmelnytsky, then battling the Polish-Lithuanian Commonwealth, pledged loyalty to the tsar: three decades later, when peace was signed, Kyiv and the Cossack lands east of the Dnieper came under Russian rule and the Ukrainian lands west of the Dnieper went to Poland. For Peter the Great’s Russia, read Vladimir Putin’s; for Poland, the European Union.

When Ukraine finally emerged in 1991 as an independent state for the first time in 354 years, it was from a history of extraordinary stagnation. (Various messy proto-independent Ukrainian states were declared after the 1917 revolution but imploded rapidly.) Under the tsars, Ukrainian language, culture and national identity had been suppressed systematically: it was known simply as “the south-west”. In the early 1920s a Soviet experiment with a policy of Ukrainianisation gave the country fixed borders and a national identity but, as Nikita Khrushchev noted later, “For Stalin, peasants were scum,” and once collectivisation began the family relationship nosedived into domestic violence.

A measure of that violence is that today, three generations after the horror of four and a half million dead in the golodomor (famine) of 1932-33, my Ukrainian relations still instinctively cram their fridges with stale bread, refusing to throw it away. In the late 1930s Stalin’s purges of the intelligentsia were nowhere deadlier than in Ukraine. From Russia’s little brother, it turned into Russia’s alternately petted and viciously battered wife, shrinking culturally to a folkloric backwater and politically to a servo-state with a handsome but vacuous Stalin-classical capital. The origins of revolt always lie in dormancy and one centralist decision, silently but deeply resented, may have been more instrumental in Ukrainians’ move towards independence than any other: the decision in 1970 to force on the country the construction of its first nuclear plant 140 kilometres north of Kyiv, at Chernobyl.

It would be insulting to say that Ukrainians have misunderstood themselves; but in the strange relationship dynamics of a horribly abused polity, it is possible – as in an abusive relationship – to become the thing you are treated as. The liberal west might have helped Ukraine to emancipate itself but instead has obstructed Ukrainians’ healthy self-view with its own misunderstandings and condescension. In August 1991 George Bush visited Kyiv to lecture listeners on the dangers of nationalism and separation. Subsequently the EU and US treated independent Ukraine with indifference, viewing it as just another newly open marketplace for everything from obsolete US hand-ploughs to mail-order brides. For years the English-speaking world has gone on calling it “the Ukraine” – the British Foreign Secretary did so last week – as if it were still a region of Russia, like the Urals or the north Caucasus.

Only when the 2004 Orange Revolution, the 2008 Russia-Georgia war and gas disputes with Russia in 2006 and 2009 kept dragging it on to the west’s foreign-policy radar did Brussels and Washington start to see its significance as a buffer between Europe and Russia. Yet even then they viewed it as no more than a commodity: a strategic chess piece, a prize of influence, a resource-rich target of western expansionism.

The result of this psychically toxic mixture of abuse, neglect, condescension and exploitation? The Ukrainian people, ethnic Ukrainians (78 per cent), ethnic Russians (17 per cent) and others, had a nation but did not – until 31 November last – start to have the confidence of nationhood.

In such an analysis, Crimea is no doubt a special case with its majority Russian population (58 per cent), but that figure has been shrinking for 50 years while the proportion of Crimeans who consider Ukraine their homeland has doubled to more than 70 per cent in the past five years. As a footnote, the 1897 census shows that, just over a century ago, the largest ethnic group in Crimea was the Tatars. So the Russian flags thrust aloft in Simferopol today are woven from thin stuff. Of more importance is Putin’s wrath at Russia having had to give up Crimea – its elegant strategic solution to Mediterranean influence, its Riviera – and rent floor space there after Ukraine separated itself, on paper at least, from the USSR.

What finally triggered Ukrainians’ confidence? President Yanukovych’s rejection of a trade and political associa­tion with the EU provides a part-answer; so do living costs and the vegetative state of the economy (Poland’s economy, slightly smaller than Ukraine’s in the early 1990s, is now more than twice its size). Yet political opportunism and vulnerability to threats from big brother Russia have been around for years, for as long as the economy has been a basket case. And the third element – corruption by the bucketload – has also been a constant of Ukrainian life for decades.

But let’s, for the sake of argument, examine what corruption means in Ukrainian terms. In the mid-1990s a friend living in Odessa asked me what I thought of his country’s prospects. I said it seemed to me that building on the foundations of the time – stagflation, ubiquitous mafia activity, dire infrastructure, astronomical fiscal crime – was like trying to fill a rusty bath full of holes. He shook his head. “It is worse,” he said. “We are an open house which is being looted while the people who live in it watch.”

Roads are another helpful metaphor. In more ways than one a journey in Ukraine can be long (the country is nearly twice as big as Germany), uncomfortable and dangerous. The standard of driving is appalling, though not quite as bad as in Russia: you are eight times more likely to die in a traffic accident in Ukraine than in the UK. The usual causes – speeding, drink-driving – are aggravated by another factor: many Ukrainians don’t pass a driving test but merely pay money to obtain a licence. The same principle applies to university places, jobs, planning decisions and judicial verdicts.

You will witness frequent fatal accidents on the roads and need to be alert for super-sized potholes, even on prestige projects such as the relatively new 480km Kyiv-Odessa highway. This is because it is common practice in public infrastructure projects for a contractor to tender for a specific quality of construction, spend a quarter or even an eighth of the value of the tender, and split the difference between himself and the minister in charge of the budget.

Similar rake-offs are practised across government. Farmers deliver their wheat to the ministry of agriculture for sale through official channels: the eventual sale price is roughly three and a half times what the farmer is paid, with most of the multiple going into ministers’ and officials’ pockets. If you fancy a secure job in a ministry there is an interview, but then you’ll also have to pay to be appointed: the going rate for a middle-ranking job is around $50,000 to the relevant minister. Family and friends will have to chip in to help.

One thing is not appalling on Ukraine’s roads and that is some of the cars. Automotive swank was part of Isaac Babel’s stories about Odessa gangsters in the 1920s – his young “king” Benya Krik drives “a red automobile with a music box for a horn playing the first march from the opera I Pagliacci” – and luxury cars were one of the first signs of business wealth in post-independence Ukraine. In Kyiv before the Maidan protests you’d have seen two-a-penny Porsches and Bentley Continentals. Maseratis and Ferrari Californias were common; for exclusivity, you had to move up a little, to a Lamborghini or a Rolls-Royce drophead coupé. The race, when “business” opportunities abound, is always to the swift. Cars are potent symbols in that realm: the wheels of fortune.

And, for two decades, business in post-Communist Ukraine has been synonymous with politics. Yanukovych’s kingmaker, the eastern oligarch Rinat Akhmetov – owner of the Shakhtar Donetsk football club, the most expensive private flat in Britain and more wealth than anyone else in Ukraine – is reported by the BBC and Ukrainian Forbes magazine to have secured 31 per cent of all state tenders in January through his businesses (though Yanukovych’s son Oleksandr trumped him, obtaining 50 per cent of contracts in the same month). Akhmetov controlled 50 deputies in parliament, and his loyalists held six positions in cabinet.

But, having supplied the private Airbus to ferry his protégé to Moscow for the cabalistic meeting with Putin at which the infant EU deal was thrown out of the pram and replaced with a rowdy Russian pact – loud promises, some threats, little money so far – Akhmetov had a change of heart when snip­ers shot and killed protesters. After Putin’s forces occupied Crimea he issued a statement asserting that “the use of force and lawless actions from outside are unacceptable”.

Parliament’s change of heart was even more decided. It removed the president from office by 328 votes to zero; after his dismissal, his own Party of the Regions followed up with a statement declaring that “full responsibility [for the violence] rests with Yanukovych and his entourage”. Many of these deputies are the same ones who, little more than a month ago, passed draconian anti-protest laws that led to the first shootings of protesters.

Which brings us back to why the Maidan revolution began.

For years Ukrainians have known that their political class is among the most self-seeking anywhere in the world. Their tolerance can even be said to have been an inevitable part of the abusive relationship dynamics I mentioned. When holding legislative and executive office not only confers access to patronage and public funds as well as immunity from prosecution, but also allows leaders control of law enforcement and the courts, and none of this seems so different from the Communist system that preceded it, it’s a reasonable reaction for the ordinary, exhausted citizen to put his head down and get on with it. In many senses the system is a continuation of the old Communist way. From the 1970s onwards few Soviet officials privately believed in Marxism-Leninism, and when these ideology-less men took power in 1991 they had nothing but cynicism and venality to offer their citizens. The former Ukrainian prime minister Pavlo Lazarenko was recently released after eight years in detention in a Californian jail for embezzling at least $100m from United Energy Systems of Ukraine, the company that he set up with one Yulia Tymoshenko. Yanukovych’s predecessor Leonid Kuchma negotiated an amnesty for himself over alleged illicit weapons sales to Iraq. Even the “honest man” of the Orange Revolution, Viktor Yushchenko, rapidly disgusted his people by enriching his family members.or years Ukrainians have known that their political class is among the most self-seeking anywhere in the world. Their tolerance can even be said to have been an inevitable part of the abusive relationship dynamics

The rot didn’t stop with cynicism, however. The combination of venality and freed markets brought with it wild lawlessness. Ukraine is a world leader in political “accidents”. The former interior minister Yuriy Kravchenko apparently killed himself with two shots to the head; the transport minister Heorhiy Kirpa (in charge of the Kyiv-Odessa highway), supposedly shot himself in the sauna of his holiday home; the opposition politicians Vyacheslav Chornovyl, Anatoly Yermak and Oleksandr Yemets all swerved off the road or drove thoughtlessly into trucks.

It adds up. It adds up to the kind of amorality described by Yulia, the young woman in the viral protest video I am a Ukrainian. It adds up to the reaction of Volodymyr Parasiuk, the 26-year-old from Lviv who picked up the microphone on the Maidan and who, as protesters carried the open coffins of victims of the violence towards the stage, demanded that they reject the opposition’s EU-brokered deal with Yanukovych – which they did. (So decisive was Parasiuk’s speech that the opposition leader Vitali Klitschko apologised to him afterwards for having shaken hands with Yanukovych.) It adds up to the words of the anonymous female Maidaner, tweeted the day the new government of unity was to be announced: “We haven’t won yet. All the politicians in power during the last ten years must go.”

This is why the Maidan backlash began when it did. These protesters are a new generation, without their parents’ resignation, grown up, despite their government’s monstrosity, with something that passes for freedom – access to the internet, television, mobility, consumer goods. They have looked west, embraced a prospect of European ideals of fairness and justice just as we begin to become blasé about these, and erupted into revolt at their denial. They are protesting for themselves; they are, I think, also protesting for their families, for their parents and grandparents, and for their nation. It is not an intellectual reaction, nor a particularly political one. It is the final, unreflecting “Enough”.

Nationalists, ultra-nationalists and the motley crew of right-wing survivalist and anti-Semitic groups represented by Svoboda (“Freedom”), Right Sector and others all made themselves visible on the Maidan. But their prominence, like that of genuine separatists or Putin’s stooges in Crimea or Kharkiv, could – with tactful handling –have been diminished to the margins where, even in the most balanced societies, they will always exist. The nationalism of most Maidaners is that of the core of Ukrainians who, from the 18th century onwards, when Johann Gottfried von Herder, the pastor of nationalism, declared that their country would become the new Greece “for the blueness of its sky”, began to cultivate a sense of nation as a cultural, literary and social rebuttal of their suppressed status.

All this is now significantly more complicated by Putin’s invasion of Crimea. We should have foreseen it; the abusive partner never wants to let the other one go; or, put it another way, Putin’s very Soviet cynicism understands how little the west wants to take him on. But we can’t anticipate everything. There were suspicions, however, that he would act after the Olympics were done.

What we must now do in the Europe to whose values the new generation of Ukrainians aspires is, yes, be sympathetic bankers, tactful facilitators, members of a vigorous effort (bilateral, if Putin withdraws, which I don’t think he will) to aid the belated emergence of the independent nation that was created, but in name only, 23 years ago. What we must not do is fail to give strong support, and so embitter Ukraine’s new-found belief in European ideals. We must not, from neglect or pious realpolitik, act as we did previously and let it slip back into its old abusive relationship and subservience, subject to Putin’s violent but oddly fey muscle-flexing. That includes not allowing the Russian president to go a metre further towards occupying eastern Ukraine. Yet when the wind carries away the smoke, the task won’t be achieved by filling a power vacuum in Kyiv with a temporary government of national unity or with new elections featuring many of the same old candidates. The Maidaners know it. It is why they have said they will not leave, and that all the politicians of the past ten years must go.

I believe a majority of Ukrainians know that, too. They know that it’s a moral vacuum they need to get rid of in their country. That is the only vacuum that matters. Understand this, and you – concerned outsider, careful diplomat, pragmatic politician, deep-thinking strategist, denizens of all shades of eastern and western foreign policy – will understand what needs to happen next in the nation of Ukraine.

Julian Evans is a travel writer and biographer

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

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The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt