Growth has stalled in the UK. What signs of recovery there are look tepid. At most, we hope to regain wealth that was lost after the financial crisis, rather than create genuinely new prosperity. Despite sustained austerity, the government's financial position still appears unsustainable. Youth unemployment is persistently high. Our trade deficit continues to worsen. The prospect for the UK economy remains bleak. In A Competitive Pound for a Stronger Economy, entrepreneur and economist John Mills places the UK's plight in a wider context. High-growth economies require a strong manufacturing base, from which it is easier to secure productivity gains than from services. Yet the relative contribution of manufacturing has declined throughout developed countries like the UK, causing stagnation and decline. The answer to this is not austerity but an economic stimulus through devaluation. If the UK sets a more competitive exchange rate, there will be increased demand in the economy, both from abroad through higher exports and domestically as British goods become more competitive vis-a-vis imports. As a consequence, the UK's manufacturing base and its economy will see a genuine revival.
John Mills also deals carefully with the objections to a devaluation, systematically explaining why it will not cause inflation to rise, living standards to fall or trigger a tit-for-tat currency war; why governments can influence the exchange rate; and why it is not true that: 'The UK has tried devaluations before and they do not work'. In this exciting new pamphlet he moves the debate away from tired arguments about the merits of fiscal stimulus vs. austerity and provides a path out of our current predicament.
John Mills is an entrepreneur and economist. He graduated in Philosophy, Politics and Economics from Merton College, Oxford, in 1961. He is currently chairman of John Mills Limited, a highly successful import-export and distribution company. He has been Secretary of the Labour Euro-Safeguards Campaign since 1975 and the Labour Economic Policy Group since 1985. He has also been a committee member of the Economic Research Council since 1997 and is now Vice-Chairman. He is also Chairman of The People's Pledge campaign for a referendum on Britain's EU membership, and Co-Chairman of Business for Britain. He is the author of Growth and Welfare: A New Policy for Britain (Martin Robertson and Barnes and Noble 1972); Monetarism or Prosperity? (with Bryan Gould and Shaun Stewart Macmillan 1982); Tackling Britain's False Economy (Macmillan 1997); Europe's Economic Dilemma (Macmillan 1998); America's Soluble Problems (Macmillan 1999); Managing the World Economy (Palgrave Macmillan 2000); A Critical History of Economics (Palgrave Macmillan 2002 and Beijing Commercial Press 2006); and Exchange Rate Alignments (Palgrave Macmillan 2012). He is also the author of previous Civitas pamphlets A Price that Matters (2012) and An Exchange Rate Target (2013).
Author, 1. Is Austerity the Only Way?, 2. Cutting Public Expenditure, 3. Increasing Purchasing Power, 4. The Exchange Rate, 5. Objections, 6. Conclusion, Notes