The coming financial crisis

ABSTRACT

The 2007–2008 international financial crisis was the worst since the 1929 Wall Street Crash – triggering the 1930s Great Depression, the rise of fascism and Hitler in Europe, and the Second World War. In the 1930s there were reforms to tackle the causes – particularly in the US with Roosevelt’s New Deal – including splitting banks’ ‘casino’ from ‘high street’ operations, and strengthening trade union rights. Following the Second World War, there were global reforms, including exchange controls to prevent cross-border financial speculation. But in the post-1980s era of privatisation and deregulation, these reforms were lobbied against and generally abandoned. The resulting speculative orgy, accompanied inevitably by increased inequality, led to the 2007–2008 international financial crisis. Reforms were promised, including increasing the degree of corporate diversity in the financial services sector, and creating ‘resolution’ plans for banks to prevent their collapse. However, the promised reforms regarding corporate diversity were reneged upon. Resolution plans were adopted in the UK, but in Europe this is being driven in a way that will strengthen the power of finance that created the problem in the first place. And the UK Government wants the regulator to promote the ‘competitiveness’ of financial services, which was tried before, and didn’t end well.

KEYWORDS:

• Financial crisis
• global financial crisis
• corporate diversity
• mutuals
• competitiveness
• financialisation

JEL CLASSIFICATION:

• A13
• D02
• D72
• D78
• E02
• E44

The 2007–2008 Global Financial Crisis was the most severe disruption to the world’s financial markets since the 1929 Wall Street Crash. That had led to the Great Depression of the 1930s, the coming to power of the Nazis in Germany and fascism elsewhere in Europe, and ultimately the Second World War. In 2008, the global commitment to prevent such a repeat was broad and deep. Co-ordinated expansionary economic policies did avoid the horrors of the 1930s, yet 2009 still saw the first global recession since the 1930s, and the Global Financial Crisis precipitated a Eurozone crisis in 2009 lasting several years.

The longer-term task was to tackle the causes of the 2007–2008 Global Financial Crisis, to prevent a reoccurrence. Governments and Central Banks initiated Commissions and other work into what policies needed to be pursued.

The fundamental causes of the 2007–2008 Global Financial Crisis lay in the scrapping of the measures which had been put in place following the 1929 Wall Street Crash and 1930s Depression. Some of these had been adopted in the 1930s, such as in the USA separating ‘casino banking’ from regular high-street banking, and strengthening trade union rights so as to maintain consumer demand. Others were part of the post-Second World War international arrangements, agreed at Bretton Woods, such as preventing the movement of speculative financial flows across borders.

The policy recommendations following the 2007–2008 financial crisis were timid compared to President Franklin D. Roosevelt’s New Deal, or the Bretton Woods agreement. There was a recognition that having casino banking and high-street banking together was part of the problem, but rather than the obvious solution that was implemented in the 1930s, banker-friendly variants were adopted, of requiring separation but within the same company, and relying on such regulations to be honoured and obeyed – in an industry where proven law breaking has been rampant for years. As for reintroducing controls on speculative financial flows across borders – which had operated so successfully during the ‘Golden Age of Capitalism’ from 1945 to the mid-1970s – little was said, or done. Likewise, there was no repeat of the attempts in 1930s America to strengthen trade union rights. Rather, wages have generally stagnated since the global financial crisis, with workers instead having to rely on credit and increasing levels of debt – thereby exacerbating one of the causes of the 2007–2008 Global Financial Crisis.

Another of the causes of the 2007–2008 Global Financial Crisis was the increased inequalities in income and wealth, with the new super-wealthy demanding ever-higher returns on their investments, leading to banks and financial institutions developing increasingly exotic ‘financial instruments’ that paid out higher rates of return that were, quite literally, unsustainable.¹

If an investment looks too good to be true, it probably is. But that did not put off those who made a fortune from trading such ‘assets’, thereby further exacerbating the inequalities of income and wealth that had caused the global financial crisis in the first place. Again, there was no serious attempt post-2008 to reduce inequalities of income and wealth. Quite the contrary, the Government in the UK – which was typical of many across the world – imposed austerity on those who were not well off, and gave tax cuts to those who were already well off, thereby exacerbating inequalities. This wasted decade led to hundreds of thousands of excess deaths in the UK alone, by pushing people into increased poverty.

How, then, can Central Bankers and politicians claim to have introduced measures to prevent a recurrence of the 2007–2008 Global Financial Crisis?

The answer is that they focus on what they have done, much of which has been good, but which has been very limited in face of the larger issues that have been left untouched – the failure to fully separate casino banking from retail; the failure to prevent speculative financial flows across borders; and the failure to strengthen trade union rights so that spending can be backed by earnings rather than by increased levels of debt.

And even on the narrowly focused financial services sector, what little was promised has in some cases not even been delivered. Worse still, in some cases there seems to have been no intention to deliver what appeared to have been solemn pledges, enshrined in the Coalition Agreement signed by the two political parties making up the UK’s 2010–2015 Government (namely the Conservatives and Liberal Democrats). This began a dangerous political process in the years since, which has created the platform to promote demagoguery. A process where politicians have begun to make pledges and promises with the sole intention of creating sound bites, tweets, and popularity – rather than to actually implement the pledges and promises. This is leading across the world to a growing cynicism about politics, which represents a danger to democracy itself. Following the First World War, the UK’s Ministry for Reconstruction had addressed this danger directly, advocating adult and community education as a ‘permanent national necessity’. This led to all universities creating departments for continuing education, to pursue what today would be known as lifelong learning. Yet in the UK, at least, this too has been undermined, with funding cuts and legislative and regulatory changes removing much of the country’s adult, community and continuing education. It is almost as if today’s governments do not wish to face an educated electorate.²

In Britain, 2010 saw a Coalition Government formed, between the Conservatives and Liberal Democrats. Recognising that one of the causes of the 2007–2008 Global Financial Crisis had been the dominance of ‘too big to fail’ shareholder-owned banks, their Coalition Agreement pledged to diversify the financial services sector by promoting member-owned mutuals. In the UK most of the market for house buying had been financed by such member-owned mutuals, known as building societies. From the Thatcher Government onwards, these were demutualised. The argument was that this would make them more efficient. The reality was that those involved in the process – Board Members and financial advisors – took a great deal of money personally from the sector. Of the newly independent banks this created, not a single one survived as an independent bank. One such demutualised building society was Northern Rock. Once it became a bank, unrestricted by the strict regulations limiting what building societies could do – which was basically to take savings from local people, and use the excess of what was required to conduct simple banking operations to lend to local people to buy homes – Northern Rock began borrowing and gambling on the international financial markets. When the gambles failed, their customers queued round the block all night to withdraw their savings – demutualisation had successfully reinvented the ‘bank run’. In the morning their customers were told that their money was no more. The former building society – which had been demutualised to become a private bank, supposedly to be more efficient – had to be nationalised.

The Coalition Government had pledged to strengthen the mutual sector, so at least they were provided with an easy win, of returning Northern Rock to the mutual sector, where it had thrived for generations before it had been demutualised. Instead, the Coalition sold Northern Rock to Richard Branson and a consortium of New York hedge funds. When challenged in the House of Commons as to why the Government had not followed the advice given to UK Financial Investments (the body through which the Government managed the bank) as to how Northern Rock could have been remutualised, the Government Minister misled the House by replying that no such advice had been received – it was, and I know, since I was the one who delivered it, at a meeting in Kellogg College, Oxford, to which the UKFI officials had travelled in order to receive the advice.

The failure of Government and governance goes further, in terms of undermining the very process of democracy, since although the Coalition Government pledged to increase the degree of corporate diversity of the financial services sector, they neither introduced nor proposed any way of measuring the degree of corporate diversity of the financial services sector. There would be no way that they, or the electorate, would be able to tell whether or not they had fulfilled their pledge. This undermining of the democratic system is perhaps the most worrying. Although the coming financial crisis should concern us too.

Because of this dereliction of duty by Government, Professor Oughton and I created a ‘Diversity Index’ (D-Index) to measure the degree of corporate diversity of the financial services sector. How this index is constructed is reported in detail in ‘Measuring corporate diversity in financial services: a diversity index’, which also reports what the index indicates, namely that the degree of corporate diversity had indeed deteriorated prior to the 2007–2008 Global Financial Crisis. But following the Coalition Government’s pledge to increase the degree of corporate diversity, this simply did not happen.

So, we can accept the claims of Carney (2021) and others that steps were taken, but not that these have solved the problem, because some of the necessary steps were only done partially (such as separating casino banking from retail); the big steps were never discussed, let along taken – such as reimposing controls on speculative financial flows across borders, as had underpinned the ‘Golden Age of Capitalism’; and some pledges were broken (such as the UK Government’s pledge to increase the degree of corporate diversity in the financial services sector by supporting the growth of the mutual sector).

Almost more worrying than these failures, is that the UK Government in 2022 is set to make matters worse, rather than better. The causes of the 2007–2008 Global Financial Crisis, rather than being tackled, or even ignored, are going to be exacerbated.

First, rather than strengthen trade union rights as was done in 1930s America, to give workers purchasing power to create sustainable demand, trade union rights are being further eroded, even beyond what was done by the Thatcher Government, strengthening the ability of employers to break strikes. This is at a time when inflation is running at around ten percent a year, with wage settlements often around three percent, so that after a decade or more of austerity, with real wages stagnant, real wages are now being seriously depressed – by seven per cent or so in a single year. The only way of workers dealing with this cost of living crisis – which Government acknowledges exists – will be to take on yet more credit, expanding debt levels still further above those levels that provoked the 2007–2008 Global Financial Crisis.

Second, the pressure from the super wealthy on the financial services sector to introduce and trade unsustainable new financial products will be fuelled by the continued increase in wealth and income inequality. Rather than this inequality having been reigned in, to promote a degree of economic – and social and political – stability, the degree of inequality has been exacerbated by the form of quantitative easing pursued by Central Banks around the world, which has pushed up the price of assets held by the wealthy. This should be halted now, with such quantitative easing being used to fund a Global Green New Deal.

Third, the hubris which drove the unsustainable economic policies and developments up to the 2007–2008 Global Financial Crisis included the idea of ‘competitiveness’ as a policy aim – rather than sound economic policies, practices and regulation. It was this mantra of competitiveness which drove banks to outdo each other – to become more ‘competitive’ than the other – by introducing ever more outlandish financial instruments which delivered yet higher financial pay-outs to those who ‘invested’ in them. The UK Government is planning to reintroduce this toxic goal, that led to financial crisis, and will do so again. The Financial Services Future Regulatory Framework (FRF) will give regulators statutory objectives to promote ‘competitiveness’. We reproduce below a letter sent to The Chancellor of the Exchequer and Economic Secretary to the Treasury in May 2022, arguing that ‘competitiveness is an inappropriate objective for regulators’. As the Bank of England Governor said, we tried a competitiveness objective before, and ‘it didn’t end well, for anyone’.³

The organisation ‘Finance for our Future’ argues that rather than repeating the mistakes of the past, the Financial Services and Markets Bill should prioritise:

1. Climate Change and nature: by giving regulators a new statutory objective to align the financial system with the 1.5 degree goals in the Paris Agreement so that they can focus on what matters most for our future;

2. Fair access for all: by giving regulators a responsibility, for the first time, to promote financial inclusion to help the millions of people who are excluded from essential financial services;

3. Stability of the economy: by maintaining the independence of regulators to act in the public interest, and abandon the dangerous proposal to force them to cheerlead for industry through an ‘international competitiveness’ objective; and

4. Accountability and transparency: by introducing requirements that give the public and civil society as big a say in how the financial sector works as industry lobbyists.

As Sir John Kay puts it: ‘Britain needs a healthy financial sector. But its health should be measured by the contribution it makes to the needs of British business and the welfare of British consumers. The dangers of regulatory capture – the process by which regulatory agencies come to identify with the industries they regulate – are evident in many regulated industries, none more so than financial services. Regulation should promote financial stability and favour competition, not competitiveness’. (Kay 2022)

1. Promoting corporate diversity in the financial services sector

In ‘Banking diversity, financial complexity and resilience to financial shocks: evidence from Italian provinces’, Beniamino Pisicolil tests whether more diverse banking and financial systems are less prone to fragility and more resilient during financial shocks:

In particular, building on Michie and Oughton (2022) we compute an index of banking diversity for Italian provinces (NUTS 3). Moreover, we propose an index of diversity (and development) of the overall financial sector by implementing the complexity algorithm by Hidalgo and Hausman (2009). We examine the role of greater diversity in the banking and financial system on financial stability in a period (2006–2020) of high financial distress.

Beniamino notes that his empirical work covers three periods of high financial distress, namely the Global Financial Crisis of 2007–2008, the European sovereign debt crisis from 2009–2013, and the Covid-19 crisis from early 2020. His findings suggest that ‘greater diversity in the local banking and financial markets has beneficial effects on financial stability’. This is consistent with the findings of Michie and Oughton discussed above and reported below. It is also consistent with the Economists’ Competitiveness Letter – discussed above and reported below – arguing as it does that what is needed is competition within the financial services sector, not of the financial services sector. A variety of corporate forms will enhance that competition (not to be confused with competitiveness), because the dominant form of shareholder-owned banks face a qualitatively different and more powerful form of competition when faced with a different corporate form – with different corporate objectives, policies, practices and behaviours. That represents a far more significant competitive pressure than just one more company of the standard corporate form.

Beniamino concludes that:

The argument for a greater diversity is today more compelling than ever. The disastrous economic effects of the Covid-19 pandemic are well documented, with access by firms to liquidity being one of the most critical concerns. Support by the financial sector will play a crucial role in avoiding firms’ serial defaults and in determining the ability of our economies to recover from the pandemic. To this aim, we showed that a greater financial diversity might be one of the arrows in our quiver.

These findings, and these arguments, should indeed be taken up by European regulators and politicians. But as the next article published in this issue demonstrates, they are unfortunately heading down a different and dangerous path.

2. Making matters worse in Europe

One of the positive moves that the Bank of England and other central banks made following the 2007–2008 Global Financial Crisis was to develop ‘resolution mechanisms’ for resolving the problem of insolvent banks, to find ways to avoid them having to be bailed out by taxpayers – or to collapse, which risks a domino effect which may trigger a broader financial crisis. This is one of the reforms that former Governor of the Bank of England, Mark Carney points to when claiming that we are now better prepared for a financial crisis. In ‘Reviving financial markets – a critical assessment of the single resolution mechanism’, Mariana Mortágua and Izaura Solipa analyse the creation of the Banking Union which aims to be an integrated financial framework for the Eurozone, including the development of a resolution mechanism. They argue that even these seemingly positive moves are reinforcing rather than weakening the forces that caused the 2007–2008 Global Financial Crisis – because they are part of a process of ‘governing through financial markets, where policy-makers resort to market-based instruments and policies for governance purposes, thus forming an alignment with the interests of financial elites’.

As for the resolution mechanism, Mortágua and Solipa argue that its design and decision-making process would actively strengthen and further integrate market-based finance in the European banking system:

The resolution framework and its underlying conditionalities imposed by the limited public intervention toolkit and the European State Aid regime are promoting banking capital concentration and the marketization of more traditional banking systems. … While the Banking Union has the overall goal of financial stability and increased convergence between member states, the outcomes of the Single Resolution Mechanism point to an increase in market-based finance and riskier business models at the expense of smaller and more traditional banking systems, fostering too-big-to-fail institutions and further deepening the already rooted intra-euro divergences.

In terms of corporate diversity, these moves therefore threaten to make matters worse – both in terms of corporate models, increasing the dominance of the too-big-to-fail institutions, and in terms of geography, with ‘detrimental effects for the member states of the Southern Periphery’.

In terms of the broader causes of financial crises – and the 2007–2008 Global Financial Crisis in particular – the process is ‘another step in the ongoing marketization of economic governance’. Thus, not only is the economy as a whole made increasingly fragile by marketisation and financialisation which makes a growing proportion of economic and social activities dependent on the casino of financial markets, but the key safety mechanism of governance is itself becoming increasingly subject to these very processes they are supposed to be regulating. In the run up to the 2007–2008 Global Financial Crisis it was argued that ‘light touch’ regulation did not mean ‘soft touch’, but that argument was shown to be nothing more than a sound bite, as the soft touch regulation proved powerless in face of the collapsing house of cards that was the international financial system. The need for proper, independent regulation and governance is still not being met – indeed, is being further undermined by these policy moves in the European Union.

3. Financialisation in developing countries

Although the 2007–2008 financial crisis was largely caused by the ‘capitalism unleashed’ deregulatory policies pursued in the USA and the UK in particular, the current form of free-market globalisation ensured that it impacted negatively on practically all countries and people across the world. It thus became the 2007–2008 Global Financial Crisis, creating the first global recession since the 1930s, in 2009. However, it is a mistake to think that globalisation has replaced nation states – on the contrary, it is very much the product of nation states, the USA and UK again at the forefront. Countries and regions of the world continue to have a degree of political, legal, and military power, and the way that globalisation impacts upon countries and regions differs. So, while financialisation has become a dominant force in the world economy, it takes different forms across countries, and in particular impacts differently in developing countries. In ‘Financialisation in Developing Countries: Approaches, Concepts, and Metrics’, Costas Lapavitsas and Aylin Soydan review the literature on financialisation in developing countries. They argue that financialisation in developing countries should be distinguished from the more general concepts of financial liberalisation or financial globalisation, and is different from that in developed countries regarding the conduct of non-financial enterprises, banks, and households.

4. Conclusion

The fundamental causes of the coming financial crisis are now in place. These causes have not been removed or dealt with. True, good work has been done on how banks may help themselves when the crisis hits; but not on how to prevent the crisis occurring in the first place. The ingredients are still all there; indeed some more have been added.

We need to understand the underlying nature of the economic system, how it operates, what incentives are driving behaviours. That was done by the classical economists, from Adam Smith to Karl Marx, both of whom extolled the power of markets to drive production and investment; but they recognised the underlying dangers of those drivers to society, and even to the system itself. One of the key objects of analysis for the classical economists was the distribution of income and wealth between economic classes. Indeed, this was one of the drivers behind the rise in the late 19^th Century of ‘neoclassical economics’, with social classes replaced by individuals – utility maximising consumers and profit maximising entrepreneurs – and the great shifts and even revolutions in production and society reduced to marginal changes in costs and revenue. Keynes challenged this orthodoxy, detailing the way in which financial markets actually worked, with investors trying to second-guess other investors, so they become little more than casinos:

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done (Keynes 1936, 159).

Hence Keynes advocating the exchange controls which restricted global financial speculation during the post-war boom, dubbed the ‘Golden Age of Capitalism’ (Marglin and Schor, 1991).

Milanovic’s book Capitalism, Alone (2019) argues that capitalism as an economic system has established itself, with the fall of the Soviet Union and the other socialist or centrally planned economies of Eastern Europe, as the dominant economic system globally – including, he argues, in China. It is the only game in town, he argues, and the focus needs to be on how it might develop. However, he recognises Adam Smith’s fear, in The Theory of Moral Sentiments, that the pursuit of wealth might dissolve the vitally important – to society – relations and bonds between people, involving trust and honesty; and in The Wealth of Nations (Smith, 1776) that market forces would incentivise people to act in ways which were damaging to society, driven by their individual drive for personal enrichment, even if at the cost of others.⁴

So, while Milanovic argues that capitalism is the only game in town, he argues that its innate drive towards corruption makes it economically and socially unsustainable for the future, and that the current era of global capitalism does need to be overcome with some urgency, and a more socially sustainable system developed in its place.⁵

Following the 1929 Wall Street Crash and the Great Depression of the 1930s, attempts were made to limit the damaging effects of capitalism’s drive to greed, inequality, and speculation, including in the US’s New Deal a strengthening of trade union bargaining power, and a splitting of high street banking activity from the speculative activity of banks. Following the 2007–2008 international financial crisis and 2009 global recession, attempts have been made to ensure banks have more reserves and better plans to prevent collapse. But as Michie and Oughton show, even some of the promised reform, such as to promote a greater degree of corporate diversity in the financial services sector, were not pursued or achieved. And as Mariana Mortágua and Izaura Solipa argue, even Europe’s attempt to develop plans to prevent individual banks collapsing is being done in a way that further strengthens the power of finance, and may even make the degree of corporate diversity worse rather than better. And in the UK, the letter to the UK Treasury – published in this issue – warns that the direction of policy will make the risk of financial crisis more likely rather than less, with the reintroduction of the mantra of the financial sector pursuing ‘competitiveness’, which as the Bank of England Governor said, was tried before and didn’t end well.

As for the reforms put in place following the 1929 Wall Street Crash, the enforced separation of high street banking and speculation was reversed in the run up to the 2007–2008 international financial crisis, and in the UK has been restored in a weak form, not properly. So, taken together, the measures needed to prevent a future international financial crisis have not been taken.

The fundamental drivers remain untouched – and if anything are more powerful today than in the run up to the 2007–2008 global financial crisis. The incentives for greed and corruption that Adam Smith noted are stronger than ever.⁶ Inequality of income, wealth and power, far from being restrained, has got worse. The super-wealthy are even wealthier, still demanding ever greater returns on their capital, which in turn drives further speculative behaviour to try to achieve those returns. The mass of the population has done worse in terms of improved living standards since the 2007–2008 crisis than before, so the driver of having to rely on credit and increased debt has got worse rather than better. Certainly in the UK, trade unions are seeking to resist falls in living standards – which current pay offers below the rate of inflation represent; but while the current Government claimed they were going to move from a low-wage to a high-wage economy, in practice they are resisting these trade union attempts, and are even introducing still further anti-trade union measures, repeating and indeed exacerbating what was done in the 1980s to weaken trade unions, which was one of the contributory factors to the increased inequality that led to the 2007–2008 crisis.

The seeds of the coming financial crisis have been sown. And the global economy will be in a worse shape to deal with it than we were in 2007–2008. As the UK Guardian’s economics editor points out:

… the previous crisis followed a 15-year upswing in the global economy. Growth was strong and living standards rose steadily. Cheap imported goods from China and other emerging market economies kept inflation low.

Since then, growth has been anaemic, living standards have flatlined and inflation is now running at its highest level in four decades (Elliott 2022, 28).

And in the global south, as Lapavitsas and Soydan argue in this issue:

… the opening to international capital flows and the growing presence of foreign financial institutions have facilitated the growth of foreign debt by the private sector, thus fostering domestic financialisation and creating new mechanisms of financial profit making.

The changes in the conduct of private agents together with the macroeconomic environment accompanying financialisation have created additional sources of vulnerability for developing countries.

The danger of greed and speculation leading to financial crisis has long been recognised, as has the need to try to counter the danger through regulation. The 1929 Wall Street Crash and the subsequent Great Depression of the 1930s led to an immediate regulatory response in the US with President Roosevelt’s New Deal, and elsewhere to the rise of fascism and Hitler. The resulting World War led to a global regulatory response in the form of the Bretton Woods agreement, introducing strict controls on international financial speculation. Why were these reforms withdrawn, leading to a frenzy of what the late Andrew Glyn referred to as Capitalism Unleashed? The 2007–2008 crisis led to many banks and other companies failing, with some personal fortunes no doubt damaged, but overall, the costs were paid by the taxpayer, bailing out those investors who had gambled and lost. The rich got richer. The taxpayers who paid the bills suffered from a decade of austerity, meaning poorer public services and stagnant living standards.

Perhaps this explains why there is so little Government and regulatory action to deal with the causes of the coming financial crisis – namely inequality and speculation; because those with wealth and power have learned from experience that if they continue speculating and winning, they will continue to accrue the winnings, whereas if the coming financial crisis wipes them out, the taxpayer will once again foot the bill.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. This is researched, reported and discussed in detail by Professor Lysandrou (2019).

2. For detail, see the 2019 Report from the Centenary Commission on Adult Education, available free of charge from www.centenarycommission.org.

3. The full list of signatories is published below, but for full disclosure, these include the founding and current editors of this journal (Malcolm Sawyer and Jonathan Michie), and Editorial Board member Michael Ash.

4. Malik (2022) also cites Smith (1759) reference to the “disposition to admire, and almost to worship, the rich and the powerful, and to despise, or at least, to neglect, persons of poor and mean condition” being both “necessary” and “corrupting”. “It is ‘corrupting’ because, as he put it in his later book, The Wealth of Nations, no society can by ‘flourishing and happy’ when the ‘greater part of the members are poor and miserable’. But, he argued, it is necessary ‘to establish and to maintain the distinction of ranks and the order of society’ to allow markets to work. And since ‘the affluence of the rich excites the indignation of the poor’, so the rich must be protected ‘by the powerful arm of the civil magistrate continually held up to chastise’ the poor”.

5. For a review of Milanovic’s book, see Michie (2021).

6. For a case-study of corruption involving the UK Prime Minister David Cameron who introduced austerity as the response to the 2009 global recession, saying “We’re all in this together”, see Mavin (2022).