The Courageous State:
Rethinking Economics, Society and the Role of Government
- Richard Murphy

In The Courageous State, Richard Murphy argues that neoliberalism has bred weak governments led by weak politicians who believe implicitly in the supremacy of the market. It has created a cowardly state: a state that sees responsibility and then runs away from it. Worse, the weak politicians who run our cowardly state want power solely to ensure that as much tax revenue as possible is used to benefit the private sector that they idolise. But neoliberal theory is wrong – it has created the crises we’re suffering. And it has no solution to them.

The Courageous State argues powerfully for a new economic model. That model is based on a very different idea of what the role of the state is. The Courageous State is driven by its desire to work on behalf of the people of this country.  And that means a Courageous State is populated by politicians who believe in government and in the power of the office they hold. They believe that office exists for the sake of the public good. They know what that public good is. They think it is their job to help each and every person in their country to achieve their potential, sustainably, in a strong mixed economy. And they believe they can command the resources to fulfil this task – whether through tax or other means.

A Courageous State offers hope; our existing, cowardly, state does not. Which is why building a Courageous State is essential if we want to both solve our current problems and build a sustainable future.The question is, are you willing to be that Courageous?

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Chapter 1    Introduction
The creation of the cowardly state
What the cowardly state represents.
The need for a Courageous State.
Where markets go wrong
The cappuccino economy
Why this book needed to be written
A new economic model
The way to achieve our potential
An approach to poverty
The effect of money on well-being
The right of the state to intervene
Finding solutions to the challenges
Creating a state of hope

Part 1    Why we need the state

Chapter 2    The crisis of confidence in the state
The development of the cowardly state
The consequences of the cowardly state
How did we get a cowardly state?

Chapter 3    The economic myths
The fundamental flaws in neoliberal thinking
Putting this in context – or why we’re in a mess right now
Some excuses and some other flaws
The consequences

Chapter 4    The myth of the market
The role of the state
State regulation
The state as market overseer
The state as service provider
Accounting for externalities
The Courageous State and society

Chapter 5    The cappuccino economy
The ingredients
The correct mix
The final component
Assembling the mix
Getting the most out of the final product

Chapter 6  Where only the state may venture
Where the private sector does not always work best
Why markets are inefficient in practice
Why we can’t afford markets in essential services
Where the markets don’t meet needs
The pensions dilemma
Where the market failed
Market constraints
The need for real capital investment
The custodian of hope

Chapter 7  Financing government activity
The right to tax
The power of taxation
Redistribution of wealth

Part 2 The theory of the Courageous State 

Chapter 8 A new economic model 
The existing model
The basis for a new model
The economic dilemma
Recognising potential
Defining potential
Making sense of these ideas
Putting potential on the map 
The limit to potential
Our different needs
Absolute poverty
Relative poverty
Understanding the area of achievement
Working within our limits

Chapter 9  The problem is caused by other people
How to achieve our potential
Choosing what to achieve

Chapter 10 Cash ain’t king
The value of money 
Money and the real economy
Over-consumption relative to capacity
The influence of advertising
Corporate motivation
Borrowing to fund current consumption
The consequences of borrowing
Borrowing for asset acquisition
The lender’s viewpoint
What happens when cash is king
Types of financial flow
The consequences of the cash relationships in society

Chapter 11 Delivering the Courageous State
Extremes of wealth and democracy are incompatible
The goal of social democratic government
So how is the courageous state delivered?
The role of tax in the economy
Empathy and redistribution
Tax and redistribution
The five Rs of taxation
Fiscal policy – and why it’s so much more useful than monetary policy
The other tools of macroeconomic management
The attributes of a good tax system
Capital controls

Chapter 12 – Summary of Part 2 arguments 

Part 3

Chapter 13  Identifying the Courageous State

Recognising the Courageous State

Chapter 14 Constraining the world of feral finance
Create Financial Transaction Taxes
A Spahn tax
A ban on short selling
Loan of shares 
Splitting banks 
State ownership of the payment platforms used by clearing banks
Taxing banks 
Stopping tax relief on the excess incomes of those speculating
Taming tax havens
Capital controls
Tax on investment income
Equal taxation of capital gains
Close the tax loopholes that encourage excess saving
Restrictions on buy-to-let speculation
Treasury Deposit Receipts

Chapter 15  Rebuilding the role of the state
Close the tax gap
Regulate business properly
Stop privatisation of natural monopolies
Create country-by-country reporting so multinational corporations are accountable
Only procure from companies with acceptable business policies
Create a Green Investment Bank
Funding the new economy

Chapter 16    Building a balanced, sustainable economy
Progressive taxation
Simpler taxation
Wealth taxes
Tax and interest
Taxes on advertising
Ban on advertising to children
Multiple rates of VAT
Promote repair and recycling 
Increasing the minimum wage
Protecting union rights
Industry wages boards
Industrial training boards
Extra tax relief for employing people
Reorganising the structure of the workplace

Chapter 17    Supporting the broader goals of the Courageous State
Reforming education 
Higher education should be free
Lifelong learning
Maximum working hours
Local democracy
Social housing
Health care
Care for elderly 
Youth services
Relocating work

Chapter 18    Cooperating internationally
Closing down tax havens    
Country-by-country reporting
International tax agreements – unitary taxation
Fair trade
Capital controls
Peace keeping – not war


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