Austerity, not Brexit, has doomed the Tory party | Aditya Chakrabortty

Our economy is sick – and with next week’s budget, May and Hammond look sure to make it sicker

The obituary for this government was published within days of its birth. Theresa May was a “dead woman walking”, proclaimed former cabinet colleague George Osborne. Thus was a sniggering bully transformed into an acerbic prophet. Who now dares argue with that verdict? Two senior ministers out within a week, two more barely clinging on to their jobs, and an administration that makes no progress, but merely lurches from disaster to catastrophe.

And so begins the Great Unravelling of the oldest political party in Europe, arguably the world. It leads the BBC bulletins. For the commentariat, it is their meat and drink and their tiramisu.

Austerity is now the thudding drumbeat behind every ministerial misstep

Related: Theresa May’s position is unsustainable, yet she still can’t see it | Matthew d’Ancona

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The fatal flaw of neoliberalism: it’s bad economics

Neoliberalism and its usual prescriptions – always more markets, always less government – are in fact a perversion of mainstream economics. By Dani Rodrik

As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over cultural norms, and private entrepreneurship over collective action. It has been used to describe a wide range of phenomena – from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and the UK’s New Labour to the economic opening in China and the reform of the welfare state in Sweden.

The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash.

Related: Globalisation: the rise and fall of an idea that swept the world

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