Bankruptcy, bubbles and bailouts

Aeron Davis is Professor of Political Communication at Victoria University of Wellington. He is the author of seven previous books, including Reckless Opportunists: Elites at the End of the Establishment (2018). His work has appeared in the Financial Times, the Daily Telegraph, Times Higher Education, the New Statesman, the Guardian and elsewhere.

A Financial Times Best Book of 2022: EconomicsOne of Bella Caledonia's Books of the Year'At the heart of British policymaking stands the mighty Treasury, instinctively pro-market, conservative and centralising. Its achievement is to preserve stability and its failure is to stifle innovation. In this superb book, Aeron Davis tells a somewhat depressing story of institutional continuity in the midst of change over half a century. Institutions matter. The example of Her Majesty's Treasury shows how and why.'Martin Wolf, Chief Economics Commentator at the Financial Times'Aeron Davis's balanced, historical account of unaccountable, technocratic power is an essential read.' Ann Pettifor, Director of Policy Research in Macroeconomics at PRIME'Through fascinating and surprisingly candid interviews with those who ran the Treasury over decades, Aeron Davis has put the politics back into UK economics, revealing the personalities and ideologies that have profoundly shaped the nation's most powerful institution and, through it, the whole economy. For anyone seeking to understand and influence UK policymaking - whichever political party is in power - this book is an essential and riveting read.'Kate Raworth, author of Doughnut Economics'As Aeron Davis shows in this perceptive and revealing history of the past half-century of the department that underwrites every British political decision, the Treasury has a very strong instinct for self-preservation. Many of the most important – and the most damaging – policies of recent decades have been developed and promoted by the Treasury’s institutional compulsion to settle the national balance sheet.'Will Dunn, The New Statesman'A very valuable guide to the most important and powerful institution in Whitehall.'Sam Freedman, author of Failed State (one of his Books of the Year 2024)'This is a splendid survey of a key department of state. The Treasury dominates the state machine.'Will Podmore, Morning Star 'An invaluable record of what some of the key political and official actors involved in UK economic policy thought they were doing at the time and how they view that in retrospect. I thoroughly recommend reading it to anyone interested in the recent economic history of the UK.'Simon Wren-Lewis, Emeritus Professor of Economics and Fellow of Merton College, University of Oxford 'This is a very good book. If you want to understand more about the most powerful institution at the heart of UK Government I’d heartily recommend it.'Paul Kissack, Group Chief Executive of Joseph Rowntree Foundation and Joseph Rowntree Housing Trust'Aeron Davis lucidly and accessibly illuminates an institution, the UK Treasury, that prides itself on being the salvation of the British economy when, in fact, it is a major contributory factor in its sub-par performance. Combining responsibility for controlling the public finances and economic management, the latter has very much played second fiddle, increasingly contracted out to third parties, with over-reliance on a bloated financial sector and successive property bubbles to keep everything afloat. The analysis thematically unfolds from the IMF debacle under the Callaghan Labour Government, to the Brexit and Covid crises under the Johnson Conservative Government. Essential reading for academics as a case study of the importance of an institutional perspective - and for a more general readership to understand all that has gone wrong with the British economy over the last half century.'Chris Painter, Emeritus Professor of Public Policy and Management, Birmingham City University'This is a lively book that makes excellent use of its high-profile interviews to highlight an elite view of how the British economy should be managed. I particularly liked the focus on financialization over neoliberalism.'Duncan Needham, Journal of British Studies

• Preface to the paperback edition1 Introduction: the Treasury as saviour?2 Creative destruction and the road to nowhere: a microeconomists’ story3 Financialisation not neoliberalism: the City’s Trojan Horse enters the Treasury4 Pseudo-Keynesianism, debt and magic money trees: the financial fixers come to town5 Visions of empire and globalisation: rise of the internationalists6 The great financial crash and the great failed paradigm shift: a technocrats’ tale7 Austerity, spin and the road to Brexit: posh boys take charge8 Brexit and Covid postscript: reckless opportunists gain control9 Conclusions: an institutional perspective on UK economic historyIndex