Economics & Riots

Olaf Storbeck has highlighted a useful piece of research on the links, if any, between fiscal austerity, economic conditions and social unrest. Needless to say, it is not a simple story. The analysis looks at the last 90 years and crunches data from 26 European countries. In days of old, there was in fact a strong and causal link between austerity and unrest. Interestingly, though, since the late 80s, this relationship has broken up and vanished. According to the results, in modern, industrial societies, there is no longer any palpable link between spending cuts and rioting.

The Association of British Insurers has revised its estimated figure of claims likely to be paid out by the insurance industry to be in excess of £200 million.

Comparisons with the French riots of 2005 can be found here. It might be worth remembering that, in France, the unrest lasted several weeks with a State of Emergency in place for over 3 months.

Some further links from marginalrevolution.com, a new study being proposed by the LSE and Guardian newspaper (5 Sep 2011) and ongoing material from the Financial Times.

Of course, Britain’s riots are not just about budget cuts and the state of the economy: policing methods, social morality, parenting skills, technology, inequality, alienation – the list is long! But when Iran starts its wagging its finger at the UK about “violent suppression” of human rights you have to worry about where this whole debate is going!

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