Tag Archives: Economics

People who have their heads fuddled with nonsense The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable – the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years … Our main task, therefore, will...

Brexit shows the need for a reformed economics Brexit is about much more than frustration about the E.U. and immigration. It is about a shortage of decent and secure jobs; an impossibly precarious labour market; inexplicable inequalities in incomes and wealth; closed access to affordable education, and a terrible deficiency of affordable housing; and it is about British Chancellor of the Exchequer Osborne’s single-minded austerity economics and the...

What Brexit was all about      Societies where we allow the inequality of incomes and wealth to increase without bounds, sooner or later implode. In a market economy it is money that counts. In a democracy it is your vote that counts. If you’ve got money, you vote in. If you haven’t got money, you vote out.

Brexit — a rejection of mainstream economics If, as a result of Brexit, the economy crashes it will not vindicate the economists, it will simply illustrate once more their failure. We, at Policy Research in Macroeconomics (PRIME) call for an urgent, independent, public inquiry into the economics profession, and its role in precipitating both the financial crisis of 2007-9, the subsequent very slow ‘recovery’; and in the British European referendum...

There will be a lot of postmortems for the European Union (EU) after Brexit. Many will suggest that this was a victory against the neoliberal policies of the European Union … The problem is that while it is true that the EU leaders have been part of the problem and have pursued the neoliberal policies within the framework of the union, sometimes with treaties like the Fiscal Compact, it is far from clear that Brexit and the possible demise of the union, if the fever spreads to...

Bad ideas never die — Greg Mankiw’s Alesina fairy tale So what’s wrong with the economy? … A 2002 study of United States fiscal policy by the economists Olivier Blanchard and Roberto Perotti found that ‘both increases in taxes and increases in government spending have a strong negative effect on private investment spending.’ They noted that this finding is ‘difficult to reconcile with Keynesian theory.’ Consistent with this, a more recent study of...

The EU establishment has been held to account for the euro mess, for austerity policies that turned recession into depression, for the galloping inequality, and for the millions and millions of unemployed. The austerity policies pursued in the UK and elsewhere, is deeply disturbing. When an economy is already hanging on the ropes, you can’t just cut government spendings. Cutting government expenditures reduces the aggregate demand. Lower aggregate demand means lower tax...

On the 23rd of June, Nigel Farage says we got our country back. This couldn’t be any further from the truth. The UK’s decision to leave the EU is the UK’s death knell. I don’t mean to speak in cliches, but goodbye Great Britain, and hello Little England. Every region in Scotland voted to stay in the EU. If the UK leaves, this is a direct violation of the will of Scottish voters. Scottish independence — and possibly Irish reunification, given that a majority of Northern Irish voted to stay...

Modern economics — the victory of technique over substance Modern economics is sick. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. To pick up a copy of The American Economic Review or The Economic...

Good Hayek vs. Bad Hayek The source of confusion is that there was a Good Hayek and a Bad Hayek. The Good Hayek was a serious scholar who was particularly interested in the role of knowledge in the economy (and in the rest of society). Since knowledge—about technological possibilities, about citizens’ preferences, about the interconnections of these, about still more—is inevitably and thoroughly decentralized, the centralization of decisions is bound to...