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The return of beggar-my-neighbour policy
The Financial Times 27/07/10
The academic name for the economic policy into which the British prime minister has stumbled is "mercantilism". According to the Encyclopaedia Britannica, this is "the economic theory and practice common in Europe from the 16th to the 18th centuries that promoted government regulation of a nation's economy for the purpose of augmenting state power at the expense of rival national powers". Among its doctrines was that the trade balance must be favourable, meaning an excess of exports over imports...The best name [for modern mercantilism] is "beggar-my-neighbour" economics. This was coined by the leftwing Cambridge economist Joan Robinson - no market fundamentalist she. By this she meant that because governments were unwilling or unable to promote output and employment by domestic means they had to resort to trying to promote it at the expense of other countries...more |
Thoughts on the troubles of banks
The Financial Times 13/08/10
There are three alternative courses of action for a political economist to take when a crisis blows up in an area that is far from his speciality or range of interest, such as banking in my case. The first is to stay silent. The second is to bone up as quickly as possible on the new area and to talk plausibly about Basel I, Basel II, the looming Basel III, first and second tier capital and so on. The third is not to bluff one's way into the technical discussion but to use the crisis to think about a few fundamentals. The third is the course that appeals to me...more |
We do not prosper by income or happiness alone
The Financial Times 04/08/10
The wellbeing of a society cannot be judged by national income indicators alone, even when these are augmented by so-called happiness measures. And it is worth removing specific injustices on a piecemeal basis even if it is impossible to construct a perfectly just society or even agree on what such a society would look like. These two propositions might seem blindingly obvious, but they go against the grain of much recent political philosophy and highbrow economics. This seems to me the central message of The Idea of Justice by the Nobel-winning economist and philosopher Amartya Sen...more |
Take central banks down a notch
The Financial Times 30/07/10
Following the Peter Principle, we should expect people to be promoted to the level of their incompetence. It may be unfair, but that thought crossed my mind in a week in which the Bank of England has been given unprecedented responsibilities. It retains the operational independence for monetary policy conferred on it by Gordon Brown in 1997 as chancellor. In addition, it regains all the responsibilities for financial oversight of which it was deprived by the Labour government - and then some more. These aspects are not confined to the UK, although the thoroughness and relentlessness of the operation are perhaps typical of the not-very-pragmatic British...more |
 Against The Flow: Samuel Brittan's book
Atlantic Books - Now in paperback
"Samuel Brittan has been one of the Financial Times' leading columnists for nearly thirty years. He has also advised numerous Chancellors of the Exchequer on economic policy. Against the Flow collects the most important of his writings from the last three decades. Taken together the pieces in Against the Flow amount to a robust defence of classic liberalism"...more |
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