Economics

The fast elevator

Published by Anonymous (not verified) on Thu, 04/01/2018 - 8:51am in

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Economics

Solutions come from the combined enterprise of individuals, and central Government only constrains that entrepreneurship.

Winning the Tax Wars

Published by Anonymous (not verified) on Wed, 03/01/2018 - 9:53pm in

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Economics

I am co-author of the chapter on wealth taxation in this new book:

The book came out of a conference at the World Bank in 2016. A summary of my presentation is here.

The book is important for three reasons. First, for what its authors say. Second, because of the issue it addresses. And third, because the World Bank embraced those issues. In dangerous times that is significant.

The threat to the NHS

Published by Anonymous (not verified) on Wed, 03/01/2018 - 7:34pm in

We have another NHS crisis. It will cost lives, unnecessarily. It will cause untold long term harm as staff give up, voluntarily or otherwise, under the pressure brought to bear on them. And nothing about this crisis is made up: this is the real thing, resulting from real demand, and no edict from Westminster will solve that.

I am not claiming medical expertise. Nor am I suggesting that I can solve all the problems of the NHS overnight. But I do know that the NHS need not suffer a cash shortage. What it is, instead, suffering is a political crisis. I explained why in an article I was asked to write for the British Medical Journal last summer, which did not get published as there simply wasn’t time to deal with the shortening in length that the editor requested from me before publication was planned. I share it here instead:

The threat from and to the NHS

There is a widespread belief that the NHS is under threat. A recent conference at the Royal Society of Medicine, which attracted considerable media attention as a result of the exchanges it generated between Jeremy Hunt and Prof Stephen Hawking, was premised on the assumption that this was the case. If this is true it is, however, important to understand why the NHS is itself threatening to some and why those threatened wish to threaten the NHS as a consequence. Without that understanding the threat to the NHS cannot be appraised.

Who and what the NHS threatens

The creation of the NHS has to be seen as the consequence of a circumstance of chance that occurred at a particular point in history. But for the Second World War, the concept of the welfare state to which it gave rise, the election of a Labour government in 1945, the creation of Keynesian economic thinking during the recession of the 1930s and the willingness of that 1945 Labour government to spend despite the massive accumulation of debt that the war gave rise to there would have been no NHS. That this coincidence happened indicates something deeper, which was the creation of a post-war political consensus that meant that the founding principles of the NHS continued in existence after Labour fell from power.

Those three principles were clearly stated in July 1948 when the NHS began to operate. They were[i], in the words of Nye Bevan, that the NHS would meet the needs of everyone; that it would be free at the point of delivery and that its services would be supplied based on clinical need and not ability to pay. The survival of the NHS suggests that these principles resonated across political boundaries. The evidence is that they still do: if the UK has anything close to a national religion in the twenty first century it is faith in the NHS.

That faith does, however, reflect a very particular worldview. It assumes that there is a state. Quiet explicitly, it suggests that the state has a role in people's lives. In saying so it explicitly rejects the notion that the market can meet all need. In its place it substitutes central direction of the supply of at least some services and it assumes that hey will be paid for by taxation. Implicitly this assumes that the price signalling mechanism of the market is an unsuitable indicator for allocating resources with regard to health: explicitly need is substituted instead.

This worldview was predominant in 1948, and for a long time thereafter. But this does not mean that there was no other worldview at the time that the NHS was created. In the year before it was founded Frederik von Hayek founded the Mont Pelerin Society[ii]. To do so he brought together thirty-six academics, journalists, financiers and other interested parties to discuss how their alternative vision of society might be promoted in the face of what they perceived to the threat of socialism which would lead, as Hayek put it, to 'The Road to Serfdom'[iii]. With the creation of the Mont Pelerin Society the political economic philosophy of neoliberalism was born.

The defining principle of neoliberalism is that it is competition for resources that defines their optimal allocation within a society. Alternatively, as William Davies has argued[iv] neoliberalism is hostile to what it sees as political discourse and it seeks to put in its place explicit economic indicators for which the market price system is the model. It does not allow for any alternative: it is this principle that dictates optimal solutions, it says.

A number of obvious conclusions follow from this logic in the context being discussed here. The first is that it is markets that should allocate resources. The second is that the only role of the state is to underpin the smooth functioning of markets. The third is that taxes must be minimal to allow individuals to engage to the maximum possible degree within the market. Fourth, this requires that those engaged in the supply of any service must be capable of failing or the pressure of competition cannot be brought to bear upon them. And, since this pressure is also only possible if the capital available to any provider is limited it also follows that suppliers must either be in the private sector or, at least, be removed from government control and access to its capital.

What this analysis makes clear is that the culture of the NHS, based as it is upon universal state provision that has sought to minimise cost by seeking to supply consistent, high quality care in a non-competitive environment, guaranteed by medical ethics rather than by market imperatives, is very different to neoliberal thinking. This would not matter to neoliberal thinkers if the NHS did not work, but it very obviously does. Both its popularity and the success of the NHS in rankings, such as that of the Commonwealth Fund[v], where in 2017 it was found to be the overall most effective health care system in the eleven advanced economies subject to appraisal, spreads this perception that there is an alternative to the neoliberal model. Unsurprisingly those who promote neoliberalism as threatened as a result. Their response is to threaten the NHS.

The origins of the threat

The threat to the NHS has its generic root in the rise of neoliberalism, so successfully related by Nancy MacLean in her 2017 book 'Democracy in Chains'[vi]. As she relates, the challenge to the state and its agencies, like the NHS, is organised and well funded, most especially through secretive think tanks. The Institute of Economic Affairs, the Adam Smith Institute and the Centre for Policy Studies are simultaneously at the forefront of this attack on the NHS[vii] and think tank secrecy in the UK: a 2017 study found they were almost entirely opaque about their sources of revenue[viii].

One paper published by the Centre for Policy Studies is particularly notable in this respect. Written by John Redwood, then (as now} Conservative MP for Woking, and Oliver Letwin, who had then to start his House of Commons career, it was entitled 'Britain's Biggest Enterprise: ideas for radical reform of the NHS' and was published in 1987[ix]. In a quaint reminder of the way things once were, the very obviously type written text remains available on the web. It is laden with barely veiled attacks on the NHS, behind the usual expressions of support for the NHS’s long suffering employees encumbered, as they were, by having to work in such a hostile system. But what really matters is the prescription it made for the direction of NHS reform, which it recognised could only be achieved in piecemeal fashion. The incremental goals would, it suggested, be:

  1. Establishment of the NHS as an independent trust;
  2. Increased use of joint ventures between the NHS and private sectors;
  3. Extending the principle of charging;
  4. A system of 'health credits';
  5. A national health insurance scheme.

Looking at the NHS in England it is clear that the first and second goals have largely been achieved and are now deeply embedded within its structures. In social care charging is similarly profoundly embedded. So too is the concept of a 'health credit’ becoming more commonplace in some aspects of NHS service[x]. That said, whilst it is still appropriate to note that options three and four are far from complete, it is not unfair to say that they are works in progress. In that case the concern that an insurance system remains the direction of travel, as expressed by Professor Stephen Hawking[xi], appears to be entirely realistic in the circumstances. The neoliberal assault on the NHS is very real.

What I would also argue is that the assault is conducted on more than one level. What might be called the Redwood / Letwin assault is explicit, and direct. It may be thirty years old and only partially successful, but it is well funded and continuing. The assault also exists at another level, for which the last decade has been little short of a gift. This second assault was accurately described by Noam Chomsky in 2011 when he said[xii]:

There is a standard technique of privatization, namely defund what you want to privatize. .... [F]irst thing to do is defund them, then they don’t work and people get angry and [then] they want a change.

The threat from austerity

The political choice to pursue the policy of austerity, adopted by the incoming UK government in 2010, has resulted in very limited real term increases in NHS funding per capita in England since then, and no forecast increase at any time in the foreseeable future[xiii]. In the face of changed demographics; real cost increases as better procedures become available, and imposed costs from reorganisation that have distracted resources from patient service provision the result has been a real reduction in resources available for patient care, a reduction in beds available for the supply of that care and enormous stress on a system that has, in the opinion of many practitioners, reached breaking point. Many economists, me included, have argued that none of this was necessary: austerity was a choice and not a necessity. It is indisputable that in 2017 the policy has failed to achieve its stated goal of a balanced budget: in the current financial year the UK government deficit is expected to exceed £58 billion. The consequence has not, however, been the abandonment of austerity as a policy but is instead its promised perpetuation: the assault on the NHS budget is to continue, remorselessly. That is why the Redwood / Letwin solution has to be still be considered to be on the table.

Two other factors contribute to this assault. One is the deliberate creation of confusion within the structure of the NHS in England. The 2012 Health and Social Care Act achieved its goal of shattering the NHS into as many parts as possible with no obvious lines of control remaining intact. This was not by chance: a private sector health service cannot be subject to central control and in England there is no effective way that it is now. In addition, neoliberal dogma demands that this service must have built into it the possibility of failure. Again, that is precisely what the 2102 Act delivered. The fragmented trusts that now make up the NHS, each with a balance sheet left fragile by under-funding, has been created to open the possibility of widespread financial failure, as Chomsky predicted. After all, how can an organisation suffer the pressure of competition if its risk of financial failure is insignificant? That patients might suffer as a consequence of that failure is inconsequential: the dogmatic goal of creating market risk is being achieved, come what may.

The illusion of patient choice is the third component in this process of undermining the NHS. Most practitioners will realise that choice is token in many cases: in an emergency it's far from a patient's concern. But for the neoliberal it exists for a reason: it is there to undermine the idea that the NHS might, firstly, exist to provide universally good care, and secondly that it is the only option that the state might fund. Choice exists to provide openings for the private sector, and not for patient benefit.

What can be done to counter the threat

The threat to the NHS is not from an ageing population, increasing costs, migration or even, ultimately, from a shortage of trained staff, because all those issues can be managed if the right political will exists. The threat to the NHS is that the political will that it succeed in the task that it has undertaken for the last near-seventy years does not now exist amongst some politicians. The fault is not that of one political party, although it is fair to note that the problem appears to be peculiar to England. The solution to the problem is, in that case, political and particular to the deeply divided English political, social and economic environment, where the relationship between London and the south east and all remaining regions is one of deep division and significant inequality.

The solution can only be found in a willingness to accept that this division and inequality is similar in effect to the stress that, in a different way and at a different time, gave rise to the need for the NHS. This, then, requires that the founding principles of the NHS be reinstated and that their replacements, which can tolerate so many of the characteristics of the neoliberal vision of healthcare, be themselves consigned to history.

With those principles restated what has to then be understood is that it isn't money that constrains the NHS. That is because the economic reality is that there is no limit to the amount of money a government can create if it so wishes. Money creation is, after all, costless. It is also technically limitless. That does not mean a government should be reckless. There is, of course inflation to consider. But that is what tax is for. It is government spending that creates the ability to tax. Where else, after all, does enough government created money to pay tax come from if government does not create it in the first place? Quite emphatically, it is not tax that creates the capacity for government to spend; that capacity always exists. Instead it is taxation that limits inflation when the government is spending to meet social purpose, for example, by funding the NHS. And spending in that way is always desirable, and there is always a gain to society, until the point is reached then the economy is working at its capacity, from which point the UK as a whole has been so far adrift for so long a time. That’s precisely why any constraint on NHS spending is inappropriate at present.

When this is appreciated it also has to be understood that there is literally no shortage of capital to invest in the NHS at present. In fact there is a shortage of government bonds in issue in the UK right now. That is because government bonds underpin most private pension funds and as more baby-boomers retire the demand for bonds is growing. In fact, people are queuing up to lend the government the money it needs to invest in the NHS. It is dogma alone that is denying people the chance to save in that way, and the economy (and NHS) the investment it needs. Poor facilities, a lack of training and failed systems all exist because of government choice as a result, and not because they need to. And since, right now the effective interest rate that has to be paid on the funds in question is near enough zero per cent, despite which the funds still roll in, it’s almost scandalous not to use them for social purpose and yet that is what is happening.

This is the economic reality that we face. Money is available for the NHS if people are able to work in it. But there is a problem. Because that money would come via the state, and would require central organisation and control to ensure it was well spent (which cannot happen in the current incoherent NHS management structure) there are those who politically oppose that use, not because it is economically rational to do so, because it clearly is not, but because of dogma alone.

The NHS need not be under threat. The NHS could be, and should be, well funded. It could be and should be the basis on which opportunity for new generations in need in this country could be built. But that requires a new generation of economists, politicians, health care professionals and others to believe, as some did in 1948, that they can make a more effective difference to people's lives through the provision of state provided healthcare than they could by promoting a market based system. Those who believed that in 1948 were right. The current threat to the NHS suggests that their vision is at risk. That vision, of universal care for people who are, whatever their economic situation considered to be of equal value, needs to be restored. Nothing else will tackle the threat to the NHS.

[i] NHS Choices http://www.nhs.uk/NHSEngland/thenhs/about/Pages/nhscoreprinciples.aspx Accessed 3 September 2017

[ii] The website of The Mont Pelerin Society  https://www.montpelerin.org/about-mps/  Accessed 3 September 2017

[iii] Hayek, F.A. ‘The Road to Serfdom’, 1944. London: George Routledge & Sons

[iv] Davies, W. ‘The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition’. 2017. London: Sage Publications Limited. Available at https://uk.sagepub.com/sites/default/files/upm-binaries/79542_Davies___The_Limits_of_Neoliberalism___Chapter_1.pdf . Page 6.  Accessed 3 September 2017.

[v] Schneider, E., Sarnak, D., Squires, D., Shah, A. and Doty, M. ‘Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care’. The Commonwealth Fund. Available at http://www.commonwealthfund.org/~/media/files/publications/fund-report/2017/jul/schneider_mirror_mirror_2017.pdf  Accessed 3 September 2017.

[vi] MacLean, N., ‘Democracy in Chains’.  London: Scribe Publications, 2017.

[vii] See, for example Niemitz, K., ‘Universal healthcare without the NHS’. Lodnon: The Institute for Economic Affairs, 2016. Available at https://iea.org.uk/publications/universal-healthcare-without-the-nhs/ accessed 3 September 2017.

[viii] See the ‘Who Funds You?’ website http://whofundsyou.org/ accessed 3 September 2017

[ix] Available at https://www.cps.org.uk/files/reports/original/111027171245-BritainsBiggestEnterprise1988.pdf Accessed 3 September 2017

[x] See, for example, the NHS Choices web page on Personal Health Budgets. http://www.nhs.uk/NHSEngland/patient-choice/personal-health-budget/Pages/about-phb.aspx Accessed 3 September 2017

[xi] Hawking, S. ‘The NHS saved me. As a scientist, I must help to save it’. London, The Guardian newspaper, 18 August 2017. https://www.theguardian.com/commentisfree/2017/aug/18/nhs-scientist-stephen-hawking Accessed 3 September 2017

[xii] Chomsky, N. ‘The State-Corporate Complex: A Threat to Freedom and Survival’. Text of lecture given at the The University of Toronto, April 7, 2011 (Transcript courtesy of Yvonne Bond). Available at https://chomsky.info/20110407-2/ Accessed 3 September 2017

[xiii] I have summarised the data at http://www.taxresearch.org.uk/Blog/2017/08/22/nhs-spending-data-necessar... Accessed 3 September 2017

The reasons to tax

Published by Anonymous (not verified) on Wed, 03/01/2018 - 6:40pm in

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Economics

There was some discussion here yesterday on the relationship between tax and government spending. As I pointed I out, this is by no means a direct relationship: the reality is that tax does not fund government spending, all of which can in principle be funded by ‘money printing’ or borrowing.

It is, of course, very unlikely that this would actually happen: inflation would rapidly destroy the value of a currency in this situation and the willingness of people to lend would quickly expire. This means that tax, which is used to balance the equation between government spending, money creation and borrowing, is an essential fact of economic life. The relationship can be formally summarised as:

G = T + ∆B + ∆M

Where:

G = Government spending

T = Net tax receipts

B = Borrowing (and so ∆B is the change in borrowing in a period)

M = Government created money (and so ∆M is the change in that sum during a period).

In this context the purpose of tax is to achieve a number of  goals, none directly related to spending:

  1. Reclaiming the money the government has spent into the economy. As already noted, it may appear that tax revenue is being used to pay for government services supplied but that is not true: government spending always comes out of funds the government borrows from its central bank. Tax, in that case, reclaims the money spent to prevent excessive inflation. The amount reclaimed is that which is considered sufficient to leave the desired rate of inflation in the economy.
  2. Ratifying the value of money. Because a government requires that tax be paid using the currency that it creates (simply because that’s the currency it bills in) that currency has for all practical purposes to be used in the economy for which it is responsible, assuming that tax forms a significant part of people's total liabilities. The payment of tax does, therefore, give a currency its value in exchange and as a result passes control of an economy to the government that charges that tax. This makes tax an absolutely fundamental component in macroeconomic policy.
  3. Reorganising the economy. Fiscal and monetary policy are the two fundamental tools available to a government to manage its economy, assuming it has its own currency. As the explanation already offered has shown, money creation and taxation are the flip side of each other. Tax is then an integral part of macroeconomic policy and so of reorganising the economy to meet social and economic goals.
  4. Redistributing income and wealth within the economy. Experience has shown that market economies are very good at concentrating income and wealth in the hands of a few people in a society. At the same time economics makes clear that this is harmful to the prosperity of a society as a whole because it seriously reduces overall levels of demand in the economy. Redistribution of income and wealth is then an essential function that any Government must undertake and appropriately designed taxes are a proven and effective method for delivering this policy.
  5. Repricing goods and services. Markets cannot always price the externalities of the goods and services they supply or reflect social priorities. Tax permits repricing of goods and services to reflect these facts.
  6. Raising representation in a democracy. The fact is that if people know they pay tax they vote. This only seems to be true, however, for income taxes. That's why it is important that people are in that tax system. When they are they want a say on how the system works and democracy is enhanced as a result.

When this is properly understood by governments we might get some decent economic policy. And as the formula shows, it’s not exactly rocket science and yet it is apparently nigh on impossible to get politicians (and others) to accept this reality which is why we perpetually end up with the fascicle question whenver a new poliucy is proposed of ‘how are you going to pay for it?’, which in itself assumes that the above variables are independent of each other, when they are not. But that’s the subject of another blog.

Jersey takes note

Published by Anonymous (not verified) on Tue, 02/01/2018 - 9:27pm in

This was published in the Jersey Evening Post on 30 December (I only reproduce part, and only do that because I cannot find the article on their web site):

The article continues by quoting extensively from my blog before adding that:

I will look forward to that. But right now Jersey looks to be on the back foot. It's been there before of course, having been so almost continuously in its tax relationship with the EU from 2005 to 2012. This time it is different though: as the EU has made clear sanctions could be imposed in months unless Jersey gets its act together as it is now required to do.

I look forward to watching this progress with interest in 2018.

I rather hope Guernsey, the Isle of Man, Cayman, Bermuda and the BVI are also taking note.

Seeking an answer to the suggestion that the government wastes taxpayers’ money

Published by Anonymous (not verified) on Tue, 02/01/2018 - 8:45pm in

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Economics

Having just pondered upon what the purpose of this blog might be in 2018, a near perfect suggestion came along, pretty much fully formed. This exchange took place on the blog over the last few hours of yesterday:

The suggestion that comes from that is, of course, that the blog does at least in part exist to provide responses to the ill-informed comments too commonly heard in public debate on tax, economics and the role of government of the type Anth has made.

Let me offer some facts. This is what the UK government will spend its money on in 2017/18:

Now Anth, tell us what's wasted and of no use to anyone in there, and how much you expect to save as a result?

And do remember that you don't pay for any of that spending anyway. That spend comes to £802bn, but revenue looks like this:

That comes to £744bn. So even if you find savings in the first chart there is no way that they will necessarily reduce your tax bill because (as I have long argued) tax does not actually fund government spending. That's paid for by (metaphorically) printing more of these:

The promise to pay printed on there is fulfilled by accepting such money in settlement of your tax bill, which only exists precisely because the government spent in the first place and has to tax some, all, and on occasion even more than that spending back only because if it did not there would be inflation. Its decision on how much to tax to control inflation then leaves a surplus, balanced budget or deficit, but it does not mean tax pays for the spend: that's paid for by the Bank of England extending the government credit against its promise to pay, in exactly the same way as all other money for spending is created.

So, given these facts Anth, what spending would you cut, and why, and what would the effect on tax be?

I'm curious to know. So are others. Please tell.

Priorities

Published by Anonymous (not verified) on Tue, 02/01/2018 - 7:38pm in

A new year, and for this blog one that cannot, I suspect, repeat the level of traffic of 2017. The final data for the year was 2,512,000 individual page reads, up from 2,004,000 the previous year. Unique visits increased from 1,286,000 to 1,754,000 in the year. Assuming there is no election and no referendum, which between them have boosted traffic in each of the last three years, those are figures that are not going to be repeated in 2018, I suspect.

So what to do with the blog instead? Indeed, what to do with the year? The first objective is to shake off the lurgy that has blighted my last few days, and which was the almost inevitable consequence of slowing down after a frenetic autumn.

I have to be candid and say that academic work will be dominating my agenda. I am in the second year of a three year grant when the shape of the planned deliverables has to be determined.

New research on the tax gap, and ways to both define and calculate it, is already well under way and in draft.

Work is proceeding rapidly on research on the Big Four firms of accountants and their impact on corporate behaviour.

That’s also true of work on new methodologies for assessing tax spillover effects.

I also have research underway on country-by-country reporting and its relationship to mainstream accounting.

An old theme, which is the role of company registrars in tackling tax abuse, is also receiving new attention.

And at City our work on the changing nature of the modern corporation is yielding surprising results that may begin to be published this year.

That is a pretty big agenda and leaves little time over, especially given teaching and other obligations.

I am not planning a new book, although I am being asked to consider it. I will only do so when I am happy I have a tightly defined topic worth the agony book writing involves: suggestions are welcome.

So where does the blog fit in? This is the place where I find out what I think on current issues by rehearsing them, often several times a day. I foresee some of the above themes appearing here, of course. I am also well aware that it is not tax that drives most of the traffic to this site; it is instead the politics and economics that surrounds the issue that do that.

Much of that writing is reactive. I am sure that will continue to be the case. But I would also love to spend time developing issues in a bit more depth and in the process pursue the wiki idea that has rather fallen by the wayside simply due to lack of time and the fact that I have a life beyond blogging. Again, suggestions are welcome, without promises being offered that I will meet requests made.

However, it being new year I might appraise a few fundamentals over the next week or so. There’s no harm in that. It might also fit with lecture writing, and that is my first work task of the year.

Have a good one.

Keynes: Reader's Goodwill, Intelligence, and Co-operation

Published by Anonymous (not verified) on Tue, 02/01/2018 - 4:09pm in

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Economics, Marxism

"A final difference was one of intellectual manners. By the early 1930s, Keynes and his followers felt a sense of urgency, almost of desperation, to get their ideas accepted. It became the hallmark of Keynes's coterie to regard every economist outside Cambridge as mad or stupid; argumentative good manners were sacrificed to world salvation. On the other hand, there is near unanimous testimony to Hayek's intellectual hospitality."

There's no dearth of goodwill, intelligence, and co-operation towards Keynes and his coterie in the essay where that passage comes from. His author does not number among Keynes' harshest critics. What one cannot see there is goodwill, intelligence or co-operation towards those "outside Cambridge". They were simply "mad or stupid".

Believe it or not, one finds that passage in Robert Skidelsky's 2006 essay "Hayek versus Keynes: The Road to Reconciliation".

John Toye, in his 2000 book "Keynes on Population", chronicles in excruciating detail a couple of public controversies Keynes sustained on trade (and demographics and Eugenics, implicitly). Referring to Keynes' first controversy in 1910-11, Toye writes: "From the beginning, he [i.e. Keynes] did not shy away from public polemics on issues related to the quality of population."

That's not an overstatement, by any means. Keynes enjoyed playing hardball. In that book Toye demonstrated enough goodwill, intelligence, and co-operation to earn positive reviews from prominent Keynesians, even though he concluded that:

"To propose that Keynes was afflicted by a considerable coarseness of sensibility is no doubt controversial and will provoke objections from those who are interested in Keynes as a towering contemporary cultural icon. Is it not sacrilege, they will doubtless ask, to aim such criticism at a member of the cultural pantheon? This charge is groundless. It deserves not only to be rejected in the name of free enquiry, but also to be turned back on those who make it. If the question of sacrilege were to be raised, I would contend that it was committed fifty years ago. Those who successfully established Keynes as a secular saint committed it. Those who wrongly attributed to Keynes an all embracing love of humanity committed it. Those who raised him from the status of a mere wise man to the rank of a Prophet of the Age committed it. That was the impiety. That was the hubris. That was the error that must now be redressed."

That controversy, first in Keynes' long record of controversies, saw him taking Alfred Marshall's side against Karl Pearson. Keynes was 27, Pearson 53. In a private letter to a friend, Keynes apparently wrote of Pearson:  "[T]he man is a liar".

That was beyond merely convincing his opponents.

Indeed, Keynes was not beyond convicting his opponents or even those among his followers who gained his disapproval. Paul Samuelson, Abba Lerner and maybe even Lionel Robbins could have provided testimony of that.

One need not repeat Keynes' numerous disparaging comments on Marx, Marxism and Marxists. Joan Robinson, who wasn't even remotely a Marxist and who knew Keynes personally described Keynes' attitude towards Marxism in the preface to the second edition to her "Essay on Marxian Economics":

"In those days most of my academic colleagues in England thought that to study Marx was a quaint pastime (though Keynes, who was allergic to Marx's writings, received my Essay kindly) and in the United States it was disreputable."

Keynes never gave much goodwill, intelligence, and co-operation to others.

----------
That, of course, does not deny Keynes' intellectual achievements. A man can be despicable without being inept. Further, in his defence one must say he was neither the first nor the last to act that way.

There's much to say for this plea for the reader's goodwill, intelligence, and co-operation, to be sure, but I find it a bit rich that Keynes, of all people, had the gall to make it.

UPDATE
03/01/2018. By the way, in the biographical notes of Joseph E. Stiglitz and Amartya Sen, delivered on occasion of being awarded the Sveriges Riksbank Prize in Economic Sciences (2001 and 1998, respectively) Cambridge does not emerge as a model of intellectual hospitality, even after the world had been "saved". If one believes their recollections, maybe outsiders were no longer seen as "mad or stupid" (or liars), but they were treated with serious reservations. Nor was Cambridge a big, happy family: there were many "outsiders" inside Cambridge.

New Years Chartfest, 2 January 2018

Published by Anonymous (not verified) on Mon, 01/01/2018 - 9:22pm in

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Economics, Links

All picked up from Twitter or reading within the last week… GLOBAL MARKETS & MACRO Total Assets of Major Global Central Banks 2017 Best & Worst commodities 2017 Best & Worst Currencies USD – GBP, EUR JPY 2017 Asset Returns Global Bonds and Central Bank balances Commodities v Equities Global Bonds Outstanding   UST Yields

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