Well.

That’s very nice.  Prospect magazine have given my humble pamphlet, ‘A balancing act‘, the award of Publication of the Year at their Think tank of the year awards. Congratulations to the Centre for Social Justice and the IFS for their richly deserved joint award of the main prize.

I won’t give a blow-by-blow account of the gestation of this piece because a. it was 6 months ago and b. it would be boring.   But it should not go unmentioned that:

  • my colleagues at CentreForum, Alasdair and Julian, gave me a fantastic long leash, showing considerable confidence that had not been earned by my previous work;
  • several writers, in particular Martin Wolf, Sam Brittan and Will Hutton  (see side links) did me a huge favour by giving very generous reviews;
  • also Aditya Chakraborrty of the Guardian made a big difference with his advocacy of one or two of its views;
  • the piece might have been remembered for entirely the wrong reason had my lovely and eagle-eyed wife had not noticed the references to pubic spending* targets in a late draft

And, finally, a word of explanation.  The paper was popular, I think, for its Keynesian views: supporting the way the government has stood against the chaotic deleveraging that might have turned a nasty recession in the vicious wipe-out of a great chunk of this country’s productive future.  I obviously stand by this – half the posts here are about it.  (yes, very repetitive).

But I don’t want people to think that I am some sort of 1970s Keynesian headbanger.  In the majority of circumstances I am very nervous about the idea of the government being the reason we are growing, year by year.  It goes against my conception of liberalism, which sees individual choice and daring at the heart of our economic story.  When people propose grand schemes of investment in things like Green Roads I am normally sceptical.  I was very influenced by John Kay’s The Truth about Markets, and even Hayek’s notion of a catallaxy.  I like to bore people with the view that if investment in 1993 had been all in the government’s hands, it would have been sunk into HOTOL or superconductors.

Instead, we got the Internet. (Yes, yes, I know: ARPANET and all that.  But with the government all the way it would have looked like Minitel). I like it when a thousand flowers bloom.

So yeah, it’s Keynesian, but Keynes was a genius for distinguishing the conditions of the moment, not applying the same dogma to all positions.  As people point out, he would have changed his mind, and ended up not being Keyensian if he had lived to 90.  Too bright for that.

The other thing that people liked was an emphasis on property tax.  Thanks to ALTER I am now convinced that this is still a good idea, but a fullblown land-tax is better.  I like the Mansion Tax idea, and wish it well.  I hope it is a first step to fairer taxation.

And on that pious note, good night.

*I have yet to develop my views on this

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10 thoughts on “ahem . . . thinktank publication of the YEAR . . .

  1. Well done, richly deserved.

    I have to say that I largely share your view on Keynes. I’m reading General Theory… at the moment, and as I’m a non-specialist (i.e. I had to look up what the heck a catallaxy was…) it is in parts an inpenetrable work – but still the narrative holds true, for the particular circumstances which he is describing. Probably fair to say that in years to come we’ll see Keynesian thought as an effective remedy to crises such as we’re going thriugh now, rather than a coherent platform on which to base long-term economic progress.

    There’s a whole other discussion to be had about the nature and direction of a Keynsian intervention, but perhaps you can write your next award-winning pamphlet on that…?!

  2. “The essence of the Liberal outlook lies not in what opinions are held, but in how they are held: instead of being held dogmatically, they are held tentatively, and with a consciousness that new evidence may at any moment lead to their abandonment.”
    Well done, Giles!

  3. You are all very kind.

    Prateek, I’m not sure about the nature and direction of the Keynesian intervention: I am a bit sceptical on the ability of a westminster pointy head to come out with clever investments. I am rather worried that once we are out of this mess, Keynes will be misused. Need to have a big think.

    But my next piece but one is on QE. The next piece is really an extension of this theme:

    https://freethinkecon.wordpress.com/2009/10/16/warning-to-osborne-this-aint-ever-happened-before/

    cheers

  4. The inability of pointy-heads to come up with clever investments is exactly why we need to have Keynsian interventions that stimulate the private economy into employing more people in a sustainable way, which is why I’m calling for a discussion of the nature (i.e. VAT cuts, unconditional bailouts to banks which hoard capital) and the direction (scrappage scheme for petrol cars etc).

    The idea of a real Keynsian intervention, if I understand it, is to ignite demand in sectors of the economy most likely to produce a large multiplier, so that those directly employed by the new investment can go on to employ more and spend more – this we haven’t seen in the last 12 months…

  5. But I’m not sure that identifying the high-multiplier items is easy either.

    If I were to choose one thing, I would STUFF the banks with capital. Give equity to people. This will give them a huge natural incentive to lend the stuff out. They want LESS capital, all things being equal: the less for new shareholders, the more for old shareholders and employees. And the more they have, the less they are free riding on state insurance . . .

    By the way, your photo on LD voice is really unrecognisable

  6. Of course on paper stuffing banks full of capital works for exactly the reason you said – they would then lend out to people, re-igniting demand. Problem is that in the last 13 months we’ve more or less done exaclty that, only the banks have sat on the incoming capital – lending to business is still far too low, so in that sense this strategy hasn’t (yet at least) worked. As Larry Elliott often writes, the projected recovery has two questions hanging over it, whether it’s technically feasible (i.e. whether stuuffing banks with capital will trickle down into increased demand) and whether even if it is it’s desirable on the old terms – i.e. if lending did re-start, if all that achieves is a new asset price bubble and renewed spending on polluting technology, is that what we really want…?! crikey this discussion would go on for some time 🙂

    as for LD photo – I tend to cycle between being a bearded wonder and looking like a clean-shaven twelve-year old, mood depending. The photo itself is from my A-level in photography I did last year…

  7. Congratulations.

    “In the majority of circumstances I am very nervous about the idea of the government being the reason we are growing, year by year. It goes against my conception of liberalism, which sees individual choice and daring at the heart of our economic story.”

    Which makes you more like Keynes than the Keynesians of the 1970s (if my rudimentary economics training serves me correctly), right?

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