This is a good article from David Blanchflower in the Independent. Check it out!
via David Blanchflower: David Cameron’s economic gibberish – David Blanchflower – Business Comment – The Independent.
The article once again questions David Cameron’s judgement and leadership, in my view.
I have been thinking about what you said for some time and the conclusions I have come to are twofold.
1. I really do not know enough about economics for any of my ideas to be worth considering from an economic viewpoint. However, I have studied the effects of various economic situations on people and that leads me to . . .
2. Neither the supply nor the demand argument creates an economic situation is which it is comfortable for all people to live.As soon as you say ALL then there are immediate problems so perhaps it should be narrowed down. Done properly that would take too much space – simply, all REASONABLE and reasonably RESPONSIBLE people (and disabled for any reason including age are in a separate category).
This is why I talk about a new economic model which aims to create a stable and sustainable economy in which there is a tendency to reduce the gap in living standards between the rich and the poor. What I feel is that it needs people like you who are far better qualified than I am to come up with such a model – a model I am reasonably certain would by very different from those created by proponents of either supply side or demand side.
Rodney, thanks for your latest posting but I am not qualified, as well.
However, I think that capitalism needs a compassionate tweak. I have blogged a lot about “neoliberalism” (check it out on Wikopedia). I think that we need Third Wave Neoliberalism – but that probably needs different political leaders. Will think some more on the theme.
Two thoughts, Alf. The first is that although I am not overly keen on the way that David Blanchflower writes, in this instance I would be hard pressed to argue. Everything he says is true but . . .
The second is about growth. from, say, 1650 until about 1800 inflation in this this country was negative. There was then a short burst of about 25 years when inflation took over but from 1725 until 1900 it was again negative. The relationship between inflation and growth has been much studied with the result that no matter what position one wishes to adopt you can find a reliable pundit to confirm your ideas. Nevertheless, I hope you would agree that growth creates inflation (usually) and it certainly creates a huge disincentive to save. Interesting, though, that given its head (i,e, with government either totally uninterested or else – as in the Victorian era – only too happy to give permission for people to speculate and build railways or canals or bridges) and the removal of safety nets for those willing to take risks, we didn’t do too badly, did we?
So, can we stop going on about growth and the government’s failure to create it. That is beyond the power of the government in any event. The only people that can do that are businessmen. What we need is for far less regulation – and let the buyer beware – and far less nanny state. We also need to encourage grand projects and let people have serious tax breaks when they invest in new projects. Then it is up to the CBI to prove that its members have the guts to get on and make things happen and for those running SNB’s to do likewise..
Many thanks for your comments here. I fear that on this point we see matters very differently.
At the moment, there are broadly two economib camps: the suply-siders; and the demand-siders.
I believe that you are a supply-sider and I am a demand-sider, although when Lady Thatcher was in power, I was a supply-sider.
Damand-siders favour Keynesian principles of the state stimulating the economy to create demand. I agree that there is a downside risk of inflation.
For me, the supply-siders just do not have a powerful enough argument right now.
What do you think?
PS: I shall now be offline for a couple of days