Tag Archives: John Maynard Keynes

Economics students rebel…

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EconomicsHome

I tweeted this story a couple of days ago.

Then I heard about the revolting students of Economics from the University of Manchester , who have accused their lecturers of blinkered adherence to the very economics that got us in the trouble that we are in. So much so that they started a group called The Post-Crash Economics Society;

We are The Post-Crash Economics Society and we are a group of economics students at The University of Manchester who believe that the content of the economics syllabus and the way it is taught could and should be seriously rethought.

We were inspired to start this society when we heard about a Bank of England Conference called ‘Are Economics Graduates Fit for Purpose?’ At this event leading economists from the public and private sphere came together to discuss whether economics undergraduates were being taught the right things in the light of the 2008 Financial Crisis. This chimed with some of our frustrations about the economics we were learning and so we decided to set up a society that would through doing research, organising events and running workshops seek to bring this discussion to Manchester. That was at the start of the 2012/13 academic year.

As of today we have a fully-fledged society, a book club, an incredibly successful launch event led by world class economists, many student and academic supporters, a petition that is constantly gaining signatures, links with a national network of economic societies and organisation and even more passion and determination to change the current state of economic education!

Where do we find the new economic thinking then? What alternatives are there to the Neo-Liberal hegemony that grips our political an economic establishments so firmly that anything else seems to lack ‘common sense’?

Today Radio 4’s ‘Thinking Allowed’ programme carried an extended discussion about Neo-liberal economics, defined interestingly NOT as a kind of super conservative laissez faire free market thing, but rather as a hyper interventionist big government approach that promotes a certain kind of economic policy (aggressive venture capitalism) to the exclusion of all others. Impose a certain kind of market society, because the market can process information much better than individual human beings. Any problems with markets can be fixed by the evolution of new markets.

There was an interesting discussion led by Robert Sidelski, who described John Maynard Keynes prophecy that by now we should all be working a 15 hour working week, as individual wealth would have increased 8 fold (Written back in the 1030s.) Living standards have indeed gone up but we remain caught in wage slaving. There have been endless improvement in productivity, but we never seem to have enough.  Sidelski called this ‘insatiability’, which has been unleashed as never before by capitalism.

Why?

Is this about greed, and the almost total lack of moral controls on this? Sidelski suggested that greed has become the lodestone of our culture. All other standards yield to the need to make money.

He also suggested that society gets richer, relative wants become more important than absolute needs– so the real issue is how we consume relative to others- leading to us all comparing what we have relative to what others have constantly, a madness that is stoked and fed by advertising.

Is there any economic alternative to this? Marx would say this is unsustainable delusion, and it is very hard to argue that he was wrong. It is not as though this wealth brings happiness or satisfaction!

Everything has been reduced to gadgets- leisure has been commoditised by gadgets. Leisure is not easily seperated from consumption. We seek to make time (particualarly holidays) SPECIAL by increasing consumption and gadgetisation, not seeing them as about activity unyoked from purpose.

Sidelski quoted Keynes from 1930, reflecting on the possibility of people set free from all this consumption and pursuit of money;

I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue-that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable, that those walk most truly in the paths of virtue and sane wisdom who take least thought for the morrow. We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.

From Economic Possibilities for our Grandchildren (1930)

Do you think the Post-Crash Economics Society are looking for this kind of economic theorising?

I hope so, and may their voices become louder…

Capitalism; a conspiracy against the common good?

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Interesting interview with the current Bish of Durham in the Guardian.

Justin Welby, who is apparently one of the favourites to become the next Archbishop, has an interesting background at the centre of UK establishment- Eton school, Cambridge University, The City of London as an oil executive, along with stints working in the oil fields of Nigeria.

All of which would suggest that his perspective on economic ethics would be rather right of centre. Not so however- this on the Occupy Movement;

“Occupy reflects a deep-seated sense that there is something wrong, and we need to think very hard about what’s wrong.” I press him on this, just to make sure I am hearing him right: “Were Occupy right that something is wrong?” He doesn’t hesitate in any careful, diplomatic Anglican way. “Of course they were right. Absolutely. And everything we are hearing now says that.”

His time as an oil executive in the centre of the City must give him a particular perspective on Capitalism, red in tooth and claw. The interviewer asked him if it all was not just one great, big conspiracy against the common good; profits privatised, losses socialised, to which he had this to say;

“When one group corners a source of human flourishing, it is deeply wicked. It applies to the City, to commodities traders, and to churches who say only this way is right.” This is pretty strong stuff. He continues: “The City is unspeakably powerful. The longer I go on, the more I am aware of the power of finance.”

Talk of the common good is exactly where Bishop Welby is at, ethically. He cites Pope Leo XIII’s 1891 letter Rerum Novarum as the greatest influence over his moral thinking. In this letter, a response to the exploitation of workers in industrial societies, the Pope sets out that the job of the state is to provide for the benefit of all, not least the most dispossessed. Though it rejects socialism, the theology it advocates lays out what later came to be called a preferential option for the poor: “The interests of all, whether high or low, are equal. The members of the working classes are citizens by nature and by the same right as the rich; they are real parts, living the life which makes up, through the family, the body of the commonwealth … therefore the public administration must duly and solicitously provide for the welfare and the comfort of the working classes; otherwise, that law of justice will be violated which ordains that each man shall have his due.”

There is also an interesting discussion about how Christianity is intertwined with capitalism- how the cultural inheritance of Christianity made us who we are, including our greed and excess;

(He quotes a) letter from the economist John Maynard Keynes to Virginia Woolf. The Bishop tries to recite the quote from memory: “We are the lucky generation, we have inherited the benefits of our father’s faith but don’t have the moral obligations. The next generation will be lost in their lust like dogs. We have destroyed Christianity, they will reap the cost of that.” In other words, Welby suggests we are living off and running down the cultural capital of Christianity. I point out to him that Stephen Green (Rev’d Stephen Green, now Lord Green, trade minister and author of Good Value, a book about ethics and finance) ran HSBC when it was laundering Mexican drug money, and Roman Catholic John Varley was CEO of Barclays. Christianity may offer little mitigation against City wrongdoing or morally significant mistakes.

Can Christianity, through the voice of people like Justin Welby, really start to become the faithful, engaged critics of our generation? Can we propose or model a real live alternative? This is my hope, although what this alternative may be is still so hard to visualise, so entwined are we with the culture we have both spawned and feed from.