Conservative economists commonly use three metaphors of potential doom – meteorological, seismological and medical – when arguing for austerity. In addition. there is the economy as “runaway train” that has to be slowed and brought back “on to the right track”. And we must not forget the most enduring metaphor – the national economy is a household that needs prudent management, if disaster is not to strike the whole family.
Although Theresa May has survived to fight another day as Prime Minister, the of her Brexit deal in parliament has blown the debate wide open. The Prime Minister has called on MPs to "put self-interest aside" and "work constructively together" to find a way forward. In this context, the Labour Party’s next steps are critical.
The debate about Lexit is now irrelevant. The only form of Brexit that is possible is one that will entrench the status quo or empower something far worse. The left must unite against it.
This is an extract from a chapter in Economics For the Many (Verso, 2018) edited by Rt. Hon. John McDonnell MP. The chapter was written in August, 2017.
If we are to secure a sustainable, stable and liveable future for the people of Britain, then implementation of the Green New Deal will be vital. Not just for the sake of the ecosystem, but also for the sake of rebuilding a stable, sustainable economy. A sustainable economy will be one dominated by a “Carbon Army’ of skilled, well-paid workers.
Neglect of Keynes’s monetary theory and policies has come at the price of increasingly frequent international financial crises.. It is time to restore the revolutionary Keynes.
On 19th July, 2018, the director of Policy Research in Macroeconomics (PRIME), Ann Pettifor, received the following from Professor Antonia Grunenberg of the Heinrich Boll Foundation, Bremen, Germany.
Dear Mrs. Pettifor,
it is my great pleasure to inform you in behalf of the international jury of the „Hannah Arendt Prize for Political Thinking“ that you have been unanimously selected to be the winner of the prize in 2018.
Die date of the ceremony is December 7, 2018.
The jury pointed out that you, a distinguished scholar, have had the courage to touch a complex topic that keeps influencing European and world affairs as well as the life of people all over the globe: the domination of the political realm by the dynamics of financial speculation…
It’s good to see the latest (21 December) New York Review of Books give space to a review – by Robert Kuttner of American Prospect– of a biography of "Karl Polanyi: a Life on the Left" by Gareth Dale. For as we have been arguing for a long time, it was Polanyi who better than any other historian / analyst got to the heart of the contradictions of free market globalised liberalism, and saw that it was such economic liberalism, pushed too far, that is likely to lead to authoritarian, or even fascist, outcomes.
On Wednesday 29 November 2017, PRIME's director, Ann Pettifor, gave evidence at the Committee's invitation to the UK Parliament's Treasury Select Committee, together with Professor Jagjit Chadha, Director, National Institute of Economic and Social Research and Paul Johnson, Director, Institute for Fiscal Studies. A verbatim report of the discussion can be found on the Select Committee's website here.
Neoliberalism’s finance-driven model, beset by rising crises since the 1970s, properly derailed in the crash of 2007 – 08. Then, the greatest exponent, Alan Greenspan, chairman of the US Federal Reserve, had a brief moment of enlightenment and appeared to renounce his faith in the invisible hand of self-interest, saying he’d, ‘discovered a flaw in the model that I perceived is the critical functioning structure that defines how the world works.’ Private finance was revealed as a froth that sat on the foundations of public guarantee. I tell this story and the tale of alternatives in a new collaboration with the playwright, Sarah Woods, in Neoliberalism - the Break-Up Tour.
What has the horror at Grenfell Tower to do with economists? And what have the lives lost at Grenfell Tower to do with the government’s budget deficit? A great deal, I will argue here. When on Twitter a few days ago I raised the issue of the shared responsibility that economists have for this ghastly tragedy, I was attacked. So let me explain.
Since 2010 the ideology of balanced budgets has dominated economic policy debate in Britain, from the micro through to the macro (George Osborne’s “living within our means”).
This policy regime produced its predictable results - slow growth, stagnant wages and for most households falling living standards. It also confirmed that cutting public expenditure is a slow and ineffective method of reducing a fiscal deficit.
The 2017 Labour Party Manifesto, which breaks with this failed ideology, is a game changer.
The “gold standard” for analysis of the economic policies of political parties was set by The Netherlands Bureau for Economic Policy Analysis (CPB), established by Jan Tinbergen, Nobel prize winner.
On 26 May the UK Institute of Fiscal Studies held an invitation-only meeting to announce its evaluation of the taxation and expenditure policies of the Labour and Conservative Parties.
But in place of the rigorous modelling in the tradition of Tinbergen, the IFS presentations gave the audience an exercise in arithmetic that is not fit for the task - no more than educated guesses about budget balancing with no apparent link to broader economic effects.
It is generally considered by lawyers and political scientists who study the EU that the Union has all or most of the attributes of a “constitutional order”, and that its Treaties are to be seen as providing a constitutional framework.
But many key economic and social policies are decided not through debate and elections, but via inflexible EU Treaties which lay down a specific economic ideology and policy framework. No matter how they vote, citizens are not allowed to choose a truly different set of economic policies. In the economic domain above all, there is a mismatch between the EU's constitutional democratic principles and the Treaties' detailed provisions.
One of the more depressing aspects of the Brexit debate has been that once again the economics profession has not covered itself in glory. The predictions of economists were overwhelmingly pro-remain and not as soundly based as many assumed. Evidence viewed as pro-Brexit could be met by rudeness and we experienced this ourselves. A few economists supported the Brexit case but the middle ground seems to be under-populated, indeed hardly populated at all. This is a real problem since the general public needs neutral referees in such a difficult and fraught issue.
Over the last week, we have posted the autumn 1940 series of Karl Polanyi's lectures as individual posts. Since they were always intended to be taken together, we have also compiled them as a single set in the attached pdf, "The Present Age of Transformation."
This e-publication comes with introductions by PRIME's Jeremy Smith and Ann Pettifor, and also by the distinguished economist and daughter of Karl Polanyi, Professor Kari Polanyi-Levitt. These introductions draw attention to the strong contemporary relevance of Polanyi's lectures.
Within the last decade [this lecture was written and delivered, we recall, in 1940 - ed] free institutions have succumbed to the impact of sudden change in most of the countries where civilisation bore the imprint of the Industrial Revolution.
Must America go the same way? Or is there hope that she might be able to master her own future?
The failure of the international economic system was ultimately due to the same inherent weaknesses which characterized the national systems under a market economy. The view which makes autarchy responsible for the breakdown can hardly be upheld. On the contrary, it might be more justly argued that it was the failure of the international system which gave rise to autarchy.
The subject matter of these lectures is a vast and unique event: the passing of 19th century civilization in the short period that elapsed between the first and the second wars of the 20th century.
At the beginning of this period, 19th century ideals were paramount, indeed their influence had never been greater; by its close hardly anything was left of that system under which our type of society had risen to world leadership.
The recovery of five lectures under the title The Present Age of Transformation, delivered by Karl Polanyi in Bennington College in 1940, is indeed serendipitous. It invites a comparison of the collapse of the 19th century liberal economic order in the Great Depression and its transformative consequences, with the contemporary unraveling of its neoliberal reincarnation and the rise of right-wing populist politics in the Atlantic heartlands of capitalism.
This week PRIME is publishing (as individual posts) the set of five lectures given by Karl Polanyi in autumn 1940 at Bennington College, Vermont, and entitled "The Present Age of Transformation". The lectures, together with introductions from PRIME's Jeremy Smith and Ann Pettifor, and from Professor Kari Polanyi-Levitt, have also been put together for ease of reference into a pdf "publication". We begin with the PRIME editors' introduction.
This week is PRIME’s Polanyi week. We are re-publishing – because of their topical as well as historical significance – a set of five lectures given by Karl Polanyi in autumn 1940 at Bennington College, Vermont, and entitled “The Present Age of Transformation”. The first three essays briefly prefigure the main themes of his major work, “The Great Transformation”, published in 1944.
We are publishing each of the lectures as individual posts, and have also compiled them into a pdf “publication”, including introductions from Professor Kari Polanyi-Levitt and PRIME's Jeremy Smith and Ann Pettifor.