Wednesday, 19 September 2018

Robert Skdelsky's new book

Yesterday I attended an 'in conversation' event in which Robert Skidelksy (Lord Skidelsky of Tilton) presented his latest book, Money and Government: a Challenge to Mainstream Economics. Of course, challenges to mainstream economics have been circulating ever since the financial crisis and there have been new developments in economics such as behavioural economics which draws on the insights of psychology.

In the book, Lord Skidelsky says that he has been chiefly influenced by the insights of Keynes. His biography of him is well known and it was interesting to see Bill Clinton congratulate him when he came to Warwick University to give his last speech as US President. However, Skidelsky also says that he has been influenced by the insights of Polanyi who is certainly 'dans le vent.'

Someone asked me afterwards if I agreed with what he said and I replied, 'Up to a point.' There is no doubt that serious errors were made in the run up to the financial crash in 2008 by both policy-makers and academics. It is also evident that more needs to be done to improve global regulatory supervision of the financial sector, but the willingness for international cooperation is declining, particularly from the United States. What remained of the post-war economic world order is being dismantled.

I think that he was correct in saying that cheap credit became a replacement for the old social contract. Whilst he is critical of the 'fine tuning' Keynesianism of the 1950s and 1960s, he thinks that the collapse of Keynesianism was more the product of a particular conjuncture than systemic. Its collapse may have been hastened by particular events, but from my perspective, neo-corporatism as a political project was flawed (at least in the UK) and could not sustain the weight placed upon it.

He also got in a good dig at The Economist which always proclaims its current line with confidence while insisting that it has been consistent in its faith in liberalism for 175 years. In fact, as he illustrated, the line it takes is inconsistent.

The Conservatives had managed to give austerity a compelling political narrative in 2009. However, the problem was one of private not public debt. He favoured higher levels of public investment, possibly involving a National Investment Bank as advocated by Keynes. In response to a question, he said that there was no magic number for the public debt/GDP ratio, particularly in terms of its effect on growth, although he did mention a figure of 90 per cent.

What would concern me is the proportion of public expenditure devoted to debt servicing, although I can see the case for public expenditure in infrastructure when interest rates are low. However, in my view too many 'grand projets' (Crossrail, HST2) inevitably run over their time and money budgets and fail to deliver a sufficient rate of return.

When I asked him whether there would be another crisis, and, if so, what was the important thing we could do to prevent it, he reasonably enough said that we could not predict the timing or nature of a future crisis, although there could be a series of smaller ones. Earlier he had said that breaking up global banks was unfinished business.

He was more critical of the role of an independent central bank than I would be, although I accept that there has been too much emphasis on the inflation objective. He thinks that interest rates should be decided by politicians and if people don't like what they do, they can throw them out at the next election. This is a rather crude form of control as many factors affect voting decisions.

He argued that politicians were not as bad as many people said, it was essentially an American-based narrative that they were corrupt. I don't think they are corrupt, but they can be influenced by short-term electoral considerations or simply gaining advantage over colleagues. As Alan Watkins, sadly no longer with us, said: 'Politics is a rough old trade.' The evidence on the political budget cycle is mixed to say the least, but that does not mean that the temptation to manipulate economic variables is absent.

He argued that central bankers are accountable to no one, but I think that the Treasury Committee of the House of Commons has subjected the Bank of England to close scrutiny.

It was a polished performance by someone who is widely read, as I know from teaching with him. The political weather is shifting in his direction. I suppose that my fundamental disagreement would be that I think government failure is a more systemic problem than he allows.

Nevertheless, if anything, global political arrangements to curb the excesses of globalisation are slipping away. In particular, what has recently been called 'Moneyland', an unregulated offshore economy continues to go largely unchallenged, allowing global companies to arrange their tax affairs to their advantage. I always saw one of the main benefits of the EU as being its ability to offer some resistance to the worst effects of globalisation, but its political effectiveness and legitimacy is being challenged by populist movements that offer simple solutions to the challenges that people face in their lives.

What does it mean to be a 'political economist'?

Over the years at Warwick I had the privilege of teaching with many distinguished economists, among them Nick Crafts, Mark Harrison and Ben Lockwood. I also taught with Professor Lord Skidelsky and I attended an 'in conversation' event involving him in London yesterday to celebrate the publication of his latest book. I have a signed coy, but I am yet to read it.

The economists I have taught with over the years have always been polite about political science, but I suspect they were rather sceptical about it. I did once give a presentation at the Agricultural Economics Society (of which I am a member) on what political science had done for the study of agricultural economics which at least historically has been a policy oriented branch of the discipline. One distinguished agricultural economist got up and said 'Nothing!' and one had to admire his honesty (the paper has subsequently been published).

One of my economics colleagues was generous enough to say that I thought that I was literate in economics in the sense that I understood the terminology and had a basic grasp of theory. I would admit that I probably learnt more from them than they did from me.

When I started doing work with life scientists, the impression I got was that at least some of them thought that political science had something new to offer, primarily in terms of how issues are 'framed'. For example, in our work on cattle diseases, they could see how the myth of the 'rogue badger', a deviant badger that was supposedly terrorising the countryside, had influenced policy.

I was able to ask the first question at Lord Skidelsky's presentation yesterday, and he was gracious enough to acknowledge my book on 'the politics of economic policy'. In fact there were three books. The first was written with Shiv Nath which I think was the one that Robert read and he said to me at the time that he wondered how we had managed to write a book together as it was evident that we disagreed so much.

I then wrote a short book on 'The Politics of Economic Policy' which was reliant on a ruthless intellectual pillage of the work of Nick Crafts. Finally, I wrote a book on 'Economic Policy in Britain' which was my attempt at a more mature reflection on the subject matter. It has been overtaken by events such as the crash and Brexit, but still sells some copies and hopefully still has some insights to offer.'

I try to make some claim to be a 'political economist', most recently in some work I have been doing on football (Nick Crafts has actually written about the turf). In essence what I think I am doing is examining the interaction between the market and the state within the context of globalisation, although that has been encountering increasing resistance with the resurgence of nationalism as in 'America First'.

But what theoretical perspective can be deployed to assist this task? Robert Skidelsky would still advance the claims of Keynes, although his reflections on political matters in the General Theory were largely confined to an admittedly interesting appendix. Keynes wrote very extensively, e.g., on football and the shortcomings of Ramsgate (the editor of the Charlton fanzine lives in Ramsgate so I often draw his attention to what Keynes had to say). However, it is possible to read what you want into Keynes and we have been reliant on those who chosen to interpret him, in very different ways over time since his untimely death. This has allowed commentators to present themselves as Keynes's representative on Earth.

Another claim is for Marxist economics. Although I am no Marxist, there are some valuable insights to be derived. I think that crisis is endemic to capitalism, but it can also have valuable purgative effects, admittedly at great cost to individuals (which is where effective government comes in).

There is then public choice which I taught about with Ben Lockwood. This has become indelibly associated with neo-liberalism, but that was really the Virginia School. Ben and I took the view (as did Patrick Dunleavy) that it could be deployed as a neutral toolkit that enabled you to ask some challenging questions. Colin Hay sees it as highly politicised and having a harmful effect.

One would also have to acknowledge the work of Polanyi, which at the very least has been marketed very well in recent years, but also contains some important insights about different types of capital. Last but not least, I would mention the work of Elinor Ostrom which won her a share of a Nobel prize in economics, a rare accolade for a political scientist (Herbert Simon, whose work influenced me, was another example). I think that Ostrom's work is flawed, particularly methodologically, but in an interesting way that allows us to look at problems in a fresh light.

Where this ends up is with an eclecticism that is both a strength and a weakness of political science. One area in which I have attempted to work is the development of a political theory of a firm which I explore with David Coen and Graham Wilson in our Oxford Handbook of Business and Government. I have to admit we didn't get very far beyond sketching out the challenge.

So perhaps what I have been doing is examining the politics of economic policy, although that is something that needs to be done. I will write subsequently about what Robert Skidelksy had to say.

Tuesday, 18 September 2018

An authorised biography of the Queen?

I think that the late Ben Pimlott's biography of the Queen is a masterly piece of work. He was a very talented biographer, I also very much enjoyed his biography of Dalton whom as he once told me was 'an odd old cove.'

The biography has been criticised for too political an emphasis, but that is its attraction to me.

Why I am mentioning it now? There is a full page obituary in The Times today about Lady Elizabeth Cavendish who was the lover of John Betjeman and a close companion of Princess Margaret (Craig Brown's biography of her is a hoot). It says that Lady Elizabeth was given royal approval to talk to Pimlott.

This confirms my view is that it was a semi-authorised biography. Anther indication is that Pimlott and his partner were invited to stay at Windsor Castle after the biography appeared. In accordance with the Queen's usual discretion, the biography was not mentioned and you cannot initiate a subject with Her Majesty (ok, a friend of mind did and was subsequently made a Dame Commander, but that is a story that can't be told).

The book was published in 1998 and I think it was encouraged by New Labour to give them a perspective on the monarchy.

I was also interested to read in The Times that the Queen by her own admission to one of their players is an Arsenal fan like her mother.

Sunday, 9 September 2018

Tripping the light fantastic

A while back I was at the theatre in London and Vince Cable come into the row in front. The reaction to him showed that he was personally well liked, at any rate by a London theatre audience. I felt quite sorry for him when a Liberal Democrat bore (of whom there are many) droned on at him in the interval.

He can certainly trip the light fantastic and his ballroom dancing contrasts with May's robotic style. His personal style may be that of a 'tetchy rationalist' as Matthew Parris observed yesterday, but that probably goes down well with some voters.

But is he a good leader of a political party? No. Otherwise the Lib Dems would not be flatlining in the polls when the political weather should be quite good for them. He says he is going to stand down, which he should at 75 (don't give me Churchill), but clearly it's going to be a long goodbye.

Trying to learn from Canadian experience, but in fact turning it into something from the Daft Ideas Department, he is now advocating bringing in a leader from outside Parliament. The favoured candidate, Gina Miller, has sensibly said no way.

The Lib Dems have never had a woman as leader, and have been predominantly masculine in terms of their MPs. However, they now have two women in Parliament who could do the job: my marginal preference would be for Jo Swinson.

William Haugue (not talking about the Lib Dems) at his lovely home in Wales

However, there are more fundamental dilemmas. William Hague said that the good thing about the Coalition Government was that it would finish off the Liberal Democrats and it probably did tarnish their brand beyond repair.

Now many pin their hopes on a Social Democratic Party Mark II. There has been media speculation for months, but whether the advocates will ever come into the daylight remains to be seen.

The Social Democrats failed in part because they were a rump of the Labour Party, notably failing to attract moderate Conservatives (other than the worthy Christopher Brocklebank-Fowler). They did, however, damage Labour in the 1983 election which became 'a race for second place' and this should concern Labour now.

However, the Centre Party will not succeed. The main constraint is the first past the post system. UKIP failed to turn their votes into more than one general election seat (in one of the most barking areas of the country). When voters were offered a modest alternative in a referendum, they voted it down.

The advocates of a Centre party say that most voters identify themselves as 'centrists'. But I think this is because voters don't like to identify themselves as 'extremists', even if their views are on either end of the political spectrum.

Tuesday, 4 September 2018

My best guess on Brexit

I can't make a prediction, there are just too many variables and uncertainties, but here is my best guess.

The UK has a governing party that has been negotiating with itself, but also a split opposition party with unclear policies. There is no sure majority in the Commons for any path to Brexit. A second referendum would shift the decision from a deadlocked Parliament to a deadlocked people, and what would the question be?

It is in the interests of both the UK and the EU to come to some sort of agreement. There have been some signs of a softening of the Commission position. At some point the member states are going to have to get more involved, in particular France and Germany, but they have different positions: France hopes to poach UK jobs and business and German domestic politics are fragile.

Northern Ireland is the most difficult issue. The original EU proposal in March would have given EU courts and regulators near unimpeded jurisdiction over the province. The EU is now considering limiting powers of EU authorities to make checks on UK territory and giving the ECJ only indirect authority. However, the Democratic Unionists are capable of vetoing any solution that outsiders might consider reasonable.

A no deal exit has been talked up. Some of this is people playing political games to suit their own ends. There is also an element of brinkmanship as the case in many negotiations A no deal exit is certainly possible, but I don’t think it is the most likely outcome.

An eleventh hour fudged compromise is more likely. EU decision-making characterised by last minute deals. This would leave many issues unresolved that would have to be addressed during the transition or implementation period. But during that period economic relationships would continue much as before.

Tuesday, 24 July 2018

By-elections in the Lords

An interesting piece by Sir David Beamish, a former Lords clerk, on the anomaly of by-elections for hereditary peers to be voting members of the House of Lords: Hereditary peers

Attempts to get rid of the by-elections and let the hereditary peers gradually die away have been blocked by members of the Lords putting forward amendments so that the bills run out of time. Of course, attempts at Lords reform by successive governments have also failed.

I may have unwittingly played a small part in setting up this system. In the late 1990s I was teaching a course with Lord Skidelsky who was then a Conservative front bencher. He asked me if I knew anything about the old system of Scottish representative (elected) peers and I recommended a book on the subject.

Wednesday, 4 April 2018

Mick Moran

I was wondering how to pay tribute to Mick Moran, emeritus professor of the Department of Government at Manchester University. A fellow of the British Academy, he was one of the leading British political economists of his generation.

I first got to know Mick when he was teaching at Manchester Polytechnic and I was external examiner.

I am reproducing here a tribute by Ben Rosamond who knew him better than I did:

'It's the autumn of 1984. I'm sitting in a large lecture theatre at the University of Manchester awaiting the latest instalment of Government 1. A slightly dishevelled man in a leather jacket shuffles in stage right and proceeds to talk about the Conservative Party. It is the first time we have seen him in this first term. It proves to be the stand-out lecture of the whole course, performed apparently without notes and featuring several very funny lines, including a masterpiece of self-deprecation that references David Bowie.

Two years later, I'm assigned to the lecturer's seminar group for the final year compulsory course 'Contemporary Political Analysis'. There are eight or nine of us in the group. We fit easily into his office, which is lined with thousands of books, filed - I note approvingly - alphabetically by author. In the first session he tells us that this is the first time he has taught this class and that he will be learning with us. As if. I learn more in those sessions than in any other single class. We are guided through the classics. We read them all - Dahl, Lukes, Moore, Skocpol, Winch, Popper, Kuhn. And he is a gentle, constructive guide.

There's no grandstanding, no-mini lectures, simply gentle questions that probe us to think more deeply, to make connections and to become more confident users of our newly acquired conceptual vocabulary. He is teaching us to be political scientists - the best kind of political scientists: open-minded, inquisitive, interested in how theory helps us to grasp political problems, never afraid of learning new tricks and reading new work that emanates from outside of our comfort zones. He's teaching us to be like him.

Mick Moran passed away yesterday. He is one of 2-3 teachers and mentors who inspired me to do what I do today. Aside from being a truly marvellous teacher, Mick was one of the UK's best scholars of politics. He was a political economist, rooted in the comparative tradition who never stopped being insightful and essential. His late interventions on post-crisis UK and Brexit, including his late tour de force 'The End of British Politics?', should top the reading list of anyone who wants to make sense of the current sorry state of affairs.

And he was a truly lovely bloke - the nicest academic you will ever meet.'

I would add that he wrote a superb textbook on British politics which I know was enjoyed by people who were not academics, whilst his work on the regulatory state was of considerable importance for me.

One quote from him that I used to head up a personal web page: 'Our sense of identity is formed by our own complicated life histories, and our understanding of those life histories'