Archive for June, 2010
Adam Smith and the Cuts
The Institute that takes the name of Adam Smith (wholly in vain in my view) has been in the forefront of the expenditure cut propagandists. They have produced, in the guise of impartial analysis, two documents that start with their desired conclusions and proceed by the use of pseudo-logic and misdirection. The great Kirkcaldy moral philosopher and economist will be spinning in his grave if he has had the misfortune of posthumously reading these travesties.
Firstly, the Institute’s co-director, Dr Eamonn Butler has produced a document apparently rather cleverly called ‘Re-booting Government’. In fact, the correct computer analogy would be ‘Re-installing a cheap and cut-down operating system sold to you by a dodgy guy in the local computer repair shop’! It starts with an economic premise that is simply wrong: Read the rest of this entry »
Cameron’s Deceitful Cuts Rhetoric
David Cameron says he wants an apology from Labour for the state of the economy. But his approach to the budget deficit is either one of the most mendacious or one of the most ignorant ever made by a British Prime Minister. By using half-truths and gross over-simplifications Cameron has shifted the blame for the financial crisis and its aftermath from the reckless and probably fraudulent behaviour of traders of financial assets to the ‘irresponsible economic management’ of the previous government. By implication the hapless ordinary British voter is also guilty, and is going to feel the righteous pain of public service and job cuts. We are quite likely heading for one of the most unjust periods of governance Britain has ever known. Read the rest of this entry »
Labour’s Future
In May 1998 I attended an academic seminar in Downing Street organized to discuss the meaning of Tony Blair’s ‘Third Way’. The event was hosted by David Miliband, then the head of the No 10 Policy Unit. Before the meeting I sent Miliband a document I entitled ‘Two Lanes on the Third Way’ pdf(95.5kB), in which I argued that since ‘when we increase the capacity of others to help themselves, we also increase their capacity to help us’ the Labour government should embrace proportional representation and economic democracy. Both of these, in the form of a manifesto commitment to a referendum on electoral reform, and as an exploration of the stake-holding idea espoused by Will Hutton among others, had already entered ‘New Labour’ thinking. Read the rest of this entry »
Religious Logic and Religious Morality
Posted by diarmid in Philosophy, Religion on June 3rd, 2010
No Miracles Here
‘Faith in science is at least as superstitious as any faith in God’.
My response was:
I don’t believe it is, despite the problems I mention in my earlier post. If we broaden ‘science’ to include all knowledge acquired by the experimental method – ie: we find a consistent correlation between particular events, assume this to be a persistent feature of the world, and then proceed further on this basis – then this method is adopted because it is self-reinforcing. We can build up a network of propositions that, while none of them are certain, tend to support each other. Every time we find one confirmed, this helps in a small way to confirm the others. Read the rest of this entry »
The Nature of Modern Money
Posted by diarmid in Business and Society, Economics, Money and Banking on June 3rd, 2010
I posted this short piece on the Scotland Quo Vadis discussion site yesterday, in response to a piece by Gordon Morgan suggesting the ‘printing of money’ would be a better option than government spending cuts.
It’s important to take a step back and consider the nature of money in the modern economy. It’s taken me about 15 years to get to grips with it – but maybe I’m slow, and it could be done in 5…
All modern money is created as debt – government or private. It’s a symbol of a promise to provide some good or service in the future. Problems arise when promises are unfulfilled, either in the quantity or the quality of goods provided. If there’s a lot of money around and not many goods, prices tend to rise.
Problems also arise when not enough money is created, or the money created is not actually used to purchase enough of the goods provided. Then we have demand failure, recession and unemployment. Read the rest of this entry »