The 2001 winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, Professor Joseph Stiglitz, was in Edinburgh last week to give two talks as part of the Edinburgh International Book Festival. He is a pioneer of the economics of information, showing how markets can produce unexpected outcomes because information is unequally available to parties to a contract. These outcomes can include bankruptcies that transmit further failures. So he was one of the few economists to whom collapse of the financial system did not come as a complete surprise. He noted the irony of his appearance in a large tent sponsored by the Royal Bank of Scotland, an institution that perceptively backed a large tranche of mortgage-backed securities, and ended up mainly owned by the UK government as a result!
Professor Stiglitz is also famous for turning on his previous employers, the World Bank, and criticising the policy of ‘structural adjustment’ imposed by this institution and the IMF on developing world borrowers. These arguments appear in his book Globalisation and its Discontents.
I attended the first of his Edinburgh talks, in which Professor Stiglitz started by pointing out that the three decades of crisis-free rapid growth that followed the Great Depression were primarily a result of the financial regulation introduced following it. As that regulation has been removed crises have become more frequent and more damaging. Continue reading Joe Stiglitz in the RBS tent→
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. Continue reading Labour’s Future→
From the coalition policy statement that’s been produced and the attitude of David Cameron (plus the fact that William Hague has thankfully been dispatched to foreign parts) it rather seems that he (Cameron) was really a closet Lib-Dem all the time! Quite a few Conservatives must now be waking up to this fact with some horror – it may well be from the Tories right wing that the immediate threat to this coalition lies. Continue reading Coalition calculations→
Interesting times in politics indeed! As anyone reading my No 10 Seminar Paper of 1998 (apparently seen by David Miliband himself – hope he read it!) would know, I am a keen supporter of electoral reform leading to genuine proportional representation. But I find myself torn on the political and possibly the moral implications of the various options. I think, however, there is an underlying reality that will guide what will happen.
Unless either the Tories or Labour offer a whipped vote on a referendum for a genuine PR system (not AV alone), there will be no PR. No PR now means no PR for the foreseeable future, and the Lib Dems might as well disband. So basically the only thing that makes sense is for them to go with the party offering this. That’s the reality, and the Lib-Dem MPs must know it.
Opponents of PR should realise that it is actually the lack of PR that is causing the problem here. For the Lib-Dems it is an existential issue of political representation and so trumps all others. If PR were already in place, the Lib-Dems and Tories could probably fairly happily reach a compromise agreement on the economy and support the Tories either on a minimum agreed programme or measure by measure for everything else.
The Conservative Party leader David Cameron has today published in the Guardian the text of a speech in which he outlines a programme of constitutional reform. What he says is interesting, but shouldn’t be taken too seriously. We mustn’t forget that David Cameron is no political thinker. He is and has always been a political operator. He is the type of individual we need less of in Parliament. Still we must make do with what we have, and maybe he can serve an important purpose. Certainly he may have jumped on the right bandwagon. Labour, having promised constitutional reform to appeal to their less tribally-committed supporters over the years, have as far as Westminster is concerned signally failed to deliver. Indeed it is practically (and may effectively turn out to be so) criminal that the government has not transferred many of the systems trialled in the Scottish Parliament and Welsh Assembly (proportional representation, powerful and independent committees, transparent expense arrangements, to name but a few) to Westminster. It is probably too late to claim the initiative back on these issues, and so we have the strange sight of the Conservatives leading on them. Continue reading Welcome to Cameronia!→
The Daily Telegraph and their informant have certainly opened a veritable can of worms! Their publication day after day of new revelations of MPs’ expense claims has certainly boosted their sales, despite the widespread reporting of every detail in other outlets. But if they also have a political agenda, this must be a dangerous game, both for the paper’s chosen champions, David Cameron’s Tories, and for the rest of us. The likely public response to the Telegraph’s uncovering of the somewhat murky operations of the Commons Fees Office is ‘a plague on all their houses’. This will probably encompass all the prominent parties in Westminster: Labour, Conservatives and Liberal Democrats. Many will presumably opt not to vote in the Euro elections on 4th June and perhaps in the General Election which must come within the next 12 months. Some may be persuaded to vote for candidates they would not otherwise have voted for. If they are going to do so let us hope they are clear on exactly the issues at stake. Continue reading A New Politics?→