Tag Archives: keynesianism

When is the right time to reduce the deficit?

Liberal Democrats and Social Democrats have a very wide range of opinions, including economics. However, despite our differences, it’s possible to discuss them in a good-natured, honest way, without polemic.

The time to reduce the deficit has been a matter of huge controversy over the last six years. Paul Krugman is, perhaps, the best known advocate of continuing stimulus. In 2012, he attacked the UK deficit reduction programme as ‘deeply destructive’. He said, “Give me a stronger economy and I’ll turn into a fiscal hawk. But not now”.

Posted in Op-eds | Also tagged | 56 Comments

New edition of Liberator magazine

The latest issue of Liberator magazine (issue no.350 – January 2012) has just been mailed to subscribers. For those of you who are not yet subscribers, here’s a summary of the contents:

  • The editorial column Commentary examines the electoral consequences of the Autumn Statement for the Liberal Democrats. It also castigates the party’s Federal Executive for deciding against running candidates in next year’s police commissioner elections.
  • The insider gossip column Radical Bulletin begins with a report on the party’s decision not to contest the police commissioner elections.
  • Alice in Wonderland’ – Paul Crossley (leader of Bath

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Opinion: Frankensteinomics

Why are Western politicians failing to tackle the debt crisis? Partly, because they do not know why things got this way. So they do not really know what to do. We need better understanding.

At the risk of sounding like an airport paperback I offer – Frankensteinomics! The global economy, I contend, is like Frankenstein’s monster – bloated, dysfunctional, and kept alive only by repeated jolts of artificial stimulation.

The mad scientist who first showed how to apply the electrodes was Maynard Keynes. Using State spending to jolt the economy out of depression …

Posted in Op-eds | Also tagged and | 22 Comments

Opinion: revisit economic theory before cutting the real economy

The UK is now in a great rush to reduce GDP in order to reduce the financial deficit. But before we frame economic policy, we need to revisit  economic theory, in particular the theory of money and macroeconomic demand theory.

On the theory of money

Money is an artefact, not a real physical commodity. It does not obey the laws of thermodynamics – it can be created and destroyed. The idea that macroeconomic budgets have to be balanced is a category error. It takes a microeconomic simplicity, that individuals or firms have to balance their budgets, and falsely transfers this to macroeconomics. …

Posted in Op-eds | Also tagged | 43 Comments

DLT: Liberal Summer School (now Keynes Forum)

For the past year, Duncan Brack and Ed Randall, authors of the Dictionary of Liberal Thought, have kindly agreed to let us publish extracts on Lib Dem Voice. Last month’s instalment was Keynesianism, following on John Maynard Keynes; this month, the Liberal Summer School. You can read previous chapters on LDV here. The entire book is available on Amazon here and can also be bought at the Westminster Bookshop.

Liberal Summer School (now Keynes Forum)

Founded in 1921 as an annual week-long residential school to develop innovative Liberal policies, domestic and international, for the post-war world, the Liberal Summer Schools were the source of the Liberal ‘Yellow Book’ and helped to develop the thinking behind Beveridge’s proposals for the reform of welfare provision. The School now survives as an annual one-day seminar, in 2004 renamed the Keynes Forum, and run by CentreForum.

The Liberal Summer Schools movement in the 1920s originated in the apparently disparate strands of Nonconformist (q.v.) Manchester liberalism, as represented by Ernest Simon (q.v.) and C. P Scott (1846–1932), social and industrial reformers from Toynbee Hall and the LSE (including William Beveridge (q.v.) and Seebohm Rowntree (1871–1954)); and John Maynard Keynes’s (q.v.) Cambridge- and Bloomsbury-based circle of young economists (including Hubert Henderson (1890–1952), Walter Layton (q.v.) and Dennis Robertson (1890-–1963)).

In 1920 Liberals were simultaneously faced with a world that seemed both dangerously disintegrated and full of exciting promise, and with the disastrous Asquith–Lloyd George (q.v.) split. Recognising the urgent need for positive Liberal polices to fill this vacuum, the powerful Manchester Liberal Federation under Ernest Simon and the chief national party agent, Thomas Tweed, initiated the movement which ‘recruited intellectuals to the Liberal Party, and provided a forum at which experts could float their ideas about contemporary economic, social, and industrial questions’.

The first Summer School was held at Grasmere in 1921, on the lines of the Fabian Summer Schools. The founders included the historians Ramsay Muir (q.v.) and Philip Guedalla (1889–1944), and the economists Keynes, Henderson and Layton, supported by Simon’s friend and Lloyd George loyalist, C. P. Scott of the Manchester Guardian. Eleanor Rathbone (1872–1946), herself from a Manchester Nonconformist Liberal dynasty, spoke on ‘Women and the Family’. ‘What a party!’ Simon noted in his diary at about this time: ‘No leaders. No organisation. No policy. Only a Summer School!’

The format, retained for many years, was a residential ‘school’ where Liberals and sympathisers met in a university setting to hear and discuss lectures on topical issues, domestic and international. The ‘school’ structure remained through the 1920s and ’30s; the programme was described as a ‘Syllabus’, with the emphasis on discussion rather than received wisdom, and a recommended reading list. The week included cultural excursions, concerts, a dance, a garden party and sometimes a satirical revue by School members.

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DLT: Keynesianism

For the past year, Duncan Brack and Ed Randall, authors of the Dictionary of Liberal Thought, have kindly agreed to let us publish extracts on Lib Dem Voice. Last month’s instalment was John Maynard Keynes; this month, Keynesianism. You can read previous chapters on LDV here. The entire book is available on Amazon here and can also be bought at the Westminster Bookshop.

Keynesianism

A school of economic thought inspired by the work of John Maynard Keynes, especially his General Theory of Employment, Interest and Money. Keynes’s challenge to the ideas underpinning classical and neo-classical economics, and in particular to the proposition that market economies would always find an equilibrium consistent with the highest possible level of economic output, became the foundation for macroeconomics, and Keynesian ideas came to underpin the economic policy of Western governments for the three decades following the Second World War.

In the General Theory, first published in 1936, John Maynard Keynes (q.v.) challenged the majority of his peers in the economics profession, who had steadfastly rejected his notion that there was any need for a branch of economics that distinguished between the behaviour of individual economic actors and the operation of the economy as a whole.

Posted in Dictionary of Liberal Thought | Also tagged | 3 Comments

DLT: John Maynard Keynes 1883-1946

Duncan Brack and Ed Randall, authors of the Dictionary of Liberal Thought, have kindly agreed to let us publish extracts on Lib Dem Voice. Last month’s instalment was Mary Wollstonecraft

This month’s entry on Keynes has been selected as it is particularly topical in the current financial climate – and the next two entries to appear, Keynesianism in Februrary, and the Keynes Forum in March, complete the series.  If you can’t wait until March, the entire Dictionary of Liberal Thought is available on Amazon here and can also be bought at the Westminster Bookshop.

John Maynard Keynes 1883–1946

The most influential and important economic thinker of the twentieth century, Keynes’s most important academic works were concerned not only with challenging accepted economic theory but also with finding solutions to real economic problems; his ideas came to underpin the post-war economic strategy of Western governments. He was an active Liberal and contributed to Lloyd George’s reshaping of Liberal Party policy in the 1920s; he also helped to found the Liberal Summer School.

Key ideas

• Human decision-making under uncertainty is necessarily based on subjective expectations of utility (this reflects the fact that human beings lack a sound basis for calculating probabilities).

• Economic recovery from war requires great magnanimity in order to fashion a programme of economic assistance and cooperation that serves the best interests of victors and vanquished alike.

• A stable world requires the strong to help the weak, and intelligent international cooperation is essential in order to build the foundations for general prosperity and diminish the risks of future conflict.

• It is possible that where an economy’s aggregate output is below its potential, it will suffer an extended period of high unemployment and depressed output; public policy should therefore be designed so that government is equipped to raise effective demand in such circumstances.

• The need for an international reserve currency, managed by an international clearing union.

Posted in Dictionary of Liberal Thought | Also tagged , , , , and | 2 Comments
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    A good tone of speaking from Jo. Authority without talking down.
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    Lie down, shut your eyes for a moment and imagine an election in which Liberal Democrats vow to revoke Article 50 and win an overall...
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    http://liberalbureaucracy.blogspot.com/2019/09/alde-party-congress-athens-2019_21.html Liberal Democrats should support our policy of a voting age of 16 at every opportunity. 1) David Cameron (Con) allowed it for the 2014...
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