economics

Aug 05 12:22

Human Left from Human Free

By: Ciarán Tags:

I don't have any major stake in the ongoing row (see here for a commentary) over the establishment of a Milton Friedman Institute at the University of Chicago. Friedman is a major figure in politics and economics, and it seems more or less appropriate to me that Chicago would continue his line of study (I'd guess it's safe to assume that the centre has the usual academic character and isn't simply a policy shrine). That said, people are in the habit of talking some real bollocks about the link between free markets and free societies. See Daniel on Crooked Timber refering to one supporter of the Institute citing China as a paragon of free market globalisation. In fact, as Daniel points out, China is an instance of accessing global markets through the close management of internal market development. As Stiglitz points out about the Washington Consensus on the Asian Tigers as were, they were held as instances of successful capitalism until the crisis of the 1990s and then held as instances of the failure of managed markets when they crashed. So this sort of thing ain't new.

Anyway, I'm not sure we should go to far in congratulating China on being an enormous version of Singapore.

On another note, Truth on the Market (which is generally a very enjoyable blog) points approvingly to a weird comment by Steve Horwitz where he asks why so many of his colleagues in the humanities and social sciences "still think Marxism and socialism have social value when those ideas were the inspiration, even if wrongly interpreted, for thugs who engaged in the killing of tens of millions of innocent people and the destruction of the economies of billions." Eh? Now, I don't think there's much point in a pissing contest on whose idea killed the most people, and I wouldn't find this quite so strange, even if it was highly arguable, if he said that the deaths and ruin resulted from an accurate porting of Marxism into policy (and thus that it has no 'social value,' whatever that means), but that it lacks social value because of a misinterpretation of Marxism? How so very strange. As I say in a comment on TotM, so much for Christianity, Islam and Judaism then. More to the point, how many people would it take waving Wealth of Nations in the air as they slit throats or push people out of helicopters before we decided that we'd better abandon capitalism too?

I suspect that this is all a heated argument thing, but if it is a measure of the standard of public intellectual-style reflections among these people (as opposed to what I assume is their good head for sums), they'd better shut the whole thing down now.

And so ends the day's pedantry.

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Apr 22 21:49

France? Not so bad

By: Ciarán Tags:

While we're all reading up on first round of the French Presidential Election, it might be worth skipping over to A Fistful of Euros for some perspective on France's economic woes.

Not that France doesn't have economic woes. And it certainly has political problems, perhaps even to a catastrophic degree. But badly-compiled comparisons don't help.

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Mar 15 23:15

Bright Sparks

By: Ciarán Tags:

The central tenet of the privatisation movement is that public sector companies, protected from competition, will be inefficient and expensive. So, the consumer will suffer. Anyway, competition means we can choose who to buy our widgets from which is, like, dead democratic and stuff.

Unfortunately, pro-privatisation zealots tend to forget that some industries were nationalised, all those years ago, for very good reasons indeed. Like, the state could do some things in a tidier, more efficient manner. Moreover, markets don't just happen. They have to be made. Unfortunately, as John Major's Government discovered, manufacturing a market is not easy, especially when it comes to markets with vast entry costs like railways. This is a lesson that the State of California also learned at the hands of Enron and other groups. Where you don't want people to build whole new railways, or new electricity grids, you have to devise a way for them to share the infrastructure without collaborating in selling the product (which is by its very nature identical or as close as be damned).

A difficult, though not entirely impossible, proposition.

Ireland, it seems, is in the process of taking the first steps towards fouling up the electricity market. That is, instead of devising innovative ways to produce sharing-without-collaboration, they seem to be intent on running the state electricity company into the ground in the hope that some bright new world will arise from the ashes. Take a look at Michael Taft's excellent analysis of recent price increases in the Irish electricity market. A very strange tale.

Not much joy for the consumer in that story.

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