Worthwhile work and human organisation

Under all sorts of forms of human organisation, people engage in work because they have to earn a living. They work to live, rather than live to work, in a capitalist system as much as in any other. Individuals might be considered lucky if they find a job which is fulfilling and gives meaning to their life. Continue reading

Rethinking Economics Part II: the microfoundations of macroeconomics

Another useful talk I attended at the recent Rethinking Economics conference was by Michelle Baddeley, Professor at UCL, on ‘rethinking the microfoundations of macroeconomics’. Microeconomic analysis concerns itself with the behaviour of individual economic agents or methodological individualism; that is, human agents, firms and households. Macroeconomics analyses the behaviour of the economy as a whole, at the national or global level. Continue reading

Shareholder value: is it holding back growth?

Andy Haldane, chief economist at the Bank of England, has recently spoken out against ‘excessive’ shareholder power as being one factor holding back business investment and growth in the UK. The dominance of shareholder value is a characteristic of what is often referred to as the ‘Anglo-Saxon’ model of capitalism, as it is prevalent in the US as well as in other English-speaking nations. Continue reading

Rethinking Economics Part I: Ideas from Development Economics

I recently attended the Rethinking Economics Weekend at the beautiful University of Greenwich in London. It was attended by a mixture of students (of economics and other subjects), academics, journalists and the general public, with the aim of contributing towards reform of the subject in the way it is taught and making it more accessible and pluralistic. Continue reading

Mitigating recession: how far should government policy go?

Among Keynesian economists, it is generally accepted that governments should intervene in the economy to manage the business cycle using fiscal and monetary policy as tools of macroeconomic management. During the post-war boom until the 1970s, full employment used to be considered not only desirable but also feasible. Continue reading

The Eurozone crisis: Germany needs change as well as Greece

The current Eurozone crisis seems at the moment to be all about economic reform in Greece, which includes the imposition of further crushing austerity ad infinitum. This is bound to keep Greece in recession, even if the so-called ‘structural’ reforms prove to be beneficial. It seems that Germany and its paymasters dominate decisions made regarding the potential resolution of the crisis. But the Greek government will find it extremely hard to pay down debt without a strong economic recovery. Continue reading

The UK summer budget: canny politics but some poor economics

The UK chancellor, George Osborne, last week delivered his latest government budget. Characteristically, it was loaded with crafty political moves, and although some of the announcements proved that he is more pragmatic than the image he presented in the recent election campaign, on some of the big economic issues facing the UK, it was sadly lacking. On housing, productivity and the current account, Osborne is largely missing a trick. Continue reading

Allocation and growth in economics: are they complementary ideas?

Two important ideas in economics that seem in some ways incompatible are those of the efficient allocation of resources and that of growth. Neoclassical microeconomics in its basic form is thought to encourage governments to pursue free market policies so that resource allocation is efficient and maximises the welfare of society in the form of utility. It is concerned with a static model of allocation. By contrast, theories of growth are concerned with change over time, that is a dynamic process. Continue reading

Building bridges between left and right on policy

One of the basic tenets of Keynesian economics is the importance of aggregate demand or spending in the economy for the purposes of supporting growth and employment. This spending takes the form of consumption and investment in the private, public and foreign sectors for an economy open to international flows of trade and investment. Continue reading