This week, the British Labour Party has launched a new attack on the government on falling living standards. Real wages have been falling consistently since the coalition took power; OBR figures project that the median worker will be £6,660 worse off in real terms in 2015 than in 2010. Labour is right to point out … Continue reading Real wages and Employment

by Robert Skidelsky and Peter Mills The Archbishop of Canterbury, Justin Welby’s attack on the payday loan company Wonga is a modern manifestation of an ancient theological prohibition. Just as Jesus threw the moneylenders out of the Temple, and medieval popes banned their flock from charging interest, today’s Church is waging its own battle against … Continue reading Vix Pervenit

With humanity’s millennia-old focus on collective survival no longer a primary concern, a few fortunate societies in the West have become preoccupied with matters of human, or individual, rights. In recent decades, we have experienced a second flowering of the individualism associated with such nineteenth-century thinkers as John Stuart Mill. The rights of the individual … Continue reading Gays and the New Public Philosophy

We all know how the global economic crisis began. The banks over-lent to the housing market. The subsequent burst of the housing bubble in the United States caused banks to fail, because banking had gone global and the big banks held one another’s bad loans. Banking failure caused a credit crunch. Lending dried up and … Continue reading Economic Rebalancing Acts

In a recent article, ‘Sympathy for the Luddites’, Paul Krugman looks at the impact of automation on the future of work. He argues that the old conflict between labor and capital is entering a new phase. In the past technological progress displaced unskilled labor; now it is knocking out skilled labor as well. There are … Continue reading Playing by the Rules

Funding for Lending, the Bank of England’s scheme to boost bank lending, has been operating now for nine months. The results? The Bank has now dispensed £16.5bn of cheap funding, but bank lending again contracted in the last quarter, this time by £300m. Previous schemes gave banks government guarantees on their borrowing provided they passed … Continue reading More Funding, Less Lending

How does one describe an economy betwixt and between boom and slump – the state of much of the world today? Growth is too low, unemployment is too high, but the economy is not actually contracting, but bouncing along somewhere near zero growth, with bursts of low growth interspersed with plunges into negative territory. Keynes … Continue reading Sub-normal Prosperity

A bit of history to remind us where the economists stood on the matter of fiscal austerity: On February 14, 2010, the Sunday Times published this letter: "It is now clear that the UK economy entered the recession with a large structural budget deficit. As a result the UK’s budget deficit is now the largest … Continue reading Unrepentant Economists

The doctrine of imposing present pain for future benefit has a long history – stretching all the way back to Adam Smith and his praise of “parsimony.” It is particularly vociferous in “hard times.” In 1930, US President Herbert Hoover was advised by his treasury secretary, Andrew Mellon: “Liquidate labor, liquidate stocks, liquidate the farmers, … Continue reading Austere Illusions