LONDON – Not so long ago, there were two competing explanations of unemployment. The first was the Keynesian theory of deficient demand, which holds that workers become unemployed “involuntarily” when their community lacks the money to buy the goods and services they produce. The second was the view often associated with the Chicago School, according to which unemployment is a voluntary choice of leisure over work at whatever the offered wage.
A review of the policy debates of the post-crisis years suggests that flawed macroeconomic theories were given too much weight for too long. The result has been slower growth, lost economic capacity, and surplus misery for millions of people around the world.
Ten years after the 2007-2008 financial crisis, it is worth asking where the world’s developed economies are today comma where they would have been had there been no crisis, perhaps more importantly, where they might have been had different policy choices prevailed before and after the collapse.
LONDON – The poisoning of Russian double agent Sergei Skripal and his daughter Yulia at an Italian restaurant in Salisbury has driven an important story off the front pages of the British press. Earlier this month, the former actor and comedian John Ford revealed that for 15 years, from 1995 to 2010, he was employed by Rupert Murdoch’s Sunday Times newspaper to hack and blag his way into the private affairs of dozens of prominent people, including then-Prime Minister Gordon Brown.
LONDON – February 6, 2018, marked the centenary of the Representation of the People Act, which enfranchised (some) women in Britain for the first time – a reward for women’s work during World War I. In honor of this historic event, statues of two leaders in the struggle for women’s suffrage, Millicent Fawcett and Emmeline Pankhurst, are to be erected in British cities.
LONDON – Dispelling anxiety about robots has become a major preoccupation of business apologetics. The commonsense, and far from foolish, view is that the more jobs are automated, the fewer there will be for humans to perform. The headline example is the driverless car. If cars can drive themselves, what will happen to chauffeurs, taxi drivers, and so on?
LONDON – The tenth anniversary of the start of the Great Recession was the occasion for an elegant essay by the Nobel laureate economist Paul Krugman, who noted how little the debate about the causes and consequences of the crisis have changed over the last decade. Whereas the Great Depression of the 1930s produced Keynesian economics, and the stagflation of the 1970s produced Milton Friedman’s monetarism, the Great Recession has produced no similar intellectual shift.
This is deeply depressing to young students of economics, who hoped for a suitably challenging response from the profession. Why has there been none?
LONDON – Sociology, anthropology, and history have been making large inroads into the debate on immigration. Homo economicus, who lives for bread alone, has, it seems, given way to someone for whom a sense of belonging is at least as important as eating.
This makes one doubt that hostility to mass immigration is simply a protest against job losses, depressed wages, and growing inequality. Economics has certainly played a part in the upsurge of identity politics, but the crisis of identity will not be expunged by economic reforms alone. Economic welfare is not the same as social wellbeing.