The folly of George Osborne

The Chancellor has been celebrating the recent estimates showing that the economy has grown by 0.8 per cent in the third quarter of this year. However, these forecasts do not tell us anything about what is most important: well-being. National well-being is the only object of economic growth, but GDP data says nothing about it.

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By George, he hasn’t got it: What would JM Keynes think of George Osborne’s Budget?

I don’t wish to examine the structure of George Osborne’s emergency Budget, but to analyse its logic. On the structure I have only this to say: the balance between increased taxes and reduced spending is probably right. It is right to demand sacrifices from all sections of the community, though I doubt the attack on welfare benefits (designed to save £11bn a year by 2014-15) will be seen by many as fair. And there are a number of useful measures to encourage enterprise. My objection is to its overall fiscal – and ideological – stance. It is deflationary – not as deflationary as the Chancellor’s rhetoric demanded – but deflationary all the same.

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What would Keynes have done?

Expect plans for higher borrowing, tax cuts, and more spending in Monday’s pre-Budget statement. With Britain sliding into depression, it is not surprising that the old Keynesian tool kit is being ransacked. But Keynesian economics is not just about fixing damaged economies. You don’t need very sophisticated economics to spend your way out of a depression. In one form or other – usually by war or war preparations – governments have been doing this throughout history.

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Obituary J. K. Galbraith

For 20 years in the middle of the last century, John Kenneth Galbraith, who died yesterday at 97, was the “best known living economist”. But he was not, and will never be, regarded as a great economist by economists. He is best thought of as a sociological economist, who tried to develop a theory and a policy from an analysis of the institutions of contemporary American capitalism. He had a genius for significant description, and wrote with confidence, wit and a notable talent for phrase-making, but the theory he sought proved elusive and he had no lasting effect on policy.

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Podium: The flaws in the new world order

ONE OF the oldest divides in politics is between the moralists and the prudentialists. Moralists have a passion to make the crooked path of humanity straight; prudentialists to make the best of an inherently imperfect world. I know that prudence is itself a moral virtue, and moralists are also capable of discarding the sandals of the preacher for the clogs of the politician. But the basic divide goes back at least to biblical times. The New Testament calls the two sides the “children of light” and the “children of this world”.
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