Thursday, 21 October 2010

NEF and George's medicine - more evidence-free economics from the masters...

George plans his spending cuts

Now as you know dear readers I am an especial fan of the New Economics Foundation. Their brand of greeny-greeny, evidence-free economics with a twist of Keynesian nonsense, is just what I need to reassure me that my ever so slightly grumpy view of economics is right.

Today – courtesy of New Start – I stumbled across the opinion of this august body of mythic thinkers on the “cuts”.

Andrew Simms, policy director at the New Economics Foundation, said: ‘George Osborne is set to apply the economic equivalent of medieval medicine to the UK economy. Unfortunately bloodletting an already ailing patient is unlikely to improve their progress. To strengthen the economy and make it more resilient and fit for current challenges, we need to invest comprehensively in new low carbon infrastructure. This modern medicine will improve security, create jobs and boost the economy.’

Now leaving aside the image of George Osborne as some form of hedge witch administering a tincture of wood sorrel and elderberry to the ailing British economy, I am struck by the transference implicit in NEF’s argument. For it is the green economists who prescribe medieval remedies for modern ailments – indeed, NEF’s economic ideas has about as much link to the science of economics as homeopathy does to the effective practice of medicine.

After all this is the organisation that thinks we can get by with only working three days a week (I vaguely remember those days – happy ones for an eleven year old but less happy for older folk), who think that jobs aren’t created by enterprise but by the magic of public sector intervention and who persist in misunderstanding the Keynesian multiplier. I could go on to talk about how NEF believe there’s another credit crunch on its way and how Britain should be more like poverty stricken Ecuador. All in all a fine bunch of pseudo-economists (remember this is “new” economics so it can ignore nearly 200 years of evidence, research and study).

When we get to the crunch, NEF are simply a bunch of socialists and peddle the same tired (and disproven) solutions as all the socialists of past times. Despite its low-carbon tinge NEF’s economics is more red than green and its application would represent a huge leap backwards to a protectionist, interfering, over-taxed, over-regulated and producer dominated economy. The sort of economy that nearly ruined Britain in the 1970s. That NEF want investment to be in a “low carbon infrastructure” is irrelevant – this is just repeated the disasters of socialist capital investment led, import substitution strategies.

But then, like Gordon and the Labour Party, NEF have a money tree

1 comment:

Jon Beech said...

Point to an economic model that's accurate and I'll give you the Nobel, Simon.

You may not like Keysianism but to say it's evidence free is unfair, at best, and "in my opinion"(- which remains a shibboleth for all the economically grounded people I know) counterfactual.

I'd be happy if you were to even assert the evidence is equivocal or even partial - but essentially - the economic coup de grace against Keynes has not yet been delivered.

The US and GB underwriting of the international banking system post Lehmann Bros is evidence that the free market needs defending from itself, and that State still have a role.

I'd also be interested to know your evidence-rich alternative to the the wholly Keynesian notion of internationally attempting to co-ordinate monetary policy/fiscal stimuli of recent times which would not have led to international financial meltdown.

You also elide Keynes with socialism, which is also not 100% fair - much as many Socialists would love Keynes to be one of their ilk, ultimately - he was not.

NEF may not to be to your taste, but to deride their evidence free agenda with a broad brush of assertion is to... well, you're too bright to need me to rub your nose in the irony.

NEF's primary agenda is to counter the consumerist agenda that's piped out through radio tv etc, and to help people to reflect on what their relative wealth actually buys them: neuroses and over-leveraged anxiety. They question the economies of scale which result in uninterested interest. Both you and the Communists seem to think that either a] technology will save us b] there's nowt to fret about. Both of which sport debatable evidence bases to boot... But, I suppose, the enemy of your enemy and all that....

It's an enjoyable rant Simon, but as assertion filled and evidence-free as those you deride. So in the end just a lot of sound and fury.

The bloodletting analogy was indeed unhelpful twaddle btw.