I will always defend a big spender like J.M. Keynes
29 November 2008
Nancy Dell’Olio makes an impassioned case for Keynesian economics as the necessary remedy for the global crisis. It is to the Cambridge economist that we should turn once more
Sadly, the next day Andrew — who I had never taken for a cad — seemed much less keen on a column-inch confrontation. Perhaps he sensed that the Cameron–Osborne team’s rendition of ‘Dear Prudence’ might lose the public vote to ‘Santa Darling’ and the great Christmas giveaway. But I would like to think that it was surrender to the global consensus on the need for co-ordinated fiscal stimulus that made him realise he might have to admit that ‘we are all Keynesians now’.
Despite Andrew’s pull-out, I could not just let this slur upon my hero pass unchampioned and took up the Spectator’s offer of an opportunity to celebrate the genius who just keeps coming back. Keynes’s big idea was that the modern market economy does not always operate at maximum efficiency, and smart government intervention can raise the game to deliver an optimum result. As we are sucked toward the black hole of super-recession, the infatuation with free-market capitalism has cooled. Although few would quarrel with the notion that the free-market economy is the best way to distribute capital, most G20 leaders are agreed that state intervention is the only way to stave off the global slump. Inevitably, government is always going to be the spender of last resort. The question is — how smart is government with its spending?
Keynes, writing about Lenin, pointed out his dictum ‘that the best way to destroy the capitalist system is to debauch the currency’. Of course, in the UK, according to Lord Mandelson, we have George Osborne to do that. But this is a strange time for the Tory party to take a contrary line to the rest of the world. Prudence and fiscal restraint may be virtues in Notting Hill but for the rest of the world, facing the big squeeze, access to credit is what counts; and, as my local corner-shopkeeper says, ‘You only have cash flow if customers come through the doors to spend.’
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Augustus
November 26th, 2008 4:47pm Report this commentYes, the more you spend, the more important you are!
Jim
November 27th, 2008 11:38am Report this comment"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens" J.M.Keynes.
Your stimulus package is of course inflation. As you sit around fine tables, drinking finer wines, with fine friends, spare a thought for the old lady opening a tin of dog food for her dinner. As all her life savings have been confiscated by the state, in stimulus packages to save wealthy, incompetent, thieving bankers.
Keynes was immoral, and an evil genius.
Tim Calvert
November 27th, 2008 12:20pm Report this commentCongratulations Mr D'Ancona.
You have achieved your ambition - a merger with Hello!
Must rush - Heat Magazine has an insightful ananlysis of the CDS market
Dwight Vandryver
November 28th, 2008 12:28am Report this commentIt's as if Labour is expecting a miracle, or some divine intervention, in a few years time to defray the debt it has, and will be, amassing. Perhaps Ms Dell'Olio would care to enlighten us as to the mechanism that will make this possible. Manufacturing is no longer the UK's forte and the financial services sector have taken a big hit. With the building industry at a standstill, we have become a nation of shopkeepers. The only secure employment appears to be in the public sector, which is non-productive and a constant drain on public spending. It is difficult to see how a 15% VAT rate will revive personal spending, and even if it did, the goods purchased would add yet more to the balance of payments deficit. Let us hope that these concerns live in a virtual world on databases, and that in practical terms, Ms Dell'Olio is correct, but do we live in a virtual world?
JohnAnt
November 28th, 2008 1:49am Report this commentWhat next? Prescott on serialism?
Andrew Forbes
November 28th, 2008 10:32am Report this commentThis was actually written by Craig Brown, surely, and it's brilliant.
Helen Jackson
November 30th, 2008 2:02pm Report this commentWhat a pointless article.
The Spectator is rapidly becoming a vehicle for a cosy clique, seemingly unable to write about issues of national significance unless refracted through the minor details of their everyday lives (Venetia Thompson's sock draw springs to mind), anecdotal evidence about what their mates think, and a heavy dependence on the 'I' key.
Please consider you have a readership which buys the Spectator hoping for quality insights into current affairs from people with superior knowledge, not the outpourings of people the editor has randomly met at dinner parties.
It is unprofessional journalism and hugely off-putting.
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