Wednesday, 6 March 2013
Guest commentary by Malcom Tucker
Malcom's views on bloggers. Very funny. I should point out, however, that I never wear a track suit or sit in my bed-room when I write on this blog.
Some meta commentary
As I explained in my first post the primary function of this blog is to comment on the use of historical evidence in today's debates about fiscal and economic matters. This part is going well, I think. At least I am enjoying the writing and from the statistics that google shows me every time I open this blog, I can tell that at least some people are reading me. Well over 800 page views so far. That's great. Thanks a lot. By the power of google I can also see where readers are from: the US, Italy, Germany and Australia are top of the list.
But when I included this blog as a 'publication output' into my fellowship application with the Leverhulme Trust I also promised that I would talk about the progress of my research from time to time. I have not done much in that direction and should start today.
Put simply, the main question that I am trying to answer is 'Why are we so bad at learning from history in economic and financial matters?' More specifically, there is a good argument, made by Reinhart and Rogoff, that historically financial crises have developed according to very similar patterns. If true, this begs the question of why we are still so bad at handling them. Not that there has been no progress. Central banks were much more effective in the early stages of the current crisis than in the 1930s. But clearly there is still room for improvement. So, I am looking at how historical evidence has been used in public debates about fiscal crises in the last 250 years. I am mainly interested in what determines continuity and discontinuity in economic thought and what the main obstacles and catalysts of learning from the past are.
More details about the manuscript that I am working on will follow soon. Now I have to ... ahem ... work on the manuscript.
But when I included this blog as a 'publication output' into my fellowship application with the Leverhulme Trust I also promised that I would talk about the progress of my research from time to time. I have not done much in that direction and should start today.
Put simply, the main question that I am trying to answer is 'Why are we so bad at learning from history in economic and financial matters?' More specifically, there is a good argument, made by Reinhart and Rogoff, that historically financial crises have developed according to very similar patterns. If true, this begs the question of why we are still so bad at handling them. Not that there has been no progress. Central banks were much more effective in the early stages of the current crisis than in the 1930s. But clearly there is still room for improvement. So, I am looking at how historical evidence has been used in public debates about fiscal crises in the last 250 years. I am mainly interested in what determines continuity and discontinuity in economic thought and what the main obstacles and catalysts of learning from the past are.
More details about the manuscript that I am working on will follow soon. Now I have to ... ahem ... work on the manuscript.
Tuesday, 5 March 2013
What is going on at the FT?
First, Martin Wolf becomes a Keynesian and now Gideon Rachman is turning Marxist. In today's column, he essentially argues that we are seeing a replay of the 1930s, but this time as a farce, not a tragedy. In light of the Italian elections, he argues that the voters of the European crisis countries are turning to clowns rather than fascists. This, he says, is good because they're more entertaining, less brutal, and ultimately also quite responsible. The reason, he says, is that Europe is much richer today. Therefore, the pain inflicted by the crisis is not quite the same as in the 1930s.
It is refreshing to see someone arguing that it's not the 1930s all over again. And it would, indeed, be very difficult to argue that Grillo is the new Brüning. Some journalists have compared him with Mussolini, but that's not very apt either. And not only because of the hair.
However, there are some problems with Rachman's argument. First, there is the problem of evidence. He's basing his argument on Grillo's success and the election of a comedian as major of Reykjavik. But two comedians don't make a trend. He is right to say that there has been no significant rise in neo-fascist movements. Even in Greece this has remained a limited phenomenon. But we have seen another phenomenon that is quite pre-occupying: the re-emergence of nationalism, often with chauvinistic overtones. There is much anti-German sentiment, even in mainstream politics, in the European periphery. At the same time, a dangerous mix of arrogance and fear is prompting mainstream politicians in Germany and elsewhere in the European centre to play on deeply ingrained prejudices against southern Europeans. This is not neo-fascism, but nationalism can be destructive enough on its own.
There is another problem: Rachman seems to believe that it was misery that swept Hitler and Mussolini to power. But that is only partly true. The fascist movements on the 1930s were essentially petit-bourgeois movements. People who were hanging on to their 'bourgeois' status by the skin of their teeth and who were fearing to be 'declassed' as a result of the crisis were the driving force behind fascism. In contrast, fascist movements found it much harder to tap into the working class vote. The unemployed often voted communist. What mattered was not poverty per se, but fear of a relative loss of economic and social status. And this mechanism can apply at any level of wealth. Also in today's comparably much wealthier societies.
Finally, Rachman argues that clowns are not that bad because ultimately they behave reasonably once they're in power. What is his evidence for that? When Grillo's people took charge in Parma they began to cut public spending and the stand up comedian who became major of Reykjavik began to fire municipal employees. Is that the new litmus test for reasonableness? I think, Rachman needs to start reading his colleagues columns about austerity.
It is refreshing to see someone arguing that it's not the 1930s all over again. And it would, indeed, be very difficult to argue that Grillo is the new Brüning. Some journalists have compared him with Mussolini, but that's not very apt either. And not only because of the hair.
However, there are some problems with Rachman's argument. First, there is the problem of evidence. He's basing his argument on Grillo's success and the election of a comedian as major of Reykjavik. But two comedians don't make a trend. He is right to say that there has been no significant rise in neo-fascist movements. Even in Greece this has remained a limited phenomenon. But we have seen another phenomenon that is quite pre-occupying: the re-emergence of nationalism, often with chauvinistic overtones. There is much anti-German sentiment, even in mainstream politics, in the European periphery. At the same time, a dangerous mix of arrogance and fear is prompting mainstream politicians in Germany and elsewhere in the European centre to play on deeply ingrained prejudices against southern Europeans. This is not neo-fascism, but nationalism can be destructive enough on its own.
There is another problem: Rachman seems to believe that it was misery that swept Hitler and Mussolini to power. But that is only partly true. The fascist movements on the 1930s were essentially petit-bourgeois movements. People who were hanging on to their 'bourgeois' status by the skin of their teeth and who were fearing to be 'declassed' as a result of the crisis were the driving force behind fascism. In contrast, fascist movements found it much harder to tap into the working class vote. The unemployed often voted communist. What mattered was not poverty per se, but fear of a relative loss of economic and social status. And this mechanism can apply at any level of wealth. Also in today's comparably much wealthier societies.
Finally, Rachman argues that clowns are not that bad because ultimately they behave reasonably once they're in power. What is his evidence for that? When Grillo's people took charge in Parma they began to cut public spending and the stand up comedian who became major of Reykjavik began to fire municipal employees. Is that the new litmus test for reasonableness? I think, Rachman needs to start reading his colleagues columns about austerity.
Monday, 4 March 2013
The spirit of '45
It's easy to forget, but not so long ago the UK was a nation leading human progress. Ken Loach's new film is about how it came to be that and how it ceased to be that. I haven't seen it, yet, but it's bound to be brillant. And it's very much about linking past and present, learning from the past and all that. See the trailer here:
And a Guardian review here.
And a Guardian review here.
Lecture
For those of you who are in London. Might be an interesting lecture:
'The (Very Deep) Roots of Greece's Crisis: A Historical Reassessment'
The Hellenic Observatory research seminar
Date: Tuesday 19 March 2013
Time: 6.30-8pm
Venue: TW1.G.01, Tower 1
Speaker: Professor Stathis N. Kalyvas
Chair: Professor Kevin Featherstone
Taking the present crisis in Greece as a departure point, Professor Kalyvas takes stock of the surprising number of critical junctures during the past two centuries, when Greece managed to become a focal point, both in negative and positive terms, of critical issues in European and global politics. This lecture also questions why a country so small and peripheral has come to play such a role, providing an interpretation based on a review of the country's history since it became an independent state in the third decade of the 19th century.
Stathis N. Kalyvas is Arnold Wolfers Professor of Political Science, Director of the Program on Order, Conflict, and Violence, and Co-Director of the Hellenic Studies Program at Yale University.
Time: 6.30-8pm
Venue: TW1.G.01, Tower 1
Speaker: Professor Stathis N. Kalyvas
Chair: Professor Kevin Featherstone
Taking the present crisis in Greece as a departure point, Professor Kalyvas takes stock of the surprising number of critical junctures during the past two centuries, when Greece managed to become a focal point, both in negative and positive terms, of critical issues in European and global politics. This lecture also questions why a country so small and peripheral has come to play such a role, providing an interpretation based on a review of the country's history since it became an independent state in the third decade of the 19th century.
Stathis N. Kalyvas is Arnold Wolfers Professor of Political Science, Director of the Program on Order, Conflict, and Violence, and Co-Director of the Hellenic Studies Program at Yale University.
This event is free and open to all with no ticket required. Entry is on a first come, first served basis. For any queries contact Ioanna Antonopoulou by email i.antonopoulou@lse.ac.uk or phone 020 7107 5326. For further information visit theHellenic Observatory website.
'The sad record of fiscal austerity'
It's not only Italian graffiti artists who think austerity is not working. The chief economics editor of the FT thinks the same. See Martin Wolf's recent piece 'The sad record of fiscal austerity'. I wonder if Angela Merkel is reading the FT or the writing on the wall in Italy.
While you were away....
Here's the big news that I missed during my absence: 'Italy ungovernable'. Other breaking news that I missed include: +++next pope likely to be a catholic+++bears prone to defecating in the woods+++earth probably not flat+++
Perhaps the only glimmer of hope is that Italians expressed a clear view about current economic policy. The writing on the wall in Italy is this:
It has to be said that the Italian people chose rather odd messengers to deliver the message. But nonetheless, the success of Berlusconi and Grillo who ran on an anti-austerity platform (together well over 50%) along with the clamorous defeat of Monti are a clear vote of non-confidence for a policy that does not work. I doubt that Grillo and Berlusconi have much to offer in terms of a long term political programme that gets Italy out of the crisis. But their success may be instrumental in liberating Europe from a misguided economic policy.
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