Why Blog?

For some months I have maintained a daily post on this site. Sometimes I have reiterated a broad point of principle, at other times I have drawn attention to an emergent fact [such as point protectionism as a major factor in the Brexit debate], and on few occasions I have enunciated a new principle; but more often I have merely commented on the recent news. I have found it enjoyable - sometimes even cathartic - to have got my reaction down in writing and thus 'off my chest'; but in taking that route I have departed from the main reason for starting the blog. So I will go back to the beginning, then state my plan for the near future.

I had the immense good fortune to go up to Durham University, and specifically to the Durham Division of that university when King's College, Newcastle and the Medical School were fully parts of one federal university. Had I gone to Newcastle I would have been able to study Economics as a single subject, and my entire career would have been different. In the Durham Colleges at that time there were well under 2,000 students, which meant that teaching resources were limited. Thus the only social sciences honours degree was in Politics and Economics; and furthermore the Economics syllabus had a heavy component of Economic History, while first year students also had to study Ethics or Statistics and a modern foreign language. This meant that we had a broad introduction to the field which has made me sceptical of the inner dogmatics of Economics ever since. We were well taught in Economics: my first year tutor became a distinguished regulatory knight under the Thatcher regime and the most of the rest of the staff were comparably competent and qualified.

By the time I graduated I had become so sceptical about Economics that I applied for - and, to my eternal surprise, got - a research place to study how Economics had evolved into what it was. At that time successive governments were keen to expand the university system and money was no problem; there was a shortage of able and willing graduates [this was long before the massive influx of overseas students provided an over-supply of good graduates alongside the growing cohort of UK students]. Hence, via scholarship funding and a research fellowship I was able to complete a Masters degree and a Doctorate: and I was invited to take up a lectureship before my doctoral thesis was completed. As a teacher who rose through the hierarchy of a good university to become Dean of Social Sciences and Pro-Vice-Chancellor I maintained my agnostic approach to Economics as the neoKeynesians urged governments into the inflationary spiral that undermined the entire system after 1973. I was PVC at the time of the first imposition of Monetarist-inspired cash limits on university spending, and was instrumental in getting a cash bonus for the university as one of the few that believed what the politicians were reciting from their Monetarist mentors and capped its spending plans accordingly. By that time the amiable notion that academics had 'tenure' of their posts for life, however ineffectual they proved to be, was ended; and the state funded a round of redundancies that marked the opening of a new era of 'efficiency' that covered a reorientation of Economics towards the free market dogma. It took a few years to impose the predominance of that doctrine: the first Thatcher cuts were opposed by 364 Economists who signed a letter to the Times which was ignored by the new establishment, and within a generation their opinions were either consigned to retirement or radically revised in accordance with the new dogma.

I saw no place for myself in that world, I so moved with modest success to the City of London where I found significant fulfillment. But I have constantly developed my contrarian views on Economics; which I expressed at length in the book that is advertised on this page: The Brexit Vote and Economics. In June, 2016, I took the view that the rejection of the government's advocacy of the Remain side in the EU Referendum was also, implicitly [and perhaps more importantly] a rejection of the underlying orthodoxy that gave us Thatcherism,the financial bubble and the inevitable crash of 2007-9, austerity and widespread disillusion and cynicism to the political class. I stated my own conclusions. Then I took the decision that instead of constantly trying to issue updates of the self-published text, I should make a constant commentary on my views and on the real-world events that I believe my text illuminates. This week the Tory Party Conference is likely to provoke some splenetic reactions on my part, so I have decided to take a more cerebral line, with less frequent but deeper ruminations on the site. We'll see how that goes....

The Glory of a Mixed Economy

Between 1950 and 1972, Britain boasted of its Mixed Economy. Then, in the 'seventies, the misapplication of Keynes's principles by the self-styled NeoKeynesians combined with the OPEC cartel to create an inflationary spiral that threatened to destroy the economy. That situation, in turn, made the opportunity for Thatcherite Monetarism and the 'free markets' dogma to be installed: with apparent temporary success and long-term ruinous outcomes. I have issued sufficient jeremiads about the latter state to give it a rest for the moment, and to pick out instead the features of the economic policy [broadly pursued by both Labour and Conservative governments] that prevailed beneficially under the generic description of the Mixed Economy.

During World War II the coalition government published the Beveridge Report, which promised a universal, compulsory social insurance scheme that would provide healthcare, unemployment insurance and old-age pensions for all contributors and their dependents. Both the major parties in the coalition were committed to implementing the scheme, and though the costs - especially of the national health system - always exceeded the income of the national insurance fund it was hoped that a time would come when those books would balance and a subsidy from general taxation would not be necessary. The National Health Service, in particular, was immensely popular and it delivered massive benefits to the entire nation.

Labour won the 1945 election, with a clear mandate to nationalise core infrastructure services and the 'commanding heights' of the industrial system. Under the infrastructure policy, the clapped-out railways, the partially-derelict canals, the major bus companies and the biggest road haulage companies [with their depots and other support facilities] were nationalised. The railways already owned some ports, and major hotels near stations, and these were taken into state ownership as well. For the first decade of nationalisation there was an attempt to support all of these facilities; but with the rapidly rising popularity of private cars and the consequential demand for the state to provide an appropriate road network the aggregate costs became too great. The slow death of the canals continued, and the subsidy of railways became excessively burdensome until a Tory government appointed a 'technocrat', Dr Beeching, to manage the railways. He just adopted a slash-and-burn approach, reducing the system too much in an orgy of destruction that is pretty universally regarded with hindsight to have been absurdly excessive. But the core railways system was preserved, to become a success eventually: and the motorways were built.

Coal and steel were among the 'commanding heights' of the economy which were nationalised, reorganised, and subject to massive investment and modernisation: which worked beneficially for a couple of decades. Electricity and gas services were nationalised, with massive investment in new power stations and the creation of the national grid for electricity and the beginning of a similar system for gas distribution. Telephones had been developed as a state monopoly, under the Post Office, and their availability increased immensely. Television had been suspended for the war, and it was reintroduced [BBC only, at first] to become massively popular.

The state managed all these things, while making good the massive destruction that had been effected by German bombing during the war and the massive wear-and-tear on all types of plant and equipment that had happened while concentration on war production had meant that maintenance and repairs had been minimal. Perhaps the greatest achievement was in housing. Private builders were enabled to develop private estates while the state sector built hundreds of thousands of houses. So great was the success of that programme, that under a Conservative housing minister in the later 'fifties 400,000 houses were completed in a single year. By contrast, the pathetic shower who govern us now cannot orchestrate the 'market economy' to provide so many as 100,000 homes in the face of desperate need.

Not all was perfect in those years; but things felt better than they do now because there was a feeling of common national purpose with significant objectives being achieved by the public and proivate sectors of the economy working in concert.