Beyond simple-minded economics (and policies)

It isn’t that I haven’t been reading. I devoured a proof copy of Kaushik Basu’s The Republic of Beliefs and Michael Best’s How Growth Really Happens. As they’re not out until the summer, it’s a bit early to post reviews, but they will both be contenders for the 2018 Enlightened Economy Prize, essential reads.

It was interesting in the light of reading those two to also read this week an important pamphlet by Rachel Reeves MP, who chairs the Business, Energy and Industrial Strategy Committee in the House of Commons. The Everyday Economy starts the left-of-centre policy task of bringing together a vision of how the economy operates – or can operate –  more fairly, to the benefit of many more people than has been the case for a generation. It isn’t a work of economic theory of course, but is aligned with important strands of work in modern economics incorporating the importance of institutions and political economy, bargaining power, asymmetric information, and so on. I was pleased to see it cites the work of the Industrial Strategy Commission. Although the focus of Reeves’s pamphlet is fairness and sharing the benefits of economic growth, rather than how that growth should be generated in the first place, this seems to me to be an important contribution to the development of a coherent and realistic policy framework for a left-of-centre party. What’s particularly encouraging is that the two main parties here now both speak of industrial strategy and the need for a strategic framework for managing the economy on the supply side. It’s about time.

Anyway, what all of these signal in their various ways is a decisive public intellectual shift away from simple-minded states vs markets economics – at least from the non-partisan and from thoughtful politicians. As I’ve been saying for some years now, the high tide of simplistic free marketism in academic economics occurred a long time ago. I hope this is filtering through into the world of policy and politics. Maybe I’m being over-optimistic…. (reading the headlines).

In between I read Jon Kalman Steffenson’s About the SIze of the Universe. I was in a discussion with him (and director Anna Ledwich, and Dharshini David, whose new book is The Almighty Dollar) on Start the Week recently, about the aftermath of financial crisis. The novel isn’t really about post-crash Iceland, as the discussion led me to expect, but the universal theme of escape from a small nowheresville and the pleasures and pains of uprooting.

Now I’m starting with great eagerness Benn Steil’s The Marshall Plan – first chapter already ace.

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