This is the short version of ‘Mrs Thatcher’s Favourite Economist’…a mere 3 pages instead of 12….having said that the programme was so packed full of things you could object to it had to be done. However many may not want to read that much…..
Stephanie Flanders looks at the economic theories of three economists in the ‘Masters Of Money’.
Keynes, Hayek and Marx.
Why those three?
If she reduces the selection to them only one is left in her opinion who is ‘respectable’…conveniently the one her ex-boyfriends, Ed Miliband and Ed Balls, look to for inspiration…..Keynes.
Hayek is presented in a negative light, an oddball extremist that only fellow oddball extremists would follow….Flanders tells us he was a favourite of Mrs Thatcher and therefore Flanders is saying Thatcher and her policies must be oddball and extreme.
Marx of course, no one can take seriously in the economic sense…..he is used as an ideological inspiration for revolution and so produces wars, terror and tyranny if not economic prudence…and so is influential in that sense.
So that of course leaves Keynes, who is the harbinger of the bright and sunny uplands, of a prosperous future that means we can borrow what we like today because tomorrow we’re all going to be millionaires, you’ve got to speculate to accumulate, kushty.
Her programme on Keynes was upbeat and enthusiastic about him and his theory.
However she missed off that Roosevelt’s New Deal ruined the US economy in 1938 and she claimed Hoover was a ‘tax and cut’ man when he clearly wasn’t.
Flanders claimed Roosevelt built the Hoover Dam….clue is in the name!, and claimed it as a victory for Keynesianism (though no one listened to Keynes then)……‘A celebrated example of how to boost an economy…no more iconic example than the Hoover Dam.’ ….no figures to prove that….so nothing to do with Keynes or Roosevelt…good skills!
She claims the command economy of the war shows us how such planning, government control and massive investment can produce growth.
The war was a finite event the spending on which ended as soon as the war ended…unlike welfare or the NHS or policing etc. She never told us how the US paid off its massive war costs. High taxes might have something to do with it.
So Keynes is the chosen One…..however one ‘giant’ at least is missing from her modern pantheon of economic Masters….Milton Friedman.
If as some suggest of Mrs Thatcher that …‘No one can seriously dispute that she mattered – more so than any other twentieth-century politician with the exception of Winston Churchill and , perhaps, Lloyd George.’ then surely her ‘favourite economist’ must merit a mention, a whole programme to himself?
Lady Thatcher said: “Milton Friedman revived the economics of liberty when it had been all but forgotten. He was an intellectual freedom fighter. Never was there a less dismal practitioner of a dismal science.”
“Over half a century, Mr Friedman, established himself as arguably the most influential economic thinker of his time. Over that post-war period, “Friedmanism supplanted Keynesianism as the dominant economic philosophy of the industrial world.”
“It’s hard to think of anyone who’s had more of a direct influence on social and economic policy in this generation,” Professor Allan H Meltzer of Carnegie Mellon University.”
Milton Friedman, is now a hero of the Chinese Republic, not Marx, not Keynes:
‘On reaching retirement age in 1976, he joined Stanford University’s Hoover Institution, and from there he continued to campaign for economic freedoms worldwide. This mission took him to China months before the Tiananmen Square massacres. As one observer recalled, the young Chinese “followed Milton around like he was a god”.’
and not only Friedman…..
‘The former British Prime Minister is now being held up as an inspiration for future leaders of the People’s Republic of China…Professor Li Min, a lecturer at the institution, said when it came to crisis management Britain’s former prime minister was a model of behaviour.’
So Friedman totally eclipsed Hayek and has sidelined Keynes for decades…..and yet he is almost totally ignored by Flanders.
You can only conclude that is a political decision by Flanders…..Friedman was Thatcher’s favourite and the man who influenced her policies most….the policies that eventually brought stability and prosperity to Britain.
If Friedman is the ‘good’ economist embracing both the free market and some government ‘investment’ when necessary then Thatcher and her policies must have been ‘good’.
Not something perhaps Labour would like to hear the BBC endorsing? And so it doesn’t.
A continuous thread throughout the programme is that free markets and austerity bring Fascists in jackboots onto the streets….look at history again and it is Keynesian type economic stimulation which brought Hitler to power as the US ‘stimulated’ its economy and caused the Great Depression (Ben Bernanke…‘We did it!’)…..and now who is on the streets? The left wing agitators, the unions, the students……it’s not Hitler’s Stormtroopers, it’s Marxist revolutionaries.
And finally something odd:
As Flanders went on, apart from the expected upbeat cheerleading of a Keynesian approach to running the economy, I noticed something…I know that the Party conference season is upon us but as she talked I realised I’d heard or read much of the same lines she spouted as coming from Ed Miliband….is she just doing the warm up act for him?
She told us that Keynes saved capitalism from the capitalists, what is Miliband’s latest line? ‘I’m going to save Capitalism from itself’.
Another phrase that kept popping up…‘we’re all in this together’…..a Tory phrase that Miliband has tried to co-opt as his own recently…and now repeatedly echoed by Flanders.
Or Miliband’s ‘We want a market economy not a market society’…….Flanders told us a Keynesian policy was to suggest ‘If we can tame capitalism we can shape our destiny.’…also an echo of Miliband’s ‘predators and producers’ sound bite?
And of course Keynes is just Plan B with a moustache.
So to sum Flanders up….Keynes theory of spending massively to promote growth is good.
Austerity and Hayek can only bring fascism and war to our streets.
And Milton Friedman was….. who?