14th March 2009
As Tristram Hunt (April) points out, Friedrich Engels—the part-owner of Ermen & Engels—was clearly a generous benefactor to the Marx family. But the issue which his admirers seem most reluctant to address is whether this generosity extended to the workers employed in his own factory. Were the wages and conditions imposed by capitalists Ermen & Engels significantly different from those of other Manchester workers at this time?
Ivor Morgan
Lincoln
Yes he can
27th March 2009
Most of Bartle Bull's "criticisms" of Obama (April) are outright distortions. Obama never claimed that healthcare, education, and energy "caused" the housing crisis. What he said was that these were areas that stood in the way of long-term economic stability. In America today, 47m people are uninsured, and this number rises by 2m every year. The US spends more on healthcare than any other developed nation in the world, yet it is ranked 37th in quality of care and many people, even those with insurance, go into debt because they cannot afford the cost of care. If that problem seems unrelated to long-term economic stability, I don't know exactly what is.
Bull claims that the economy is now in a "cyclical contraction," dismissing its severity by historical comparison. But the parallel to the great depression was based, not just by Obama but by many economists, on what could happen if problems were not addressed directly. And Bull's prediction that economic recovery will arrive is an optimistic forecast that relies on exactly the kind of government spending for public works projects (to keep people working) and much else that Bull opposes. It is a cheap criticism that 80 per cent of the stimulus bill money won't be used this year—that is how government spending works, and if things do get worse, there needs to be resources and plans ready to go. Incidentally, blaming the economic crisis on regular "boom and bust cycles," as Bull does, is the explanatory equivalent of saying "this stuff just happens." You can't fix a problem until you know what is wrong.
I do not agree with all the president's economic policies, but at least he has a plan and accounted for its cost in his budget. Bush never did that. Bull refers to Obama's 150-page policy document. The current Republican plan is 19 pages and contains no figures, no deficit numbers.
I have criticisms aplenty of many of the president's plans–but those are based on a factual assessment of what his policies actually are.
AMG
Via the Prospect blog
Economics 101
30th March 2009
Critics will also say that economics is not about prediction but about understanding. I have some sympathy with that, because prediction in economics is as hard as it is in seismology, and probably for analogous reasons. Yet earth scientists, unlike economists, recognise not only that prediction is a test of understanding, but that they have a social responsibility at least to attempt it. They, unlike economists, accept that the unpredictability is inherent in the system they are studying, and don't try to wash their hands of it by blaming it on "exogenous forces."
Nothing, however, may provoke so shrill a response as Kaletsky's suggestion that the economic orthodoxy is guided by political ideology. I am sure that many, perhaps most, economists seek understanding untrammelled by ideology (though Hayek was clearly not one of them). But it is ridiculous to suggest that the ascendancy of simplistic free-market dogma in the Thatcher-Reagan era had anything to do with its demonstrable validity, rather than its convenient fit with the preconceptions of its political advocates. Perhaps the only real defence economists can make here is that this ascendancy was eventually so complete that it transcended political boundaries, to the cost of us all.
The real crime of economists is not that they failed to avert or even predict the current recession, which (for all the venality and ignorance in its causes) is, after all, just an example of what markets have always done. The crime is that they disown any responsibility for the undergraduate-level delusions that led our leaders to believe that such things had been banished forever.
Philip Ball
London SE22
Bad maths
13th April 2009
Anatole Kaletsky (April) is almost completely right to say that academic economists take a slice of the blame for the financial crisis. They—perhaps I should say we—have used an intellectual framework that has proved incapable of predicting or so far correcting the problems of the world economy. It will, as he argues, be necessary to embrace new ideas. He has told the straightforward truth, although it is not true to say there were no warnings (in the middle of the decade, for example, I and a few other economists wrote in the Times about the likelihood of a house price crash). My profession now needs to take intellectual stock.
But Kaletsky is almost completely wrong to rail against the use of mathematics. If Britain's bridges fell down, we would not instruct engineers to stop using mathematics. If epidemiologists were hopeless at predicting the spread of HIV in a population, we would not ask them to give up mathematical tools. We would tell them to get their bloody sums right.
The difficulty is that economists are, plainly, using the wrong conceptual framework. We do not understand properly how an economy—part machine, part organism—works. (Most of this can be traced back to our inability to do controlled experiments on something as complex as the economy.) My profession needs a better mathematical understanding of the economy. Until we have that, we need to be rather more humble.
Andrew Oswald
University of Warwick
All together now
13th April 2009
Gerald Holtham (April) set out three principal goals for the G20: a global reflation plan, support to poorer countries, and reform of the IMF. Against this analysis, the London summit was a modest success. But Holtham missed two critical components on which the summit fared poorly: measures to address climate change and a clear statement of the G20's own future.
Some argue that deficit spending to stimulate the economy is unfair on future generations, yet global warming is too, and the summit communique failed to address this problem. But there is still time for the G20 to act, since the members will meet again later in 2009. The G8 has been losing legitimacy for years, so global leaders should take this opportunity to make the G20 the leading forum for global economic governance, empowered with a proper mandate, a mechanism for the membership to evolve over time, and a fully funded secretariat. It must take full charge on
The London summit may have exceeded expectations, but much more will be needed in future if we are to recast the world economy on a more stable and fair footing.
Will Straw
Centre for American Progress
To read the full version of this letter, visit www.prospect-magazine.co.uk
Peace, not ceasefires
2nd April 2009
Let's not draw the wrong conclusion from Monica Toft's argument (April) that the international ability to broker peace talks in civil wars means no side wins and the conflict remains unresolved. We cannot leave such wars to be fought on, often for decades with terrible human suffering.
Instead, the international community must get better at turning negotiated agreements into long-term peace processes. This means getting stuck into peacebuilding that may last decades. Today's problem is that the international community takes its eye off the ball a couple of years after the peace agreement is signed. The result, all too often, is a return to violence. Sudan's peace agreement looks worryingly like a case in point: despite its name, it was really a multi-year ceasefire, intended to give time to keep working out differences. But once it was signed, the international community took its foot off the pedal.
What's needed now is a viable international architecture for peacebuilding. The bodies that do exist are underfunded, understaffed and their importance is not yet recognised within the system. Improving these institutions is the most critical priority for the UN today.
Dan Smith
Secretary General, International Alert
A Marxist onslaught
13th April 2009
Nigel Warburton's desire (April) to stymie the development of a biological theory of art on the grounds that "lesser thinkers" than Denis Dutton might take up the subject is a bizarre argument. On that basis no academic discipline would ever survive.
More importantly, the theory already has a long history. Figures like Herbert Read in England and Wilhelm Worringer in Germany were its original promoters in the first half of the 20th century. Unfortunately, their efforts could not survive the astonishing onslaught, primarily from Marxist academics, against all non-sociological theories of art. Consequently biological or evolutionary theories were not developed, tested and modified by later academics. Perhaps now they can be.
Michael Paraskos
London SE27
