I thought this piece in the FT really well written.
I love J K Galbraith (the second best economists of the twentieth century and a massive influence on my early economic thinking) for saying it.
But the introduction is first rate too, so I make no apologies for reproducing this:
In 1958, Harvard economist John Kenneth Galbraith was looking for a term to describe certain ideas that were commonly held, intellectually accessible and yet fundamentally flawed. To define such widely spread misconceptions he wrote: “I shall refer to these ideas henceforth as the conventional wisdom.”
What's the conventional wisdom now?:
a) That there are bond vigilantes;
b) That cutting government spending will result in an immediate uplift in private sector activity
c) That there is significant and abnormal level of inefficiency in the state sector.
None of those things is true of course.
But they are the conventional wisdom.
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An excellent article indicating that the FT is not always like the Daily Mail .
It is difficult to understand how anyone can believe that government spending cuts will boost the fortunes of private industry…. excepting that those suffering redundancy in the public sector and successfully finding re-employment in the private sector are likely to provide a stimulating boost to industry.
The “conventional wisdom” that “there is significant and abnormal level of inefficiency in the state sector” has no concept of the ineptitude and empire building within the hierarchical muddle of the private sector.
With some exceptions the ability and enterprise of the public sector work force in relation to the private sector work force is not what “conventional wisdom” would have us believe; and rather than stifling industry by introducing Stalinesque tractor production output quotas these people will breath new energy into Britain’s future.
Which is another reason why the public sector cannot afford to lose them!
Gramsci describes it more accurately as ‘false consciousness’ and Marx talks about it too.
Richard,
If JKB is the second best economist of the last century IYO, who’s the best? JMK?
You got it, in one
I’d buy you a drink right now if you were here, just to celebrate!