With apologies to my non-Scottish readers, what is happening there continues to be of economic and political interest when the rUK only has Brexit and the farce of both Tory and Labour positions on that issue to consider.
And let's be honest there is something to debate there when in Westminster there appears to only be consensus on a) promoting politically fantastic ideas on Brexit and b) crashing out of the EU.
The latest twist on Scotland is a new report that CommonSpace reported yesterday, saying:
An off-shoot paper from the SNP's Growth Commission has echoed its economic strategy but for a devolved context, advocating fiscal discipline, restricting government expenditures and tax competition with other small nations.
As they add:
‘Policy insights for Scotland from small advanced nations', authored by Dr Skilling, who sat on the SNP's Growth Commission and is a former New Zealand government economic advisor, was launched in Edinburgh this morning [7 June] with Tory shadow Finance Minister Murdo Fraser, Labour Economy spokesperson Jackie Baillie and SNP MSP Kate Forbes speaking at the launch.
So, Dr Skilling, who was an adviser to the neoliberal New Zealand government that has been rejected by its voters, put forward pure Washington Consensus neoliberal nonsense straight out of the George Osborne austerity copy-book as a spin off from the SNP Growth Commission, which Skilling advised, and Labour and the Tories applauded.
Please don't tell me that the neoliberal consensus is not alive and well and in UK politics - as it very clearly is.
I am, however, hopeful that this weekiend's SNP confernece many see a backlash begin, however, co-ordinated the leadership's backing for the trusty awful Growth Commission recommendations might be.
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Here are some figures from New Zealand that the Scottish people might like to consider along with the ‘policy insights’ (courtesy of UNICEF):
27% of their children live in ‘income poverty’.
15% of their children live in ‘material hardship’:
https://www.unicef.org.nz/in-new-zealand/child-poverty
David Skilling is just another neoliberal stooge, ex Mckinsey etc. His ‘ advice ‘ comprises the same old, same old neoliberal game so clearly identified by Foucalt all those years ago ‘ Set the market against the state and ultimately treat the state and all its doings as a marketplace ‘ . If the Growth Commission adopt his recommendations it won’t end well for the people of Scotland .
Professor Murphy, thank you for your thoughts which I find most interesting. I share a lot of your blogs on pro Scottish independence Facebook group. I find that MMT resonates with many supporters. However, not with all by any means.
In response to sharing this blog someone has said “Check his blog. Murphy is peddling a new-ish economic fad called Modern Monetary Theory. This controversial and untested approach is evangelised by small clique of left-leaning economists and intellectuals mostly in the US who are looking for an unsuspecting guinea pig. Step forward Scotland”.
Are you able to point me to something robust to show that MMT is not as he labels it? That is “untested”. I’d be most grateful.
I will answer in a blog
That would be very helpful thank you.
Maybe today….
Calmly explain to SNP doubters there’s nothing left wing or right wing about MMT. It simply describes how a sovereign nations monetary system works.
Firstly, if MMT is being pushed “by small clique of left-leaning economists and intellectuals”, ask them how come Wall Street market practitioners fully endorse MMT? No better an example than the biggest trader of US government bonds in the last 10 years (one Glen Hadden) explaining here in his own words on YouTube (at 17:15)…
https://www.youtube.com/watch?time_continue=881&v=N8FhDsuJnvk
Moreover point out that, unlike mainstream neoclassical economics, MMT is entirely consistent with the research findings of historians and anthropologists of the role of tax-driven money played throughout history and across civilisations (e.g. David Graeber and his book “Debt: The First 5,000 years). The evidence is utterly compelling in that regard.
You might also point out that serious world-renowned economists, such as Professor Jamie Galbraith (son of JK) and Professor Lord Robert Skidelsky (an expert on Keynes) fully endorse MMT. Another economist of note, whose thinking is very close to MMT, is Professor Charles Goodhart of the LSE who was a former member of the Bank of England’s Monetary Policy Committee.
Finally, to keep things nice and simple, why not recommend this beguiling cartoon short of the power that having its own currency bestows upon a nation (in this case the US $, but the story is exactly the same for the UK £ and for a future independent Scotland with the Scot £)
https://www.youtube.com/watch?v=TDL4c8fMODk&t=11s
Thanks
Good article from Naked Capitalism which reveals the “Neoliberal Consensus” has actually been with us for centuries and would appear to be largely the product of shallow or superficial deductive thinking as opposed to careful inductive thinking. In short the Enlightenment and Age of Reason had limited penetration amongst the human species. The Naked Capitalism article is of interest as much for the comments many of which are educationally instructive why the “Neoliberal Consensus” is a clunker:-
https://www.nakedcapitalism.com/2018/06/worrying-deficit-17th-century.html
It is not a phenomenon peculiar to economics; the point is well-made. The public, influenced by Neoliberal arguments, are responding to two features; the supposed authority of the “experts” (so much media ‘news’ is presented by ‘experts’, ‘think-tanks’, but nobody asks – whose interests do they represent, who pays the bills; everybody is for hire), and a certain intuitive ‘plausibility’ in the case being made. The public is more easily duped than we think is possible: ‘household budgets’, ‘tax and spend’. Randall Wray thinks MMT scares people too much; as description it seems sinful, wanton – and an “explanation” is needed (sounds to me like join the dupers!).
What MMT needs is momentum, and for me Scotland is the case all of them; Kelton, Keen, Mitchell (who has at least wtitten about it), Pettifor should be charging in. As an example of the impact in Scotland – Look at the effect Richard has had in Scotland, from a ‘standing start’ (with Dalzell, McAlpine and Common Weal). The ‘water’ is actually conducive, albeit the public is apt to start misinformed and lazy; the effort to understand such counter-intuitive ideas seems excessive; but eventually, the penny drops, because it is a sound explanation, it provides some usable answers to dispel problems made too difficult, and unwarranted fears; and the Scots believe in education.
Oh, I missed Wray in my list of names. Mea Culpa; we need them all.
Thanks
Change is possible
Schofield
Have you got the difference between inductive and deductive thinking right dear chap?
Here is a definition from the internet:
“……inductive reasoning starts with a conclusion and deductive reasoning starts with a premise. … Therefore, inductive reasoning moves from specific instances into a generalized conclusion, while deductive reasoning moves from generalized principles that are known to be true to a true and specific conclusion.”
To me neo-liberal economics has always been (and always will be ) inductive. I mean, look at ‘trickle down theory’ (and to add the word ‘theory’ to trickle down is an insult to theory generally).
No, no, no; sorry that is quite wrong. The quote below is from ‘The Oxford Companion to Philosophy’; a dictionary of phislophical terms:
“Scientific reasoning from observations to theories is often held to be a paradigm of inductive reasoning”.
MMT is inductive in these terms; it describes reality first. Neoliberalism is deductive; it produces theories independent of observation of reality. I oversimplify, but you catch the significance.
I have sympathy with John here, I am afraid PSR
Indeed I do.
Deduction seems to me to be genuine thinking whereas induction is more like a passive acceptance of any theory whatsoever – lazy thinking in other words. Thanks anyway.
Deduction is abstract; it has little to do with the real world, science or social science. It is the reason that most mathematical physicists are not just mathematicians. I do not doubt that it can be rigorous, but most of the time I think you have this upside down; rather like the neoliberals: lazy abstractions so they do not need to grapple with the awkward real world. Sorry.
Surely both are valid. Many (all?) mathematical theorems are deduced and maths is the basis of the universe. Each method is appropriate according to circumstance.
Platonism. It makes some mathematicians feel authoritative.
“The test of all knowledge is experiment. Experiment is the sole judge of scientific ‘truth” (Feynman).
The problem is, all theory is provisional, and subject to revision – as knowledge extends through new experiments (nothing is a theory of everything).
Well yes, but trial and error is often a lot quicker. 🙂
As GK Chesterton observed
“More wisdom is required to profit from ‘good advice’ than to give it.”
(My parenthesis)
The neo-liberal hegemony is far too alive all over the planet. For the past 46 years it has extended its reach into the daily lives of almost everyone on the planet in one way or another. For good reason comparisons are made with religious ideology but it’s actually been more destructive in terms of lives lost via industrialised wars, agriculture and iatrogenic medicine – not to mention the exponentially growing issue of mental health across the globe. It’s a pernicious political matrix that hung its credentials on a faux economic theory financed by its perpetrators.
However, unlike institutionalised religions that offer salvation in the life hereafter, neo-liberalism has enhanced the earthly material well-being of billions of people, without any concern for the cost to society and the planet. It is legalised drug dealing (an industry with which it has unseen affiliations) in the sense that excessive materialism also creates a state of unsustainable euphoria. As George Carlin said: “That’s why they call it the American Dream, because you have to be asleep to believe it.”
Sorry for repeating what has been said a million times before by significantly more erudite people than me. It’s just that it, in spite of decades of progressive protest, it hasn’t yet permeated into the mindset of the 95% (arbitrary number) that they are being fxckxd over by these neo-liberal protagonists whose agenda does not include the general well-being of society. The Hudson-esque parasites skillfully learned how to let just enough money trickle down to keep the host alive and prevent overt social unrest. As we now know, it has worked brilliantly … for them. But maybe, just maybe, they’re reaching ‘Peak Piracy’ as their victim hosts are simultaneously wising up and gradually running out of disposable income/credit.
What’s all this got to do with Scotland? Well, exactly the same as it has to do with the rest of us. The Scottish situation just helps to bring the issue into closer, more detailed focus and subsequent scrutiny. It’s a mini blue-print for the world. My fear is that the sociopathic neo-liberal hegemony has a lot more life left in it yet. For years (decades) to come it will continue to shapeshift and re-invent itself, but like all man-made ideologies it will eventually self-destruct, happy to bring down societies with it. The answer? To have alternative structures already in place and ready to fill the vacuum. Which is why, on a micro-level, this and the legion other progressive ‘vehicles’ around the world are the essential building blocks for a better future. On that slightly more positive note, end of rant.
I get exhausted just thinking about it all. Goodness knows, Richard, how you find the energy to multi-task as actively as you do. Ever more strength and power to you. Barista, un grande caffè corretto per favore 🙂
PS: I hope your son is making solid progress and enjoying his philosophy ‘sabbatical’. I wonder if he would enjoy Ernst Schumacher’s ‘A Guide for the Perplexed’ (https://www.brainpickings.org/2014/08/05/a-guide-for-the-perplexed-schumacher).
Thanks
I’ll let you into a secret: after my second conference in two days – co-leading this one – I am exhausted
It will be a quite weekend
And my son needs the same thing, I think. But he seems OK.
I have not read that one for many years. It is on my bookshelf though….I will drag it down
“I’ll let you into a secret: after my second conference in two days — co-leading this one — ..”
Yeah, but I bet you looked like you were having a fun day out…..
Best to the son, you’ve both had a hell of a week.
Draw breath.
I always look like I am having a fun day out
I enjoy mot of my work
Although there are always moments….
I don’t have an economics or an accountancy background but this blog has been an education to me and has highlighted the economic bullshit we are fed on a daily basis but on this occasion you may haven missed the point Richard, the growth commission or Mr Skilling won’t decide economic policy in an Independent Scotland that will be done by the elected goverment which in my view would not be the SNP since an independent Scotland would have no need for an independence party.
Neo liberalism may be wrong but it seems to be the prevailing consensus and these are the people that need to be persuaded to vote yes. When people change their opinion they do so in small steps. Jumping from neoliberal unionist to Independence supporting MMT enthusiast is too big a jump. When persuading someone it is best to start from a point of view the person you are persuading can at least partially agree with.
After independence there will be a large realignment of politics in Scotland and that is the best opportunity for those in favour of MMT to make their case.
Jim Perston says:
“I don’t have an economics or an accountancy background …..” Neither do I, Jim.
…..”….but this blog has been an education to me….” Diito. Endorsed in spades, with hat tip to contributors.
I quite agree that an Independent Scotland will need, and no doubt develop, a polity representing the entire range of political views (and prejudices…in the case of those I don’t happen to agree with 🙂 ) Will the SNP wither? Who knows. Not quickly I suspect, but I take your point. SNP has IMO been doing the ‘day job’ competently and I would hope to see the party being central in building the country they aspire to create.
“After independence ……. that is the best opportunity for those in favour of MMT to make their case.”
I hear this argument, loud and clear, and frequently, but it worries me that if the independence settlement (divvying of assets and liabilities, for one thing) is done without Scotland having the complete suite of financial infrastructure, that an independent currency requires it may be impossible to bolt on as an afterthought.
My view is that the currency is the engine of independence, not a nice to have accessory.
If I’m right, (based on the opinions of people who know far more than I do about the technicalities) we have to sell the proposition of the Scottish ‘Poond’ as a basic requirement of independence that will enable the desired future.
As I said in a recent exchange, if we don’t get the currency, I’ll probably retire to a quiet glen and breed unicorns.
My view is that the currency is the engine of independence, not a nice to have accessory.
This is worth reading – power and elites in Scotland trying to capture Independence: https://www.commonspace.scot/articles/12860/david-jamieson-growth-commission-charlotte-street-partners-and-scotlands-ruling-class
I think this piece reveals most of what needs to be known about the Growth Commission
And its allies
Interesting link to the Charlotte Street Mob(sters), G Hewitt.
Thanks. Read and bookmarked.
@ Jim Perston
I don’t agree. The process you describe, as I understand it, has led us to the critical state the West now finds itself – with social democrats in retreat and right-wing nationalist parties in the ascendancy. Current available research suggests this is because the social democrats (incl. UK’s Labour Party & US Democrats) bought into the neo-liberal agenda precisely for the reasons you give. It was thought to be the best strategy to gain and retain influence over the centre-ground electorate. In the process they’ve lost out to a) their core voters, who feel disenfranchised and hence are seeking solace with less progressive parties; and b) the broad middle-classes who eventually think ‘why settle for a watered-down version of the real thing’ and vote centre-right. New Labour was a prime example and more recently Germany’s SDP. And although the American political scene is somewhat different, Trump’s victory was more to do with the failure of the Democrats.
At critically uncertain times like these voters want a vision for the future that they can ‘buy into’. In the absence of this they tend to stick with the status quo or align with regressively more authoritarian parties who appear to offer some form of national immunisation against hyped-up external threats. While thankfully it’s not 1930, there are some general similarities driving voter behaviour. Yes, it takes a lot of political courage to offer radical change. Bernie Sanders went some way to showing what could be achieved given an opportunity he was deprived of. on the other hand I’ve never been sure that Jeremy Corbyn is ‘the man for the job’ here in the UK because he lacks authenticity (IMHO). Scotland certainly has an opportunity to show that radical change is possible but maybe the time is still not quite right. The death rate has an impact on voter profiles and Conservatives tend to have fewer years ahead of them than progressives. Similar demographic factors apply to NI.
MMT will have to be at the core of any party offering a progressive vision for the future. And any such party cannot afford to be timid about it. “Neither do men light a candle, and put it under a bushel, but on a candlestick; and it giveth light unto all that are in the house.” (Matthew 5:15 – lol).
PS: I should’ve mentioned the alternative, which I intimated earlier, and that is to wait until the neo-liberal programme self-destructs wreaking ever further misery on the general population. That is why the opportunity offered by Scottish Independence will hopefully attract so much international interest, as suggested by John S Warren.
John D says:
“….the alternative, which I intimated earlier, …. to wait until the neo-liberal programme self-destructs …..”
A bit like the dark ages theory….. It’s not a pretty scenario and one which we have political thinkers to prevent. In theory.
” That is why the opportunity offered by Scottish Independence will hopefully attract so much international interest, as suggested by John S Warren.”
Indeed this is my hope; that an independent Scotland is small enough and smart enough to set out a new road map.
It’s not an untrodden path; there are plentiful examples of countries which loosed the bonds of Empire and have thrived, and there has been no one single pattern. Amongst Scotland’s immediate neighbours no two have even the same relationship with the EU. The spectrum ranges from being part of the Eurozone to being a fairly casual acquaintance.
I recommend “McSmorgasbord” by Leslie Riddoch and Eberhard Bort, as a series of concise portrait sketches of very differently organised independent states. There is no one-size-fits-all prescription, each tries to harness the best of its resources and has done so only from its own unique starting point. Finland and Iceland are about as different from each other as they are different from Scotland.
But all offer insights.
I am a retired pipe layer roofer concrete worker banksman factory worker miner farmhand and more all I can say is most of us producers for our country want is enough to feed heat and clothe our family we want enough ribbon not just to join together but tie a littli bow instead of talking gobbly gook I have about 400 friends who have made prob over several millions in there life time for the country through hard work thing is I di not think any of them know what a neo liberal hard right soft left or all the fancy books you read all they want is work producing goods any one on here actually making money for the country or just talking shit
In my time I reck9n I have helped quite a lot of people work for a living, whilst doing the same myself
My aim is simple: well paid fuel employment for those who want it is what I would like
In all the detail never forget that is what the argument is about
Many do not share the view
Derek hannon says:
” I have about 400 friends who have made prob over several millions in there life time for the country ”
Maybe you have, or maybe you’ve made a fortune for somebody who doesn’t give for you or the country you call home and has shifted the profits away to a tax haven in the sun.
As you suggest, most people just want to make a decent living doing what they can or preferably are good at.
People who ‘talk shit’ on here would like everybody to be able to do that I think.
You and your fronds included.
fronds….!! Friends.
I like the fronds
So I left it
(Sometimes I do edit typos in comments, because I never make any 🙂 )
Andy Crow:
Apropos of nothing: in answer to you on another thread; yes, you jumped in with a crossed-wire. The comment you thought I directed to you was directed to a comment by Schofield. Just for clarification.
Okay, this is meaningless to everyone else here. Apologies to all whose eyes have glazed over.
I have been thinking that the last 8 years of Austerity have been rather like a massive clinical trial. The difference is that in Medicine, you look at the side effects, also when it is clear that the drug is not working, you stop the trial. In Economics, you ignore the side-effects, you cherry-pick the data, and then you conclude that you need to double the dose of the ineffective drug.
Michael Green says: “when it is clear that the drug is not working, you stop the trial.”
And sometimes the patient dies as a result of the trial. There is evidence that austerity may have caused deaths. (although other explanations are available) https://fullfact.org/health/austerity-120000-unnecessary-deaths/
[…] Howdle posted a comment on this blog in which he […]
Maybe the non neo liberals should leave Scotland alone. ( is that you) Your interest in Scottish Independance seems to be wholly related to your experiment in MMT with Scotland being the guinea pig. Nothing wrong with that , it might work well , it might not. But the fact is you don’t really know. As a Scot I find your interest in our independence baffling , you were not born or brought up in Scotland so maybe you should back off a wee bit. It’s our country after all and we all ( us Scots that is ) disagree on how we should run it. Last thing we need is foreigners poking their oar in
I note your email address
It does not suggest you are in a position to comment
And I was invited to comment: is that so wrong?
I am a Scot , and live in Scotland , and I am a Unionist. I make no apologies for that. With respect I am in a position to comment. It is after all my country. It is not not yours so with respect perhaps you should back off. I know you will not because you think you can impose your views just because you want to experiment with MMT and if it is is disaster , we’ll who cares it’s only Scotland.
I reiterate: I comment because I have been asked to do so
Michael says:
Some intemperate things in an ill-mannered tone, which fortunately in my experience are not typical of the people of Scotland.
Certainly not the ones I associate with anyway, although I pick up similar vibes in local online discussions from time to time to time. I get the impression many of them do very nicely out of the largesse of Westminster and quite like being on what they seem to see as a good screw being subsidised by the English. They don’t seem so happy that poorer people should be in receipt of any government benefits at all however.
Many are complacent , careless of the welfare of others and frankly, often very rude.
I wish they would go away, but they probably think I should. So we’re about even.
You reiterate what? You do don’t really do debate do you? Anyway , comment away , you are ignored my most clear thinking Scots.
I have always been told I am ignored by those with fingers in their ears
I know damned well I am not
You would not be here if that was the case
[…] Howdle posted a comment on this blog in which he […]