I attended the launch of the Progressive Economy Forum in the House of Commons last evening. I will be at its first council meeting today.
The Forum is a joint venture between CLASS (The Centre for Labour and Social Studies, of whose advisory board I am a member) and London based solicitor Patrick Allen, who is sponsoring its work.
As the Forum says on its new web site:
The Progressive Economy Forum (PEF) is a group of economists who have come together to launch a new macroeconomic programme, founded on the progressive values of equality, dynamism and sustainability.
To this end, the Forum aims to develop, advocate and disseminate progressive policy ideas for the UK economy. PEF also seeks to inform the public, policy makers, politicians, activists and the media of the principles of progressive macroeconomics, and of the possibilities offered by this new programme.
It adds:
We will represent a diversity of views and encourage innovative analysis, sharing the following principles:
- Economically informed citizens are essential to effective policy-making in a democratic society.
- A strong public sector that provides essential social services, such as health, education, transport and housing, is the foundation of a fair society.
- Active macroeconomic management, fully accountable to citizens, is key to achieving an equitable, dynamic and sustainable economy.
The twelve founding economists of the Forum are:
- Dr Ha Joon Chang
- Ann Pettifor
- Prof Daniela Gabor
- Prof John Weeks
- Lord Robert Skidelsky
- Dr Johna Montgomerie
- Prof Stephany Griffith-Jones
- Will Hutton
- Prof Simon Wren-Lewis
- Prof Danny Dorling
- Prof Guy Standing
- Prof Richard Murphy.
At the very least we should have some interesting discussion, but I am hoping for a lot more than that, with a focus on creating accessible materials to increase understanding of how the economy really works.
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[…] yesterday was a good day for getting new ideas going. In addition to the Progressive Economy Forum, launched last night, a new institute was launched that will promote UK understanding of modern monetary […]
Never been more urgently needed. In my view the economics “profession” does not even yet understand how the economy wored in the past, let alone how best to shape the future.
This is bad news, because we now face the most rapid era of economic upheaval in human history, druven simultaneously by :
Globalisation of 21st century trade and commerce, operating in a 20th century framework of national regulation
Acceleration of automation and AI disrupting employment in all sectors, abd creating rapidly rising inequality
Overwhelming need to change whole base of our economy from fossil fuels to renewable energy
Urgent need to switch to a circular economy that can extend an acceptable standard of living to a record Global population, while working within our planetary limits.
Any one of these challenges on its own would be incredibly daunting, but to face all at once in the space of the next decade goes way beyond current economic thinking.
Good luck to your team. I hope you will share as much of your thinking on line as possible, so that you can also gain from a sparking ideas outside the group.
That’s certainly a diverse panel. There will be probably be 12 different definitions of austerity among that line-up including believing that it ended over 5 years ago to any amount of government spending that occurs when we are below full employment. I bet there would be 12 different views on how to go about reforming the EU too.
There’s nothing wrong with a diversity of views
I wish those participating in this forum well. But I fear it will provoke either MRDA (Mandy Rice-Davies Applies) or damning with faint praise among the broadcasters and opinion-formers whose assessments are required to secure some traction in the public domain.
My personal view is that the broad corpus of economic theory and practice is not in a bad shape. There are always deficiencies and shortcomings, but it is a living organism that is constantly renewing itself.
It is only when it comes to the impact of the relatively small portion of economic theory and practice on public policy that most of the prominent economists who operate in this area and the economcs they practice have been captured by corporate capitalists, oligarchs and high net worth individuals (HWNIs) – and by the armies of well-heeled professional flunkies and functionaries they retain. And the latter, in turn, have also suborned the governing politicians.
This is what gave us the “efficient markets hypothesis”, the de-regulation of finance and of the trading of derivatives, the privatisation mania, the demonisation of anti-trust policies, the protection and cossetting of monopolies, the emasculation of economic regulation, the rigging and subversion of market mechanisms, the never-ending unproductive pursuit of economic rents, the concerted shrinking of the state in terms both of the provision of services to those most in need of them and of the co-ordination of the provision of public goods, the marginalisation of trades unions (sometimes self-inflicted) and the exploitation of individualised, atomised workers and consumers.
The existing corpus of economic theory is well able to describe, explain and quantify these outcomes. But it would be career-threatening, if not career-ending, for many of those in positions of authority and influence, and with the necessary knowledge and competence, if they were to address these public policy outcomes and to propose remedies. Indeed those who facilitated and justified these outcomes (or turned a blind eye) were and are well rewarded.
The sad reality is that many of those who benefitted previously from progressive policies, or who would benefit in the future, do not vote, or, often impassioned by other issues, vote against their interests. Those who benefit from the current dispensation are much more focused on pretecting their often ill-gotten gains. Unfortunately, the opposition that most frightens the current elites and is proving most effective in crude political terms are various shades of xenophobic, populist nationalism. The rise of Jeremy Corbyn in Britain is simply the vaguely comic exception that proves the rule.
I note what you say
But I have to say that I cannot agree: there is abundant eveidence that macroeconomics is in a profoundly sorry state even if micro may be in better health
I think you are confusing the two. It’s commonplace
I would still content that it is more the result of deliberate distortion, selective use and abuse of economic theory and practice than a failure of the discipline. I expect we’ll have to agree to disagree. In any event you have Prof. Wren-Lewis on board to highlight the extent to which established macroeconomic theory and practice are being deliberately abused and traduced.
Simon and I do not entirely agree
BUT even so Simon clearly thinks macro does need reform
Hope you are using the findings from the Framing the Economy by NEF on how to communicate better on a progressive economy: http://neweconomics.org/wp-content/uploads/2018/02/Framing-the-Economy-NEON-NEF-FrameWorks-PIRC.pdf
Thank you
I am familiar with it
What a very exciting development this looks to be though I’m not quite sure I knew that Robert Skidelsky was the son of a duke.
Great! Impressive line up. Has anyone thought of involving Kate Raworth?
Others are to be added – I think Kate would be a great person to be on it
Good. thank you.
Richard,
As well as working on a new macroeconomic programme and accessible understanding of how the economy really works, may I encourage this illustrious panel to use their positions to develop education in how to influence political economy in practice. Business schools teach people strategy, tactics and methods for practical enterprise, including accounting, marketing and policy advocacy, but there are very few courses in how advocate change in public policy. As Paul Hunt says, certain groups have been highly effective in setting the intellectual and policy agenda for political economy, but there many other policy frameworks on taxation, regulation, corporate governance, social protection etc., which don’t have have powerful lobbies behind them. But with political skill and knowledge, citizens can make a difference, as you and others on your panel know from experience. The trouble is we don’t teach practical politics and assume that getting the ideas right is enough.
My book Practical Politics: Lessons in Power and Democracy shows why and how we need it. People like Prof Alberto Alemanno (author of Lobbying for Change) and Duncan Green at the LSE are actually teaching it, but they are the exception. Members of PEF could use their position and experience to run courses on creating change in practice.
Titus
Greetings, and good to see you here
I would love to teach more of this: getting such matters on the curriculum of any university is very hard – as Ha Joon Chang ally argued
But I do think education is vital now
It is what I see the rest of my active career being abiut, as well as some campaigning of course
Best
Richard