As a result of exchanges with Prof Danny Blanchflower on Twitter yesterday the 'Mile End Road Economists' appear to have been created.
The issue Danny raised, and which he invited me to join in with, was the transparency of those always advocating interest rate rises, which we both see as deeply detrimental to the interests of the ordinary people of this country, but which so many economists seem to want.
Danny took issue with two well-known economists who have both served on the Bank of England Monetary Policy Committee, as he has. One was Kate Barker, and the other Andrew Sentance. He made a simple request, summarised in a tweet he sent to Andrew Sentance, who now lists his main occupation as being a senior adviser to Cambridge Econometrics, in which he said:
This was during an exchange that began with Danny making this suggestion:
To which I responded:
Now, I should make clear that both Danny and I have form with Andrew Sentance, who worked as an economist for PWC whilst at the Bank of England.
I also have a history with Cambridge Econometrics. I was a director there until 2019 when the Board decided to appoint Andrew Sentance, very much against my recommendation. They asked me to work with him. I met him once and quit that evening. Sometimes you don't have to try something to know it is a really bad idea, and Andrew Sentance's ideas are really bad, and based on what I might call flakey economics at best, with a considerable dash of right-wing rhetoric added in. What Cambridge Ecoomnetrics saw in him I still don't know, and in that context, I think Danny's reasoning and questioning as to whether he was representing their views, and was being promoted to do so on behalf of their client base was quite fair. I also think the extrapolation to make the request generic was appropriate. It is wholly appropriate that economists be held to account for the interests that they represent. Other professions are required to do so. Why not economists?
I do disclose my interests and funding. I have always sought to do so.
The response from Andrew Sentance was to block us both. That's not exactly a mature or reasonable response, and it does still beg the question of in whose interests he really is promoting a rise in interest rates in the UK, and does Cambridge Econometrics, to whom he is a senior adviser agree with him, and if not why not, and why do they engage him in that case? Worse, it seems to imply that he thinks opacity is the right approach to this issue. It is not.
But there is another dimension. As Danny, who created the term Mile End Road Economists also said:
We'd welcome other Mile End Road Economists, but you will have to make your funding clear. And you'll need to act in the interests of ordinary people, and not a financial elite. That shouldn't be hard. But for some it seems that it might be.
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Quite fun watching Tony Yates wade in as some sort of mediator.
Here’s Steve Keen’s humorously scalding take on Tony’s views on the teaching of macro:
https://www.patreon.com/posts/introduction-to-43848097
Ouch.
I am not Tony’s greatest fan
He is not a fan of me either, it’s fair to say
I had an interaction with Tony Yates 3 years ago when Prospect published my piece “Rip It Up And Start Again: The Case For A New Economics.” Tony tweeted saying the article was “awful” (without giving any further explanation of why he thought that) and then had an interaction with Diane Coyle (who wrote a rebuttal piece in Prospect “In Defence of the Economist”) where he criticised Diane for taking too *negative* a view of mainstream macroeconomics! The guy seems to be living in a fantasy world where macroeconomics is entirely fit for purpose and beyond criticism. Fortunately, even most of the neoclassical economists out there aren’t buying his utopian view.
Spot on
They sunlight is a good disinfectant (it is..) and transparency is always necessary.
Keep it up!
I am not an economist and do’t really have any powers of advocacy. I can see that for a lot of people an interest rise at the moment could indeed be detrimental. On the other hand, because interest rates are so low those who are fortunate to have some savings are increasingly putting it into property as any ordinary saving account, even a longer term one means they are losing monetary value- so pressure on the housing market and prices will continue, raising prices, which in itself is not a good thing for the first time buyer on Mile End, or the renter from Mile End.
It’s a conundrum that I can’t see an easy way out of.
The very low interest rate is also enticing people to borrow more that as and when there is a tis ein interest rates will cause problems.
OK here are some decision criteria
Savers are wealthy (they have to be, having savings is the defitni0on of wealth)
Savers are usually older
They have higher incomes
They tend to own their own houses
Now, who do you want to bias, them or those less well off? The people in the City or on the Mile End Road in other words – those in or outside the walls?
But the point I was trying to make is that savers investing in housing is just pushing up housing and rent prices even more so that is hardly helping the less well off is it.
Accepted
So we need to reduce the subsidy that sector still gets from the state in the form of tax relief on capital gains and borrowing
Those that have a mortgage will lose out from higher interest rates. Including those that have had to borrow money from their parents to get on the property leader. Those that have 2 a household of 2 earners and are barely surviving.
Those that benefit from higher interest rates are the ones that after buying property have money left over and who don’t want to invest their time, money and labour in starting a business. These are the ones with surplus savings.
Those who default on their mortgage are young families. A few landlords wmight have to sell, but more than likely would put up rents for their tenants. And of course landlords with more money than sense will carry on buying property regardless.
I read you later post and commented there and gain satisfaction from reading this which is for me the more salient post.
Well done to Danny and well done for you to highlight it.
Boy, am I sorely tempted to go Twitter.
I think that declarations of interests should be made.
As for Mr Sentance, my post-Mirowski point of view is that not only are his motives rather opaque, but also that it is rather common these days in the practice of Neoliberal agnotology to employ rather dim, simple or fanatical people to say outrageous things in support of outrageous claims and ideas.
That is what we are seeing here.
But it isn’t just demanding increases in interest rates, even if it is a current hot topic. It is advocating policy changes that benefit certain segments of the corporate capitalist class and high net worth individuals (and the already wealthy and powerful) at the expense of ordinary citizens. All economists advocating these policy changes should be required to declare their interests and affiliations – and journalist should be required to put them front and centre when reporting the utterances of economists who advocate these types of policy changes.
This might help understand a bit more of the context
https://twitter.com/asentance/status/1429774285011308549
Then people can make up their own minds which of Blanchflower’s three motivations applies to Mr Sentance.
It could just be incompetence, of course
I would be wary of disagreeing with Blanchflower. He’s got a very good record.
I’m not an economist, though deeply interested for 40 years. I’m funded by my employement in a totally unrelated sector, and I totally support you and Danny Blanchflower in what you’re doing. Well done, and well said, it’s time those think tank funders were brought to the light, and the interest represented made explicit.
Academics are required, like many other professionals, as you say, no reason for economists not to.
Mile End etc… where do we sign up?
Except – hasn’t the idea of an “economy that works for the people” been touted numerous times before, and remains as unsupported an idea as it was a decade or so ago. Or – hey ho – shall we just get on with proposing the just societal infrastructure, and squawk when they stop us?
I am not claiming this is new….but we are finding another way to say it
Our angle is very much on transparency – using our social media profiles to say ‘why are you doing this?’
But we will bang some ideas out too
Fair enough! and this project may be more productive because you have a different, perhaps more economically literate, platform to that which some earlier ones targetted…
Just a note to say entirely agree with your campaign – cf. organisations’ refusal to say who sponsors / funds them. Moderately amusing that the latest Atlas Network pub, Freedom’s Champion , has an article in which the notoriously secretive IEA lauds its own achievement of a Brexit that gives the UK control of its trade.
https://www.atlasnetwork.org/assets/uploads/misc/Freedoms_Champion_2021_-_Web_Spreads_2_%281%29.pdf?utm_source=Atlas+Network&utm_campaign=d158d2aab7-EMAIL_CAMPAIGN_2021_08_19_05_53&utm_medium=email&utm_term=0_12f788371f-d158d2aab7-64155055
The weirdest thing about this, for me, is why Cambridge Econometrics would need Andrew Sentance as a ‘senior adviser’. Having done a bit of work with CamEcon recently, they’re an intellectually high-powered outfit with a lot of very good technical people. Andrew Sentance is more of a general macro kind of guy, so it’s unlikely he can teach them much on the technical side. And on the policy side of things, Sentance seems somewhat unhinged: his latest blog on the CamEcon website (https://www.camecon.com/blog/jobs-recovery-brings-inflation-warnings/) is about the risks of inflation and makes the rookie error of not distinguishing between one-off shocks to prices (I would argue that Covid-19 is largely a one-off shock based on a temporary reduction in labour and product supply due to lockdown) and sustained price increases (along the lines of what we saw in the 1970s – I would argue we’re simply not in the same situation we were back then). My guess (and I should stress this is entirely my own view, not informed by any conversations with CamEcon personnel) is that Andrew Sentance has been hired to provide some “star quality” (as an ex-MPC member) that they can put on applications and use to “glad-hand” potential clients, etc. Of course, if you’re going to hire an ex-MPC economist as an adviser, Danny Blanchflower would be the obvious choice if you want someone good!
You share my bafflement
There are really good people at Camecon
I am still bemused as to their logic for doing this – and they know that
Mile End Road always makes me think of the Blind Beggar pub, the Krays and their activities.
The Blanchflower and Murphy gang terrorising those City economists perhaps?!
🙂
For me for many years it was my route home
The Mile End Road Economists……Brilliant. Putting this approach to journalists and urging them to engage would surely add a little to the impact…..but I suppose that may already be happening. I have a contact in the NUJ world and will push this there.
We need the leading broadcast economics journalists to take this on but i fear that most are not remotely aware of the degree to which they accept the status quo; it sometimes looks more like reflecting power to power rather than speaking truth to power.
Alan Wallace
Thanks