I agree. I am reminded of Richard Thaler’s distinction between ‘econs’ and ‘humans’. Econs are the obedient types, who behave as economic theory says they should. Humans make up their own minds and are not necessarily predictable.
D Oliver
1 year ago
Good article. The inability to distinguish between intentions and outcomes when formulating policy is one of the defining features of our time.
Will Will
1 year ago
A good piece.
Cancel HS2.
CHARLES STANHOPE
1 year ago
“The early data from China suggested that the death rate might be of the order of 3-4%. So it was reasonable to have an initial lockdown to try and assess the situation.”
No it was NOT. Have you forgotten the old adage “if you see their lips moving, then they are lying “? The Chinese are currently an existential threat to mankind, and everything they say should be instantly discounted.
Thanks to Ancient Greece and Roman ‘we’ are the greatest civilisation ever to grace this planet. Are we really going to throw it all away on the mutterings of Fu Manchu & Co?
Arkadian X
1 year ago
“Hindsight” is always great.
Anthony Sutcliffe
1 year ago
Great article. I don’t think it undermines the case for government intervention…but it needs to be intervention of the right type. The aim of the intervention must be to stimulate the private sector to set up myriad businesses and allow the market to solve market problems. Government intervention aimed at solving the problems itself means British Leyland.
David Harris
1 year ago
“The complexity of the world… means that governments and firms must be flexible.”
Firms usually are flexible and governments not. Why? Because governments spend other people’s money.
Jon Hawksley
1 year ago
Economic outcomes are the product of human behaviour driven by greed and fear and constrained by resources. This article is right in that it is not easy to anticipate collective behaviour, particularly when those outcomes are very different according to whether fear dominates greed or vice-versa. However achieving growth requires resources and throwing money at it when those resources are not available will either lead, with greed, to inflation or, with fear, to saving. The problem is politicians thinking they can just pull levers and make things happen. They need to check whether the train is on the right track and going in the right direction, and when they get that wrong, as the author says, be flexible.
Nicky Samengo-Turner
1 year ago
the great mass of computer key tapping jobsworthgnomes in nu britn hate, fear and loath risk and the unknown more than anything else: one only has to look at the sorbo rubber backboned attitude and compliance cum coroniaphobia to Covid, the police abuse of the law, and every other Quasi Stasi law passed by Boris, not least the hate crime Orwellianism.
We have a citizenship of a new GDR in waiting… as long as the monthly pay comes in, the Spanish holiday and car to impress the neighbours are not threatened…. actually they would be no different to thos in Germany in the 1930s who sent the authorities to the houses of The Jewish population.
AND… these people make up the majority of the Conservative party and their MPs… but not Rishi, and that is why we are so lucky to have him.
Tom Watson
1 year ago
“In 2019 the government piled up massive amounts of public debt with the furlough scheme.”
No doubt the author planned to write an article that didn’t contain howling factual errors. A perfect illustration of his point.
Aaron James
1 year ago
”Politicians act with good intentions.”
It started with a utter falsehood, and went down hill from there.
I stopped reading after the Vu-Du economics of Keynes
”All this was anticipated by Keynes, a much more subtle economist than many of his followers grasp. In his magnum opus, the General Theory of Employment, he championed the idea that extra government spending
Give up this unicorn economics and find some reality in Milton Friedman –
”Inflation is Always and Everywhere a Monetary Phenomenon’‘
Boris and Biden did the insane MMT thing – and now you are well and truly Hoist by your petard
And Sunak is the man who was steering the ship last 2 years as Exchequer – and now he is Captain of the blighted ship Boris before him wrecked on the rocks a hundred times…..
”“Day after day, day after day, we stuck nor breath nor motion As idle as a painted ship upon a painted ocean Water, water everywhere and all the boards did shrink Water, water everywhere nor any drop to drink.” ― Samuel Taylor Coleridge, The Rime of the Ancient Mariner”
“Inflation is always and everywhere a monetary phenomenon” surely needs putting to bed when we’re living through an entire continent having its gas supply switched off. Whatever your take on Keynes (and I’m no expert), he was indeed a much more subtle economist than many of his supporters (and detractors) grasp.
This article is tops. I congratulate the author on an excellent work.
I agree. I am reminded of Richard Thaler’s distinction between ‘econs’ and ‘humans’. Econs are the obedient types, who behave as economic theory says they should. Humans make up their own minds and are not necessarily predictable.
Good article. The inability to distinguish between intentions and outcomes when formulating policy is one of the defining features of our time.
A good piece.
Cancel HS2.
“The early data from China suggested that the death rate might be of the order of 3-4%. So it was reasonable to have an initial lockdown to try and assess the situation.”
No it was NOT. Have you forgotten the old adage “if you see their lips moving, then they are lying “? The Chinese are currently an existential threat to mankind, and everything they say should be instantly discounted.
Thanks to Ancient Greece and Roman ‘we’ are the greatest civilisation ever to grace this planet. Are we really going to throw it all away on the mutterings of Fu Manchu & Co?
“Hindsight” is always great.
Great article. I don’t think it undermines the case for government intervention…but it needs to be intervention of the right type. The aim of the intervention must be to stimulate the private sector to set up myriad businesses and allow the market to solve market problems. Government intervention aimed at solving the problems itself means British Leyland.
“The complexity of the world… means that governments and firms must be flexible.”
Firms usually are flexible and governments not. Why? Because governments spend other people’s money.
Economic outcomes are the product of human behaviour driven by greed and fear and constrained by resources. This article is right in that it is not easy to anticipate collective behaviour, particularly when those outcomes are very different according to whether fear dominates greed or vice-versa. However achieving growth requires resources and throwing money at it when those resources are not available will either lead, with greed, to inflation or, with fear, to saving. The problem is politicians thinking they can just pull levers and make things happen. They need to check whether the train is on the right track and going in the right direction, and when they get that wrong, as the author says, be flexible.
the great mass of computer key tapping jobsworthgnomes in nu britn hate, fear and loath risk and the unknown more than anything else: one only has to look at the sorbo rubber backboned attitude and compliance cum coroniaphobia to Covid, the police abuse of the law, and every other Quasi Stasi law passed by Boris, not least the hate crime Orwellianism.
We have a citizenship of a new GDR in waiting… as long as the monthly pay comes in, the Spanish holiday and car to impress the neighbours are not threatened…. actually they would be no different to thos in Germany in the 1930s who sent the authorities to the houses of The Jewish population.
AND… these people make up the majority of the Conservative party and their MPs… but not Rishi, and that is why we are so lucky to have him.
“In 2019 the government piled up massive amounts of public debt with the furlough scheme.”
No doubt the author planned to write an article that didn’t contain howling factual errors. A perfect illustration of his point.
”Politicians act with good intentions.”
It started with a utter falsehood, and went down hill from there.
I stopped reading after the Vu-Du economics of Keynes
”All this was anticipated by Keynes, a much more subtle economist than many of his followers grasp. In his magnum opus, the General Theory of Employment, he championed the idea that extra government spending
Give up this unicorn economics and find some reality in Milton Friedman –
”Inflation is Always and Everywhere a Monetary Phenomenon’‘
Boris and Biden did the insane MMT thing – and now you are well and truly Hoist by your petard
And Sunak is the man who was steering the ship last 2 years as Exchequer – and now he is Captain of the blighted ship Boris before him wrecked on the rocks a hundred times…..
”“Day after day, day after day,
we stuck nor breath nor motion
As idle as a painted ship upon a painted ocean
Water, water everywhere and
all the boards did shrink
Water, water everywhere nor any drop to drink.”
― Samuel Taylor Coleridge, The Rime of the Ancient Mariner”
Never attribute to malice that which is adequately explained by incompetence
“Inflation is always and everywhere a monetary phenomenon” surely needs putting to bed when we’re living through an entire continent having its gas supply switched off. Whatever your take on Keynes (and I’m no expert), he was indeed a much more subtle economist than many of his supporters (and detractors) grasp.