Your inviting Our Wullie over to advise you on how to get out of your economic mess is amusing to say the least. For the Japanese economy is the end state of Huttonism.
Hutton thinks that if clever people like Wee Willy Hutton tell everyone else to do then the economy will grow off into the indefinite future. This is pretty much what Japan did for decades when all the clever people were in MITI.
But there comes a point when this does not work. As explained by a real economist (ie, not either Wee Woolly or myself). Essentially, when playing catch up growth the clever people telling the proles to get educated, stick the women into the workforce, mechanise agriculture, this all works, to a point. When you get to the technological frontier this works no longer.
For a very simple reason: uncertainty.
No, not risk, but uncertainty.
When we\’re trying to grow at that frontier we face the fact that we just simply do not know, among all of the possibilities, what it is that people will value. Thus, given that GDP is a measure of value added, if we don\’t know what it is that people will value then we cannot know what it is that will increase value created.
It does not matter how clever people are. Doesn\’t matter whether those clever people are in academia, the bureaucracy, politics, big business or small. No one knows and no one can know.
If you can point me to any of the above who predicted Angry Birds, pet rocks, consumer use of SMS or the popularity of Strictly Come Big Brother Darts Playing on Ice then I might be persuaded otherwise.
At this limit of what we know how to do we have no alternative to a pure market system. Not because we don\’t have clever people but because being clever ain\’t the point. Being lucky is. We need the tens of thousands of experiments, the 9,999 snds of failures, before anyone clever or not can work out what is adding value and thus is growing the economy.
And this is what I insist is wrong with Huttonism, that he just doesn\’t get this basic point. He\’s living in a country, he\’s advising one, where the problem is not insufficient guidance by the clever, it is the impossibility of guidance by the clever. So advocating such guidance just isn\’t going to work.
In Japan, …… toilet seats are electronically warmed and cleaned;
Willy\’s elderly British Bottom was thus presented with a warm and clean seat from which to crap his advice to you. So that\’s OK then.