Polly on economics?

Basic economics still has the nerve to teach as fact that markets are more rational than public servants can ever be

Leave aside whether it\’s true or not…..I\’m certainly not sure that the teaching is that markets are more rational. Better informed, more efficient perhaps,……..and just listen to the outrage there. An entire science that I know little of says something different to what I believe. How dare they!

11 thoughts on “Polly on economics?”

  1. Surreptitious Evil

    Many public servants are indeed rational. But “public choice theory” exists to tell us that there might just be a small misalignment of incentives between them and the public they are supposed to be serving.

  2. I like this bit out of a totally disjointed and incomprehensible article.

    “The crash and the slump should have ignited a sense that government is often all that stands between us and disaster, but the foghorns of the right succeeded in blaming government more than runaway financiers.”

    I didn’t realise the right had won the argument that the blame was due to the government. Everywhere I look I see the bankers being blamed.

    However she is right, for once. It was government that caused the crash with the two Freddies in the US and the emphasis on property values here in the UK and elsewhere. It was government fiddling that twisted the markets until they blew up.

  3. Ordinary plebs interacting with each other produces a more rational system than micro-management by the Great and the Good (I.e. Polly and chums). How preposterous!

  4. Business has the right incentives. It’s got to make a profit. And what does profit generally equate to? That it’s something that lots of people are going to use (or in the case of Ferraris, that a small number of people are going to pay for).

    The state? A PM can just get an idea in his head (HS1, HS2, The Olympics, Connecting for Health) and money gets spent. It’s not their money, after all.

  5. Like Polly I am not an expert on economics.
    However I would that the USSR would have shown that markets are better than “public” servants.

  6. pedant2007,

    That’s exactly the point. Markets keep doing things which are obviously wrong to anyone with half a brain. Some of us look on in wonderment that the system has managed, apparently without guidance, to discover and use the right solution despite the fact that no rational or sane person would have done so because the right solution appears to be completely bloody stupid. The Pollies of this world refuse to let go of the solution’s apparent obvious wrongness just because it works and conclude that markets are irrational.

    Funny thing is, there’s so much overlap between people who ridicule the claim that this can work with markets and people who ridicule the claim that it can’t work with evolution. Well? Can external pressures cause an unthinking unguided system to reach cleverly designed outcomes or not?

  7. “The triumph of anti-state neoliberalism has for decades cowed the case for government as a force for good.”
    No, it was Krushchev exposing the evils of Stalin and mass starvation under Mao.
    As I have said before, I visited Albania while it was starting to recover from 40-odd years of Communism. I do not dispute that government *can* be a force for good (but unlike Polly, I do define subsidising the Grauniad so that she can be paid a vast salary that she does not earn and anyone not buying the Grauniad is unable to apply for cushy or even not-cushy jobs in the public sector as “good”) but I am *very* aware that government can be a force for evil.

  8. Nice to see that she is conscious of the example of North Korea as the strongest evidence that no state ‘Courageous’ or otherwise should ever be allowed to grow as powerful as she would advocate!

  9. Oh dear: I omitted thew “not” before “define” but due to the lack of outrage I assume that everyone realised that this was just a typo

  10. Notice Timmy does n’t lock horns with some -time adversary Deborah Orr who in Saturday’s Guardian “Neoliberalism has spawned a financial elite..” p 47 knocks the markets uber alles argument into a cocked hat ,demonstrating very ably that markets don’t just appear out of nowhere.
    “The basic problem is this: it costs a lot of money to cultivate a market- a group of consumers- and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy , cultured law-abiding and financially secure people- people who expect to be well paid themselves, having been brought up believing in material aspiration as consumers need to be.
    …Markets cannot be free .Markets have to be nurtured .They have to be invested in .Markets have to be grown. Google, Amazon and Apple have n’t taught anyone in this country to read. But even though an illiterate market would n’t be so great for them, they avoid their taxes…”
    I would add ,on my own account, that you can’t nurture a sophisticated modern market when people are saddled with so much mortgage debt ,for so long, that they are already living in what Albert Edwards of Societe Generale calls “Indentured Servitude” (showing a rare grasp of Economic History among contemporary commentators).Nowadays the same phenomenon is known as the One-Party Homeownerist State.

Leave a Reply

Your email address will not be published. Required fields are marked *