Third, the moral bankruptcy of neoliberal thinking has been exposed, and as a consequence the entire moral foundation of our economy has collapsed. The aberrational, and even mad (I use the term advisedly) thinking that underpins our economics, which suggests that we are all entirely selfish individuals, born without empathy or concern for others, has to be eliminated from our education system, where it has represented a pernicious form of corruption. At the same time its impact has to be removed from the structuring of our economy, where it has driven us to the brink of massive failure.
Who says peeps are without empathy? We have rather a good description of it – called sympathy but still – in Theory of Moral Sentiments. By, you know, Adam Smith. Even, actually, a discussion of mirror neurons – not that they were called that then – in the discussion of the watchers of the man walking upon the tightrope.
Equally, that discussion of how the man might think his finger or summat is more important than a million Chinee. Which is rather how humans work, that empathy radiates out and declines by distance rather like gravity, squared and distance and all that.
But isn’t it lovely to know that all this must be banished from the education system? We must, that is, be censored into Spudnomics as we can’t and won’t reach it by any other route.
Third, and very obviously, we also need to address the failed culture of our economics. I can think of no easier way to achieve this than by revising the mandate of the Bank of England. At present, all the Bank of England is required to do is keep inflation below a 2% target.
It would help if these pronouncements were in fact true. But no, the Formerly Tre Professore knows not of what he speaks. The ECB has an inflation target of up to 2%. The Federal Reserve a dual mandate of full employment consistent with an inflation rate. One which the Fed interprets as core PCE running at 2%. The Bank of England one of either side of 2% inflation – less than 1% or more than 3% triggers a letter to the Chancellor explaining why the target hasn’t been hit.
There is a perfectly good argument saying that an “up to ” target is a bad idea as the incentive will always be to low ball in order not to exceed. Which is the very reason why the BoE’s target is not an “up to” one but an “around” one.
And recall, Snippa is the one who would tell us how the world should be run, has the detailed plans for it even. And yet Snippa is the one who doesn’t know how it currently works.
Nothing could more effectively say that the economy is to be run in the interests of those with wealth than this single statement does. The reason for the paranoia about inflation is that inflation deflates the value of debt, which debt is the instrument that those with wealth use to preserve their wealth and maintain their income whilst simultaneously, imposing their control upon most of the population.
Oddly, the rich folk out there tend to be in equity and property, two inflation protected classes of investment. But you know, knowledge and all that.
A change is, then, required. If that mandate was re-written as follows our economic policy would be very different:
The Bank of England shall be required to cooperate with HM Treasury in the promotion of an overall economic policy that:
Promotes full employment;
Funds the transition to a sustainable, net-zero carbon economy;
Supplies sufficient fiat currency to the economy to facilitate the smooth operation of the financial system in fulfillment of the above goals;
Recognises that inflation might prejudice achievement of these objectives and seeks to limit it to not more than 3% per annum.
You see the problem? The BoE is already fine up to 3% inflation. And “up to” targets are a bad idea anyway. We want “around” targets. The man’s too ignorant to be designing that new world.
Then we would have a fundamentally different economy.
Well, no, not really, as anyone who grasps the current one would know.
Oh, and the supplies sufficient fiat currency one? That’s straight Milton Friedman. The money supply should increase as the size of the economy does. You know, a restaurant serving 150 covers needs more plates than one serving 50? Or even, MV=PQ and if the right hand size increases then so must the left…..and you can’t get much more neoliberal than that now, can you?