Yearly Archives: 2007

New Labour economics, in both private and public sectors, is based on the idea of market failure. But the doctrine smuggles in too many neoliberal assumptions, and does not acknowledge collective choices. The centre-left needs something better.

Bear in mind the gambler’s advice: if you don’t know who is the patsy in the room, it’s you.

The anthropomorphic metaphor of the market is too relativist, the view of the market as a voting machine is too rationalist: to take either too seriously leads to error.

Active financial systems don’t build more schools and factories, shops and offices. They are associated with higher shares of consumption and lower shares of investment in national income.

When pressure for brand extension of products and geography is continuous, and the service must be delivered by local partners, it is hard to maintain the brand as a means of quality control.

The debate over the role of competition and competition policy is less about technical arguments than about the nature of society.

There was too much haste in following up on successful early privatisations, in a perhaps justified belief that almost any organisational structure would be better than the British conception of nationalised industry.

What mattered to Richard Rorty was not the search for what is true, but the search for what works. And that is what economists can learn from him. The test of a model, a way of thinking, or a theory, is not truth, but usefulness.

Socialist planning requires that those who would undertake it hold information that they do not have and to which they cannot realistically aspire. In an uncertain world, successful economic development – whether directed towards economic growth or environmental friendliness – is piecemeal, tentative and adaptive.

The market economy promotes diversification when the future is uncertain and there are differences of view. This is one of its fundamental strengths. But the market economy does not achieve enough diversification when the future is uncertain and there is commonality of view. This is one of its fundamental weaknesses.