Tag: Economics In Action

Britain cannot aspire to continental European levels of public services with lower tax rates. Any British government has to confront that simple fact.

Was there a “third way”, a politics which reconciled the market economy with the values of compassion and fairness that had traditionally motivated the political left? When was government interference with the operation of free markets justified, even necessary, and when did such intervention reduce choice and welfare?

The macroeconomics taught in advanced economics today is largely based on analysis labelled dynamic stochastic general equilibrium. The unappealing title gives the game away: the theorists are mostly talking to themselves. Their theories proved virtually useless in anticipating the crisis, analysing its development and recommending measures to deal with it.

Insurance is partly a market in securities, partly a mechanism for collective action; a means by which risks are traded, but also a means by which risks are socialised.

The substitution of transaction-oriented dealings for relationship contracting added to profitability in the short run; but in the long run it eroded relationships that had been the underlying source of much of that profitability.

Even if economic issues are more central to politics than ever before, argument today is less about the nature of economic systems than about the relative abilities of different politicians to administer a system on whose basic structure all are in agreement.

Tailgaters think the view that their behaviour is dumb is based on a purely theoretical analysis, which is refuted by the tailgater’s practical experience. And so the culture of self-confident, self-congratulatory tailgaters perpetuates itself.

Processes matter to us as well as outcomes, and so we genuinely appreciate gifts even if we don’t really care for the item.

British governments will need to make tough choices about taxes and public spending in the decade ahead. These choices are inevitably political. But they can only be well made if the information on which these choices are based is not.

A stance which is pro-business must be distinguished from a stance which is pro-market. In the two decades since the fall of the Berlin Wall, that distinction has not been appreciated well enough.