Five years of economic crisis
Robert Skidelsky
I'm interested in reading some of the books by Robert Skidelsky, in particular his views on inequality. I thought I'd start with this as it's a short book, even though it's not specifically about inequality - I'm sure a look at the recent economic crisis will be of interest. I haven't found a sample for this book. This is one of those odd books where after reading it I've ended up being less convinced about the arguments it's putting forward than I was before I started. The book is a collection of essays written by Skidelsky concerning the recent economic crisis, together with some of the replies. Skidelsky is calling for more Keynesian stimulus, but there are replies from Vince Cable, arguing that deficit reduction is justified. And do you know what : Cable's replies have a lot going for them. Skidelsky quotes Keynes "The boom, not the slump is the right time for austerity at the treasury" but doesn't say when we should admit when we are entering a boom. 2011 seemed to have money growth of 6% which seems to be a reasonable point to reduce the stimulus. Skidelsky very much seems to think we can have an era of growth similar to that after WWII, but in my mind this has a lot of problems. Firstly we're pushing up against environmental limits and can't expect simply grow out of any problems. Skidelsky is keen on the exploitation of shale gas, but seems to think that global warming will be simple to deal with. Secondly inflation. The post WWII policies eventually led to high inflation, which had the effect of reducing the effect deficit. Skidelsky dismisses the idea that a bit of stimulus would upset the bond markets, but I there would be trouble if there was a hint that the government were using the same trick again.
It's a thought provoking book, and I still believe that there's scope for a bit of Keynesian stimulus for which Skidelsky has some interesting ideas of what it could be. Hence I would say it was definitely worth reading, even if it wasn't entirely persuasive. |
