The “muted” response of US academic experts to the global financial crisis has been noted, as has its partial nature. (Heist – Part 2, G2, 22 May). More remarkable, perhaps, has been the extraordinarily limited response to the crisis of the mainstream economics profession as a whole. The background to this lies in the extent to which so-called “neoclassical” economics has succeeded in purging the subject of the so-called “institutional” factors that embrace the political, economic and social organisations primarily responsible for the creation and management of the crisis in the first place.
And so long as prevailing economic theory is dominated by models abstracted from such “exogenous” factors, it is unsurprising that its practitioners have so little to say about the real world. I found this illuminated, if parochially, by the University of Glasgow finding, some decades ago, that the name of Adam Smith’s “department of political economy” was unfortunate, being a possible deterrent to the recruitment of students from countries such as Saudi Arabia. The “political” element in the economics of its founding father was therefore removed, with the Adam Smith Building now housing the more respectable “department of economics”.
Honorary senior research fellow, department of economics, University of Glasgow
• Cometh the hour cometh the man … Thank the Lord for Alexis Tsipras challenging the crazy economic orthodoxy that has gripped our pedestrian and unimaginative coalition government here in the UK, and the leaders of much of mainland Europe, since 2010. Even the head of the IMF, Christine Lagarde, is warning George Osborne that he needs a Plan B (Report, 23 May). Along with Monsieur Hollande in France and, hopefully, a re-elected Barack Obama, there is some hope for the unemployed people of Europe, particularly those aged between 16 and 24. Just imagine if the likes of Cameron, Osborne et al had been in power in the years after 1945. There would have been no commitment to reconstruction, full employment, social welfare, and no preparedness to borrow American money to finance it. Capitalism needs managing and directing by progressive governments, otherwise it tramples people into the ground. Greece is fortunate to have a party leader who is not prepared to allow this to happen to his fellow countrymen and -women without a fight.
• As ever, Seumas Milne gets to the heart of it (In or out of the eurozone, we must ditch this failed model, 23 May), focusing on the crucial point that mainstream politicians seem so blithely to forget: “the eurozone’s implosion [is] the product of the wider crisis of neoliberal capitalism that first erupted in the banking system five years ago and has since wreaked havoc on public finances, jobs, services and living standards throughout the western world”. John McDonnell (our Alexis Tsipras?) is calling on his blog for signatories to a statement on the radical alternative to austerity. In defence of us, the people of Europe, sign up!
• Many of us are looking round for reassurance and leadership during the continuing financial turbulence, but Christine Lagarde’s visit hasn’t helped. The suggestion that lowering interest rates could help our financial situation betrays ignorance of Japan’s long-running economic difficulties, and the continued determination of British banks to play hardball with commercial and domestic customers while sitting on the reserves with which they have been provided.
• Your image of the BAE workers at the rollout of a section of HMS Queen Elizabeth showed highly skilled people watching a billion-pound (of taxpayers’ money) white elephant for which there is no useful future or export market (Carrier build on course, 15 May). Like most of the carrier sections, it is probably to be towed to Rosyth by Dutch tugs. For the foreseeable future at Portsmouth and other naval bases, thanks to the PFI, it will be handled by Dutch-designed tugs on Polish-built hulls for which there is a huge export market, costing the taxpayer multimillions. We are in a double-dip recession not least because successive governments have wilfully sent taxpayers’ capital monies (and thousands of skilled jobs) abroad for spurious accounting reasons.
• Pat McFadden writes “Sending out signals that we don’t want the highest-value workers to come here is a huge mistake” (Creating the future, 21 May). Yes, but is it not also a huge mistake to send out signals to business such as “No need to pay taxes to educate British youth – there are other countries fool enough to pay for decent education, you can pick your talent from them”?
Is the purpose of our government to work for the interests of the British people as a whole, or for the interests of global companies with a base in Britain? Sections of the right seem to have shifted to the latter, and the left, out of fear of accusations of racism, are not challenging it. Industry complains that British people have no sense of work discipline, but what has it done to create it? That discipline went hand in hand with job security and long-term loyalty. No wonder people have lost confidence.
• Can someone explain to me how “making it easier to dismiss workers” is “a way of boosting employment” (Too chillaxed? No, I’m driven like Thatcher, says Cameron, 21 May)? What perverse logic makes Cameron believe this? Surely if you sack someone you create unemployment? Does he conversely think that making it easier to take people on will create unemployment?