The Ideas That Shaped Post-War Britain. Anthony Seldon

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СКАЧАТЬ predicament that makes immediate action imperative regardless of the consequences. This argument attempts to deflect the perversity thesis.

        We should adopt a certain reform or policy because such is the ‘law’ or ‘tide’ of history – this argument is the counterpart of the futility thesis, according to which attempts at change will come to naught because of various ‘iron laws’.

        We should adopt a certain reform or policy because it will solidify earlier accomplishments – this is the progressive’s retort to the jeopardy claim that the reform is bound to wreck some earlier progress.

      How difficult would it be for reformers to give up this kind of rhetoric, which tends to turn the debate with their opponents into a ‘dialogue of the deaf’? I believe I have just listed the arguments in decreasing order of dispensability.

      The most dispensable of the three arguments is, to my mind, the alarmist claim that disaster is upon us if we fail to take this or that progressive step. This way of arguing might be called ‘impending-disaster’ or ‘impending-revolution’ blackmail. It has been a common way for various Western progressives or reformers to present their programmes, particularly since 1917, when the threat of social revolution re-appeared on the horizon of Western societies. An important variant of this way of arguing became current after the Second World War in discussions on aid for the countries of the Third World: here the disaster to be fought off – by extending generous financial aid – was revolution and the prospect of these countries being ‘lost’ to the Soviet zone of influence.

      For some time, these ways of arguing for national or international redistribution of income have been stale from overuse. Since the events of 1989–91, they have become largely unusable as a result of the collapse of communism and the Soviet Union. As Gunnar Myrdal argued long ago, progressives can and should make a convincing case for the policies they advocate on the grounds that they are right and just, rather than by alleging that they are needed to stave off some impending imaginary disaster.

      What about the argument that a certain progressive policy should be adopted because to do otherwise would be to oppose the ‘tide’ of history, the ‘wave of the future’, a futile position? This argument should also not be too difficult to discard, in part, I will admit, because, with the recent upheavals and pace Fukuyama, the tide of history appears to run quite strongly against the tide-of-history view of things!

      Things are rather different in the case of another typical ‘progressive’ argument which I implicitly ask my progressive friends to use sparingly. It is the argument that a proposed reform is not only compatible with previous progressive achievements, but will actually strengthen them and will be strengthened by them. Progressives will often argue that ‘all good things go together’ or that there is no conceivable area of conflict between two desirable objectives (e.g. ‘the choice between environmental protection and economic growth is a false one’). In itself, this is an attractive and seemingly innocuous way of arguing and my advice to reformers cannot be never to use this argument. Given their considerable interest in arguing along mutual support, rather than jeopardy lines, reformers may actually come upon, and will obviously then want to invoke, various obvious and non-obvious reasons why ‘synergy’ between two reforms exists or can be expected to come into being.

      My point is rather that reformers should not leave it to their opponents, but should themselves make an effort to explore also the opposite possibility: that of some conflict or friction existing or arising between a proposed and a past reform or between two currently proposed programmes. If reformers fail to look in this direction and, in general, are not prepared to entertain the notion that any reform is likely to have some costs, then they will be ill-equipped for useful discussions with their conservative opponents.

      For example, it would be disingenuous to pretend that stimulating economic growth and correcting or attenuating inequalities that arise in the course of growth require exactly the same policies. The problem rather consists in finding an optimal combination of policies that does as little damage as possible to either objective. We are more likely to find something close to this optimum if we admit from the outset that we are in the presence of two objectives between which there exists normally a good deal of tension and conflict.

CHAPTER 3

      The Fall of Keynesianism

      A Historian’s View

       Robert Skidelsky

      I

      The 1950s and 1960s were a capitalist golden age, even in slow-growing Britain. By historical standards, unemployment was exceptionally low, growth in real incomes exceptionally fast, economies exceptionally stable; all were achieved at a very modest cost in inflation. Although there were some sceptical voices, the consensus at the time was that this achievement was produced by something called ‘Keynesianism’. In the 1970s, the golden age was replaced by a silver age of ‘slumpflation’, in which growth rates halved and unemployment and inflation increased simultaneously. By the end of the decade a consensus had emerged that this sorry record, too, was the result of ‘Keynesianism’, and the 1980s were aggressively anti-Keynesian.

      Today Keynesianism is dead as policy. Most governments have inflation, not employment, targets; belief in discretionary management of the macro-economy has all but vanished. For Britain, the crucial stages in the demise of Keynesian policy can be traced in the speech of James Callaghan to the Labour Party conference in 1976, Nigel Lawson’s Mais lecture of 1984, and the 1985 White Paper, Employment: The Challenge to the Nation.1 Keynesian economics, of course, continues to exist in the sense that macroeconomics is still taught to all economics students, and even monetarism can be regarded as a dissident branch of Keynesianism.² Moreover, the re-emergence of mass unemployment in the 1980s has stimulated a ‘new Keynesian’ research programme aiming to show rigorously how wage and price rigidities – central but unexplained features of the original Keynesian model – arise from the microeconomics of wage and price setting in imperfect markets.³ However, belief in the Keynesian model of the economy, as opposed to use of Keynes’s analytical framework, is confined to a minority of economists.

      The problem here is to explain the ‘fall of Keynesianism’. There is no doubt that Keynesianism was engulfed in what Albert Hirschman calls a ‘rhetoric of reaction’ and savaged in the name of futility, perversity and jeopardy.⁴ The point of interest is how far this rhetoric was simply rhetorical, and how far it pointed out ‘real’ failures in Keynesianism. Rhetoric is the art of persuading by language rather than by argument or proofs: one can write better than one thinks. But is the central monetarist proposition that ‘Changes in nominal variables have no real effects’ simply a piece of rhetoric? (It is, of course, a classic example of what Hirschman calls the ‘futility thesis’.) According to Donald McCloskey, economics is so impregnated with rhetoric that it makes little sense to ask which economic propositions are rhetorical and which, in some sense, are true.⁵ But this begs the question of why some kinds of rhetoric flourish at some times and decay at others, or why one should prefer one kind of rhetoric to another.

      I want to explore the idea that Keynesianism was undermined by real failures and not just by rhetoric. If we take Keynesianism, minimally, to be a set of ideas and policies, we have three possible sources for its failure. The first is that it misdiagnosed the causes of the social ills (such as unemployment) it set out to cure and therefore its remedies were mischievous and, in fact, created other problems (such as inflation). A sub-issue here is the extent to which Keynesian ideas, as generally accepted, were the ideas of Keynes. Secondly, one might argue that the Keynesian revolution was wrecked by policy mistakes. The ideas were right, and might have been applied with success, but in fact were not. Between the idea and the policy something intervened СКАЧАТЬ