This may seem a little introspective, but there are some general points here about how economists deal with the political implications of what they say.
I guess it is inevitable that as the UK election gets closer more comments on this blog accuse me of being partisan and writing propaganda. Let me start by saying what I think a partisan economist would do, and then contrast that with what I try to do. 
Suppose a government does some economic related things well and some things badly. A partisan opponent of the government (in a party political sense) would focus on the bad things, and hardly mention the good things. They would do the opposite for the opposition. I can think of one or two UK academic economists who appear partisan in this sense, on both sides (pro or anti-government), but they are very much the minority. Among the US macroeconomists I know the same is true.
Part of the motivation for writing this blog in the first place was a belief that the UK, along with the US and Eurozone, where making a fundamental mistake in turning to fiscal austerity in 2010. It happens to be the case that this move is associated with the political right, and it is inevitable that I would speculate on the reasons for that. However the IFS has recently reminded us that Labour’s plans for fiscal policy from 2010 were not so very different from what the Coalition actually enacted. If Labour had remained in power and if (a big if) they had stuck to their plans I would be writing much the same critical stuff about the Labour government. (See this post on the European left, for example.) In my NIER piece on the Coalition government’s record, I praise two out of their three major innovations: it’s just unfortunate that their third (fiscal austerity in 2010) is a mistake which dwarfs the other two.
When I first started the blog at the end of 2011, I always knew I would occasionally stray beyond macroeconomics. I have always had an interest in poverty and inequality, but my first post on that was hardly political - indeed it started off praising the UK Prime Minister. At the end of March 2013 that changed. I wrote “Surely it should now be clear that this is a government with at least as strong an anti-state, anti-poor ideology as Mrs Thatcher, but with rather less honesty about what it is doing.” The first ‘anti-state’ claim came from a realisation by that stage that the drive for austerity was about more than reducing deficits. The second ‘anti-poor’ claim was justified in two following posts: the first documented work by the IFS showing how government policies would lead to a steady increase in poverty, and that and a second talked about how sections of the press went out of their way to denigrate welfare recipients, and how some (not all) politicians went along with this. 
Is this partisan propaganda? I certainly think it would be good to reduce both poverty and the incomes of the top 1%: the latter view can come from understanding that recent growth represents a huge market distortion, which economists naturally abhor. I also believe in treating those unfortunate enough to be claiming benefit with respect, so what I write follows naturally from those positions. As the chronology makes clear, I did not choose to write about poverty because it allowed me to be negative about the government, which is what a partisan would do. Another issue I feel very strongly about is climate change, and again I cannot help it if the current government contains many who deny the proposition and acts with - to put it mildly - some ambivalence towards the problem.
So this blog is not partisan. However it is also not ‘balanced’, in the sense of framing everything in ‘shape of the earth views differ’ style, or avoiding saying the obvious because it has political implications, as in this classic BBC headline. If the logic of a position or argument is that one political party has it right and another wrong, why avoid saying this? Nor will I avoid expressing an opinion on voting behaviour: it seems abundantly clear to me that a future Labour government would produce outcomes that are closer to the views expressed in this blog than a future Conservative government, and that those on the left who argue that ‘they are both the same’ are seriously misguided. This is issue based politics, and we need more of it.
So I do not worry too much about accusations of being partisan or too political, but as ever I'm open to criticism that I'm failing in my objectives. I do worry more about something related, however, but not for the reason you might think. In May 2013 I wrote something I had not imagined I would do when I started the blog, which was a post essentially just about politics. It compared UKIP and the Tea Party, in part because the dominant narrative seemed to be that the rise of UKIP represented the consequences of the Conservatives abandoning right wing views, which apart from certain ‘social’ issues seemed simply wrong and analogous to arguing that the Tea party had arisen because the Republicans had moved to the left! I have subsequently written a few other ‘political’ posts in this sense. In each case I try to write them as any good social scientist should, which is trying to explain political developments, rather than to give an evaluation of whether they are good or bad given my own views. This can be difficult, and you have to choose your language with particular care, as I note in this post. But my main worry when I write these posts is that I will be displaying my ignorance of political science.
So what do you do if you want to read this blog for the macroeconomics, but do not like some of the political implications that I draw? There are hundreds of reasons to vote for a particular political party, and I would hope there are many Conservative voters out there who nevertheless worry that this government’s macroeconomic policy is misguided, and who are also concerned about some other directions of travel. I wrote this post for those Conservative voters, and I want them to keep reading.
 Propaganda is information, especially of a biased or misleading nature, used to promote a political cause or point of view. I have never written anything that I know to be biased or misleading.
 Here is a more recent IFS assessment of the impact of past policies. At about the same time Margaret Thatcher died, and I wrote this short evaluation of her macroeconomic record, which I do not think anyone can read as partisan.
"more comments on this blog accuse me of being partisan and writing propaganda."ReplyDelete
Do people accuse you of this? I read the blog regularly and don't see this.
A better criticism is that the posts on economics are (unsurprisingly) stronger than the posts on politics. The posts on politics seem to me to be dated (eg the 1980s views on the power of the media), naive (eg on how honest you can expect a Chancellor to be about failure of policy), or paranoid (eg the constant claims that there are hidden agendas, when far more plausible cock-up explanations are available). I am far more exercised by the anti-democratic bent of your views on taking economic decisions out of the hands of the elected politicians than I am about partisanship.
Indeed, having a writer's normative agenda on display is a good thing. I don't accept that any decisions on fiscal or monetary policy are possible on a purely 'scientific' or 'factual' basis. We need some conception of the ends we are seeking to achieve. 'Facts' alone cannot enable us to make any choice. Which is why these decisions ought to be taken by those with democratic legitimacy.
You say, "I don't accept that any decisions on fiscal or monetary policy are possible on a purely 'scientific' or 'factual' basis."Delete
But 'scientific' and 'factual' are not quite the same thing, and are not interchangeable terms. No argument of any complexity is dependent on a "purely ... factual basis". Prof. WR expresses the scientific viewpoint when he says that he tries to write his political posts "as any good social scientist should, which is trying to explain political developments, rather than to give an evaluation of whether they are good or bad given my own views". His expressions of his understanding of economic or political systems are aimed at some objective validity; in other words, he is searching for the truth about how these systems actually work. This is opposed to the partisan, who is only interested in bending the economic and political systems to get what they want (and to prevent the others from getting what they want), and as for the truth, they have no use for it. The result is dishonest argument, because it is based on self-serving rather than universal principles.
Nobody is saying that academic economists should be the ones making policy decisions; but policy makers should have a good knowledge of the scientific understanding of economic and political systems and to be able to apply this knowledge in a competent way, in consultation with their constituents. Unfortunately what often happens is that some of "those with democratic legitimacy" listen only to those of their constituents who have the most money, while the interests of the majority of their constituents who voted for them, as a result of having been thoroughly deceived about the nature of their party, are ignored.
Any accurate understanding of the current political reality absolutely must include an account of the prevalence of this dishonest argument, demonstratively at the service of interested economic elites. To pretend that it doesn't exist is akin to censorship.
I don't agree.
You question, "how honest you can expect a Chancellor to be about failure of policy." Well, I expect the Chancellor to be completely honest. I know that the Chancellor is not honest. That does not make me naive -- it does make me think that George Osborne is the wrong person to have that position.
You say that: "'Facts' alone cannot enable us to make any choice." True, but irrelevant. Facts do help us make policy choices. Osborne, David Cameron, Nick Clegg, and Danny Alexander disregard facts and make ludicrous, obviously false statements -- arguing, for example, that: "in 2010 the UK was on the brink of bankruptcy"; "we have maxed out the nation's credit card"; "there is no alternative"; "we have a long term economic plan."
This government has squandered its democratic legitimacy. As Samuel Brittan memorably put it back in 2010: "David Cameron and George Osborne are behaving like owners of a whelk stall rather than economic managers of a nation with its own currency." Fact: the UK is not a whelk stall.
"Well, I expect the Chancellor to be completely honest. I know that the Chancellor is not honest. That does not make me naive -- it does make me think that George Osborne is the wrong person to have that position."Delete
Unfortunately it also means that every person who has been Chancellor in my lifetime, and every person who could plausibly be Chancellor was and is unfit for that office.
Perhaps Sir Stafford Cripps was ok, but he was before my time.
The rest is just rhetoric.
I accuse SWL of being a not-so-secret sympathiser with the SWP, certainly. The partisanship is most noticeable in the near complete abscence of thinking or interest in wealth creation. Somehow, it's a given. And mainstream economics can get on with its all-consuming focus on market failure. It's propaganda dressed up as science, because all the "scientists" involved are socialists to begin with, happily reinforcing each other's prejudices, and raging, SWL-style against the Conservatives. It's as if the supply-side economics revolution never happened.
The stuff about Conservatives being anti-poor is typical. Or that being anti-state is is a closing argument.
The millions of people caught between the 40% and 45% tax bands will be delighted to hear the technocratic arguments in a related post for increasing the 45% rate to 50%, even if it brings in less tax ... Implying those on 40% will have to pay more. Lovely.
I am afraid I think that is nonsense, and will just reassure S W-L that those who don't entirely agree are fools.
James in London certainly went off at the deep end, but that doesn't helpDelete
S W-L much:
If you say 2+2=3 and are then criticized by someone who says 2+2=5, then you are still wrong.
"Unfortunately it also means that every person who has been Chancellor in my lifetime, and every person who could plausibly be Chancellor was and is unfit for that office."
I think you're wrong. You can only know the answer to the fit / unfit question after seeing how the person acts in that office. Not going to argue about it though. You can think what you like.
What concerns me more is that the people who are most responsible for the UK's economic policy -- Osborne, Cameron, Clegg, Alexander -- make dishonest statements (they are clearly false, but said as if they are true) and base their policies on such ideas, for example:
"The UK was on brink of bankruptcy in 2010."
"There is no money left."
This is like saying that:
" Coventry City won the FA Cup in 2010."
Ok. Perhaps you could point me to a statement where Cameron, for example, has said "The UK was on brink of bankruptcy in 2010".Delete
"There is no money left" was said, in a note as a joke, by the outgoing Liam Byrne to his successor, Laws, as Chief Secretary to the Treasury. None of the people you accuse of saying it have said any such thing.
It is, of course, a bit of a problem if you are going to accuse others of making dishonest statements if the claims that you make about them are not, in fact, true.
"I am afraid I think that is nonsense, and will just reassure S W-L that those who don't entirely agree are fools."Delete
This implied criticism of SWL is odd given that you are much more dismissive than he is of those that hold different views.
Fair play on the Cameron quote, that is dishonest,Delete
Nice try, but no more than an immunization strategy for questionable theories (inflation would be good now etc.).ReplyDelete
Of course you believe what you say - but so did Michael Foote., not to mention others. What they - and you - lacked is a critical awareness of the limits of your knowledge (you sometimes acknowledge them, but you do not draw the conclusions). You truly believe the government has the tools to bring about the results you wish for. In spite of Dornbusch, who warned of overshooting results, you believe the government could have spent any amount of money without negative consequences.
You may not be alone, but wrong nevertheless. At least, you should be sceptical.
"you believe the government could have spent any amount of money without negative consequences"Delete
A classic sign of partisanship is the heroic battling of straw men.
donnie14 February 2015 at 12:41#Delete
You caught me there. What I meant was :
"any amount if money to the point of 4% inflation"
With the danger of overshooting reactions in the economy, that could mean higher inflation than intended and higher interest rates - a possibility many macroeconomists including SWL consistently ignore.
Krugman and SWL mentionned both the possibility to overshoot and, in fact, theit argument rests on the possibility. What they say is that, if you have to err on the side of doing too little or on the side of doing too much, you should err doing too much. Why? Because there's no upward positive bound, but there is a zero lower bound -- easy to kill inflation compared to countering bad fiscal policy when rates can't fall further down and when people aren't naive enough to believe the UK will turn into Zimbabwe.Delete
Basically, you never read their posts...
Stephane14 February 2015 at 14:50Delete
So you believe it is easy to kill inflation. P.Krugman does not. In his textbook "Economics", he says:
"Disinflation is hard."
Think about it.
@ Anonymous 15 February 2015 at 02:41Delete
Even as a non-economist I can see that your implied criticism of Stephane is false:
Stephane says: "easy to kill inflation compared to countering bad fiscal policy"
There is no conflict between that statement and "disinflation is hard". The two statements imply that countering bad fiscal policy is harder than disinflation.
Surely all macro changes are hard?
By the way, Paul Krugman was a student of Rudi Dornbusch, see here:
Simon Reynolds15 February 2015 at 03:54Delete
So we agee that disinflation is hard.
The idea that it is easier than countering bad fiscal policy is manifest nonsense: All it takes is an act of parliament.
Krugman was of course a student of Rudi Dornbusch - but it doesn't seem to have helped when one reads his ideas about inflation: It will only help if people believe that the central bank will continue to be irresponsible. Since central banks in developed countries cannot be trusted to remain irresponsible, inflation won't work. Q.e.d.
And we have a counterexample: The central bank of Zimbabwe can be trusted to be irresponsibe indefinitely. Why isn't Zimbabwe booming?
The mention of Zimbabwe in economic blogs should be subject to Godwin's Law.Delete
Good point -- any mention of Zimbabwe or Weimar, and it's time to stop reading.
@Anonymous 15 February 2015 at 23:12
Above, you criticize S W-L as follows: "You truly believe the government has the tools to bring about the results you wish for."
and now you say: "The idea that it is easier than countering bad fiscal policy is manifest nonsense: All it takes is an act of parliament."
Simon Reynolds16 February 2015 at 02:46Delete
I do not think fiscal policy can solve the problems of a recession at the lower zero bound. The effectiveness of the tools is limited.
That being so, fiscal policy can be better or worse. That can be cured through an act of parliament. Unfortunately, that will not solve all the problems SWL thinks can be cured by it.
That point stands even without mentioning Zimbabwe. But aren't we allowed to mention its central bank?
Anonymous16 February 2015 at 09:25 - I do not think fiscal policy can solve the problems of a recession at the lower zero bound. The effectiveness of the tools is limitedDelete
What model are you using to justify that statement? What evidence backs it up? What are your policy proposals.
On disinflation, most textbooks I've read conclude that the policies for achieving disinflation (with a view to reducing inflation to a lower level) is a costly process that generally lowers output and raises unemployment. In the current situation this cost looks like a possible risk but it is asymmetric, the losses from maintaining the status quo appear both larger and more certain.
That is not a satisfactory answer, not by a long shot.Delete
Lots of economists* write about the failures of austerity, particularly in the Eurozone.ReplyDelete
Whilst I understand the UK is not trapped to quite such a degree by the Maastrict Treaty as regards the Stability and Growth Pact, it seems unable to even discuss alternatives.
* eg, Robert Pollin, Mark Blyth, Ann Pettifor, Jonathan Portes, etc, etc.
even Ambrose Evans-Pritchard in the Telegraph had a go at questioning it, but seemed to get drowned out by other distractions, such as Benefit Fraud.
Probably to keep the media from focussing on the real crooks.
Hopefully a sea-change in Q2 with some fresh clowns.
A decent bit of inflation would be good at the moment. The government does have the tools to create it and control overshoot. The government could spend any amount of its fiat currency but if it spends more than the economy can sell, it will get inflation.ReplyDelete
All economics is politics. All politics is economics. Long may it remain so. The continual confused theories that create wrong decisions by politicians, means money making opportunities for some of us.
"Suppose a government does some economic related things well and some things badly."ReplyDelete
From a scientific perspective, a government can do economic related things a certain way with certain consequences. "Good" and "bad" are not scientific categories. As soon as you use them you are not doing economics anymore, but instead politics : you are passing judgements on what should or shouldn't be the aims of public policies.
Normative economics is a subdiscipline of politics, not of economics.
While this is all true, many people share the normative belief that large numbers of citizens hungry, sick, and sleeping on the street is "bad".Delete
If you share this normative belief, you can objectively state that a government has done some economic things well or badly, by looking at whether these economic things have resulted in large numbers of citizens being hungry, sick, sleeping on the street, etc...
Of course, it is quite possible that the Tory government in the UK, or the Republican government in the US, has different normative views. Perhaps Republicans believe that making people starve, making people sick, and making people sleep in the street are good things. Perhaps because suffering is good for the soul according to their brand of Christianity.
I can believe that Republicans believe this. I am most certainly going to make a normative statement that Republicans have done bad things economically. In this case, I mean that they have done *immoral* things economically.
A number of Republicans have made statements expressing their positive appreciation for slavery. A whole lot more have expressed positive support for torture.Delete
Which goes to show you that you can't assume that they share the normative beliefs of ALL CIVILIZED PEOPLE.
It was not normative economics for SWL to criticise claims that austerity would promote growth and be proven correct in his criticism. He adopted the stated normative economics agenda to restore growth. He disagreed on the pure economics of how to do it. Let the political implications of his successful application of pure economics lie where they fall. All that is happening then is a pure economist's correction of others' normative economics.Delete
I read many econ blogs, but the archetype of how macro and politics intersect is Krugman. This is inevitable macro may tell you a policy is needed and you need political solution. But it isnt alwas the same. If the economy of the were growing at 8 percent with inflation and full employment PK would be FOR austerity to tame deficits. Context! One may be a Keysian and aliberal but one can also one but not the other.ReplyDelete
Some issues are implicated by both._.Inflation vs Unemployment ._.Income ineqality may be bad for the economy but may be worse for the political system ._.Citigroup literally wrote the amendment to the finance regulation. Economics and Politics are huge systems and it would foolish to discuss one and ignore the other. Political economy . In the US we have the freshwater, more conservative, saltwater, more liberal.
We all have biases which be moral intutions. If child labor added 1 pct. to GDP I'm still against it. Key is, be viligant about bias,listen carefully to the other side, and check Data to see whose model is working. Currently Salwater 4 Freshwater nil.
Great blog and you're no partisan. You are a public intellectal on the net, that means trolls. If PK's blog comments weren't moderated you'd death threats on a daily basis. You guys are a blessing to people like me who didn't get macro 10 years ago. I studied Romance languages.
Typos._.Above was typed on PS4 controller.Delete
When you wrote, in your article about Nicola Sturgeon's speech, "It is odd to criticise the policy of fiscal austerity, and at the same time complain that the government has failed to meet its own 2010 fiscal target. It would be more logical to praise the government for abandoning its 2010 target," I made an article on Vox Political out of the fact that you seemed oblivious to the human cost of the policies involved.ReplyDelete
On reading your piece, it seemed bizarre that you would suggest the Coalition had abandoned its fiscal target when the measures it had introduced - that have caused a great deal of suffering - were still in place.
The conclusion I reached was that I did not think it was intentional; that you might have mentioned it, had a few actual politicians done so; that perhaps it indicates a certain blindness to the realities of the current situation - economics is not and end in itself.
Was I right?
I do think it needs to be recognised that there is a human level to economic decisions. Osborne's cuts - most obviously to social security - have had a huge impact on a section of society whose economic contribution may not be recognised but still exists. Very few people sit around like vegetables; most find something they can do that eases the burden on others around them, if nothing else. That feeds back into the system but if you don't recognise the harm that economic policies cause to these real people, does it follow that you don't recognise the good they do either?
For the record, I'm surprised anyone has suggested you are partisan with your articles.
I'm not really sure what you are trying to say here. That I am "oblivious to the human cost of the policies involved." I just do not see how you can conclude that from anything I wrote. (You could also read this: http://mainlymacro.blogspot.co.uk/2013/08/measuring-cost-of-austerity.html)Delete
The fact that Osborne abandoned his 2010 target for current balance in 2015 does not mean the impacts of what he had already done, or what he continued to do, suddenly stopped. What it does mean is that he avoided cutting further to meet his originally target, which given the alternative that he tried to meet that target, has to be a good thing surely.
Well, no - because now he's inflicting cruelty on people without even having a purpose.Delete
Abandoning the target of a policy but allowing the harmful effects of that policy to continue are not praiseworth actions, in my opinion.
Nor is it a matter for praise that he has not made matters worse - especially when we know he intends to do just that, if the Conservatives win the general election.
Simon Wren-Lewis always mentions the human cost of austerity but not of inflation.Delete
And the threat of inflation is where?Delete
In SWL's policies. Inflation of 4% is what he wants.Read his posts.Delete
Why do you apologise for introspection? Introspection is a good thing. Economists rarely seem to think about how they think, or about the limits of what we can know about a hugely complex system, or about why different economists reach very different conclusions from the same evidence, or about why other people don’t seem to understand economics, or about why other people don’t trust economists. I also thought that your post on how you found it difficult to write for a non-academic audience was both interesting and thoughtful.ReplyDelete
On this post, I think that political bias has to be seen in the context of what you are trying to achieve with your blog. One lesson you learn in business is that you need to understand your audience before you make an argument you want them to find persuasive.
For example, if you want an audience of left-wingers then your political bias is a positive. However, left-wingers would vote for economic stimulus even if you didn’t make an economic argument, so you would not be changing any minds.
On the other hand, if you want to change minds then your audience needs to include right-wingers as those are the minds you need to change. However, your political bias will then be an obstacle as right-wingers will argue that “well he would say that as he is a left-winger” and will not listen further to your argument.
All arguments on the macro-economy are selective in terms of what they include and exclude. For example, a scientist might point out that most economic progress is driven by advances in science and technology. The industrial revolution happened when it did because of scientific advances rather than economic theory. They might suggest that the most effective economic policy would encourage scientific R&D and focus education on areas which encourage entrepreneurialism and risk taking. From this perspective, your arguments are mostly irrelevant.
Of course, you might argue that my scientist has a very narrow and biased perspective, and you would be right. However, you might want to consider whether others might say the same about your perspective which focuses almost exclusively on a very small number of economic measures and levers.
Partisanship has its place in being friendly with members of one's tribe, comforting them that you are one of "them," and as a means to pursue specific ends.ReplyDelete
"Nor will I avoid expressing an opinion on voting behaviour: it seems abundantly clear to me that a future Labour government would produce outcomes that are closer to the views expressed in this blog than a future Conservative government, and that those on the left who argue that ‘they are both the same’ are seriously misguided. This is issue based politics, and we need more of it."ReplyDelete
Well, everybody who read your blog knows that you are a centrist/ left-liberal / progressive economist. So don't be shy about it. You do like the Labour Party and do dismiss more leftists parties, not at least because they dare to point out that most centre left parties in the Western world are more neoliberal than progressive.
Now ironically I am a left-liberal economist myself but unlike you I realize that centre left parties are no options. You cannot seriously claim to be against austerity and claim to care about climate change while you propose / imply that people should vote for Labour and not do something more radical.
The fact that such a high proportion of the articles you link to come from the Guardian tells me all I need to know about where you (political) localities lie, whether or not you acknowledge your own bias...ReplyDelete
*your (political) loyaltiesDelete
Most newspapers are pay walled, but the Guardian is not. True, I tend to read more Guardian articles than Telegraph articles (although I link to both), but that is partly because the degree of political bias is less in the former. I would link much more to the FT if it was free. I have no party political loyalties.Delete
But I regard your accusation that I allow my judgement as an economist to be influenced by political considerations to be an insult. Can you show me one example where that is true. Take the mediamacro myths series for example. One example. Could it perhaps be that you do not want to be influenced by the facts and analysis I set out there, because of your own political loyalties?
I am perfectly happy to be educated (hence I am reading your blog), although I don't really the word "influenced". I don't read either the Telegraph or the Guardian as both a far too partisan for my tastes (in fact the Guardian seems to have a per article quota for anti-Tory jibes regardless of the subject matter). I read the FT, Economist and New Yorker (make of that what you will) and strive to ignore as much of the party politics in my beliefs as possible. The conservatives are pretty hopeless; Labour with Miliband in charge is potentially dangerous for the country (IMO). In any event, I was not trying to insult you, merely draw attention to the fact that most people at least (perhaps you are the exception) read things that support their pre-conceived notions. It's all about the premise of the debate/question I guess...Delete
I read papers for the information they contain, rather than the opinions they express. Of course the Guardian is partisan, although not in the same league as the right wing press at the moment. However it does contain a lot of useful information on social issues that I would not get otherwise. Given my job, the FT is the paper I could not do without.Delete
The Miliband is dangerous thing I just cannot see, but you can give me your reasons if you like. But I think the presumption you initially made that my politics might 'explain' my economics can be a very dangerous attitude to apply to everyone. Of course there are many economists for whom that is true, but I suspect at least of many if not more for whom it is not.