Sunday, January 16, 2011

Keynes would back the coalition says Cable

Vince Cable has an essay in this week's New Statesman arguing that modern Keynesian economists are wrong to cite Keynes to justify opposition to the government's public spending reductions. The whole article doesn't appear to be available to non-subscribers but there is a summary here.

The essay is a riposte to an article by Keynes's biographer Robert Skidelsky in October. Vince Cable comments:

... we should be sceptical about Keynsian economists, however distinguished, who conspicuously failed to anticipate the financial critis and now blithely ignore its consequences. Skidelsky's essay does not even make passing reference to the banking crisis, like someone dispensing advice on earthquake relief without any refernce to past or future earthquakes.

The article is to be welcomed for a number of reasons. First it is a good thing that Vince is making the 'progressive' argument for the government's measures - this is necessary if the debate is not simply to be polarised as Tory measures facing Labour opposition. Second it is a sign of identying a clear Lib Dem identity within the government - many Tories would not be pleased at the thought of Keynes being on their side. Third it is a hint of some degree of pluralism remaining at the New Statesman.

Incidentally, I can't help puzzling over the political trajectory of Lord Skidelsky, Vince Cable's intellectual sparring partner in this debate. A Labour supporter who joined the SDP, he was among the Owenites who stood out against merger (presumably finding the Lib Dems too lefty and irresponsible). For a time he took the Conservative whip in the House of Lords. During this period I remember him addressing a Liberal Democrat History Group meeting on Keynes and telling us all 'Keynes was right, but he can't be used'. Now it seems Keynes can be used and Skidelsky is criticising the Lib Dems ostensibly from the left.

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