Tuesday, October 20, 2009

Greens and Keynes: total muddle

You'd think it would be a simple question. Do the Greens support the fiscal stimulus to get the economy growing again, or do they, like the Tories, consider it more important to balance the budget sooner?

Logically, as the Greens are not supposed to be that keen on economic growth anyway, you would expect the latter answer. But that has to be weighed against visceral knee-jerk opposition to the Tories.

So I've been intrepidly commenting on Green blogs trying to get to the bottom of this. Natalie Bennett at Philobiblon was cheering the return of Keynes but wouldn't explain whether she wanted the growth that Keynesianism is thought to deliver.

When Jim Jay attacked Cleggy over the "savage cuts" remark, I asked whether opposing growth won't mean even savager cuts in the long run. And I get some vague guff about a "paradigm shift away from a capitalist economy", which is a rather vague answer to quite a specific question.

And now Rupert Read adds mud to the water with a pithy condemnation of growth. So is he against the fiscal stimulus? He wouldn't say.

This muddle is all the more surprising when we consider that it would actually be quite easy for no-growth Greens to come up with a clear and consistent position. If you think that the Tories are correct that balancing the budget now is better for prosperity in the long run, then go with Keynsianism. And if you think the Keynsians are right that a fiscal stimulus now is better for prosperity in the long run then go with balancing the budget. You'd have to half agree with the Tories either way, and I guess this is the problem.

Now it turns out that growth figures are about how much the goods and services we supply each other are worth to us, and not about how much environment is destroyed, and so the greens really ought to be a bit more specific and focus their attentions on the actual destruction of the environment rather than on an aggregate statistic like GDP that includes a great many good and unobjectionable things.

But no. Far from being more specific, their solutions just get vaguer. Paradigm shifts. Alternatives to capitalism, as yet unspecified. Read's suggestion of a stimulus to stabilise the economy is at least specific, but suggests that his green new deal should stop dead as soon as growth figures go positive.

Often on specific policies the Greens sound like what is simply a high tax-and-spend party. And this too, would make sense particularly if you want to strangle the economy. But ask them about economics or political philosophy, and they will never say this. Why choose this vague waffle over a simple policy that meets your objectives? Is some deeply held contradiction at work here?

This is a breathtaking shortcoming for what claims to be a serious political party. What have they been thinking about for the last 20 years?


Jim Jay said...

As you say we, the Greens, are a high tax and spend party taking our lead from Keynes.

However, your specific question to me was about whether there was a contradiction between the fact that "You want to challenge the economic system? And you want no cuts in public services?"

So it wasn't 'guff' about paradigm shifts when you'd asked about tax cuts - it was a direct answer to a higher level question about the economic system itself - that I do want to change, even whilst using the systems in place right now.

If you'd asked a simple question on whether we support a high tax and high spend approach at the moment my answer would not have included the word paradigm but would have been "Yes we do. Taxing the rich the most and poorest the least, if at all."

Hope that clears things up for you.

Joe Otten said...

Thanks Jim. Clearly we all want money spent on our priorities. But do you also support high taxes explicitly as a means to reduce economic growth?

Greenfield said...

'Will the real Green Party & their Policies please stand up?' - when this happens it will be the end of them as a political party - they are a Heinz 57 party - thinking all over the place - never having to deal with power (no Green party councils).Once they are out under the spot light many folks will realise their shade of green aint theirs!!

Tristan said...

Given Keynesianism is necessary to support the corporate state I'd have thought the Greens would be against it.

One of the biggest cons ever pulled is the corporate liberals convincing the left that they're helping the little man...

Jason Kitcat said...

Speaking personally, the problem is the terms of the debate make proper discussion rather difficult. It's not really about stimulus vs cuts from my Green perspective.

Yes stimulus is needed: Hence the jobs creation proposals in the Green New Deal report we Greens championed.

Yes cuts are needed: Goodbye Trident, ID cards, expensive wars, wasteful farm subsidies, byzantine tax and credit systems etc.

Yes reforms are needed: Much simpler taxes, citizens income instead of a plethora of credits & top-ups, change financial regulation and so on.

It's just such a sterile discussion to say "we bailed out the banks at massive expense, do we pay it back now or wait until later?"

Let's acknowledge bailing the banks without any significant reform other than creating even bigger banks (which certainly must be too big to fail now) was and remains a disaster.

Then let's look at the whole budget and sort it out. It is a shame Clegg & co has decided to join the debate on the same false terms as the other two.

Joe Otten said...

Jason, I struggle to tell the difference between "the terms of this debate are false" and "I haven't got an answer".

I largely agree with your suggestions, although I would fail to find enough money for a Citizens' Income.

But it would make sense, after a fashion, to say: we will shrink the economy by taxing you heavily if you work hard, and paying you a CI even if you don't.

But if shrinking - or even "stabilising" the economy is what you are after, the cuts will have to go a lot further than Trident and ID cards. The Greens would have to be the biggest cutters of public services of all.

Jim Jay said...

Joe "do you also support high taxes explicitly as a means to reduce economic growth?"

Like the Lib Dems and most parties the Greens don't all come from the same place in terms of economic philosophy and I would say that of those who think about such things there are probably a number of different approaches.

I love the Green New Deal approach, for example, and I would add to it's eco-Keynesianism radical attempts to democratise the economy.

As a short/medium term measure against unemployment, poverty and economic recession I'm for a mass spending plan that draws its funding from progressive taxation which will mean a heavy burden on the richest (and to a lesser extent scrapping wasteful anti-social projects like trident and id cards).

I have to say what I don't see it as is a means of tackling economic growth. Now I think some Greens probably do and certainly a 'zero growth' economy is one thing that I'm less enthused by than some of my colleagues.

Some days I think it's because that's too rich even for my blood, on others I think it's because 'growth' is an abstract concept that we're defining in different ways - it's probably the former though.

Derek Wall said...

Go on Joe gives your opinions on Elinor Ostrom!

if you want my opinions on growth have a look at the SDC document 'Prosperity without Growth'

Joe Otten said...

Elinor Ostrom is about the dispersal of power, right? That is what liberalism is.

The 'prosperity without growth' thesis is interesting, if a little evasive - so long as people are free to choose their own paths, whether this is measured in increasing cash values or not is not important. I don't prejudge that it should or should not.

Derek Wall said...

so you don't know about Elinor Ostrom...do have a look though.

She is very important.

Keynes is dead but spending some cash on a green new deal seems an excellent idea, any way Elinor is a lot lot more important.

Joe Otten said...

Local people controlling resources without privatisation or regulation, is dispersal of power.

I would be happy to see experiments along those lines, but I wouldn't impose it as the only way - co-operatives can go wrong when they get too ideological rather than focussing on what the co-op is there to deliver, and my guess is that this is similar.

Sandwichman said...

The muddle is easily resolved if only you go back to Keynes and realize that the difference between Keynes and Keynesianism is night and day. The long view for Keynes involved getting past the "economic problem" to focus on the good life. For Keynesianism there is no long view. It's just one economic problem after another. The key to all this is a letter Keynes wrote to T.S. Eliot in 1945 explaining that the economic stimulus strategy was only one application of an intellectual theorem. The other two legs of the tripod were redistributing income from the wealthiest to the rest of us and working less. Yes... working less.

Shockingly, working less is a key strategy recommended in the Sustainable Development Commission's Prosperity without Growth? report. So the SDC is more Keynesian than the Keynesians!!!

Joe Otten said...

Right. And "working less" implies massive cuts in public services. Because all this excessive work either pays for public services through taxation, or is directly involved in delivering them.

So what I'm hearing is a confirmation that the Greens would be the biggest cutters of public services of all.

Now maybe you're right that this is the best thing to do, but in that case why do you never argue for it openly?

limestone cowboy said...

Joe, what is the point of using so much space to slag off the Green party. And I wonder is it your own work? You benefitted from Green party membership when you had it, and you were not so erudite in polemics then.

Joe Otten said...

Cowboy, you might as well ask what the point is of discussing politics at all. At least I am playing the ball.

It is true I was less confident expressing myself 15 years ago. I guess because I was still trying to reconcile strands of an ideology that I now recognise defy reconciliation.