Different economic views.

I am always slightly bemused when I see a headline that is in parenthesis.  Take yesterday’s article on the BBC web site.  Brexit deal means ‘£70bn hit to UK by 2029'.  So the national broadcaster can make a statement on its website that may or may not be true, it's fall back position being we were merely quoting someone else.  No one knows if it will happen that way or not for that is just one economist’s view.   But that is not made clear in the article.  It is presented as fact.  Indeed, it may be completely the other way around; we may have a £70bn bounty by 2029.  But anyone who reads the article would think it to be true because it is a headline on the BBC.  While not fake news, it certainly is very misleading.     

There are other economic visions of the future that are different ones to those of the National Institute of Economic and Social Research that the BBC is quoting.  Some people have said there is political bias in the NIESR.  I’m not so sure that’s true.  But what I am sure of is that NIESR is a very devout follower of Keynesian economic theory.  And a highly respected one too.   So if you want a Keynesian approach, they are the people to go to.       

And there is the problem.  Keynesian thinking is only one way of seeing the economy.  And the NIESR is very biased if we mean it seeks to see the world though a Keynesian macroeconomics perspective.   It is true, Keynes certainly isn't politically biased.  It is not his fault that some on the moderate Left support his views and policy recommendations.  And yes, some to the right have been devoutly Keynesian as well.  But the reality is, there are dozens of different flavours of economic thinking.  But the BBC has showed a bias to Keynesian thinking by its failure to reflect there are other mainstream economic models that would fundamentally disagree with the headline of the article.   

One economic model to watch in the next few weeks of the election campaign will be the one espoused by Shadow Chancellor John McDonnell.  They come from the Little Red Book from Chairman Mao, the man who’s economic and social polities caused the death of up to 35 million people.  Indeed, nowhere in the world has this brand of economic theory ended in anything other than utter failure.   

Yes, I know his answer, chillingly, is always along the lines of, ‘yes but they weren’t fully and properly implemented, that’s why they failed’.   

So over the next few weeks as we head to an election I am sure his brand of Marxist economics, which to be honest are as legitimate a position to hold as any other, even though its implementation around the world has caused unimaginable misery and destruction to once great economies, will be tested to the limit with the likes of Andrew Neil holding Mr McDonnell’s feet to the fire.