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Articles from Syndicated Column "Against the Current" (for Project Syndicate)
The Keynes-Hayek Rematch
Robert Skidelsky
Project Syndicate
| Monday, August 29, 2011
The Austrian economist Friedrich von Hayek, who died in 1992 at the age of 93, once remarked that to have the last word requires only outliving your opponents. His great good fortune was to outlive Keynes by almost 50 years, and thus to claim a posthumous victory over a rival who had savaged him intellectually while he was alive.
Hayek’s apotheosis came in the 1980’s, when British Prime Minister Margaret Thatcher took to quoting from The Road to Serfdom (1944), his classic attack on central planning. But in economics there are never any final verdicts. While Hayek’s defense of the market system against the gross inefficiency of central planning won increasing assent, Keynes’s view that market systems require continuous stabilization
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The Battle of the Bonds
Robert Skidelsky
Project Syndicate
| Thursday, August 18, 2011
Everyone knows that Greece will default on its external debt. The only question concerns the best way to arrange it so that no one really understands that Greece is actually defaulting.
On this topic, there is no shortage of expert plans – among them bond buy-backs, bond swaps, and the creation of Eurobonds, a European version of the “Brady” bonds issued by Latin American countries that defaulted in the 1980’s. What all such schemes amount to is piling one lot of bonds on top of another in an attempt to square the circle of Greece’s inability to pay, and to minimize the losses faced by its creditors – mostly European banks.
Every week, a preposterous coterie of European bankers and finance ministers drags itself from one capital to
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Free Speech Under Siege
Robert Skidelsky
Project Syndicate
| Monday, June 20, 2011
Recently, at a literary festival in Britain, I found myself on a panel discussing free speech. For liberals, free speech is a key index of freedom. Democracies stand for free speech; dictatorships suppress it.
When we in the West look outward, this remains our view. We condemn governments that silence, imprison, and even kill writers and journalists. Reporters Sans Frontières keeps a list: 24 journalists killed and 148 imprisoned just this year. Part of the promise we see in the “Arab Spring” is the liberation of the media from the dictator’s grasp.
Yet freedom of speech in the West is under strain. Traditionally, British law imposed two main limitations on the “right to free speech.” The first prohibited the use of words or
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Lumpy Labor
Robert Skidelsky
Project Syndicate
| Tuesday, May 17, 2011
LONDON – As the world recovers from the Great Recession, it has become increasingly difficult to discern the true trend of events. On the one hand, we measure recovery by our success in regaining pre-recession levels of growth, output, and employment. On the other hand, there is a disquieting sense that today’s “new normal” may be slower growth and higher levels of unemployment.
So the challenge now is to formulate policies to provide work for all who want it in economies that, as currently organized, may not be able to do so. This issue is much more acute in developed than in developing countries, though interdependence makes it, to some extent, a common problem.
The problem has two aspects. As countries become more prosperous, one
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Democracy or Finance
Robert Skidelsky
Project Syndicate
| Monday, April 18, 2011
LONDON – “Shorting” is a tactic well known among the financial cognoscenti. It means betting against an asset with borrowed money in the expectation of making a profit when its value goes down.
A speculator can “short” a government by borrowing its debt at its current price, in the hope of selling it later at a lower price and pocketing the difference. For example: on January 1, 2010, I think to myself that the game will soon be up for the Greeks. I borrow, at face value, €10 million of the Greek government’s 2016 bond, which is then trading at €0.91, from Goldman Sachs for six months. For this, I have to pay Goldman Sachs the yield that it would receive from the bond – around 5% annually at that price, so about 2.5%, or €250,000 –
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