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Articles from Syndicated Column "Against the Current" (for Project Syndicate)
Is Stimulus Still Necessary?
Robert Skidelsky
Project Syndicate
| Sunday, September 13, 2009
London – Have stimulus packages brought the world’s traumatized economies back to life? Or have they set the scene for inflation and big future debt burdens? The answer is that they may have done both. The key question now concerns the order in which these outcomes occur.
The theory behind the massive economic stimulus efforts that many governments have undertaken rests on the notion of the “output gap.” This is the difference between an economy’s actual output and its potential output. If actual output is below potential output, this means that total spending is insufficient to buy what the economy can produce.
A stimulus is a ...
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Fictional Sovereignties
Robert Skidelsky
Project Syndicate
| Wednesday, August 19, 2009
London – A year ago, tiny Georgia tried to regain control over its breakaway enclave of South Ossetia. The Russians quickly expelled the Georgian army, to almost universal opprobrium from the West. South Ossetia, together with Abkhazia (combined population 300,000), promptly declared their “independence,” creating two new fictional sovereignties, and acquiring in the process all the official trappings of statehood: national heroes, colorful uniforms, anthems, flags, frontier posts, military forces, presidents, parliaments, and, most important, new opportunities for smuggling and corruption.
So far, only Russia and Nicaragua recognize the ...
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Economic reform needs a dose of reality
Robert Skidelsky
Project Syndicate
| Monday, July 13, 2009
Mainstream economics subscribes to the theory that markets "clear" continuously. The theory's big idea is that if wages and prices are completely flexible, resources will be fully employed, so that any shock to the system will result in instantaneous adjustment of wages and prices to the new situation.
This system-wide responsiveness depends on economic agents having perfect information about the future, which is manifestly absurd. Nevertheless, mainstream economists believe that economic actors possess enough information to lend their theorising a sufficient dose of reality.
The aspect of the theory that applies particularly to ...
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The Lost Continent
Robert Skidelsky
Project Syndicate
| Saturday, June 13, 2009
LONDON – Home to one-sixth of the world’s people, but contributing only one-fortieth of world GDP, Africa is the most conspicuous victim of the global recession. After a half-decade of 5% growth, the continent’s growth rate is expected to halve in 2009. Some countries, like Angola, are contracting. Elsewhere, the crisis has swept away the benefits of several years of economic reform. Many Africans will fall back into desperate poverty.
Development economists wring their hands in despair: Africa defies their best efforts to create a miracle. On the eve of decolonization in 1960, real GDP per head in Sub-Saharan Africa was almost three ...
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Anatomy of Thatcherism
Robert Skidelsky
Project Syndicate
| Wednesday, May 13, 2009
London – Thirty years ago this month, Margaret Thatcher came to power. Although precipitated by local conditions, the Thatcher (or more broadly the Thatcher-Reagan) revolution became an instantly recognizable global brand for a set of ideas that inspired policies to free markets from government interference. Three decades later, the world is in a slump, and many people attribute the global crisis to these very ideas.
Indeed, even beyond the political left, the Anglo-American model of capitalism is deemed to have failed. It is held culpable for the near financial meltdown. But 30 years of hindsight enable us to judge which elements of the ...
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