Governments: Fostering Crises and Stifling Entrepeneurs? An Evening With Matthew McCaffrey

On the Monday of December 5th we were joined by Matthew McCaffery for a low down and discussion of the famous and influential ‘Austrian’ school of economics. A school that builds up it’s analysis of the economy from the ground up, highlighting the importance of entrepeneurship, and the motivations and actions of individuals in the shaping of the economy. Although of course, to give a brief summary risks misrepresenting it, so for more details of what this school is about, and for an idea of how it analyses the world, you’d do well to look at a few of Matthew’s publications: http://www.manchester.ac.uk/research/matthew.mccaffrey/publications . The Austrian school struck us as having pretty watertight and often quite radical arguments. Matthew had strong responses for all our criticisms, one response that stood out especially was the response to the central argument of Mariana Mazzucato’s book the Entrepeneurial State, put forward by someone in the back rows. For many of us in the room the book is very much a knock out argument that reaffirms an idea that state intervention has been the most important force in our economic progress. Let’s just say that Matthew’s response ‘sent us back to the drawing board’ slightly. As we were very happy to see at PCES, the school had some interesting analysis on the role of debt, finance and money in the economy. Things that we can reasonably say are not heavily featured in mainstream economics. Some of us came in with preconceived ideas about the content of the talk, assuming it might be perhaps slightly right wing and even slightly inhumane. This was not the case, a strong...
What You Won’t Learn In An Economics Degree: Ecological Economics

What You Won’t Learn In An Economics Degree: Ecological Economics

The UoM Post-Crash Economics Society were lucky to have Kate Raworth from the University of Oxford present her work on Ecological Economics. Ecological Economics is perhaps one of the most important ways of thinking alternatively about the economy, and creates a real conversation about sustainability and the economy’s place within the ecosystem. To view the economy as an ever expanding source of resources and focus our ambitions only on economic growth is futile, as the economy is bounded by the limits of the ecosystem imposed by nature. Raworth’s depiction of an ecological model of economics raised the important question as to whether there is a counter design to the current system of debt, money creation, maximising shareholder return and increasing productivity in the pursuit of economic growth.  Such debates stem from the concept that we should not only consider whether such economic growth possible, but whether this type of exponential growth should even be desirable. It terms of an ethical argument, the earth’s resources have been depleted by industrialisation, investment in profitable industries such as oil and gas, and other processes that have taken from and polluted the environment to improve material conditions for humans. There is a trade off between too much environmental degradation and providing for humans. Raworth proposes the “Doughnut Model” that concludes our sustainable solution is a middle ground between the two: using the Earth’s resources both efficiently and cautiously. The inside limit of the “doughnut” is social foundation; the outside limit is the environmental ceiling; and to go beyond these respective limits would be detrimental to either human and economic needs or the balance of the...

Brussels on Post-Crash

One of the key motivations for PCES has been a forward-looking desire for us, as graduates of Economics, to understand our social environment and, beyond this, to change  it. Following the economic crisis of 2008 enigmas such as unemployment, debt crises and threats of inter-generational inequality persist. Often as students we are left to accept these aspects of our economy without much thought or resolution, and so it was a privilege for PCES to be invited to attend the “Labour Economics after the Crisis” conference by László Andor, Commissioner for Employment, Social Affairs and Inclusion at the European Commission in Brussels last month. As the hub for EU policy-makers, the discussion over two days was enlightening on the matter of how economic theory influences the design and implementation of socio-economic policy. It was also an exposure to the power of institutions such as the EC, and their impact on the lives of people in the EU. The conference addressed key targets set for growth, youth unemployment, female participation in the labour market and job creation, and how these would be met through macroeconomic policy. The high calibre of speakers included Etsuro Honda, Special Adviser to the Prime Minister of Japan. Etsuro provided us with an analysis of Japan’s experience of reducing structural employment following the burst of an asset price bubble, and the movement to refocusing on “moral persuasion” to restore confidence in the Japanese economy. Japan’s experience was an intriguing start to the conference as a source of comparison for the EU. It highlighted the central issues an economy must focus on during recovery: the timing of policy,...