Left v right or right v wrong?

John Rentoul

osborne balls 2515889b 300x187 Left v right or right v wrong?Tony Blair often says that the debate about the response to the economic crisis is not a matter of left versus right but of right versus wrong. I was talking about this with a clever person who used to work for him, who pointed out that the economists who support a looser fiscal policy to support demand tend to be left-wing, while those who prioritise deficit reduction tend to be on the right politically.

That is obvious, but the reasons for it are not. If the debate about economic policy really were about “what works” in promoting growth and employment while keeping an eye on inflation, which seem to be common objectives, why should fiscal expansionists tend to be Labour supporters with liberal views on, for example, immigration and a positive attitude to the European Union, while the advocates of fiscal responsibility tend to be Conservative supporters, or, at least, politically undeclared with conservative views on Europe. (If there are any well-known economists who support the Liberal Democrats, do let me know.)

I know how little I know about economics. The economists I respect tend to be neo-Keynesians on the left: Gavyn Davies and Jonathan Portes are my main points of reference. Paul Krugman I know less about; he seems to be even more partisan politically. Hamish McRae, my colleague on The Independent, is more of a budget-balancer, and I don’t know what his politics are, but he has long been a sceptic about the euro.

What is that all about?

Update: Larry Summers is another one.

Photo: Stefan Rousseau/PA. George Osborne (left) and Ed Balls (right)

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  • HJ777

    But we are getting more efficient at using them and are better at developing alternatives.

  • JohnJustice

    But we are not doing this fast enough in relation to the rate that we are using up the resources. As someone once said we shall need three earths to cope with the voracious demands of the expected 9 billion people who will be on the planet by 2050.

  • Steve

    Republicans were not, in the last few incarnations economic conservatives, they ran the US into the ground in the same way as Cons/Lab/cons have and are doing now in the UK but only more so

  • HJ777

    Are we not?

    In a market, prices will rise and encourage us to develop substitutes if things run short. In any case, much of our economic/technological growth allows us to be more resource efficient. For example, I now read newspapers online, consuming virtually no natural resources to do so. Contrast that with the resources used to produce and distribute traditional newspapers.

    I remember the problems forecast in the electronics industry because of the dwindling of mica supplies for capacitors. Now, mica is only used for very specialised forms of capacitors because substitutes were developed for most applications.

  • JohnJustice

    No, look up the effect of EXPONENTIAL demands on the world’s resources.

  • HJ777

    Thanks for the capital letters. They must mean you’re right.

    Do you even know what exponential means?

  • Peter Connell

    It’s mostly about focusing competition. During the last election I heard a Tory candidate say that the problem with Labour supporters is they are not aspirational. We need to make people aspirational for US rather than ME. This seems to work in Cuba, where they terrify the people over the hedge so much that they will do anything to destroy the Cuban system. The people with the biggest cars and fridges are terrified that if what happens in Cuba escapes, they will have to give up some of their stuff.

  • sroughley

    Haha! Seems I completely missed your original point there. Interesting perspective nonetheless. Thank you

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