Friday, 17 July 2009

Report is expression of a paradox

David Jacobson: Rather than discuss the details of the report, I’d like to make four more general points about the situation.

First, the report itself is an expression of a ridiculous paradox. In the context of a crisis arising from the fact that markets did not work and were inadequately regulated by the state, the job of recommending cuts has been given to a neoclassical economist. Like others of his ilk, he believes in markets and this underlies his proposals. Surely a strategy for the way forward should focus on radical new ways of generating output in the economy in such a way as to support the people who live in this country.

Second, the McCarthy report provides a huge range of possible cuts. The selection of which ones are to be implemented will be done politically. This again calls for political economy in the analysis of the report.

Third, given the short-termism of political perspectives – with a time horizon of about as long as the period between elections! – the cuts selected will be those resisted by the weak. Arguably politicians are influenced by their key supporters, the powerful and the rich. To the extent that this is so, the cuts implemented will be those in the interests of the powerful and the rich.

Fourth, consideration of the report will have to be balanced with the forthcoming report of the Commission on Taxation. In the end the choice of what to do will have to balance an increase in taxation with a reduction in government expenditure.


Fergus O'Rourke said...

"...a neoclassical economist...believes in markets"

1. It is not only "neoclassical" economists who "believe" in markets. Even Marxist economists believe in them;

2. Does Colm McCarthy describe himself as "neo-classical" ? If not, to so describe him might be defamatory :-) (And the Defamation Bill is not yet law);

3. I cannot accept that the lesson of 2008 is that markets have no use. It would make as much - or as little - sense to say that the State has failed, and should be abandoned as a vehicle for increasing the general welfare;

4. Your points 2 to 4 are good.

Conor McCabe said...

"It is not only neoclassical economists who believe in markets. Even marxist economists believe in them."


Neoclassical economists believe in markets; Marxist economists analyse them.

And Marxist economists analyse markets in terms of relations, not in terms of the simplistic linear-based causality of modern economic modelling.

There is no "even" about neoclassical economists, markets, and marxist economists.

Fergus O'Rourke said...


Is it your position that

1. No Marxist economist sees any merit in any market ?

2. All modern non-marxist, and all neo-classical economists specifically, use only "simplistic linear-based ...economic modelling" ?

If not, what *are* you saying ?

Conor McCabe said...

Well, the fact that you think marxist economists see all markets the same, I think pretty much shows how little you know about this subject.

The economic relations which operate under a capitalist economy differ to those under other types of markets. That's Marxism 101, Fergus, but it appears that it's news to you.

Slí Eile said...

I guess 'marxist economics' can mean different things. I am more interested in what works - especially for those with less access to wealth, power, income etc. Markets do work sometimes. The key point is how they are regulated and how different 'actors' cooperate and relate to each other - State, Markets, Civil Associations, Families and individuals. If that makes some of us on the 'left' lapsed marxists that's fine by me. You can't eat flags as John Hume used to say and you can't eat dogma.

Fergus O'Rourke said...


I don't know/remember what I've done to "get up your nose", but you are evidently still too upset to read what I actually write without seeing ghosts there.

conor mccabe said...

Well I see that you're still working off assumptions, Fergus. Assumptions about marxist economics, and now assumptions about my "feelings". There you go.

As regard your comment re: "no marxist economist sees any merit on the Market?" Again I say, a Marxist economist doesn't look at "markets", s/he looks at economic relations at the point of production, not at the point of consumption, and how those economic relations at the point of production play out in the wider society. There is a world of difference between a conceptual framework that has as its basis "markets" - indeed a conceptual framework that allows one to "believe" in markets - and a conceptual framework that analysis economic relations at the point of production and the dynamics surrounding such.

Left-wing / social democratic / liberal / left-leaning economists certainly would look at markets, and see merit in them, but left wing economists are not marxists. Nor do they have to be Marxist. I mean, Keynes was no Marxist.

But in terms of Marxist economics, to say that marxist economists "believe" in markets is to totally miss where marxist economics is coming from, its theoretical and conceptual frameworks. I'm just pointing that out, Fergus, and if that comes across as being snotty, then sorry. Thing is, once you do some background reading into Marxist economics you'll see for yourself that saying that Marxist economists "believe" in markets is, well, I suppose you might as well say that atheists "believe" in theology. Neo-classical economists, now they DO believe in markets.

To suggest, as you seem to do above, that left-wing economists are necessarily Marxist (even Marxist-lite) is wrong. James K. Gilbrath is left-wing, but no Marxist. It IS possible to be left-wing and NOT be a Marxist. But, it is not really possible to be a Marxist and "believe" in markets.

If you want to talk about "ghosts", you've got one here, thinking that left-wing economists are necessarily, or even relatively, marxist. They aren't, and the difference isn't one of degree of "leftness", it's also analytical and conceptual.

If we're going to have discussions on the irish economy, and approaches to it - and I don't mean we as in us two but in terms of the left and right in reland - then the right has to meet us half-way and at least read something about left-wing economics that comes from left-wing economists, instead of getting ideas and assumputions about left-wing economics from right-wing textbooks. At the very least it would stop the type of stuff about marxist economists somehow "believing" in markets, or that left-wing economists - who do see merit in markets - as somehow mini-marxists, which they aint.

Is that too much to ask?