Sunday, 10 April 2011

Rip Van Will Hutton and my own half-digested economic thoughts

Any article which contains the phrase: "John Maynard Keynes, the 20th-century's finest economist" sets off sirens in my brain: Repel! Repel! Enemy! Fire at Will! Literally in this case.

Will Hutton comes over like the character Rip van Winkle, waking from his long sleep and wandering into town. He's looking for his old pal John Maynard. Unfortunately for Will, John Maynard's been dead for years, killed by reality. Bretton Woods also; long gone. After years of poor health, finally put to sleep by Dr Nixon back in 1971.

Bretton Woods; the bastard son of the Gold Exchange Standard; this latter; the bastard son of the Gold Standard.

The Gold Standard; the Maginot Line of sound monetary defence; all very well for the length it covered; unfortunately with a Belgian barn door swinging open round the side; supposedly founded on hard currency, but with a central bank free to magic up money from the thin air.

Hutton's position boils down to one idea; print money and everyone will be rich. He's not the first to come up with it, and sadly he won't be the last. He ends his piece with: "It's a race against conventional thinking – and time." But sometimes, indeed oftentimes, the 'conventional thinking' is correct and the pipe-dream-smartie-pants wankfesters like Will are all wrong.

What I hear in my head when the evil spirit of Keynes is invoked

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