This classic text is unlikely to have been read by Donald Trump. Many affluent men perceive women as trophies to be won, but the President of the United States is particularly prone to judge a book by its cover. However, Wolf shows that this cultural trend has an economic base.
We all know about the injustice of the gender pay gap. We all appreciate that men typically shirk their share of chores. But lots of us forget the full extent of the pressure exerted on females to look their best. This force breeds unnecessary competition. Furthermore, it means that substantial discretionary spending is wasted on keeping up appearances.
Perhaps Wolf was slightly too passionate at times. Maddened by the social disasters of anorexia and unnecessary plastic surgery in the United States, she did make an unfortunate comparison with the Holocaust. Nevertheless, the author did produce a compelling argument. She was generous towards other feminists and paid a warm tribute to Virginia Woolf:
“Virginia Woolf in A Room of One’s Own had a vision that someday young women would have access to the rich forbidden libraries of the men’s colleges, their sunken lawns, their vellum, the claret light.”
This presentation raised many questions. Democracy is one of those concepts which can be interpreted variously. The emphasis here was on public ownership. However, Professor Andrew Cumbers was interested in putting limits on it. He was also enthusing about the potential for participation.
Professor Cumbers has a lot of empirical data to support his arguments. He is also thinking about the production of an index of economic democracy. This would permit international comparisons to be drawn. The relevance of this process may depend on the criteria selected for measurement.
It was in the realm of theory where the approach seemed least convincing. Many people want a greener and fairer economy. They may be prepared to vote for it. In unusual circumstances, citizens might rise up and demand it. But it is Utopian to expect that ordinary people have the time, interest, skills and patience to participate in complex economic institutions on a regular basis. Technocrats are a necessary part of a modern system because we lack the expertise to make important things happen. Professor Cumbers was full of praise for the liberalism of John Stuart Mill, but social life has become more complex since the publication of On Liberty.
We live in an age where Utopian and reactionary thought are on the increase. It is vital that political discourse matches with economic possibilities. In the UK, the disaster of Brexit is unfolding. This illustrates the dangers of simplistic optimism. People cannot eat flags, regardless of nationalist rhetoric. Nor can they consume hope. The Labour Party must be pragmatic, internationalist and flexible if it comes to power.
This history of the Bank of England is recommended reading for anyone who wants to understand the modern political economy of the UK. The institution in question has attracted lots of criticism down the centuries. It has adapted to change, and it has remained at the heart of the Establishment. Given that modern capitalism is a different beast from the economy of 1694, the fact that the Bank of England has survived deserves some explanation.
The story of British capitalism is a complex one. The country has become much less significant in global terms since the First World War. But the City of London retains importance on the international scale. Hence the relative economic decline of the UK has rarely been attributed to the Bank of England. While the institution might have made significant errors, major crises of capitalism have often impacted on other countries too. Regardless of whether the Bank of England has been in the public sector when mistakes have been made, elected politicians have usually been held to be responsible for economic failures.
The economic crisis of 2007-2009 may have been exacerbated by the inappropriate performance of the Bank of England. Its officials could have been more aware of the impending catastrophe. It should have acted sooner to assist Northern Rock. It would have been better if it had adjusted interest rates more swiftly to address the emerging recession. However, it was New Labour which had established the Financial Services Authority and which had tasked the independent Bank of England with focusing on inflation. Therefore the responsibility of Governor Mervyn King must not be exaggerated.
Understanding capitalism is about appreciating continuity as well as change. This means that institutional analysis can be valuable. Nevertheless, an absence of developed theory does make it difficult to comprehend what might have been done differently. David Kynaston downplays the preference of the Bank of England for the coalition between the Conservatives and the Liberal Democrats. Given the counterproductive economic policies of Chancellor George Osborne, this is a significant choice. However, Kynaston remains balanced enough to cite the liberal Paul Krugman on the apparent bias of the institution:
“‘the point is that if you’re going to have an independent central bank, the people running that bank have to be careful to stay above the political fray.'”
Central bankers make their decisions in a calm manner and sucking up criticism is part of the job. If they act or opt not to, they seldom receive any thanks. Traditionally, central bankers prefer practice to theory, but they do rationalize their decisions with recourse to ideas.
Experienced journalist Larry Elliott has suggested that the Monetary Policy Committee might have overestimated inflationary pressures in the UK economy. He has contended that this is the consequence of a reliance on the Phillips Curve. The wage increases that could boost inflation do not seem to be developing from his perspective. He has highlighted that the Phillips Curve has a ‘hit and miss’ history. The curve has worked to different degrees during diverse eras of capitalism.
Capitalism does not have immutable laws of motion. Central banks cannot read off the ‘right’ thing to do by looking at history. The Phillips Curve is best seen as a rough interpretation of the past which might give a policy clue. It is foolish to give it excessive significance, but it would be an error to ignore it. The point is that a central bank needs to preserve its credibility. If it hints it will do something, it can cause consternation if it does not follow through.
Elliott has engaged in the debate about the Phillips Curve, but he would do well to remember his earlier work on the “reserve army of labour” and zero-hours contracts. Wage rises may not be strong in the UK because the relationship between employers and employees has changed since the Great Recession. Weak unions mean that inflation is not coming from the bargaining of workers. The Phillips Curve might come more strongly into play if the political situation alters in favour of ordinary people. Nevertheless, the Bank of England wanted to call time on the ultra-low interest rate because delay could have exacerbated problems down the road. In the absence of a strong economic policy from the Government, the Governor of the Bank of England, Mark Carney might have viewed this as a dereliction of duty.
If the Bank of England moves the interest rate today, commentators will focus on the official level of inflation. However, some inflation is hidden. Manufacturers can keep the price of a product the same whilst reducing its quality or its quantity. Consumers of chocolates may be outraged by this type of corporate behaviour.
The Phillips Curve suggests that there is a trade-off between inflation and unemployment. In the modern British labour market, we have concealed unemployment. This is where the official measures of unemployment do not capture the true extent of underemployment in the economy. People capable of work if they received support might be on sickness-related benefit, while self-employed workers may be unable to access benefits when demand for their labour is limited. If contemporary inflation statistics and unemployment statistics lack rigour then the Bank of England could be tempted to take action which is inappropriate for the long-term health of the economy.
It is hard to discern whether hidden inflation or concealed unemployment is the more significant problem. The answer may well vary on a regional basis. When the Government does not have a credible regional economic strategy, the Bank of England can only hope for the best. The Northern Powerhouse has not given much concrete support to manufacturing so far and it must be hoped that any interest rate rise does not impact adversely on the performance of the peripheral regions. Fortunately, any adjustment to interest rates will be small so the impact on unemployment should be limited.
The Office for National Statistics regularly adjusts the composition of the basket of goods which is used to assess inflation in the UK. This can be a controversial process because consumers buy such different items. While artisan gin may be really popular in some circles, other social groups could be more concerned with the price of iced buns.
Class and gender may impact on what we purchase. Our perception of inflation is thereby influenced by the position we occupy in society. When inflation is above the two per cent target, our emotions about it might be structured by more than our income.
This matters when interest rates are the subject of elite discussion. The Bank of England may cite inflation if it nudges up the interest rate this week. But people know that the central bank is also concerned with its credibility. Any decision of the Monetary Policy Committee will be evaluated by citizens with different spending patterns. This suggests that a broader economic debate is needed. Minor interest rate adjustment may be deemed to be tinkering if enough people think that the unbalanced UK economy requires the implementation of a robust democratic strategy.
Radio can take the listener to troubling places. The Dark Tower by Louis MacNeice is a journey worth taking. Combining the psychological and the political, the play raises existential questions. A dark humour can be discerned, but a seriousness is never absent.
It is no coincidence that Albert Camus wrote La Peste in the same historical period. Both writers were trying to come to terms with the ruin of Europe. They were concerned with what fascism had done to people. Neither thinker was dogmatic, but both individuals were unable to leave politics to politicians.
MacNeice was a poet who understood that certainty could be a terrible thing. His ambivalence was one of his strengths. And yet he could not feel isolated from the political fray. He knew that leaving history to its own devices could cost the world. His message resonates in the era of Trump, Brexit and casino capitalism.