"Governance" as New Kids on the Block

New words do not always indicate a new condition. One of my favourite cartoons is the Jules Feiffer one of a small kid rehearsing the various words which have been used to describe the condition of those like him -

“I used to think I was poor. Then they told me I wasn't poor, I was needy. Then they told me it was self-defeating to think of myself as needy, I was deprived...then underprivileged. Then they told me underprivileged was overused. I was disadvantaged. I still don't have a dime. But I have a great vocabulary”.

Although I hated the word "governance" when it started to appear in the 1990s, I did understand why some academics felt a new word was needed. A whole new architecture of institutions - Agencies, regulators of privatised public utilities, legally superior (EU/NATO/WTO) and inferior (devolved) bodies; not to mention public procurement and consultation procedures - means that a Government is no longer Master of it's Domain. There are other kids on the block with whom it has to share power

I am aware, however, that there are other, more ideological, reasons for using the term. Recent posts have referred to the role of bodies such as the World Bank and American Think Tanks in weakening the role and power of the State - and the use of the word "governance" has undoubtedly been one the weapons they have used. Take, for example, the famous injunction of the 1991 "Reinventing Government" book to "row - rather than steer"
But I concede that the new institutional complexity does justify the new word. Somewhat reluctantly, therefore, I have accepted that the word is a legitimate one - even if I still shiver when people use it wrongly, when they should have said "government"

But why - as I indicated in the last post - did academics stop using the term some 5-6 years ago? Are they no longer interested? Have other topics become sexier?
Have they exhausted all that can be said on the topic? If so, it would be useful if someone could do a post-mortem article to tell us that was usefully learned from this 25-year episode of scribbling...
Or perhaps this Chinese article - Governance and Good Governance (2018) was that article?
- although I have to say I prefer this 2014 article Making sense of governance

Masochists who really need an answer to such questions are directed to the two definitive Handbooks which were published just as the fashion for the subject was spluttering to an inglorious end. The excerpts give an excellent sense of the field
The Sage Handbook of Governance ; ed M Bevir (2011) 600 pp
The Oxford Handbook of Governance ; ed  David Levi-Faur (2014) 800 pp

Whatever Happened to Governance?

Most people are confused by the word "governance" which crept into our language  some 30 years ago - and which indeed tends now to be used interchangeably with "government".
There is, however, a huge difference in meaning between the 2 words - with "governance" being a dangerous and slippery concept which, significantly perhaps, has now totally disappeared from academic discourse. For me, such sudden academic silences often offer important clues about our political culture - so bear with me while I muse.

An American political scientist by the name of Harlan Cleveland was apparently the first to use the term - as an alternative to the phrase "public administration" - although it was the late 80s before the word came into intensive use. In the mid-1970s, he suggested that:

“What the people want is less government and more governance” (1972).

What he meant by governance was the following cluster of concepts.

“The organizations that get things done will no longer be hierarchical pyramids with most of the real control at the top. They will be systems—interlaced webs of tension in which control is loose, power diffused, and centers of decision plural. 

“Decision-making” will become an increasingly intricate process of multilateral brokerage both inside and outside the organization which thinks it has the responsibility for making, or at least announcing, the decision. Because organizations will be horizontal, the way they are governed is likely to be more collegial, consensual, and consultative. The bigger the problems to be tackled, the more real power is diffused and the larger the number of persons who can exercise it—if they work at it” (p. 13). 

He was, in other words, anticipating the "network" approach which I discussed last year in a review of Niall Fergusson's "The Tower and the Square"

It was, however, only in the 1980s that academic began to notice not just privatisation but the increased tendency of governments to "hive off" decision-making to technocratic "agencies" which were given vast managerial authority. These may still have been state bodies but were run increasingly like private companies.
"Partnerships" - with both private companies and other state bodies - were another device in which power came increasingly to appear "shared"

It was such developments that encouraged academics (and the World Bank) to invent the new term "governance" - not just as a neutral term for a new structure but as a celebration of a new concept of "networking" which, in principle, offered greater pluralism of thinking about an issue.....
Indeed, in typically helpful academic fashion, they added an adjective "multi-level" to most discussions to give us the acronym MLG
In a famous phrase, RAW Rhodes called the result "hollowed-out government" - with one of the consequences being that Governments were able to disown unpopular decisions (not least  of the EU) and Governance and Public Administration (2000) sets out that academic's argument
"Whatever happened to Public Administration? - governance, governance everywhere" was a useful paper which tried to explore (in 2004) what lay behind the word's sudden appearance. 

That's the background.
I now have two questions 
- did the new term actually serve any useful purpose?
- why has the term disappeared from academic discourse?

Recommended Reading
Rethinking governance – the centrality of the state in modern society; S Bell and A Hindmoor (2009) A good overview of the concept - putting it firmly in its place

Matt Flinders gave us an excellent short article in 1999 with an excellent overview of the word

Peter Drucker's 6 sins of PA - a post with a very comprehensive annotated bib on the key readings
Time to Reclaim public services - an update
Governance in the 21st Century (OECD 2001) an interesting book whose summary suggests first that "old forms of governance in both the public and private sectors are becoming increasingly ineffective. Second, the new forms of governance that are likely to be needed over the next few decades will involve a much broader range of active players eg active citizens. Third, and perhaps most importantly, two of the primary attributes of today’s governance systems – the usually fixed and permanent allocations of power that are engraved in the structures and constitutions of many organisations; and, the tendency to vest initiative exclusively in the hands of those in senior positions in the hierarchy – look set to undergo fundamental changes"

The Pandemic as a Warning Shot

The last post ended with a suggestion that how we behave in a crisis is a mark of our character and that all of us should feel under a moral microscope in times of crisis. A post last autumn had made the point that

Nobody seems to want to talk any more about “character” – perhaps it has shades of “self-discipline” and “self-control” when the spirit of the age continues to encourage the self to flourish?So it took some courage for David Brooks to produce in 2015 a book entitled “The Road to Character” consisting of profiles of 8 people whose life demonstrates “character” including Dwight Eisenhower, Samuel Johnson (!), George Marshall (of Marshall Fund fame), St Augustine (!), the american woman behind Roosevelt’s New Deal (Francis Perkins), the charity worker behind “The Catholic Worker” (Dorothy Day) and George Eliot, the British writer.

I idly googled the Ngram user for "character" to discover that useage of the word "character" has fallen in the past decade to almost zero!
No wonder that I followed up that post by wondering whether our social DNA was changing

Some months back I referred to a vimeo encouraging us to use lockdown to conduct more meaningful conversations . It invited us to consider the following questions -
- what we found the most difficult thing about the lockdown?
- how we reacted to it eg fears and hopes?
- what we were ”bringing” to the experience? eg characteristics/strengths
- which of a range of ”spheres” (work, family, friends, personal development, health, finances, wider community) we actually spent time on?

This was part of what was called the Adventus Initiative  which went on to consider, coming out of Covid19,
- what sort of changes (if any) we might we want to make in our priorities?
- for example in the time we devote to each of those spheres?
- what our first action would be?
In many ways, however, this reflects the privileged world which global warming should have us questioning - with both Extinction Rebellion  and Bill McKibben upping the ante

The Canadian blogger Dave Pollard has a great post today which imagines that we are almost at the end of the 21st century - with "civilisation" as we know it today having completely broken down and our lives lived in small communities - generally in primitive form of wars with one another. His "retrospective" covers 11 points - and I have selected the last three to give you a sense of his argument

9 We have had our share of crises, of course. The Great Earthquakes devastated America’s west-coast cities, though by then the big cities were already starting to be depopulated. We’ve had six pandemics that killed about 400 million people between them, though that number is highly imprecise, since the most recent ones, after the production of vaccines ceased in the third decade of the Long Depression, were uncontrolled and our information systems could no longer gather much reliable data on their impact. The latest one was extremely virulent, but since long-distance travel has pretty much ceased, its effects were severe but localized. We figure it’s likely to be like that going forward. The loss of the great forests to fire and insects has caused a whole cascade of ecological crises, as has the death of the oceans that preceded it. That has caused the hot deserts of the tropics and the cold deserts of the boreal areas to expand enormously, and they’re largely uninhabitable now, as are the semi-arid areas of western North America, central and east Asia, and southern Europe that have grown unbearably hot and have long ago run out of water.

10 And water, always our most precious resource, is now probably the biggest factor driving our population down and our continuing migrations to areas where it is still available. It was the cause of the last great wars, in the northern parts of North America and Europe, and across Asia. When the Long Depression eliminated the capacity to create and maintain pipelines to transport water long distances, those wars ended in a whimper. But with the Long Migration, even that water is in danger of running out, especially as the climate collapse worsens.

11 You might be surprised to learn that, despite not having man-made pharmaceuticals, vaccines, or hospitals, our life expectancy is about the same as it was in 2020. We apparently eat much more nutritious food than people did then — less of it, almost entirely plants, and no processed food — and we of necessity exercise more, as we live without most of the electrically-powered equipment that made lives in 2020 dangerously physically inactive. And I’m not sure why, but we seem less obsessed about dying than people back then were. Maybe it’s because we see it when it happens, whereas in 2020 it was always hidden, in institutions, behind closed doors.

The pandemic tells us, surely, that the sort of modern life we had taken so easily for granted is now over....Some aspects of normality may return - but our easy reliance on air travel, mass tourism and imports will surely reduce significantly. 
If we are to be able properly to anticipate and prepare for our new future, we will all need a strong shot of imagination ...

Resource on global warming
What is wrong with us?
Facing Extinction

Who's having a good Covid19 War?

Covid19 certainly "separates the wheat from the chaff" - it didn't take long, for example, for us to identify the "good" leaders (both political and professional) whose judgements we felt we could trust - for example Ahern and Merkel and the Far-East leaders mentioned in Pankaj Mishra's article in the last post. The 1990s saw an interest in something called "good governance" - which tended to degenerate into a rather mechanistic list of desiderata unable, for example, to throw any light on the odd fact that  two of the countries with the highest Covid19 death rates (US and UK) are also the countries which
- have adversarial,”first past the post”, electoral systems;
- pride themselves on their ”exceptionalism”;
- gave us neoliberalism;
-  have a transactional approach to business which insists on paring costs down to a bare minimum – regardless, as Paul Collier argued recently, of the damage this does to social resilience.

Covid19 offers an opportunity to rethink what became a rather sterile academic debate about what was a pretty vague concept ("good governance") and to craft instead useful guides to the far more important topic of good government
There are, for example, thousands of books about leadership  but not so many about political leadership. It's certainly worth trying to identify what Merkel and Ahern have - which distinguishes them from Trump. Johnson and Bolsonaro - eg calmness under pressure; a search for a diversity of opinions; a refusal to be rushed into decisions; integrity; and effective story-telling are vastly underestimated features of the good leader

Fukuyama is one of many commentators who have identified the issue of Trust as a defining one for government systems in the future.

The crucial determinant in performance will not be the type of regime, but the state’s capacity and, above all, trust in government.
All political systems need to delegate discretionary authority to executive branches during times of crisis. No set of preexisting laws or rules can ever anticipate all of the novel and rapidly changing situations that countries will face. The capacity of people at the top, and their judgment, determine whether outcomes are good or bad.

And in making that delegation of authority to the executive, trust is the single most important commodity that will determine the fate of a society. In a democracy no less than in a dictatorship, citizens have to believe that the executive knows what it is doing.
It is a popular misconception that liberal democracies necessarily have weak governments because they have to respect popular choice and legal procedure. All modern governments have developed a powerful executive branch, because no society can survive without one. They need a strong, effective, modern state that can concentrate and deploy power when necessary to protect the community, keep public order, and provide essential public services. A democracy delegates emergency powers to its executive to deal with fast-moving threats.

But willingness to delegate power and its effective use depend on one thing above all, which is trust that the executive will use those powers wisely and effectively. And this is where the U.S. has a big problem right now.

Trust is built on two foundations.
- citizens must believe that their government has the expertise, technical knowledge, capacity, and impartiality to make the best available judgments. Capacity simply has to do with the government having an adequate number of people with the right training and skills to carry out the tasks they are assigned, from local firemen, policemen, and health workers to the government executives making higher-level decisions about issues such as quarantines and bailouts.
- The second foundation is trust in the top end of the hierarchy, which means, in the U.S. system, the president. Lincoln, Wilson, and Roosevelt enjoyed high levels of trust during their respective crises. As wartime presidents, this trio succeeded in symbolizing, in their own persons, the national struggle. George W. Bush did initially after September 11, but as his invasion of Iraq soured, citizens began questioning the delegations of authority they had made to him via legislation like the Patriot Act. The United States today faces a crisis of political trust. Trump’s base—the 35–40 percent of the population that will support him no matter what—has been fed a diet of conspiracy stories for the past four years concerning the “deep state,” and taught to distrust expertise that does not actively support the president.

And even the world of political science has woken up to the importance of Trust - with the UK's Economic and  Social Research Council funding a programme on the subject which has so far released such papers as
- "Trust, Mistrust and Distrust"
- "Lesson-Drawing from New Zealand"
- "Nudges against pandemics - on the Swedish experience" ( by Swedish political scientist J Pierre)
For a more critical view of the Swedish left's response see here

But it's all of us who should feel under a moral microscope in times of crisis - not just our leaders. How we behave in a crisis is a mark of our character - which often finds expression in our choice of career. I was intrigued by a recent post which suggested that certain character deficiencies of economists had been exposed during the Covid Crisis

Update;

I missed this always-interesting Matt Flinders' article on The Politics of Covid19 - trust, blame and understanding 
The interesting UK Alternative journal commissioned and published this interesting report on how Plymouth activists have responded to the pandemic

We need to talk about ....the state

Governments have long been an easy target for public anger - whether defined as the particular collection of personalities who form a particular political regime OR as the administrative systems which provide our public services. But underlying attitudes to the state  tend to ebb and flow....25 years ago "the State"  was very much out of favour - with the low point being probably the 1997 World Bank annual development report "The State in a changing world" which reflected the neo-liberal critique of the very concept of state provision which had become the default mode.

The new millennium saw the beginnings of a realisation that the pendulum had swung too far toward business and deregulation; and that the state did have important functions to manage The global financial crash of 2008 should have brought us to our senses - but didn't.
It is rather Covid 19  which has brought the whole issue of the role and performance of government back into public debate

Last month Pankaj Mishra had a superb long article in LRB about what the performance of different states on Covid 19 tells us.
And an article in the forthcoming issue of the Political Quarterly - "Covid 19 and the blunders of our governments" - by Gerry Stokes et al is an early example of the sort of academic treatment we can look forward to in the near future (be warned - this may be behind a paywall - but an annual sub for the best UK political journal is under 20 pounds!) The article sets the UK government's performance in the pandemic in the wider context of the political science literature of the past 25 years on "policy blunders" and makes some recommendations which, I have to say, I found very weak.
But first, Mishra

The escalating warning signs – that absolute cultural power provincialises, if not corrupts, by deepening ignorance about both foreign countries and political and economic realities at home – can no longer be avoided as the US and Britain cope with mass death and the destruction of livelihoods.
Covid-19 shattered what John Stuart Mill called ‘the deep slumber of a decided opinion’, forcing many to realise that they live in a broken society, with a carefully dismantled state. As the Süddeutsche Zeitung put it in May, unequal and unhealthy societies are ‘a good breeding ground for the pandemic’. Profit-maximising individuals and businesses, it turns out, can’t be trusted to create a just and efficient healthcare system, or to extend social security to those who need it most. 

East Asian states have displayed far superior decision-making and policy implementation. Some (Japan, Taiwan, South Korea) have elected leaders; two (China, Vietnam) are single-party dictatorships that call themselves communist.
They share the assumption that genuine public interest is different from the mere aggregation of private interests, and is best realised through long-term government planning and policy. They also believe that only an educated and socially responsible elite can maintain social, economic and political order. The legitimacy of this ruling class derives not so much from routine elections as from its ability to ensure social cohesion and collective well-being. Its success in alleviating suffering during the pandemic suggests that the idealised view of democracy and free markets prized since the Cold War will not survive much longer.

Few narratives are more edifying, as economies tank and mass unemployment looms, than the account of the ‘social state’ that emerged in Germany in the second half of the 19th century. In "Atlantic Crossings: Social Politics in a Progressive Age" (1998), Daniel Rodgers showed that many Americans in the late 19th and early 20th centuries returned from stays in Germany with ideas that would inform the New Deal.

‘The state must take the matter into its own hands,’ Bismarck announced in the 1880s as he introduced insurance programmes for accident, sickness, disability and old age. German liberals, a tiny but influential minority, made the usual objections: Bismarck was opening the door to communism, imposing a ‘centralised state bureaucracy’, a ‘state insurance juggernaut’ and a ‘system of state pension’ for idlers and parasites. German socialists saw that their Machiavellian persecutor was determined to drive a wedge between them and the working class. Nevertheless, Bismarck’s social insurance system wasn’t only retained and expanded in Germany as it moved through two world wars, several economic catastrophes and Nazi rule; it also became a model for much of the world. 

Japan was Germany’s most assiduous pupil, and the Japanese, in turn, inspired China’s first generation of modern leaders, many of whom spent years in Tokyo and Osaka. Despite the defeat and devastation of the Second World War and the US occupation, Japan has continued to influence East Asia’s other late-developing nation-states: South Korea, Taiwan, Singapore and Vietnam.
What made Germany such a compelling prototype for Japan? It is that Germany was a classic ‘late developer’ – the archetype of all nation-states in Asia and Africa. It unified only in 1871 and began to industrialise nearly a hundred years after Britain. Its leaders had to cope with the simultaneous challenges of rapid mechanisation and urbanisation, the disappearance of traditional livelihoods, the growth of trusts and cartels as well as trade unions, and an intensifying demand, articulated by a vibrant socialist movement, for political participation.

Fascinating stuff - which owes not a little to Francis Fukuyama's brilliant 2 volume study of "The Origins of Political Order - and Decay"
Regular readers will know that I am trying to complete a book with the title "Is Admin Reform really all that sexy?"  I last blogged about my efforts at the beginning of the year  This is clearly the signal to get back to work!

Revised Favourite Blogs

One of this blog's many features is the list of my favourite blogs. It's a long list - some 50 in total which I've accumulated during the past decade and brought up to date today, removing a couple which no longer gave access and adding others - mainly book blogs.
The focus of the blogs is fairly diverse - a fair number deal with political or economic issues as you would expect but several connect to book blogs, collections of art  -  and a couple celebrate photography
It's  now more easily accessible - at the top of the right-hand column.

For my money, the most interesting blogs are -
- Brave New Europe - good open site committed to bring down the neo-liberal thought collective
- Crooked Timber - a collective blog of US and Australian academics with occasional group assessments of non-fiction books. Quite excellent
- Mainly Macro - one of the best-written blogs (by Prof Simon Wren-Lewis) on UK socio-economic matters

- Our Finite World - quite excellent blog by an energy specialist
- Stumbling and mumbling - rigorous application of method to contemporary issues by a UK economist
- The next recession - a rare marxist blog which makes real sense

- The Political Economy of Development - a quite fascinating blog by someone who has some of the same background as me (although younger and without the political experience). But the same dedication to books....
- Understanding society - rigorous blog by a real social scientist - Dan Little of the US

Money Talks - why we need a new Vocabulary of social change

Exactly one hundred years ago. Keynes wrote a famous paragraph about globalisation which started -

The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.

Two world wars checked capitalism's dynamism - although the post-war period enjoyed what the French have called "the glorious 30 years". A new phase, however, came into play in 1971 with Nixon's unilateral decision to take the US out of the 1944 Bretton Woods system of global finance. The UK's Big Bang liberalisation of banking and the EU's Single Market 15 years later; and the establishment in 1995 of the World Trade Organisation were further boosts to a new phase of global financialisation.
These past 40 years of increasingly instantaneous financial flows have made a mockery of both democracy and of sovereignty. It is capital markets which now decide the shape and scope of state policy-making - and which have destroyed the model of social democracy. 
When countries borrow, it is the money markets who make the judgements about the risks and therefore the range of interest rates payable.

Whatever the rhetoric of party manifestos, it is money - not politics - which now talks and which should make us take more seriously the question posed more than a decade ago by the veteran US political scientist SM Wolin in Democracy Incorporated – managed democracy and the spectre of inverted totalitarianism (2008) - namely whether capitalism and democracy can continue to coexist. Robert Kuttner's Can Democracy Survive Global Capitalism? (2018) clearly doubts it

The ideology of "neoliberalism" may well be a useful one for academics but is disastrous as an explanatory tool for social activists - let alone one likely to help persuade others. We do therefore desperately need a proper vocabulary for persuasive conversations with others about the nature of the system which is grinding us asunder. I've taken in recent blogposts to refer to it, variously, as "The Beast" or the Elephant - although Yanis Varoufakis's "Minotaur" is probably the best metaphor.
When I was born, capitalism was something which stood or fell according to its ability to produce real things - now it is more of a psychic process so well described in Adam Curtis' documentaries. The 2011 book Monoculture - how one story is changing everything is one of the few good reads about all this.

Skidelsky's "Money and Government", which was the positive focus of the last post, is an important book in its (sadly all too rare) attempt to make the world of money comprehensible to the average citizen. But it has, these past few weeks, been lying unread in my car - I just didn't have the patience to wade through the economic history it offers.
Something called "Modern Monetary Theory" has suddenly become flavour of the month in leftist circles thanks apparently to one of Bernie Saunders' advisers, one Stephanie Kelton whose book The Deficit Myth  has been attracting feverish reviews - although Michael Roberts, the Marxist economist, needs some convincing 
Such is the level of interest in this new body of work that Real Economics devoted an entire issue to the subject which is well worth reading

update; last year saw the publication of this book which argues against the prevailing view that capitalism is destroying democracy – balancing the 2013 book Managing Democracy; managing dissent – capitalism, democracy and organising consensus.

A Challenge to Conventional Finance

The curious title which the blog has had for the past year or so is a tribute to those who have managed to escape a monoculture (or “tunnel vision”) - generally by having moved from one territory to another; be that intellectual or geographical.

Being an outsider seems to give one’s writing a bit of an edge – as I argued earlier this year with some examples

Robert Skidelksy’s name should probably be added to that list – it’s not just his family background (he lived in China until he was almost 10) but the fact that he is both an historian and an economist.

I’ve been a fan of his ever since I came across his Interests and Obsessions – historical essays (1994) in a second-hand bookshop a couple of years ago. It’s a delightful collection of essays on different aspects of British life in the last century or so – including quite a few profiles. He is the definitive biographer of Keynes – his 3-volumes on the man come in at more than 1000 pages.

So I didn’t need a lot of convincing to buy his Money and Government – a challenge to mainstream economics (2018 – full access by clicking the title) even although several chapters have short appendices of formulae (for me the ideal place for them!)

David Graeber (another excellent writer) has a long and very positive review from which I’ve taken some excerpts at the end of the post

Before I get on to that book, here’s an example of Skidelsky writing – from a book review he did a few years ago for NYRB on the impact of computerised systems

The aim of all control systems is to control human behaviour, including the way we think. Priests and political leaders have long used religion and ideology for this purpose, since it economizes on the use of force and terror. But it is only in the last hundred years or so that the attempt to control behaviour by controlling the mind has achieved scientific status, largely through the explosion of calculating power that computers have made possible. In one of his many fascinating chapters, the author shows how CBS originated in the needs of the military for battlefield control, before they were applied to the needs of business.

Unlike the machine assembly line for Ford cars, the human assembly lines in giant retail organizations like Walmart and Amazon pose special problems. The stacking and retrieving of customers’ orders requires the attention of a “panoptic monitoring regime to pick up on…human waywardness [on the part of the employees] and correct it without delay.” The model is that of Jeremy Bentham’s Panopticon, the circular prison he designed with an inspection tower at its centre, where a single watchman could observe the inmates without them being able to tell if they are being watched. Bentham himself thought of the Panopticon as an unprecedented way of obtaining power of mind over mind. What has made computerized business systems universally applicable is the joining of Taylorian scientific management (breaking down jobs into small tasks) with the panoptical control made possible by digital technology.

In 2016 Skidelsky edited a book with the fascinating title Who Runs the Economy? The role of Power in economics from which, I suspect, this text is taken

Adapting Steven Lukes (1974), one may think of ideas as a form of ‘soft power’, which structures our debates about reality. Alternatively, and more comprehensively, they may be seen as shaping our consciousness –the way we interpret our world. But just because ideas are produced in institutions, we cannot ignore questions about the hard power behind the soft power. Who finances the institutions from which ideas spring? Who finances the dissemination of ideas in popular form –media, think tanks? What are the incentives facing the producers, disseminators, and popularisers of ideas even in a society in which discussion is ‘free’? In short, what is the agenda of business? It is reasonable to see business as the hard power behind the soft power of ideas, not because the business community speaks with one voice, or because there are no other centres of hard power (e.g. government) but because it is the main source of the money without which the intellectual estate would wither and die……

Assertion of the independence of ideas is a necessary modification of crude Marxism, which I dare say Marx himself would have accepted. Nevertheless, in the Marxist scheme, the intellectual class, like the state, attains only ‘relative autonomy’; and ideas rarely overturn the perception or promotion of self-interest, however much they may modify its expression. Practical men like nothing better than to have their prejudices dressed up in scientific language. Ultimately the ideas in power serve the interests of the class in power; under capitalism, this is the capitalist class.

Skidelsky is 85 but is extraordinarily prolific – he has just produced What’s wrong with economics – a primer for the perplexed 2020) and was an active member last year of a small advisory group to the OECD Sec-Gen which helped produce an amazing little document Beyond Growth – towards a new economic approach; (OECD Sept 2019) which basically questions the entire raison d’etre of the OECD for most of its existence!

But here’s what David Graeber had to say about Money and Government – a challenge to mainstream economics

What it reveals is an endless war between two broad theoretical perspectives in which the same side always seems to win—for reasons that rarely have anything to do with either theoretical sophistication or greater predictive power. The crux of the argument always seems to turn on the nature of money. Is money best conceived of as a physical commodity, a precious substance used to facilitate exchange, or is it better to see money primarily as a credit, a bookkeeping method or circulating IOU—in any case, a social arrangement?

This is an argument that has been going on in some form for thousands of years.

Technically, this comes down to a choice between what are called exogenous and endogenous theories of money. Should money be treated as an outside factor, like all those Spanish dubloons supposedly sweeping into Antwerp, Dublin, and Genoa in the days of Philip II, or should it be imagined primarily as a product of economic activity itself, mined, minted, and put into circulation, or more often, created as credit instruments such as loans, in order to meet a demand—which would, of course, mean that the roots of inflation lie elsewhere?

To put it bluntly: QTM is obviously wrong. Doubling the amount of gold in a country will have no effect on the price of cheese if you give all the gold to rich people and they just bury it in their yards, or use it to make gold-plated submarines (this is, incidentally, why quantitative easing, the strategy of buying long-term government bonds to put money into circulation, did not work either). What actually matters is spending.

Nonetheless, from Bodin’s time to the present, almost every time there was a major policy debate, the QTM advocates won. In England, the pattern was set in 1696, just after the creation of the Bank of England, with an argument over wartime inflation between Treasury Secretary William Lowndes, Sir Isaac Newton (then warden of the mint), and the philosopher John Locke.

Newton had agreed with the Treasury that silver coins had to be officially devalued to prevent a deflationary collapse; Locke took an extreme monetarist position, arguing that the government should be limited to guaranteeing the value of property (including coins) and that tinkering would confuse investors and defraud creditors. Locke won. The result was deflationary collapse.

According to Skidelsky, the pattern was to repeat itself again and again, in 1797, the 1840s, the 1890s, and, ultimately, the late 1970s and early 1980s, with Thatcher and Reagan’s (in each case brief) adoption of monetarism.

Always we see the same sequence of events:

(1) The government adopts hard-money policies as a matter of principle.

(2) Disaster ensues.

(3) The government quietly abandons hard-money policies.

(4) The economy recovers.

(5) Hard-money philosophy nonetheless becomes, or is reinforced as, simple universal common sense.

How was it possible to justify such a remarkable string of failures? Here a lot of the blame, according to Skidelsky, can be laid at the feet of the Scottish philosopher David Hume.

The one major exception to this pattern was the mid-twentieth century, what has come to be remembered as the Keynesian age. It was a period in which those running capitalist democracies, spooked by the Russian Revolution and the prospect of the mass rebellion of their own working classes, allowed unprecedented levels of redistribution—which, in turn, led to the most generalized material prosperity in human history. The story of the Keynesian revolution of the 1930s, and the neoclassical counterrevolution of the 1970s, has been told innumerable times, but Skidelsky gives the reader a fresh sense of the underlying conflict……

Economic theory as it exists increasingly resembles a shed full of broken tools. This is not to say there are no useful insights here, but fundamentally the existing discipline is designed to solve another century’s problems. The problem of how to determine the optimal distribution of work and resources to create high levels of economic growth is simply not the same problem we are now facing: i.e., how to deal with increasing technological productivity, decreasing real demand for labor, and the effective management of care work, without also destroying the Earth. This demands a different science. The “microfoundations” of current economics are precisely what is standing in the way of this.

Any new, viable science will either have to draw on the accumulated knowledge of feminism, behavioral economics, psychology, and even anthropology to come up with theories based on how people actually behave, or once again embrace the notion of emergent levels of complexity—or, most likely, both.

Intellectually, this won’t be easy. Politically, it will be even more difficult. Breaking through neoclassical economics’ lock on major institutions, and its near-theological hold over the media—not to mention all the subtle ways it has come to define our conceptions of human motivations and the horizons of human possibility—is a daunting prospect. Presumably, some kind of shock would be required. What might it take? Another 2008-style collapse? Some radical political shift in a major world government? A global youth rebellion? However it will come about, books like this—and quite possibly this book—will play a crucial part.