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Chris Dillow: Stumbling and Mumbling

Stumbling and Mumbling is a personal blog of Chris Dillow, an economist who spent eight years with one of Japan’s largest banks. He blogs about British politics and provides thoughtful analyses on the British economy and sports.

Job Guarantee: Marxist or Keynesian?

For decades there has been a debate about the differences and similarities between Marx and Keynes. The question of whether we should introduce a job guarantee highlights this debate: is it a means of supporting capitalism, or a challenge to it? A job guarantee is the offer by the government of a job at a living wage to anybody that wants one. This would, in effect, eliminate involuntary unemployment. Pavlina Tcherneva has a nice paper (pdf) describing the details. Other advocates of it...

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On Britain’s intellectual decline

The commemorations of Marx’s 200th birthday have done at least one thing: they’ve reminded me of Britain’s abject intellectual decline. Listen, for example, to this debate about Marx (34 min in); Paul Mason’s interlocutor couldn’t tell the difference between Marx and a bucket of fish. Contrast this with a few decades ago. Then, if you wanted a critical assessment of Marx, you might reasonably have asked Leszek Kolakowski, Samuel Hollander or Isaiah Berlin – men who, agree with them or...

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Progress in economics

I’m getting cheesed off with the economic culture war. One peeve I have with it is that economists do so many things that it’s easy to find examples of both bad work and good. Rather than speak in generalities, I’d prefer critics and defenders to focus more upon specific aspects of economics. As an example of what I mean, I’ll take a bit of financial economics, as this might highlight what’s both good and bad in economics. For years, we’ve had a mainstream theory here. The efficient...

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The problem with power poses

Millions of people will have looked at the newspaper front pages this morning and wondered: why is Sajid Javid looking like an utter tool? The answer sheds light upon the nature of academic research and people’s attitudes to it. The reason for his absurd stance can be found in a paper (pdf) by Amy Cuddy and colleagues. They claim that by using “expansive postures” a person can “embody power and instantly become more powerful”: By simply changing physical posture, an individual...

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On forecasting failures

Economists take a lot of stick for their inability to foresee crises and recessions. But I wonder: wouldn’t it be fairer to chastise politicians for their lack of foresight? Two current events make me ask. One is the scandal about Windrushers being deported.  This injustice was not just foreseeable but foreseen. Ministers were warned of it two years ago. It should be no surprise that a “hostile environment” and crude targets would hit law-abiding British citizens. As I said in 2016:...

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Commitment & analysis

Is political campaigning compatible with the detached analysis required of journalism? I ask because of something David Aaronovitch tweeted about Owen Jones: He is a tireless political activist in a partisan cause seeking very specific outcomes. Nothing wrong with that, but it doesn't sit at all with analysis. There's no distancing possible. Or contrary information. This might be true. The danger in Owen’s campaigning is that he meets too many people who agree with him which...

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The media closed shop

I suspect that Owen Jones gets even more abuse when he’s right than when he’s wrong. So it has been with his claim that national newspapers and broadcasters are “full of people who made it because of connections and/or personal background rather than merit.” This is true. As he points out, there’s lots (pdf) of evidence (pdf) that columnists and top journalists are disproportionately from posh backgrounds. Of course, some of these have merit. But the fact is that background does matter....

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Good bad theories

In 1945 George Orwell wrote an essay on good bad books – “the kind of book that has no literary pretensions but which remains readable when more serious productions have perished.” He gave as examples the Sherlock Holmes stories. Uncle Tom’s Cabin and Dracula. These are in contrast to bad good books, works of alleged literary merit which aren’t much cop: Orwell cited George Meredith but you can add other examples. We might add to this that there are good good books (Dostoyevsky) and bad...

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Facts vs hand-waving in economics

On Twitter this morning Jason Smith asked a good question. Is this, he asked, an “anonymous blog comment from a simpleton? ... Or analysis from a prominent financial economics professor?”: A company has $100 in cash, and $100 profitable factory. It has two shares outstanding, each worth $100. The company uses the cash to buy back one share. Now it has one share outstanding, worth $100, and assets of one factory. The shareholders are no wealthier. They used to have $200 in stock. Now...

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On thin predictions

Back in 2016 I wrote that “immigration controls will hurt decent people…because they are the softest targets.” Paul Cotterill interprets this as meaning that I saw the Windrush scandal coming. I think he’s being too kind, but this illustrates an under-appreciated point – that good predictions can be “thin” in the sense of containing little data. I’ll give you two other examples from my day job. One is that back in 2007 I pointed to record foreign buying of US shares as a warning that the...

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