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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.

The social mobility lie

Sonia Sodha writes: if we care about social mobility, then we should care about reducing assortative mating.  To which Tim Worstall replies that this requires serious infringements of freedom. I agree with Tim. Social mobility is the enemy of freedom. Enforcing it would require governments to prevent parents from doing their best for their children to stop them falling below the glass floor, and it would prevent firms from hiring whom they wanted. It seems, then, that we have...

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Entrepreneurial Marxism

Carl Packman on Twitter has described my vision of socialism as “entrepreneurial Marxism.” I like that. Entrepreneurial Marxism is necessary, roughly compatible with Marx, and feasible. Let’s start with the necessary. Here, we Marxists have a paradox. On the one hand, Marx thought that socialism required material abundance: it was the solution to Keynes’ problem (pdf) of what to do with our leisure time. As G.A.Cohen put it: [Marx] thought that anything short of an abundance so...

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Game of Thrones & ethical misjudgments

Is Daenerys the real villain of Game of Thrones? asks Matt Miller. Logically, he has a point; there was more than a grain of truth in Cersei’s denunciation of her. Her claim to the throne is founded on no more than her descent from a mad tyrant; she’s murdered hundreds of her opponents in cold blood; the Dothraki army is no respecter of human rights; her acquisition of titles betokens a dangerous narcissism; and she’s acquired weapons of mass destruction. And yet I instinctively recoiled...

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My socialism

Looking at critics of Venezuela makes me feel like intelligent religious believers when confronted with some new atheists: they’re attacking nothing I believe in. The shortcomings of the Chavez-Maduro government in no way whatsoever undermine my conception of socialism. What is my conception? You might think I’m going to set out my blueprint of a socialist Utopia. You’d be missing the point. Capitalism was not the conscious design of a single mind, but rather it evolved. The same should...

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Choice in economics

The other day, I woke up thinking I fancied toast for breakfast rather than my usual muesli. I got up, got dressed, put the kettle on…and got myself a bowl of muesli. Force of habit overcame my conscious choice. I mention this because of a post by Jason Smith, in which he questions economists’ assumption that people make deliberate choices. “I do not think humans are "really thinking" about many of their economic choices” he writes. My breakfast was an example of that. Now, I don’t want...

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Fiscal policy with a flat Phillips curve

It’s widely agreed that the Phillips curve is flat, that low unemployment is not stoking up wage inflation – though perhaps this has been true for longer than thought. This poses the question: what are the policy implications of this? Simon says there’s a danger of the Bank raising interest rates too soon – because looking at unemployment and the output gap points to a risk of inflation which isn’t in fact there. But I suspect it also has implications for fiscal policy. I’m thinking here...

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Tories vs the 21st century

It’s become a cliché that the Tories want to return to the 1950s, before the age of mass migration and our entanglement with the EU. These, however, are not the only examples of Tories discomfort with the modern world. Tom Welsh says the Tory party is threatened by the large number of university graduates, and Amber Rudd seems befuddled by the internet. This poses the question: why are the Tories so unhappy with the 21st century? It hasn’t always been so. Cameron and Osborne, despite...

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Reinventing the wheel

In both the UK and US, wage inflation has stayed low despite apparently low unemployment – to the puzzlement of believers in the Philips curve. Felix Martin in the FT says there's a reason for this. The “dirty secret of economics,” he says, is “the central importance of power.” Inflation, he says, is “society’s default method of reconciling, at least for a while, irreconcilable demands.” And because workers don't have the power to make big demands, we haven’t got serious inflation. What's...

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Brexit: an interminable debate?

David Aaronovitch has a nice piece in the Times on the stories that Trumpites and Brexiters can tell themselves to avoid admitting being wrong*. I’d add another problem – that the ratio of noise to signal is so high that firm evidence is hard to find. Let’s take GDP per head. Remainers claim that this will be lower under Brexit. NIESR estimates that Brexit will cut GDP by up to 7.8% by 2030, and CEP economists (pdf) by up to 9.5 per cent. But trend growth is noisy, even over longish...

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Trade deal? Yawn.

One of the most elementary distinctions in economics (and in life) is that between instruments and objectives. Interest rates, for example, are only an instrument whereas the objectives are price and output stability. I fear, though, that this distinction is being overlooked by those Brexiters aroused by what Trump calls a “big and exciting” trade deal between the UK and US. Trade deals are only a means of achieving what really matters – prosperity. And they might be a weak one at that....

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