Economists From England

"I think there is a case for opening a national debate on these matters."

"If we were to fail, I do not think any Government could succeed. I feel it would lead to a totalitarian government of the left or the right."

"Now we must get back to fundamentals. First, overcoming unemployment now unambiguously depends on our labour costs being at least comparable with those of our major competitors. Second, we can only become competitive by having the right kind of investment at the right kind of level, and by significantly improving the productivity of both labour and capital. Third, we will fail – and I say this to those who have been pressing about public expenditure, to which I will come back – if we think we can buy our way out by printing what Denis Healey calls ‘confetti money’ to pay ourselves more than we produce."

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment. That is the history of the last twenty years."

"The cosy world we were told would go on for ever, where full employment would be guaranteed by a stroke of the Chancellor's pen, cutting taxes, deficit spending – that cosy world is gone. Yesterday, delegates pointed to the first sorry fruits: a high rate of unemployment. ... When we reject unemployment as an economic instrument — as we do — and when we reject also superficial remedies, as socialists must, then we must ask ourselves unflinchingly what is the cause of high unemployment. Quite simply and unequivocally, it is caused by paying ourselves more than the value of what we produce. There are no scapegoats. This is true in a mixed economy under a Labour Government as it is under capitalism or under communism. It is an absolute fact of life which no Government, be it left or right, can alter."

"For too long, perhaps ever since the war, we postponed facing up to fundamental choices and fundamental changes in our society and in our economy. This is what I mean when I say we have been living on borrowed time. For too long this country – all of us, yes this Conference too – has been ready to settle for borrowing money abroad to maintain our standards of life, instead of grappling with the fundamental problems of British industry. Governments of both parties have failed to ignite the fires of industrial growth in the ways that countries with very different political and economic philosophies have done."

"You know, as I do, that we face two deep-seated problems, inflation and unemployment. Both of them are still too high. ... I have to emphasize to you that if we fail to bring down inflation, we shall never succeed in overcoming unemployment. We cannot have a prosperous industry in this country if we are unable to sell our goods overseas. No one owes Britain a living, and may I say to you quite bluntly that despite the measures of the last 12 months, we are still not earning the standard of living we are enjoying. We are only keeping up our standards by borrowing, and this cannot go on indefinitely. There is no soft option. I do not promise you any real easement for some time to come. There can be no lasting improvement in your own living standards until we can achieve it without going deeper and deeper into debt as a nation."

"But the policies of the 1960s would not be successful today. No more would general import controls.They benefit some home industries at the expense of the livelihood of everyone working in exports. We would be robbing Peter to pay Paul."

"First of all, please make sure that you go and vote in the Common Market referendum on Thursday. And secondly, the Government asks you to vote 'Yes', clearly and unmistakeably."

"James Callaghan: ...I am not pro, nor am I anti... Robin Day: What are you doing on this programme? Callaghan: I'm here because you asked me. Day: You're here to advise people to vote 'Yes' aren't you? Callaghan: ...I am here, and the Prime Minister has taken the same line; it is our job to advise the British people on what we think is the right result. Now there are a lot of other people who've always been emotionally committed to the Market. A lot of other people have been always totally opposed to the Market. I don't think the Prime Minister or myself have ever been in either category and that is not our position today. I'm trying to present the facts as I see them and why we have come down in favour of – now Britain is in, we should stay in."

"The power structure in Britain is changing. Authority is no longer obeyed for its own sake. There are severe limits on what government can do, so the way to win the battle against inflation and unemployment is not to try to dragoon the country. If we do we shall fail. We must secure its consent. We are playing for high stakes. In a real sense, adherence to the social contract puts on trial whether our society has the will and determination to solve its problems by democratic means."

"Our place in the world is shrinking: our economic comparisons grow worse, long-term political influence depends on economic strength – and that is running out. The country expects both full employment and an end to inflation. We cannot have both unless people restrain their demands. If the TUC guidelines [on pay] are not observed, we shall end up with wage controls once more and even a breakdown of democracy. Sometimes when I go to bed at night, I think that if I were a young man I would emigrate. But when I wake up in the morning, I ask myself whether there is any place else I would prefer to go."

"[D]espite the indignation and horror with which most of us regard the actions of the Provisionals, we must not allow our policy to be dictated by revenge or by passion. If we do, we shall not only behave in an immoral way; we shall lose the battle."

"Too much stress is being put on the soldiers and the RUC to solve problems which politicians have failed to solve for so many years. There must be a political solution if the gunmen are to be divided from the rest of the population."

"What would need to be reopened would be the test questions that were put to Mr Heath by M Pompidou and tamely accepted by him. To the question: “Do you agree to work for economic and monetary union?” Mr Heath had said “yes”, but the Labour movement said “no”. To the question: “Will you turn away from the open seas and mould yourself to Europe?” Mr Heath had said “yes” and the Labour movement was saying “no”. A Labour Government will seek to reopen the principles and renegotiate the details, specifically on high food prices which are part of their present policy and a reversal of Britain's food policies for over a century. We intend to have that renegotiated and to return to our traditional freedom to purchase food from other countries outside the EEC without incurring penalty."

"The Treaty of Rome was tailor-made to support French agriculture and German manufactures. It is by no means ideal for Britain's future trading arrangements. It was not designed for this purpose. The question is whether it is worth joining on the terms that are on offer or, as I believe, whether we would do better for ourselves by waiting."

"[Callaghan] said that President Pompidou had made it clear that where differences existed between Britain and the French-dominated EEC, "Britain must subordinate them to the extent of a complete rupture with our identity". He asked if Mr. Heath's offer to participate in a European spirit, which signified a French spirit, meant that "we are honour bound not to try to upset the principles of the common agricultural policy?" Had Mr. Heath made it clear that no one believed it made sense to give up buying cheap food from New Zealand to buy dear food from France?"

"Millions of people in Britain must have been very surprised to hear that the language of Chaucer, of Shakespeare and of Milton must in future be regarded as an undesirable American import from which we have to protect ourselves if we are to build a new Europe. We can agree that the French own the supreme prose literature in Europe. But if we are to prove —if we have to prove—our Europeanism by accepting that French is the dominant language in the Community, then my answer is quite clear, and I will say it in French in order to prevent any misunderstanding: Non, merci beaucoup."

"I think that it came as a surprise, if not a shock, to most people, when that notorious advertisement appeared in The Times in 1967, to find that there is a lobby in favour of legalising cannabis. ... The existence of this lobby is something that the House and public opinion should take into account and be ready to combat, as I am. It is another aspect of the so-called permissive society, and I am glad if my decision has enabled the House to call a halt in the advancing tide of so-called permissiveness. I regard it as one of the most unlikeable words that has been invented in recent years."

"I come to the question of the Governor of the Bank of England, who made [a] speech...[which] was, I thought, a very good exposition of the nature of this country's problems. ... When he came to the question of the rate of wage and price inflation, in which he dealt with the question of unused resources, what he said I agree with. He said: “it is impossible to manage a large industrial economy with the very small margin of unused manpower and resources that characterised the British economy in the 1940s and 1950s.” That is true. ... We must have a somewhat larger margin of unused capacity than we used to try to keep. That is the truth of the matter."

"Those who advocate devaluation are calling for a reduction in the wage levels and the real wage standards of every member of the working class."

"I sum up the prospects for 1967 in three short sentences. We are back on course. (Loud Ministerial cheers and Opposition laughter.) The ship is picking up speed. (More Ministerial cheers.) Every seaman knows the command at such a moment: "Steady as she goes". (Laughter and cheers.)"

"If we achieve our target, 1967 will be a different year from the last two, a year in which we will begin to move forward again, and 1968 to 1970 will be the years of achievement in which the fruit of the work now being done will be shown."

"We have had a tremendous battle over the past 12 months. Sterling is safe. That battle is won."

"I hate putting up taxes."

"We should be aiming in the latter part of the 1960s for a 5 per cent. and then a 6 per cent. growth rate. Only then shall we attain the programme of social expenditure that is both necessary and desirable."

"I have not the slightest doubt that the economic measures and the Socialist measures which one will find in countries of Eastern Europe, will become increasingly powerful against the uncoordinated, planless society in which the West is living at present."

"There could be no democratic and independent Socialist Party in this country unless they aligned themselves with others against the insidious attempts of Communism to break the Socialist movement."

"Peace-or-war, not cost-of-living, was the most important issue at the election. He did not believe that peace with Stalin would be easy to achieve. Some delegates seemed to think it was all a matter of “getting together with Joe.” Had they forgotten their Marxism, and its interpretation of history. That was what they were dealing with, not Uncle Joe."

"I claim that this dinner, too much to eat and drink, was the basic reason why, for the only time in my life, I slept with Joan Robinson. Let me tell you the story. Ken Arrow was to read his famous paper - we know now that it was famous - on uncertainty and the economics of medical care, and I was one of the guests asked to come to the Arts Theatre Restaurant. It was a cold winter's night, we ate and drank a lot, and then we went into this room with a great big fire and a huge couch. Joan sat here, and I sat there, and Ken was sitting as close to me as you are now, and both Joan and I went to sleep while he read his paper."

"That combination, Hayek, Myrdal and Robinson, might have cast the contributions of each into sharper relief: three pioneers who, after important early contributions, gave up economics for political activism."

"Instead, I would concede her a point of uncertain importance. There isn't really a great deal to economics, considered as a logical structure based upon a few indisputable axioms about the world. … A logician is a wondrous creature, but he cannot distinguish between the two simple errors: if A = B, and B = C, then (1) A = 1.01C, and (2) A = 10⁶⁵C. An economist can."

"I remember also when I was a student in Cambridge, one of my teachers, Joan Robinson, a great economist, explained to me why China is so admirable, as she was making a cultural comparison of the kind which has become very common now ever since Sam Huntington wrote his book about civilisation and trying to reduce every civilisation into something like a one or two sentence summary. Joan told me that the real trouble with Indians, she told me, is that Indians are just too rude; and she said the Japanese, the trouble really is that the Japanese are too polite; and then she said the Chinese are just right. So I think those are good inspiration to go and study the Chinese experience. Now, in so far as private income is only one of the influences on the achievements in reducing poverty, the first thing I want to mention is that even though in the poverty discussion most of the concentration tends to be these days on what happened since economic reform. The fact is that there is a very major lesson in what happened in China previous to that. I am not commenting on the excesses of the Cultural Revolution, I am not talking about the Chinese famine (from) ’59 to ’61 in which 29.6 million people died. There were all kinds of mistakes. But the fact is that China was still the global leader as a poor country expanding basic education at a level which was very hard to imagine, as well as basic health care. All kinds of things came like “barefoot doctors” and so on. But the spread of health care across the country was quite remarkable. By 1979, when the economic reform came, the Chinese life expectancy was already 68 years; the Indian life expectancy was 54 years, 14 years behind it. There are really major lessons there, and I might say also one of the unsung contributions of the pre-reform educational and health care expansion is, I believe, the radical economic expansion that took place in the 1980s. After the economic reform, it would have been very hard without the base of elementary education which China had and India did not at that time, which is still a factor which bothers India badly."

"She was taken in a sealed train from coast to coast—from Paul Baran to Paul Sweezy."

"Böhm and Wicksell and Cassel and Wieser and Clark and Walras and Hayek and other economists before and after Sraffa, all must face what the role of intertemporal pricing must be in organizing technologies that are irreducibly time-phasing. When Joan Robinson and I discussed these matters face to face, I used to get nowhere with her by babbling about supply and demand. She already had seen through that tommy-rot. Things went better if I could keep the focus on Mao’s China. "Could Mao’s 1970 China now, sans trade, produce a U.S. per capita standard of living for her near-billion population?" "Of course not. She can’t convert her few steam trains into diesels and electricfed railways. Her workers can use only few and primitive tools. Their medical care is fragmentary, their years of education limited by China’s previous despotism." "Joan, by what steps can a People’s Society move into the golden-rule plenty available to a 1970 America, or Britain or Spain?" "First they should build the higher-yield bridges, roads, and machines. Then, later, deferred and delayed projects can be ranked in their turns." Trite stuff, you will say? That is my point. Learned Aristotle couldn’t handle such trite stuff. And neither could the physicist-statistician P. C. Mahalanobis who had Premier Nehru’s ear in the decades just following India’s liberation from the British Empire."

"I must mention my special intellectual debt to Joan Robinson, with whom I had the opportunity to discuss over a period of nearly twenty years some of the problems analysed here. She, more than anybody else, convinced me of the radical content of Keynesian economics which we could decipher more easily with the help of Marx and Kalecki."

"the merchant had observed that the marginal utility of daughters decreases with surprising rapidity."

"The bastard Keynesian doctrine, evolved in the United States, invaded the economic faculties of the world, floating on the wings of the almighty dollar."

"An agent must have some discretion."

"To supply goods is a source of profit, but to supply services is a ' burden upon industry '. It is for this reason that when, as a nation, ' we have never had it so good ' we find that we ' cannot afford ' just what we most need."

"It seems that neither the Keynesian nor the Marxian prognosis of the future of capitalism is being fulfilled and we are left without any particular theory as to what will happen next."

"At any moment there is certainly not balanced trade between the various areas of the habitable globe that happens to be under separate national governments — there is an ever-changing pattern of deficits and surpluses."

"Income from property is not the reward of waiting, it is the reward of employing a good stockbroker."

"It is much easier to organize control over one industry serving many markets than over one market served by the products of several industries."

"Why did the hunters in the Wealth of Nations exchange beavers for deer?"

"But the tygers of wrath go the other way. Do not ask me why. It is just a fact I noticed when I was looking through field glasses from a machan."

"It is high time to abandon the mainstream and take to the turbulent waters of truly dynamic analysis."

"'Capital' is not what capital is called, it is what its name is called."

"The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists."

"Michal Kalecki's claim to priority of publication is indisputable."