UK governments, of whatever party, may finally be compelled to break with the crony corporate capitalism promoted by New Labourby Paul Ormerod / November 13, 2017 / Leave a comment
Published in December 2017 issue of Prospect Magazine
In this month’s issue of Prospect, Adam Posen articulates clearly the serious damage he thinks Brexit will do to the UK economy. He may be proved right. But the future has a habit of remaining obstinately unknowable. Keynes wrote in the 1930s of the “dark forces of time and ignorance which envelop our future.” This is a more stylish way of making the same point. Keynes used “ignorance” in its literal sense. We face inherent limits to our knowledge of social and economic systems.
One regrettable aspect of the current Brexit debate is the way in which many Remainers appear to believe that their opinions about the future are scientific: their “evidence base” means they are bound to be correct. They do not appear to have learned anything from Project Fear’s referendum projections. Posen bases his arguments on conventional economic theory, in just the same way that the Treasury’s fear-mongering forecasts claimed to be based on a “widely accepted [my italics] modelling approach.” Yet these turned out to be completely wrong. On a “Leave” vote, for example, unemployment was forecast to rise by half a million by the end of 2016. In fact, it has fallen more or less continuously. It is now at its lowest level since the mid-1970s.