Things you may have missed #2Posted: September 27, 2014
Captains of industry: the history of an authoritarian phrase
The accomplished Australian economist Robert Dixon, known mostly I would think for his work on the economics of regions, has developed a sideline in work on the linguistic impact of Thomas Carlyle on the language of popular economic writings. I recently had cause to read his paper on the origins of the ‘dismal science’ (not an attack on Malthus; an attack on anti-slavery), and in so doing came across this: Dixon’s JEP paper of a decade or so ago that explains the phrase ‘captains of industry’ (which may be a calque of Saint-Simon’s chefs de l’industrie):
Carlyle coined the phrase “captains of industry” in his book Past and Present, published in 1843.3 Having described the chaos and godlessness that beset the world, Carlyle declares that the “Ultimate genuine Aristocracy of this Universe” are the “Captains of Industry” (p. 192) because they are “warriors in the one true war [against chaos]” (p.275). He says to these Captains of Industry (pp. 275 and beyond): “All human interests, combined human endeavours, and social growths in this world, have, at a certain stage of their development, required organising: and Work, the grandest of human interests, does now require it.” The Captains of Industry are needed to “reduce [the Working Class] to order, to just subordination” because it is only “as a firm regimented mass, with real captains over them, will these men march.”
Karl Miller, 1931–2014
Karl Miller founded the London Review of Books, but that achievement must fight for space in his obituary in The Guardian. Among them, of special interest to me, is Miller’s biography of the—can I say proto-modernist?—Scottish writer James Hogg (a distant but apparently direct ancestor of mine):
In 1951 he went to Cambridge to read English at Downing College, under the fearsome FR Leavis. Miller was a “Scottish scholarship boy” and unpolished. At one sherry party, asked by a Sitwellian don which public school he had attended, he replied “none”. Later he overheard the comment “remarkable fellow, that Miller, entirely self-educated”
Edward Hugh says it’s time for Madrid to start worrying about Catalonia
In the wake of Scotland, Europe needs to start paying more attention to other huddled nations yearning to break free, says Catalonian-by-adoption Edward Hugh:
So although the world will not change on November 10, and even if there are elections instead of a vote on independence the outcome could well produce a definitive sea change about how Catalans view their relations with Spain. They may well mark a “point of no return”. So to go back to where we started. Right now global markets and most of the international press are being pretty sanguine about the situation, when – as President Obama suggested in the case of the US government crisis – perhaps they shouldn’t be. Perhaps they should be worried about the complacency in Madrid, and remember that one of the principal ways of letting something unexpected happen is to assume it won’t.
Karl Whelan on how to think about monetary policy, fiscal policy and structural reform:
In a very wise briefing paper on how the European Central Bank should go about trying to bring back sustained and moderate inflation and growth in the Eurozone, Karl Whelan explains the difference between monetary policy and fiscal policy (which can help an economy reach its potential) and structural reform (which can help an economy increase its potential). The lack of inflation in the Eurozone is a pretty good indication that, however good the structural reforms governments may be able to devise, what’s lacking in Europe at the moment is expansionary fiscal and monetary policy:
A final word is perhaps appropriate on the topic of structural reforms. As the ECB takes a more active role in battling the ongoing slump, Mario Draghi has intensified his rhetoric about structural reforms. The transcript of his September press conferences shows fifteen uses of this phrase. Draghi now says he has “concluded that there is no fiscal or monetary stimulus that will produce any effect without ambitious and important, strong, structural reforms.” It is hard to find a logic (at least one based on macroeconomic theory as we know it) for this argument. It is certainly the case that potential output growth in the euro area is currently low and can be improved by various policy reforms. However, it is also true that there is currently a very large shortfall between aggregate demand and the current supply potential of the euro area economy, a shortfall summarised in an unemployment rate of
over 11 percent. So there is room for fiscal and monetary stimulus to boost the economy, even without structural reforms. In addition, to the extent that we are worried about deflation, the initial impact of structural reforms that boosted the supply capacity of the euro area would be to further depress inflation. My point here is not to argue against structural reforms. There are many such reforms that can have an important positive effect over the medium- and longer-run (though we know little about the magnitude of their potential impact). But it is important for the ECB to take responsibility for its crucial role in the shorter-term macroeconomic management of the euro area and ECB officials continually placing structural reforms at the heart of discussions of this issue is unhelpful.