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August 26, 2014

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Socialism In One Bedroom

"Note: feasible isn't the same as desirable"

Or feasible actually!

ANON

'Ontology’s form the parameters of our existence' R. W Cox

Stevenclarkesblog.wordpress.com

I fear constraints are rather like fairies in Peter Pan. If enough people believe in them they are real. If enough don't believe in them, they disappear.

Many of the constraints on a future social democratic government wishing to pursue an expansionary fiscal policy are imaginary. But if enough CEOs, voters, journalists etc. believe them to be real then they really are real. CEOs might lose confidence and put off investment. So too might voters, who switch to a conservative alternative.

Unfortunately in politics and economics we are not all observing the same objective reality. A critical mass of people can create their own reality.

Ralph Musgrave

The idea that if every country in the EZ implements loads of fiscal expansion, everything will be a bed of roses is naïve. That fails to solve the periphery’s basic problem, namely that it isn't competitive vis a vis Germany. In fact it makes the problem worse: that would tend to boost inflation in the periphery.

The only way out of this problem that I can see is to abandon the Euro and go back to national currencies. Another possibility – a long shot this – is to organise some sort of quick internal devaluation in periphery countries. I.e. cut wages and prices in those countries by 20% or whatever. But that would be difficult to organise.

But congratulations to Chris for constantly referring to the Overton Window. I agree: the OW governs everything, from conversation in your local pub to the brains of Westminster politicians.

theOnlySanePersonOnPlanetEarth

BTW if a top tax rate of 100% is unfeasible can everyone stop pouring fucking ice water over their fucking heads.

chris

@ Steven - yes, some realities are socially constructed. For example, I suspect hostility to high tax rates is greater now than 50 years ago in part because neoliberalism has created a tax-hostile world.
However, in other cases we can shift from one belief equilibrium to another - as in abandoning the Gold Standard. And in still others, we can simply ignore the beliefs, for example as the 1997-2010 Labour govt largely ignored public antipathy to immigration.

Stevenclarkesblog.wordpress.com

@Chris

Western economies took a lot of pain before they decided to leave the Gold Standard. And they recovered fairly quickly after they did so. Maybe it takes a lot to get us to break from bad policy, and the results from doing so have to be fairly quick and obvious for us to accept the new regime.

I doubt the pain from the current recession is quite as severe, or the bounce-back from adopting a new policy (like ceasing austerity) would be quite dramatic enough for it to change perceptions.

As for the immigration example, Labour may have ignored the antipathy, but it hasn't gone away and is being exploited by the Tories. You recently linked to a very good article about voters being 'reality invariant' to immigration - which shows just how strong the grip of our socially constructed realities are.

An imaginary constraint that I care about is one that affects immigration and house building. People think 'the country is full' and are hyper-sensitive to new building, as if the country is on the verge of being concreted over. If people realized only about 10% of the country is built on, maybe we could sensibly relax some planning laws and accept higher immigration.

Keith

For a self defined realist you are a little naive. Do people like Hopi, Hariet Harperson, or Blair really believe in the confidence fairy?

Or is it not more likely that the trustifarian middle class leaders of the labour party prefer policies more in their class interests? No tax please we are new Labour... with a pathological desire to appease asset holders obsessed with inflation. Constraints or self interested choice?

Luis Enrique

imho by far the most important imagined - or self-imposed - constraint is the prohibition of outright monetary financing / permanent monetary expansion in Europe. The ECB could buy lots sovereign and other debts judged to be drags on the economy, announce the purchases will not be reversed unless certain things happen (inflation, growth) which I think would simultaneously address the deflation problem and the impaired state of the credit system.

But this possibility is barely even discussed, let alone taken seriously

Churm Rincewind

There's a bizarre preference in this discussion for casual data over people's actual feelings. Thus Steven Clarke defers to Left Outside's dim-witted idea of "social invariance" - the idea that the application of data trumps all other considerations, which is plainly bonkers.

Similarly, we don't actually have to decide whether politicians serve interests or preferences. In real life they do a bit of both.

It ain't all black and white, you know. Politics is the art of the possible. dh

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