Two related pieces from the Irish Times worth sharing. Both under Mark Hennessey’s byline. First this from his interview with Joe Stiglitz…
Politicians today offer meagre fare to voters, he says, despondently: “Most government ministers (throughout the world) are middlemen in ideas. They are looking for packaging for simplistic ideas.”
For the last few years, the simplistic package, in Stiglitz’s view, has been austerity: “It said austerity works. I very strongly believe it doesn’t. And the IMF – which is not a left-wing organisation – says it doesn’t,” he tells The Irish Times.
However, the Nobel Prize winner believes the narrative is changing. “There is a growing recognition that it is a problem. In the US, even the Republicans are beginning to talk about inequality.
“Even they can’t shy away from it because it has become so serious. It has gone to the top of the global debate. The business people at Davos say it is one of the major threats to the global economy,” he says.
Ireland’s current more optimistic air, where it exists, is partly delusionary, argues the Columbia Business School-based academic: “The Irish are a little bit like Americans in terms of optimism.”
Questioned about the impact of spending cuts, Stiglitz refuses to give ground: “Ireland being a small country had the ability to adjust a little bit more than some of the other countries have been able to do.
“They were willing to take some more pain. I don’t know whether this was some sort of Catholic guilt feelings that allowed them to take that that other societies would not have done,” he said.
Now, it’s well worth picking up Mark’s comment here on video. He makes a valid point about the limitations of Stiglitz’s thinking, not least in the face of the successful return of a UK party to government which made austerity almost its only goal.
He’s not wrong to press back on arguments in favour of austerity. But as Hennessey points out, it is an economic insight with very little sense of the embedded social or political contexts of each country.
As my colleague John Kellden puts it…
What Stiglitz gets wrong is the foundational assumption: it is no longer about economics writ large. the future need to be about an economics, as if people and narratives – matter. It’s about a return to economics as skillful means.
Quite. Location, location, location. Ireland adjusted, because it can. Greece is struggling, presumably because it can’t. It all comes wrapped in that (nasty) political trilemma that global economists discount that their peril.
That said, Ireland is far from out of the woods yet. But getting out of these particularly woods needs a functional retrenchment to the Irish Demos, however that may be defined.