Tag Archives: Ancient Rome

Why do we constantly choose men who we would reject as friends as our leaders?

As somebody with a keen interest in history, I often see in past times leaders who resemble those of today. I see in the last three Caesars, Caligula, Claudius and Nero men who embody the characteristics, so often demonstrated in the behaviours of contemporary politicians. Caligula was mad and brutal, once slaughtering a senators son and forcing that same senator to share in his jokes about his dead son. This senator having one surviving son was forced to participate in this charade to preserve that son. He was reputed to have wanted to make his horse a senator and to have declared war on the sea. Claudius was a vindictive mediocrity, who ordered an invasion of Britain, so he could have a triumph in Rome. He believed this would establish his right to the throne. Claudius was poisoned by his wife, so her son Nero could become Emperor. Nero was a vainglorious man who believed that he was a talented poet, musician and playwright. He was neither, but his courtiers out of fear flattered him by praising him as a talented artist. Madness, mediocrity, charlatanry and vaingloriousness are personality traits that I can identity in so many of contemporary leading politicians.

Although contemporary political leaders no longer have the power or right to kill their enemies, they as so many vindictive Caesars try to destroy them. The media can be relied upon to indulge in the character assassination of their rivals. Any right wing politician can expect the media to conduct on their behalf the most vituperative and vile attacks on their left wing rivals. Intimidation is their weapon of preference. It is no coincidence that so many politicians are poor public speakers. They don’t need to employ reasoned speech, as they have much more effective means of silencing their critics.

Without exception the person who abuses, exploits and intimidates people is recognised as the person best qualified to be leader. These are people who amongst our friendship groups, we would reject recognising them as unpleasant dysfunctional individuals. Today power and the ability to use and exploit power are seen as the only political virtue required of a politician. What we worship is the abuse of power. Bad behaviour by our leaders is excused as being necessary to get the job done.

Contemporary politics lacks any great motivating belief or ideology. The politicians who govern us today have grown up in what is an age of relative plenty*. They and the people found the great ideologies of the past unnecessary, as no great change was needed in society, all were well fed and housed. The great anger at the injustices of society of which gave rise to the great reforming and revolutionary ideologies of the past was no longer there. The left grew complacent and abandoned socialism and was negligent in the protecting the rights of the people.

Whether it be called individualism or something else, people saw the life as being the acquisition of material goods, the securing of a comfortable lifestyle. However in this complacent society, there were the malcontents. These malcontents were of the right, the wealthy right. They wanted a return to the unequal society of the past. A society that gave them a unique set of privileges of wealth and status. They wanted back a society that deferred to wealth and privilege.

All societies have periods of crisis, any organisation created by fallible mankind is prone to periods of failure. When the economic crisis of the 1970s occurred, rather than take action to remedy the most obvious failings of a society that served most people well; the right seized the initiative and implemented a series of changes that would create not a society that served all well, but one that served to benefit a small group of the most privileged.

They also had an ideology, Neo-liberalism which claimed that by dismantling the regulatory state it would free the economy to create more wealth for all. These regulations which they were so eager to destroy were those that protected the well being of the people. Soon even the political left adopted this philosophy believing it the only means of attaining political success. Neo-liberalism is a belief system empty of any moral code. The only moral value that can be ascribed to this philosophy is a belief in success to be achieved at any cost.

What Neo-liberalism created was a moral waste ground, a society in which the old social contract was destroyed. No longer did the political leaders govern in the interests of the people, so the people no longer gave there consent to be governed by their current leaders. Dissatisfaction with the political leadership has grown, increasingly people have turned to political groupings outside parliament which promise change. Change that will benefit them the people. Although these leaders are charismatic, what they offer is unreal solutions to real problems. Solutions such as leaving the EU as the means to restore national prosperity and pride. These political groups are so like the millennial cults of the past, that offered magical but unreal solutions to real problems. Since they preach the impossible, they don’t employ reasoned argument, but the tactics of the advertising industry to sell there set of impossible truths. Criticism of such movements only attracts hostility and threats. The British Brexiteers constantly make threats about what will happen if they are denied. A threat left unspecified.

Returning to my main argument since the onset of the Neo-liberal revolution we have been taught that the only people that count are the ‘movers and shakers’ of society. Such people can be identified by their abrasive personal style and there contempt for the ordinary people. The billionaire heroes of Ayn Rand’s ‘Atlas Unchained’. Even politicians that are far from being characterised as movers or shakers feel they have to adopt this mode of behaviour. A politician would feel insulted if they were described as principled and of good character. Unless of course it was in their election literature and being used as a means of winning votes.

There is also the self fulfilling prophecy. Our expectations of the political class are so low we expect them to behave in an unprincipled manner. Any politician that behaves differently is an object if suspicion.

* This has become increasingly less so since the Neo-liberal reforms of the late 20th century and the financial crash of 2008


What skills does a good economist need?

Humility and the willingness to change their minds

Winston Churchill when speaking of Maynard Keynes (the greatest British economist of the 20th century) said that when four economists are gathered together you will get five opinions and two of them will be from Keynes. What this  illustrates is that what the good economist recognises is that economics is dogged by uncertainty. The economy and its host society is so complex that any unexpected change can result in the policy measures undertaken producing contrary results. When Nigel Lawson in his budgets in the 1980s cut taxes he overstimulated a rapidly growing economy. All that extra money from the tax cuts had no outlet except in for investment in the property market, causing a housing boom that ended in a crash in 1990.  Policy recommendations should be made in the spirit of cautious optimism. With the recognition that policies might need to be changed if circumstances change, as there is no certainty in the practice of economics.

When Mrs Thatcher said, ‘that the lady is not for turning’, she made a terrible mistake. Her policy  of using high interest rates to squeeze inflation out of the economy through depressing demand had the unfortunate consequence of driving the exchange rate. This high exchange rate made large sections of British manufacturing industry uncompetitive. The consequence of this was that British manufacturing industry lost 20% of its capacity, which had the long term consequence of Britain developing the largest trade deficit in the developed world. A problem that still persists today.

A capacity for scepticism

There is no ‘economic cure all’ that can solve all problems, although many economists and politicians foolishly believe that there is such a policy. The latest ‘economic cure all’ is Neo-Liberal economics. In the 1970s the post war economic settlement seemed to be falling apart. In 1976 inflation hit the unheard of high of 27% in Britain. A group of economists the Chicago School claimed to have the answer, they diagnosed the problem as being one of excessive government borrowing to finance its spending programmes. This borrowing increased  demand to a level beyond that which the economy could meet and as supply could not be increased prices rose, as consumers entered into bidding war to get these relatively scarce goods and the consequence was rising inflation. This problem was made worse they said by all the restrictions on the market which prevented industry responding to change by increasing supply to meet increased demand. These restrictions were such as the managed exchange rates, trade unions, employment protection laws and health and safety legislation. If government spending was cut and the restrictions to the market were removed, inflation would fall and the economy would grow ending what was a period of ‘stagflation’. What these economists ignored was the massive increase for the world’s oil etc caused by the American participation in the Vietnam war. There was such a massive expenditure of material in this war that it seriously distorted the world economy.  More bombs were dropped in this short war than during the whole of World War II. When Nixon negotiated an end to the Vietnam War that decision did more than any economic policy measure  to end the malfunctioning of the world economy.

Whether its called the monetarist or the Neo-Liberal economic school of economics, it has failed.There have been three world wide recessions since 1990 each one worse than the previous one. Growth remains minimal, the growth in incomes has stalled yet economists (the majority in the universities and those employed by government and international institutions) and politicians refuse to change their policies. They have invested too much prestige in the Neo-Liberal revolution to abandon it now. A little scepticism about the policies of the present would not come amiss. There are plenty of alternative policies that can be used, it’s only stubbornness and ignorance which prevents them being used.

When politicians and economists state ‘that things have changed’ and that we are in a new economic paradigm, it a sign things are  going badly. It’s a weak defence offered for a policy that is failing and for which no better defence can be thought of. It is the wisdom of parrots as politicians repeat this mantra endlessly without understanding that these phrases are completely meaningless.

A good economist will be well versed in literature, in fact English literature should be an essential part of the course of study undertaken by a trainee economist.

Economics has the potential to be the dullest of subjects. I remember that in the second year of my university course all the second year students had to attend a series of lectures given by one of the world’s greatest monetary economists. They were so boring that students did all kinds of things to distract them from the tedium of the lecture. One particular incident sticks in my mind and that was when a group of bored students launched a giant paper plane from the balcony which soared over the lecture hall.

Literature should be an essential part of the course, because a great novel can better than anything else explain the impact of economic and social change on a people. One of my favourite novels is “The White Guard” by Mikhail Bulgakov. This novel details the impact on one Ukrainian family of the Russian civil war. The play on which the novel was based was Stalin’s favourite play, even although he was on the opposite side of the conflict. The reading of such novels will hopefully lead to the development of some sensitivity towards the human condition in the trainee economist  and hopefully led them when qualified and employed by government to hesitate before recommending policies that cause unnecessary economic and social hardship. One cannot impose a test on economists for the possession of those essential qualities that go to make a wel rounded human being, but hopefully immersion in a course of literature will be a good substitute.

Milton Friedman the Chicago economist provides an example of the extreme insensitivity of which economists are capable. General Pinochet launched a coup to overthrow the socialist government of President Allende. The aftermath of the coup involved the torture and killing of many of those people opposed to the coup. Milton Friedman lauded the actions of Pinochet as necessary for the greater good of society, as the imprisonment and killing of these socialists made possible the introduction to Chile of the free market economy. Only a person of extreme insensitivty would applaud the killing of people as the best means to achieve some ultimate end. I tend to agree with Ivan who at the end of the novel “The Brothers Karamazov” asks God why does he permit the death of a child. (when being shipped of the Labour camps of Siberia he witnesses the pain and a suffering of a woman holding her dead baby). Any economist should ask does my policy proposal cause unnecessary suffering and is there a better alternative that will minimise human suffering. Killing may be necessary in fighting a war but never in imposing economic change on a society.

It may also hopefully prevent economics students suffering from too many dull and boring lectures, as the lecturer will have a better grasp of the English language and human nature than would otherwise be the case.

A good economist will be schooled in philosophy

Any economist must recognise that any policy proposal will be flawed or wrong in some measure. J.S.Mill in the 19th century stated that there could be no science of the humanities because human society was so complex. There were so many possible causes of a particular social or economic event and so many possible unintended effects of a policy measure that the one essential requirement of a science could not be fulfilled and it was impossible to have a science it which it was impossible to demonstrate cause and effect. Mills’ words seem to have been forgotten in the twenty-first century. It is believed that computers that can overcome this problem, as they can make calculations involving thousands if not millions of variables. However what politicians and economists at the world’s Treasuries fail to recognise is that the output of the computer findings are only valid if the calculations on which the predictions are based are valid. What politicians fail to recognise and economist ignore, is that the model of the economy used in the computer does not work, there is something missing. Treasury economists have to insert an ‘x’ factor into the calculations,  a reality factor to enable the computer to deliver a realistic prediction. This x factor is little more than an informed guess. This is why the Treasury computer can only make a correct prediction about economic growth after the event when the necessary corrections can be made to the computer model.

Any student of philosophy learns the limits of human knowledge in the first year of their course. It was a shock to this particular student that philosophy provided few of the answers to the questions that he wanted answering. One such question is what is good, Plato tried to answer this question in this question in his book ‘The Republic’ written in 380 BC and it is a question which philosophers ever since have struggled to answer. Now analytic philosophers tend to think it is an unanswerable question and not one contemporary philosophers should waste time on answering. Instead the quests of past philosophers to understand the nature of the good are to be seen to provide a good schooling in the techniques of philosophy but little else.  Students such as myself had instead to look to theology to provide some answers. The point that I am trying to make is that philosophers understand the frailty of human nature and its limitations. A true philosopher can only laugh at the claims of Neo-Liberal economists who claim to understand the workings of the economy, as the evidence from philosophy demonstrates the continued failure of man to have a complete and full knowledge of  human nature let alone human society. The problem with so many economists today is that although they have studied PPE, they compartmentalise the philosophy they learn and think that its findings do not apply to economics.

Diogenes Laertes in his history of the philosophers recalls how visitors to Democritus frequently  found him laughing in his garden. A thing he frequently did when considering the follies of mankind. If the effects of the wrong economic policies were not so disastrous, I would join Democritus in his laughter.

A good economist is aware of the past and does not think today’s events are unique and without parallel in the past and is prepared to recognise the similarities between today’s events and those of the past.

One extreme example springs to mind, both the governments of the Roman Empire and contemporary Britain regard the provision of cheap food for the people as a priority. Rome was able to supply cheap bread to its people through conquering the countries that were the bread baskets of the Mediterranean and then by  supplying low cost labour for the farms in the form of slaves. Contemporary Britain by contrast encourages the production of cheap food through the provision of subsidies to farmers, one estimate is that now 50% of farmers incomes now comes from EU subsidies. Most of this money goes to towards subsidising what is termed industrial farming, which produces large quantities of food at low cost, but in an environmentally damaging manner. Unfortunately there is evidence that British food suppliers are adopting some of the practices of the Romans. Some of migrant workers on Uk farms  adopted in work in slave like conditions.

What the government could learn from Rome is that using low cost labour methods of production discourages investment and innovation in industry. If there are endless supplies of cheap labour employers see no compellilng reason to invest in expensive machinery, if there are endless supplies of cheap labour. Studies of slave labour have demonstrated how slave labour acted as a deterrent to industrial innovation. A government and business class that believes the only solution to problems in the economy is to make labour as cheap as possible have a lot to learn from the slave economies of the past.

While the one lessons that can be learnt from Rome’s history are negative, much that is positive can be learnt from the actions of the government in the 1930s. This government tried to stimulate an economic recovery after the devastating crash that was the Great Depression. The government then recognised the importance of getting new investment into manufacturing industry so as to kickstart a recovery. Recognising that the banks were unwilling to do this, it set up an industrial investment bank which would lend money to manufacturing industry. Today one of the issues that is delaying the recovery is the comparative lack of investment in industry and manufacturing industry in particular. A recent study showed that only 15% of bank loans went to investment in industry most when into speculative trading in property etc.  There is nothing to be lost and much to be gained by setting up a new industrial investment bank and it could be financed through a levy on commercial banks, as happened in the 1930s.

This list of criteria for judging what is a good economist is not intended to be exhaustive but suggestive.