The continuation of rising house prices - despite the fact that about £3.4 trillion is already tied up in them

This article notes that house prices are still rising, despite the economic situation. For ease of arithmetic, assuming the average house price is £170,000 and that there are 20m houses, this means there is about £3.4 trillion (that is: £3,400,000,000,000) of capital tied up in them [at least in theory].

As I said in another article , it may well be that Britain is tying up a lot more capital in housing than would be economically optimal.

On the pause in the postal dispute

This piece in the Guardian by a postal worker suggests that some of the rank-and-file are critical of the pause in the industrial dispute agreed between the CWU and the Royal Mail. The CWU has not managed to get any notable concessions and, perhaps, the management will be emboldened to attack the union and its workforce further in the New Year - especially if the Tories come to power in 2010.

Taking a pragmatic stance was helpful in 1989

This article highlights that George Bush Snr and Helmut Kohl were actually very cautious before and after the Berlin Wall came down 1989. This pragmatism, caution and realism may well have helped the transition become as peaceful as it was. A more bellicose and triumphalist approach by the NATO powers in those early days may well have triggered coups by Stalinist hardliners.

British libel laws are onerous

This article draws attention to the onerousness of British libel laws. They deter people criticizing foreign dictatorial governments, their collaborators and corrupt businessmen. Additionally, in the Simon Singh case, they have hindered an attempt to criticise charlatans and bring their pseudo-science to public attention.

Gold - a 6000-year bubble

I have written a couple of articles on Keynes' view of the misallocation of capital. He thought people hoarded too much wealth in the form of land, jewels and money.

This article by Willem Buiter highlights what seems to me a sensible argument that gold has been a 6000-year long bubble. Gold, unlike food, clothing and shelter, has no intrinstic use and, unlike machines, it can't produce goods of intrinsic use. Instead, it only has value because of social fiat - because people believe it is valuable.

Some civilizations of the past, in the Americas, for example, did not see gold as intrinsically valuable and were confused by the fact that their European conquerors did. It is only a social construct that views gold as valuable. But, because of this social construct, people have been speculating in it and hoarding their savings in the form of it for perhaps six millenia.

Given social norms, it may well be logical for an individual to invest in gold. However, it is far from clear that this is beneficial for society as a whole.

20 years since the fall of the Berlin Wall

It is 20 years since the fall of the Berlin Wall - probably the most momentous political event of my lifetime. It marked the start of the process that would end the Eastern Bloc. The collapse of the repressive Stalinist regimes of the Eastern bloc meant greater freedoms for the people east of the Wall. However, the dismantling of the Stalinist planned economy saw rising unemployment and rising inequality. Some countries, like the Czech Republic and the Baltic States seemed to have done well economically since the fall of Stalinism. Others, like Bulgaria and Romania, have not seen their GDP rise much since the end of communism.

Additionally, the fall of the Wall let the genie of nationalism out of the bottle. The re-emergence of the national question was a tragedy for the people of the former Yugoslavia - and of the ex-USSR.

The fall of the Berlin Wall also led to triumphalism from the Right. This perhaps fed into the deregulation and privatisation mania of the last couple of decades, which affected social-democratic countries of the West as much as it did the ex-planned economies of the East. This mania for more free-market policies led us into the situation we have now - where the banking and financial systems have led us into a recession.

The challenge of democratic politics is to control the powers of the market and of corporations - and to ensure that freedom means more than the freedom of the consumer in the marketplace.

The falling rate of economic growth since 1980

This article on Krugman's blog shows that the US rate of economic growth has fallen since 1980. The era of increasing inequality and deregulation does not seem to have reaped benefits for the economy as a whole.

In 1950-80, the US per capita GDP rose by an average of 2.2% a year in real terms. From 1980 to 2007, it grew by 2% a year.

And a lot of that growth went to the already wealthy. In terms of real median family income, a more meaningful figure when trying to look at the material benefits of economic growth to the average American, it rose by an average of 2.3% from 1950 to 1980. From 1980 - 2007, it only rose by 0.7% a year.

In the US, there does not seem to be much difference between male and female views on abortion

According to this article it seems that social attitude surveys don't show much of a difference between men and women in their views on the abortion question - which does seem rather surprising.

It seems support for 'abortion on demand' is 40% among men and 39% among women in the US. The level of opposition is 59% among men and 61% among women. So, if anything, US social attitude surveys show men seem to take a more pro-choice stance than women on the question.

In cases of genetic abnormality, it seems that 69% of female respondents said they would be opposed to abortion on these grounds and 67% of male ones said the same.

In case of danger to the mother's health, it seems that 88.8% of men supported abortion in that situation and 87% of women. It does seem that the hardline "pro-life" crowd in the US isn't that big - since 11.2% of men and 13% of women opposed abortion on those grounds. So, it seems that the most stringent anti-abortion stance is taken by more women than men.

In terms of economic reasons, it seems that the US public don't appear to be in support of abortion if the mother is on a low income and feels she can't afford to raise children. Opposition to this is around 56% among men and 59% among women.

In the case of pregnancy as a result of rape, it seems that 80% of men and 76% of women support abortion in this case. And 19% of men and 24% of women oppose it.

These survey results do seem to show that, surprisingly, there does not seem to be much of a difference in the stated views of men and women on this issue and, if anything, women tend to take the more conservative line. This could be due to their greater religiosity.

As always, though, I do sometimes wonder if the results people give to social attitude surveys reflect their actual views. People in a liberal milieu might feel the need to give more liberal answers than what they actually think [a form of "social desirability bias", i.e. giving the answers your acquaintances want you to give] and people in a conservative milieu might feel the need to give more conservative answers than what they think [another kind of social desirability bias, giving the answer a different group of acquaintances want you to give].

On the misallocation of capital

In a previous post , I quoted Keynes as saying:

"That the world after several millenia of steady individual saving, is so poor as it is in accumulated capital-assets, is to be explained, in my opinion, neither by the improvident propensities of mankind, nor even by the destruction of war, but by the high liquidity-premiums formerly attaching to the ownership of land and now attaching to money”.

This raises to me the interesting question of whether capital has often been notably misallocated in human economic history. No doubt many people will claim it was misallocated in the planned economies of the Eastern Bloc - and their poor economic performance in the 1970s and 1980s seems to show this.

But it has also been misallocated in feudal, mercantile, semi-capitalist societies and it is, in my view, also being misallocated in our modern capitalist British economy.

Keynes talks of people being very keen to hold land or jewels. As such, people - rather than investing in opening new workshops or factories - just bought land or just bought jewelery or hoarded their money in some secret place away from thieves. This seems to me to be a misallocation of capital. People had taken the trouble of saving some money but, instead of investing it in such a way that it could produce future returns, they hoarded it. The very fact that archeologists come across big hoards of old coins shows that, rather than investing their money, people hoarded it in ancient times. This lack of capital may well have hampered economic growth. Obviously, one of the main hindrances to economic growth was the low level of technology and social institutions that were not conducive to innovation - but there was also a lack of capital. Perhaps, if more capital had been available in [say] the era of the Roman Empire, its economic growth could have reached higher levels - since the availability of capital might itself have changed social institutions and spurred technological innovation.

This tendency to hoarding continued even after the advent of capitalism. Even as banks developed, some people distrusted them [as early banks did have a tendency to collapse] and so hoarded notes or coins in their homes, gardens and in safes.

In early 20th century Britain, there was a lot of saving even, perhaps, by people on incomes that were not that much above subsistence. Social norms were perhaps different from what they are now and this meant that people were strongly encouraged to put their money in banks, building societies and National Savings certificates. However, that saving - if it was not invested productively by the institutions that held these deposits - may just have reduced the level of consumption and so reduced the impetus to further economic growth. The British economy was performing sluggishly for much of the 1920s, even before the Great Depression started. And, of course, in the 1930s there was little growth.

To what degree is capital misallocated in modern Britain, though? After all, the country has a much lower savings rate than it did in the 1970s [when about 10-12% of household income was saved, compared to less than 5% in the 2000s]. The thing is, though, I think a major reason why a lot of people are not saving much is because of the high amounts of mortgage repayments [or other housing costs] they face. And this demonstrates to me that the desire to "hoard" money by purchasing land has driven up house prices [and hence mortgage costs and, indirectly, rents].

The low level of house-building in Britain - and the availability of large mortgages to buy existing houses - has bid up the price of existing homes. Thus, people seem to be hoarding their assets in the form of a house and garden. This thirst for land is, in some ways, like the thirst for land among feudal barons and some merchants in the past. They craved land and so, during the Middle Ages, they preferred to spend money on acquiring estates than on investing in workshops and factories and new technology.

As about 70% of households are owner-occupiers, this tendency to see housing wealth as the way to "hoard" one's wealth seems to have become virtually universal. A house is thus not seen as a place to live but as an "investment". However, unlike investment in plant and machinery, it does not produce anything and so is of little benefit to the economy as a whole. To my mind, having considered the writings of Keynes, this seems like a misallocation of capital.

Should US conservatives support PR?

With reference to the election in the 23rd district of New York State, this article puts forward the case that US (social) conservatives should be keen on bringing in proportional representation. It would avoid (for them) the undesirable situation of a left-leaning candidate winning an election on a minority of the vote when the majority of the electorate split their votes between an (moderate) economic and a (hardline) social conservative.

However, being as they are conservative, I don't see it likely that the hard Right in the US will be pushing for electoral reform any time soon!

Link to an overview of the economic situation

This post gives an overview of what the author thinks are 10 of the most salient points about the recession. To me, one of the most interesting facts is that the private sector is now paying down the debt it acquired in the boom and that this is having the kind of "knock on" effects forecast by the Keynesian doctrine of the paradox of thrift.

Additionally, although the recession has mainly been caused by the actions of a few individuals in the financial services sector, it seems to have hit manufacturing the hardest. This is very bad news for people working in the manufacturing sector.

The concept of the "political will" to do something

This post asks the question of what is meant by saying there needs to be "political will" to do something. He argues its a lazy way of phrasing things and that people should look at the factors that drive political will. Political will does not some, abstractly, from the minds of people in power. There are social, scientific, environmental and other factors that drive it up the list of priorities in their minds.

It strikes me that voter interest in a matter is what drives political will among most democratic politicians. Additionally, of course, scientific and civil service views may also play a role. In general, if voters are not interested in a matter such as (say) international development, then politicians will tend to give it a low priority.

The poor quality of private postal services

The letter below is the second apt one that I read in today's Independent. The author writes:

Last Monday, I waited in all day for a parcel from a private courier firm. It was not delivered. I got on to the website of the courier, which told me that an attempted delivery was made at 1.15pm and that a card was put through the door. Eight members of my family were having lunch at this time, three yards from our front door, No card was left.

I spent 15 minutes listening to their telephoned message that my call was important, etc, then gave up. I eventually got delivery on Wednesday.

The Post Office and even Parcelforce have never treated me like this. All these people who want to privatise the Post Office will have to get used to this kind of treatment, because the Post Office as we know it is on the way out.

John Richards

St Ives, Cornwall

He makes a very good point. People on the Right are often holding up private services as somehow better than public ones. This is wrong. Poor customer service can often occur in private firms, especially if they don't face competition or legal redress. We must remember that private firms are only in operation to make money for their shareholders. Serving the public is a very low priority for them.

MPs did not live in their constituencies in the past

This is going to be the first of two articles drawing attention to interesting letters in today's Independent. On the letters page , there is a letter from a grandson of a former MP for Sedgefield. He writes:

Denis MacShane (5 November) says that until 30 years ago, it was accepted that MPs would be London-based and make occasional fleeting visits to their constituencies. Would a return to this be altogether a bad thing? MPs are elected to a national parliament to debate issues of national or international importance. Local matters should be the concern of local council members.

My grandfather, J R Leslie, JP, MP, served from 1935 until Labour was overturned in 1950, as Labour Party member for Sedgefield. (Rumblings thereabouts are due to his turning in his grave as his shade contemplates the doings of a later incumbent.)

Upon election he moved to a modest house in Muswell Hill, north London, just as most people would move to where their job was to be. From there he commuted to Westminster by bus and Underground. He would return to the constituency, by train, for occasional weekends and longer in the vacations. From my childhood recollections, I believe that he was then accommodated by one of his constituents; what is certain that he used modest accommodation and would never have thought of needing two homes. That he was re-elected several times indicates that his constituents were satisfied with these arrangements.

I believe that the recent growth of the idea of constituency MP as local trouble-shooter militates both against the attention of Parliament to strategic concerns and against true local autonomy.

Ian Leslie

Ludlow, Shropshire

He makes a very interesting point - that MPs primary duty is to represent their and their party's views in Parliament. As such, they should be based in London. In terms of local problems of constituents, perhaps these are matters more appropriately dealt with by ombudsmen and by local councillors. Unfortunately, the seepage of power up from local government to the Centre has been such that people may not be convinced their concerns can be dealt with by their most local elected representative. Also, it strikes me that a lot of people don't take the trouble to discover what local authority ward they live in or who their representatives are.

Proto-Poujadism?

I haven't seen the word 'Poujadism' used for ages - and only then in reference to the historical conditions of the French Fourth Republic. In this article on Daniel Hannan , though, Dave Ostler argues that the view Hannan articulates is one of proto-Poujadism. He makes particular reference to Hannan calling for the "paraphernalia" of direct democracy. He sees this as a call for populist referenda on issues the Right think they can win, not genuine direct democracy.

Of course, with referenda, a key issue is how you phrase the question - and what issues you choose to refer to the electorate. As Dave points out, some referenda, like a referendum on the renationalisation of the railways or one on increasing pensions would be able to be won by the Left. However, I suspect these are not the issues Hannan wants a referendum on!

Keynes' view on the 'euthanasia of the rentier', as articulated in the General Theory

J.M. Keynes thought, in the long-run, if the principles outlined in the General Theory were applied, that a situation could transpire when wealthy investors living off unearned income (rentiers) would cease to be an important part of the economy. They would no longer be able to gain large amounts of money in interest from their capital, since capital would cease to be as scarce. It would, though, in his view, be a gradual process.

He wrote:

"I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work. And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change. It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged continuance of what we have seen recently in Great Britain, and will need no revolution."

Who pays for Primark's profits?

The parent company of Primark announced earnings of £655m. This article points out that they were only able to make so much money because they have engaged suppliers in a race to the bottom. Conditions for workers in the sweatshops that make their clothes are terrible. The conditions are terrible because there is a focus on driving wage costs as low as possible. The lower the wages, the higher the profits they and some of their suppliers make.

Is there going to be a big fall in the pound?

Chris Dillow asks this question . He argues that, if there are spending cuts but interest rates remain low, then this could lead to a fall in the pound. This could be inflationary given the volume of goods/services that Britain imports - albeit good news for exporters.

Breaking up the banks

The government, at the insistence of the EU, is to be instructing RBS and Lloyds to hive off some of their businesses. This seems to me to be a good idea, since the banking system is overly concentrated and there does not seem to be much genuine competition.

However, an opportunity has been missed, as part of the bank break-up, to do two things. One thing that would be good, and that Mervyn King has called for, is to have a retail banking/investment banking split - like the one that used to exist in the US from the 1930s to the 1990s. This opportunity has not been taken. Also, as I wrote previously , there is a strong case for keeping in state hands or for remutualising some of the parts of these banks. When NR was mutualised, it was a lot more responsible than it has been since. A similar approach should be taken to the retail banking arms of RBS and Lloyds.

Additionally, the state may wish to keep hold of some branches to provide a utility banking service to areas that don't have easy access to bank branches. It could also keep hold of some of the investment banking assets of these banks in order to encourage banks to lend to productive industry rather than return to the malestrom of speculation and short-term lending. There are options that are alternatives to the "minimalist" approach being taken by the government. Not taking a bolder approach is a missed opportunity.

The X-factor and electoral reform

This article makes the case that the X-Factor illustrates the need for electoral reform. An act that is "in the lead" when there are 10 contestants may actually only have the support of just over 10% of the viewers voting. It seems meaningless. Perhaps it would be better for people to express preferences and have an eliminative ballot. However, in practice, that would be very difficult to do in a TV programme based on phone voting!

Has the recession led to more older people retiring?

This post asks that question. It seems that it has. The weak labour market has led to people who can retiring rather than staying in the labour force. However, they often have low retirement incomes because of the poor performance of many private pension schemes and funds. They are instead being edged out by employers and by the weak labour market. Perhaps they may re-enter it if the economy picks up in the next 2-3 years. Retirement may not be a continuous state for the current generation of "younger" retirees in, say, the 55-64 age group.

Good article in defence of David Nutt

The ever-articulate Ministry of Truth has a good article up in defence of David Nutt . It criticises the idea that scientific advisers shouldn't "take sides" in a debate since the whole nature of science is that it can draw conclusions based on evidence. The Home Secretary's decision to sack David Nutt was a bad one.

J.M. Keynes on savings, investment and liquidity preference

Keynes takes issue with the Victorian idea [that still seems to be shared by a lot of conservative commentators] that a high rate of saving is automatically a good thing. He highlights the paradox of thrift in The General Theory.

If people’s savings rates increase then [if their incomes remain constant] their consumption must decrease. Decreasing consumption means a decrease in the level of output and employment – as there will be a falling-off of business for some firms and so they will produce less and lay off some workers. This fall in output and increased unemployment may well then feed through into decreased incomes for the population as a whole. Keynes cites the Fable of the Bees and even a verse from Proverbs to illustrate his point. What is a good idea for an individual or household [increasing their savings rate] may well be a bad idea for the economy as a whole. It is the fallacy of composition to think that what is good for one household is good for the country [or the world] as a whole – it is a fallacy many people fall into.

Remember – what spurs economic output is producing things for others’ consumption. If others don’t consume the output, then there is no need to produce it and so output and employment will fall. Of course, in an open economy, surplus output can be exported. However, by definition, in the world as a whole that is not the case. Imports must equal exports.

The most significant point that I took away from reading Keynes is that greater savings in an economy are not a good thing in themselves. They need to be invested. Depending on how you define ‘savings’ and ‘investment’ they can defined as identical in quantity. However, a rise in savings could, all other things being equal, move things from one equilibrium to another equilibrium – with lower output and employment. In contrast, a rise in investment could lead
to more spending on capital goods, more employment/higher wages in capital goods industries and greater consumption as a result. A rise in investment can thus get a virtuous circle going; a rise in savings could get a vicious circle going.

Keynes thus emphasises the need for the state, in a situation like in the 1930s when output & employment are falling, to engage in spending aimed to raise the level of investment. By doing so, it will give work to some people. They will then, especially if on a low income, consume the bulk of it. This consumption will then boost the sectors of the economy that depend on their consumption – that produce the consumer goods they want. That will have a knock-on positive effect on the economy and will help raise output and employment.

Keynes notes that investment decisions are often made on the basis of what he dubs “animal spirits”. Businessmen and senior managers will often make investment decisions to buy new capital or new plant based on their optimism or pessimism. If they are optimistic they can sell the goods they produce at a good price, then they will invest and expand their production. If they are pessimistic then, however low interest rates are, they will not borrow to invest. If the animal spirits of the private sector are not such as to favour greater investment, then the key point to take away from Keynes is that the state should be the investor of last resort and should spend on the national infrastructure to avoid a spiral of declining confidence, declining investment and declining output.

Another interesting thing Keynes draws attention to is the preference for liquidity among investors. People want to have easy access to their money when they save it. However, most productive capital investments require large sums of money to be committed for a long period of time. This means that people may often ‘hoard’ money or other goods as a form of ‘saving’ rather than save it in such a way that it can be easily invested [i.e. by making a long-term loan to a business]. It also emphasises the importance of banks as institutions, since they try and bridge the desire of depositors for easy access to their money and the desire of borrowers for long-term loans at fairly stable rates.

Hoarding money or gold or other valuables, although it might prove useful to an individual household, is not beneficial to the economy as a whole as this ‘capital’ can not be invested. Keynes says, “That the world after several millenia of steady individual saving, is so poor as it is in accumulated capital-assets, is to be explained, in my opinion, neither by the improvident propensities of mankind, nor even by the destruction of war, but by the high liquidity-premiums formerly attaching to the ownership of land and now attaching to money”. Interest rates, in Keynes’ view, have to be higher than they ought to be – in a capitalist (or feudal) economy – to induce people to part with liquidity.

Later on in the General Theory, Keynes writes a paragraph in reference to India – a society which he feels has failed to grow much economically because of a disinclination to lend and invest money for long-term projects at reasonable interest rates. He says, “The history of India at all times has provided an example of a country impoverished by a preference for liquidity amounting to so strong a passion that even an enormous and chronic influx of the precious metals has been insufficient to bring down the rate of interest to a level which was compatible with the growth of real wealth".

Keynes says that Britain, in the golden age of laissez-faire for her, was able to develop political, social and financial institutions that were able to turn savings into productive investments. Even then, however, he notes that the rate of return demanded for safe government bonds was in the region of 3% or 3.5%. Slightly riskier commercial investments carried a return of 5% or more. This means, under capitalism, that the rate of return the entrepreneur would need to get from his investment to make a profit and to repay his creditors would have to be much more than that. In the 19th century, when the world was poorer than it was when Keynes was writing in the 1930s, there were more such investment opportunities. Now, it seemed to Keynes that the marginal rate of return to capital was falling. As such, to spur the increased investment needed to have full employment and to have output growth, interest rates would have to fall lower and lower to make such investment profitable.

Keynes thus thought that the state should keep interest rates low by monetary policy and by trying to make capital more abundant. Only by doing so would more investments be financially worthwhile.

Keynes was not an anti-capitalist in the sense that Marx and others in the Marxist tradition were. However, as a thinker, he became sceptical of laissez-faire – seeing the economic problems that faced Britain after the First World War. He, therefore, as a progressive Liberal wanted greater steps taken by the government – not to directly control industry as those further to the left wanted – but to intervene in the market and in the economy to achieve desired goals. These desired goals, given the high level of unemployment in Britain even during the boom years of the 1920s and given Britain’s relative economic decline vis a vis the US and some continental European countries, were full employment and a greater investment and growth.

New Zealand will be having a referendum on changing its electoral system

New Zealand's National Party government has said it wants to hold a referendum on whether to keep the country's post-1996 electoral system [AMS]. This article suggests it is going to be a close call.

If AMS does lose, though, it is interesting to see what alternative system would emerge. STV could be an alternative or, if the electorate want to return to more of a 2-party system and single-party majority government, then they could go for FPTP.

Keynes and the myth of equilibrium

Lots of classical economics seems to assume an economy is moving towards an equilibrium. However, that equilibrium may never be reached - it is a moving target. For example, a price rise for a product may stimulate more production; but by the time the production comes to market, it may have gone out of fashion. This constant change, in a modern capitalist economy, makes economic prediction difficult - and it illustrates why policies should not aim at bringing about an equilibrium but, instead, aim at trying to deal with problems that flow from the current disequilibrium.

Keynes pointed out in the General Theory the fact that equilibrium might not be reached and, as decisions are made, this changes the environment which may then mean that 'equilibrium' is a new point. Economics is fundamentally a social science, not a natural one, and - as such - is not bound by the same kind of universal rules that sciences like physics are. It can be predicted that, if an object is dropped, it will fall to the ground. It can not be predicted to what degree the quantity of something purchased will change if prices fall. And it can not be predicted to a high degree of certainty what the effect will be on other markets.

Will Iran move its capital from Tehran?

It seems that the Iranian government is considering moving its capital from Tehran . If so, then this would be a big move - since Tehran has been the capital of Iran for more than 200 years. It may also make it more difficult for demonstrations and protests to take place close to power, since the new capital city may well only consist of government functionaries and a handful of other people.

Tax avoidance by UK citizens abroad

With particular reference to the case of Lord Ashcroft this article takes a stand against the way in which UK citizens can avoid UK tax by living abroad . It is one thing if the entity they are living in is another "normal" state. But, if it is a tax haven, then they will not be paying tax on a lot of their income - even if it has been originally obtained from activities in the UK and other social-democratic states. This does seem rather unjust.

The US have found a way round this by taxing US citizens on their worldwide income. Clive Stafford-Smith suggests Britain should do the same. I agree - and I also think measures should be taken to tax income that is obtained by non-doms to avoid people being able to drive a coach-and-horses through the tax system.

Bruce Anderson on the drugs issue

Bruce Anderson makes the case for legalisation . The approach being taken in the Netherlands and Portugal of decriminalising some drug use appears to be effective in terms of harm reduction. Perhaps it is the fear of public opinion and a status quo bias which makes many people reluctant to embrace this idea in Britain.

Sacking David Nutt and trying to silence public debate on the issue by official scientists seems to me to be a grave error. The Government ought to give its scientific advisers the chance to air their views freely, rather than just behind closed doors. In a democracy, scientific evidence and debate should be something held in public - with people being freely able to weigh in on both sides of the debate.

Causes of death in contemporary Britain

This article highlights what the major causes of death in Britain today are.

The common infectious diseases of previous centuries appear to have been largely conquered. This is a great triumph for medical science and for modern standards of hygiene and treatment. The major cause of death in Britain is now circulatory diseases [notably heart disease and strokes, I would have thought]. This killed about 168,000 of the 509,000 or so people who died in Britain in 2008. Cancers were the next biggest cause of death, with about 140,000 fatalities to their name.

Keynes and the General Theory

I recently read J.M. Keynes' General Theory of Employment, Interest and Money. I shall be commenting on it more in future posts. This book seems to me to have shaken the "classical" economic theory based on the writings of Ricardo, Marshall and others.

Keynes argues that the 'classical theory' of economics applies to a special case and that he is trying to produce a theory that will apply in the general case, where the assumptions of classical theory do not hold. The time he was writing the book was the time of the Great Depression. Output and employment were well below optimal levels - something which classical theory found very difficult to explain. By embracing Keynesian ideas, the US and other nations were able to get out of the Depression and to march on to the prosperity of the post-war era.