Wednesday 14th October 2009
I am old-fashioned in my view of politics and economics. I understood the basic rule of capitalism was that the market determined the price and value of goods and services; at least that was the way it used to be. Professor Joseph Stiglitz has been much quoted in recent times. He is a Nobel laureate in economics, a former World Bank chief economist and was an economic adviser to former President Bill Clinton. He is not an unimportant observer in these matters and his firm advice to us – as a social democrat it is not something I would normally exhort to the House – is to play by the rules of capitalism. It is a view that was firmly enforced by those who cheered on the economic bubble that was the celtic tiger.
For the boom years the Government took hold of an economy left to them by the rainbow Government which was creating 1,000 new jobs a week based on solid exports, industry, production and real goods and services and created a parallel false economy based on inflation and bubble economics whereby we could all have a notional ever-increasing value on or homes and one could invest forever more in pyramid selling of land and property and it would be all right for ever more. On that basis we could reduce our tax base and increase public expenditure because the bubble was going to expand forever.
It is a profound irony that what is now proposed in the Bill before the House is that the rules of capitalism are no longer to apply to the capitalists.
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