This fascinating programme the ’Masters of Money’ has been developed jointly between the Open University and the BBC. At the heart of the programme lies the question of how Keynes would have dealt with today’s economic problems. He was apparently a stunning intellect and unfortunately for us it is not likely he would repeat some prescriptive formula based on his previous remedy of bringing the economy out of depression in the 1930s.
Of course we still hear disciples of Keynes urging us to spend our way out of the crisis and push investment based on Government spending. However there is almost no doubt the great man himself would have suggested anything so simple as a solution.
The problem is that our difficulties now are very different from the economic woes of yesteryear. He would certainly have recognised the vast differences and realised that any solution would have to be based on the actual situation. Our situation is based on a conjuction of several problems. From the Euro crisis flawed in it’s very design to the the rapid switch of economic power from the west to the developing east and south. Combined with these a fundamental problem that our economy is based on a debt financed capitalism model that basically didn’t work.
Old fashioned Keynesian economics is ill-placed to deal with these complexities and it is almost certain JM Keynes would have realised this. It may be that our solution will only come when we begin to accept that perpetual growth in our economies is perhaps impossible to achieve.
Whatever the solution, Keynes certainly has much to teach us and I recommend the show Masters of Money to you without reservation – Masters of Money, it’s well presented by the Beeb’s Economic Correspondent Stephanie Flanders. It’s up on Iplayer for a few weeks so catch it soon – if you are outside the United Kingdom and have trouble watching, this post should help – http://www.onlineanonymity.org/uk-tv/how-to-watch-uk-tv-in-usa/. It demonstrates how to use a proxy to watch these shows wherever you are based, watch the video half way down for a simple example.
If you access via an iPad then this post is also useful.