How Can You Plan In The Face of Uncertainty?
THERE is more illogic in political economy than you think.
I’ve been having an extended shouting match with a bloke called Richard Murphy for years now. He’s set himself up as the arbiter of all things economics and tax and would now like to tell us all how to run the country. It’s not a bad ambition for a retired accountant from Wandsworth.
However, the problem he’s got is that he cannot in fact follow logic. Try this for example:
And I know markets are full of people who are as clueless about what will happen next and who are as willing to fly by the seat of their pants as the person setting out to climb a mountain without a map or guide. They’re not wrong to do that – it’s just what has to happen in a world of uncertainty. But in that same world of uncertainty (which neoliberals do not think exists) there has also to be firm government action under the direction of politicians who know they have been elected to make decisions.
OK, so there’s uncertainty in the world, yes, we know that. What’s going to happen tomorrow is a little uncertain and what’s going to happen in a decade is very uncertain. So, what’s the best way of dealing with this problem?
I, as one of those neo-liberals, would say that flying by the seat of your pants is a pretty good way to go. As we don’t know what’s going to happen let’s just stay flexible and react to what does happen.
Mr. Murphy says that no, we really shouldn’t do that. We should give all the power to the politicians and then let them tell us what to do. Something they will make plans about. But, and here’s the catch, what use are plans if we don’t in fact know what’s going to happen?
For the thing is, you can believe one of two things. The future is predictable, so therefore we can plan for it: in which case, doing what the clever people tell us too from Whitehall, with their strategic plans and 5 year rolling developments, makes sense.
Or, the future is unpredictable and therefore we cannot plan it, only react to it: seat of the pants stuff.
The thing you absolutely cannot believe is that because it’s all uncertain therefore we must plan it.
Which is what Murphy is saying and explains some of why I’ve been in a shouting match with him for years.
Posted: 6th, September 2011 | In: Money Comment (1) | TrackBack | Permalink
