[발췌: Howard Davies's Chancellors' Tales (2006)] Chapter 3. Lord Howe

출처: The Chancellors' Tales: Managing the British Economy (Polity, 2006)

편집: Howard Davies

자료: 구글도서

Brief Contents:

1. Introduction by Howard Davies

2. Lord Healey: Why the Treasury is so Difficult 

...

※ 발췌(excerpts): Chapter 3. Lord Howe: Can 364 Economists all be Wrong?

p. 104~ :

QUESTION:

You said at the outset that your were trying to avoid theological absolutes, but surely monetarism is or was a theological absolute. Could I also remind you that you did abandon the Medium term Financial Strategy in 1985, therefore bringing into question the whole theology of monetarism. The second point I would like to mention is you did describe the situation in the economy at the end of your period as being characterized by success in terms of long-term growth and so on, but you didn't really stress the recession of 1979-81, 3 million people unemployed, and the following recession in 1991-2, with a massive decline in output and national income and again 3 million people unemployed.


ANSWER:

I did address and acknowledge the unemployment during my time at the Treasury as bein inescapable. It was a consequence of having to get inflation under control, and the absence of it, as we went through the 1980, was an achievement of success in that direction. For me the sadness is, and I say this in my own memoirs, that by the end of the 1980s we had begun to over-believe in our own success. At that time I was foreign secretary, and I remember making speeches around the world which made it sound as though we had learned to walk upon the water. We became over-confident. That is one of the hazards, and it is one of the hazards that the present Chancellor may face. If he goes on proclaiming as often and as loudly as he does about his economic success, he might begin to believe it himself and land himself with the same problem.

I would like to address much more directly your discussion of monetarism and theology. I have tried to emphasize that I am not a theologian. I am not an absolutist, and I think those who proclaim either monetarism or Keynesianism as 'isms' in which you have to believe are profoundly misguided. Those who have helped us to understand the importance of monetary policy as a component of economic planning have played an invaluable and inescapable role. One of the people whom I admired very greatly during our years in opposition was Gordon Pepper, one of the most regular commentators on the monetary aspect of economic policy, and he taught us to recognize it as important. In the Heath government it was never mentioned in all the debates about prices and incomes policy.

Gordon Pepper has written an interesting book since then with Michael Oliver entitled Monetarism under Thatcher: Lessons for the Future,[15] and he there does really try to analyze it in almost theological terms because he categorizes monetarists by degrees of belief in monetarism. Denis Healey in a way started that by talking about sado-monetarism, but he practised monetarism himself. He introduced economic monetary management into his lexicon and was right to do so. To denounce sado-monetarism was to use a quasi-religious device to denounce other peoples's management of the same economic essential. Gordon Pepper divides people into sheep and goats. He says Denis Healey and Douglas Wass were self-confessed sceptical monetarists. He describes Peter Middleton, Nigel Lawson and myself rather remarkably as political monetarists. He describes Terry Burns incomprehensibly as an international monetarist, and the only true believers in monetarism, in Gordon Pepper's analysis, are Margaret Thatcher and Keith Josephㅡwho were, of course, the two who were furthest from the coal face.

Now, I do not believe in monetarism. I am not required to believe in economic doctrines. I attach great importance to monetary policy. I attach great importance also to the learnings of Keynes, but they have to be married together and judged. That is why I commended my experience as an assessor of expert witnessesㅡand economic experts are as difficult as they come.