Italic figures refer to graphs and charts
the Acadamy and scholarship, 11–12, 13
ageing populations, 301–2, 371
AIG bail-out (2008), 325
Albermarle, Duke of, 78
Alesina, Alberto, 192, 231, 233, 241
anthropology, classical, 24
‘Aquarius’ CDO structure, 326
Aquinas, Thomas, 28–9
Asian Development Bank Institute, 327
‘asset-backed commercial paper’ (ABCP), 326
‘asset-backed securities’ (ABSs), 322–6, 327, 330
Attwood, Thomas, 48
austerity policy, 3, 49, 84, 114, 219, 225
and comparative recovery patterns, 241–4, 242, 243, 273, 273–4
cost of to British economy, 243–4, 244, 245
and financial folklore, 235–6
and inequality, 245–6
neo-classical errors, 232–3
Osborne’s crucial mistake, 229–30
Reinhart-Rogoff work, 232
Austrian School, 46, 104, 192, 226, 296, 349–50
Bagehot, Walter, Lombard Street (1873), 50
balance of payments, 103, 142, 143, 144, 145, 150, 152, 153, 159–60, 165, 332
balanced budget theory
and gold standard, 56–7
and Keynesian economics, 126–7, 137–8, 142, 143–4, 146, 149–50, 151, 155
as mainstream until Keynes, 76, 95, 98
mandated by EU fiscal rules, 242–3
neo-Victorian reassertion of (from 1980s), 76, 114, 185, 193, 215, 221–2
nineteenth-century fiscal policy, 9, 29, 43, 76, 85, 87–8, 92
and post-2008 austerity policies, 223–4, 227–39, 242–6
post-WW1 attempts to return to, 106–14
Roosevelt on, 130
Stiglitz’s balanced-budget multiplier, 235*
Baldwin, Stanley, 108
Balogh, Thomas, 169
Bank of England
1950s view on monetary policy, 146
actions during 2008 crisis, 234–5, 253–4, 254, 257
Bank Charter Act (1844), 50
Bank Rate, 58, 101–2, 113, 115, 116, 145, 146, 249, 251, 253–6, 254, 261–2, 276
‘Consols’ (consolidated debt), 43, 80–81
Currency School vs Banking School debate, 49–50
given ‘operational independence’ (1998), 249, 272–3
imposes ‘Corset’ (1973), 168
inflation targeting, 188, 189, 249–53
and ‘law of reflux’, 46
as ‘lender of last resort’, 50, 249
‘loss function’ for inflation target, 252
macroeconomic model (2004–10), 233, 310, 310–11
Monetary Policy Committee (MPC), 249, 254, 265, 275
during Napoleonic wars, 45–8
power over credit conditions, 105, 115–16
Prudential Regulatory Authority, 363
quantitative easing (QE) by, 254, 257, 259–62, 263–73, 274, 275–7, 276
Bank of International Settlements, 342–3
Bank of Japan, 271
Bank Rate
after 2007–8 crisis, 254, 261–2, 279
during 2008 crisis, 253–6, 254, 278
and Bank of England, 58, 101–2, 113, 115, 116, 145, 146, 249, 251, 253–6, 254, 261–2, 276
and broad money monetarism, 186
in Cunliffe’s model, 54, 54–5, 102, 145
after First World War, 101–2
and inflation targeting, 188, 249, 251, 252, 358–9
and Keynes, 101, 102, 115, 166, 255*
and managed gold standard, 71
in pre-crash USA, 340
and Radcliffe Report (1959), 146
set by independent central banks, 188, 249–50
transmission mechanism of, 250, 250–51
Banking School, 49–50
banks
Austrian School’s 100 per cent reserve requirement, 350, 367
bail-outs, 30, 217, 223, 319–20, 364–5
‘bank lending channel’, 64
Basel I (1988) and Basel II (2003), 320, 363
capital adequacy requirements, 320, 363–4
capital/collateral requirements weakened, 320
collapse of in 2008 crisis, 217, 223, 319
and consolidated debt, 43, 80–81
continued bonuses after crash, 319–20
continued complaints by over regulation, 363–4, 367
creation of money by, 27, 34, 61, 67–8, 71, 311
damage inflicted by, 361–2
deposit and joint-stock banking, 92
deregulation, 307–9, 310–16, 318–22, 328, 332–3
development of modern system, 34
functional separation proposals, 362–3
funding of CRAs by, 326–7, 329
Glass–Steagall overturned in USA (1999), 319
growth of unregulated sector, 168
late-medieval rediscovery of, 33–4
liquidity concept, 316–17
‘living wills’, 365
LTROs (long-term refinancing operations), 257
macroprudential regulation, 363–5
maturity mismatch of SPVs, 326
‘money multiplier’, 35, 64, 146, 179, 185, 258–9, 268–9, 277–8, 280
off balance-sheet assets, 318, 324, 325–6
post-crash reform agenda, 361–8
pre-crash orthodoxy, 5, 308–11
and quantity theory, 61, 64, 65–6, 67–70
reasons for regulation of, 316
reserve or liquidity requirements, 364
root of problem as greed, 365–6
solvency concept, 316–17
‘stress testing’, 364
see also financial system
Barber, Anthony, 167
Barings Bank
demise of (1995), 366
rescue of (1890), 50
basic income guarantee, 371
Bavarian Banking Association, 266
Bayes’ theorem, 209
Bear Stearns, 217
‘behavioural economics’, 388–90
Bernanke, Ben, 105, 179, 188, 248, 256, 275, 278, 334, 344
Bible, 30
Blanchard, Olivier, 230–31, 239
BNDES (Brazilian Development Bank), 354
Bodin, Jean, 33
Boer War, 86
bond markets, 7, 90–92, 148, 186, 218, 219, 235, 246, 287, 341
Borio, C., 342–3
Brash, Donald, 188
Bretton Woods system, 16, 139, 159, 374–3, 381
collapse of in 1970s, 16–17, 162, 164–5, 166–7, 184
Brexit vote (June 2016), 257, 316*, 373
Britain, xviii
adoption of Keynesian policy, 141, 142–3
austerity policy see austerity policy: cost to British economy
bullionist vs ‘real bills’ controversy, 44, 45–9
centralization of tax collection, 80
Currency School vs Banking School debate, 44, 49–50
debate on post-crash policy, 225–8
deficit and public sector borrowing statistics (1956–2013), 156
Employment White Paper (1944), 141, 142
final suspension of gold standard (1931), 113, 125
First World War borrowing, 95
fiscal experience (1692–2012), 77
forced out of ERM (1992), 188
GDP per capita growth (1919–2007), 154
‘Geddes Axe’ (1920s), 108
and gold standard, 9, 42, 43, 44, 45–50, 53, 57–9, 80, 101
and Great Depression, 97, 98, 110–13
growth Keynesianism (1960–70), 148–9, 150–51, 152
industrial relations system, 147, 167–8, 169
inflation peak (1975), 166
inter-war cyclical downturns, 107, 113
monetarism in, 185, 186–8, 189, 192–3, 249
nationalization in post-war period, 142, 158
post-crash bank liquidity ratios, 364
pre-crash housing bubble, 304
‘prices and incomes policy’ in, 147, 150, 151, 167–8
public finances before 2008 crash, 224, 225
Public Sector Borrowing Requirement (PSBR), 155–6
public spending and tax revenue (1950–2000), 157
rearmament in late 1930s, 113
recession of early 1980s, 186–7
recoinage debate (1690s), 40, 41–3
return to gold standard (1925), 102, 103, 107
sharp rise in inequality since 1970s, 288–9, 299–300, 300
slow recovery from 2008 crash, 241, 242, 243–4, 245, 273, 273–4
‘stop-go’ in post-war period (‘fine tuning’), 142–3, 145–6, 150, 152
victories over France (eighteenthcentury), 43, 80, 81
see also Bank of England; Conservative Party; Labour Party
Brittan, Samuel, 225
Brown, Gordon, 193, 220, 221–3, 354, 357
declares era of ‘boom and bust’ over, 215
‘prudence’ as watchword, 226
Bryan, William Jennings, 52
budget deficit see balanced budget theory
Buchanan, James, 198
Buffett, Warren, 326
Bundesbank, 140, 154, 257, 275
Bush, George W., 242
business schools, financing of, 13
Cairncross, A. K., 59
Cannan, Edwin, 100
capital movements
and banking crises, 331, 333, 333–43, 334, 335, 337
controls on in post-war era, 308, 332
hot money as main story, 318–19, 337, 382
Keynes on, 382
liberalization from 1970s, 17, 318–19, 332–3
post-war liberalization, 16
recycling of OPEC surpluses (1970s), 308, 332
regulated in Great Depression era, 16
see also global imbalances
central banks
actions during 2008 crisis, 3, 217, 219, 234–5, 253–4, 254, 256–8, 359
forecasting models, 5, 197, 233, 310–11
‘dual mandate’ proposal, 358
during Great Moderation, 215, 252–3, 310, 359, 360
independent, 1, 32, 43, 129, 140, 188, 198, 215, 249, 272–3
inflation targeting, 2, 101, 188–9, 189, 196, 215, 249–53, 347, 358
in Keynesian economics, 101, 102–4, 105, 115–16
need for revived regulatory tools, 361
in new macroeconomic constitution, 352, 355, 359–61
open-market operations, 71, 102–4, 105, 185–6, 257–8
in post-WW1 period, 100, 102–6
pre-crash models of 2000s, 197, 212–13, 233, 310–11
purchase of government debt, 234–5, 256–8, 260–61, 274
and quantity theory, 61, 69, 70, 71
‘resolution regimes’, 364–5
‘stress testing’ by, 364
and twentieth-century monetary reformers, 60, 61, 69, 70, 71, 99, 100, 101, 125, 129, 178, 200
see also Bank of England; Bank Rate; European Central Bank; Federal Reserve, US
Chamberlain, Neville, 113
Chang, Ha-Joon, 378
Chartist movement, 48
Chi Lo, 381–2
Chicago School, 174, 194, 349, 350–51 see also Friedman, Milton
China
bank liquidity ratios, 364
current account surplus, 331, 333, 334, 336, 338–41, 342, 380, 381
Churchill, Winston, 99, 109, 110
City of London, xviii, 58, 113, 226, 328, 367
Clark, John Bates, 288
class
business class as not monolithic, 7
creditors and debtors, 29–32, 37
growth of merchant class, 79
and ideas, 13–14
and Keynesian theory, 128–9, 130–31, 169–70, 386–7
and Marx, 6, 7, 14, 130, 131, 288, 296, 386
and neo-liberal model, 305, 374
rentier bourgeoisie, 31, 43, 288, 297
shift of power from labour to capital, 7, 32, 169–70, 187, 190, 192–3, 299–301, 304, 305–6
and theory of money, 27–8
under-consumption theory, 293–6, 297–8, 303–6, 370
see also distribution; inequality
classical economics tradition, xviii
abstraction from uncertainty, 385–6
‘anti-state’ view as deception, 93
contrast with Keynesian-theory modelled, 132–3
‘crowding out’ argument, 83–4, 109–11, 226, 233–5
government as problem not solution, 1, 3, 6, 9, 10, 29, 74–5, 76, 82–3, 85–7, 93, 347
and Keynes, 122–3, 128, 130, 175–6
and labour flexibility, 56, 245
no theory of output and employment, 96
post-WW1 ‘back to normalcy’, 96–7, 102
and price of labour, 107, 108, 115, 121–2, 123, 128, 130, 132, 138, 172
‘real’ analysis of money (‘money as veil’), 22, 24, 37, 45, 84–5, 121
repudiation of mercantilism, 74–5, 78, 79, 81–5, 93
and role of state, 73, 74–5, 76, 81–5, 109, 110
Smith’s ‘invisible hand’ metaphor, 10, 312, 385
and unemployment, 10, 37, 56, 96, 118, 121–2, 123, 128, 129, 130, 138, 172
wage-adjustment story, 107, 108, 115, 121–2, 123, 128, 130, 132, 172
Walras’ general equilibrium theory (1874), 10, 173, 181, 385
see also balanced budget theory; equilibrium, theory of; neoclassical economics tradition
Clay, Henry, 115
climate change, 383
Coalition government (2010–15), 227–8, 243–4, 265–6
Cochrane, John, 233–4
Coddington, Alan, 173
Colbert, Jean-Baptiste, 75, 140
Cold War, 140, 158, 159, 162–3, 186, 374
collateralized debt obligations (CDOs), 323–4, 327, 330
collateralized loan obligations (CLOs), 327
collapse of (1989–90), xviii, 16
see also Marx, Karl; Marxism
Congdon, Tim, 40, 105, 185, 197, 258, 268–9, 276, 279–81
on free trade, 377
and monetarism, 279–85
Money in the Great Recession (2017), 281–2, 287
‘real balance effect’ argument, 283–5
total rejection of fiscal policy, 280, 285–7
Conservative Party
governments (1951–64), 142–3, 147, 150, 152
Howe’s 1981 budget, 186–7, 192
and Keynesian ascendancy, 138–9, 142–3, 147, 150, 152
Lawson’s counterrevolution, 185, 192–3, 222, 358
Maudling’s ‘dash for growth’, 150, 152
narrative of 2008 crash, 226–8, 229–31, 233, 234–5, 237–9
and orthodox Treasury view in 1920s/30s, 109–10, 112, 113
Osborne’s economic policy, 227–8, 229–30, 231, 233, 234–5, 237–9, 243–4, 244, 245
supply-side policies, 197
Constantini, Orsola, 171
Corn Laws, repeal of (1846), 15, 85
counter-orthodoxy to Keynesianism
‘Colloque Walter Lippmann’ conference (1938), 174–5
emergence of, 163, 170, 171–2, 174–8
Friedman’s onslaught, 177–83
Hayek’s Road to Serfdom, 16, 175–6
inflation as greatest evil for, 162
Mont Pelerin Society, 176–7
rooted in political ideology, 6, 93, 176–8, 183–4, 202–3, 245–6, 258, 287, 292, 354, 386
see also Friedman, Milton; monetarism; neo-liberal ideology
credit and debt
and anti-Semitism, 30–31
‘bank lending channel’, 64
credit theory of money, 23, 24–7, 33, 34, 39, 100–101, 102–3
‘debt forgiveness’, 30
derivation of word ‘credit’, 30
doctrine of ‘creditor adjustment’, 127–8, 139, 159
excess credit problem and 2007–8 crisis, 4, 104, 303, 366–7
and gold-standard, 53
‘hoarding’ during Great Depression, 104, 127
and inflation/deflation, 37, 42, 47
Keynes and control of credit, 100–101, 102–3, 105, 115–16
Keynes’ Clearing Union plan (1941), 127–8, 139, 159, 380–81
loan sharks and ‘pay day loans’, 32
Locke’s social contract theory, 41–2
moral resistance to credit, 30–31
private debt and 2008 collapse, 3–4
prohibition of usury, 31
USA as post-WW1 creditor, 95, 103
and value of money, 27–8, 29–31
see also national debt
credit default swaps (CDSs), 324–5
credit rating agencies (CRAs), 320, 326–7, 329–30
Crimean War, 91
criminality, 3, 4, 5, 7, 328, 350, 366, 367
Cunliffe Report (1918), 54–5, 102, 145
Currency School, 49–50
current account imbalances see balance of payments; global imbalances
Dale, Spencer, 275
Dante, Divine Comedy, 31
Darling, Alistair, 224, 225, 254
Dasgupta, Amir Kumar, 12–13
Davies, Howard, 253
de Grauwe, Paul, 341, 376, 377
debt see credit and debt; national debt
deflation
‘Austrian’ explanation of recessions, 33, 104, 303
classical view of, 44
and debtor class, 37
depressions in later nineteenthcentury, 9, 15, 51–2, 89
at end of Napoleonic wars, 48
in inter-war Britain, 107–8
and quantity theory, 32–3, 60, 65, 66
US ‘dollar gap’, 159
DeLong, Brad, 225
democratic politics
Bretton Woods system, 16, 139, 374
corrupted capitalism as threat to, 351, 361
election finance, 7
EU ‘democratic deficit’, 376
extensions of franchise, 87, 96, 100
neo-liberal capture of, 6, 292
political left in 1960s, 148–9, 150
and ‘public choice’ theory, 198–9
Rodrik’s ‘impossible trinity’, 375
social democratic state, 16, 149, 176, 198, 292, 293, 303–4, 348, 373–4
structural power of finance, 6–7, 309
taboos against racism, 383
twentieth-century triumph of, 32, 96
unravelling of social democracy (1970s), 16, 304
Descartes, Rene, 22
developing countries
and 2008 crash, 217
Keynesian era growth, 162
in monetarist era, 186
‘neo-liberal’ agenda of IMF, 139, 181, 318–19
‘peripheries’ in gold standard era, 56–7
and promise of globalization, 17
and protectionism, xviii, 90, 378
World Bank loans to, 332
Devine, James, 298
Dicey, A. V., 15
distribution
class character of, 288, 295–6
and classical economists, 288
Kaldor–Hicks criterion, 291
and Keynes/Keynesians, 127, 149, 297
lack of theoretical basis for redistribution, 291–2
as macroeconomic question, 293–305
and marginal productivity theory, 295
and marginalist economics, 288, 290–91, 295
microeconomics of, 290–92
and monetary policy, 32
in neo-classical perfect markets, 292
and quantitative easing (QE), 248, 271–3, 272, 279, 284, 305
and quantity theory, 61
redistributive policies and total utility, 290–91
rekindled interest in issues of, 299
and ‘secular stagnation’ theorists, 370, 370
and social democratic consensus, 149, 293
standard of value as political question, 41, 43–4
theoretical case against redistribution, 292
see also inequality
Disyatat, P., 342–3
dot.com bubble collapse (2001), 202, 284, 304
Draghi, Mario, 248, 257, 265, 266, 364
Dynamic Stochastic General Equilibrium (DSGE) models, 196, 211–12
East Asia, 139, 202, 253, 319, 333, 337, 339, 371, 382
Eccles, Marriner, 298
Econometrica (journal), 173
economic cycles, 14–17, 74, 350
economic forecasting, 5, 138, 162, 194–5, 197, 228, 229–33, 310–11
economic theory, ‘scientific’
Adam Smith’s claim to be founder of, 79
‘anti-state’ view as deception, 93
the classical dichotomy, 21–3, 24–5, 36, 66, 121, 183, 201
and Congdon, 185, 281, 286, 287
and cycle theories, 14–17, 74, 350
Dasgupta’s ‘epochs’, 12–13
fiscal policy in Victorian age, 76, 85–8, 86
interest as a justified payment, 31
lack of paradigm shifts, 10, 12, 201
‘real’ analysis of Smith and Ricardo, 22, 24, 37, 45, 84–5, 121
and redistribution, 290–91
and rise of capitalism, 10
and scarcity, 19
as synthesizing discipline, 201–2
theory of value, 21–3, 25–7, 28–30, 36–9, 41–4
see also entries for individual theories, schools and economists
‘economics of politics’ theory, 198–9
economists, professional, xvii, 13, 344
and greatness, 390
Hicks’ ‘concentrations of attention’, 7–8
language from physical sciences, 388
policymaking in hands of, 6
see also entries for individuals
Edgeworth, Francis, 291
Egypyt, ancient, 26
Eichengreen, Barry, 55, 56, 58, 95
Einaudi, Luigi, 192
Eisenhower administrations (1950s), 151
Elliott, Larry, 225
empires, European, 57, 58, 80, 294–5
equilibrium, theory of, 1, 14, 132, 278
and Congdon, 282
disequilibrium theories, 350
and DSGE modelling, 211–12
Friedman’s reassertion of, 177, 181
and Hayek, 350
Keynes’ modification of, 118–21, 123, 124, 128, 129, 138, 172, 174
and neo-classical synthesis, 174
and New Consensus, 201, 211–12, 232–3
and New Keynesianism, 195–6
and pre-Keynesian orthodoxy, 347, 348
and price of labour, 107, 108, 115, 121–2, 123, 128, 130, 132, 138, 172
short-run and long-run distinction, 38, 49, 385
Walras’ general equilibrium theory (1874), 10, 173, 181, 385
Erhard, Ludwig, 153
Ericsson, N. R., 179
Erie Canal, 90
Eshag, Eprime, 71
European Central Bank, 139, 188, 198, 217, 242–3, 253, 254, 361
institutional constraints on, 50, 234, 242, 249, 274–5
misreading of Eurozone crisis, 275
quantitative easing (QE) by, 273–4
on ‘stress testing’, 364
taxing of ‘excess’ reserves, 266
use of LTROs, 257
European Commission, 139, 3612, 365
European Exchange Rate Mechanism, 188
European Investment Bank, 354
European Union (EU, formerly EEC), 153, 318, 379, 383
Financial Stability Board (FSB), 363
‘Four Freedoms’, 375
lack of state, 376
Single Resolution Board, 365
Eurozone
current account imbalances, 333, 334, 335, 336–7, 341–2
Juncker investment programme, 274
proposed European Monetary Fund, 376, 382
structural flaw in, 341, 375–7
two original sins of, 274, 376–5
Eurozone debt crisis (2010–12), 50, 223, 377, 382
and double-dip recession, 241, 242–3, 274
ECB’s misreading of, 275
and financial crowding-out theory, 234
and Greece, 32, 224, 224–5, 226, 233, 235, 242–3, 243, 365
exchange-rate policy, 127–8, 139
and Congdon’s ‘real balance effect’, 285
and domestic interest rates, 251
fixed rates under Bretton Woods, 16, 159, 161, 162, 168
floating rates from 1970s, 16–17, 184
and Friedman, 182
IMF ‘scarce currency’ clause, 380–81
Nixon’s dollar devaluation (1971), 153, 154, 165
and quantitative easing, 267, 267
sterling crisis (1951), 145
sterling devaluation (November 1967), 152
sterling-dollar peg (from 1949), 148, 150, 152
sterling/franc/deutschmark devaluations (1949), 152
‘expansionary fiscal consolidation’, 192, 225, 231
Fabian socialism, 96
Fama, Eugene, 208, 311–12, 313
Federal Reserve, US
and 2008 crash, 50, 217, 254, 256
AIG bail-out (2008), 325
Federal Open Market Committee (FOMC), 185–6
and Great Depression, 104–6
inflation targeting, 188
monetary policy in 1950s, 146
‘Operation Twist’, 268
quantitative easing (QE) by, 256–7, 273–4
‘Reserve Position Doctrine’ (1920s), 103–4
and under-consumption theory, 298
Ferguson, Niall, 73, 79, 80, 91
financial collapse (2007–8)
‘Austrian’ explanation, 104, 303
banks as proximate cause, 343, 361, 365
Bear Stearns rescue, 217
British analogies with Greece, 235
British debate after, 225–8
causes of, 3–4, 343–4, 365, 366, 368
central bank responses, 3, 217, 219, 234–5, 253–4, 254, 256–8, 359
comparative recovery patterns, 241–4, 242, 273, 273–4
compared to 1929 crash, 218
Conservative narrative, 226–8, 229–31, 233, 234–5, 237–9
and crisis of conservative economics, 17
and embedded leverage, 318, 322, 325
five distinct stages of crisis, 216–19
‘global imbalances’ explanation, 11, 331, 333, 336–43, 337
government responses, 3, 217–18, 219–20, 221–36, 237–47
Hayekian view of cause, 303
hysteresis after, 239–41, 240, 241, 370
inequality as deeper cause of, 299–306, 368
Lehman Brothers bankruptcy, 3, 50, 217, 365
leverage (debt to equity) ratios on eve of, 317–18
liquidity-solvency confusion, 317
outbreaks of populism following, 13, 371–3, 376, 383
post-crash deficit, 226–33, 229, 237–8
private debt as proximate cause, 3–4
stagnation of real earnings as deep cause, 4, 303, 367
standard account of origins of, 3–4
as test of two theories, 2–3, 76
theoretical and policy responses, 10, 129, 219–20, 223–36, 237–47
see also austerity policy
and under-consumption theory, 303–6
US sub-prime mortgage market, 3, 216, 304–5, 309, 323, 328, 341
see also Great Recession (2008–9)
Financial Services Authority, UK, 321–2, 330
financial system
and causes of 2008 collapse, 3, 4–5, 253, 307–9, 361
and crisis of conservative economics, 17
deregulation, 307–9, 310–16, 318–22, 328, 332–3, 384
East Asian financial crisis (1997–8), 202, 339, 371, 382
‘Efficient Market Hypothesis’ (EMH), 311–13, 321–2, 328, 388
‘financialization’ of the economy, 5, 305, 307–9, 366–7
fraud and criminality, 3, 4, 5, 7, 328, 350, 365–6, 367
and free-market orthodoxy, 5, 308–16
loosening of moral restraints, 319
mark-to-market (M2M) framework, 314
offshore euro-dollar market, 308, 332
privatised gain and socialised loss, 319–20
released from national regulation (1980s/90s), 131, 318–22
structural power of finance, 6–7, 14, 309
systemic under-estimation of risk, 314–16, 316*, 320–22, 323, 329–30
Thatcher’s Big Bang (1980s), 319
tradable public debt instruments, 43, 80–81
Turner’s ‘financial intensity’ concept, 366
unrealism of assumptions, 310–16
value at risk (VaR) framework, 314–15, 315, 330
‘Washington consensus’ deregulation, 198, 200
see also banks
FinTech, 356
First World War, 86, 95, 106–7, 374, 375
‘fiscal consolidation’, 10–11, 129, 225
Darling’s plan (2009), 225–6
and Osborne, 227–8, 229–30, 231, 233, 237–9, 243–4, 244, 245
fiscal policy
and 2008 collapse, 10, 217–18, 219–20, 223–36, 265–6, 273–4, 286
during Blair-Brown years, 221–4, 223, 225–6, 227
British experience (1692–2012), 77
Congdon’s total rejection of, 280, 285–6
‘crowding out’ argument, 83–4, 109–11, 226, 233–5
current and capital spending, 107–8, 114, 142, 155–6, 193, 221–3, 237–8, 355–7
directing flow of new spending, 286–7
fiscal multiplier, 110–11, 125–6, 133–6, 138, 230–31, 233, 235, 244–5
in inter-war Britain, 106–17
and Keynesian economics, 2–3, 109, 111, 114–17, 125–7, 129–31, 133–4, 137–8, 173, 278
Keynesian full employment phase (1945–60), 141–8
Krugman’s ‘confidence fairy’, 117
Lawson counterrevolution, 185, 192–3, 222, 358
legacy of monetarism, 190–93
May Committee (1931), 112
national income accounts, 138
New Classical view of, 200
in new macroeconomic constitution, 351–2, 355–7, 360–61
nineteenth-century theory of, 9, 29
post-Keynesian disablement of, 193, 221, 258, 304, 328
pre-crash orthodoxy, 221–2, 223–4, 230–31
Public Sector Borrowing Requirement (PSBR), 155–6
see also balanced budget theory; public investment; taxation
Fisher, Irving, 9, 52, 61, 99, 280
‘compensated dollar’ scheme, 66
equation of exchange, 62–4, 71–2, 258, 278–9, 283, 284, 287
and quantitative easing, 258, 278–9
Santa Claus money, 62–4, 258, 278–9
Fitch (CRA), 329
France
assignats in 1790s, 64–5
and gold standard, 50, 102, 104, 127
‘indicative planning’ system, 150
‘physiocrats’in, 81
protectionism in late nineteenthcentury, 59
state holding companies, 356
university campus revolts (1968), 164
Freddie Mac, 217, 256, 309, 320
free trade, xviii, 9, 58–9, 76, 79, 81–2
abandoned in Britain (1932), 113
general presumption in favour of, 377
and Hume’s ‘price-specie-flow’ mechanism, 37–8, 53, 54, 104, 332
and Irish potato famine, 15
List’s ‘infant industry’ argument, 88–9, 90, 378–7
and nationalist–globalist split, 371–3
and post-war liberalization, 16, 374
and presumption of peace, 379
repeal of Corn Laws (1846), 15, 85
Ricardo’s doctrine of comparative advantage, 88, 378, 379, 379
US conversion to (1940s), 90
Freiburg School, 140
Friedman, Milton
adaptive expectations theory, 180–81, 183, 194, 206–11
and Cartesian distinction, 22
as Fisher’s heir, 278
The Great Contraction (with Schwartz; 1865), 105
idea of ‘helicopter money’, 63
and Mont Pelerin Society, 176–7
and ‘natural’ rate of unemployment, 163, 177, 181, 195, 206, 208
onslaught on Keynesianism, 170, 174, 177–83, 261
‘permanent income hypothesis’ (1957), 178, 183
and Phillips Curve, 38, 180–81, 194, 206–8, 207
policy implications of work of, 182–3
political motives of, 177, 183–4
and quantity theory, 61, 70, 177–9, 182, 183, 194
‘stable demand function for money’, 179
view of Great Depression, 104–6, 179, 183, 256, 276, 278
weaknesses in arguments of, 183
Frydman, Roman, 389
Fullarton, John, 49
Funding for Lending programme, 265–6
G20
Financial Stability Board, 363
summits (2009/10), 219–20, 223, 225
G7 finance ministers meeting (February 2010), 224–5
game theorists, 389
Gasperin, Simone, 357*
Geddes, Sir Eric, 108
German Historical School, 88–9
Germany
current account surplus, 333, 334, 341, 342, 380, 381
employer–union bargains, 147, 167
and Eurozone crisis, 341, 365, 376, 377
and Great Depression, 97, 111, 129–30
growth Keynesianism (1960–70), 153–4
high growth rates in 1950/60s, 149, 156
Hitler’s reduction in unemployment, 111, 112, 129–30
hyperinflation of early 1920s, 275
as Keynesian in 1960s, 140
nineteenth-century expansion and unification, 89, 91
‘ordo-liberalism’ in, 140
post-war modernization/catch-up, 156–7
protectionism in late nineteenthcentury, 59
return to gold standard (1924), 102
‘Rhenish capitalism’ model, 154
Giffen, Robert, 51
Glass–Steagall Act (1933), 319, 361, 362
global imbalances
basic theory of, 335–6
and capital account liberalization, 318–19
capital flight, 59, 334, 337, 341, 343
Eurozone see Eurozone: current account imbalances
as explanation for 2007–8 crash, 11, 331, 333, 336–43, 337
and financial deregulation, 318–19, 332–3
and First World War, 95
increases in pre-crash years, 333, 333–4, 334, 335
problematic nature of, 333–4
reserve accumulation, 336, 337–41
‘saving glut’ vs ‘money’ glut, 338–41, 342
structural causes still in place, 344
US dollar as main reserve currency, 338
global warming, 383
absence of the state, 350, 373, 375–6
anti-globalist movements, 371–2, 373
first age of, 51, 55, 57, 59, 374, 375
future of, 382–4
Geneva and Seattle protests (1998/99), 371
and inflation rate, 252–3
and lower wages in developed world, 252–3, 300, 379
nationalist-globalist split, 371–3
‘neo-liberal’ agenda of IMF, 139, 181, 318–19
popular protest against, 351, 371–2
resurgence of after Cold War, 374
Rodrik’s ‘impossible trinity’, 375
new gold production, 51, 52, 55, 62
gold standard, xviii, 1, 9, 27, 29, 338
and Britain, 9, 42, 43, 44, 45–50, 53, 57–9, 80, 101, 102, 113
collapse of US exchange standard (1971), 160, 165
commitment to convertibility, 55–6
depressions in later nineteenthcentury, 51–2
dysfunctional after First World War, 95, 97
final suspension in Britain (1931), 113, 125
Fisher’s ‘compensated dollar’ scheme, 66
Hume’s ‘price-specie-flow’ mechanism, 37–8, 53, 54, 104, 285, 332
and international bond markets, 92
as international by 1880s, 50–52
Kindleberger thesis, 58–9
move to ‘managed’ system, 71, 99–100
replaces silver standard (1690s), 42, 43
restored (1821), 48
return to in 1920s, 102, 104, 107
suspension during Napoleonic wars, 43, 45–7
suspension of convertibility (1919), 101–2
triumph of by mid-nineteenthcentury, 44, 50
working and design of, 52–9
as working in tandem with empire, 57, 58
Goldberg, Michael D., 389
Goldman Sachs, 315
Graeber, David, 28
Great Depression (1929–32), 9, 13, 96, 97–8, 110–13, 127
compared to 2008 crash, 218
Friedman-Schwartz view, 104–6, 179, 183, 256, 276, 278
impact on US policy-makers in 2008 period, 256, 275, 278
left-wing explanations of, 298
rise in inequality in lead-up to, 289
and second wave of collectivism, 15–16
Great Moderation (early 1990s–2007), 4, 53, 202, 278
economic problems during, 348
financial deregulation during, 318–22, 328
financial innovation during, 322–8
and independent central banks, 215
inflation during, 106, 215, 216, 252–3, 253, 348, 359, 360
international financial network, 309, 318–28
output growth during, 215, 253, 348
Great Recession (2008–9), xviii
co-ordinated global response, 219–20, 383
decline in productivity after, 305–6
initial signs of recovery (2009), 218–19, 225, 226
monetary interpretation of, 105, 106
‘premature withdrawal’ of fiscal stimulus, 219–20, 223–36, 245, 352
reform agenda after, 361–8
rise in inequality in lead-up to, 289–90, 299–300
see also financial collapse (2007–8)
Greece
and Eurozone debt crisis, 32, 224, 224–5, 226, 233, 235, 242–3, 243, 337, 341, 365
in gold standard era, 59
Hamilton, Alexander, 88, 90, 92
Hannover Re scandal, 329
Harrison, George, 105
Harrod, Roy, 123
Hayek, Friedrich, 33, 46, 177, 195, 350, 367
founds Mont Pelerin Society, 176
‘over-consumption’ theory, 296
The Road to Serfdom (1944), 16, 175–6
on Wall Street Crash, 104
Heath, Edward, 167–8
Heckscher, Eli, 37
Help to Buy programme, 265, 266
Henderson, Hubert, 109
Henderson, W. O., 92
Hendry, D. F., 179
Hicks, John, 7–8, 34, 138, 158–9, 369
IS/LM model, 173, 199, 203, 203–4, 204
Hobson, J. A., 294–7
Hoenig, Thomas, 365
Hoover, Herbert, 53
Hopkins, Sir Richard, 112, 116–17
housing market
boom before 2007 crash, 239, 304, 331
British boom (1931), 125
British boom (1980s), 187
Coalition government subsidy programmes, 265–6
as core activity of retail banks, 362–3
post-crash recovery in, 265
social house-building, 363
speculative boom and bust in, 331
US sub-prime mortgage market, 3, 216, 304–5, 309, 323, 328, 341
Hume, David, 22, 37–8, 53, 54, 84, 104, 181, 285, 332, 336
Hutchison, Terence, 349
hysteresis (Blanchard and Summers term), 239–41, 240, 241, 370
Ibn Khaldun, 73
India, 35–6
inequality
assault on Piketty’s framework, 302–3
and austerity policies, 245–6
causes of disequalization, 300–306
and crisis of conservative economics, 17
as deeper cause of banking collapse, 299–306, 368
and deregulation of financial markets, 384
fall in wage share of national income, 299–300, 301, 303, 304, 305
in Great Moderation years, 4
macroeconomic impact of, 11, 289–90, 299–300, 303–6, 370
and new macroeconomic constitution, 352
Pigou’s work on redistribution, 290–91
and protectionism, 380
and quantitative easing, 248, 271–3, 272, 279, 284, 305
sharp rise in since 1970s, 288–9, 289, 298–302, 300, 302
and slow down in Western growth rate, 369–70, 369
and under-consumption theory, 293–6, 297–8, 303–6, 370
inflation
Bodin’s description of, 33
‘cost-push’ school, 146–8, 304
economic deterioration (1969–73), 164–6
‘excess demand’ school, 144–6
Friedman’s view of, 179–83
global lowering of from 1990s, 190
during gold-standard years, 43
during Great Moderation, 106, 215, 216, 252–3, 253, 348, 359, 360
hyperinflation of early 1920s, 100, 275
increases in late 1960s, 152, 153, 154, 163, 164
inflation targeting, 2, 101, 188–9, 189, 196, 215, 249–53, 347, 358
and interest rates, 101–2, 359
Keynes–Cannan debates on, 100
and Keynesian policy, 131, 141, 144–8, 161, 162, 169–70, 171, 180, 304, 348
during Napoleonic wars, 45–6, 47–8
new-classical approach to, 2
nineteenth century debates on, 44–9
oil price shock (1973–4), 166–7, 189, 190
oil price spike (1980–82), 189, 190
onset of stagflation (1965–9), 164
Phillips Curve, 144–5, 147, 162, 163, 180, 194, 205, 205–12
post-war period until 1960s, 32, 148
and quantitative easing (QE), 254, 258, 261, 262–3, 270–71, 271, 272, 277
Quantity Theory of Money, 9, 32–5
Ricardo on, 28
‘stagflation’ in 1970s, 2–3, 9, 16, 152, 154, 162–70, 163, 183, 184, 189, 189–90, 304
and suspension of convertibility (1919), 101–2
wage explosion in Britain (1968), 152
innovation, state subsidy of, 353–4
interest rates
during 2008 crisis, 217, 218, 253–6, 254, 274
anti-usury laws, 31
central bank reaction function, 212–13
cost of government borrowing (2000–2016), 234
and Cunliffe Report (1918), 54–5, 102, 145
during economic deterioration (1969–73), 165, 168
in Eurozone, 376
and ‘expansionary fiscal contraction’, 192
and Fed’s ‘Reserve Position Doctrine’ (1920s), 103
financial crowding out theory, 234–5
and gold standard debtor countries, 127
investment’s sensitivity to changes in, 116, 125, 137, 145, 173, 204
IS/LM model, 173, 199, 203, 203–4, 204
and Keynes’ MEC (marginal efficiency of capital), 119
Keynes’s recipe of low rates, 107, 116, 117, 124–5, 137, 138, 145, 297
liquidity preference theory, 106, 121, 124–5, 146, 173, 259, 261, 265, 283–4
as main control-mechanism from 1990s, 185, 249–53, 256
and monetarism, 180, 184–5, 186, 187, 188, 206
moral considerations, 31
‘natural’ rate of, 68–9, 70, 102, 201, 213, 251, 255, 278, 311
in neo-classical multiplier, 134–6
in new fiscal constitution, 352
as not optimally self-adjusting, 172, 311, 339
and Phillips Curve, 206
as price of liquidity, not saving, 121, 297
and quantity theory, 61, 64, 65, 66–7, 68–70, 71
Victorian fiscal constitution, 86
and Wicksell, 61, 201, 251, 255, 278
see also Bank Rate
International Monetary Fund (IMF), 139, 140, 198
and Eurozone crisis, 139, 242–3
and fiscal multipliers, 230–31, 233
‘neo-liberal’ agenda of, 139, 181, 318–19
‘scarce currency’ clause, 380–81
‘structural adjustment’ programmes, 139, 181
Ireland
potato famine (1840s), 15
sovereign debt crisis, 328, 341, 365
Italy, 33–4, 91, 102, 156, 157, 242, 299, 356
James, Harold, 383
James I, King, 79
Japan, 166, 332, 333, 369, 378
post-war modernization/catch-up, 156, 157, 159
Jenkins, Roy, 152
Jones, Stedman, 197
Jordà, Ò., 243–4
Juncker investment programme, 274
Kaldor, Nicholas, 34, 150–51, 160, 190, 378
Kaldor–Hicks criterion, 291
Keynes, John Maynard, xviii, xix
‘animal spirits’ of, 120, 127, 133, 282, 286
Clearing Union plan (1941), 127–8, 139, 159, 380–81
and control of credit, 100–101, 102–3, 105, 115–16
demolition of Say’s Law, 119
doctrine of ‘creditor adjustment’, 127–8, 139, 159
ethics of, 123–4, 126–7, 297, 369
and fallacy of composition, 389
and fiscal multiplier, 111, 125–6, 133–4, 138, 235, 244–5
and heuristics, 196
on ‘inflation tax’, 28
on international capital movements, 382
letter to T. S. Eliot, 368, 370
liquidity preference equation, 125
liquidity preference theory, 25, 106, 121, 124–5, 146, 173, 259, 261, 265, 283–4
and liquidity trap, 255*
Macmillan Committee hearings, 114–17
‘marginal efficiency of capital’ (MEC), 119
‘monetary theory of production’, 22–3
on ‘money multiplier’, 259
on nationalist economics, 95
and ‘natural’ rate of interest, 69, 201, 278, 311
and ‘natural’ rate of unemployment, 197
on possession of money, 1, 25, 36, 115, 119, 121, 385
on psychology of investment, 119–21, 199, 286–7
and ‘quantity adjustment’, 98, 118
and quantity theory, 61, 102–3, 125
saving and investment relationship, 118–21, 172, 339, 342–3, 386
view of State in future (1936), 354
and Wall Street Crash, 104, 105
‘Economic Possibilities for our Grandchildren’, 369
General Theory (1936), 9, 11, 117–27, 128–9, 137, 173, 194, 235, 296–7, 386–7
Tract on Monetary Reform (1923), 99, 101, 125
Treatise on Money (1930), 102, 125, 259, 279, 280
Keynesian economics
and 2008 crash, 219, 223–4, 241–2, 244–5
anti-Keynesian counterattack see counter-orthodoxy to Keynesianism
‘automatic stabilizers’, 142, 143–4, 219, 237
and capital-labour balance of power, 7, 130–31, 147, 169–70, 187, 190, 192–3, 299–301, 304, 305–6
and class, 128–9, 130–31, 169–70, 386
collapse/overthrow of (from 1970s), 16, 162–70, 194, 202–3, 221, 348
comparisons with neo-classical view, 204, 204
contrast with classical-theory modelled, 132–3
dominance of (1945–1970s), 1–2, 7, 76, 139–62, 348
economic deterioration (1969–73), 164–6, 168–9
and excess private saving, 118, 228–9, 294, 297, 331, 339, 352–3
and exchange-rate policy, 127–8, 139, 159, 380–81
Fed’s ‘Reserve Position Doctrine’, 103–4
fiscal policy as central, 2–3, 109, 111, 114–17, 125–7, 129–31, 133–4, 137–8, 173, 278
formula for multiplier, 125–6, 133–4
full employment phase (1945–60), 141–8
gains in welfare during golden era, 162
growth Keynesianism (1960–70), 148–54, 162–3, 164
Hicks’ IS/LM model, 173, 199, 203, 203–4, 204
in Hutchison’s continua, 349
inattention to supply-side questions, 161, 167, 174, 190
and interest rates, 107, 116, 117, 119, 121, 124–5, 137, 145, 146, 297
Keynesian revolution (1930s), 1–2, 9, 10, 15–16, 75, 98, 118–31, 348
and Lloyd George ‘pledge’ (1929), 109–10, 111, 116–17
and monetary policy, 98, 100–101, 114–15, 116, 124–5, 137, 138–9, 145–6, 173
neo-classical synthesis, 172, 173–4, 201–2
as not rehabilitated post-crash, 2–3, 348
onset of stagflation (1965–9), 164
political-economy gap in, 128–9
and post-war ‘catch-up’, 158–9
and post-war employment policy, 368, 370–71
post-war settlement, 139–41
and quantitative easing (QE), 259, 261, 269–70, 271
as response to Great Depression, 13, 15–16, 98, 114–15, 118
right/left political implications of, 138–41, 142
short-run ‘sticky’ wages/prices, 122, 132, 138, 171, 173, 174, 195
social context of rise of, 130–31
and social democratic state, 16, 149, 176, 198, 292, 293, 303–4, 348, 374
stabilization theory, 128, 133, 143–4, 180, 183, 219, 237, 278, 350
‘stagflation’ in 1970s, 2–3, 9, 16, 152, 154, 162–70, 163, 183, 184, 189, 189–90, 304
and strength of post-war boom, 154, 154–62
theoretical abolition of, 201
and uncertainty, 25, 36, 101, 119–24, 172, 180, 196–7, 199, 352–3, 385, 387
‘underemployment equilibrium’, 1–2, 118, 128, 130–31, 233, |293, 352
and wages problem under full employment, 131, 141, 144, 147–8, 161, 162, 169–70, 171, 304, 348
widespread diffusion of, 139–41
see also New Keynesianism
KfW (German Development Bank), 354
Kiel Canal, 89
Kindleberger, Charles, 58–9
King, Martin Luther, 149
King, Mervyn, 53, 187, 254, 311, 331
Knapp, Georg Friedrich, 25
Konrad Zweig, 157
Kornai, Janos, 357
Krugman, Paul, 106, 117, 119, 225, 255*, 370, 378
Kuroda, Haruhiko, 271
Kuznets, Simon, 302
labour market
and automation, 370–71
classical wage-flexibility, 107, 108, 115, 121–2, 123, 128, 130, 132, 172
employer-union bargains, 147, 167
Friedman’s view of, 180–81
full-employment, 1, 10, 15–16, 131, 144, 147–8, 169, 195, 236, 303, 352
Kaldor’s supply side policies, 150–51, 190
low waged workers from developing world, 252–3, 300, 379
and New Consensus, 202
in new macroeconomic constitution, 355
off-shoring of millions of jobs, 17
post-crash decline in productivity, 305–6
post-WW1 wage structures, 95, 100, 108, 115
since Great Recession, 245, 305–6
stagnation of real earnings, 4, 32, 122, 245, 303, 340, 367
in tributary economies, 26
‘underemployment equilibrium’, 1–2, 118, 128, 130–31, 233, 293, 352
wage and price controls (1960s/70s), 16, 147, 151, 152, 153, 167–8
wage-price spirals (from late 1960s), 164, 165–8
Labour Party, 147, 152, 169–70, 188, 222
and 2008 crash, 223–4, 225–6, 227, 238–9
fiscal policy (1997–2010), 221–4, 223, 225–6, 227
minority government (1929–31), 111–12, 142
National Plan (1965), 150
public service provision (after 1997), 197
renationalization proposals, 356
Selective Employment tax (1966), 151
Laffer, Arthur, 191
Latin America, 57, 59, 92, 139, 319
Lawson, Nigel, 185, 192–3, 222, 358
Leeson, Nick, 366
Leffingwell, Russell, 160
Lehman Brothers bankruptcy (15 September 2008), 3, 50, 217, 365
Leigh, Daniel, 230–31
Leijonhufvud, Axel, 60, 68, 69–70
Leontief, Wassily, 371
Liikanen Report, 362
limited liability, 31
Lindbeck, Assar, 198
Lippmann, Walter, 174–5
liquidity concept, 316–17
liquidity trap concept, 254–6, 255
List, Friedrich, xviii, 88–9, 90, 378
Lloyd George, David, 87, 107–8, 113
‘pledge’ (1929), 109–10, 111, 116
local authorities, 108–9, 155–6
Locke, John, 35, 41–2, 43, 44, 80
Lowe, A., 130
Lowndes, William, 41
LTROs (long-term refinancing operations), 257
Lucas, Robert, 194–5, 202–3, 208–11, 292
Lukes, Steven, 13
Luttwak, Edward, 299
Maastricht Treaty (1992), 198
MacDonald, Ramsay, 112
Macmillan Committee on Finance and Industry (1930), 114–17
macroeconomics
contrast to natural sciences, 8, 10, 201
and distribution, 293–305
efforts to remove from economics, 386
Keynes introduces concept of, 75, 124, 129
need for inserting society into, 386–90
and REH, 194–5
Say’s Law, 19–20, 36, 96, 110, 190, 293–4
short-run and long-run effects, 14, 38, 48–9, 64, 282, 385
Wicksell’s circular flow, 67–70, 68
see also entries for individual economists, theories and policies
Macron, Emmanuel, 372
Malthus, Thomas, 48–9, 293, 385
‘Manchester system’, xviii, 122–3
marginal productivity theory, 63, 295
marginal propensity to consume, 118, 125, 133, 272, 297
marginalist revolution (late nineteenth century), 288, 290–91
mark-to-market (M2M) framework, 314
Marshall-Lerner condition, 251*
Martin, Felix, 27
Marx, Karl, xviii, 6, 130, 288, 386
labour theory of value, 296
and production of ideas, 12, 14
and under-consumption theory, 293, 296
Marxism, 128–9, 130, 140, 304, 350
explanations of Great Depression, 298
Masch, Vladimir, 381
Matthews, Robin, 155
May, Theresa, 248
mercantilism, 9, 28, 36–7, 74, 75–6, 77–81, 82, 84–5, 93
developing countries in twentiethcentury, 90
export surpluses in present-day, 380
German Historical School, 88–9
Mesopotamian empire, 26
Methuen Treaty (1703), 78
Mexican peso crisis (1995), 371
microeconomics, 75, 174, 192, 384, 386
of distribution, 290–92
and DSGE modelling, 211
limitations of, 387
radicalization of by Conservatives, 197
Middleton, Roger, 114
Miles, David, 265
Essays on Some Unsettled Questions of Political Economy (1844), 19–20, 36, 84
Miller, Marcus, 239
Mills, Terence, 111
Minford, Patrick, 187
abandonment of, 184–5, 186, 188
American and British-styles of, 185
and Congdon, 279–85
experiment in (1976–85), 184–90, 189, 270–71
fiscal legacy, 190–93
illusion of self-financing tax cuts, 191–2
policy failure of, 184–5, 186, 187–8, 249
monetary policy
and 2008 crash, 10–11, 104, 105, 106, 116, 129, 221, 278–9
bimetallist controversy, 44, 50–52
British recoinage debate (1690s), 40, 41–3
bullionist vs ‘real bills’ controversy, 44, 45–9
Competition and Credit Control Act (1971), 168
and control of inflation, 181–2, 185, 186–7, 189, 190, 193, 201
creditors and debtors, 29–32, 37, 39, 47
Currency School vs Banking School debate, 44, 49–50
during economic deterioration (1969–73), 165
Fed’s ‘Reserve Position Doctrine’ (1920s), 103–4
and financing of deficit, 245, 246–7, 285
four key monetary debates, 40
and Friedman, 104–6, 177–83, 205–8
and Great Depression, 104–6, 183
‘hard’ and ‘soft’ money schools, 39, 39, 41–2, 44
during Keynesian full employment phase (1945–60), 145–6
and Keynesian revolution, 98, 100–101, 114–15, 116, 124–5, 137, 138–9, 145–6, 173
‘money multiplier’, 35, 64, 146, 179, 185, 258–9, 268–9, 277–8, 280
in new macroeconomic constitution, 352
and nineteenth-century theory, 9, 29, 44–52
pre-crash orthodoxy/mindset, 2, 146, 212–13, 221–4, 229–35, 249–53, 310–16, 348
primacy under New Consensus, 200–201, 212
‘real bills’ doctrine, 46–7
as right wing preference, 138–9, 181–2
transmission mechanism of, 64, 146, 250, 250–51, 277–9, 283
Wicksellian, 69–70, 102, 251, 255, 358–9
see also quantitative easing (QE)
monetary reformers (first third of twentieth-century), 37, 44, 60–72, 99–106, 116, 124, 125, 129, 177–8, 200, 277, 280
money
Aquinas on, 28–9
barter theory, 19, 21, 23–4, 37–8, 45, 63, 69, 384
bartering savage theory, 24
the classical dichotomy, 21–3, 24–5, 36, 66, 121, 183, 201
class-struggle theory of, 27–8
credit theory, 23, 24–7, 33, 34, 39, 100–101, 102–3
creditors and debtors, 29–32, 37, 39, 47
determination of value, 21–2, 25–7, 28–30, 36–9, 41–5
Friedman’s ‘stable demand function’, 179
hoarding of, 35–6, 105, 115, 116, 121, 127–8
Keynes’ ‘monetary theory of production’, 22–3
Keynes’ ‘speculative demand for’, 36, 120, 179, 183, 261
Keynes’ view of, 1, 25, 36, 115, 119, 121
law of ‘diminishing marginal utility’ of, 290–91, 292
‘modern monetary theory’, 26
‘money illusion’, 36–8, 182, 206
as most liquid form of wealth, 36
‘real’ analysis of classical school (‘money as veil’), 22, 24, 37, 45, 84–5, 121
Smith’s metallist theory, 23–4, 25, 27, 28, 38–9, 44
standard of value as political question, 41, 43–4
see also Quantity Theory of Money (QTM)
in tributary economies, 26
money supply
‘base’ or ‘narrow’ money, 35, 46, 61, 105–6, 165, 185–6, 187–8, 265, 268, 277–8, 279, 280
bimetallist controversy, 44, 50–52
‘broad’ money, 35, 105–6, 165, 168, 179, 185, 186, 188, 249–50, 268, 268–9, 269
broad money, 275–6, 279–80, 281
in classical theory, 1, 38–9, 47
debasing the coinage/printing of money, 28–9, 32, 41–2, 45–6
exogenous or endogenous question, 35, 39, 100, 183
and Friedman, 177–83
Heath abolishes quantitative controls (1971), 168
late-medieval rediscovery of banking, 33–4
massive expansion worldwide (1969–73), 164–5
measures of, 34–5, 71, 249, 279–80
Smith on, 38
velocity of circulation, 38, 62–5, 71, 101, 129, 146, 168, 179, 187, 268–9, 283–4, 285, 287
Victorian fiscal constitution, 9, 29, 59, 76
see also Quantity Theory of Money (QTM)
Mont Pelerin Society, 176–7
Montagu, Sir Edwin, 107
Monte dei Paschi di Siena, 364
Moody’s (CRA), 329
mortgage-backed securities (MBS), 256–7, 274, 320–21, 323, 327, 328
Mosler, Warren, 26
Müller-Armack, Alfred, 153
Mummery, A. F., 294
Napoleonic wars, 43, 45–8, 80, 81, 84
national debt
and 2007–8 crash, 76, 217–18, 219–20, 223–4, 224, 225–36, 237
British experience (1692–2012), 77
British long-term securities, 43
‘burden on future generations’ fallacy, 236
bust at end of Lawson boom, 193
in eighteenth-century Britain, 80–81
four big spikes (since 1815), 84
and ‘Geddes Axe’ (1920s), 108
Alexander Hamilton on, 92
international bond markets, 90–92, 235
in Keynesian era, 156, 159–60, 161
Merkel’s ‘Swabian housewife’, 236
and modern tax systems, 32
monetary financing of deficits, 246–7, 285
during Napoleonic wars, 45–8
nineteenth-century money lenders, 90–91, 332
‘off-budget’ accounting, 108–9
and PFI, 222–3
post-crash deficit, 226–33, 229, 237–9, 328, 352
public sector net borrowing (PSNB), 185, 227–8, 237, 238
Reagan’s budget deficits, 186, 190–91
recession of early 1980s, 186–7, 191
sinking fund, 83, 84, 85, 106, 108, 112, 114, 355
Sinking Fund Act (1875), 114
Smith and Ricardo’s view, 81–2, 83–4, 109, 110
‘structural’ or ‘cyclically-adjusted’ deficit, 237–41, 238
Victorian fiscal constitution, 85–8, 86
and warfare, 83
nationalism, 17, 92, 95, 351, 371–3, 375
nationalization, 15–16, 142, 158
during 2008 crisis, 217
Labour’s renationalization proposals, 356
Navigation Acts, British, 78
neo-classical economics tradition, xviii
and 2008 collapse, 310–16, 328
comparisons with Keynesian view, 204, 204
and deregulation of banking, 310–11
distribution in perfect markets of, 292
formula for multiplier, 134–6
and Friedman, 177–83
and growth in inequality, 245–6
in Hutchison’s continua, 349
Keynesian synthesis, 172, 173–4, 201–2
microeconomics of Walras, 10, 173, 181, 385
model of rationality, 120
‘natural’ rate of unemployment, 2, 163, 195, 197, 208, 232–3
and New Consensus, 199
and ‘optimal’ rate of investment, 368
pivotal role of banks ignored, 311
Solow growth model, 293
theoretical abolition of Keynesianism, 201
wage-adjustment story, 107, 108, 115, 121–2, 123, 128, 130, 132, 172
see also classical economics tradition; New Classical economics
neo-liberal ideology
‘anti-state’ deception of, 93
capture of politics by, 6, 16–17, 292
and Eurozone constitution, 274
and Eurozone design flaw, 376, 377
implosion of growth model, 305
need for jettisoning of, 351, 367
term coined by Rustow (1938), 175
totalitarianism as original target, 175–6
as unchallenged since Cold War, 374
Netherlands, 78
New Classical economics
and erroneous austerity arguments, 232–4
and growth in inequality, 4
inflation targeting, 2
and microeconomics of Walras, 10
‘natural’ rate of unemployment, 2, 195, 197, 208, 232–3
and neo-liberal capture of politics, 6, 16–17
and policies of austerity, 3
pre-crash models/mindset of 2000s, 212–13, 221, 229–35, 310–16
REH as analytic core of, 194–7, 385–6
synthesis with New Keynesians, 195–7, 199–201, 202
and unimpeded financial markets, 5, 6–7
unrealism of assumptions, 200, 310–16, 321–2
victory of in 1970s, 16–17
based on supply not demand, 200
Brown constitution, 221–3
main features of, 199–201
primacy of monetary policy, 200–201, 212
‘Washington consensus’, 198
New Keynesianism, 195–7, 199, 200, 201, 202, 212, 358
Brown constitution, 221–3, 227
and inflation targeting, 196, 251
‘new stagnation’ theorists, 151
New Zealand, 188
Nielsen, Robert, 389
Niemeyer, Sir Otto, 108
Norman, George, 49
Norman, Montagu, 115
North, Douglass, 198–9
Obama, Barack, 225, 241–2, 274
O’Brien, Denis, 78
Office for Budgetary Responsibility (OBR), 228, 229–30, 237
oil price shock (1973–4), 166–7, 189, 190
price spike (1980–82), 189, 190
Orbán, Viktor, 373
Osborne, George, 114, 227–8, 229, 231, 233
and cost of austerity, 243–4, 244, 245
crucial mistake in austerity policy, 229–30
‘deficit’ obsession of, 237
and Reinhart-Rogoff work, 232
and ‘structural’ deficit, 237–9
output gaps, 144, 197, 212–13, 229, 235, 237, 258, 286
‘over-consumption’ theory, Austrian, 296
Overstone, Lord, 49
Palley, Thomas, 302–3, 304, 305
Papandreou (Greek Prime Minister), 324
Paulson, Henry, 217
Péreire brothers, 91
Pettis, Michael, 339
Petty, William, 28
Phillips Curve, 144–5, 147, 162, 163, 205, 205–6
collapse of in 1970s, 169, 180
Friedman’s expectations-augmented, 180–81, 206–8, 207
New-Keynesian, 212
Sargent-Lucas (rational expectations), 208–11, 210
see also inflation: Phillips Curve; interest rates: and Phillips curve; unemployment: Phillips Curve
Piketty, Thomas, Capital in the Twenty-First Century (2013), 289, 298–9, 301–3
Pitt, William (the younger), 45
Polanyi, Karl, xviii, xix, 373–4, 387
political ideology
assault on Piketty’s framework, 302–3
and economic theory, 1, 3, 6, 12, 93, 176–84, 202–3, 245–6, 258, 286–7, 292, 354
and hostility to government, 1, 3, 6, 10, 93, 202–3, 258, 286–7, 292, 347, 354, 385–6
nationalist–globalist split, 371–3
and research agenda, 12
rise of identity politics, 372–3, 384
and structure of power, 6–7, 12, 13–14
prices and incomes’ policies, 16, 147, 150, 151, 164, 167, 169
Heath’s statutory policy, 167–8
Samuelson on, 171
Prisoner’s Dilemma (game), 389
Private Finance Initiative (PFI), 222–3
privatizing of state assets, 193
Bismarck’s Germany, 89
Compensated Free Trade (CFT) strategy, 381
cultural diversity argument, 379
definition of, 377
health and safety standards, 380
Import Duties Act (1932), 113
in late nineteenth-century, 59
List’s ‘infant industry’ argument, 88–9, 90, 378
New or Strategic Trade Theory, 378
nineteenth-century USA, 89–90
Nixon’s import controls (1971), 153, 165
pressure for as growing, 380
seven main arguments for, 378–9
‘strategic industry’ argument, 379
Trump’s tariffs, 373–2, 379, 381
psychology, 24, 27, 117, 119–21, 199, 286–7, 292, 297, 355, 388–90
‘public choice’ theory, 198–9
public investment
Brown constitution, 221–2
and classical economics, 172, 175
Conservative cuts in 1980s, 192, 193
and constraints of gold standard, 103
efficiency issues at full employment, 236
growth after WW1, 106–7
independent state investment banks, 354, 355–6
Keynes as advocate of, 109, 111, 116–17, 126–7, 130, 297, 352–3
in Keynesian ‘golden age’, 140, 142, 143, 144, 149–50, 153, 156, 157
Krugman on, 370
Lloyd George as advocate of, 107–8, 109–11, 113, 116–17
market mechanisms introduced, 197
minority Labour government (1929–31), 111–12
in new macroeconomic constitution, 352–7
in nineteenth-century Prussia, 92
Osborne’s cuts, 227–8, 231, 245
PFI, 222–3
programmes in 1930s US and Germany, 129–30
public works during recessions, 355
QE seen as preferable to, 258
share of total investment in UK, 354, 354
Smith’s public goods argument, 82, 93, 123, 352, 353, 356
UK spending (1950–2000), 157
UK spending (1997–2010), 223
UK spending as proportion of GDP (1692–2012), 77
in Victorian Britain, 86–7
quantitative easing (QE), 10–11, 116, 179, 226, 233, 242, 248–9, 254–8
assessment of, 263–77, 264, 267, 270
bank lending channel, 259–60, 260, 265–6, 266
by Bank of England, 254, 257, 259–62, 263–73, 267, 274, 275–7, 276
distributional effects, 248, 271–3, 272, 279, 284, 305
effect on output and unemployment, 269–70, 270
in the Eurozone, 273–4
as failure judged by its own |aims, 277–9
and inflation, 254, 258, 261, 262–3, 270–71, 271, 272, 277
portfolio-rebalancing concept, 260, 260–62, 263–5
signalling channel, 261–3, 267–8
theoretical basis of, 254–6, 258–9
transmission channels, 259–68, 260, 267, 283–4
Quantity Theory of Money (QTM)
and the business cycle, 65–6, 67–70
‘Cambridge’ equation, 63, 64, 65
control of narrowly defined monetary base, 46
equation of exchange, 62–4, 71–2, 283, 284, 287
Fisher’s model, 61, 62–7, 71–2, 258, 278–9
Friedman’s restatement of, 178–9, 182, 183, 194
in Keynesian economics, 102–3, 125, 177
and monetarism, 178–9, 182, 183, 185, 192, 282
monetary reformers (first third of twentieth-century), 37, 44, 60–72, 99–106, 116, 124, 125, 129, 177–8, 200, 277, 280
muddled nature of, 60–61
no ‘demand for money’ in, 35
origins of, 32–3
as palpably untrue in short-run, 71, 282
role of central banks, 61
short-run and long-run effects, 64, 282
as ‘supply of money’ story, 34
transmission mechanism, 64, 146, 277–9, 283–4
two main versions of, 61–72
and uncertainty, 65
Wicksell’s credit money version, 67–70, 102–3, 278
Quarterly Journal of Economics, 120
Queen Elizabeth II, 4
Radcliffe Report (1959), 146
Raghuram, Rajan, 340
‘rational expectations hypothesis’ (REH), 194–7, 202, 208, 385–6
anticipated by Fisher, 66
and behavioural economics, 389
conceit of, 387
‘Efficient Market Hypothesis’ (EMH), 311–13, 321–2, 328, 388
and erroneous austerity arguments, 230–31, 232–3
and Friedman’s adaptive expectations, 208–9, 210
and heuristics, 196
Lucasian Phillips Curve, 208–11, 210
‘public choice’ theory, 198–9
Volcker on, 307
Rawlsian political theory, 292
Reagan, Ronald, 6, 181, 186, 190–91, 292
Real Business Cycle (RBC) theory, 195, 196, 197, 211, 350
real estate, urban, 301
Reinhart, Carmen, 232
‘Representative Agent’ device, 292
ResPublica, 365–6
revolutionary period in Europe (1848–9), 48
Ricardo, David, xviii, 28, 38, 40, 47, 74, 85, 114, 177
comparative advantage doctrine, 79, 88, 378, 379, 379
The High Price of Bullion (1810), 45–6, 47–8
and ‘limits of nature’, 369
and ‘nativist’ tradition, 379
and real bills doctrine, 46–7
and state expenditure, 73, 83–4, 109, 110, 286, 352
vice of abstraction from reality, 48–9, 385
Roberts, Katie, 239
Robertson, Dennis, 71
Rodrik, Dani, 375
Rogoff, Kenneth, 232
Roosevelt’s New Deal, 16, 129–30
Rostow, Walt, 199
Roubini, Nouriel, 225
Rougier, Louis, 174–5
Royal Bank of Scotland (RBS), 223, 319*, 364
Russia, 217
Rustow, Alexander, 175
Samuelson, Paul, 14, 24, 143–4, 148, 173–4, 202, 292
Sargent, Thomas, 208, 210, 211
Saul, John Ralston, 17
Say, J. B., 352
Say’s Law, 19–20, 36, 96, 110, 190, 235
demolition of by Keynes, 119
and under-consumption theory, 293–4
Schauble, Wolfgang, 225
Scheidel, Walter, The Great Leveler (2017), 289
Schiller, Karl, 153
Schlesinger Jr, Arthur, 15, 16
Schumpeter, Joseph, 11, 14, 71, 104, 139, 350
Schwartz, Anna, 105, 179, 256, 276
sciences, natural, 8, 10, 11–12, 201, 388
‘secular stagnation’, 4, 149, 151, 304, 340, 348, 370
securitization, 5, 307–8, 309, 322–6, 327, 341, 362
and fraud, 328
theoretical mistake behind, 328
Senior, Nassau, 64
Shakespeare, William
Hamlet, 29
The Merchant of Venice, 30–31
short-selling, 325
British recoinage debate (1690s), 40, 41–3
from mid-sixteenth century South America, 33, 35
Skidelsky, Robert, 226
‘new macroeconomic constitution’ proposals, 351–7, 357, 359–61, 371
Smith, Adam, xviii
on chartalist theory, 26
and free trade, 38, 76, 81–2, 377
and growth of wealth, 74, 82–3
‘invisible hand’ metaphor, 10, 312, 385
and mercantilism, 78, 79, 81, 82
metallist theory of money, 23–4, 25, 27, 28, 38–9, 44
and primacy of consumption, 81–2
public goods argument, 82, 93, 123, 352, 353, 356–7
on state’s four duties, 82
Wealth of Nations (1776), 15, 82, 83, 288
Snowden, Philip, 112, 113, 142, 224
social insurance schemes, 15
‘social market economy’, 140
sociological economics, 386–90
Solon, 30
Solow growth model, 293
solvency concept, 316–17
sixteenth-century influx of silver from South America, 33, 35
Special Purpose Vehicles (SPVs), 325–6, 367
Sputnik satellite launch (1957), 149
Standard &Poor’s (CRA), 329
state, economic role of
AROM (activist real output management), 139–40
Brown constitution, 221–3, 357
and class power, 14
Congdon’s rejection of fiscal policy, 280, 285–7
crisis in 1970s, 16
and debasing the coinage/printing of money, 28–9, 32, 41–2, 45–6
Friedman’s view, 177–83
Hutchison’s classification of opinions, 349–50
impact of First World War, 95, 106–7
innovation, 353–4
in inter-war Britain, 106–17
Keynes’ view of future (1936), 354
Keynesian full employment phase (1945–60), 141–8
Keynesian golden age (1945–1970s), 1–2, 7, 76, 139–62, 348
Keynesian revolution (1930s), 1–2, 9, 10, 15–16, 75, 98, 118–31, 348
Lloyd George’s coalition government, 107–8
Locke’s social contract theory, 41–2
mercantilist view, 9, 74, 75–6, 77–81, 380
‘minimal state’ theory, 9, 29, 74–5, 76, 82–3, 85–7, 93, 106, 177, 184, 347, 385–6
minimized in pre-crash orthodoxy, 5, 9, 16–17, 76, 385–6
in neo-classical perfect markets, 292
New Right critiques in 1970s, 16
nineteenth-century Prussia, 92
‘off-budget’ accounting, 108–9
origins of, 73–4
political implications of Keynesian policy, 129–31, 138–41
privatizing of state assets, 193, 198
‘public choice’ theory, 198–9
public goods argument, 82, 93, 123, 352, 353, 356
public investment in new macroeconomic constitution, 352–7
responses to 2008 crash, 3, 217–18, 219–20, 221–36, 237–47
Smith and Ricardo’s view, 73, 74–5, 76, 81–5, 109, 110
social democratic state, 16, 149, 176, 198, 292, 293, 303–4, 348, 373–4
‘stationary state’ of nineteenthcentury, 368–9
tradable public debt instruments, 43, 80–81
in traditional societies, 74
‘Treasury View’, 108, 109–10, 112, 116, 194, 235
in tributary economies, 26
Victorian fiscal constitution, 9, 29, 59, 76, 85–8, 86, 106
see also fiscal policy; gold standard; monetary policy; national debt; public investment
Stewart, Walter, 115
Stigler, George, 85
Stockholm School, 139–40
Strong, Benjamin, 103–4
sub-prime mortgage market, US, 3, 216, 304–5, 309, 323, 328, 341
Sweden, 139–40
taxation
centralization of collection, 80
and chartalist theory, 25–6
and the franchise, 86
illusion of cuts as self-financing, 191–2
income tax introduced, 86
Lloyd George’s ‘People’s Budget’, 87
and public debt, 32
and public goods argument, 353
redistributive/progressive, 148, 235*, 291, 292, 295, 301, 343–4
Ricardo’s view of, 84
Victorian fiscal constitution, 86, 87
Taylor A., 243–4
technological change, 130, 299, 300, 370–72
Thatcher, Margaret, 1, 181, 186–7, 249, 292, 319
think-tanks, financing of, 13
Thomas, Ryland, 281–2
Thornton, Henry, 46–7, 68, 278
Thurow, Lester, 151
Tooke, Thomas, 49
Torrens, Robert, 49
trade, international
and capital flows, 56–7, 332–5, 333, 334, 335, 336–43, 337
see also global imbalances
commodity structure of (before 1914), 56
and Cunliffe Report (1918), 54–5, 102, 145
Hume’s ‘price-specie-flow’ mechanism, 37–8, 53, 54, 104, 285, 332
mercantilist view, 36–7, 78–81, 380
nineteenth-century adjustment mechanism, 54–5, 58
Ricardo’s doctrine of comparative advantage, 79, 88, 378, 379
sterling as main vehicular currency, 43, 58–9, 101
between Western Europe and ‘peripheries’, 56–7
trade unions, 16, 56, 130, 167
capital–labour co-operation, 147, 167
destruction of from 1980s, 169
and fall of Heath (1974), 168
in the Keynesian era, 131, 147, 148, 161, 303, 304
power of shop stewards in UK, 147
Trichet, Jean-Claude, 275
Triffin, Robert, 161
Trouble Asset Relief Program, 217
Trump, Donald, 192, 316*, 352, 373, 379, 381
Turner, Adair, 246, 285, 307, 366
under-consumption theory, 293–6, 297–8, 303–6, 370
unemployment
during 2008 crisis, 261–2
in classical theory, 10, 37, 56, 96, 118, 121–2, 123, 128, 129, 130, 138, 172
economic deterioration (1969–73), 164–6
and emigration to New World, 15, 56, 58
employment targets, 141–2
during Great Moderation, 4, 202, 348
growth Keynesianism (1960–70), 151–3
Hitler’s reduction in, 111, 112, 129–30
increases from 1980s, 32, 186–7
Keynesian full employment phase (1945–60), 141–8
and Keynesian revolution, 75, 76, 98, 103, 129–30
as main inter-war challenge, 8, 96, 97, 97–8, 103–4, 107, 108–24, 129–31
Marxist view of, 128–9, 130, 304, 350
‘natural’ rate of, 2, 163, 177, 181, 192–3, 197, 206, 208, 222, 232–3, 384
oil price shock (1973–4), 166
Phillips Curve, 144–5, 147, 162, 163, 180, 194, 205, 205–12, 207
as primary government responsibility, 87–8, 98, 130–31, 139–40, 141–6, 147, 150, 168–9, 303
and protectionism, 378
and quantitative easing, 269–70, 270
rates (1929–38), 112
and ‘speculative demand for money’, 36
word in Oxford English Dictionary, 9
United States
and 2008 crash, 217, 218, 241–2, 242
adoption of Keynesian policy, 141, 143–4
adopts full gold standard (1879), 50
American Recovery and Reinvestment Act (2009), 242
bimetallist controversy, 44, 50–52
capital–labour co-operation, 147
Civil Rights movement, 149
current account deficit, 333, 334, 336, 338–41, 342
dollar as main reserve currency, 338
dollar convertibility into gold, 27
Economic Stimulus Act (2008), 242
European catch-up (after 1945), 156–7, 158–9
European Payments Union, 159
excess demand conditions in mid-1960s, 163, 164, 166
fall in wages (1929–32), 122
Fanny Mae & Freddie Mac nationalized (2008), 217, 256
‘fiscal drag’ in 1950s/early 60s, 151, 152–3
fiscal formula (1945–61), 143
Full Employment Act (1946), 141
GDP per capita growth (1919–2007), 154
Glass–Steagall Act (1933), 319, 361, 362
and Great Depression, 97, 98, 127
growth Keynesianism (1960–70), 148–9, 151–3, 162–3, 164
hegemony in post-war world, xviii, 139, 158–60, 162–3, 374
housing bubble (from 2001), 304–5
Johnson’s ‘Great Society’ programme, 153, 161, 163, 164
National Homeownership Strategy (1994), 309
nineteenth-century protectionism, 89–90
post-crash bank liquidity ratios, 364
as post-WW1 creditor, 95, 103, 159
Reagan’s deficits, 186, 190–91
recession of early 1980s, 186–7
resurgence of protectionism in, 373, 379, 380, 381–2
role in first phase of golden age (1950s), 159–60
Roosevelt’s New Deal, 16, 129–30
Schlesinger Jr’s epochs, 15
Security and Exchange Commission, 320–21
sharp rise in inequality since 1970s, 288–9, 289, 299–300, 300
university campus revolts (1968), 164
see also Federal Reserve, US
value at risk (VaR) framework, 314–15, 315, 330
Verdoorn’s law, 150
Vickers, Sir John, 362
Victorian fiscal constitution, 9, 29, 59, 76, 85–8, 86, 106
Vietnam War, 153, 161, 163, 164
Viner, Jacob, 131
Volcker, Paul, 185–6, 191, 307, 362
Wall Street Crash (1929), 3, 97, 104–6
Walras, Leon, 10, 173, 181, 385
warfare
British WW1 borrowing, 95, 97, 106–7
bullionist vs ‘real bills’ controversy, 44, 45–9
classical view of, 73, 74, 75, 78, 79, 81–2, 83, 84
eighteenth century British victories over France, 43, 80, 81
and mercantilism, 37, 74, 75, 78, 79–82
post-WW2 catch-up process, 156–7, 158
and recoinage crisis (1690s), 41, 42
relative absence of (1871–1914), 58, 85
and Rothschild lending, 91
‘strategic industry’ argument, 379
war debt, 43, 45–8, 80–86, 86, 87, 91, 95, 97, 106–7, 129
Warwick, University of, xvii
Washington consensus, 198
Webb, Beatrice and Sidney, The Decay of Capitalist Civilisation, 96
Weidmann, Jens, 257
welfare state, 9, 15–16, 96, 149, 291, 374
Bismarck’s Germany, 89
Liberal government’s social reforms (1900s), 87
Where Does Money Come From? (Ryan-Collins et al, 2014/2011), 311
White, Harry Dexter, 159
Wickens, Michael, 211
Wicksell, Knut, 9, 47, 60, 61, 67–70, 99, 102, 201, 251, 255, 277, 278, 296, 358–9
Wilson, Harold, 152
Wilson, James, 49
World Trade Organization (WTO), 371
Wray, Randall, 26
Wren-Lewis, Simon, 196, 244, 358
Young, Warren, 173