Saturday 23 November 2019

'Economic forecasts ideological '-- shock for Graun readers

P Mason is a curious specimen of Labour Left remainerism. He has got increasingly pissed off over Brexit in his increasingly rare TV appearances. Here, he makes some good points about the IFS:


The Institute for Fiscal Studies seems unable to imagine an economic model that is different from the one we have

[Reacting to Labour's spending plans, the IFS argues]: instead of the rich and big companies paying for better public services... “we collectively will need to pay for it” – and will pay for it, according to the IFS, through the £44bn rise in taxes on corporations being passed on to shareholders, consumers and workers...The core assumption of rightwing economics is that companies can always put up prices to consumers or depress wages. But the assumption is wrong...Only if all companies had an absolute monopoly could they force workers and consumers to bear all the pain of increased taxes....But the IFS cannot consider this because it has no model of an economy in which the government pursues social justice via structural change...on some outcomes, the model will show firms passing between 10% and 50% of the tax increase to workers and consumers, and on some outcomes it will not. The result depends on execution and class struggle....For the IFS, workers are always powerless individuals, consumers are dumb price-takers, and shareholders are money-grabbing optimisers of short-term profit, incapable of investing for the long term. 

Good arguments all, possibly a bit incoherent on the relative merits of economic competition and class struggle in achieving social justice, but why have we not heard them concerning IFS forecasts of doom after Brexit?

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