George Osborne in details

In his comments on the debate about the plans for legislation to enforce budget surpluses, Philip Booth (Letters, 16 June) takes the opportunity to return to the debate about the crucial 1981 budget. He reiterates the common claim that the 364 economists who criticised the budget were wrong because growth returned to the economy soon after. What he doesn’t say is that the reason growth was resumed was because of a previous easing of monetary policy, which helped correct the disastrous appreciation of sterling which was the main cause of the early 1980s recession. This easing of monetary policy was quite at odds with the government’s medium term financial strategy, and showed that claims that “the lady’s not for turning” were empty rhetoric.

This whole episode was one of the most disastrous in postwar economic policy. As Mrs Thatcher’s key economic adviser, John Hoskyns, later wrote, the government had “accidentally engineered” a major recession and “done the economy a great deal of damage by mistake”. George Osborne’s policies seem likely to repeat this process.
Jim Tomlinson
Professor of economic and social history, University of Glasgow

Philip Booth rightly observes that, in many university economics departments today, “conceptual discussions between alternative paradigms” are “almost nonexistent” in undergraduate courses. Indeed, in some cases, what dominates is an extremist doctrine according to which “there are no schools of thought in economics” – no schools, of course, apart from that of the dominant “mainstream”. In that case, no “conceptual discussion” is even conceptually possible. It is high time that universities put an end to this shameful chapter in the history of academic life in this country.