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Economic historian Niall Ferguson reminds me of the late Oxford historian A.J.P. Taylor. Although Prof. Taylor maintained that he tried to tell the truth in his historical writing, he was quite ready to spin the facts for a good cause. Prof. Ferguson, too, is a wonderful historian – but equally ready to spin when he shifts into political gear.

Prof. Ferguson's cause is U.S. neo-conservatism, coupled with a relentless aversion to John Maynard Keynes and Keynesians. His latest defence of fiscal austerity came immediately after Britain's recent election, when he wrote in the Financial Times that "Labour should blame Keynes for their defeat."

His argument amounts to that of a brutal disciplinarian who claims vindication for his methods by pointing out that the victim is still alive. In pleading on behalf of British Chancellor of the Exchequer George Osborne, he points out that the British economy grew by 2.6 per cent last year (the "best performing of the G7 economies"), but ignores the damage Mr. Osborne inflicted on the economy en route to this recovery.

There is now much agreement about this damage. The Office of Budget Responsibility, the independent agency set up by Mr. Osborne to assess the government's macroeconomic performance, has just concluded that austerity reduced gross domestic product growth by 2 per cent from 2010 to 2012, bringing the cumulative cost of austerity since 2010 to 5 per cent of GDP. Simon Wren-Lewis of Oxford University estimates that the damage might be as high as 15 per cent of GDP. In a recent poll of British economists by the Centre for Macroeconomics, two-thirds agreed that austerity had harmed their country's economy.

Moreover, Britain is not alone. In its October, 2012, World Economic Outlook, the International Monetary Fund conceded that "fiscal multipliers were underestimated across the world." In plain English: The forecasters underestimated the extent of spare capacity and hence the scope for fiscal expansion to raise output.

Was it an honest mistake? Or was it because the forecasters were in thrall to economic models that implied that economies were at full employment, in which case the only result of fiscal expansion would be inflation? They now know better, and Prof. Ferguson should now know better as well.

A depressing aspect of Prof. Ferguson's unscrupulousness is his failure to acknowledge the impact of the Great Recession on government performance and business expectations. Thus, he compares 2.6-per-cent growth in 2014 with the 4.3-per-cent contraction of 2009, which he describes as "the last full year of Labour government" – as though Labour policy produced the collapse in growth. Similarly, "at no point after May, 2010, did [confidence] sink back to where it had been throughout the last two years of Gordon Brown's catastrophic premiership" – as though Mr. Brown's government's performance caused business confidence to collapse.

The claim that "Keynes is to blame" for Labour's election defeat is peculiarly odd. After all, the one thing Labour's leadership tried hardest to do in the recent campaign was to distance the party from any "taint" of Keynesianism. Perhaps Prof. Ferguson meant that it was Labour's past association with Keynes that had damned them – "their disastrous stewardship before and during the financial crisis," as he put it.

In fact, Labour's most recent governments were determinedly non-Keynesian; monetary policy was geared to hitting a 2-per-cent inflation target and fiscal policy aimed at balancing the budget over the business cycle – standard macroeconomic fare before the recession struck. The most damning charge against their stewardship is that they embraced the idea that financial markets are optimally self-regulating – a view that Keynes rejected.

Keynes was not to blame for Labour's defeat; in large part, Scotland was. The Scottish National Party's (SNP) crushing victory left Labour with just one seat there. No doubt there are many reasons for the Scottish National Party's overwhelming triumph, but support for austerity is not one of them. (The Conservatives did as badly as Labour there.)

Nicola Sturgeon, Scotland's First Minister and leader of the SNP, attacked the "cozy consensus" around fiscal consolidation in Westminster. The deficit, she rightly said, was "a symptom of economic difficulties, not just the cause of them." The SNP manifesto promised "at least an additional £140-billion [$267-billion] across Britain to invest in skills and infrastructure."

So if the SNP did so well with a "Keynesian" program of fiscal expansion, is it not arguable that Labour would have done better had it mounted a more vigorous defence of its own record in office and a more aggressive attack on Mr. Osborne's austerity policy? This is what leaders of the Labour Party, such as Alistair Darling, Mr. Brown's chancellor of the exchequer, are now saying. But they seem to have had no influence on the two architects of Labour's election strategy, Ed Miliband and Ed Balls, both now removed from front-line politics.

What Mr. Cameron's Conservatives did succeed in doing, and doing brilliantly, was to persuade English people that they were just "cleaning up Labour's mess," and that but for austerity, Britain would have "gone the way of Greece" – exactly Prof. Ferguson's view.

One might conclude that all of this is history: The voters have spoken. But it would be a mistake to accept that narrative as the last word. It is basically a tissue of propaganda, with little support in theory and destructive effects in practice.

This might not matter so much had there been a change of government. But Mr. Osborne is back as Chancellor, promising even tougher cuts over the next five years. And fiscal austerity is still the reigning doctrine in the euro zone. So the damage is set to continue. In the absence of a compelling counternarrative, we may be fated to find out just how much pain the victims can withstand.

Robert Skidelsky, a member of the British House of Lords, is professor emeritus of political economy at Warwick University in Coventry, England.

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