User:Annanoon/Sandbox/Patrick Minford

The dismal science Economics

Economic systems

$  Free market   €  Social democracy   ☭ Socialist economy

Major concepts

Renewable energy European Union Communalism Modern Monetary Theory Wealth inequality in South Korea

The worldly philosophers

Alan Greenspan Murray Rothbard Gary North Deng Xiaoping v - t - e

Patrick Minford is a British economist linked with Brexit, Thatcherism, monetarism, and tax cuts. He has been a prominent figure in right-wing economics since the 1980s, and has tended to exist in a small minority of opinion. Nonetheless, his eccentric work has been popular with right-wing politicians from Margaret Thatcher to Liz Truss, who otherwise find no support for their economically illiterate policies.

He is linked with secretive right-wing think tanks including the Institute of Economic Affairs and Reform (not to be confused with the political party).

He was born in 1943, and since 1997 has been Professor of Applied Economics at Cardiff Business School; before that he was Edward Gonner Professor of Applied Economics at the University of Liverpool from 1976.

Economics

Minford is generally linked with monetarism and opposed to Keynesianism, but is controversial even within monetarist circles. Minford's work is focused on economic growth as the main target for society, and is heavily based on economic models which he claims demonstrate the merit of his favourite things - things like tax cuts and Brexit. However, economic models are always a questionable approximation and his models have proved controversial and been widely challenged.

In the 1980s and 90s he advocated cutting employment benefit and reducing trade union rights in order to reduce unemployment in the UK. Swedish economist Bertil Holmlund (who has been chairman of the Nobel Prize for Economics committee since 2008) attacked Minford's methodology, suggesting that a Nobel prize is probably not on the cards.

One might expect that the fact that Minford is somewhat of an outlier in his views on the British labour market would encourage him to try to persuade the reader that he is right, that he has a sensible theory and that his empirical analysis should be taken more seriously than the work of others. Yet, Minford does not seem to care about the fact that most other studies of the British labour market differ substantially with respect to estimated parameter values. Minford apparently wants us to take his numbers seriously, but he does not even bother to comment on the magnitude or statistical significance of his key parameters. As an example of rhetoric in economics, the style is hardly effective.

Another monetarist economist, Tim Congdon, said of Minford:

It is no secret Patrick and I don't get on. We go back a long way. I'm in favour of strong public finances and making sure governments can pay their bills. That's part of what monetarism is about. Patrick has managed to get himself known as a monetarist without believing any of this stuff. Patrick is basically a Keynesian.

The left-wing economist Patrick Murphy described him:

Minford has three strengths. He has been willing to think outside the constraints of prevailing economic models that restrict most other economists' thinking. He has been willing to talk about his thinking, which far too few economists do. And he has stuck to his guns. He also has three weaknesses. His outside-the-box thinking is based on market fundamentalism, and that has casualties. His ability to forecast has been much worse than that of the average economist, and that's saying something. As a result he has consistently been on the wrong side of events and political need.

Margaret Thatcher

See the main article on this topic: Margaret Thatcher

In 1981 Britain fell into a deep recession as a result of the monetarist policies of chancellor Geoffrey Howe, which sought to limit inflation by deep cuts in the money supply, which meant reducing the amount of money people had. In response, 364 distinguished economists wrote to The Times attacking Thatcher and Howe's policies. To counter this, those on the right wing of the Conservative Party sought economists who would defend Thatcher. They found two: Alan Walters, who became Thatcher's official, paid economic adviser, and Minford.

Brexit

See the main article on this topic: Brexit

Minford was an advocate of Brexit before and after the 2016 referendum, claiming Britain would be much better off out of the EU, and arguing that Britain should cut all tariffs on imports even if other nations kept tariffs on British exports. He predicted that a hard Brexit would benefit Britain's economy by £135bn (6.8% of GDP). His figures were at odds with the vast majority of economists and attacked by right-wing free-trade magazine The Economist, but they were promoted by the BBC which was desperate to achieve phony balance by finding an economist who thought Brexit was a good idea. The government's own economics watchdog, the Office for Budget Responsibility, predicted a 4% decline in GDP (apart from any decline due to COVID), and found trade in October 2021 was 17% lower than it would be had Britain remained in the EU.

Minford admitted his policies would lead to the destruction of British manufacturing industry, due to a combination of cheap imports and uncompetitive exports, but said "this shouldn't scare us". He was also opposed by the National Farmers Union, a body hardly known for militant socialism, who saw that his plans for cheap imports posed an existential risk to British farming.

Liz Truss

He returned to prominence in 2022, being cited by Liz Truss during her successful Conservative party leadership campaign. She pointed to Minford as a supporter of her policy to simultaneously slash taxes and increase spending in areas such as defence, while ignoring Britain's vast debt produced by Covid-19 lockdowns and healthcare measures, and doing little or nothing to tackle inflation. Minford predicted that her policies could lead to interest rates rising to 7% but said this was actually "a good thing", telling the Times: “A normal level is more like 5-7 per cent and I don’t think it will be any bad thing if we got back to that level." He added that it would kill off unproductive companies, another good thing. In contrast, former Tory Chancellor of the Exchequer Rishi Sunak warned that her policies would lead to an increase in unemployment and business failures, would lead to many families struggling to afford housing, and any increased revenues would be cancelled out by increased interest payments on government debt.