Richard Kahn on The Scourge of Monetarism (11 December 1987).Richard F. Kahn was lecturer (1933-1951) and Professor of Economics (1951-1989) at Cambridge (UK), and one of the original five members of Keynes’s “Circus.”
Kahn delivered this talk at the time when the UK was experiencing the last years of the economic and social catastrophe of Thatcherism. For the history of the failure of monetarism in Britain and the horrors of Thatcherism generally, I highly recommend Michael Stewart’s Keynes in the 1990s: A Return to Economic Sanity (Harmondsworth, 1993).
Kahn’s voice is a bit faltering at times, but for me this is of great historical and intellectual interest.
The astute reader will know that the title of the talk is taken from a now classic monograph of Nicholas Kaldor called The Scourge of Monetarism (Oxford and New York, 1982), where Kaldor developed endogenous money theory. I think many would argue that Kaldor had a very important role in bringing endogenous money theory to the serious attention of heterodox economists in the English speaking world.
Back in the late 1970s and early 1980s the cult of monetarism was at its height, although the attempts to implement it in the real world by (1) Paul Volcker at the Fed (from 1979 to 1982) and (2) Thatcher in her early years were an unmitigated disaster. It is no secret that Thatcher essentially abandoned her version of monetarism in 1981, under the advice of Alan Walters, which proves, if nothing else, that the lady really was for turning.
Central banks do not directly control the broad money stock or its growth rate. This was the great lesson of those years.
Kahn’s talk here is very much a postmortem on Thatcherite monetarism, though with many other interesting points and observations.
BIBLIOGRAPHY
Kaldor, N. 1982. The Scourge of Monetarism. Oxford University Press, Oxford and New York.
Stewart, Michael. 1993. Keynes in the 1990s: A Return to Economic Sanity. Penguin, Harmondsworth.
Williams, Hywel. 2007. “The Lady was for Turning,” Guardian.co.uk, 13 June.
http://www.guardian.co.uk/commentisfree/2007/jun/13/theladywasforturning
