Kalecki, any old idiot and the European Central Bank

Abstract

If we accept the logic of mainstream free-market ideology-based macroeconomic theory, the European Central Bank should, to maximise economic efficiency, be independent of political influence. It is easy to forget that such an understanding of the economy was discredited by the great 1930s slump and banished from government policy in the``Golden Age '' of capitalism, between 1950 and 1973. Proposes to move beyond the free-market/monetarist/new-classical consensus to consider if the row over who should head the ECB is as trivial as it seems. First considers the work of Michal Kalecki, which typically represents the Golden Age's prevailing ideology of positive state intervention. Next considers how Europe's post-war economic performance can be consistently explained by Kalecki's work. Then moves on to consider the development of the Single European Currency project with the insight that an alternative economic ideology provides.

Why are Kalecki's rentiers so boom tired?

“…As part of the post 1979 international ideological switch to the right rentier representatives have increasingly been granted guardianship of apparently democratic countries’ macroeconomic policy. The new independent European Central Bank now eagerly worries about inflation and labour market inflexibility (see Potts, 2001). We should not be surprised if rentier representatives guard rentier interests, i.e.…”

To whose value is the euro?

“…Euro zone members have thus already abandoned control of their macroeconomic fates. For the euro zone's institutional structure to change there must be unanimous agreement at an intergovernmental conference, such a prospect is remote, to the dissatisfaction of French socialist hopes of democratic control of euro zone macroeconomic policy (Potts, 2001). For the UK there is still a choice [1].…”