Letter from David McDonagh to Caroline Lucas MP


Dear Caroline Lucas,

On the Westminster Hour this evening you, repeatedly, said that you wanted to explain why the nation was distinct to a household economically, and you talked about economic illiteracy. However you did not explain anything.

Someone else made the same distinction and he too failed to explain it: J.M. Keynes. He had years to do it ,but he failed, So far, his epigones have failed too. I will tell you why they failed.

There is no difference that is sound. Adam Smith made many errors, but his ideas that a great economy is like a single household was not one of them. Now, Smith knew, as well as Keynes did, that there might be such a difference, that Aristotle was right that there can be a fallacy of composition. The eleven best football players need not be the best football team, for example. But it is also the case that they might be the best team too.

Similarly, it could be that if we look after the pennies then the pounds might not take care of themselves on empirical & logical grounds, but this old adage is, in fact, quite sound. It is contingently the case that there is no distinct macro level that has different actual ways in the economy. The idea that distinct policies are needed is a false one. That is the basic fact of the matter It might have been otherwise, but it is not.

Yours sincerely,

David McDonagh

About these ads

3 responses to “Letter from David McDonagh to Caroline Lucas MP

  1. Correct, logically argued and well reasoned.

    I’m sure your argument will have absolutely no effect whatsoever.

    It is a matter of faith, regardless of all facts and reason for lefties to believe that they can borrow their way out of debt and spend money that doesn’t exist all without anynegative consequence. Reason, logic, facts and direct experience are all nothing against the shield of invicible ignorance wielded by these people.

    The only thing to do is to make them look foolish to others. To CONSTANTLY refute their nonsense. If they are allowed to repeat themselves without contradiction often enough their opinions become de facto the received wisdom. I hope a lot of people get to see your letter.

  2. Thank you very much for your reply.

    I think there is no faith whatsoever, that the idea is a mere myth. We are all rational but most of us do not make rapid progress & we tend to accept things as they have stood the test of time.

    We do make assumptions, of course, but that is not like the idea of faith. Moreover, any assumption is quite logical. The rule of assumptions in almost any logic textbok is exactly that we can assume anything that we like. Invalid arguments only arise with the relations between our assumptions.

    She may well be unaffected by the post, but note that while we are free to say what we like we are never free to think as we like. There is a chance that her automatic understanding will get her to see that which she would rather not be the case. The debater always has that chance of progress. It is not the case that some minds are closed to reason. The closed mind is a myth, as is the open mind. We all seem to have bised, erring, minds. This slows many of us down but none of us should, thereby, be thought irrational. Irrationality is a mere myth. All of our errors have a rationale. We do have the chance tolearn from them.

    You are right that we need to repeatedly make the ignorant look foolish but note that we can only do that as they open to reason. I think they are and the very last thing that matters is what people want to think. What matters is what seems to be the case to any person and that is rarely as they would best wish things to be. Any idea is good enough to begin with. And if the argument is clear to someone then they will follow it to wherever it leads. Even a Green is no exception.

    Thanks again.

  3. Did you get a reply from Caroline Lucas?
    Lady Thatcher always used a shopping basket metaphor for economics; what went up in the shops your bought cheaper or not at all. That is a kind of household economics that works well with families. You go without ciggies, booze, television, play-station (I know I’m dated) or Wii games, bingo, pubbing, clubbing, new clothes, shoes, designer gear, holidays etc., in order to pay your rent, council tax, car tax, car insurance (though they are costly so in times of hardship dump them), heating, water, gas/electricity, phone and mobile phone bills. You cut out or down, change the way you do things.
    However, cutting “the deficit isn’t about finding a list of project and schemes you will no longer spend money on, it is about deciding where savings can be made that are real savings and not merely shifts in expenditure. It is about not crippling the ability to obtain a future income, and not condemning communities to decades of deprivation. After all, nobody would suggest the household in debt balances its bank accounts by the main earner quitting their job in order to save money on petrol.” http://thisismytruth.org/2010/10/12/the-economy-is-not-like-a-household-budget/

    Until the state has become smaller and less intrusive, not just in terms of taxes and ideology, but in terms of backing away from being the payer to the provider – the NHS changes still puts the government in charge of the purse, it is still our taxes, that now go via the government to the privateer, to provide the services, same with the free school notion: Free Schools are all-ability “state-funded schools” set up in response to what local people say they want and need in order to improve education for children in their community: A key difference is that they are funded directly by central government, instead of receiving their funds via a local authority. It saves money with one hand and pays it out differently with the other hand. Until it stops doing that, the household budget is not in practice, since the government does not really save money. And for every scheme to cut staff from the public employment roll, which equals early retirement or job loses = welfare benefits = government has to pay. I know I am missing something here.