By: Rumplestiltskin or whatever
Why do I do this to myself?
It’s the time, folks. The sky is gloomy, the hot drinks expensive, and I’m rolling my eyes so hard that it’s the second time someone in this class asks if I’m okay.
No, kind comrade. I’m not okay. This trenchcoat I’m wearing is too hot when I’m inside.
Also, I’m taking a macroeconomics class, and this month’s hair-pull-out has been caused by Y, who enthusiastically rejects any form of supply side policy in favor of Keynesian demand-side ones.
Right. I’m treading on eggshells on this one, I know, so I’ll tread lightly.
In this country supply side policies are associated with Margaret Thatcher. I may have a pencil mustache and twitchy hands (that’s how you see me, isn’t it? Admit it!), but I don’t light candles in a shrine to her. Not my favourite, old Maggie T. I’m disenchanted by her approach to governance and her implementation of policies- but the policies themselves? Let me explain.
The economy is built on an intersection of supply (what people make) and demand (what people want). Supply side policies aim at increasing everyone’s income through the production of goods and services- they try to get things to be less expensive to make, so companies have to pay less to make more stuff, and everyone gets more, cheaper stuff. Supply side policies try to make markets more flexible, and more efficient. Medicine to the economy.
Why does everyone hate them? Unemployment- a massive cost to businesses is employing workers, and supply side economics is about cutting costs. The good news is, the idea behind it is that if workers aren’t being efficient in one sector of the economy they ought to be more efficient elsewhere – all you need is a good reeducation program and identifiable transferable skills, and you’ve got a flexible work force with a variety of useful skills.
The bad news is, governments rarely get it together on this front. Obviously with coal mining in the 1980s, Thatcher’s government didn’t pay much attention to taking wasted potential and reinvesting it. The implementation of the policy is flawed. People deserve better than to be taken from their jobs and left on the streets. Obviously again.
But unemployment as a side effect of supply side policies doesn’t have to be scary.
When done correctly it could be curbed, and with a good enough welfare net and job creation rate, who’s to say it would last? This isn’t any more idealistic than a Marxist utopia, friends. Neither has solid proof of success.
Crunch. Whoops. Broke the eggshell.
Anyway, my message of the month is- don’t be scared of examining Thatcher’s policies. At the very least, how will you dismantle the liberal agenda if you only listen to the people you agree with?