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Greg Byrne
I
emailed Gerry Jackson’s article The Real
Classical Theory of the Trade Cycle to the Executive Director of
the Institute of Public Affairs John Roskam, IPA
Review editor Chris Berg, Quadrant
editor Keith Windshuttle and On Line
Opinion editor Graham Young — and, of course, Steve Kates.
For those of you have not read Gerry Jackson’s article it is a complete
refutation of Steve Kates presentation of his so-called classical theory of
the trade cycle.
Kudos
to Steve Kates for a prompt and polite reply. The others played true to form.
The fearless Chris Berg refused to acknowledge the article. To have done so
would have required a modicum of tellectual integrity that he is incapable of
mustering. Berg and Professor Sinclair Davidson co-wrote an article* on
Australian manufacturing which Gerry Jackson promptly eviscerated on Brookesnews.com. Rather than accept
Gerry’s offer of full right of reply they courageously scurried off to John
Humphreys’ site to whine about what a horrible meanie that Gerry Jackson is.
This is the same Chris Berg who said, “the more free marketeers, the
merrier—a sentiment which, interesting, Jackson himself does not appear to extend to others”. (I
added the emphasis). He then ridiculously claimed that Gerry had engaged in
“self-marginalisation”. Both these gents have made it clear that
offering people they smear right of reply is not in their playbook.
That
this pair sought safe refuge on John Humphreys’ site is illuminating.
Humphreys wrote and incredibly shabby and dishonest paper for the Centre of
Independent Studies promoting the destructive carbon tax. Berg and Davidson
refused to attack it. They still do even though they both assert that they
are opposed to a carbon tax. The only person to attack and demolish Humphreys
appalling paper, which he no longer defends, was Gerry Jackson. The only
person our right attacked was Gerry Jackson. You will find neither courage
nor integrity in the Institute for Public Affairs, which explains a lot.
Of
course, it was inconceivable that John Roskam would have the decency to
respond, just as it was inconceivable that he too would attack John
Humphreys’ carbon tax. Roskam’s role is not to defend free markets but to
ensure that only one version of the story gets out. Any free market-based
view that contradicts or refutes the IPA’s party line is to be immediately
marginalised. Therefore, Steve Kates is to be protected at all costs, along
with Sinclair Davidson and Julie Novak.
This
pair announced that commonwealth spending cuts got Australia out the Great
Depression. Now that this is the established line the IPA will make sure nothing
will be allowed to contradict it. Clearly, the notion that the IPA should
countenance an open and honest debate is an anathema to them. Therefore it is
only to be expected that the IPA would refuse to even recognise the existence
of any evidence that they have committed serious error. (Boy, wait till they
see Gerry Jackson’s article on Australia and the Great Depression!)
Graham
Young’s response was particularly nasty. He basically accused Gerry Jackson
of being a liar (the IPA has done the same thing) because Gerry had never
read the classical economists. How the hell would Graham Young know what
Gerry Jackson has read? My guess is that Young’s mates at the IPA spoon-fed
him this malicious rubbish. This genius then claimed to be something of an
expert on trade cycle theory (sic)
and that is why he knows Gerry Jackson is wrong. The man is utterly, utterly
pathetic.
I had
only the faintest hope of getting a positive response from Quadrant, despite the fact that it bills
itself as Australia’s “leading general intellectual journal of ideas”. Steve
Kates frequently writes for the magazine and because of that I consider it
extremely improbable that the editor Keith Windshuttle would even think of
referring to an article that thoroughly debunks Kates’ views on the classical
economists and the trade cycle.
Now
for Steve Kates response:
I got
the paper from Prodos where you may have received it yourself. I thought
about replying but to tell the truth, there are only so many fronts I can
engage on at one time and this seemed for the moment less important than
others. Good luck, though, in trying to fit the monetary school of the trade
cycle into the recession that followed the oil shock in 1973. And unless all
recessions in the world are related to the Federal Reserve in the United
States, even the GFC is not entirely a story that can be told using his kind
of story. Imbalances happen for a range of reasons, some monetary and others
not. Why restrict your range? But regardless of which way you look at it, his
or mine, the policy that follows the downturn does not include public
spending your way out. As for crafting policy in which recessions never
occur, good luck again. The great moderation was supposed to have ended
business cycles forever and how well did that work out?
What
in the Lord’s name does any of this have to do with Gerry Jackson’s critique?
Gerry categorically stated that he was not dealing with general economic
fluctuations but a “specific phenomenon” called boom and bust. What he
did was to show that what Steve Kates is saying about the classical
economists and the trade cycle is 100 percent wrong. Gerry argues that the
classical theory was a monetary theory. Kates says it was not. They both
cannot be right. Gerry points out that the currency school formulated
the real theory of the trade cycle and that Kates is confusing it with the
“Took-Mill” theory that the banking school adhered to. These are important
points that Steve Kates adamantly refused to address. As Gerry Jackson said:
“If you are not prepared to defend what you write, then don’t write it”.
Trade
cycle theory is extremely important when it comes to economic policies. This
makes the difference of views between Gerry Jackson and Steve Kates also
extremely important. Unfortunately the Institute of Public Affairs and
Catallaxy have decided, as expected, that no debate will be permitted. And
this is the same crowd that sneers at the left for being close-minded.
*The odd thing about this article is that Chris Berg is
not a professional economist. I raised this point because Sinclair Davidson
said he only deals with professional economists and that’s why he won’t have
any exchanges with Gerry Jackson. But he doesn’t mind his “very, very good
friend” John Humphreys acting as his attack dog. Davidson is not exactly what
you would call a profile in courage.
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