Ellsberg paradox - Wikipedia

https://en.wikipedia.org/wiki/Pandora%27s_Box_(British_TV_series)


3
https://youtu.be/cNvgEQ0RHs8



0:00last night the moon was so bright it melted the walls away and it wasn't
0:07alarming when I saw Prince Charming fall into my bedroom
0:13let me persuade you to come to the place
0:30if you were a scientist you worry
0:51excellent science I'm your faithful sir
0:58building a new one
1:13for the last 30 years politicians in Britain have tried to build a new prosperity they wanted to make an old
1:22nation that had fallen behind in the world we capture the glories of its past
1:37they turned for help to what they believed was a science and money one
1:42after another labour and conservative governments became convinced if they followed what they thought were a set of scientific
1:48laws the economy would grow faster the perceived tide of decline could reversed
2:22but instead of restoring the country's fortunes the economic experiments failed to hold Britain's relative decline
2:34this is the old story of how politicians came to believe there was a technical way to make Britain great again
2:55ten years ago one car in every three bought in Sweden with British today
3:01we've less than 10% now that's a sad story but let's take a quick sample here
3:07on this bridge in central Stockholm and see just what the Swedes are driving well there's a Swedish bulb a Swedish
3:13Saab that is another Swedish Volvo over there a Swedish Volvo one after another other
3:20European countries who we were used to thinking of nice guys but poorer began
3:27to get within shouting distance of us and passing it's like being in a sailing race and seeing people you didn't think
3:34we're good enough or hadn't scraped the bottoms of their boat well enough nevertheless overhauling you a German
3:40Ford truck an English never congratulations for the Mercedes Benz people began insistently to ask if they
3:46can once get on the growth path of that steepness went they soon overtake us
3:52properly and a false bargain well in that lot one British car one Ford what
3:59was holding Britain back it was decided was the old-fashioned idea that the civil servants job was simply to keep
4:05the economy stable in 1961 the Conservative government set up Neddie the National Economic Development
4:11Council in what had been a gentlemen's club in Westminster it was advised by young economists
4:17convinced they could make the economy grow much faster I'm sorry it's all
4:26boarded up the windows there because it was a balcony out there Oh as you as you
4:31know the growth target of MIDI was 4% the air between 1961 and 1966 and I had
4:38visions of myself getting out onto that balcony and at the end of 1966 or
4:43proclaiming to the cheering clouds below for we've done it many of this generation of
4:50economists had been taught with the aid of a large machine worked by water built
4:55by Bill Phillips an engineer turned economist it has lain disused for years
5:09is the money that enabled you to illustrate for instance what would
5:15happen if you try to grow the economy pump more money into the economy for
5:22instance you could increase government expenditure and see what the effect of
5:27that is through the workings of the economy the interaction of all the variables on graph because if the
5:34economy is very prone to imports people might simply spend their money to import
5:41foreign goods or if the economy is operating at a high level of activity
5:46then that would lead to inflation Nettie's economists did not have a new
5:51theory but they believed they could use existing techniques in a new way they
5:56saw themselves as followers of The Economist Maynard Keynes he had shown how to manage an economy by increasing
6:02or decreasing demand the problem was that every time you increase demand too
6:07much imports flooded in and wages rose but Nettie's economists were convinced
6:13they could control a boom they would plan investment in industry and the government would hold inflation down the
6:20bad old days a stop-go would be over
6:33plans for the future Britain in the coming year are clear and comprehensive
6:39we have accepted with enthusiasm the Nady target of a 4% growth rate and
6:44all our actions have been designed to achieve it this nation must not jog along this
6:50nation must be inspired with the determination to achieve great things factory owner called his men and said
6:56unconfident you're running to the challenge and produce that 1% and Upton
7:02spoke a worker ryg driver and the bus said most amusing and sacked him on the
7:09spot by 1963 the Economist promises seemed to be coming true the
7:15Conservatives had poured money into the economy and sure enough it had begun to grow they had placed their bets on
7:22growth they talked about it a lot there was an announcement about it white papers speeches and all the rest in our
7:30system of politics when something important like that is put on the table by the government of the day the
7:35opposition has to respond to it my purpose tonight is to have a word with you about the future of Britain the
7:43outstanding thing we ought to do obviously is to get up our economic strengths operating a national plan a
7:51plan for steady continuous controlled production and expansion labor promised
7:58a national plan run by a separate Department of Economic Affairs under George Brown
8:04it would make Britain grow by 1/4 in just six years it was a seductive dream
8:11for Socialist Party for if the economists could produce this growth then Labour's leaders would avoid what
8:16they had always thought inevitable the battle to redistribute the country's wealth instead there will be more for
8:23everyone but it all depended on the economists promises that they had the
8:29technical solutions to the politicians problems we saw ourselves as providing
8:34politicians with a potential menu of outcomes but if the politicians would
8:40give us some indication then we could set the instruments in such a way as we
8:46could deliver reasonably enough give or take the various shocks that would occur in the economy the kind of
8:53outcomes that the politicians wanted
9:00there's one basic fact labour has a clear majority we have a Labour
9:06government but labour had come to power just as the boom the Conservatives that had gone was overheating imports were
9:14flooding in and wages rising this was the point when in the past a halt would have been called but labour were
9:20determined to press on in discussing the economic situation
9:26this morning labor had missed out a vital component from the plow The Economist told me they should devalue
9:33the pound and so make britain's exporters cheaper but in the politicians eyes devaluation would undermine
9:40precisely what they were trying to achieve to make Britain great again well she was a great one who believed in
9:46sterling sterling was in the center of everything and he always said that he
9:52would defend the pound and we'd have a place east of Suez and it was a sort of
9:58nationalism of a kind after that all talk of devaluation by
10:03economists and everyone else was forbidden I personally used to do little sums on scraps of paper in my room in
10:10the DA ban anyone open the door I'd hastily put them into my drawer there are millions of workers in this country
10:16who will never get fair play until you've got a decent income policy can't you get that into your head by 1965 the
10:25boom was clearly out of control faced with inflation that government tried to hold down wages and prices but
10:32to no avail it also faced repeated runs
10:37on the pound as foreign investors lost confidence in Labour's management of the account now became a gain between the
10:43politicians whose fortunes depended on it and their economists who had begun to realized the economy was now far beyond
10:50their control they were being used I think the moment I clearly realized it
10:58was a gimmick was when after we finished work on it and it was the summer I think
11:03it was the summer of 1965 I hadn't very much to do and so I decided I'd look at
11:09the details of plan and see all the different measures the things like the decision that you double expenditure on
11:16road building for instance and try and work out what effects these might have on the growth rate of the country and I
11:22laborious Lee worked through making my best guesses and calculations not having to be particularly told to do this by
11:29anybody and came up with the results and they were well well short of anything
11:35that might have produced the 25 percent growth and I wander along to my seniors
11:40and said hey look I've done this useful little exercise and they weren't in the least interested nothing to do with it
11:46at all
11:54the fight for the pound is on after last week's depressing trade figures and the rise in the bank rate after a weekend of
12:01growing speculation and three days of shorting up the band in the foreign exchange market mr. Harold Wilson
12:06himself cried stop what went wrong was that foreigners who hold the pound decided in unison that Britain was no
12:14longer to be trusted there was a wave there was a move what the government has done is to respond to the mood by
12:21producing something which demonstrates a will to deflate this economy which is
12:28bound to crush it when by heel in other words were condemned to no growth the
12:34attempt to plan growth had failed Britain was left with little expansion and political disaster most economists
12:43blamed it on the government's failure to devalue few asked whether the weakness
12:48of Britain's currency was really a symptom of something much deeper far beyond the power of their techniques to
12:54deal with a year later the government bowed to the
13:02inevitable and devalued but it was far too late the economy had long ago come
13:07juddering to a stop where as a result of that experience we had to abandon the
13:16notion tacitly and slowly but abandon it
13:21all the same that the planning apparatus itself was the unique and certain method
13:29of achieving the aim of faster growth we still believed in faster growth and we
13:35still many of us thought that it was attainable but this particular path to
13:40its achievement was no longer he was no longer essential could no longer be
13:46relied upon in the early 70s many economists began to find they no longer
13:52understood her money behaved the new Conservative government under
13:57Edward Heath had tried what was called a dash for Growth they poured in money by
14:03liberalizing credit and increasing public spending for a moment the economy
14:08boomed but then the strangest thing happened prices and unemployment began to rise
14:14together people called it stagflation I
14:30happened to arrive in the Treasury in 1970 when I got there people really felt
14:36that they didn't quite understand how the economy worked anymore and one particular example of this was
14:41that we saw unemployment and inflation rising at the same time and that was
14:47something that should have been quite impossible while this was going on there
14:52sitting in Chicago in the states with a monetarists who said no we know
14:57perfectly well what's going on we can explain it you've been led astray by your Keynesian beliefs and we can
15:03explain precisely what's going on and it's all to do with the growth of the money supply iein people who we're saying that a
15:11continuation of the policies was going to lead to higher inflation and more unemployment it represented a
15:17recognition that fine efforts to produce paradise and earth were producing
15:24something very different than what was intended Friedman argued that any attempt to put money into the economy to
15:30make it grow was doomed to failure but he was not challenging the idea of the economy as a predictable system only how
15:37it worked he considered his laws were as powerful and objective as those of the physical sciences it was scientific
15:45inflation it's not a communist phenomenon it's not a capitalist phenomena it's a printing press for
15:50nothing that's a scientific statement and you will only have inflation if the
15:55quantity of money increases more rapidly than output you can only stop inflation by slowing down the rate of monetary
16:02growth monetarism offered an attractive
16:07technical explanation for the problem of inflation but from it would come in less
16:13than ten years another scheme for Britain's salvation a set of scientific
16:18rules which if the politicians followed them correctly would create the right conditions for the economic growth
16:28it began with a dissolution group of economists they included two influential
16:34journalists Peter J of the times and Sam Britton of the Financial Times
16:41we were found to be stimulating and interesting which are the English words
16:47for damning people and we were always regarded as good for a puzzling
16:55interlude in a program such as this of a complete runaway inflation and an
17:01internal collapse of confidence I think that's an exaggeration when you
17:07start talking about the runaway inflation in Germany after the first world war I think quite frankly that
17:13that's an exaggeration that can't be sustained by anyone but I think there we stay on our home ground for a moment yes
17:18and there was one place where we tended to bump into each other it was the Institute of Economic Affairs
17:26good God Almighty this is the right place the cooperative what nothing yes
17:34do come in we were just about to begin without you all right if the wrong turning and not for the first time found
17:39myself in a room full of trade unionists cooking up an ex wage claim Oh Tories of course didn't take to me at
17:45all Milton Friedman would would set up it we set up a table here to maximize the array of people that we could fit in
17:51we could probably fit in 20 or 25 people in this small room and he would develop
17:58his arguments briefly very effectively in strong form and he would say if you want the details of this particular
18:05episodes in American history I could go back to that and then the discussion will take place to start with I must
18:11admit I I didn't believe the monetarists for a moment if this seemed totally implausible this was the sort of
18:17economics that I have been told to discard for all the time I'd been learning economics it was a joke really
18:22wasn't to be taken seriously whatever else one used to explain inflation it wasn't the money supply bit far-fetched
18:29perhaps couldn't see it happening in real life oh I wouldn't go as far as that life's
18:37always surprising me in February of 1974
18:47Edward Heath government fell amid power cuts a three-day week and never ending
18:52inflation they were direct consequences of his crude - for growth the time was
18:59right for the monetarists in particular Allen Walters a professor from the London School of Economics he began to
19:07attract both press and politicians with apocalyptic warnings of what was to come reduction in output and increase in
19:14unemployment and at the same time rampant inflation inflation of the order
19:20perhaps 30% perhaps even increasing as we go on there is a real danger of
19:26hyperinflation Allen Walters had snubbed me when I went back to meet old friends once I was once the government fell and
19:34I was back in I was back as there was a
19:40member of parliament without a government person and Alan waters refused to shake my hand he said you've
19:47been deporting the currency why should I welcome you back and I started to
19:53rethink what we've been up to and a fella called Alfred Sherman was very influential in convincing me used to say
19:59don't you bow case is dead Keynes is dead I don't understand what he meant he
20:05turned to me for help and I'm asked for a didn't go further and look at the
20:11whole Keynesian number jammer the panacea Keith Joseph toured the country
20:20translating monetarism into a political program the primary job of economics was
20:26no longer to create employment he said it was to reduce inflation after having
20:32failed to persuade the Shadow Cabinet to reconsider our economic policies I
20:38warned them that I'd have to make a speech well the speech was made I remember I I
20:46remember that I said to Sam Britton who looked at one of the drafts this speech
20:51has been through ninth raft we're trying to get it right an Alfred Sherman from
20:56the background said yes and I read 13 of them well we slugged at that speech is
21:02threatening to destroy our society the distress and unemployment that will
21:07follow unless the trend is stopped will be catastrophic inflation is caused by spending more than we produce too much
21:13money chasing too few goods deficit financing printing money mild inflation
21:20seemed a painless way of maintaining full employment encouraging growth and expanding the social services we now see
21:28that inflation has turned out to be a mortal threat to all three
21:39but labor was in power as before they had inherited the chaos of a
21:44conservative boom yet this time none of the traditional Keynesian methods of it than any help because inflation and
21:50unemployment were rising together it was something that Keynes ian's believed in possible by the end of 1975
21:58The Economist's advising the government were lost my memory is I think it was a
22:05dinner party at Liberty organized where the main economic models were there the
22:11Treasury was represented the bank was represented the National Institute of Economic and Social Research London Business School either final war and
22:20they're talking about the meeting term projections in their models and they were unanimous that they could not
22:27project what was going to happen inflation or to unemployment or the balance of payments there's almost total
22:34agreement around the room that the UK was in serious danger of going to absolute decline there was negative
22:41growth not just grain that's lower rate than other industrialized countries that is when the civil servants in the
22:48Treasury in the Bank of England realized that the UK economy had arrived at the brink of the abyss they had sight of the awfulness what
22:56that abyss might look like and they were shell-shocked as his ultimate
23:12then in March 1976 Britain fell into the abyss foreign investors led by American
23:23bankers panicked the pound began to slide against the dollar and nothing would stop Britain faced bankruptcy in
23:40desperation labour turned to the International Monetary Fund for a loan an IMF team came to London they were
23:47determined that the only way to restore confidence was for the British government to adopt monetarist policies
23:52in a speech that could have been written by Keith Joseph Prime Minister James Callaghan told the Labour Party why I
23:59have to do what the financial markets wanted we used to think that you could
24:05you spend your way out of a recession and increase employment by cutting taxes
24:10and boosting government spending I tell you in all candor that that option no longer exists and that insofar as it
24:19ever did exist it only worked on each retention since the war by injecting a
24:27bigger dose of inflation into the economy on every occasion followed by a
24:34higher level of unemployment as the next step it was presented scientifically but
24:39then they were always presented scientifically as being the only way of doing it there is no alternative and the
24:45script people but at the same time he was never forget that politics is in the pursuit of an interest and an ideology
24:52and if the scientist helps you with the ideology you use him if he doesn't you disregard him so the conflict between a
24:57saguaro Milton Friedman and Keynes was a political conflict it wasn't really that it was people solemnly assessing the
25:04different values of two sets of ideas one benefited one group another benefited another
25:25in December 1976 the IMF granted a loan to Britain
25:31that same month Milton Friedman was awarded the Nobel Prize in just five
25:37years his economic theory had moved from the margins to center stage it was seen
25:42by many politicians as the only solution to Britain's disastrous economic position and waiting in the wings was
25:51Friedman's most devoted follower a politician who believed it was possible to use monetarism
25:57as the basis of a plan to regenerate the country Keith Joseph was now the closest
26:05advisor to the new leader of the Tory Party Margaret Thatcher he and the economists around him had drawn up what
26:11was called the medium-term financial strategy and in particular I bring you
26:23all out in a moment the plan was to combine monetarism with another theory from economics called
26:28rational expectations it said that whenever a government changes policy it
26:33will only work if the politicians can persuade people they are going to stick with it whatever happens we believe that
26:40in in announcing and publishing a midterm financial strategy of what we
26:46were going to do with the crucial element of the money supply we would
26:53persuade the negotiators the management's and the trade unions and
27:01the opinion formers that there must be some limit to pay claims if jobs were
27:09not good to be priced out of the market rational expectation it was to get away
27:15from short termism and in that respect it had something in common with a national plan comparison of which I'm
27:22not ashamed and as with the national plan it was all very simple the supply of money was to
27:28be reduced by raising interest rates and cutting expending inflation would fall and
27:34enterprise flourish instead of putting money in as labor had done 15 years before this time the
27:41theory said it should be tightly controlled to discuss phase one of the
27:49operation now I don't have to tell you that as a general rule thanks take very
27:55good care of people's money they are not going to give it to us so we shall have to take it
28:01monetarism works throughout the nineteenth century when we were the envy of the world with our people growing in
28:09numbers and generally prospering generally despite all the horrors of the
28:14time generally prospering with the world looking to us for how to do it it could
28:21work again there arose a slightly
28:26messianic sense of mission so you are
28:32don't want to see what's that labor in power again beside the Marx Brothers huh
28:38another bunch of comedians coming shortly the Conservatives I can't bear
28:45Britain in decline I just can't we who either defeated or rescued half Europe
28:51who kept half Europe free when otherwise it would be in Chains and look at us now
28:57the patcher government is a kind of an experiment in whether it will be possible in a democratic society that
29:03has gone as far as Britain has gone to change course in an orderly effective
29:08way to set Britain on a new road if if the fetcher government succeeds it will
29:15be an example that will not be lost in the United States or the rest of the world
29:22the latest unemployed from the Royal Stafford helped form an unwelcoming committee for mrs. Thatcher as she
29:29arrived but the economy did not behave in the way the monetarist predicted the squeeze on money led to a wave of
29:35factory closures while inflation continued to rise I've been in
29:46insolvency for all my professional life and I think up until 1980 I used to go
29:52in with a great deal of confidence that with new management and perhaps some sort of reorganization something could
29:57be done it was very sad to have to go into the shop floor in the early 80s into a company knowing in fact that
30:03there wasn't much chance of selling that business and that in fact the the business would come to an end this is
30:09what would normally be a working day as the middle of the week and we're now down in this plant which produces well over half at a stein baths
30:16the United Kingdom on - when we come one week off and that's an immediate and
30:24practical effects of the strict monitors of policy that the government is carrying out the managing director said
30:30a very sorry to tell you but as from this minute the theme has gone into volunteer liberalization that was it
30:37there's somebody shouted well we get any wages and he said you'll get nothing there now follows a government statement
30:44on the current employment figures
31:04the government seems to have totally lost its way in terms of the interaction
31:10of for economic indicators on British industry as every member of any firm
31:20knows once with high interest rates is a weapon for controlling money supply what is the first thing that has to be cut
31:27investment because you still have to pay wages and you still have to pay your current costs the government would say
31:41just hang on and stop making such a fuss now yeah all I'd say is that the government isn't standing where I'm
31:46bloody well standing even more mystifying was the behavior of the money supply despite the squeeze it was still growing
31:52something the monetarists thought impossible but it was all a bit embarrassing people like me were at the
31:59Bank of England because we being enforced government had signed up for
32:06this path of gently declining monetary aggregates and instead of the monetary
32:13aggregate strangely declining some five or six months after this new policy was
32:19put into operation they took an enormous jump and he was the a difficult to know
32:24why or to know what ought to be done about by the end of 1980 unemployment
32:29had nearly doubled manufacturing output had fallen by 6 Britain was declining
32:34faster than even in the darkest days of the 1930s despite this the politicians were
32:39convinced they were right the laws of their science told them Sir let me just have a word about monetarism and monitor
32:46control first and then you all know full well that if you produce too much of
32:52something it's value will fall that's elementary it turned on newfangled
32:59it is as essential as the law of gravity and you can't avoid it
33:04people used to say you're destroying my job and I was absolutely securing my conscience the dear negotiators and now
33:11empires were destroying their jobs by not following rational expectations and
33:17seeing that if they didn't accommodate units labor costs by a combination of
33:22pay increases allowed and rising productivity to what would keep their
33:28prices internationally competitive jobs would go so there was I absolutely
33:34clearing my conscience and there were they convinced in there what I would call invincible ignorance that I was an
33:42enemy yes it was awkward time it's no question of what was happening did in my
33:48view a great deal of damage the economy ago poultry the politicians of the day will never admit that they never admit
33:54to making mistakes at all but it's quite clear that's what was happening they were trying to do it right but they got it wrong in January 1981 Allen Walters
34:02became mrs. Thatcher's economic adviser although a convinced monetarist he agreed with Sir John Hoskins that
34:09interest rates would have to come down this in turn would reduce the exchange rate and make exports more competitive
34:15but the problem was how to do it without admitting that all the destruction of the past two years had been for nothing
34:21the only solution they said was to cut even more from public spending that way
34:27the government would be seemed to be keeping up its squeeze on the money supply what we said was we will take a
34:32deep breath and take an enormous amount of money out of the economy but at a at
34:39the nerdier of a major recession I mean it's against every textbooks to have been retinyl all the Keynesian
34:45conventional wisdom which prevailed at the time and thus hopefully buy that
34:52insurance make it very unlikely that we would have to put interest rates back up
34:58again just at the wrong moment at a meeting with mrs. cetera and Geoffrey harm they were both absolutely taken
35:07aback I think I could hardly believe their ears and this essentially saying they indignantly you know it's all very well
35:13for you but you don't have to stand up and defend it in the house in the budget
35:24of 1981 public borrowing was cut by 1/5 364 leading economists wrote to The
35:31Times and prime minister accusing her of virtually destroying the economy that
35:44summer there were riots in English cities that even some cabinet members blamed on the economic policy
35:51unemployment headed towards two and a half million inflation did begin to fall
35:57but the money supply continued its mysterious rise it became clear that the
36:03fundamental law of monetarism the relationship between the money supply and inflation didn't work ever so
36:10quietly this solution to Britain's problems was discarded finally the man who had first brought
36:17the monetarist message to Britain was publicly told it was over monetarist
36:23economists believe in something called the natural rate of unemployment which is supposed to be the rate at which
36:28unemployed inflation stops or ceases to accelerate now do you think that we
36:33Prime Minister with all-time record unemployment figures this week have yet reached that natural rate even though
36:40inflation is still proceeding sufficiently to have the value of money every 15 years it's not a doctrine to
36:45which I had ever subscribed it's how much I think actually came in with Milton Friedman I used to read about it
36:51I used to look about is not a doctrine it's a theory to which I've never subscribed some of those who had lived
36:59through the experiment now became deeply pessimistic one economist saw it as proof that it was fundamentally
37:05impossible to change in a predictable way how an economy behaved as in other
37:11sciences his observation had a formal name good hearts law
37:17it hurts for said that if ever the government decides to rely on any
37:23particular statistical relationship as a basis for policy as soon as it did that
37:28that relationship will fall apart and that's just worth that the implication
37:36is both of what you should try and do is not to disturb things too much and let individual agents go on and try and make
37:43the best of the situation as each of them sees it individually
37:54it was a conclusion that fitted well with conservative philosophy if there was nothing that governments could do
38:01then the economic agents in a newly liberated city of London should be left alone unlike the economists they seem to know
38:08how money worked the city's growing confidence and drive owes a good deal to
38:14young people it's vast new dealing rooms are run by the young people who made it not because
38:23of who they know of what school tie they were but on sheer merit and that is the
38:29kind of society I want to see capital was available ideas were available and
38:35there was a keenness to do things and I think that probably the government felt
38:42that our merchant bankers in the city of London which after all had put us on the map there they were again that we were
38:47to go out and they were going to make us great again if you like money now became
38:52a commodity traded for itself it was managed by young technicians in the dealing rooms economists who once
39:00thought they could control money became its servants they were now employed in their hundreds by the banks to predict
39:06on television what might or might not happen as a result of the colossal flows of capital what do you see it is of
39:14course extremely uncertain but my view is that I guess there's still a lot more to come we're currently saying people
39:20fear that there will be a rerun of what happened a fortnight ago I suspect it'll certainly not stop there is however a
39:26risk that interest rates will have to go higher it may even get worse when you get a loss of faith save bishops cease
39:32to believe in God they're going for socialists are are sodomy but an economist whose is agnostic about
39:39economics is unemployable and therefore they said we know if you do this and if
39:45you do that and the economists will argue with each other but none of them will ever question whether economics is
39:51a scientific as you claim written the finest print in the world
39:58right and that does not forget who made it Great Britain
40:03this last eight years when I go to the Western summit in
40:10Venice on Monday I will go with my head held high as leader of a strong country
40:17there were people earning a lot of money without doing anything at all in this world of money then it suddenly came to
40:24a dramatic halt in the eighties the reasons I can't give you you'll need to
40:30talk to a qualified economist and no doubt they'll have differing views and why it happened but the system
40:36overnights became much more cutthroat we had examples of firms ran out of the
40:44blue calling fire drills lock in their employees out and throwing their
40:50belongings from the window to them and saying sorry chaps you're fired that's how bad things became the bubble
40:57burst again that's what happens in history you'll have these these slumps
41:03and these booms and you won't change it because that's what capitalism is really isn't it I don't think we can change the
41:08world it's not something we can do certainly we insolvency specialists can't our job is sweeping up or trying
41:14to prevent now as far as I can see the best way is to try and see whether we
41:20can do something about stopping people being greedy or stopping people being over ambitious and I don't think you
41:25ever will do that I mean the economists seem to think that the whole of the problems can be solved by by money by
41:33the use of money rather than the creation of wealth but they've never really got anywhere near it so I would
41:39ask the question whose money what money where's he coming from
41:46ago Britain was a loser today Britain is a winner yes buddy the party's over the
42:03drink and the luck ran out
42:22economics is really obscured the fundamental problems of the British economy by seeming to be able to give a
42:30particular solution by pulling a particularly rough pulling a set of levers it's obscured the longer-term
42:36decline our industries the longer-term decline in the quality of our labor force which politicians should really
42:43have been addressing 30 or 40 years ago and we serve our European competitors who have turned that far fewer economist
42:48in Britain by the way have succeeded in doing much better than we have in the UK
42:54for some economists who were involved in this story there is a further question were their theories used to disguise
43:02political policies that would otherwise have been very difficult to implement in Britain the nightmare I sometimes have
43:10about this whole experience runs as follows I was involved in making a number of
43:15proposals which were partly at least adopted by the government and put in play by the government now my worry is
43:23as follows that there may have been people making the actual policy decisions or people
43:28behind them or people behind them who never believed for a moment that this was the correct way to bring down
43:33inflation they did however see that it would be a very very good way to raise unemployment and raising unemployment
43:40was an extremely desirable way of reducing the strength of the working
43:45classes if you like that what was engineered there in Marxist terms was a crisis of capitalism which recreated
43:52reserve army of labour and has allowed the capitalists to make high profits ever since now again I don't say I
43:59believe that story but when I really worry about all this I worry whether indeed that was really what was going on
44:07what we now duct which we used to think
44:12was that our morals will enable us to look into the future and indeed to
44:18change the future to the benefit of mankind we the experience of recent
44:26years has been such that as soon as we develop a model that seems to be reasonably good at explaining the
44:33present and there are few enough of those God knows now the future changes we live in an
44:41imperfect world and if that's true how are you ever going to make it a better world we can perhaps hope that we can
44:49prevent it becoming a worthless world I didn't think that we can easily make it at 11 o'clock on UK TV history
45:15great raids of world war ii tells the story of the cockleshell raiders our v for victory season continues next with a
45:23look at the turbulent relationships between Churchill Roosevelt and the gore in a Liza