EconomicsNotes

  The Economic Debate The 1970s in the West saw the emergence into policy of a debate which had been continuous but which was largely conducted amongst intellectuals and policymakers. This was the battle between the Keynesians who had defined the ‘post-war settlement’ and Monetarists who were focussed upon inflation. The consequences of this battle were to be quite serious, and pushed economics and political economy towards a kind of market-based, anti-inflation position which prevailed across the world with few exceptions by 1987-91. The basic disagreement was between those who believed that Aggregate Demand drove the economy, and that the worst problem in a real economy was unemployment, and those who believed that all policy eventually came down to how sound and trusted the money supply of a country was and could be. The former group argued that governments should spend against the economic cycle, that deficits were not a bad thing, and that the economy could be stimulated...

  There are several challenges here. One is that a general consensus has arisen that a reduction in the carbon waste which enters the atmosphere from traditional forms of power generation is necessary to slow or reduce dangerous climate change. This means a move from an economy based around the generation of power from coal, oil, and to an extent gas, and towards one based upon renewable, abundant, and satisfactory replacements.   The challenge is that hydrocarbon power is a really efficient and effective form of power for electricity grids, cars, aeroplanes, heating, and factories. It is also globally used by competitor economies. Switching from it might therefore limit the capacity of economies, create advantages for competitors, lower living standards, and reduce the amount of investment capital available for the development of renewable resources. A second challenge is that the renewables sector is one covering a great many things. Some of these things, whilst improvin...