Wynne Godley

Wynne Godley was a professional oboe player for some years in his twenties; in his thirties he joined the Treasury, where he reached the rank of Under-Secretary; in 1970 he became a fellow of King’s College, Cambridge and, later, was appointed director of the Department of Applied Economics. He died in May 2010.

Memories of Frank Kermode

Stefan Collini, Karl Miller, Adam Phillips, Jacqueline Rose, James Wood, Michael Wood and Wynne Godley, 23 September 2010

Stefan Collini writes: ‘Yes, I’d like that very much. That really would be something to look forward to.’ Frank was already weakened and wasted by throat cancer, but my suggestion that we go to watch some cricket at Fenner’s did seem genuinely to appeal to him. There wasn’t much to look forward to by this point. On the appointed day the weather was kind, and...

Saving Masud Khan

Wynne Godley, 22 February 2001

This is the story of a disastrous encounter with psychoanalysis which severely blemished my middle years.

I was about thirty years old when I found myself to be in a state of terrible distress. It was the paralysis of my will, rather than the pain itself, which enabled me to infer, using my head, that I needed help different in kind from the support of friends. A knowledgeable acquaintance...

The United States is widely believed to have acquired a New Economy, having achieved the longest economic expansion in its history and the lowest unemployment rate for thirty years. Untold wealth has been created, productivity growth has accelerated and inflation has been dormant.

Derailed

Wynne Godley, 19 August 1993

I am in favour of Britain having much closer ties with other European countries, provided that appropriate institutions are created and the whole thing is brought under effective political control. But I have never been able to understand what it is that those who support the Maastricht Treaty think they are going to get out of it. Maastricht supporters are keen on ‘not being left out’. But left out of what exactly? How can people be so sure that a united Europe is something they want to be part of – particularly with the expensive, destructive and corrupt monstrosity called the Common Agricultural Policy sitting there as the single most important achievement of the EC so far? Matters were not helped by the frantic procedural manoeuvring in Parliament over ratification, and by the rather uncritical support which Maastricht has received from the opposition parties. The substantial questions have not yet been debated or criticised with any penetration, although the British people are deeply suspicious and would almost certainly have voted against ratification if there had been a referendum. Platitudes are not good enough. John Major thinks it means something to say that he wants us to be ‘at the heart of Europe’ but he must do far better than that to convince me. I suspect that his purpose is destructive, that all he really wants is to be inside the tent, pissing all over the shop.’

I have heard people say that the Budget was a bore. This may be true for those who had to listen to it or for those who are interested in minutiae. But as one interested primarily in economic strategy, I cannot remember a more intriguing situation. How can it possibly be right to propose a huge tax increase for next year, and an even larger one for the year after that, when by general consent unemployment is going to be in the region of three million and rising? I am going to argue that this Budget only makes sense on very special assumptions about the performance of the economy; and that if, a year from now, the situation is broadly unchanged – if, that is, output has not changed much, with unemployment still around three million and the balance of payments not in serious deficit – it will be every bit as wrong to raise taxes then as it would now.

Letting things rip

Wynne Godley, 7 January 1993

This book brings together the ‘most important academic papers and journalism’ of Professor Tim Congdon, described in the blurb as ‘one of the City’s most well-known commentators’. Congdon’s provocative thesis is that ‘monetarism’, as adopted by British governments between 1976 and 1985, was a decisive success, but that the gains were lost when Nigel Lawson let things rip, causing a boom that had to go bust. The book falls into two parts. The first consists of articles which appeared in newspapers and journals between 1975 and 1989, focus and context being provided by a general introduction and prefaces to the individual essays. The second part, consisting mostly of conference papers, lectures and essays published in other books, is intended to provide the theoretical basis for Congdon’s views on policy. Its most important chapter, ‘Some Initial Theorising’, attempts, in Congdon’s words, ‘to set out, in loosely theoretical terms, how I think the economy works’. Why does Congdon present his views on economic policy in the form of disjointed newspaper articles a few hundred words long, written up to eighteen years ago, ‘many of them … at great speed, often to a newspaper deadline, in only two or three hours’? The most likely reason is that he is trying to convince us that his views are correct because his economic forecasts were borne out by events, which puts a heavy obligation on him to be sure, first, that nobody holding opposing views made equally good forecasts and, secondly, that his forecasts were right for the right reasons.

Maastricht and All That

Wynne Godley, 8 October 1992

A lot of people throughout Europe have suddenly realised that they know hardly anything about the Maastricht Treaty while rightly sensing that it could make a huge difference to their lives. Their legitimate anxiety has provoked Jacques Delors to make a statement to the effect that the views of ordinary people should in future be more sensitively consulted. He might have thought of that before.

The Government’s financial policy in Britain during most of the post-war period has been based on ‘demand management’: the attempt to maintain total spending on a smooth upward trend, thereby preserving a high and stable level of employment. This basis for policy, correctly called Keynesian, has recently been displaced by the adoption of targets for money and other financial variables on the basis of a doctrine, monetarism, of which the central contention is that employment cannot in the long run be influenced much by financial policy, and that attempts to change the level of employment from what is dictated by market forces will only cause inflation.

The implications for Britain of EEC membership are rapidly becoming so perversely disadvantageous that either a major change in existing arrangements must be made or we shall have, somehow, to withdraw.

Letter
Terry O’Shaughnessy rightly takes me to task concerning Keynes and the ‘inflation tax’ (Letters, 22 October). I transposed a course of action which Keynes discussed into one which (I for a moment wrongly imagined) he had advocated. But my mistake has no bearing on the substantial points argued in my article and O’Shaughnessy is therefore wrong to say that it weakened my case....
Letter
SIR: The answer to Mr Hardie (Letters, 6 December) is that for any given level of our own farmers’ real income the taxpayer would obtain a large direct benefit if Britain were not a member of the EEC. The point in the article to which Mr Hardie refers was that if sterling were to become very strong our own agriculture could, under EEC rules, be ruined, and we would have no power to prevent this,...

For thirty years after the war Britain had full employment, stable (if slow) growth, low inflation, and a welfare state that was widely admired. And it was common ground that governments could...

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Keynesianism in One Country

Lester Thurow, 1 September 1983

Godley and Cripps devote their first seven seven pages to acknowledging the storms that are raging around the subject of macroeconomics. Deteriorating economic performances, and monetarists,...

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