It's not Keynesian

[DrNorm]

Indeed. It has to be useful infrastructure.

It's really no different than a business borrowing to expand. If they build a second factory, it will probably more than pay for itself in the long term as business will grow.

If they spend it foolishly, all they have is a big debt and no extra revenue to service it.

 

And my point is that the analogy of infrastructure being like a factory is a false analogy.

 

Infrastructure doesn't produce, it only supports production.

 

There are jobs as soon as the factory is built, but after the road is built what then? You have to build a factory.

 

Putting infrastructure first is cart before horse.

 

Like building a motorway to Mablethorpe - it only makes sense if there is first a demand for transport to Mablethorpe.

[I1L2T3]

"We have always been a Keynesian Party" Diane Abbott 13th october 2015.

Diane Abbott is shadow secretary of state for international development and a member of Labour's front bench.

 

What would constitute "real evidence"?

 

My whole case here is that Labour operate under the pretence that they're operating on Keynesian economics, but in fact they just pretend so to justify borrowing and then reclassify normal state spending as "investment" to perpetuate the illusion.

It's not actually their core policy. They just pretend.

 

If they're not pretending to be Keynesians, what are they? From what in the school of economics do they draw to justify their policies?

 

---------- Post added 09-11-2015 at 22:03 ----------

 

 

I'm more saying that Keynes would have far less of a problem with Osbourne's policies than with Labours.

He would most certainly have approved of the Fiscal Charter which Osbourne and the Conservatives support and Labour reject.

 

We'll have to see whether he thinks infrastructure investment is a good idea during the next downturn, but one of the first things he did when becoming chancellor was to restore infrastructure spending which had been drastically cut by the outgoing Labour administration.

It is not my intention to suggest that he's any kind of fundamentalist Keynesian. I expect he, like most with an interest in economics, tries to draw wisdom from various respected economists and base his decisions on that overview.

 

My issue with Labour is they talk like they are Keynesian believers. Although they mention his name a lot less than they used to. When in fact Keynes would be more sympathetic to the current Conservative approach.

 

No, Labour don't talk like they are Keynesian believers. Because Diane Abbott (of all people) said it it isn't true. The policies under New Labour were not Keynesian, and New Labour never pretended they were. Not for a minute. They couldn't!