Join the Masons

Morning everybody. Lots to do today, including finishing a column for the university magazine and seeing lots of dissertation students - mostly those who don't realise quite how good they are: my job today is to point out exactly how much work they've done and how much sense it makes.

There is a spectre haunting The Hegemon: the spectre of Mason

Firstly though, here are a few photos of last night's inaugural professorial lecture by Paul Mason, the distinguished Newsnight economics journalist, and now Visiting Professor. The main theme of the night was the crash and whether or not it fits executed Soviet economist Kondratiev's theory of long waves (Stalin's henchmen realised what he didn't: that the wave refuted Marxist belief in the historical inevitability of Marxism). 

'Peoples and countries will be pitched against each other' as we struggle to get out of the slump he said. There's a reckoning to be paid for the past 20 years or so of economic madness: the question is who pays it, and whether we take a lot of pain now or a massive amount of pain later (for instance, we could inflate our way out of debt now, but everybody's savings would disappear overnight). In a really serious slump, you see things like party political broadcasts being conducted by candlelight, as he remembers happening in the 1970s (send me a link, someone?).

Mason's shadow makes a point

 It was complex, thoughtful and pretty gloomy. Mason himself spoke authoritatively and passionately: he thinks in the long term and clearly cares about actual people rather than economic models and states. He felt that elite groups such as those who meet at Davos are in a state of some panic, and have little conception or interest in the public good. We shouldn't look to China either: they don't want to be a hegemonic power setting and keeping to standards of behaviour. Instead, we should expect a prolonged period of post-globalisation protectionism (we can already see it happening in sneaky devaluation, which just shifts economic problems onto other countries): we just have to hope that it isn't fascists leading this charge. Or, he said, we could easily inflate our way out of trouble in no time: just start a war with Iran. Oil prices will rocket, so will inflation, debts wiped out. There are a few down sides to this of course…

This chap was sitting in front of me. I was very distracted by his directional haircut.

 The discussion also took in the big one of UK economics: the supposed high-tech manufacturing miracle which politicians always say is coming won't help employment. Modern factories are virtually deserted. So what is everybody else meant to do? We can't sustain an economy based on people serving each other coffee for low wages: there's no demand available now that credit-fuelled spending is off the table. I don't have the answer to that one, and nor does Mason. But he thinks we should be worrying about it. Plenty of people on the left (Marx, deriving it from Hegel) looked forward to the end of work, whereas others believe in the Dignity of Labour. Here's Marx's vision of the perfect society:

In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.

He also made the point that technology doesn't lead booms: oceans of cheap money lead to tech booms as investors seek risky bets. This reminded me of David Harvey's work. In it, he says that the credit crunch wasn't caused by too little cash in the system, but too much. The Germans saved all their money. They therefore got low interest payments on their cash. So they started showering it on risky, silly investments: obscenely high mortgages in Ireland, speculative Spanish building, weird derivatives, CDOs, MBSs and the rest of the alphabet soup. The more money went in, the safer it looked: after all, risk had been 'sliced and diced'. When actually, it just meant that everybody held debt with absolutely no idea of its provenance or actual risk. When the penny dropped, panic was the only sane response. Bingo: the crunch.

He's got the whole world in his hands

Other highlights: Mason reckons embittered Mervyn King (outgoing chair of the Bank of England) believes he saved the UK economy from a much, much worse fate by quietly allowing the pound to devalue in 2008, propping up exports to some extent.

Finally, Mason cautioned students even on the most vocational of courses to cherish the opportunity to engage with ideas, pure and simple. Music to my ears.

The rest of the photos I took are here.