Mervyn King's economic inspirations

 

Mervyn King speaks to the BBC's economics editor Stephanie Flanders about the great thinkers of economics

Sir Mervyn King was an economics professor at the London School of Economics before joining the Bank of England in 1991, and becoming its governor in 2003.

He studied at John Maynard Keynes' old college in Cambridge in the 1960s at a time when Keynesian economics was in the ascendant, but about to come under attack from monetarist economists such as Milton Friedman.

To my knowledge, Sir Mervyn has given just three extended television interviews since becoming governor. Only one of these - last month, for Channel 4 - was broadcast live.

I sat down with him for this interview in late February 2012 for the BBC 2 series, Masters of Money - a documentary series about the lives and economic thinking of Keynes, Friedrich Hayek and Karl Marx which I have written about before. The last episode, on Marx, is broadcast on 1 October.

In this interview the governor of the Bank of England comments on each man's contribution to economic history, and the relevance of their ideas to recent events.

Sir Mervyn says that the last few years have given him a deeper understanding of some of Keynes' writing about the 1930s.

Before the financial crisis of 2008, Sir Mervyn says, he had struggled to comprehend how policymakers had allowed the economic disasters of the interwar years to take place. Now he understands all too well.

He credits Hayek with having given economists a valuable warning against hubris. We can't predict the future, he says. And we probably can't prevent more crises from happening. But we can try to make the system better at coping with them.

 
Stephanie Flanders, Economics editor Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this
    +7

    Comment number 16.

    King probably is more responsibility for the crisis than most, at least in the UK for creating an environment along with Gordon Brown that could allow the greed, hubris and selfishness of the investment bankers to have free reign. He reminds me of the bungling WW1 generals, cosy in their armchairs at HQ, whilst others are dying in the trenches. He is so out of touch.

  • rate this
    +7

    Comment number 19.

    Poor old Merv. Looks like all he's missing in that picture is an ear trumpet!
    Like so many other dinosaurs still plodding around, he remembers better times.
    Our children would like to remember better times Merv!
    Throw away your toasting fork and crumpets, take off your ear trumpet, forget your financial pals, and have one last stab at doing something brave and clever for ALL your countrymen.

  • rate this
    +6

    Comment number 20.

    like quite a lot of economists he's back-tracking on his position of recent years, Keynes is suddenly all the rage among economists who weren't giving his ideas mental "house room" a year or so ago & they almost invariably claim they haven't altered their position. Many economists who backed Tory economic arguments at the election are busy weaseling out of their then unequivocal support

  • rate this
    +6

    Comment number 17.

    After 40 years plus in economics he has a deeper understanding of Keynes views of the problems in the thirties! Should be useful for a post retirement paper or two but what about the 21st century? Does he understand how we got into this position. Is he able to enlighten us on the mystery workings of QE. Does he believe that economics is not an academic discipline and that 'free' markets dont work.

  • rate this
    +6

    Comment number 7.

    You cannot rehabilitate King!

    He does not understand money, for all his supposed Harvard (like you Stephanie) education.

    We paid him very handsomely to maintain the idea of money and its necessary prudential price throughout any/all economic conditions.

    Yet the fool has devalued money to just one fifth of its previous 300 year low. The facts show that the man is an economic fool.

 

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