The paper exposes the incoherence of the economics of central bank independence, and argues independence is a politically driven phenomenon intended to benefit particular interests.
A thought provoking and rather disturbing article. Bad economics, which is clearly what we're suffering from, seems to be the root cause of much if not most of today's spreading social malaise.
Rabobank jumping up and down about Lisa Cook in yesterday's FT, "Just as the interpretation of law is inherently political, the price of money is inherently political" Excuse me? If money is 'inherently' political and not neutral, how do they justify technocrats setting policy? Or do they consider it neutral until money taps are diverted away from the wealthy, at which point it magically becomes political? You couldn't make it up.
I can imagine the frustration that Copernicus and Galileo felt trying to explain the newly-proven Sun-centric solar system to the religious establishment with their entrenched Ptolemaic view of the cosmos. The old guard will always refuse to even consider an alternative approach that challenges their authority, even when it resolves obvious anomalies with traditional dogma.
The UK has had a number of shocks as you point out in recent years that perhaps unsurprisingly challenges how we operate monetary & fiscal policy that largely benefits the wealthy & corporations since Thatcher.
However the shocks just keep coming:
Ageing demographics
Climate Change
Defence and rearmament
World Order
Expecting the old policies of right and left with respect to say public finances or the markets to still be relevant looks less and less feasible.
I can see UK public debt rising for at least a generation while these difficult challenges are addressed. We need politicians and policy makers to accept this and get on with devising practical solutions for society and the environment.
Conservatives, Monetarists, Liberals, Socialists, Keynesians, etc want to protect their perspectives I understand but I think they have had their day and if they can't adapt and be useful to the British people in meeting the challenges of our age they need to go.
LeChat free AI Assistant doing critical thinking with pros and cons for a Ann Pettifor Article of Summer 2025
"**100-Word Summary**
The article critiques the ideology of **central bank independence**, arguing that technocratic policies—such as austerity, quantitative easing (QE), and bailouts—primarily benefit financial elites while undermining public welfare. It highlights the **Bank of England’s Asset Purchase Facility (APF)**, which has cost the UK Treasury £38bn in 2023 and is projected to reach £230bn by 2033, as a mechanism that transfers public funds to commercial banks. The piece links technocratic decisions to economic instability, the rise of authoritarianism, and public discontent, citing examples like the **Eurozone debt crisis** and the **2007-9 Global Financial Crisis (GFC)**. It calls for greater democratic accountability and coordination between monetary and fiscal policy to address systemic challenges like climate change and inequality."
To be fair to the FED and BoE they are in horns of dilemma between curbing inflation through their MP remit and not throttling growth without which fiscal crisis looms with its attendant political pressures.
Perhaps, indeed. the success of the MP led pre GFC era of combined low inflation and sustained growth (NICE) was a chimera conjured by unsustainable private credit growth and asset price inflation amid benevolent world conditions, now we'll gone.
Probably best in the UK context to focus on the fiscal implications of QT and the past scandal of not investing for growth when interest rates were close to zero.
Central Bank Independence: A Rigged Debate Based on False Politics and Economics
https://thomaspalley.com/?p=1754
The paper exposes the incoherence of the economics of central bank independence, and argues independence is a politically driven phenomenon intended to benefit particular interests.
A thought provoking and rather disturbing article. Bad economics, which is clearly what we're suffering from, seems to be the root cause of much if not most of today's spreading social malaise.
Yep. Reagan/Thatcher and Friedman - the rise of monetarism and Neoliberal political dogma.
It's been downhill ever since.
So pleased to read this timely piece!
Rabobank jumping up and down about Lisa Cook in yesterday's FT, "Just as the interpretation of law is inherently political, the price of money is inherently political" Excuse me? If money is 'inherently' political and not neutral, how do they justify technocrats setting policy? Or do they consider it neutral until money taps are diverted away from the wealthy, at which point it magically becomes political? You couldn't make it up.
Quite so Jim. And thanks for the kind remarks.
"Central bank technocrats are not ‘independent’"
Particularly when ascribing neutrality to nonetheless working within an increasingly oppressively ever narrowing orthodoxy?
Thank you for another inspiring article, Ann; I am thus even more avidly looking forward to reading your forthcoming book! ☺️
I can imagine the frustration that Copernicus and Galileo felt trying to explain the newly-proven Sun-centric solar system to the religious establishment with their entrenched Ptolemaic view of the cosmos. The old guard will always refuse to even consider an alternative approach that challenges their authority, even when it resolves obvious anomalies with traditional dogma.
Ann, good article. Much to agree with.
The UK has had a number of shocks as you point out in recent years that perhaps unsurprisingly challenges how we operate monetary & fiscal policy that largely benefits the wealthy & corporations since Thatcher.
However the shocks just keep coming:
Ageing demographics
Climate Change
Defence and rearmament
World Order
Expecting the old policies of right and left with respect to say public finances or the markets to still be relevant looks less and less feasible.
I can see UK public debt rising for at least a generation while these difficult challenges are addressed. We need politicians and policy makers to accept this and get on with devising practical solutions for society and the environment.
Conservatives, Monetarists, Liberals, Socialists, Keynesians, etc want to protect their perspectives I understand but I think they have had their day and if they can't adapt and be useful to the British people in meeting the challenges of our age they need to go.
New thinking and new people needed.
The accusations include selective use of evidence
Technocrats and Authoritarianism
LeChat free AI Assistant doing critical thinking with pros and cons for a Ann Pettifor Article of Summer 2025
"**100-Word Summary**
The article critiques the ideology of **central bank independence**, arguing that technocratic policies—such as austerity, quantitative easing (QE), and bailouts—primarily benefit financial elites while undermining public welfare. It highlights the **Bank of England’s Asset Purchase Facility (APF)**, which has cost the UK Treasury £38bn in 2023 and is projected to reach £230bn by 2033, as a mechanism that transfers public funds to commercial banks. The piece links technocratic decisions to economic instability, the rise of authoritarianism, and public discontent, citing examples like the **Eurozone debt crisis** and the **2007-9 Global Financial Crisis (GFC)**. It calls for greater democratic accountability and coordination between monetary and fiscal policy to address systemic challenges like climate change and inequality."
https://docs.google.com/document/d/1bJVNK7TbH3FrXKalSjatgzpirOrBbb5w35c4hfJMY5k/edit?usp=drivesdk
Thank you Ann, for a great article. You've been added to my reading list as well as following here on SubStack.
For others interested can I suggest the work & writings of Richard J Murphy and Prof Steven Keen. (and even the YouTube messaging of Gary Stephenson.
Neo-classical economics is a failure.
When will we find politicians, not in the pocket of the wealthy, and brave enough to take back control?!?
It
https://open.substack.com/pub/heterogeneousagents/p/has-the-south-african-reserve-bank?utm_campaign=post&utm_medium=web
Interesting well put counter narrative.
To be fair to the FED and BoE they are in horns of dilemma between curbing inflation through their MP remit and not throttling growth without which fiscal crisis looms with its attendant political pressures.
Perhaps, indeed. the success of the MP led pre GFC era of combined low inflation and sustained growth (NICE) was a chimera conjured by unsustainable private credit growth and asset price inflation amid benevolent world conditions, now we'll gone.
Probably best in the UK context to focus on the fiscal implications of QT and the past scandal of not investing for growth when interest rates were close to zero.