© Eric Lonergan and Mark Blyth 2020
This book is copyright under the Berne Convention.
No reproduction without permission.
All rights reserved.
First published in 2020 by Agenda Publishing
Agenda Publishing Limited
The Core
Bath Lane
Newcastle Helix
Newcastle upon Tyne
NE4 5TF
ISBN 978-1-78821-278-6 (hardcover)
ISBN 978-1-78821-279-3 (paperback)
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Typeset by Patty Rennie
Printed and bound in the UK by TJ International
Contents
Introduction: from economics to angrynomics
DIALOGUE 1 Public anger and the energy of tribes
DIALOGUE 2 The moral mobs and their handlers
DIALOGUE 3 Macroangrynomics: capitalism as hardware
DIALOGUE 4 Microangrynomics: private stressors, uncertainty and risk
DIALOGUE 5 Calming the anger: from angrynomics to an economics that works for everyone
Postscript: angrynomics in a pandemic
“A man is about as big as the things that make him angry”
WINSTON CHURCHILL
A great many colleagues and friends have contributed to the thinking behind this book. Many of them will disagree with much of what follows. We have benefitted hugely from reading and discussing many of these ideas with Martin Wolf, Martin Sandbu, James Mackintosh, Adair Turner, Angus Armstrong, Roger Farmer, Carolina Alves, Anand Menon, Michael Burleigh, Frances Coppola, Daniel Mytnik, James Hanham, Simon Tilford, John Springford, Dave Fishwick, Jenny Rogers, Tony Finding, Tristan Hanson, Juan Nevado, Megan Greene, Simon Wren-Lewis, Kate Raworth, Roman Krznaric, Sony Kapoor, Alev Scott, Rupert Taylor, Clare Patey, Stewart Gilchrist, Nigel Kershaw, Kevin Riches, Matthias Matthijs, Jonathan Hopkin, Stephen Kinsella, Holly Goulet, Joe Hanrahan, Kimberly Witherspoon, Sarah Russo, Vicky Capstick, Rose McDermott, Carys Roberts, Wade Jacobi, John and Shelley Sawers and Matthew Lawrence.
Some of the policy ideas – such as dual interest rates – have been road-tested in the Financial Times and on Twitter. In the latter forum, we have greatly benefitted from the reflections of Brad Delong, David Andolfatto, Nick Rowe, Tony Yates, David Beckworth and Chris Dillow. Fran Boait and Stan Jourdan at the not-for-profit, Positive Money, have influenced our thinking on policy, as has Gregory Claeys at Bruegel. Steven Gerrard, at Agenda, has once again helped with great insight and care.
Eric would like to acknowledge his partner Corinne Sawers’s intellect and sparkle, which has challenged and aided him at every turn. His daughters, Gina and Maia, are a constant inspiration, as is their nonna, Corinna Salvadori.
Mark would like to acknowledge his wife Jules steadfast refusal to engage with anything that he writes. Perhaps this book may prove the exception.
ERIC LONERGAN
MARK BLYTH
Introduction: from economics to angrynomics
Strong societies can bounce back from a punch in the face. Consider Iceland. If the run up to the financial crisis of 2008 was a party, Iceland was party central. Four Icelandic banks went on a frenzied international expansion and grew their balance sheets (they bought stuff in the hope that it would go up in value) to ten times the size of the economy. When those banks went bust, they took the whole of Iceland’s economy down with them. An epic punch in the face if ever there was one.
They may have been reckless, but Icelandic bankers and their co-workers had brains. When everything crashed, a lot of those brains went home and played video games – it’s dark much of the time in Iceland. And then they hit on something. Online gaming is a global industry that requires a lot of computing power. Computing power makes heat. Heat needs to be cooled. So why not stick the servers for online gaming, Bitcoin mining, and a host of other things, in the ground in Iceland (the clue is in the name), and run the show from there? Which is what they did. Iceland had supportive institutions that didn’t throw unemployed people under a bus, which allowed them to rethink their options and redeploy their capital.
The financial crisis hurt, to be sure, but given those institutions it also encouraged the growth of a whole new set of ideas and innovations that brought the country “most screwed” by the 2008 crisis back to its feet faster than almost all the others. By 2016, Iceland had fully recovered. Wages were higher than before the crisis, unemployment was low, and consumer confidence was high. Tourism was booming, in part because the crisis a decade earlier had crashed their currency, so it was a cheaper place to visit. Ten years later and the crisis seemed like a bad dream. Icelanders had never had it so good.
It
