Bill Mitchell, Professor of Economics at the University of Newcastle, New South Wales, Australia and a notable proponent of Modern Monetary Theory will be speaking during the Joan Muysken Lecture on Monday 6 March 8 PM in the lecture hall at TS53.The great European visionaries in the immediate post World War II period did not desire to put the European economies into a straitjacket of austerity and hardship. Rather they aimed to achieve peacetime prosperity. Europe’s political leaders devised the ‘European Project’ as an ambitious plan for European integration to ensure that there were no more large scale military conflicts fought on continental European soil. The Project began at a time when the advanced nations had embraced a broad Keynesian economic policy consensus with governments committed to sustaining full employment.
Within this broad policy consensus, the discussions about integration were conditioned by Franco-German rivalry, which structured a series of less than effective compromises on the way to monetary union (for example, the Common Agricultural Policy). The 1970 Werner Report and 1977 MacDougall Report both outlined a design for full economic and monetary union based on centralised monetary and fiscal policy with full democratic oversight through the European Parliament. However, the historical and cultural divide between the European nations provided for no agreement.
What eventually brought integration closer was not a diminution in Franco-German national and cultural rivalry but rather a growing homogenisation of the economic debate. The surge in Monetarist thought within macroeconomics in the 1970s, first within the academy, then in policy making and central banking domains, quickly morphed into an insular Groupthink, which trapped policy makers in the thrall of the self regulating, free market myth. The Delors Report and subsequent Maastricht process abandoned what Werner had considered to be essential requirements for successful union and put in its place a neo-liberal dystopia that was doomed to fail from the outset.The Economic and Monetary Union is a flawed design that has failed. There are superior options to the current status quo, even within the common currency arrangement. But if sustainable prosperity is to be achieved then the Eurozone should be dismantled in an orderly fashion and national currencies restored. If such a development cannot be brokered between the Member States, then the superior option for nations such as Italy, Greece, Spain and such is to unilaterally exit the EMU and restore their own sovereignty.
This lecture is organised in cooperation with the School of Business and Economics. The Joan Muysken lecture has been named after Joan Muysken, SBE’s first professor of macroeconomics (1984-2014). He was the founding father of SBE’s department of Economics.