The Power of Money by Robert Pringle

Author:Robert Pringle
Language: eng
Format: epub
ISBN: 9783030258948
Publisher: Springer International Publishing

‘A Dangerous Distraction’

To do them credit, some central bankers—not however any of the main actors of that time—have admitted that central banks’ focus on price stability had become dangerous. As Mark Carney, Governor of the Bank of England from 2013–2020, said in 2017: ‘…the financial crisis exposed how a healthy focus on price stability became a dangerous distraction.’ He concluded that following victory in the war against inflation during the Great Moderation, they ‘lost the peace’ as vulnerabilities built inexorably (Carney 2017).

Central bankers caught in the scientific mindset had mistakenly set aside the old wisdom about money and markets that previous generations of central bankers gained from experience. Just as the rest of society was becoming more money-centric, central bankers, whose job, everybody assumed, was to pay attention to money, decided to have as little to do with it as possible. One reason was the search for higher social status—their aspiration to be seen as full professionals. But the main factor that betrayed society’s trust was that they were captured by the Dawkins Delusion—a belief in science as the only basis for true knowledge about the world. Economics had the double advantage of pretending to be a respectable science while (in the version of macro-economics embraced by central bankers) also dispensing with the need to pay attention to grubby money and irrational money markets. It was indeed a fatal attraction. Thus, from stressed-out housewives, through the upper middle-class high earners, to economists, journalists, novelists, the educational system, government officials, and business leaders, the Money Delusion had us in its grip (and I include myself). It ruined many ancient professions and once-great businesses. Not the God Delusion, but the Money Delusion was the big threat of the early twenty-first century. It was made yet more dangerous by the capture of the monetary guardians, the central banks, by what I term the Dawkins Delusion, an irrational faith in a modern social science.

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