The Passing of Abe Rotstein a Polanyi pioneer and leading member of the U of Toronto nationalist political economy school: Britain enters deflation

Abe Rotstein one of Canada’s outstanding political economists and a leading founder of the Canadian nationalist school of political economy centred in Toronto  passed away last month at the age of 86. The Globe and Mail had a full page obituary and a large photograph of Abe in his prime as one of the co-authors of the Watkins Report on foreign ownership in Canada.He was a central figure along with Walter Gordon , Mel Watkins and others in the renaissance of Canadian political economy during the Trudeau era. Abe was an outstanding humanist economist who won the respect of many generations of students and analysts and activists.  He was one of the examiners at my Ph.D defense and we had a spirited discussion about issues of interpretation. His questions were thoughtful and probing and I never forgot the encounter. He made a major contribution to economic thought and public political economy in Canada which will live on.My condolences to his family and friends. He was also a Polanyi scholar and strongly influenced by Karl Polanyi’s work.The Globe obituary explores this connection in great detail.

Kari Levitt Polanyi , Polanyi ‘s daughter has had a long and distinguished career at McGill university in Montréal and played a significant role in the revival of Canadian political economy and economic nationalism .

The passing of Rotstein comes at a time when there is a renewed interest in nationalism as a reaction to hyper globalization which has had very negative consequences for workers’s salaries and non wage benefits, inequality and employment security.This was clearly a major factor in the recent British election which will continue to be a hot issue in the years to come. It may well play a role in the upcoming Canadian election also.In Britain the latest inflation data reveals that year to year inflation in Britain April 2014 to April 2015 was actually negative by 0.1 % .

So deflation has happened for the first time in more than fifty years. This deflation is the direct consequence of the severe recession that followed the crash, the anti-Keynesian austerity policies which the British Tories have foolishly adopted and the excessively ready acceptance of hyper globalization which the British economic leadership have embraced.The event has been greeted by key spokespeople and some commentators as posing no serious threat. Time will tell us whether that is actually true. It may turn out to be more than a short term event with more serious consequences for the income earners and the economy than the establishment believes.

It is also once more proof of the proposition which I have been arguing for years namely that quantitative easing which involves temporary greater monetization of the debt through the central bank purchasing more of it does not necessarily lead to inflation. Rather it depends upon the circumstances that prevail in the economy. If a slump is deeply rooted and deflation a tendency QE does not threaten inflation. Friedman and the quantity theory of money is wrong in certain circumstances.


About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in austerity, J.M.Keynes, Milton Friedman and NAIRU, monetary policy, quantitative easing and Keynes, quantity theory of money, U.K. economy and tagged , , . Bookmark the permalink.

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