Political commentary
The politics of economics
Patrick Cosgrave
"Damned dots", Lord Randolph Churchill is said to have called decimal points when he was Chancellor of the Exchequer. For many years the phrase has been quoted as an example of comic ignorance and arrogance on the part of a politician. After all, these were the years — that was the generation — in which politicians and public alike became mesmerised by expertise; and in which Civil Servants and their advisers persuaded a succession of Prime Ministers and Chancellors that political programmes and ambitions had to be tailored to what the gentlemen of the Treasury thought was reality. A very few politicians stood out against the view of the world as rendered by the pupils of Keynes in Great George Street, but most listened patiently and carefully to what they were told. It has made little difference that every single Treasury forecast of British economic performance has been wrong; and that the supposedly independent National Institute of Economic and Social Research has been not just comically, but hilariously, wrong in practically every projection it has made. Even Dr Wyn Godley's recent revelation, that the Treasury commonly makes errors of many millions when doing the nation's sums, has made little impact.
It is against a background, therefore, of virtually unrelieved incompetence that the views of Mr Healey and his advisers — to the effect that inflation will be down to single figures by the end of this year and that economic recovery will "be moving fast, maybe uncomfortably fast, in 1977" — should be judged. The words of the Chancellor's Christmas message, and the phrases in practically every statement he has made since, are uncomfortably reminiscent of all those utterances by Lord (then Mr Anthony) Barber, Mr Peter Walker and Mr Edward Heath about "the problems of success". What is happening, as perhaps only Sir Keith Joseph and Sir Geoffrey Howe among front bench politicians have seen, is a hiccup in the inflationary process. We are approaching a "go" phase in the old business of stop-go; and all the indications are that a reduction in the rate of inflation this year will be followed by another deadly burst in the autumn of 1977. What is extraordinary is that most politicians, and nearly all critics, are unwilling or unable to look that far ahead.
Now, clearly, something deeper and more significant than mere human error is at issue here; and it is that, rather than simple juggling with predictions of national economic performance that I want to consider this week. What has been perhaps the greatest triumph of so-called economic experts — especially in the Civil Service — has been their ability to convince politicians that the nostrums they recommend, and the policies they advocate, are, however imperfect, the only realistic ones. "All right," their message runs, "incomes policies don't really work, and public expenditure should be sharply reduced. But really, you know, because of the unions, or human greed, or something else, incomes policies and high public expenditure are the only possible and realistic methods of governmental economic management." And the figures presented to and used by politicians in the course of the continuing debate about economic policy vary wildly and even drunkenly year by year and even month by month, because they are devised solely in order to meet the exigencies of a given situation.
And the extraordinary thing about this whole wretched business is the uncritical reception accorded to each new prediction. How many commentators, for example, listening to Mr Healey's latest projections, recall that it was this man who claimed, in October of 1974, that inflation was running at an annual rate of just over eight per cent? The incredible thing about that prediction was not that it was so evidently wrong, nor that the Chancellor cynically abused his authority to use the figure to make a political point, but that he actually believed it.
When all is said and done one cannot, of course, blame either Civil Servants or outside experts for getting everything back to front, as long as politicians attend so slavishly to their soothsaying. After all, the mandate provided by means of the ballot box gives a politician an undisputed authority to govern: it makes him the man in charge. And if he gets things wrong, if he does not trust his own judgement, but relies on supposedly neutral analyses of the situation he confronts, then the fault is his own. The major fact which historians will want to consider about British politics in the last generation is the extent to which politicians have been unwilling to trust themselves and to which they have been willing to accept the views of non-experts about what is or is not politically possible. When the magazine the Banker runs, as it did this month, a leading article called "Is an economic policy possible?" its editor is expressing a wholly justifiable
Spectato' ry 24, i76 unwillingness to believe that, Jiannuthaem0n: ahead, "political leaders or their advisers . • • are prepared to withstand short term pressures to repeat earlier mistakes." If there is one vice more marked than others in recent British political leaders it is their adherence to the doctrine of political unacceptability, according to which a minister or senior spokesman, while saying in private that such and such should be done, will decline either to do the thing, or say in public that it ought to be done because he imagines that it will he unacceptable to the public. The most striking example of the influence of the doctrine of unacceptability in the last few years was °le willingness of the Heath government te jettison the whole of a carefully considered economic policy because a relatively low level of unemployment was considered to be politically unacceptable. All those bright hopes for the future of the country so eloquentlY expressed by Mr Heath at the first conference after his 1970 electoral triunaPh‘ were tossed aside because of a number 01 statistics on unemployment, statistics since shown by Sir Keith Joseph and the Institute of Economic Affairs to be of doubtful validitY. More, as the Banker 'puts it, it must be understood "that Britain's present econonlic depression and concomitant political dangers are the consequence of the excessively rapi° boom in 1972-4." So, when Mr Healey suggests that recovery may be moving "uncomfortahlY fast" in 1977 — suggesting his willingness te encourage an exactly similar kind of boonl — we have just cause to shiver. The curious thing about all this is the willingness of politicians to operate within af particularly short term. After all, the amount 0' time it takes for an apparently unpalatahl! political statement to be accepted as a truisrn,"s not very long. When, in 1974 Sir Keith Joserit: speaking at Preston, argued for a tight monetary policy whatever the consequeneesf for the unemployment statistics (thoue, ° course, he also suggested that these statistics were misleading) many of his friends as well as his enemies shouted from the rooftops that he, was adopting a suicidal political position. ye' here we are, less than 'two years later, celebrating his prognostications and diagnosis as the most self-evident of orthodoxies. As he showed in a fine speech last week, moreover, Sir Keith now enjoys so much authority as a practising political philosopher that he can ring. the changes on his own message, and conaPel other politicians to define their own views in reference to himself. I do not know the motive behind Mr Peter Walker's weekend speech ons economic doctrine — it may well have been, a „ some Tory loyalists believe, an expressmioonoe dissatisfaction at his continued exclusion from the Shadow Cabinet — but when called upon t0
. defend his views Mr Walker anxiously insisted that they were merely a variation on what Sir , Keith Joseph had been saying. That is not, course, true; but it is significant that Mr Walker! , ,
took that particular tactical line. And where nowadays, is Mr Michael Foot, who declaimed most loudly that Sir Keith's Preston speech Was not cnaoltsirmuipnloyupsolitically unacceptable, but pot
ly i ly i should The message is that politicians seoe„
their business as being the proclamation their own understanding about the state of the nation, unhindered and unhampered either Tb_ Y so-called experts or by their own fears. he political reward for telling the truth, th°Ltlogn often delayed, is substantial and, having id tohffei et re ui ts hc ionnos ipdpeor saibt oy ne, nohnae' s nc me do oritY
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