Political commentary
The Charge of the 364+1
Ferdinand Mount
Three hundred and sixty-four is an awful lot of economists. You cannot help admiring the heroic scale of the manoeuvre. Imagine receiving the request to sign the letter to Mrs Thatcher condemning her economic policies . . . the Cambridge postmark . .
already the shadow of Lord Keynes implores you to stand up and be counted, . .
the covering note from Professor Hahn and Professor Neild: 'for the sake of the country and the profession, it is time we all spoke up.' Oh to be part of that 'we'. . . .
Alas, the reception of the great roundrobinson can only be described as humiliat ing. Instead of being treated as serious political ammunition like the bulletin of some uppity stockbroker, the gallant 364 were greeted with a volley of stink-bombs. Most wounding of all, not a single Labour MP bothered even to mention them. In fact, it was a Tory diehard, Sir Anthony Kershaw, who offered them up as cannon fodder to Mrs Thatcher. The Charge of the Light Brigade suffered only minor casualties by comparison. This debacle is certainly not due to abounding public confidence in Mrs Thatcher or her policies. It is due to the low standing of the economist's profession. Dismal? Yes. Science? Well, most people have begun to have their doubts.
Take the opening sentence: 'We . are convinced that . . . there is no basis ,in economic theory or supporting evidence for the government's belief that . . .' Specious already. So long as there are some recognised economists who argue that the government's belief is not entirely wrong, then that belief must have some basis in their economic theory. The only alternative is to deny that Hayek, Friedman, Walters, Brittan, Budd et al are economists at all and to • assert that there is only one 'economic theory', to wit, the 364 variety.
The 364 go on to prophesy that 'present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.' And very nasty tog. Now these prophecies clearly depend on highly contentious economic assumptions. Is an industrial base something fixed?Does raising taxes depress economic activity more than lowering interest rates animates it? But they also depend on equally contentious political assumptions about how people will react to the predicted hardships, about popular allegiance and obedience to authority.
What the 364 aretryingto do is to bolster up these audacious predictions with a profes iional authority which we simple folk are iupposed to accept as scientific like elementary chemistry is scientific.
Thit authority-boosting is a tricky busi ness. It has to combine the air of certainty with a 'measure of low cunning to allow for accidents. Mr Roger Opie of New College, Oxford, who somehow rather uncharacteristically got left out of the 364, hastened in a letter to The Times to line up with the 'we' and to emphasise that: 'Inflation . will accelerate again when costs rise. That will certainly happen when demand rises unless we are very lucky.'
A superb example of Keynesian kerb drill, this, and one to be borne in mind by all attempting their 0-level in Prophetics.
Historians date its invention at around 999 AD: 'The world will certainly come to an end on 23 April next year, unless we are very lucky.' Note the brilliant use of 'lucky' as a get-out adjective. If we are spared, it will not be because Prophet was wrong and the scoffers were right, it will be an act .of God, which Prophet could not have been expected to foresee.
Prophet should never allow his denunciation of error to go out in pale, pseudo objective form. It should always be couched in violent moralistic language (see Marx K. and Foot M., both passim). Thus Mr Opie abuses monetarism as not just 'nonsense' but 'wicked nonsense'. Ingeniously, to make up for having been at best the 365th economist to denounce Mrs Thatcher, he accuses the other 364 of 'treason' for having failed to strangle the said wicked nonsense at birth. This is another fine pre-emptive piece of rhetoric, taking it for granted that they could have strangled monetarism effortlessly if only they had bothered.
Here Mr Opie reflects a genuine puzzlement shared by most Keynesians. How is it that monetarism ever got going at all? The vast majority of academics have indeed stayed loyal to Keynes. It is among flighty politicians, City men and journalists that the new (or revived) faith has found most of its converts and not so very many of them at that. These converts were naturally almost all brought up by sound Keynesian tutors. Whatever they have learnt or mislearnt since, they have learnt in the school of experience 'not a school we recommend for our first-class men', as an old Oxford tutor used to say.
Now we could turn the question the other way round. Why have most academic economists remained so unmoved by the shattering experiences of the last seven or eight years? Governments crash, inflation whooshes up to annual rates of 20 and 30 per cent, unemployment steadily climbs. Yet still the 364+1 continue to argue that the sort of policies they espoused when in Whitehall are the best available. They may disagree about the precise form of incomes policy to be adopted, or about imPort controls, or about how far the government can keep down the value of the I by sitting on it as upon an overfilled suitcase. But 1.11 general they are all agreed that deflation Is bad and reflation good, even if it is sometimes hard to tell apart from inflation' But all this is just what British politicians have been obediently doing for the past 30 years. And here we are. Surely, it is time f°1 a tiny re-think, even if only for the look of the thing. I think there are several reasons why the 364+1 are so reluctant to re-examine their old workings. If you have invested 20 or 30 years of your life in one line of business, it is always hard to adapt. But perhaps most important is that Keynesian economics is more fun. It is no accident that economists should have been most in demand in the Keynesian decades of the Fifties and Sixties, nor that the new universities founded in those years Lan' caster, East Anglia, Warwick, York should be so well represented among die 364. That intake of academic economists now aged 35-45 shared the ambitions of those now aged 65-75, but they were even more confident in the capacity of economists to run the world better than so-called practical men who, as we all know, were onlythe, slaves of some great economist who haul passed over from the medium term into the Long Run. The 364+1 are experiencing the It drawal symptoms of power with an especial' ly painful intensity. Not merely has the accident of a Thatcher government ternign..; arily robbed them of access to the levers e' power (that's not so bad, we all have our ins and outs), but the fashion for monetariscti econoniics aims to restrict the scope all influence of all economists. No more fine-tuning. No more delicately nudging the £ this way and that. No more ingenious strategies for investment or ek pansion. Only the dreary and devilishlY difficult business of tracking down the pettY cash. One can only salute the courage of the 364+1 364+1 and condole with them on tue slowness of the postal deliveries these daY.s. A couple of weeks earlier, immediatelY after the Budget, and they would have hit a, government in a shaky state, ready to hea lY lY the worst. But now morale has mysterions perked up; the City smiles; even the doubters in the Cabinet seem willing to sit quiet and wait to see how things go„ All this will no doubt make the Keyll'(.. sians crosser still. But they have only 'diet intellectual bad manners to blame for thol.'r fall from greatness. It is as much thel,, refusal to go back to their own first principles and re-argue their case o the persuasiveness of Hayek or Ftiedld which has estranged public attention. And even if their direst warnings should coin: true-which I rather doubt their arrogan will have cost them the right to say you so'.
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