IT ISN'T SUCH A DISMAL SCIENCE
Mervyn King reveals his
favourite economic reading and sets a poser
FOR Thomas Carlyle, economics was not just 'the dismal science', but 'a dreary, des- olate, and indeed quite abject and distress- ing one . . . which finds the secret of this universe in "supply and demand" '. Senti- ments no doubt shared by many.
Sadly, it is true that the writing, if not the science, of economics has often been dismal. Indeed, as the discipline has become more scientific, the life in the prose has ebbed away. The classics remain. There are few more readable descriptions of a market economy than Adam Smith's An Inquiry into the Nature and the Causes of the Wealth of Nations, first published in 1776, And the case for stable prices was put with more force and passion by Keynes in his Tract on Monetary Reform than by any central banker. Nevertheless, with few exceptions, books on economics have become either specialised monography or are to be found in the how-to-become-rich sections of bookshops in American air- ports. They are rarely written to satisfy a lay reader's intellectual curiosity.
In many ways the absence of accessible yet serious writing on economics is surpris- ing. Newspapers are full of stories about economics. But in the bookshops it is pop- ular science that has flourished, with rising sales and special offers (three for the price of two in one of my local retail chains) of books explaining recent discoveries to the general reader. Both the National Gallery and the Royal Society can fill their lecture halls. Audiences are eager and willing to learn about art and science, but not, it would seem, economics. Has economics run out of new ideas? Is that why there are so few books that explain economic ideas to the general reader?
There is no shortage of suitable subjects. The explanation of why some countries grow rapidly and others remain in poverty is surely no less exciting than recent devel- opments in cosmology. Yet Stephen Hawking's A Brief History of Time remains, more than a decade after publication, at 203 in amazon.co.uk's league table of sales, whereas Peter Jay's recently pub- lished Road to Riches languishes in 1985th position, and that in spite of a companion television series. Moreover, Hawking's book is, to say the least, difficult to follow while Jay's is both accessible and readable.
Perhaps the explanation is that eco- nomics appears too close to our everyday concerns. It lacks the magic and mystery of the origins of the universe or the creation of a great painting. It does not lift our spir- its or expand our horizons. Indeed, in practice one of the contributions of eco- nomics is to bring people down to earth, to cut through fanciful speculation with logic and facts. If economics is the science of everyday life, it is understandable that some of the best writing on the subject is to be found not in treatises but in novels.
So it is to fiction that we turn for eco- nomic insight. Almost all of Balzac's pro- lific output concerned the power of money, inspired in large part by the author's lack of it. Not even the Financial Services Authority could warn investors of the need to manage their personal finances as effectively as Dickens's portrait of Mr Micawber. In Dreiser's great Ameri- can business novel, The Financier, the inti- mate relationship between power and finance first creates and then destroys the wealth of Frank Cowperwood, who ends up in prison. The corrosive consequences of wealth for individuals and families can be seen in Fitzgerald's The Great Gatsby and Mann's Buddenbrooks. At the other end of the spectrum, Zola's Germinal vividly and relentlessly describes the mis- ery and poverty of life in the coal mines.
Non-fiction should not, however, be neglected. And there is much to be said for exploring the shelves of a good library. In the London Library economics books are classified under Miscellaneous Science (Finance) between Fashion and Folklore. There can be found, among many others, Clare's Money Market Primer, Swedish Bul- lionist Controversy, Eight [sic] European Central Banks, The Monetary Policy of Fourteenth-Century Florence, and The Quicksands of the City (a few useful tips here for the Stock Exchange).
My one real discovery in the London Library came four years ago. There on the shelves I found a quite brilliant example of polemical writing from 1933 by James Ramage Jarvie entitled The Old Lady Unveiled. Not one to mince his words, Jarvie goes for the jugular in the opening paragraph:
The objective of this book is to awaken the public to the truth that the Bank of England, commonly believed to be the most disinter- ested and patriotic of the nation's institu- tions, has been since its foundation during the reign of William of Orange a private and long-sustained effort in lucrative mumbo- jumbo.
The book continues in similar vein. It is a devastating critique of the secrecy of the Bank and those who worked for it. In October 1932, in the columns of this maga- zine, Philip Snowden, the former chancel- lor of the exchequer, defended the secrecy of economic policy: 'The relations between the Chancellor and the Governor of the Bank are intimate and confidential. What takes place between us is inviolable as if under the seal of the confessional.' Jarvie was outraged by Snowden's statement. He wrote in response: 'Isn't it damned inso- lence when you think of it? Why the secre- cy? Why the inviolability? . . . Lord Snowden did not retire a day too early.'
Perhaps Jarvie would be more sympa- thetic to the transparency which has become the hallmark of modern central banking. But who was James Ramage Jarvie? He appears to have been air- brushed out of British monetary history. Neither his book nor any record of him can be found in the Bank or in any rele- vant bibliographical source. Does any reader know more about this man whose pen chastised the Bank of England of an earlier era? My own guess is that he was a financial journalist — because of his prose and the fact that the copy in the London Library came from the estate of Lord Riddell, chairman of the News of the World, complete with supportive annotations.
So if you visit a library or bookshop, you will find economics everywhere: among the classics, among fiction of all periods and among the latest offerings from Peter Jay and William Keegan (whose witty 2066 and All That comes with cartoons by Trog). And if the Internet takes your fancy, you might try the draft chapters of Brad DeLong's Economic History of the Twentieth Century — available on his web- site (www.j-bradford-delong.net) — and become an interactive reader. All in all, whether or not you agree with Carlyle, you are not condemned to a dismal read.
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