This is not an obituary. Samuel Brittan is alive, well and still publishing vigorously at the age of 71 to the joy of his friends and admirers, among whom I thankfully number myself, and to the enlightenment of his contemporaries. Nonetheless, when a man publishes what the frontispiece acknowledges as his 12th book (though my bookshelves make it his 18th) in the year in which he will pass the 50th anniversary of his first recruitment by the Financial Times, where his fortnightly column still appears, it is hard to resist a lifetime perspective. That life can be seen as a quest for the definitive statement of the author’s political and economic philosophy.
In that sense the subject of almost all of his books is the same: how should human societies organise themselves so as to reconcile most successfully the apparently competing claims of individual freedom, fairness between individuals and - least important - efficiency and success in creating wealth and security. Brittan wrestles, physically and perpetually one sometimes feels, with these puzzles like a latter-day Laocoon cast into a terrible pit where liberty, justice and community have assumed the shape of gigantic snakes who seek to engulf our hero in their toils.
Yet, in the end, one begins to believe that it is the snakes who will tire first, exhausted and tamed by Brittan’s relentless struggles and dazzled by his unblinking lucidity. When long, long ago I found myself cast briefly in the role of a supposed professional rival or competitor of his (as economics editor of The Times) I used to despair of the contest, haunted by the spectre in my imagination of Brittan endlessly at work, morning, noon and night, reading, reading, reading, while I tried ineffectually to reconcile the demands of work and family life.
This was, of course, self-serving self-pity. For it was not any extra hours of the day vouchsafed to the confirmed bachelor that explained his pre-eminence in our field, but the power of his mind, the inexhaustible freshness of his curiosity and the flashing penetration of his pen.
Already, but a few sentences into this essay, my old neuroses begin to twitch, as I sense in the mind’s ear Brittan’s gentle and pained, but well-aimed, rebukes for my inaccurate paraphrasing of his thought. I recall him ticking me off in the sweetest possible tones for my rapturous review of the second edition (in 1969) of his first and most famous book The Treasury Under the Tories, retitled Steering the Economy: The British Experiment. I had obviously failed to notice the radically different thesis of the new book, although the full consummation of what he later called “my own U-turn” away from “unreconstructed Keynesian demand management” had to wait until the final edition of the volume in 1971.
But, not content with rebuking me, he vented his annoyance at the comparable failure of the wider world to recognise the change by penning, in The Banker magazine, an aggressive pseudonymous attack on himself for the inconsistencies between the two editions. This gave me the opportunity, having been privileged by him to penetrate the disguise of the reviewer “A. Shepherd”, to insert into The Times diary a series of stories about Alaric Shepherd and his keenly awaited Monetary History of the UK, a fiction that shamefully abused the trust of The Times’ readers.
The snake in whose coils Brittan most nearly succumbed was the snake of his own brilliant success as a blow-by-blow economics commentator, which reached its first apotheosis in the runaway success - and unsurpassed by his later books - of The Treasury Under the Tories. It threatened to typecast him as what he did not want to be, or at least did not want only, mainly or forever to be.
His problem was that he was phenomenally good both as an investigative reporter and as an explainer of what was really going on in the murky and little-known or understood world of the Treasury’s intensely secretive economic policy-making. This was a time when short-term economic management dominated all political discussion, and when media coverage of such matters was divided between political and “City” correspondents, who competed with each other only in their fathomless innocence of all macroeconomic reasoning.
This was almost 20 years before Gavyn Davies arrived at Goldman Sachs and 30 years before Andrew Dilnott transfigured the Institute for Fiscal Studies (IFS). Indeed, the IFS did not exist. Nor did City economists, who were certainly invisible and inaudible. Banks and brokers published no hourly, nor daily, nor weekly commentary on economic conjuncture. Even quarterly publications were rare; and the National Institute of Economic and Social Research’s Review was unique in tackling macro-issues professionally and head-on.
Into this vacuum entered, with whirlwind energy and terrier tenacity, the young Samuel Brittan with his Cambridge First in economics. In Gordon Newton at the Financial Times and David Astor at The Observer he found two editors who, in their different ways, gave him the encouragement and the freedom to develop, as he largely did, a new branch of journalism based on macroeconomics allied to a formidable ability to generate front-page stories as well as analyses.
Very rapidly, those in Westminster, Whitehall and the City who would today rely on regular briefings from Goldman Sachs, the IFS, the big banks, dozens of newsletters and a thousand website databases came to rely on Brittan - and gradually a growing band of imitators - for their primary knowledge and understanding of budgets, economic crises, crisis “measures”, devaluations and suchlike, which in turn seemed to dictate the rise and fall of governments, to say nothing of businesses great and small. This was heady stuff; and Brittan, in his field, tasted the sweets of super-stardom.
But it was not in his nature, ever contrary, to go with the flow too far in that direction. His second (and still favourite) book, Left or Right: The Bogus Dilemma, had in 1968 already proclaimed his intense interest in political philosophy and in the question that dogged much of the rest of his life, both intellectually and emotionally. That question was why people wanted to treat his libertarian and anti-establishment belief in competitive market forces, which challenge vested interests and make financial power accountable to a wider economic democracy, as “rightwing” - and Brittan himself with it. For Brittan these views flow from the same moral fountain as his antiwar reflexes, his sympathy for the downtrodden, oppressed and impoverished, his horror of savage punishments, his preference for mercy over “justice”, his detestation of conformity and his abhorrence of any form of nationalism (unless it be the nationalism of small states trying to escape the oppression of the big bully next door).
It is not, of course, entirely surprising in an age dominated by mindless political slogans that ingenue “researchers” and fixers on current affairs programmes should pigeon-hole a leading advocate of markets and their benign potential as towards the right in a political spectrum that associates markets with capitalism and opposes capitalism with socialism. Even greater economists than Brittan - one thinks of Keynes and James Meade - have suffered, if that is the word, from the failure of Marxists to recognise the democratising force of free and competitive markets and therefore to see such thinkers as their allies in the struggle against concentrated and anti-social economic power.
That problem grew worse in the 1980s. Margaret Thatcher’s class war on behalf of the petite bourgeoisie polarised society and political debate. Nigel Lawson - the true author of “Thatcherism” - seized the opportunity to advance liberal economic ideas. And so the perceptions that Brittan was an intellectual progenitor of something called “monetarism” (which as far as the political classes were concerned was all mixed up with privatisation, bashing the unions, rolling back the frontiers of the state, cutting top taxes, duffing up the Argentines and anything else with which Thatcher’s name might be transiently linked). That he also worked for the FT, seen as the house mag of the arch capitalists in the City, and was Lawson’s friend and occasional adviser, were enough to tar him more darkly than before as a man of the right.
This was a calumny on stilts. Few wish to be called rightwing. But Brittan could not be so. That his mind is an open book is almost literally true - somewhere between 12 and 18 open books. He has not a genuinely rightwing atom in his body. His role in “monetarism” was important, but had nothing whatever to do with political opinions left or right. He happened, prompted by Professor Charles Goodhart, to read Professor Milton Friedman’s seminal presidential address to the American Economic Association in 1967 somewhat sooner than any other prominent commentator in Britain at that time and to expound it to the lay British audience.
It contained the “thunderbolt” thought that the Phillips curve (the supposed trade-off between inflation and unemployment) is vertical; that is, that however high inflation goes unemployment will in the long term always be the same - and therefore all attempts to achieve full employment by fiscal and/or monetary demand management were doomed. The price of any unemployment below the “natural” level set by the structure of the labour market could only lead, not as postwar British policy had supposed, to faster but possibly acceptable inflation, but to geometrically accelerating inflation, a self-evidently unacceptable consequence. The recognition of this truth transformed British economic policy-making over the next 10 years, chiefly under a Labour government. Brittan’s role in this was central. He changed the intellectual climate by the power, lucidity and topicality of his writing.
The highly prolific Professor Friedman’s name was, however, associated with many other economic and indeed political ideas (including his emphasis on the over-supply of money as a cause of inflation, from which the term “monetarism” came, but with which Brittan was never deeply taken). Some of these ideas - not including the money supply thesis, but possibly including economic advice to Chile’s General Pinochet - could meaningfully be located towards the right of the political spectrum. This combination of circumstances bamboozled contemporary British political writers - already paralysed by their fear of having to use numbers to handle economic ideas - into the supposition that Brittan was a “monetarist” and therefore a rightwing beast.
Brittan’s true natural political reflexes are vividly exhibited in his new book, Against the Flow: “Two kinds of anti-individualists come together in their advocacy of a year or two of compulsory national service to knock some patriotism and civil virtue into the American young... Another tell-tale symptom is propaganda for so-called Asian values and admiration for the Singaporean leader Lee Kuan Yew, who justifies his brutal punishments by saying ‘To us in Asia, an individual is an ant.’”
Brittan asks, are British Conservatives any more tolerant? “Almost every increase in personal liberty and toleration, from the legalisation of homosexuality among consenting adults to the abolition of theatre censorship and more sensible divorce laws, has been brought about in the face of opposition from the majority of Conservative MPs and activists. In nearly every country the political right (with a few honourable individual exceptions) is adamantly opposed to any re-examination of the drug laws which have done so much to make money-laundering one of the world’s biggest businesses.”
If there is any philosophical core to the right/left dichotomy in politics, it lies precisely in the difference between the dispositions to prefer justice or mercy, retribution or deterrence, nation or the individual, order or freedom, control or liberty, conformity or diversity, to be an insider or an outsider, to exclude outsiders or to include them, to admire the winner or to sympathise with the loser, to gawp at the rich or to befriend the poor, to regard a stranger as a threat or as a potential friend, to fear change or to seek it. Of course there are cases that cut across this simple catechism: is putting solidarity with the team ahead of individual convenience leftwing because it is unselfish, or rightwing because it subordinates the individual? Does it make a difference if the team is the nation, the school, the company, the union, the club or the parish - or indeed the family? What about equality and what about redistributive social programmes?
Brittan sails through these tests in the sense that his reflexes in the first list are entirely to the left (so defined) and his discussion of the dilemmas in the second list is consistently profound, humane and lacking in dogma.
But we must return to the economics. It is typical that in the new volume Brittan is challenging the conventional wisdom of current economic management with as much freshness and recalcitrance as he once applied to the dismal agonies of Chancellors such as Selwyn Lloyd and Tony Barber. Only missing now is the intense official disapproval that attended his refusal 40 years ago to accept that £1 did, should, must always and most certainly would always equal $2.80, since when its market price has fluctuated between $2.81 and just over $1.
It is, incidentally, good to see in his latest book that his passionate hostility to fixed exchange rates almost anywhere at almost any time - spelt out most persuasively in his third book, The Price of Economic Freedom (1970), - is restored to its rightful place in his pantheon of economic ideas. This is notwithstanding the ample digressions taken over the decades by his restless spirit of inquiry.
This new refusal to conform extends to the present - his perennial search for what has been variously thought of as a compass, an anchor, a lodestar, an autopilot and a framework for short-term economic policy, concerned with inflation and the stop/go business cycle. Those of us who have travelled alongside him for much of these 40-odd years may be tempted at last to relax, and to be impressed by the record of the 13 miraculous years since Britain abandoned its last flirtation with the anathema, as I see it, of fixed exchange rates. Since Mervyn King, from his vantage point in the Bank of England, became the prime mover of a strategy based on gearing policy, essentially monetary policy, to publicly stated targets for inflation, we have felt the temptation to complacency and so even to dream of living happily ever after.
Since that happy hour in 1992 just about everything that Brittan and I set forth in the 1960s and 1970s as the goals of any successful policy - stable prices, sustainable external balances, smoother business cycles, high employment and peaceful labour markets - has been achieved, and in combination, as we judge these things today. We would then, of course, have been shocked at the idea of unemployment at almost 4 per cent, regarding anything above half of that as both a moral outrage and a political impossibility.
And that difference may be a big part of why nothing worked then and everything works now. Or so it seemed, not just to me, but to Sir Alan Budd when last autumn he implied that we might have reached the end of economic history (though the phrase, used sarcastically, was that of Lord Lamont, used recently at the LSE and quoted by Brittan in remarks last month at the Political Economy Club). No such complacency has found a foothold in Brittan’s septuagenarian mind. It could, he thinks, easily go wrong in a variety of ways. The most important of these is a possible disconnection between the course of inflation, to which policy is officially and in fact targeted, and the fluctuations of the real economy around some supposed non-inflationary mean, close to which the Bank’s Monetary Policy Committee (MPC) endeavours to steer a safe course.
A slump without falling consumer prices might, Brittan argues, require official corrective action. This would not necessarily be forthcoming from the MPC, either because the inflation prospect did not require it or because the kind of action available to the MPC, for example zero interest rates, was not sufficient to the needs of the situation. The economic sin against the Holy Ghost of heavy government deficit spending financed by the central bank might be required; and this ugly situation, Brittan speculates, could be triggered by a boom-bust collapse of some major category of asset prices. An example would be my own prognostication a year ago of a possible 50 per cent crash in house prices over the next two or three years, which now seems to me firmly on track in spite of all the huffing and puffing of those whose interests oblige them daily to pretend that all will somehow end well.
The difference between now and then, however, is that now one has to work quite hard to generate these hypothetical possibilities of macroeconomic adversity (not just a busted house price bubble). Whereas when Brittan and I were occupying broadsheet front pages with this sort of stuff, the horrors were actual, frequent and in the real economic life of the nation. It was the world of stable prices, boring economic news and independence from frontline politics that was only in our dreams.
Now Mervyn King presides in Threadneedle Street. Then, as Brittan himself wrote in Capitalism with a Human Face, “the sound-money men were too shocked by the very idea of inflation to go further into the matter” - a sentence surely worthy of Keynes himself. It is a different world, though history, including economic history, will continue.
Peter Jay was for more than 20 years economics editor of The Times and later of the BBC. He is a non-executive director of the Bank of England.
Against the Flow
by Samuel Brittan
Atlantic Books £25, 385 pages
