© The Financial Times Ltd 2016
FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The Financial Times and its journalists are subject to a self-regulation regime under the FT Editorial Code of Practice.
Last updated: April 21, 2012 12:22 am
Inside the Department of Economic Affairs: Samuel Brittan, the Diary of an ‘Irregular’, 1964-66, edited by Roger Middleton, Oxford University Press, RRP£50, 229 pages
Samuel Brittan is well-known to FT readers as an enormously influential writer on the British economy and macroeconomic policy. Few, however, will know that early in his career he had a brief interlude drafted in as an “irregular” civil servant in the short-lived Department of Economic Affairs during the Labour government of the mid-1960s.
The DEA, under the auspices of George Brown, a flamboyant politician who liked a drink, was tasked with preparing a national plan that would produce 4 per cent annual growth over the years to 1970. This book is an edited version of the (illegal) diary Brittan kept during that period.
The DEA’s mission was surely misconceived and its policy space was, inevitably, constrained by the Treasury. In the event, the decision not to devalue sterling in 1964, when Labour returned to office, meant that devising an expansionary programme for the UK economy (based on telling business it should invest on the basis of its projected 4 per cent growth) was sabotaged by the deflationary policies needed to try to keep the pound at $2.80. It was in any case a seriously flawed idea and no substitute for a sensible supply-side policy to address weaknesses in human capital and productivity.
All this was only too apparent to Brittan, whose diary reflects his increasing frustration. He saw devaluation as a necessary condition for ending the “stop-go” policies that impeded growth. His is very much the diary of a “grumpy young man”, and his impatience with the senior politicians of the day comes through repeatedly.
James Callaghan, Edward Heath, Harold Wilson and, of course, George Brown appear as deeply unattractive, economically illiterate individuals whose expertise, if any, is in conning the voters, rather than in running the economy. Brittan’s reflection on the January 1966 Hull North by-election, in which Labour bribed voters with the promise of building the Humber Bridge, seems to sum up his mood at the end of his time at the DEA: namely that “you can fool a lot of the people a lot of the time”.
But is the diary of any great interest to the general reader today? I rather doubt it. There are certainly moments of hilarity – mainly relating to Brown’s serial drunkenness – as well as the occasional striking insight from an astute observer. Among the most notable is Brittan’s prescient observation that the City should realise that its long-term interest is for the economy to move to a floating exchange rate and much greater international capital mobility.
It may also be salutary to reflect that, at a time of fiscal consolidation, an overriding short-term priority can undermine the development of policies conducive to long-term growth.
Nevertheless, the diary is really about those far-off “Keynesian” days when they did things differently. It mainly comprises arcane detail of no relevance to the world of 2012 about the manipulation of aggregate demand or the payments deficit. At best, we learn only about how not to make economic policy.
From the perspective of the serious scholar, however, this is a most valuable resource. The diary’s minutiae will be pored over by historians seeking a better understanding of economic policymaking in the 1960s and of the policy makers themselves.
It is an expertly assembled volume: the diary has been superbly footnoted, and there is a lengthy introductory essay that places Brittan’s account within its historic and economic context. Detailed appendices provide brief biographical notes on the main players, a calendar of events and a real-time view of the evolution of revisions to the balance of payments statistics. This is a book for the academic connoisseur, who will be indebted to the immense skill of its editor, Roger Middleton, as much as to the diarist himself.
Nicholas Crafts is professor of economic history at the University of Warwick
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.