Yesterday I heard Robert Peston being interviewed by Eddie Mair about his new book, How Do We Fix This Mess? Peston explained that Britain and the rest of the consuming nations had lived beyond their means for a decade or more and would have to learn how to compete in the global economy again. The recovery would therefore take ages and be very painful.
All very sensible sounding, and pretty much in line with the financial-economic establishment’s conventional wisdom, from the Bank of England down. The trouble is, it doesn’t bear a moment’s scrutiny. The West didn’t run up most of its debts to buy flat screen televisions and cheap t-shirts. It borrowed to pay for housing in the middle of a property bubble. And it didn’t borrow the money from China, either. The banks lent it into existence. Our guilt about consumption is being exploited to make a political project more plausible.
It is a relief, therefore, that Myriad Editions are about to publish Robin Ramsay’s Well, How Did We Get Here? A Brief History of the British Economy, Minus the Wishful Thinking. In it, Ramsay, the editor of the legendary magazine Lobster, explains how British political economy actually works, in around 10,000 words. He traces the breakdown of the postwar consensus, Wilson and Heath’s failed attempts at fundamental reform, Thatcher’s all too successful vandalism and Labour’s surrender to the Bank of England / City / Treasury agenda in the 1990s.
If you are heading to the Labour conference, or if you’ve just had enough of plausible evasions from the likes of Peston and want to find out how we got into our current predicament, then you’ll want to read Well, How Did We Here? when I publish it over the weekend.