Politics and Economics
- The Role and Limits of Government: Essay in Political Economy by Samuel Brittan
Temple Smith, 280 pp, £8.95, October 1983, ISBN 0 85117 237 7
The political commitment to an active role for government in managing the economy was largely a post-war development – at least in the Anglo-Saxon world. The retreat from that position, to a harder emphasis on the discipline of market forces and on ‘sound’ finance, is even more recent: it set in from about 1968 onwards, gathering pace during the Seventies. Now, in the mid-Eighties, both the feasibility and the desirability of government action to manage the economy are widely doubted. Little seems to be left of the consensus view that prevailed in the golden age of the Fifties and Sixties – of a benign administration actively engaged in promoting economic welfare by ensuring full utilisation of resources, and by appropriate (if, in practice, modest) measures of redistribution towards the needy.
Was the consensus view of the Fifties and Sixties justified? Or are those who, writing from the standpoint of the Eighties, suggest that the idea of economic management was always an illusion nearer the mark? And, whichever side is right, what would be the implications for the future – especially for the future role of government? These are grand questions which are as much political as economic. They are seldom seriously debated: instead we have sterile and technical disputes among academics, often limping along about two years behind the political roller-coaster. From this point of view, Sam Brittan’s book is greatly to be welcomed. It addresses the chief political/economic issues of our time; and as we would expect of one of our foremost economic journalists, it is international, and it is readable. It poses, one might say, all the right questions. It is the suggested answers that many will find contentious and provocative.
The Role and Limits of Government is not primarily a work of exposition, though some of the expository passages, such as that on the origins of the debt crisis, are among the best in the book. It is clearly intended as a work of persuasion: putting forward a set of political and economic views which Brittan believes to be right, and which he wants others to share. Readers seeking a balanced discussion of alternative viewpoints will have to look elsewhere. The style is, at crucial points, assertive rather than analytical. What the book offers is a comprehensive account of where Sam Brittan stands on the role of government and on macroeconomic management, rather than new insights into the issues themselves.
There are, however, reasons why the general reader should be interested in what Brittan’s economic viewpoint amounts to. The first is that he has been almost uniquely close to the issues he is discussing over several decades. Not only has he been in touch, but he has contributed, often importantly, to the emerging consensus among officials and politicians. He was one of the midwives to the birth of monetarist policy attitudes in the UK – though, as the book makes clear, he is far from being a simple monetarist in the Friedmanite mould. The second is that Sam Brittan’s economic world-view is broadly representative of an important strand of political and economic thinking, stemming from Hayek and picking up bits of monetarism and of the thinking of the New Right along the way, which is becoming increasingly influential in much international and domestic policy-making. In Brittan’s case, however, the hard anti-collectivist and ‘sound money’ elements combine with a streak of liberalism and a concern for social justice and the distribution of income. This bitter-sweet combination is interesting: both Left and Right, from their opposite starting-points, need to articulate their response to it.
The book is divided into four sections. Part One, entitled ‘Political Expectations’, is both the most interesting and the least satisfying. In it Brittan addresses general questions such as the proper role of government and markets. There are threads here which underpin his better-known views on macroeconomic policy, expounded in Part Two – ‘How to end the Monetarist Controversy’. (This Section is based on his Hobart Paper of the same title, published by the Institute of Economic Affairs in 1980.) Parts Three and Four, on the world economy and on ‘The British Instance’, are more straightforward but nevertheless filled with provocative assertions and prescriptions. The general line will be familiar enough to readers of his column in the Financial Times.