Iain Martin examines Gordon Brown’s confident policies before and after disaster struck and finds them wanting
In a previous life, working on Scottish newspapers, I used to take delivery of the occasional article offered by Gordon Brown. The then Chancellor of the Exchequer or one of his aides would call— on the way to the airport from some important gathering — to check that the copy sent by Stone Age fax or then new-fangled email had arrived.
It had, I responded ruefully. The piece he had written for the opinion pages had most definitely arrived. It was lying there on my desk staring at me. More than a thousand words by Gordon Brown, waiting to be read.
Beyond the Crash is many times longer than the newspaper articles Brown bashed out. Yet even though the main body of his new book comes in at just 242 pages, in theory brief for a work from a recently retired leader, it feels, because of the content, much longer. Anyone who has had to listen to a sermon tinged with politics delivered by a Church of Scotland minister not blessed with an understanding of the importance of brevity will know the feeling.
The concluding chapter of Beyond the Crash — ‘Markets need morals’ — even ends with Brown invoking the lessons he ‘first learned in my father’s church long ago’. Apparently these are timeless values dictating that riches are only of lasting value when they enrich not just some of us but all. He closes with this sentence: ‘These are the values of the peoples of the world. If we fight, we can make them the values of globalisation too.’
Are they the values of the peoples of the world? All of them? Is it is possible for Gordon Brown to know what the peoples of the world want, and arrange for them to have it? Meanwhile, back on planet earth, Beyond the Crash was billed as being Brown’s account of the global financial meltdown. It is perfunctory in that regard, and lacks serious reflection on the deeper causes of the crisis or the part played by policy-makers and their central bankers. They inflated a credit-fuelled asset boom with a seemingly endless flood of cheap money. One of them was Gordon Brown, inspired by his friend Alan Greenspan.
At the root of the reckless boom-time behaviour by bankers and consumers was a very old idea — the notion that ‘it’s different this time’. The world economy was opening up, a technological wave of change equivalent to a second industrial revolution was underway and Western assets were under-priced. With money so cheap and the outlook so positive one would have to be crazy not to borrow as much as possible and join in the fun. Right?
Wrong. In Britain, who was the father of the idea that the good times would not end? Significant blame must attach to the author of the slogan ‘an end to boom and bust’ (strangely a phrase not included in Beyond the Crash).
Brown shows no sign that he has taken any of this on board since he lost the election. For him it is simple. Some of the banks had been terribly bad and he had no idea. Fred Goodwin of RBS, a man he thought he knew, had ‘misled’ Brown. Is it possible that the Chancellor wanted to be misled, as the bloated banking sector generated so much in the way of tax revenues he could throw at the public services? Yes.
Then disaster struck and Brown organised a rescue. The plan for direct recapitalision with the government taking large shares in banks was British in origin and widely copied. Even many of his critics say that the situation was so serious he had no choice other than to organise a bailout of the British banking system, or the cash machines would have stopped working.
Perhaps, but I have two observations. First, the habit of guarantees and bailouts is hard to kick when acquired. Once you’re finished you might wish you had never started. It has spread to the Eurozone crisis, where a punishing ‘rescue’ of Ireland was organised ultimately to save German and other nations’ banks from losses on their bad lending decisions. Bondholders, whose entire business is interpreting risk, also now seem to think they should be guaranteed.
And Brown’s attitude to other people’s money in the crisis was revealing. Many of those involved had moral qualms about using so much of the stuff — borrowing it, printing it — but Brown was inherently comfortable. He is certain he knows how to spend your money better than you do.
The Gordon saved the world theory is also at the centre of Brown at 10. Anthony Seldon and Guy Lodge’s exhaustive account of the Brown premiership is based on a large number of interviews, and the authors have mined good material. Brown’s struggle to create a coherent domestic policy agenda is recounted stylishly. The suggestion is that these failings are redeemed by the bank rescue and Brown’s role in organising the G20 summit featuring President Obama in London in April 2009.
I didn’t buy into the G20 hype at the time, and don’t now. Brown says that after the agreement of a $1 trillion package of measures the ‘world will never quite be the same’. Did it prevent a recession becoming a depression? Brown claims it ensured no repeat of the 1930s. But a much more plausible reason that there was no second depression is that there were engines of growth to help drive the global recovery that were simply not there 80 years ago: China, India and other emerging economies.
After dealing with the banking crisis and the G20 in the first half of Beyond the Crash, Brown moves on. With the world saved, he is impatient to get on with reorganising it. A decade of low growth must be avoided. He has a plan: a global pact for growth and jobs. Mostly, it seems to involve a lot of extra spending, or rather ‘investment’, in infrastructure, training, education and health care. A British audience will find these themes familiar.
What Brown did to Britain he now wants to do to the whole world. He wants to go global. It is almost a religious mission. Sadly for him, although not for the rest of us, he has very few followers, just a handful of economists and East Coast American liberals.
It is said that Brown, unlike Tony Blair, chooses not to wear his religion on his sleeve. That misses the point. Blair’s successor has long been reluctant to talk directly about God, which is not unusual in protestant Scots and even in the Kirk’s ordained ministers. But faith is central with Brown. The origins of his moral superiority complex lie in religion.
Brown has a far more intense vision of how humanity should be ordered than Blair ever had. He burns with moral fervour: for Africa, for ‘global justice’, for the dispossessed and for spending vast sums of other people’s money supposedly for their benefit. If only everyone would just agree to be arranged according to Gordon’s great central organising principle — ‘I know best’ — then life would be so much easier. Truly, this is the word of our Gord.
Iain Martin is Deputy Editor of The Wall Street Journal, Europe.