‘Save the City’, 7 January 2012
‘The Case for Globalisation’, 23 September 2000
‘The Hopeless Continent’, 13 May 2000: ‘Does Africa have some inherent character flaw that keeps it backward and incapable of development?’
‘A Heart-Rending but Necessary War’, 3 November 2001
‘Why War Would Be Justified’, 22 February 2003
‘The Weakened West’, 21 September 2013
‘Putin’s War on the West’, 14 February 2015
This eBook is licensed to Karim Mamdani, [email protected] on 12/02/2019
II
TRANSLATIO IMPERII
This eBook is licensed to Karim Mamdani, [email protected] on 12/02/2019
6
Extreme Centre
In 1914, the Economist had recoiled from war as a crime against economic sense, fatal to the flow of trade and credit that was both the greatest monument to British power and its one true security. Under Geoffrey Crowther, the paper saw the onset of war in 1939 in starkly different terms: less a sin against liberalism than a chance to revive liberalism as an instrument of policy after two frustrating decades of inaction and decline, based on a position he called the ‘extreme centre’.1 Whereas Francis Hirst had plunged the Economist into chaos when he broke with the Liberal government in August 1914, this time its editors acted from the start as advisors and appointees to government, crafting economic battle plans and post-war blueprints, whose shift leftward reflected the altered context of the new conflict. Abroad, Britain had no major allies after France’s fall in June 1940; at home, a coalition drew Labour and Liberal remnants into a Conservative regime, and when international isolation lifted, relief took the shape of alliances with Soviet Russia, followed by Roosevelt’s New Deal America. The need to sustain popular support under these circumstances was correspondingly greater, resulting in the Beveridge Report – a cradle-to-grave welfare scheme, whose publication to widespread acclaim in 1942 underscored the contrast. It would take more than vague promises of ‘a land fit for heroes’ to see Britain through the Second World War.
If two world wars made very different first impressions on the Economist, its proposals on how to pay for each were nevertheless an important bridge between them. Arguments Hartley Withers had advanced in the paper from 1916 – vigorous controls to curb inflation, including high taxes on incomes, profits and luxuries to reduce borrowing, as well as strict supervision of production, consumption and trade – were readily and more rapidly implemented. Taxes covered 54 per cent of spending in 1940–45, as opposed to 32 per cent in 1914–18, with the price level only 30 per cent higher at its end as compared to doubling in the earlier period.2 The impression of lessons learnt had a basis in fact. Whitehall saw the return of the most talented administrators of the earlier war, chief among them Liberals removed from the frontlines of power after it, whose plans for collective security and freer trade had often gone little further in the previous decade than the pages of Walter Layton’s Economist. That changed once Neville Chamberlain made way for Winston Churchill as premier in the crisis of May 1940. Arthur Salter, William Beveridge, Layton and Keynes – between them responsible for shipping, food, munitions, employment and external finance during the First World War, and now largely in academic roles – along with the slightly younger economist Hubert Henderson, all went back to work; indeed, as self-styled ‘ancient warlords’, in September 1939 they were already exhorting the government to proceed with decisive measures of economic mobilization.3
Nor was this influx limited to the long in tooth. Douglas Jay became an assistant secretary under his old editor Layton at the Ministry of Supply, with many other current and former editors, including Geoffrey Crowther himself. The Economist thus came to function as both an arm of the wartime state, and an open line of communication between it and the City of London.4 Nowhere was this dual role more in evidence than in the founding documents of the future welfare state. Not only did Crowther have a hand in the Beveridge Report, as well as its sequel Full Employment and a Free Society in 1944, he shaped the reception to them in financial circles, revealing the aims and strict limits baked into the post-war consensus as the Economist envisioned it.
Geoffrey Crowther Going Up
Crowther sought to transform the Economist, often with singular ruthlessness, so that neither it nor its editor would be easy to ignore in the debates over economic planning that were sure to follow the Second World War. His route to the editor’s chair was familiar: born in 1907 to a middle-class family in Yorkshire, where his father taught agricultural chemistry at the University of Leeds, he was a gifted student, obtaining a scholarship in modern languages to Clare College, Cambridge. In addition to the obligatory stint as president of the Union, he switched to studying economics, for which he gained a double first in 1928; less typically, he also won a Commonwealth Fellowship to Columbia and Yale, where he married law student Margaret Worth, and got to sample work on Wall Street. Keynes, Crowther’s tutor at Cambridge, intervened repeatedly on his behalf after he returned home in 1932 – tipping him for posts as banking advisor to Ireland, and to Layton at the Economist, doing so again six years later when Brendan Bracken asked for Keynes’s advice on a successor there.5
The faith Keynes and Layton placed in Crowther was amply justified over a career of three-odd decades as editor, managing director and chairman. Circulation rocketed, rising from 10,000 in 1938 to 55,000 in 1956. Over that span, the paper itself expanded, with a bevy of talented new journalists from across the political spectrum, among them many women – including Margaret Cruikshank, the editor of the new American Survey, inaugurated in January 1941. The page count roughly doubled, and two redesigns made it more inviting to readers and advertisers. The irreverent managing director Brendan Bracken urged the first of these in 1945: ‘Don’t you think that the lettering of the title of the Economist is more appropriate to an undertaker’s journal than your lively paper?’ ‘I quite agree’, replied Crowther. ‘I am already talking to a typographer. Of course what we really need is a more attractive name, but I suppose nothing can be done about that after 101 years.’6 Finally, as director, Crowther pushed to build a new headquarters, embodying the post-war synthesis he tried to effect intellectually: a bold modern design by avant-garde ‘Team 10’ architects Peter and Alison Smithson, made up of three Brutalist towers clad in Portsmouth stone – located in the London neighbourhood of St. James, a bolt-hole of the British gentlemanly elite, with its clubs, haberdashers, wine merchants, rifle stores, art dealers, and a royal palace. Alison Smithson found her clients ‘very pretentious, as though they were the intellectual cream’, but her design won their praise; Crowther compared the architects to Christopher Wren. As an investment, it returned handsomely. Rents tripled on the site after its completion in 1964, to the point where the Economist could sell it in 2016 to buy the half of the paper from Pearson that its shareholders did not already own.7
What was unusual about Crowther was his personality – sly, sarcastic, pushy – which stands out strongly from that of his shy and diffident predecessor. In photos, he is round with alert beady eyes and a cowlick-wisp of hair. Roland Bird, hired as stock-exchange assistant the same year as Crowther, described his ‘stocky build, with small hands and dominating head’.8 For Hugh Dalton, Labour’s Chancellor of the Exchequer from 1945–47, with whom he rowed ferociously, he was ‘a fat little pig’. Crowther may have been generous to editors but could also hector them, as he did at a dinner party where he enjoined one guest to point out and correct their notable flaws: Roland Bird, deputy business editor, ‘intensely reliable, steady and sound’ but ‘one of those to whom your words on lucidity should be addressed’; Elizabeth Layton, book reviewer, ‘clear and simple but rather slipshod and full of clichés’; Margaret Stewart, trade union correspondent, ‘good reporter but has difficulty in being anything else’; Barbara Ward, foreign affairs, ‘quite brilliant but a certain tendency to go overboard in support of her latest ide
a.’9 Nor was he shy about reminding Layton, now chairman of the Economist, about the services he was rendering it. In 1944 Crowther asked for a raise. ‘I do not aspire to more than reasonable bourgeois comfort. If I could educate my children, have a simple place in the country, do a certain amount of travel, buy the books I want and save something for my old age, I should be quite content.’ But, he quickly added, ‘with twentieth century taxation, this simple catalogue requires a great deal of money.’ He promised not to turn into a ‘Fleet Street prima donna’ or to quit to become a CEO, at least not until he raised annual turnover to £100,000.10 This done, he proceeded to do both – making the incredible demand that the new Economist offices be a tower, so that its top floor could serve as his penthouse; and ceaselessly accepting corporate jobs and directorships, distinguished mainly by the boardroom battles and botched mergers these precipitated.11
Crowther and a Liberal Five-Year Plan
The Economist was to remain Crowther’s cardinal achievement: to understand the outsize role it played under him during and after the war, however, requires a sense of his positions from the pre-war decade, when in response to the political impasse that blocked the way for progressive liberals after the financial crisis of 1931, he developed the idea of the extreme centre.
Crowther had been a lead author on the exemplary manifesto of ‘middle opinion’ in that period, The Next Five Years – an ‘essay in political agreement’, modelled on the Liberal Yellow Book of 1929, but appearing in a context of party fragmentation that by 1935 required a broader tent. To unite Labour, Liberals and Conservatives fed up with or left out of the National Government, it proposed planning (applying the term loosely to appeal to each political group): fiscal stimulus to even out the trade cycle, industrial boards to stoke business consolidation and raise profitability, regulation of natural monopolies in energy and transport as public utilities, and expansion of New Liberal social reforms such as unemployment benefit, old-age pensions and family means testing.12 Crowther wrote the chapter on banking – with fellow Liberals Layton and Salter, and direction from Tory MP Harold Macmillan – that classed it too as a ‘public concern’; defending the private character of the Bank of England and the joint stock banks, Crowther asked for greater transparency from them, in a tacit admission that lack of oversight had led to neglect of domestic for foreign investment.13
The Next Five Years had little impact on the 1935 election, however, in part because its authors had more parti pris than they cared to admit. Since almost all had backed the austerity budget that gave birth to the 1931 coalition government, their contention that economic planning could easily be implemented by it provoked hostile reactions from the bulk of the Labour Party that had refused to follow Ramsay MacDonald, as well as the Conservative-dominated government he fronted, for seeming to side with its most virulently effective critic – still, at this late date, Lloyd George, with his call for a New Deal and an electoral Council of Action.14
Crowther learned from this failure, sharpening the edges of the Next Five Years into something quite distinct from the middle opinion it represented, both in the Economist and in popular works under his name: 1936’s Ways and Means: A Study of the Economic Structure of Great Britain Today, adapted from twelve BBC radio talks, and Economics for Democrats in 1939. In outline the views they espoused were vintage New Liberal: a folksy defence of the City and of the export strategies linked to foreign investment (‘it all sounds very learned, but it is really just the same as schoolboys swapping penknives for conkers’), with claims that both collectivist and capitalist aspirations could be attained via steeper inheritance and income taxes.15 But to these Crowther added two notable departures: a Keynesian argument that savings and investment could fall out of step, and that the state had more direct means than the bank rate to bring them into line, whether as public works or itself ‘lending and borrowing for capital purposes’; and secondly, a sense that, for now, depression in the export industries required a low uniform tariff, alongside development of a capital market for domestic investment of the same high quality as for abroad.16
On the eve of his editorship, then, Crowther had found his way to the ‘extreme centre’, imparting it to the Economist as three enduring characteristics. The first was breezy pragmatism on economic matters: the debate over free trade versus protection was now ‘a religious quarrel’, with ‘the only politically realistic question at this hour’ being ‘what sort of protective tariff a nation like Great Britain should have’.17 The second was smug confidence, distilled in his bons mots, for instance that the first rule of effective journalism was to ‘simplify, then exaggerate’. But this had a deeper meaning in the politics of the age, which convinced him that both the Conservatives and Labour were sinners against economic good sense. The former peddled a ‘new feudalism’ – tariffs abroad plus monopolies at home – which in cases like the British Iron and Steel Federation had combined to raise prices, restrict output and enrich owners (‘Under Conservative rule, the British community is more planned against than planning’); the latter confused profits with large incomes, wanting to tax both to death, when it ought to aim at raising profitability so that wages could rise in line with productivity.18 Liberalism soared above these partisan creeds, surveying a political landscape in which the centre could be extreme. If a vain search for a coalition to carry out its program was an obvious weakness, it was also fundamental to its appeal, with Crowther articulating lofty goals that the hidebound parties could not – ‘efficiency, adaptability, equity’, or a cure for ‘poverty, inequality, irregularity’.19 Finally, there was Atlanticism. Crowther showed a positive enthusiasm for and understanding of America unlike any previous editor, convinced from his student days that the City had as much to learn from Wall Street as British industry from Ford.20
The Economist at War
The tocsin of war was the emergency the middle way had waited for, and helps explain why some of the boldest, most prescriptive economic battle plans came from liberals. When Keynes issued How to Pay for the War in February of 1940, the Economist reviewed it positively, but for once stressed his timidity. A tax on workers (compulsory savings rebranded as deferred pay) and capital levy (in the future) might curb inflation in a fair and orderly way, but would hardly cover a year of expenditure, which Keynes conservatively budgeted at £2.85 billion. Other expedients were available: extensive rationing, industrial controls, interdiction of luxury goods, asking more of the middle class.21 In July 1940, Crowther provided his own assessment in Ways and Means of War, which despite the fall of France, saw a clear path to victory based on ‘more and more of the economic weight of the United States being thrown into the same scale’, and the comparative advantage of the British Empire over Germany in ‘manpower and material’.22 Hayek reviewed this work, calling it a ‘sane and balanced picture of the relative economic strength of the belligerents’, and an uplifting one, for in addition to their developmental lead over the Reich, the British had the weapon of the naval blockade, which set ‘limits to the economic efforts Germany can make’.23
The defeats that followed over the next two years may have pierced the confidence of these early prognostics. But in the atmosphere of wartime London – the Economist edited between air raids and sleepless nights, and in coffee shops after bombs flattened the office near Fleet Street in May 1941 – they also spurred leftwing ambitions. So did the Nazi onslaught on Russia a month later. This drew a great sigh of relief from the Economist, which acknowledged the epic resistance of the Red Army along the Eastern Front – going so far as to hire the Marxist historian and recent revolutionary Isaac Deutscher to interpret this enigmatic new ally for it in 1942.24 A penniless refugee from Poland who had only learnt English after arriving in Britain three years earlier, Deutscher wrote over 650 articles for the paper, most before 1947. In addition to a regular ‘Russia at War’ column, Deutscher’s pieces ranged widely over the Balkans, Greece, Switzerland, France, Finland, Algeria, Libya and Persia; and in 1945, he rep
orted from occupied Germany, where he shared a camp room with the future author of 1984, George Orwell, sensing in him a tendency to persecution mania.25 Deutscher’s first-hand knowledge of Eastern Europe and Soviet Russia – he was sent to Moscow in 1931 as a delegate of the outlawed Polish Communist Party, before being ejected from it for exhorting (with Trotsky) an active line against Hitler – has never been equalled at the Economist (the same is true of the Times, where a similar wartime transformation saw his friend E. H. Carr, ‘the Red Professor of Printing House Square’, promote the idea of a permanent post-war alliance between Britain and the Soviet Union).26
Closer to home, the Economist could also act as a forum for its resident ‘City radical’ Nicholas Davenport, whose Vested Interests or Common Pool? argued that labour and capital were ‘rivals in crime’ – the first for inflationary wage demands, the second for a psychological incapacity to raise output – that the state should bypass. Leasing all capital assets, the state could then pay out rent to owners and wages to workers from a common stock.27 While Davenport’s plan invited ‘cautious scepticism’, the Economist agreed to ‘socialisation of all persons and all property, wherever the war effort requires’.28 Meanwhile, the goal of post-war full employment was already being debated in its pages, with Labour economists Joan Robinson and Thomas Balogh writing to criticize the Economist in October 1942 for preferring private to public investment, and for seeing Keynesian demand management as an alternative to centralized planning and public ownership; without both, they argued, wage inflation and crises of confidence were bound to arise.29
Liberalism at Large Page 27