Liberalism at Large

by Alexander Zevin

  42.‘The Unacknowledged Giant’, 17 June 2010.

  43.‘The Next Ages of Man’, 24 December 1988.

  44.Norman Macrae, The London Capital Market, Its Structure, Strains, and Management, London 1955; Macrae, To Let?: A Study of the Expedient Pledge on Rents Included in the Conservative Election Manifesto in October, London 1959; Macrae, Sunshades in October: An Analysis of the Main Mistakes in British Economic Policy Since the Mid Nineteen-fifties, London 1963; Macrae, Homes for the People, London 1967; Macrae, The Neurotic Trillionaire; A Survey of Mr. Nixon’s America, New York 1970; Macrae, The 2025 Report: A Concise History of the Future, 1975–2025, New York 1984; Macrae, The Hobart Century, London 1984; Macrae, John von Neumann: The Scientific Genius Who Pioneered the Modern Computer, Game Theory, Nuclear Deterrence, and Much More, Providence, RI 1999.

  45.‘The Unacknowledged Giant’, 17 June 2010.

  46.‘The Risen Sun’, 27 May 1967; ‘Consider Japan’, 1 September 1962.

  47.‘Consider Japan’, 1 September 1962.

  48.‘The Risen Sun’, 27 May 1967.

  49.‘The Pacific Century’, 4 January 1975.

  50.‘The German Lesson,’ 15 October 1966.

  51.‘De-socialize production, socialize markets’, was the slogan Macrae used to describe the competitive principle he thought would – always with the help of computers – lead not only to more efficient services, but ones that could better serve poorer regions by offering salary incentives – for example, to teachers to teach there – practices blocked by the trade unions: ‘The People We Have Become’, 28 April 1973.

  52.‘The Risen Sun’, 27 May 1967. The ‘burying’ of the Department of Economic Affairs and George Brown’s 1965 National Plan was another black mark for the civil service: ‘The People We Have Become’.

  53.‘Experience in state welfare has influenced academic thinking and public policy in America more than in Britain’, lamented Seldon, who cited Milton Friedman and Edward Banfield as cases of the former, Senator Daniel Moynihan of the latter: ‘Letters’, 12 May 1973. See Keith Tribe, ‘Liberalism and Neoliberalism in Britain, 1930–1980’, in The Road from Mount Pèlerin, eds. Philip Mirowski and Dieter Plehwe, Cambridge 2009, p. 89.

  54.Eurocurrency markets undermined the Bretton Woods system, since they operated without reference to the official, gold-backed value of the US dollar. For the competitive deregulatory pressures they exerted on policymakers, and their role in the formation of a transatlantic ‘City-Bank-Treasury’ – ‘Federal Reserve-Wall Street-Treasury’ nexus, see J. Green, ‘Anglo-American Development, the Euromarkets, and the Deeper Origins of Neoliberal Deregulation’, Review of International Studies, July 2016, pp. 9–14; Eric Helleiner, States and the Reemergence of Global Finance, From Bretton Woods to the 1990s, Ithaca 1994, pp. 15–16. For the slow ‘divorce’ between the City and sterling, in favour of alternative strategies after 1967, see Gary Burn, The Re-Emergence of Global Finance, London 2006, pp. 93–98, 184–85. In 1958 the Economist welcomed the policy of full convertibility of non-residents’ sterling accounts into dollars, and initiated a debate on the implications of further exchange liberalization with Roy Harrod, Thomas Balogh and other leading Keynesian economists. ‘Letters’, 4 January 1958, 29 March 1958; ‘Convertibility?’, 27 September 1958.

  55.‘Float Free and Low’, ‘Floating into Europe’, ‘Floating the Humpty Dumpty Commonwealth’, 1 July 1972. Banking in this broad sense might even supplant the ‘rigid’ multinational corporation: ‘The People We Have Become’, 28 April 1973.

  56.The City was less dependent on the global standing of sterling than before: world reserves of sterling were declining along with its role in trade, and there was little fresh borrowing from commonwealth countries. Marjorie Deane, Sarah Hogg, Pat Norton, Dudley Fishburn, Stephen Milligan and Alan Parker contributed alongside Macrae. Andrew Knight, Britain into Europe, pp. 14, 16, 17.

  57.Ibid., pp. 14, 16, 17. The merchant banker Siegmund Warburg, Crowther’s confidant, was an early promoter of the turn towards Eurodollar and Eurobond markets. He built his case precisely on the role the City could play in European integration, liberalizing and linking currency and capital markets as a prelude to Britain joining – and leading – the common market, with the support of the US. Ferguson: High Financier, pp. 208–13.

  58.‘The Neurotic Trillionaire’, 10 May 1969. The Economist supported Johnson’s Great Society (‘Richer for Poorer’, 15 August 1964), and reiterated that in the case of the US, it was possible to produce guns and butter at the same time. ‘The war is costing $25,000 million a year; but that is only about half of what the Americans will be adding to their gross national product … the United States can fight the Vietnam war and go on raising its standard of living at the same time. That is the measure of its economic power’: ‘The Impatient Ones’, 19 August 1967.

  59.‘The Neurotic Trillionaire’, 10 May 1969.

  60.Ibid.

  61.Watergate received ample news coverage, but there was no editorial censure of the president, with whom it shared so much, from law and order to foreign policy. ‘Watergate affair apart, the Nixon Administration is applying itself with increasing confidence to America’s responsibilities in the world’: ‘The Ideas of Gerald Ford’, 26 January 1973.

  62.Macrae guessed this could mean big business for the City, as the leading market in foreign exchange. ‘Come on, it’s Fine’, 21 August 1973.

  63.Robert Brenner, The Economics of Global Turbulence: The Advanced Capitalist Economies from Long Boom to Long Downturn, 1945–2005, London 2006, pp. 99–101, 122–29; Giovanni Arrighi, ‘The World Economy and the Cold War, 1970–1990,’ in Cambridge History of the Cold War, eds. Leffler and Westad, Vol III, pp. 26–31; Barry Eichengreen, Globalizing Capital, Princeton 1996, pp. 128–35.

  64.Hirsch was Economist finance editor from 1963 to 1966, and wrote for it earlier while also at the Banker. A socialist, he sometimes wrote letters to the editor as Fred Stag (the translation of Hirsch from German) – notably in response to the Economist’s savage review of John Kenneth Galbraith’s critique of mid-twentieth century capitalism, The Affluent Society, in 1958. ‘The unchallenged absurdities of advanced economics cited by Professor Galbraith’, Hirsch wrote, ‘stem from an attitude of mind which begins to become dangerous at quite a modest level of affluence. Perhaps the level at which the cream of a country’s brains begins to be sucked into its advertising agencies’: 20–27 September 1958. Hirsch quit shortly after the arrival of Burnet. But his time at the Economist shaped his critical appraisal of politics, society and economics in Britain. In 1965 he took detailed notes for a book to be titled Is Leftwing Government Possible?, and published The Pound Sterling: A Polemic; after he left, he developed themes from his defence of Galbraith in Newspaper Money: Fleet Street and the Search for the Affluent Reader with David Gordon in 1975, The Social Limits of Growth in 1977 and The Political Economy of Inflation in 1978. My thanks to Donald Hirsch and David Gordon for these references.

  65.Andrew Knight, interviewed by the author.

  66.Max Hastings, Editor: An Inside Story of Newspapers, London 2002, pp. 1–2.

  67.Andrew Neil, Full Disclosure, London 1996, p. 191; One interviewer literally found him ‘behind walnut veneered doors … remaining motionless’: Catherine Bennett, ‘Mr Murdoch’s Mixed-up Kid’, Guardian, 18 January 1993; Roger Cohen, ‘Rupert Murdoch’s Biggest Gamble’, New York Times Magazine, 21 October 1990.

  68.Conrad Black, A Life in Progress, Toronto 1993, p. 342. Knight and Black fell out three years later, when Knight quit as managing director to become the chairman of News International, with ‘£14 million worth of free Telegraph stock’ in a move, wrote a furious Black, that ‘raises substantial ethical questions’. Black later did time in a federal prison in Florida for obstruction of justice and fraud.

  69.Denny Hatch, ‘Direct Marketer of the Year: Beth O’Rorke, COO and Vice President, The Economist’, Target Marketing, 1 October 2004.

  70.Moss was ‘a power
ful force on the paper’, remembered Knight, who shared an office with him before becoming editor in 1974. Interview with the author.

  71.‘Straying to the Left’, 11 May 1974; ‘Kerensky with a Monocle’, 5 October 1974. Moss wrote these and other alarmist pieces; compare his ‘Making of Europe’s Cuba’, National Review, 11 April 1975 to ‘Don’t Do a Cuba on Portugal’, Economist, 12 April 1975. For praise of Spínola, see ‘War Hero Who Sees No Victory’, 2 March 1974; ‘Unendurable Burden’, 27 April 1974; for the discrediting of an historic election (before and after), with 91 per cent participation, see ‘Keen Voters’, 26 April 1975; ‘Lovely Election but No More’, 3 May 1975. For context: Ronald H. Chilcote, The Portuguese Revolution: State and Class in the Transition to Democracy, Lanham 2010, p. 123.

  72.Perry Anderson, The New Old World, London 2009, pp. 355–91.

  73.‘Makarios’s position as head of the church and head of state was becoming an anachronism’: ‘Cyprus: The Makarios Years’, 20 July 1974. Makarios ‘will not be the best person to preside over the new structure’, for ‘after the past fortnight he evokes many enmities’, and was ‘too dependent on the communists’, so ‘there are a lot of counts against him now’. ‘Welcome Back’, 27 July 1974; ‘Why Would They?’, 7 September 1974; ‘The Price of an Island’, 30 November 1974, ‘Battle for Southern Europe’, 10 August 1974.

  74.In violation of federal law, the Ford administration secretly supplied arms to Suharto for this purpose. Christopher Hitchens, The Trial of Henry Kissinger, London 2001, p 90–107. For the Economist, ‘a left-wing Timor, which could serve as a base for communist subversion and arms smuggling’, was ‘intolerable’. ‘The spectre of another mini-Angola, combined with the evident impossibility of measuring opinion among the 650,000 largely primitive people of Timor, have kept most foreign governments quiet’; Jakarta’s ‘real worry is about reactions in Washington, from which it was hoping to get $43 million in military aid’, etc. ‘Indonesia Tidies the Map’, 13 December 1975.

  75.By late December, the tide had turned for the MPLA in Angola, with assistance from 3,500 to 4,000 Cubans. Piero Gleijeses, Conflicting Missions, Havana, Washington, and Africa, 1959–1976, Chapel Hill 2002, pp. 305–27.

  76.‘It Wasn’t Ready’, 19 July 1975; ‘Unrecognisable’, 18 October 1975; ‘War Is Won, Not Over’, 14 February 1976; ‘From the Angolan Rubble’, 21 February 1976; ‘Do It with Mines’, 3 April 1976. The Economist frequently argued that Angolan rebels strengthened apartheid in South Africa, preventing the ‘moderate deal’ Pretoria had wanted with ‘black Africa’.

  77.In the event, the US did not have to invade Iran: Iraq did, with its assistance, in 1980. Saddam Hussein’s war was just comeuppance, so long as it did not advance far beyond Khuzestan. ‘Blood in the Oil’, 27 September 1980. On the hostages: ‘It is the right of the blackmailed to respond with low blows, cunning and deceit’ – ‘the affair is a matter of terrorism, not of religion, culture or anything else’: ‘Confronting a Cliché’, 1 December 1979.

  78.Odd Arne Westad, The Global Cold War: Third World Interventions and the Making of Our Times, Cambridge 2007, pp. 316, 323.

  79.‘America Gone Soft’, 5 January 1980. The potent Stinger missiles: ‘Sams for the Love of Allah’, 5 July 1980; ‘Don’t Forget Afghanistan’, 25 October 1980.

  80.‘Nicaragua: The Revolution Cuba Might Have Been?’, 29 September 1979; ‘Another Crisis for Carter’, 30 June 1979.

  81.‘The United States would be supine indeed if it refused to arm its friends, albeit unattractive, against an even more unpopular bunch brandishing Russian supplied weapons’; it was a ‘do-gooder, not a bloodthirsty meddler’. ‘The Savagery in Salvador’, 28 February 1981. Reject peace on terms offered by the guerrillas in 1983, it advised: ‘There Is an Alternative’, 19 February 1983. As a result, the wars continued. In El Salvador, the death toll was 70,000; in Nicaragua, 30,000 died (relative to population, more than the US lost in the Civil War, First and Second World Wars, Korea and Vietnam, combined): Westad, Global Cold War, p. 347.

  82.Iran-Contra showed weakness by indirectly paying a ransom for hostages in Lebanon and would ‘rile a Congress that had insisted on cutting the Contras’ aid’: Burnet, America, pp. 243–45; the Economist pleaded passionately for continuing such aid, ‘sparing Nicaragua from a less budgeable dictatorship than Somoza’s’: ‘Contra Cut-off’, 27 April 1985; ‘Why the Contras’, 6 September 1986; ‘Lordy Me’, 13 December 1986; ‘Carry a Big Stick’, 26 March 1988.

  83.Economist, 5 November 1983. Predictably, the paper also applauded the bombing of Libya in 1986: unless Qaddafi stopped sponsoring terrorists, ‘the time will come when it will be right to use more force and, if necessary, to overthrow him’. ‘Appointment in Tripoli’, 19 April 1986.

  84.‘Kissinger’s Critique’, 3 February 1979.

  85.‘Sideswipe’, 4 August 1979; ‘Letters: Cambodia and Kissinger’, 8 September 1979.

  86.Francis Wheen, ‘Being Economist with the Truth’, Guardian, 2 October 1996; George M. Kahin, Southeast Asia: A Testament, London 2003, p. 285.

  87.‘Interview with George P. Shultz’, Miller Center, University of Virginia, 18 December 2002.

  88.Shultz thanked Knight for help with his memoirs: George Pratt Shultz, Turmoil and Triumph: My Years as Secretary of State, New York 1993, pp. 828–29, 1033.

  89.In 1975, deep cuts in public spending, a real wages freeze, and a bigger devaluation of the pound could still avert catastrophe – defined as the rise to power of ‘an anti-democrat party led by Mr Benn or some other left-wing prophet’: ‘No Need for Apocalypse’, 17 May 1975. See for the period Understanding Decline, Perceptions and Realities of British Economic Performance, eds. Peter Clarke and Clive Trebilcock, Cambridge 1997, and for a reappraisal of the decade, Andy Beckett, When the Lights Went Out: Britain in the Seventies, London 2009.

  90.Keith Tribe, ‘Liberalism and Neo-liberalism in Britain, 1930–80’, in Mirowski and Plehwe, Road, pp. 71, 86–87.

  91.Ben Jackson, ‘The Think-Tank Archipelago: Thatcherism and Neo-liberalism’, in Making Thatcher’s Britain, eds. Ben Jackson and Robert Saunders, Cambridge 2012, pp. 46–49, 50–56. For more on the IEA, see Richard Cockett, Thinking the Unthinkable: Think-Tanks and the Economic Counter Revolution, 1931–1983, London 1994, pp. 122–99.

  92.Radikha Desai, ‘Second-Hand Dealers in Ideas: Think Tanks and Thatcherite Hegemony’, New Left Review, no. 203, January 1994, pp. 29–31; Wayne Parsons, The Power of the Financial Press: Journalism and Economic Opinion in Britain and America, London 1989, pp. 172–99.

  93.For an excellent recent archaeology of neoliberalism, see Quinn Slobodian, The Globalists: The End of Empire and the Birth of Neoliberalism, Cambridge 2018. See also Corey Robin, ‘Wealth and the Intellectuals: Nietzsche, Hayek and the Austrian School of Economics’, in Hayek: A Collaborative Biography: Part Five, Hayek’s Great Society of Free Men, ed. R. Leeson, London 2015, pp. 112–58.

  94.Friedman replied that he was ‘pleased to learn the extent of our agreement’. But he pointed to one misunderstanding. While excessive government control over the economy was ‘the most serious threat to the maintenance of a free society’, it did not, as Macrae had implied, cause inflation; neither did trade unions. ‘I have been dismayed, even in my few days in London, at the widespread support of “union-bashing” as a way to attack inflation.’ For ‘unions do much harm’, but ‘they do not and cannot produce inflation’ – ‘on the contrary, one of the unfortunate effects of inflation has been to strengthen unions’. Keith Joseph wrote to the paper testily to say that the Economist had inaccurately called him a ‘follower’ of Friedman, and that he owed his own recent ‘conversion’ to free market principles to him. ‘You are in a position to know better’: ‘Paradise Regained’, 21–28 September 1974. For context, see Jim Tomlinson, ‘Thatcher, Monetarism and the Politics of Inflation’, in Making Thatcher’s Britain, Cambridge 2012, pp. 62–94 and Jim Bulpitt, ‘The Discipline of the New Democracy: Mrs Thatcher’s Domes
tic Statecraft’, Political Studies, March 1986, pp. 19–39; Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman and the Birth of Neoliberal Politics, Princeton 2012, pp. 201–14.

  95.‘Towards a Keynesian Friedmanism’, 17 June 1978.

  96.‘UnKeynesian Britain’, 4 February 1984.

  97.For the extent to which monetarism had been accepted by Labour’s leadership during the 1976 IMF crisis, see Mark Wickham-Jones, Economic Strategy and the Labour Party: Politics and Policy-Making 1970–83, Basingstoke 1996, pp. 98–100; Noel Thompson, Political Economy and the Labour Party: The Economics of Democratic Socialism, 1884–1995, London 1995, pp. 222–25; Stedman Jones, Masters, pp. 241–54.

  98.Callaghan might turn out to be the ‘best practitioner of Tory policy’, but the Economist doubted if he could bring along ‘Labour’s lethargic laggards’ – who wanted bailouts for bankrupt firms and an incentive-crushing wealth tax. ‘Only One Prime Minister’ and ‘Labour’s Conservative’, 28 April 1979. At the time, on the left Stuart Hall perceived more clearly the ‘hegemonic thrust’ of Thatcherism in his Marxism Today pieces, many of which appear in The Hard Road to Renewal: Thatcherism and the Crisis of the Left, London 1988.

  99.‘Anybody but Carter?’, 18 October 1980.

  100.Reagan’s one foreign policy blemish was Israel: ‘Mr. Reagan is a simple-minded Zionist whose views will have to be reconstructed by going to the Middle East.’ Ibid.

  101.‘Can We Learn from Chile?’, 17 June 1972.

  102.Moss, Chile’s Marxist Experiment, p. 79.