Thanks to some sort of ex Spad out there, ranting, the current PM is being accused of resembling Harold Macmillan. Apparently with the Tories that’s a bad thing. Macmillan must have been electoral poison.

Reading Samuel Brittan’s excellent “Steering the Economy”, I found myself looking up Macmillan’s only ever Budget speech as Chancellor.  As Sir SB says, it is extremely entertaining. Harold Macmillan had a famously relaxed, laid back style.  Take this quote (from TheyWorkForYou):

It is customary at this point to refer to the National Debt… The total of the National Debt now stands at £27,040 million. It might interest the Committee to know that on 3rd September, 1939, it stood at about £8,400 million. On 4th August, 1914, it stood at about £645 million. These figures fill one with a certain awe. There are few nations, victors or vanquished, in these forty years that have so honourably tried to meet their obligations, at home and abroad. The service of the debt cost us £638 million—just about the same as the 1914 debt—or nearly 3s. on the Income Tax. The funded debt is a dull, dragging burden; the unfunded a constant and acute anxiety. No one who contemplates these figures can fail to draw the lesson. Whatever the temporary difficulties from which we may suffer by trying to run too fast, if we stand still we are lost. Inflation must be curbed, because runaway inflation ends up by being itself restrictionist. But deflation—in the sense of seeking stability by courses which, among other things, would result in an increase in the debt burden in relation to the national income—that is out of the question. We must all be expansionists, but expansionists of real wealth

He goes on to quote MacCauley’s wonderful observation: “On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?” He is an optimist: if debt is near 200% of GDP, well, we’ve been there before.

But amongst all that insouciance is a note of urgency.  My emphasis: “if we stand still we are lost”.  Macmillan was making the case for continuous expansion in the Budget, at a time when every such occasion was an annual tussle between those who saw overheating and those urging further stimulus. Samuel Brittan describes him as forever referring back to the mass unemployment suffered by Stockton on Tees in the Depression.

As it happened, he listened to those urging caution. Macmillan was not a governing in a world without limits.  The first sections of his speech are all about what preoccupied Chancellors for the first few decades after the war – the Balance of Payments, our gold reserves, whether we were overheating or not.  He was wrestling with an unemployment rate of around 1% (!) and his one and only budget did indeed cut down on demand.  But according to Brittan, SuperMac as PM would never have sat by if there was a risk of large scale unemployment, and used Treasury excuses like “the world situation is beyond our control”.

The language used by Macmillan is different from that of David Cameron, who puts things in a different logical sequence.  It goes like this: a country that got into trouble with debt needs to deal with that debt and then get to the good things. Household economics, rather than expansionism.  It is a formulation tested to death with the pollsters and focus groups, and it works.  But it is not quite the spirit of MacMillan -whether you see that as a good or bad thing.


One thought on “How Cameron is not like MacMillan

  1. Note, however, that he was talking specifically about “expansionists of real wealth” not of governments printing money. In that he was quite right – real long term economic growth, involving real wealth creation, is what matters not governments printing money, calling it stimulus, and hoping everybody will take it for a real increase in wealth and go out and spend it. Unfortunately he wasn’t so good at that in reality which is why Germany and japan grew much faster than us.

    Still, he wasn’t as bad as the present Labcondem cartel who are actively against growth (though the lie about it) and are thus ensuring that nearly everybody outside the EU is growing faster than us (though they & the state propaganda broadcaster lie about that too)

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