Major operations
Among the many gifts to a not-always grateful nation, Margaret Thatcher has appointed a succession of extremely clever Chancellors of the Exchequer. Nobody should underestimate the importance of this because Chancellors have the job of running the economy and Geoffrey Howe, Nigel Lawson and John Major have thought up many clever schemes to make us all prosperous and secure. Chancellors say that by cutting or increasing taxes, or by raising or lowering interest rates, they can cultivate industrial growth, stimulate an enterprising spirit among business people, bring the balance of trade into surplus and control what they call inflation (which is really rising prices).
They have had so much practice at this you would have thought they would have got it right by now. But another part of their job is to make boring speeches full of technical jargon telling us that they have not got it right — that we are still in an economic crisis and that, although they have failed to cure the problem, we must still have confidence in them. They make it sound very intricate and delicate, in the hope that we will begin to understand why Chancellors need to be so clever.
At this point we meet a problem because both of Thatcher's previous Chancellors are now written off as failures whose policies — which were so emphatically approved at the time — are now condemned as responsible for many of the present economic difficulties. Geoffrey Howe is now remembered as the Chancellor who almost single-handed engineered an economic recession. The fact that this can hardly be true does not prevent him having to fight a rearguard action for his political survival, of an obstinacy to surprise those who despise him as a moribund sheep.
Nigel Lawson, who now has such a lucrative living in the City that he doesn't have to fight for anything (his two-day-a-week, £200,000 a year job at Barclays Bank has just been supplemented by one which will take up another two days advising East European governments on how to privatise their industries) is now discredited as the instigator of wild extravagance at the Treasury for which there had to be a day of reckoning.
It's all our fault
So the Tories have been hoping that John Major will make a better showing, by which they mean that he will produce the kind of budgets to persuade workers that the best way of running British capitalism is to keep the Conservatives in power for ever, with Margaret Thatcher as prime minister until John Major is ready to take over. There could hardly be a greater contrast than that between Lawson and Major; the one overweight, arrogant and self-advertising, the other mouse-like, colourless and reticent.
In one way Major is just like all other Chancellors. Even if he has nothing new or promising to offer, he offers it with conviction and optimism. For example, there is the matter of "inflation" which all Chancellors have agreed is the main obstacle to their plans for our welfare. Unless "inflation" is beaten (they usually use such words, as if a physical struggle was in progress) nothing else will work. So severe is the problem that the Treasury itself seems confused about it, because while the Chancellor claims to be able to control "inflation" he also tells us that it is caused by influences outside his control like world oil prices and extravagant wage rises — which does not apply to people like Nigel Lawson but workers like ambulance crews and miners and teachers. But whatever the battering he receives in the fight against "inflation" the Chancellor has to keep coming back for more, in case we begin to doubt that victory is in the offing.
Ups and downs
Geoffrey Howe, in spite of his reputation as a colourless plodder, was responsible for the most extravagant boast in May 1981 that "zero inflation is possible" — that we could have a situation in which prices did not rise.
Tom King, who was not Chancellor of the Exchequer but obviously wanted to get in on the act, said in May 1984 that the government was ". . . on course to get inflation down to 4.5 per cent by the end of the year". It was then at 5.2 per cent; a year later when it was at 7 per cent King, unabashed, was declaring, "inflation will be on the way down again by the end of the year". As it happened "inflation" did come down so that in June 1987, when it was at 4.1 per cent, Nigel Lawson could promise that it would be ". . . below 4 per cent by the end of the year". A year later Lawson's way of dealing with another rise was to promise that "inflation is now likely to edge up in the second half of the year before coming back down again".
When this promise did not work, in June 1989 when "inflation" stood at 8.3 per cent, Thatcher declared "the Chancellor will get the inflation rate down. It will fall over the rest of the life of this parliament". When Lawson resigned, with "inflation" still rising, John Major admitted in July 1990 that it was ". . . taking longer than we expected to get down. It is near but possibly not at its peak". Since then it has risen by a full one per cent, which means that Major has felt the need to speak up again; in October he told us that "the prospect is for a substantial reduction in inflation over the coming year . . ". Perhaps impressed by his own performance as an "inflation" fighter, a few days later Major told the Tory conference, which is not famous for being intelligently selective, "I am now in no doubt that inflation will fall sharply over the next year". As if that forecast were not dangerous enough, he then set his sights on the same target as Geoffrey Howe in 1981: ". . . most importantly to reduce inflation and then eliminate it entirely".
Confidence
The level of "inflation" — whether prices go up or down — is of no lasting concern to the majority of people, who depend for their living on employment. Whatever the effect of "inflation" it can only be short term and makes no difference to our standing. Nor does it make capitalism a more acceptable way of running human affairs.
It says a great deal about capitalism, and about the people like Howe, Lawson and Major who win votes on their promises to be able to control the system, that after so many florid claims by so many politicians, they are now making the same promises about eliminating it as they made nine years ago. There has been no progress, which raises a wider question. If politicians are unable to control prices, what confidence can there be that they can do anything about the other problems of the modern world — war, famine, disease, poverty? Answers to John Major and his colleagues please — on your ballot paper.
Ivan
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