Three big beasts in Aldeburgh
For those who haven’t been there, Aldeburgh is a small town on the UK’s Suffolk (East Anglian) coast which is most often mentioned in despatches for its association with the composer Benjamin Britten and the quality of its fish and chips. It has an excellent independent bookshop and every March it gives book lovers an extra reason to visit in the form of its literary festival.
Mailing list subscribers wait anxiously for the postman on a January Saturday and rush down to the bookshop shop in the High Street in order to be there before the tickets for Alan Johnson (last year) or Penelope Lively or A N Wilson (this year) sell out. By the time the fish is frying at the other end of the High Street, your goose is cooked if your booking form isn’t in the hands of the bookshop.
This year the immortals threw in an extra obstacle, to organisers, audience and speakers alike, in the form of the Beast from the East. There was no A N Wilson on Darwin, and no Penelope Lively on Gardens, yet without these the quality and variety were as exhilarating as a coastal walk through howling winds by surging waves.
Ann Pettifor’s new book also makes waves. The money system, she told us, is a marvel. It is based on trust, and a promise to pay, and the rule of law. Yet there is a disastrous fallacy which stop the system working as it might to serve us all. The fallacy, she explained, is that a country has to save money before it can invest. Money is created by banks. It is, in her words, generated by us when we take out a loan or a mortgage. When the banks and AIG needed bailing out in 2008, the US Ben Bernanke created or ‘found’ $85trillion. Economies without a trusted money system cannot fuel investment and growth; those who have developed such things are shooting themselves in the foot by saying ‘we can’t live beyond our means’. Far from having to wait until it has accumulated savings accumulated, our economy will only thrive if it creates debt and invests it now to turn the wealth creating handle.
But the money needs to go into real wealth creation – housebuilding, infrastructure, education, alternative energy, climate change mitigation. We have allowed the banks instead to pump it into speculation where the returns are easier. So house prices go up. Share prices go up. The rich get richer. The government and the Bank of England were right to bail out the banks. But they failed to impose restrictions on speculative use of the money by banks. So we end up with asset inflation and the rich getting richer.
So far so good. Yet Pettifor’s analysis is incomplete. She shows a diagram in which jobs are the direct result of money being invested. It isn’t that simple. It only leads to jobs if there are entrepreneurs and well-led, well-owned and well-governed companies. You can’t take that for granted. And, when challenged on this point, Ann Pettifor said this wasn’t her specialism, and any way other economists like Mariana Mazzucato had suggested that Apple wasn’t really that innovative and drew heavily on public sector R&D. This really doesn’t wash. It underestimates the importance of creating the right wealth creating climate, and promoting investor stewardship so that the right capital is available. Government doesn’t create jobs. Entrepreneurs do.
At the other end of the political spectrum we were offered Professor Roger Scruton. Scruton started well, arguing that the Remain sider of the Brexit debate had made the mistake of thinking that the debate was about economics when, in fact, it was about identity. He talked fondly about our democracy – a system in which we allow ourselves from time to time to be governed by people we don’t like. He sang the praises of the English system of common law – a bottom-up approach – and the importance of trust law, which allowed people to form their own organisations to associate and advance perpetuate any objective they chose. He contrasted this with the more authoritarian Napoleonic law.
But then analysis gave way to assertion. He spoke with contempt for the Confederation of British Industry ‘which purports to represent enterprise, but it certainly doesn’t represent me, and I am in enterprise: I’m a writer’. He misleadingly suggested that over 70% of our laws had been made by Brussels, and didn’t try to defend this when a lawyer in the audience put the figure at nearer 20%.
This talented but opinionated man is a professor (at the University of Buckingham). If I want to be told that young people spend all their time staring at their phones, I can hear it at the golf club. I can go to the pub to hear people state without qualification that uncontrolled migration means that we are overwhelmed by people who don’t share ‘our’ values. A professor would at least acknowledge that, to the extent we can even talk about ‘our’ values and culture as one, over centuries we have drawn different parts of it from the influence of migration. Not to mention the importance of migration to entrepreneurship and wealth creation.
Give Scruton credit: he was provocative. But from now on I will associate his name with a new verb. To scrutinise is to examine something very carefully in order to discover information.
To scrutonise, on the other hand, is to mix facts and opinions very carelessly in order to justify established prejudices.
At the end of his talk he was asked by a member of the audience if he thought Jeremy Corbyn might become Prime Minister. He said it was possible, then paused and added, ‘but at least we can hope for death’. Hardly the words of a democrat who consents to be governed by those he dislikes.