That was then. This is now!

Last week in a book sale I picked up for 10p a battered copy of a book entitled ‘Britain in Wonderland’ published in 1948 by Gollancz. The author was RWG (Kim) Mackay, the Labour MP for Hull North West, 1945 –1950.* What struck me (and convinced me to part with 10p) was the cover blurb ‘We want something more attractive than austerity at home, more imaginative than work or want, & more realistic than an impossible export drive.’ Dipping into Mackay’s immediate post-war analysis, it seems clear to me that many of the establishment remedies for a flailing economy are still being touted today, captured in the banal idiocy spouted by Osborne/Reeves/Starmer that the ‘credit card is maxed out’ with its echoes of Thatcher’s likening of the UK economy to a household budget. Mackay criticised the Attlee government for bringing a basket of short term fixes to the table when what was needed he said were long term solutions which could in turn have more immediate policy aims. He saw the creation of a single European market in a federal structure as being one of the long-term solutions for an industrial economy which needed a market greater than its domestic size to flourish. He was therefore an early exponent of European integration. Mackay supported Attlee’s great nationalisations but I suspect he thought they could have gone further. Having said that, I think he romanticised the Soviet economic model under ’Marshall Stalin’ - even if it did deliver some public goods in terms of greater literacy and healthcare (Tsarist Russia no doubt set a very low bar on those fronts).
 
How prescient was Mackay? The full section from which the cover’s blurb is taken says ‘There is no hope for the British people if we follow the present economic policy of the Government. We want a long-term policy which takes into account our changed position, phrased in terms which recognises the changes that have taken place in the world. We want something more attractive than austerity at home, more imaginative than work or want, and more realistic than an impossible export drive.’ (p.95) The three items here sum up where we are today: a failed austerity program about which we all now know and suffer the consequences; employment practices which are little better (if at all) than ‘workfare’ (where to boot wages have to be subsidised by the state) and finally the failed appeal to globalisation where we can see our ‘competitive advantage’ disappearing faster than Norman Wisdom’s space rocket (for those who remember).
 
Mackay pinpoints a key failure of economic policy, referencing Lord Thomas Balogh (economist and later Harold Wilson advisor), ‘the more unequal the distribution of wealth between countries and within each country the more likely and the more violent is the world economic system. For  the war which has destroyed large areas of Europe and Asia, continents where poverty was already acute and which at the same time increased the productive capacity of the Western Hemisphere and most especially of North America very sharply, necessarily increased the inequality of distribution of wealth in the world economy.’ (p.117) The fruits of globalisation have not changed since the accrual of wealth persists in the way Mackay and Balogh described. What they didn’t consider in the immediate aftermath of the Second World War was that the fruits of globalisation could now threaten human extinction thanks to the use of fossil fuels. At the time the natural world consequences were seen as an externality, not a concern of economics. But I wouldn’t condemn Mackay for that—I think the key quality of his thinking was that he was prepared to argue against a failed orthodoxy, even if it emanated from his own party. Now a failure to deal with climate change will just multiply the dangers inherent in global inequality. Starmer’s ditching of the £28billion green investment pledge is symptomatic of the lack of a long-term approach Mackay sought.
 
Mackay also deals with the issue of national debt. To sum up: The credit card’s maxed out? My arse! 
 
*Mackay wrote ‘Britain In Wonderland’ after Victor Gollancz had heard one of his speeches in the House of Commons and asked if he would like to write it up as a book. I like the sound of that.