The Spectator's Notes

18 October 2008

Charles Moore's reflections on the week

Nearly 20 years ago, after the Tiananmen Square massacres, The Spectator campaigned for all Hong Kong people to be given British passports. Part of our argument was that, if they all had the passports, very few of them would want to come here: they would have the confidence to stay. That, in essence, is the same reasoning that the governments of the Western world are using when they prop up the banks. Banks only lend because they can get their money back, yet if they all try to get their money back, they cannot lend. When they are all terrified, therefore, some external agency has to remove the fear. That external agency has to be government, or governments. I do not see anything very ideological in this. Anyone who believes in any form of state authority at all surely recognises that there are emergencies when government has to cut the Gordian knot. What is true, though, is that ideology will soon stick its barnacles onto the lifeboat. As it grabs the ‘commanding heights’ of the economy, Labour will start issuing political commands. One should also point out how high the hazard is, moral or otherwise. It was for that reason, after all, that the government did not listen to The Spectator about six million Hong Kong passports.

Gordon Brown compares himself to ‘far-sighted leaders like Roosevelt and Churchill’ (not presumably, the Churchill who helped bring on the slump by putting Britain back on the Gold Standard). He is dangerously premature. But it is certainly an interesting political question whether Mr Brown can benefit if he succeeds in rescuing the country from the debacle which he helped to bring upon it. The Falklands war is the example cited: Mrs Thatcher had failed to notice Argentine intentions, thus provoking invasion, but then fought and won, and became very popular. Financial crises are not quite like that, though. Harold Wilson was right to devalue the pound in 1967; Jim Callaghan was right to bring in the IMF in 1976; John Major was right to take Britain out of the ERM in 1992. As a result of their actions, things improved. But the experience was sufficiently painful for the electorate not to wish to forgive the men who had finally been forced into doing the right thing. And in this case, unlike with the exit from the ERM, most of the pain still lies ahead.

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