I was standing with a cheerful huddle at a farm near Monyash in the Peak District, seeing off the Four Shires Bloodhounds on a foggy November Sunday. The hounds bayed and the horses stamped, and I wished I could still run well enough to be the quarry. In the same huddle was a friend who farms not far from where we live; he and I used to train together when we were younger and he was a fine middle-distance (and I a hopeful long-distance) runner.
‘What’s going to happen with this Europe job?’ he said to me.
‘It doesn’t look good,’ I said, wondering if it was the Common Agricultural Policy, or perhaps milk prices, he was talking about. In Derbyshire when the question is Europe-centred, ‘it doesn’t look good’ will generally serve as an all-purpose reply. And I am quickly out of my depth on cow-related matters.
‘Maybe catastrophic,’ he said. ‘Italian bonds have eased back a bit, but now it seems to be Spain’s turn — though we’ll have to see, what with their elections. And there’s no way we’re immune in Britain. If the European economy goes down, so does ours; half our trade is with Europe. There was too much easy credit for too long, and we’re all paying the price — though how the Greeks get out of their hole it’s really hard to see…’
And I had thought his world was farming. I looked at his huge, leathery hands and wondered if it would even be possible for him to target a single key on an iPhone, rather than a cluster. True, he’s a clever and thoughtful man and could have made a go of anything — politics, economics, retailing, middle-distance running … well, maybe not ballet dancing — but he made his choice decades ago, and you might have imagined horizons had closed in around him. They have not. Ten years ago our conversation would not naturally have turned to world economics. This weekend it would have seemed trivial not talk of such things.
He is not unusual. These days, not only do millions more talk of the economic weather as we’ve always talked of the weather, but they speak knowledgeably. People really do know what sub-prime mortgages were, they know that ‘over-leveraged’ sort of means ‘over-extended’; the expression ‘debt overhang’ is not obscure to them. They may animatedly discuss, and disagree, whether this crisis is created by irrational speculation or unsustainable debt. Some weeks ago I heard two people on the D7 bus in London arguing about whether it was reasonable to expect the Germans to bail out Greece, one of them maintaining that it was only to protect their own banks that the Germans were asking the Greeks to tighten their belts. Both these people knew that British banks were exposed, but not vastly exposed, to Greek default.
Had you spoken of contagion a few years ago, the presumption would be that you were making a medical point. Hedges were found around fields, not in funds. Sparrow-hawks, not currency speculators, swooped. The term ‘complex financial instrument’ would have meant nothing to us, ‘bundling up debts’ would have called for a rubber band, and ‘kicking the can down the road’ would have meant kicking the can down the road.
But for the most melancholy of reasons, the past few years have seen a massive national crash course in finance and economics. That newly acquired education, I believe, goes well beyond an initiation into the knowing use of technical jargon. We do, now, most of us, understand a good deal of what this language and these arguments are about. We know that beneath the bewildering jargon lie some huge, genuine and intelligible debates.
Take two examples. For literally decades, eurosceptics among us have earnestly rehearsed the reasons why a single currency without a single government and a proper central bank was problematic. We half thought we saw what they meant, but didn’t let it detain us long, supposing that in practice economies might muddle through. Not now. Electorates have been presented with a clear and dramatic case-study in the difficulties. The idea is now very widely understood that one country in a currency club cannot forever run its tax, borrowing and spending policies in a profligate way, while piggy-backing onto the advantages of the cheap credit hard-earned by more prudent club members. I never thought to see the day when an expression like ‘fiscal union’ was not only routinely used but actually understood by members of the public telephoning radio chat shows.
Meanwhile the debate (I would submit) between the Osborne-ites and the Balls-ites about deficit reduction really is accessible to millions in Britain. You could stand before an audience composed of a wide cross-section of our electorate, people from all walks of life, refer to the clash between politicians who thought we must cut our deficit hard and fast so as not to lose our good credit rating, and those who argued that deep and early cuts risked so stunting our economic performance that we’d never be able to pay off our debts anyway … and be reasonably confident that most of your audience were perfectly familiar with the terms and the arguments both ways.
It seems that the phrase ‘school of hard knocks’ can apply to learning things not only as an individual, but as a nation. We are all economists now; and our confidence that we are capable both of understanding and contributing to the argument has been given a lift by the fact that the experts got it so horribly wrong. In the quiet professional disgrace of an entire priesthood — thousands of bankers, trained economists and specialist media pundits — millions of citizens have found a new confidence in our own opinions: a new reason to try to understand.
Comments