Beyond the Crash

Written by David Laws MP on 25 January 2011 in Culture
David Laws finds Gordon Brown's book rapidly heads downhill when the former PM talks about a world economic policy

Gordon Brown
Simon & Schuster, £20

For those people looking forward to the publication of Gordon Brown's memoirs, this is not the book. As the title of this volume clearly indicates, this is a book about the great financial crash of 2007-09, and about how the world economy can recover over the next few years.

The first substantive section of the book is undoubtedly where Brown is at his best and on his firmest ground. This early part of the book provides a brief insider's account of the emergence of the recent financial crisis, and how Brown and his colleagues dealt with this and helped to co-ordinate an international response.

The financial crisis of 2007-09 was undoubtedly one of the greatest economic challenges of the last hundred years, and it is therefore interesting to read this account of how the key decisions were made - though it is only fair to say that there is not a lot of new information or revelations here.

Brown is commendably honest about his initial hesitation in taking bold action to stabilise the UK banks. He explains that he originally recoiled from such action partly because of his fear that nationalising a major UK bank would undermine New Labour's reputation for economic competence.

But eventually Brown and Alistair Darling were forced to act in extraordinary and unprecedented ways by the sheer scale of the crisis, which threatened the viability of the whole banking system and the economy.

The truth is that governments of every political colour were forced to take similarly extraordinary steps because the alternatives were too awful to contemplate. Any UK government would therefore have been forced to intervene in a manner similar to Brown.

Where Brown does deserve some credit is that he and his senior advisers put together a form of intervention which both went to the heart of the problem - recapitalising the banks - and was sufficiently huge in scale that confidence in the banking system returned. It was hardly a gamble, given the alternatives, but it was a bold and carefully-structured policy which was then to some extent followed by other countries.

Unfortunately, after this interesting start, Beyond the Crash goes downhill rather fast. It is not that he ponders too long on the case for slower fiscal consolidation, indeed this would have made for a few interesting and timely chapters.

It is that based on Brown's selfproclaimed success in "rescuing" the British economy, he uses the second half of the book to set out the case for some kind of world economic growth policy, involving a "global banking constitution" (undefined), a vague call for the restoration of "morals to markets" (how?), and (in ghastly phrases) a "win-win global prospectus for growth", together with "people-centred globalisation".

It almost amounts to a job application for the role of Global Economic Czar. There is also a failure to acknowledge Brown's own share of the blame for the economic crisis. The best Brown can do is to express his regrets that he was not able to persuade other world leaders to take up some proposals which he apparently made in a speech back in 1998.

The challenge of a creating a new global economic architecture in a globalised free market economy would be a huge one, even if we could today call upon the talents of a John Maynard Keynes. But Gordon Brown is no Keynes and his proposals strike this reviewer as both unrealistic and unclear, even if they result from his "iron conviction" (an odd phrase which I cannot im imgine any other leading UK politician using).

Nor does Brown, who worries a lot about a "low growth decade", appear to have noticed that in 2010 the world economy was growing again at around the five per cent rate reached before the crisis hit.

Brown's book sheds light on a fascinating economic period, and highlights the serious problems that can sometimes emerge from the operation of free markets. But to the extent that Brown's book is designed to persuade us that there is something radically different and better on offer, it is not a success.

David Laws is the former chief secretary to the Treasury and the Lib Dem MP for Yeovil

Tags: David Laws, Gordon Brown, Issue 32

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