A message from the 1970s on state spending - Telegraph.
The 1970s were when my political views were formed. In that decade, I was suspended from my bog-standard comprehensive for my revolutionary activities. I was a member of a Maoist school students union, which organised the only pupils strike in the history of British education. I sold "Quotations from Chairman Mao" and "The Little Red Schoolbook" to my fellow pupils. I refused to be a prefect or to apply to Oxbridge (alas) because I was anti-elitist.
I had a Damascene political conversion as a result of seeing men on a building site where I worked in my school holidays subjected to violent intimidation by the Shrewsbury Pickets. I had already read my Marx but that led me to my Hayek and Popper. I went on to lead my university's Conservatives to take control of its Student Union from the Left for the first time and was one of the first people to call myself a "Thatcherite". I met and discussed politics with Sir Keith Joseph and discovered I was a good judge of character when I also met the pompous, wet and unreliable Sir Geoffrey Howe. I didn't like him the instant I set eyes on him and was not surprised when he later played Brutus to Margaret's Caesar.
But the truly formative event was the national humiliation wrought on Britain by Labour bankrupting the British state and calling in the IMF. I don't think anyone who was there and understood what what happening could ever forget it. It has informed my every political and economic thought since. It's why I am so scared by the nonsense flickering across the synapses of commenter and erstwhile guest blogger Mark (and virtually everyone else in Britain, alas).
Every new Labour leader should stand before his first party conference and recite Jim Callaghan's words, because they nail the greatest lie in modern politics and economics; that the state can drive growth. It cannot. At the most it can facilitate it, by providing the rule of law and consistent, predictable regulation that businesses can plan for, but otherwise getting the hell out of our way. This is what he said.
We used to think you could spend your way out of recession and increase employment by boosting government spending. I tell you in all candour that that option no longer exists. And in so far as it ever did exist, it only worked on each occasion ... by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.
I agree with Liam Halligan, author of the linked article in The Telegraph, that these are among the most important (and I would add almost certainly the most honest) words uttered by any British Prime Minister. That they have been forgotten so quickly horrifies me. If all my efforts in writing this blog achieve nothing else, I hope I can bring people to Mr Callaghan's honest, if no doubt disappointing for a lifelong Socialist, realisation.