It isn't such a dismal science

Mervyn King reveals his favourite economic reading and sets a poser

FOR Thomas Carlyle, economics was not just `the dismal science', but `a dreary, desolate, and indeed quite abject and distressing one . . . which finds the secret of this universe in "supply and demand" '. Sentiments no doubt shared by many.

Sadly, it is true that the writing, if not the science, of economics has often been dismal. Indeed, as the discipline has become more scientific, the life in the prose has ebbed away. The classics remain. There are few more readable descriptions of a market economy than Adam Smith's An Inquiry into the Nature and the Causes of the Wealth of Nations, first published in 1776. And the case for stable prices was put with more force and passion by Keynes in his Tract on Monetary Reform than by any central banker. Nevertheless, with few exceptions, books on economics have become either specialised monography or are to be found in the how-to-become-rich sections of bookshops in American airports. They are rarely written to satisfy a lay reader's intellectual curiosity.

In many ways the absence of accessible yet serious writing on economics is surprising. Newspapers are full of stories about economics. But in the bookshops it is popular science that has flourished, with rising sales and special offers (three for the price of two in one of my local retail chains) of books explaining recent discoveries to the general reader. Both the National Gallery and the Royal Society can fill their lecture halls. Audiences are eager and willing to learn about art and science, but not, it would seem, economics. Has economics run out of new ideas? Is that why there are so few books that explain economic ideas to the general reader?

There is no shortage of suitable subjects. The explanation of why some countries grow rapidly and others remain in poverty is surely no less exciting than recent developments in cosmology. Yet Stephen Hawking's A Brief History of Time remains, more than a decade after publication, at 203 in amazon.co.uk's league table of sales, whereas Peter Jay's recently published Road to Riches languishes in 1985th position, and that in spite of a companion television series. Moreover, Hawking's book is, to say the least, difficult to follow while Jay's is both accessible and readable.

Perhaps the explanation is that economics appears too close to our everyday concerns. It lacks the magic and mystery of the origins of the universe or the creation of a great painting. It does not lift our spirits or expand our horizons. Indeed, in practice one of the contributions of economics is to bring people down to earth, to cut through fanciful speculation with logic and facts. If economics is the science of everyday life, it is understandable that some of the best writing on the subject is to be found not in treatises but in novels.

So it is to fiction that we turn for economic insight. Almost all of Balzac's prolific output concerned the power of money, inspired in large part by the author's lack of it. Not even the Financial Services Authority could warn investors of the need to manage their personal finances as effectively as Dickens's portrait of Mr Micawber. In Dreiser's great American business novel, The Financier, the intimate relationship between power and finance first creates and then destroys the wealth of Frank Cowperwood, who ends up in prison. The corrosive consequences of wealth for individuals and families can be seen in Fitzgerald's The Great Gatsby and Mann's Buddenbrooks. At the other end of the spectrum, Zola's Germinal vividly and relentlessly describes the misery and poverty of life in the coal mines.

Non-fiction should not, however, be neglected. And there is much to be said for exploring the shelves of a good library. In the London Library economics books are classified under Miscellaneous Science (Finance) between Fashion and Folklore.

There can be found, among many others, Clare's Money Market Primer, Swedish Bullionist Controversy, Eight (sic] European Central Banks, The Monetary Policy of Fourteenth-Century Florence, and The Quicksands of the City (a few useful tips here for the Stock Exchange).

My one real discovery in the London Library came four years ago. There on the shelves I found a quite brilliant example of polemical writing from 1933 by James Ramage Jarvie entitled The Old Lily Unveiled. Not one to mince his words, Jarvie goes for the jugular in the opening paragraph:

The objective of this book is to awaken the public to the truth that the Bank of England, commonly believed to be the most disinterested and patriotic of the nation's institutions, has been since its foundation during the reign of William of Orange a private and long-sustained effort in lucrative mumbojumbo.

The book continues in similar vein. It is a devastating critique of the secrecy of the Bank and those who worked for it. In October 1932, in the columns of this magazine, Philip Snowden, the former chancellor of the exchequer, defended the secrecy of economic policy: `The relations between the Chancellor and the Governor of the Bank are intimate and confidential. What takes place between us is inviolable as if under the seal of the confessional.' Jarvie was outraged by Snowden's statement. He wrote in response: `Isn't it damned insolence when you think of it? Why the secrecy? Why the inviolability? . . . Lord Snowden did not retire a day too early.'

Perhaps Jarvie would be more sympathetic to the transparency which has become the hallmark of modern central banking. But who was James Ramage Jarvie? He appears to have been airbrushed out of British monetary history. Neither his book nor any record of him can be found in the Bank or in any relevant bibliographical source. Does any reader know more about this man whose pen chastised the Bank of England of an earlier era? My own guess is that he was a financial journalist - because of his prose and the fact that the copy in the London Library came from the estate of Lord Ridden, chairman of the News of the World, complete with supportive annotations.

So if you visit a library or bookshop, you will find economics everywhere: among the classics, among fiction of all periods and among the latest offerings from Peter Jay and William Keegan (whose witty 2066 and All That comes with cartoons by Trog). And if the Internet takes your fancy, you might try the draft chapters of Brad DeLong's Economic History of the Twentieth Century - available on his website (www.j-bradford-delong.net) - and become an interactive reader. All in all, whether or not you agree with Carlyle, you are not condemned to a dismal read.

Copyright Spectator Sep 30, 2000
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