I am saddened to read that Nigel Lawson, former UK Chancellor of the Exchequer, and an articulate advocate of the UK’s departure from the EU (and also a rigorous debunker of global warming catastrophism), has died at the grand age of 91. My condolences to his family and friends.
It is ironic that he fell out with Mrs Thatcher in the late 80s over the issue of the UK joining the Exchange Rate Mechanism in Europe. He was opposed to the euro, but saw ERM entry as a necessary way for the UK to try and control inflation. In that sense he was a fixed-exchange rate man, and in the 19th century he’d have been a Gold Standard defender, I suspect. In the end, he was at one with Mrs T. on the dangers of a centralising Europe. And of course, in his time at 11 Downing Street, he cut top rates of tax and simplified the system dramatically. Alas, his successors haven’t continued that trend. Lawson was also the intellectual driving force behind privatisation of state-owned businesses, and while arguably not enough was done to promote competition, the overall benefit in my view was considerable.
His speech explaining why the UK had to leave the EU remains, in my mind, one of the most brilliant and succinct explanations for why this was the right course. He focused, rightly, on the issues of democratic accountability and freedom.
Right to the very end, his mind was as sharp as those of all too many in power are blunt.
I had a chat with him before & after an Adam Smith Institute event commemorating the end of exchange control (we were both speakers, I was essentially the comic relief). He was a very clearly thinker who also had a sense of humour.
I was not going to discuss monetary policy – but the subject has been raised. An expansionary monetary policy (creating more credit money) is wrong – and trying to fix (rig) the exchange rate does not deal with the problem, it adds a new problem on top of the existing problem.
As for the “gold standard” – the problem is the second word “standard”, either the gold is the money or it is not. If it is just a gold “standard” there is nothing to stop the government and the credit bubble banks (who are joined at the hip) from creating more money from nothing – whilst still saying “we are on the gold standard so all is well” – hence, for example, the expansion of the money supply in the late 1920s which led, like all such Credit Money expansions (in the United States since at least 1819) to a boom-bust – the great differenced being the great size of the Benjamin Strong Credit Money bubble of the late 1920s – and the utterly insane reaction to the bust of 1929 by first the Hoover and the then Roosevelt Administrations.
Both the Hoover and the Roosevelt Administrations actively intervened to PREVENT wages adjusting to the bust (this was the first time in American history that this had been done – but the Acts of 1875 and, especially, 1906 had a de facto similar effect in Britain in the 1920s and 1930s – these terrible trade union Acts of Parliament made “wages sticky downwards”, even during a Credit Money bust, which even J.M. Keynes understood, but he failed to call for the Acts of 1875 and 1906 to be repealed) this led to years of MASS UNEMPLOYMENT in the 1930s – and to utterly absurd policy suggestions, such as higher government spending, to, supposedly, deal with the Mass Unemployment.
The subject of monetary policy has been dealt with by first comment – hopefully I will not need to refer to it again in relation to the late Nigel Lawson. Fiscal policy, government spending and taxation, was the great strength of Nigel Lawson – let us turn to it.
Nigel Lawson was the only Chancellor of my life time who reduced the size of government spending and taxation as a proportion of the economy – this was a very great achievement, and Nigel Lawson deserves great credit for achieving it. I repeat – he is the only Chancellor in modern times to have achieved this.
May Nigel Lawson Rest in Peace, and may his memory be a blessing.
My knowledge of Margaret Thatcher’s team is fairly sketchy.
But I have become aware that Nigel Lawson featured prominantly in the good that was done in those years.
The poverty measures that existed prior to Margaret Thatcher’s government, such as the GBP50 foreign exchange allowance, seemed to just evaporate after they won the election in 1979.
Nigel Lawson did a great job in that administration.
Sadly, few have done it since.
May he rest in peace, indeed.
One of the best. A penetratiing analyst and a man of political action. His book on climate showed that even if you took the IPCC’s projections at face value, it was still far more cost effective to adapt in the future than act in the present. But current leaders land us with Net Zero, which aims to wreck our economy asap, in the face of hollow threats about the future. There really is no substance to them.
His ministerial memoir The View from No. 11 was witty, high readable and thought-provoking. JohnB, I recommend the section in which he discusses exchange control and its abolition in October 1979 when he was third ranking Treasury minister (Financial Secretary). It was not only the strategic change in which he took pride, but also the tactics of implementation. In those days there was a secondary market on which pounds pre-approved for foreign investment traded at a so-called dollar premium. The integrity and efficiency of the official Treasury was such that there was scarcely any tapering of the dollar premium in the run up to the announcement of abolition.
A shame he didn’t have the talent to control inflation using his own vested powers.
Stuart Noyes – that would bring us back to monetary policy.
Yes creating money from nothing is wrong – both economically wrong and morally wrong, and it is indeed inflation.
And it is also true that trying to “fix” (rig) the exchange rate does not deal with this Credit Bubble money problem – on the contrary it adds a new problem on top of the Credit Money inflation. For example, the pretence in the 1920s that the Pound was worth X number of Dollars when it was not, or the pretence after World War II (till the 1970s) that the Pound was worth various numbers of Dollars – when it just was not.
However, where would Nigel Lawson have learned about monetary policy and banking? There was no where in the United Kingdom (no where at all) that would have given him a true account of these subjects. On these subjects (not rightly taught anywhere in the United Kingdom) Nigel Lawson had to proceed by the advice of officials and “experts” – and the advice he received was terrible.
Let us remember Nigel Lawson for his reduction of government spending and taxation as a proportion of the economy.
Nigel Lawson was the only Chancellor in our life times to have done this – the only one.