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Devaluation
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London: “What would be the use if people were to say: ‘The British are nice people, but they haven’t got any money?’” The question was asked by the late Per Jacobsson, former director of the International Monetary Fund, during one of the recurrent sterling crises of the past decade. I quote his candid remark, though, from a more recent source, namely a Fabian Society pamphlet by Mr. Michael Shanks: a prominent economic publicist and for a while a junior member of the Wilson administration. Mr. Shanks, who at the age of forty already has a staggering list of publications to his credit, served in the Department of Economic Affairs for over two years from the beginning of 1965, and in May 1966 became Coordinator of Industrial Policy, whatever that may signify. He did not last long (neither did the coordination of policy), and currently he functions primarily as the chief oracle of the (London) Times in matters economic. It is in part owing to his inside knowledge of the Whitehall machine that the public has in recent months been able to form some impression of what is really the matter with the British economy.
I start in this fashion because I want to make it clear that Mr. Shanks is both knowledgeable and outspoken. He is very much the energetic young meritocrat: former honorary treasurer of the Fabian Society (his lecture, “Is Britain Viable?”, from which I have been quoting, is labelled Fabian tract 378), former industrial editor of the Financial Times, former economics lecturer at Williams College, Mass., indefatigable traveler, broadcaster and writer; and to cap it all, father of four children, he appears to have the stamina of ten ordinary men. He also has a shrewd sense of timing. Thus he left his official post shortly after it became clear that the Wilson government had no idea what to do about the economy; and in his Fabian Society lecture of early November 1967 (now reprinted as a pamphlet) he came out boldly for devaluation at a moment when Treasury mandarins, City bankers, and most editors (including the Editor of the Economist) were busy strangling themselves with their Old School Ties. By a stroke of coincidence (if that is what it was), his recommendations were promptly adopted and a fortnight later his subversive lecture appeared in print. This is what one may call sensible timing. Mr. Shanks is currently established as the man who knew it had to be done, and his almost daily articles on economic policy now carry the authority of one who was both enough of an Insider to know the ship was leaking, and enough of an Outsider to say so before the Captain had ordered the crew to man the boats. As for the Fabian Society, it can claim the distinction of having supplied the British Cabinet both with its most distinguished ornaments and with its most ruthless journalistic critic.
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