An Alternative to Globalised Competitiveness

 

If only Britain had joined the euro

If Gordon Brown had chosen to join the single currency 10 years ago, both the European Union and Britain would be stronger now

• 
• • Will Hutton
  • The Guardian, Thursday 13 June 2013 19.30 BST

Gordon Brown with Paul Boateng and Dawn Primarolo in June 2003, just after his ‘not yet' decision on joining the euro. Photograph: Sean Smith for the Guardian

Ten years ago this week Gordon Brown said no to joining the euro. It is an anniversary on which Bank of England governor Mervyn King, Ukip's Nigel Farage, Unite's Len McCluskey and the Guardian's Larry Elliott, along with most of the British economic establishment, can all agree. On this, Brown was right.

Elliott set out the establishment consensus in a classic piece this month on his alternative history of what would have happened had Britain joined. Essentially, he says, there would have been a bigger boom in the runup to 2007 and a more disastrous bust. Britain would now be struggling to maintain its membership as anti-EU sentiment mushroomed, prompting its eventual exit, dramatising the inherent unsoundness of yoking disparate economies into one inflexible currency.

But there is a more optimistic, alternative history. The first obvious point is that Britain could have joined the euro only if a referendum had been won. A victory would have depended on it being an obvious good deal, with the pound entering at a competitive rate and the euro's structure, rules and governance reformed to accommodate British concerns and interests. The European Central Bank would have needed to look more like the US Federal Reserve, with more scope for fiscal and monetary activism. The Germans would doubtless have insisted, in return, that the EU banking system be more conservatively managed.

The last decade would have been very different. What none of the mockers of the euro ever acknowledge is the economic doomsday machine that Brown created through not joining. By not locking in a competitive pound, Britain suffered a decade of chronic sterling overvaluation, made more acute by the City of London sucking in capital from abroad to finance the extraordinary credit and property boom of those years.

Imports surged and exports sagged; the economy outside banking, which made goods and services to be sold abroad, either stagnated or shrank. Much of the best of UK manufacturing was auctioned off to foreigners. Today we find that, despite a huge currency devaluation, there are just not enough companies to take advantage of it: too much of the rest of British capacity, thanks to foreign takeover, has become a part of global supply chains that are indifferent to exchange-rate variation. Our export response has been feeble; evidence of the economic orthodoxy's inability to devise policies and structures that favour production.

Inside the euro, at a highly competitive exchange rate, Britain's exports would instead have soared, and its traded goods sector would have expanded, not shrunk. Regional cities would have boomed around sustainable activity rather than property and credit. The euro's rules would have meant a less reckless fiscal policy, and banks would have been more constrained in lending for property. They would have had to lend proportionately more to fast-growing real enterprise, reinforced because the new rules would have required them to lend in a more balanced way.

Britain would have entered the 2008 crisis with a far less unbalanced economy, a stronger banking system and international accounts, and a government deficit much less acute. And the reformed eurozone could have responded much more flexibly and cleverly than it did.

In any case, both Britain and Europe are now wrestling with depressed economic activity caused by overstretched bank and company balance sheets – and the exchange-rate regime is hardly the cause of this distress. Germany and the stronger EU countries are plainly wrong in their overemphasis on austerity as a solution, but surely right to argue that the only long-term solution is for the whole of Europe to move to their productivist, stakeholder capitalism.

British mainstream commentators see the obvious fissure between the stronger European north and the weaker south as proof positive that the euro is fatally flawed. But suppose countries like Greece or Ireland rise to the German challenge? Already there are encouraging auguries in both. If so, notwithstanding excessive austerity, they could weather the crisis, and become stronger.

There is plainly a chance one or more countries could leave, but there is a greater chance the system in some form will hold – it is in too many countries' interests to avoid failure. Then expect a pan-European recovery to begin in the second half of the decade that will gather strength in the 2020s.

Inside the euro for the last decade, the economic and political debate would have necessarily moved on. Having won a historic referendum decisively affirming Britain's future in Europe, the Blair government would have had to think in European terms about how to produce, invest, innovate and export. Sure, there would have been problems. But Britain outside the euro in 2013, with endless spending cuts, the biggest fall in real wages for a century, 500,000 people relying on food banks, and a weak unbalanced economy, is hardly a land of milk and honey.

Emboldened by his referendum victory, Blair could have sacked Brown before the disastrous second phase of his chancellorship and lacklustre prime ministership. Blairism would have morphed into a new form of European social democracy, fashioning British-style stakeholder capitalism. UK politics would not have moved so decisively to the right, with conservatives preaching free-market Thatcherism while the left clings to a bastard Keynesianism – united only in their belief, against all the evidence including Britain's export performance, that floating exchange rates are a universal panacea.

A single currency demands disciplines and painful trade-offs: but floating exchange rates after a financial crisis are a transmission mechanism for bank-runs and beggar-my-neighbour devaluations. Magic bullets do not exist. Had Britain joined, both we and Europe would have been better placed, and Larry Elliott would now be writing about how better to get Britain to innovate and invest under a fourth-term Labour government. A better world all round.

Cricket - Were the good old days really better?

Let's break it down to a few parameters and try to make an objective analysis

Rob Steen

March 20, 2013

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	The stakes might be higher these days, but the DRS has struck a blow for honesty © Getty Images  Enlarge

Technology or human eyesight? Helmets or bare bonces? Covered or uncovered pitches? Back-foot no-ball law or front? Arlott or Bumble? Does any breed of sporting spectator spend quite so much time as we cricket folk when it comes to debating the merits of the way we were and the way we are? Granted, our baseball and boxing counterparts in particular might scoff at such a suggestion, but they haven't seen their game repackaged as three distinct products.

"Before the Fall? Reflections on cricket in England during the 1950s" is that sagacious social historian David Kynaston's contribution to an annual lecture series at Lord's. A prolific author and academic whose books range from Austerity Britain to W.G.'s Birthday Party, Kynaston uses ten criteria to compare past with present: aesthetic, meritocratic, competitive, craft, excitement, personalities, sportsmanship, walking, crowd behaviour, "mattering", and coverage. Overall, he concludes, "it comes out pretty even".

Loath as I am to take issue with such an esteemed chronicler - and bearing in mind that I had yet to celebrate my third birthday when the 1950s ended - this strikes me as a perfect case of nostalgia overshadowing, if not fact, then assuredly common sense.

Given that we are six weeks away from the 50th anniversary of the most far-reaching of cricket's innovations,the limited-overs game (90 years, it should be noted, after the first knockout cup event was abandoned after a solitary match), now seems an apt moment to stand back and reflect on how far we have come and whether, on balance, we have advanced. Most of Kynaston's categories will do nicely, although it feels reasonable to merge walking and sportsmanship (is the former not an intrinsic, if extreme, aspect of the latter?).

Before we begin, let's reel back to a revealing Daily Express survey from that summer of '63: the "Better Cricket Competition". Readers were invited to make five suggestions to improve the County Championship, then the planet's lone competition for full-time pros. The judges - Alec Bedser, Doug Insole and Norman Preston, editor of Wisden - assessed 2000-plus entries, from whence came sundry proposals: overseas players, Sunday play, promotion and relegation, over-restricted first innings, more overs per hour, 15-pace run-ups, rewards for faster scoring, leg-before decisions to dissuade pad-play, and eight- or even ten-ball overs.

The more sensible of these would soon be woven into the first-class fabric, though it is intriguing to note that the judges were unanimous in insisting that the most pressing need was the elimination of time-wasting. In this respect, at least, it seems fair to say that cricket in 2013 lags a vast way behind 1963, though whether this matters is another kettle of cod entirely. It certainly didn't seem terribly important to those who completed the recent public surveys conducted by the ECB and Cricket Australia.

And so to the Kynaston Test. Not unnaturally, some of his sub-divisions permit more objective analysis than others. So, for all that he rightly deems it to be "somewhere near the core pleasure", let's dispense with the aesthetic, the "sensory aspect". The way he sees it, much has been lost through the arrival of "helmets, garish-coloured clothing, umpires no longer in white coats, sponsors' markings on the playing arena" and the "continual noise and exaggerated celebrations" of the players; such preoccupations will strike younger generations as profoundly old hat, not to say downright petty and daft.

Meritocratic
Fifty Aprils ago marked the start of the first English season to be unencumbered by the distinction between shamateurs and professionals: all hail the new meritocracy. Now, thanks to the multiplicity of formats, the ultimate meritocracy is with us: not only can even an Afghan earn a penny or two, you can have a disobedient body, like Shaun Tait does, and still put in a fruitful day's work by bowling four overs. Today: 2pts

Competitive
In the 1960s the average Test total was 323; over the past ten years it has been 350. Yet before we get too carried away with this apparent widening of the gap between bat and ball, the rise in scoring rates (from 2.49 runs per over to 3.27) has compensated handsomely for the reduction in the number of overs per day, the upshot being that the ratio of conclusive results has soared from to 53% to 74%. Throw in the fact that standards are far more uniform - while only England, Australia and West Indies were regular winners in the first period, this year alone has seen New Zealand take a one-day rubber against South Africa and force England to follow on, India all but reverse 2011-12's 4-0 loss to Australia, and Bangladesh trade 600s with Sri Lanka - and it's another no-contest. Today: 2pts

Craft
Uncovered pitches might have asked more of batsmen (and commensurately less of bowlers) but immeasurably more is demanded of today's practitioner. Who knows whether undimmable titans such as WG, Bradman or SF Barnes would have been so adaptable, but there is no question that Hashim Amla, Marlon Samuels and Graeme Swann are as effective over 20 overs and 50 overs as over five days. 1pt apiece

Excitement
Two words should suffice: "Virender" and "Sehwag". Or "Kevin" and "Pietersen". Or "De" and "Villiers". Or, if we're being thoroughly modern, "Shikhar" and "Dhawan". Or, if we're being meritocratic, "Lasith" and "Malinga" or "Saeed" and "Ajmal". Put it another way: when those of us who can remember that far back try to recall feeling excited while watching the game half a century ago, the options are generally confined to "Garry" and "Sobers". It helps, of course, that we can now trust our own eyes rather than parrot the word of others. Today: 2pts

	Does cricket matter more than it did? In numerical terms, given growth in population, communication technology, access to games and ICC membership and funding, of course it does. But is it healthy for an essentially trivial pursuit to matter more?

Personalities
Comparing characters from different eras is even more ludicrous than comparing Jonathan Trott and his distant ancestor Albert (though we can at least claim with some confidence that Albert, the only batsman to clear the Lord's pavilion with a single blow, was the more aggressive). Again, greater visibility predisposes us to favour the likes of Shane Warne, but this is counterbalanced by largely unpublicised stories from an era when sportsfolk were less closely monitored and hence able to get away with more.

Hugh "Toey" Tayfield is justly celebrated as the greatest of South African spinners, but it was a complete revelation to me to learn, this very week, not only that he was a rampant womaniser who died penniless and largely forgotten in a hospice, but that during the 1960 Old Trafford Test he had been due to appear in court for allegedly failing to repay a £230 loan ("He was a slow bowler and even a slower payer" quipped the prosecution lawyer). We know Sobers and Ted Dexter would have been "personalities" in any era, but given the greater rewards for notoriety today, Tayfield might have met a very different end. 1pt apiece

Sportsmanship
You could be forgiven, here, for concluding that higher stakes and more frequent fixtures have left today lagging miles behind yesterday, but is that truly the case? "Long after the unenterprising cricket of this Test is forgotten, people will talk of two incidents which brought to a head the question of whether batsmen should 'walk'." So attested Basil Easterbrook in Wisden of the 1965 Newlands Test, referring to Eddie Barlow's decision to ignore two appeals for catches (both rejected) and Ken Barrington's self-ordered exit following a thin nick that eluded detection - arguably the least profitable act of vengeance in the game's history. On the other hand, the capacity of the DRS to expose the truth economists has sired, if not a revival of this most honest (if class-ist) of sporting customs, then certainly a few more incidences than I can recollect witnessing in previous decades. 1pt apiece

Crowd behaviour
Of the 11 riotous contests Ray Robinson analysed in The Wildest Tests, one was played in 1933, the others in the first quarter-century after the Second World War. Had he completed the book in 2002 rather than 1972, he would not have had many to add. Sure, there may be less inclination to applaud the opposition, but add comfier seats, more efficient policing of drunkenness and better protection from the elements to the joie de vivre of the Barmy and Swami armies, and there seems little reason not to believe things have improved.Today: 2pts

Mattering
Much the trickiest category. Does cricket matter more than it did? In numerical terms, given growth in population, communication technology, access to games and ICC membership and funding, of course it does. Kynaston disagrees, citing the rise in matches, freedom of player movement and alternative leisure activities alongside a decline in the ritual nature of the fixture list and a tighter focus on city-centre venues. But is it healthy for an essentially trivial pursuit to matter more? How often in days of yore did a bad result convince Indians or Sri Lankans to kill themselves? Yesterday: 2pts

Coverage
There is, of course, no comparison here whatsoever, whether in depth or breadth or even - because we see and know and understand more - quality (literary worth, again, is strictly a matter of taste). At the risk of sounding as disinterested as a mongoose pronouncing judgement on a drunk and disorderly cobra, the range and geographical sources of the voices on this site surely supply incontrovertible proof that we've never had it so good. Hell, if the residents of the Tower of Babel had co-existed this peacefully, we'd all be speaking Hebrew now. Today: 2pts

Final score: Today 13, Yesterday 5

Let's face it: nostalgia simply ain't what it used to be.