liberalism at large 7

The appointment of Alastair Burnet was a watershed for the Economist, which began a sharp and permanent turn to the right, and to America, under him. The first ever paid-up Conservative to edit the paper, his tenure was marked by unconditional support for the war in Vietnam, where the US escalated its assault on the North just as he took over in 1964. The changes Burnet heralded were generational: from Bagehot to the younger Crowther, editors had looked to the Liberal Party as their central reference, as the institutionalization of liberalism; from Crowther’s intake after 1938 to Tyerman’s after 1956, most staff – Ward, Kyle, Midgley, Monroe, Smith – were formed by the Second World War, when the ‘extreme centre’ encompassed economic planning, the New Deal was held in high esteem, and Soviet Russia was still an ally, with all the mixture of attitudes that went with this short-lived parenthesis. The Economist since Burnet has been produced for the most part by pure products of the Cold War, without any adult experience of what preceded it. (Deputy editor Norman Macrae was the main exception, chronologically, but with childhood memories of 1930s Moscow that served as a premonition of the same mindset.) More than any single economic point of policy – and even as global capitalism changed dramatically over three decades, with post-war boom fading into long downturn before a neoliberal shock – the political struggle between liberalism and communism structured coverage at the Economist.
The Burnet Show

‘Few editors of the Economist have been famous faces’, began the in-house obituary for Burnet, who passed away in 2012. A political reporter for ITN, as editor he continued to cover general elections and the monarchy, and in 1967 began to anchor the News at Ten. His small sleepy eyes sat beneath heaping eyebrows, which furrowed, implored, wheedled, or rose archly, depending on the subject, with the whole crowned by a slick bouffant of hair that greyed over time but never lost altitude. A colleague described him as a proto–Jeremy Paxman, the BBC journalist famous for flustering politicians and pop stars as well as helming patriotic documentaries that celebrate the quirky side of the British character. Burnet was even more reassuring than that; for Americans, something like a cross between Walter Cronkite and Barbara Walters. Like the former, he was portentous enough to call national elections six times from 1964 to 1987, and narrate the moon landing, albeit with less gravity: ‘there it is, the old moon – the one the cow jumped over’. On the other hand, he basked in the warm glow of the royal family, chronicling their weddings, births, funerals and daily rituals in books and television specials, sometimes with embarrassing deference. On hand when Prince Charles wed Diana Spencer, as the latter descended the steps of Westminster Cathedral with a twenty-five-foot train in tow, he exclaimed, ‘If there is any heart that hasn’t been won over by her today, it can kindly surrender now’. Sniffing at flowers on the ninetieth birthday of the Queen Mother, who observed it was a day in a million, Burnet was heard off-camera: ‘She’s made so many days in a million’. Private Eye, the satirical weekly, dubbed him ‘Arslicker Burnet’. The TV show Spitting Image gave him his own puppet. In one segment, ‘in private, in person, incredibly boring, a year in the life of Sir Alastair Burnet’, his likeness prepares for a week of ‘fawning and cringing, if he can fit it into his busy schedule of licking and slurping’, as he clutches a canister of oil and toilet paper roll; in another, Charles and Diana walk up an endless red carpet that turns out to be his tongue.
His interest in what he called ‘plain folk’ notwithstanding, Burnet’s background was standard for an editor: born in Sheffield in 1928 to Scottish parents, his father was an engineer, who nurtured hopes that his son would play cricket for Yorkshire. Burnet went to the Methodist Leys School in Cambridge, then on to Worcester College, Oxford, where he studied history but refused a second-class degree, believing he deserved a first. After a few years at the Glasgow Herald, he began his first stint on the Economist in 1958. Burnet did not take himself too seriously. One of his major impacts on the paper was that it no longer did either. He presided over meetings with a gin and tonic, did impersonations, and commissioned pieces on his favourite sports. Covers portrayed catchy visual-verbal gags, with captions and thought bubbles gently deflating world leaders, like Private Eye for the ruling class. There was Labour’s Harold Wilson dressed as Santa Claus for Christmas in 1967: ‘But I haven’t got the sack’; the Tory leader Edward Heath on his sailboat: ‘So what’s my handicap for 1970?’; around New Year in 1972, Richard Nixon splashing through the surf: ‘Hope I needn’t walk on it this year’. Some even took principled stands. When British passport holders from East Africa of Asian descent were denied entry to Britain in 1968, it pictured a UK passport in a pile of garbage, ‘If that’s what it’s worth’. Circulation rose along with jauntiness: 60 per cent in a decade, to 123,000. ‘He did work hard’, recalled one journalist, ‘and from 6 p.m. to 1 a.m. he left to do TV. His private life suffered, but not the paper.’
Burnet was at the same time an active Conservative, who took on added stature within the party thanks to his editorship. When the National Union of Miners defied the government and went out on strike in February 1974, Burnet was one of those who advised the prime minister of the day, Edward Heath, to call elections, breakfasting with him every morning during the ensuing campaign. The title of his address to the Conservative Political Centre a year later registered his shock at the outcome: the question no longer ‘who governs’ but ‘Is Britain Governable?’ His answer was that of a moderate who thought two steps could save the situation: gathering a coalition to build consensus around sensible reforms, and forcing the trade unions to hold competitive elections, ‘more important than any parliamentary by-election, and more important than most elections for the control of a city or a county’. He ended with a warning to those who favoured a more frontal assault on labour, already gathered at think tanks like the Institute of Economic Affairs or the Centre for Policy Studies, where Thatcher was imbibing much of the neoliberal program she brought to 10 Downing Street four years later:
I believe it would be ruinous for the Conservative Party, in the decisive political battle of this generation, to adopt the policies of the study, to be tempted into an academic view of unemployment … People will accept much more if they can be sure the intention of a government is that real incomes are rising than they will if they suppose that monetarism … is the only formula. We should not suppose that everyone in Britain is converted to the helpful doctrines of Dr. Milton Friedman, or that, even if they read Newsweek, they have ever heard of him.1
Brian Beedham, Robert Moss and Vietnam

The moonlighting of a celebrity editor gave a great deal more freedom to his two deputies – Brian Beedham and Norman Macrae – each equally influential in their domains, both convinced liberal capitalism must fight communism to some final reckoning. How did the Economist represent the battlefields of the US Empire, which took that fight direct to the enemy, and what were the implications for democracy? From 1965 to 1989 the answers were given by the dour, domineering and articulate Brian ‘Bomber’ Beedham, whose author photos show him dressed like a retired US intelligence analyst in a natty sweater layered over a shirt and tie, wearing aviator glasses and a beard. Feared and respected – if never much liked, with two near misses at being editor to show for it – Beedham started out like much of the staff since Crowther: on a scholarship to Oxford in 1952 and then a Commonwealth Fellowship to the US. There he received his first lessons in Atlanticism in 1956, when he called the British military attaché in Washington to enlist for service in the assault on the Suez Canal. The attaché hung up, and the patriotic Beedham deduced two things from an expedition that ended almost as abruptly: London could no longer act abroad without leave from the US, but what it could do was awaken the latter to its responsibilities as the new policeman for the world.
So the next year Beedham instead reenlisted in the Economist, where Brian Crozier, the only other champion of Suez, welcomed him. Crozier left the paper in 1964, but continued to exert pull via Beedham, who also hired Crozier’s twenty-three-year-old protégé Robert Moss as a correspondent in 1970. Crozier had been so impressed on meeting the young Australian the previous year that he had asked Moss to draft the inaugural report for his new Institute for the Study of Conflict (ISC), set up to ‘expose’ détente with the Soviet Union as a fraud and ‘save the Western Alliance’.2 At first glance Moss might have seemed an endearing contrast to his humourless mentor: pudgy face, ruffled beige trench coat, smoking cigars, mixing dry martinis; he ‘liked the smell of cordite in the morning’, he said, doing his best James Bond. Moss continued writing for Crozier’s CIA-funded ISC (which also took money from multinationals like Shell and British Petroleum) and Forum World Features (a kind of Associated Press of ‘misinformation’) during his ten years at the Economist, often using both it and Foreign Report as covers for paid intelligence agency work and the planting of false stories.3
Beedham gave Moss free rein, with striking results. ‘Foreign Report is unique in that it forecast almost to the day the coup d’état in Greece in 1967 and the coup in Chile in 1973’, ran a boastful 1979 blurb for the magazine, described by two investigative journalists as a ‘gossip column of the intelligence world’.4 In 1980 Moss would leave the Economist, taking with him an aura of authority that only the paper could have provided. He became an advisor to Margaret Thatcher, who in her memoirs thanked ‘the editor of the Economist’s Foreign Report, an expert on security and strategic matters’ for drafting her famous ‘Iron Lady’ speech warning of the ‘Sovietization of Britain’ in 1976. He was also, Thatcher noted warmly, ‘destined to be a bestselling novelist’, with a spy thriller that read just like his journalism for the Economist but with lashings of violence and pornographic sex (which she did not mention).5 Moss suffered a nervous collapse a decade later at the end of the Cold War – today he is a ‘dream shaman’ in upstate New York, advising people on how to visit dead relatives and world leaders in their sleep – and his story captures some of that conflict’s obsessive hold over the paper he and Beedham had such a pivotal hand in editing.
No issue defined their approach more than Vietnam, where in 1954 the US began to take over the role of the defeated French – funding a fragile, repressive client state in the South, while fighting communists there and in the North, to prevent any reunification of the country under Ho Chi Minh. For the staff writer and future historian Hugh Brogan, Economist coverage of the war by the early 1960s was ‘pure CIA propaganda’, which claimed South Vietnam was thriving under Ngo Dinh Diem, its US-installed premier. ‘Rice can be exported once more. Farm taxes are down. Education, sanitation and health have been greatly improved’ and ‘the great mass of the people, neither hungry nor profoundly interested in western concepts of philosophical liberalism and parliamentary democracy, are non-communist.’6 ‘But it’s so nice to have good news for once’, sighed Barbara Cruikshank when Brogan objected to such stories, in particular to their rosy depiction of life in the ‘strategic hamlets’ – concentration camps, rebranded – to which peasants were herded at gunpoint. Perhaps these had ‘defects in practice’, the paper admitted in 1963, but they could be fixed: fencing off farmers from communists (one could not be both, in its view) was the right start, but Americans ought to learn from ‘the French here a decade ago and the British in Malaya’ how imperative it was for white men to keep out of sight. ‘They should provide the material and technical means of winning the war, but leave the fighting to the Vietnamese’, for only ‘they can merge with the population like a fish in water’.7
Articles sounded more like pep talks than dispassionate analyses. For Beedham, the Tet Offensive, launched from the North and across the South in 1968, was ‘an attempt, conducted with brilliant tactical dash, to force a settlement before it is too late’, but doomed to failure. ‘American opinion at home has hardened in support of the war. The statistics are moving against the communists where it matters.’8 Two issues later, there was alarm when the offensive appeared to rattle nerves instead, as ‘Viet Cong’ breached the US Embassy in Saigon, and the death toll for US forces began its climb to 15,000 in a year: ‘Americans would be admitting that they had been beaten by the technique of guerrilla war as applied by a minority of the population of one small Asian country. That would affect the way that men in Moscow make their plans for the future.’9 On the My Lai Massacre in retaliation for Tet, involving the murder of around 500 unarmed children, old men, and women (many of whom were also raped) by US marines: an isolated incident, ‘minor variations on the general fallibility of men at war’, and paeans to Western freedom of the press for bringing it all to light. ‘The bloodiness of this war is undeniable. But it is hard to detect on the American side anything that could be called a policy of atrocity.’10
The Nixon administration’s decision to target Cambodia in 1969 – carpet-bombing it on the same pretext as Laos (where five years of this had rendered large swathes uninhabitable and over a quarter of the population homeless), and then invading it – did give rise to tensions at the Economist … with what result? ‘No one wants to raise the spectre of a second Vietnam’, it began in 1970. ‘But if the new Cambodian government is threatened by a foreign army, as distinct from a local rebellion, Mr. Nixon, whatever his reluctance, will have to consider the consequences of failing to support it.’11 That month, Nixon announced his ‘Cambodian incursion’. The paper even sniped at Henry Kissinger – the chief architect of this scheme as the National Security Advisor – for mulling peace with the North Vietnamese in October 1972 on terms far too lax. It was an extraordinary thing to write about this peace plan, which Hanoi accepted after many concessions and millions dead, only to watch Nixon drop it till after the US election (betting, on a pollster’s tip, this would win him more votes) while ordering the saturation bombing of Hanoi and Haiphong.12 ‘There is no reason a liberal should accept why the two Vietnams ought to be reunited until it has been shown that a majority of the people in both of them, or at least of those in the south, wish it to be so.’ Until this was certain, let the bombs fall where they may.13
Beedham was just as relentless when it came to combatting criticism of the war, which increased as prospects for winning it faded. In Britain, he pressed Wilson’s Labour government for ‘clearer voiced practical support for the American position’.14 Wilson was in fact unwavering, offering not just moral encouragement to Lyndon Johnson, but also training, supplies, signal intelligence and support from bases in Hong Kong and Malaya. If he refused to say so in public, or to accede to pressure for British boots on the ground, this was for fear of splitting Labour, whose left wing urged him to condemn indiscriminate US bombings of civilians in Northern towns and villages in June 1966, in a move that infuriated the Economist.15 ‘If the British want to, they can give up the attempt to influence American policy. They can retire to the sidelines and blow raspberries.’ Instead, they should respect the special relationship, whose rules were simple: Britain must ‘go along with the main aims of American foreign policy in return for the right to nudge the Americans back on course. It is a fair exchange.’16 It was silly to rant about ‘US Imperialism’. ‘How can anyone this side of lunacy suppose that the American troops fighting in the paddy-fields of Vietnam can raise their real gross national product back home by a single cent?’ Americans were the real victims, there for ‘unselfish reasons’; ‘the communists are the force on the move in the area’. Beedham could not fathom how students ‘should be tempted to scream abuse in Grosvenor Square’ at the US Embassy, where huge Vietnam Solidarity Campaign marches converged in 1968.17 And when the Pentagon Papers were published by the New York Times in 1971, he lumped it in with the same sort of student truants. Temporizing about the presidential lies running from Truman to Johnson that the Pentagon Papers revealed, Beedham maintained that these did not alter the merits of the Vietnam War, and in fact necessitated them. ‘There are powerful reasons democratic governments are seldom particularly open with their people on the brink of war.’ The most powerful of these? A ‘liberal intelligentsia’ that ‘prefers not to bring itself to face the possibility of war until it sees the knife at its own throat’ – pacifists, appeasers, the sort of people who had lain supine before the Kaiser and Hitler.18
The idea that it might be justified to lie to citizens now informed not just the content but also the sourcing and editing of foreign news at the Economist. ‘Vietnam just wasn’t debated at Monday meetings’, recalled Johnny Grimond. ‘Beedham simply had too much control, so the invasion of Cambodia might come up, but never the war itself.’19 Nor was this confined to Southeast Asia, just one front in a vaster war, as Beedham explained in a special debate with foreign editors of the Polish weekly Polityka in 1965. ‘If we in the West accept the existence of a line in Europe beyond which there is no poaching, then you must accept a similar line in Asia.’ For ‘if in the name of “wars of national liberation”, you support the use of violence to change the regime in South Vietnam, how can we appeal to other people to refrain from violence in the pursuit of “liberation” elsewhere: Pakistanis over Kashmir, the Austrians over South Tyrol – in the end, maybe, the west Germans over east Germany?’20
Enemies: Suharto to Allende

The Economist applied Beedham’s implacable Cold War logic to cover the entire earth. In Indonesia, the stakes were high, and so was the need for secrecy about Western involvement: in this case, 54,000 British troops fighting for Malaysia, a federal entity whose borders London had drawn in 1963, provoking immediate clashes with Jakarta over them. Beedham sought a physical and psychological war to ‘check’ Sukarno – the independent-minded first president of Indonesia, whose grip on power rested in part on the national communist party (PKI) – explaining as much to the Salt Lake Tribune at the height of the ‘Konfrontasi’ in 1964. A guerrilla campaign in the jungles of northern Borneo directed against the former British territories of Sarawak and Sabah was serious, but one that a modest escalation – say, ‘infiltration of British-trained guerrillas into Sumatra’ to ‘remind Sukarno that two can play the guerrilla game’ – could solve, ‘for there are signs President Johnson and Secretary Dean Rusk are as worried as the British about Dr. Sukarno’.21 Beedham, of course, was in the psychological war business himself – writing stories with help from Crozier and the Information Research Department. In 1965, he accused Sukarno ‘of trying to appease the Indonesian communists, even to bequeath the succession to them’. On this pretext, General Suharto ousted Sukarno that year, rounding up and killing half a million communists and suspected communists; the British and Americans supplied a list of names and other assistance to Suharto, as a bloody curtain descended on Indonesian democracy for three decades. For the next thirty years, the paper consistently extolled Suharto and whitewashed his crimes – minimizing student protests against his ‘postponement’ of elections and praising his reform of the army into a ‘fast-moving, police-action force’ in 1968–69, justifying his invasion of East Timor in 1975, legitimizing his Golkar party’s victory in 1987 as ‘relatively peaceful’ and ‘convincing’, and commending his economic management.22
The Economist refrained from criticizing US interventions even on the rare occasions when these violated its low bar for the respect of democratic niceties. In 1965, Johnson sent 42,000 marines to the Dominican Republic, in what the paper called a ‘reflexive move’, but then excused as a pardonable misunderstanding from ‘the most internationally responsible country in the world’. Most rebel officers in Santo Domingo were not Castroite communists, it admitted, but supporters of the ‘democratic leftist’ Juan Bosch, chafing under a corrupt military junta that had removed him from the presidency two years earlier.23 In Greece, it deplored the ‘colonels’ coup’ as a ‘tragic stupidity’ before elections slated for April 1967, but denied the CIA had any hand in plotting it – even as Foreign Report wrote quite candidly on its aims in doing so: to keep the Papandreou-led Centre Union from winning the elections by installing General Papadopoulos, a former Nazi collaborator and current CIA agent, and associated generals, instead.24 That May, in a different register, the paper cheered a ‘glittering victory’ for Israel over Egypt in the Six-Day War – finally ‘teaching a lesson’ to Nasser, a ‘would-be Bismarck’ with dreams of uniting the Arabs, and Russians, behind him.25 By the time Egypt launched a counter-attack in 1973 – a huge last-minute airlift of US tanks and aircraft turning the tide for Israel – the Economist line on the Middle East was more or less fixed. Peace would come when Arabs and Jews desired it, not from outside interference, ensuring that Israel – as the largest single recipient of just such external help from Washington – has seen little need to compromise with its neighbours, let alone the Palestinians under its thumb.26
Perhaps the most significant breach of democratic practice and journalistic ethics in the line of imperial duty came with the coup in Chile in 1973. Beedham delegated this dossier to Robert Moss, who was not content merely to criticize the leftwing physician Salvador Allende – elected president of Chile in 1970 promising a ‘peaceful road to socialism’ – but worked actively to prepare opinion for his forcible removal. Nixon had personally ordered the CIA to foment a coup before Allende even took the oath of office, with instructions to spare no expense and ‘make the economy scream’.27 Crozier, for whom Moss was already writing ISC Conflict Studies while travelling across Latin America for the Economist, tipped his protégé to help carry out this mission.28 ‘The next move from my CIA friends was to suggest the need for a book on Chile. The author I proposed to commission was Robert Moss, whose qualifications were ideal.’29
‘In the Chilean summer, it is hard to imagine civil war’, began a special Economist report from 1972, signed by Moss. ‘Yachts bob out in the Pacific at Algarrobo, beautiful girls sip pisco sours in the Grand Hotel at Zapallar.’30 To show how vulnerable this society really was – or at least the part of it drinking cocktails at hotel bars – the paper ran negative stories on Allende almost every week: his warm embrace of ‘Cuban terrorists’; economic shortages caused by his land reforms and nationalizations, so that Chinese restaurants in Santiago now served ‘sweet-and-sour turkey’; or dismissing revelations that the US was funding his opponents in the media, the political parties and the trade unions through an International Telephone and Telegraph subsidiary.31 Filing these stories still left Moss enough time to lecture and write for the Institute of General Studies (IGS), a CIA think tank that met inside the US Embassy in Santiago, aiming to connect military officers with free-market economists; and to write for SEPA, a magazine for the same officer cohort, which splashed an article of his on its cover six months before the coup: ‘An English Recipe for Chile – Military Control’.32 At the same time, Moss readied his book, which instead of fertilizing the ground for the coup, had to be revised as a post-hoc justification of it, when Chile’s generals launched an all-out assault on Allende’s government at the start of September in 1973.
Chile’s Marxist Experiment was distinguished by two compulsions, the first of which was bragging, so that Moss could not help crediting smooth coordination among top brass during the coup to ‘reports prepared by a group of independent and opposition economists who had been meeting on a weekly basis since January’ – that is, to himself and the IGS.33 The other was sniggering: the ‘irony’ that Allende used a gun Fidel Castro gave him to commit suicide as tanks and jets pounded the presidential palace, which, as he refused ‘four separate offers for safe conduct’ was nothing but vain heroics – ‘maybe he felt that death was preferable to a retirement divided between a villa in Havana and speech-making over fashionable dinner-tables.’34 Citing sloppily fabricated ‘evidence’ of an imminent communist ‘night of the long knives’, Moss maintained that the army had acted in self-defence: ‘Chile’s generals reached the conclusion that democracy does not have the right to commit suicide.’35 As a token of appreciation, the generals bought 9,750 copies, distributed through Chilean embassies; a member of the IGS, now running the state publishing house, printed another 15,000 in Spanish.36
When news of Allende’s death reached him in London, Moss danced down the corridors of the Economist chanting, ‘My enemy is dead!’ He returned in haste to finish his book while officially on assignment for the Economist, producing a special report for it on the coup in October. In it, he praised the new junta for holding public trials of suspected leftists, and for allowing foreign journalists and the Red Cross to visit the 5,000 or so people being held at the national football stadium in Santiago – where Moss somehow missed gruesome scenes of torture and summary executions, along with the disappearances that came to mark the Pinochet regime. He ended with a simple endorsement: ‘The events of September 11 were not a typical Latin American coup but the culmination of a long (and broad-based) public campaign against a minority government that was suspected, probably rightly, of preparing to perpetuate itself as a dictatorship.’37 Bagehot, writing in 1851, had worked harder than this to justify the coup in France. The larger point is that Moss operated openly, and for seven more years after this dance of death, during which time his profile did not get any lower. Brazenly overlapping with studies for Crozier’s ISC, his Economist articles spread the alarm about supposed communist threats in Spain, Portugal, Northern Ireland, Iran, South Africa and Nicaragua.38 In all this, he showed that, in the free world, it was possible to do well by doing good: free trips from the Shah; quid-pro-quos for a cheery gloss on apartheid South Africa’s invasion of Angola; a £20,000 salary to edit VISION, a magazine owned by the Nicaraguan dictator Anastasio Somoza.39 Moss left the Economist in 1980, using contacts he had made there to publish his first novel, The Spike. Here the hero is journalist Robert Hockney, ex-Berkeley radical turned anti-communist crusader, whose erotic adventures are rendered in as much graphic detail as his quest to expose media outlets and think tanks as thinly disguised KGB fronts.40
Macrae-economics: Considering Japan and West Germany

Norman Macrae was the mirror image of Beedham and Moss, complementing their geopolitical engagements with his own take on global capitalism.41 His manner was quite different, however. Macrae dressed in a standard-issue suit and tie, looking like he had slept in them for weeks, while correcting copy at his desk. At meetings he stammered out his points and burst into giggles at inappropriate moments, his large boxy frame heaving up and down. No one could read his handwriting, or his corrections, except a devoted secretary, who was said to enter a trance to decipher it (this before computers, which he touted but never used). Though admired as a brilliant, original mind, he too was passed over for the editorship, three times. As a former section editor put it: ‘the chap cut his own hair’, and ‘even then the editor had to be vaguely representable in public, you know, for visitors, on TV’. Andrew Knight would call him ‘warm-hearted and good and very eccentric’. Rupert Pennant-Rea remembered that ‘many of his spoken sentences began with the words “the thing is” and then rather tailed away’; ‘let him write about the subject, however, and words flowed beautifully, without a single “the thing is”.’
Separated by bearing, united by worldview – Beedham and Macrae agreed the greatest threat to it lay due east, in the Soviet Union. Macrae was born in Konigsberg in 1923, his father a high-ranking diplomat, who ended up as British Consul to Moscow at the height of Stalin’s purges from 1935 to 1938. Joining his family for school holidays as a teenager, Macrae said he could never forget the maids who seemed to vanish suddenly from the corridors of the embassy. (Later, he took his own children on summer trips, not to the beach or museum, but to Eastern Europe, ‘to teach them the difference between freedom and tyranny’.42) But, as with Beedham, it was disappointment with the weakness and hypocrisy of his side that came as the true call to action. A bomber navigator for the RAF (‘a public sector job with public sector productivity’) during the Second World War, he descended to earth in Germany in 1945, ‘just as the Russians were coming in from the other side’:
All the politicians, including Churchill and Roosevelt, told us these were fine liberating democrats. And of course I knew from those school summer holidays so briefly before that those were astonishing lies. That has given me one advantage in my 40 years as a newspaperman. I have never since then believed a word either politicians or public-relations officers have said.43
After demobilization, he went to Cambridge, of which he was not fond: ‘More intellectual, my left foot.’ ‘Sub-polytechnic Marxism’ was more like it: some students actually thought it a good idea to give ‘the secret of how to make an atom bomb to Marshall Stalin, who was clinically insane’. Macrae nevertheless found his home at a paper populated by graduates from the same social milieu, if not the same politics, becoming the driving force on economics at the Economist. Statistically dense, stylistically buoyant, many of his surveys turned into books and pamphlets – on capital markets, housing, industrial, trade and monetary policy, inventors, inventions and the near and not-so-near future.44 Writing from a comparative perspective, he set the post-war performance of British capitalism against the more miraculous experiences of its rivals, in special reports on Germany, France, America and Japan – this last the subject of ground-breaking work, with ‘Consider Japan’ in 1962, ‘The Risen Sun’ in 1967 and ‘The Pacific Century’ in 1975, all published in Japanese translation. His obituary called him an ‘unacknowledged giant of postwar Britain’, one of the few journalists to rank with Milton Friedman, Daniel Bell and Peter Drucker. But Macrae was not exactly unknown. In 1988 Emperor Hirohito recognized him with the Order of the Rising Sun. Like many whose star first rose in the West, he was simply big in Japan.45
If the nineteenth century the Economist had looked for investment outlets in the East, by the mid-twentieth it went in search of lessons. The parallels between Britain and Japan, two island nations ‘with very similar import structures and a tendency to run into import deficit at one stage of the internal trade cycle’, captivated Macrae. He was aghast that some Japanese policymakers he met in the 1960s thought it ‘time to learn respectable economics from the British and slow down their rate of growth’. One reason for coming to Japan, he told his hosts, was on the contrary to find an escape route for Britain, whose post-war economy seemed caught in a cycle of ‘stop-go’ – periods of expansion in which imports quickly raced ahead of exports, precipitating a balance of payments crisis, at which point government intervened to restrain demand, deflating the economy. The result? British industrial production had grown by 28 per cent, exports by 44 per cent, from 1953 to 1961; over this period, Japan increased its respective totals by 217 and 237 per cent. In 1955 Japan’s GDP was £8.2 billion against Britain’s £17 billion. By 1967 it was expected to be £40 billion, 18 per cent larger than Britain’s at about £34 billion.
In trying to explain the divergence, Macrae rejected explanations based on race or culture. Japanese ‘were not nowadays naturally servile to authority, or so silly as to actively enjoy hard work’, and ‘the inbred collectivism of the Japanese people’ was not unlike ‘the atmosphere in the heartier English public schools’. Macrae paid attention to government policies instead, which turned out to be inimical to standard practice in Britain and the US. American businessmen landed in Tokyo expecting ‘the great new successful free enterprise community of our time, created in America’s own image’. He prepared them for disappointment: ‘Japan, even more than France, is the land of indicative economic planning à outrance.’ Five years on, he was even more emphatic: ‘Ultimate responsibility for industrial planning, for deciding in which new directions Japan’s burgeoning industrial effort should try to go, and for fostering and protecting business, lies with the government.’46
On his first trip to Japan, Macrae emphasized the way that planning worked for budgets and banks. The former were relentlessly expansionary, combining fiscal stimulus and tax cuts, year after year. The latter were even more peculiar: virtually insolvent, with a deposit-to-loan ratio of less than 3 per cent, banks relied on the central bank for liquidity and responded to its instructions on when to tighten credit and investment. If fiscal policy acted as accelerator, monetary policy was the brake. When Britain overheated, by contrast, the Treasury simply depressed demand across the economy, hurting growing firms far more than old and inefficient ones. For this reason its top three exports to Japan in 1961 were liquor, sweets and textiles. ‘The vision of the average Japanese is that Britain today is a non-developing country; filled no doubt with whisky stills, children’s bonbons, skilled at making up material from old sheep; but not a dynamic country capable of producing anything expansive and new.’47 On his next visit, corporate culture caught his eye. The Japanese miracle perplexed Americans and Europeans, who demanded it ‘liberalise its rules about capital inflow’ and permit foreigners to buy up its businesses. Macrae was sceptical of their chances. On returning to his Tokyo hotel at night, he encountered ‘American businessmen reviving themselves in the bar with moans and martinis’. ‘The society’s rotten with fornication and your English Scotch [sic]’, one drawled at him. ‘OK, so I’m no puritan myself … But I don’t buy me a prostitute every night with my shareholders’ money, and I don’t suppose the London Economist buys you one either, huh?’48
Capitalism worked differently in Japan. Employees enjoyed lifetime job security, top income tax rates on executive pay were more than 10 per cent greater than in Britain, and if corporate income as a percentage of GDP was higher than in the West, gross capital profit rates were lower. Far from condemning its methods as unorthodox, Macrae was enamoured by them. Beneath the boom of his bar mates, he was forced to mutter, ‘economic miracle … remarkable planning techniques … record of growth’. To help explain these achievements he returned to the financial system, which now carried an implicit criticism of Wall Street and the City of London. Banks’ control over investment funds in Japan, instead of the stock market, ‘had overcome one of the weaknesses of the normal western free enterprise system – which is that the total of investment that seems profitable to individual profit-seeking firms is unfortunately almost invariably smaller than a dynamic economy should require’. Capital investment between 1956 and 1963 averaged 34 per cent in Japan as compared to 17 per cent in the US and Britain. Average annual growth was 10.1 per cent in the former, just 2.6 to 2.8 per cent in the latter. In 1975 he was still optimistic about Japan as it began to export its development model to its neighbours.49
West Germany was another reason to reassess the so-called English disease. In 1966 its record of growth was second only to Japan, averaging upwards of 6 per cent for over a decade; while its share of industrial exports had doubled since 1950, largely at the expense of Britain, whose share had fallen from 21 to 13 per cent. Again, Macrae was more impressed with economic policies than ‘nonsense about national temperaments’. German trade unions and management structures could easily be emulated in Britain. The former were fewer (16), more democratic (‘secret ballots’), richer (‘regular dues’), more professional (‘trained left-of-centre economists’). They were also less likely to strike or walk out based on the introduction of new equipment, since they shared in management decisions, and, though paid slightly lower wages, had seen these rise by 130 per cent (against 80 per cent in Britain) since 1955. Managers, on the other hand, could enrich themselves as well as their companies – with a lower top income tax, higher capital taxes geared to investment and activist banks, which kept track of business efficiency.50
The City and the EEC: In Search of a British Miracle

How did Britain compare to these countries? Macrae raised that question in every foreign report, even as his answer changed in response to events at home. In 1964, Harold Wilson had promised to replicate the German and Japanese miracles, with a state-led modernization of the economy that harnessed science, technology and efficient management. But that project failed. Once in power, Wilson deflated the economy, sidelining the Department of Economic Affairs and abandoning his National Plan, in order to protect sterling, for yet more Treasury- and City-inspired stop-go. In 1970, his successor, Edward Heath, came to office pledging a dose of free-market rigour – no more subsidies for ‘lame duck’ industries – and legislation to bring the trade unions to heel. But this too had come to naught. Heath backtracked as soon as unemployment hit 1 million, before miners brought down his government. By then, a world crisis had overtaken the national one that Macrae had hoped to solve in his studies abroad.
At this juncture, the deputy editor gave his verdict on the political, economic, social and cultural institutions that had long made his country the odd man out, in a 1973 survey that also signalled a bitter turn in narratives of national decline. ‘Britain entered the postwar era as the richest country in northwest Europe except Sweden. Because our economic growth rate since then has been about half that of our neighbours we are now the poorest except Ireland.’ In 1964, Macrae had pushed the Economist to back Wilson, in the hopes of unleashing economic growth. Instead, what Britain got was ‘government by inferiority complex’, as Labour ‘solemnly deflated the economy into ever greater unemployment and stagnation, in order to save an exchange rate which almost everybody outside Whitehall knew it was both undesirable and impossible to save anyway’. This episode led Macrae to conclude that Britain was not ruled by parliament, but a ‘bureaucratic oligarchy’ of about 3,000 administrative civil servants – which might have been fine, if these were younger, less risk-shy, and more like their French or Japanese brethren. From 1970, Edward Heath and the Tories offered another lesson, when their attack on the unions’ legal immunities was handily defeated. If this stood, more electrical blackouts could be expected, descending the country into a literal dark age of social disorder, even a ‘Latin American situation’.
Declinist, not defeatist, Macrae advocated a raft of measures to contain this looming crisis – as significant for the neoliberal elements these already contained as for the ways in which they differed with the ideas gaining traction among intellectuals who would be close to Thatcher. Macrae called for a long overdue showdown with organized labour (perhaps through a ‘shock legal action’ as in the 1901 Taff Vale case), and for reversing the ‘Attlee nationalizations’ of 1945–51. This version of nationalized industry – ‘narrow, monopoly production in certain rigidly defined fields’ like coal, railways, power utilities, steel – had always been doomed, not just because public corporations were kept from moving between product lines as did all private firms (Imperial Tobacco now made crisps as well as cigarettes), but because they in turn produced monopoly unions, and cost-push inflation. ‘The crucial point for any reform is not that ownership of particular plants should be wrested from the state but that there should be competition to make the products of nationalized industries.’ No ‘forced sale’ then, but the extension of competition to ‘all municipal or other public services’ – from libraries to trash pickup to prisons – on a performance contract basis.51 Still, it was difficult to be crudely anti-statist in light of the last thirty years, which suggested that Britain did not have adequate planning. In Tokyo, a civil servant at the Ministry of Economy, Trade and Industry once apologized to Macrae for handing over a report brimming with mathematical jargon. ‘There must presumably be something else, if not mathematics, of which those in charge of British economic policy tend to be excessively fond’, ventured the civil servant. ‘Moralising’, replied Macrae.52
What remained almost unthinkable was that monetary methods could or should be the main means of lifting the malaise. Here was the bedrock, as it were, of the weak Keynesian consensus at the Economist, where several reasons spoke against the manipulation of interest rates to increase unemployment or shake out inefficient firms. For Macrae, there were not just the memories of the Depression, as well as the experience of the post-war decades of ‘stop-go’, but overlaying both the logic of the Cold War: near-full employment as the price of democratic legitimacy in Western liberalism’s struggle with the Soviet Union. Amidst the miracle years of post-war capitalism, the bias was for expansion, and against constriction. As if to highlight the gap this left between the Economist and the neoliberal program, Macrae’s survey of the economy in 1973 brought a reply from Arthur Seldon, joint head of the pioneering think tank the Institute of Economic Affairs, who ‘agreed with 90 percent’ of it, but wished Macrae had followed ‘his analysis to its conclusions’ and called for denationalization of the ‘two state services that account for a high proportion of government: education and medical care’.53
Macrae’s frustration with the ‘stop’ in stop-go economics led to overlap with neoliberals like Seldon, however, on an important issue. To avoid the deflationary effects of defending the pound sterling at a fixed exchange rate, Macrae had backed a float since the late 1950s, irrespective of the City’s sterling area ties. More exciting opportunities now beckoned, at the interconnection between Europe and America, whose sluice was the growing Eurodollar market. Starting in the late 1950s, some of the City’s leading merchant bankers joined Treasury and Bank regulators to encourage American, Asian and other multinational banks and corporations to come to London to tap these liquid markets in ‘offshore’ dollars – whose chief attraction was their unregulated status, operating outside Federal Reserve and Treasury oversight and capital controls established under Bretton Woods.54 Since Macrae was neither uncritical of the banks nor a conventional neoliberal, it is all the more striking that he too looked for a partial solution to British difficulties in the speculative innovations of London’s financial hub.
Indeed, as Macrae contemplated the advantages of British membership of the European Economic Community (EEC), it was the prospects for the City that stood out: the end of fixed exchange rates and sterling area capital controls – which EEC entry demanded – meant that as ‘northern Europe starts exporting its manufacturing industries to the poor south and communist east’, British banks would boom, organizing the flexible holding, licensing and other investment and ownership strategies and structures of the post-industrial world.55 Britain into Europe, a collection of writings from the Economist staff, made the case for entry from this perspective in 1971 – arguing that it was high time for the City to abandon sterling’s reserve status (with the ‘awful record’ of ‘two devaluations, ten grisly postwar sterling crises, ten occasions on which Britain suffered a sharp drain on its gold and foreign exchange reserves’) and most commonwealth preferences in goods.56 The City should instead look to the ‘dollar and Eurocurrency markets’ of the future, becoming ‘the banking centre of the community, where the working dollar balances of Europe are kept – a new, more desired, very much more fruitful European version of the sterling balances used by Britain to finance its profitable investment abroad’. The City would act as a hinge between two eras of political economy, with Britain pivoting to the global currency markets of the future.57
If Keynesian demand management remained a relevant tool in the liberal policy mix, this had as much to do with the US – which Macrae visited for the paper in 1958, 1969, 1975, 1978 and 1980, more than any place else, outdoing even Beedham in his devotion to it. While enthusiasm for the ‘greatest country on earth’, and its mission, ‘to be at once political sedative, social healer and the leader of mankind’s last important economic advance’, never wavered, fears arose that its social and racial conflicts might plunge it into chaos, and then migrate to Britain. ‘Negros have swarmed into rotting ghettos’, Macrae reported in shock in 1969 – that year a turning point in his perception of the inner city – plagued by unemployment and crime, which have ‘sprouted a large charade cast of tough so-called “black power” leaders’. Many whites suffered from ‘feelings of insecurity and terror’, and some in Washington told him they carried guns, ‘just in case’. ‘White Americans fear (probably rightly) that “black power” ideology may make some Negro youths feel that robberies and assaults on white women are almost a noble act of black revolution.’ White students egging on black comrades at protests, as well as the ‘temporary tolerance of violence by many American white liberals’, particularly incensed him. Stimulus was needed on a scale unimagined even by Johnson’s War on Poverty, to head off ‘mortal peril’. America ‘would be wise to give almost overstrained priority to maximum economic growth, even though this will mean tolerating more inflation than its middle classes will like’.58 But just as important was reassuring those middle classes by empowering police and suppressing locally elected community action programs, to ‘encourage an exodus from the ghettos at all deliberate speed’.59
Macrae’s strong feelings about law, order and local democracy in the US had a personal element, which he disclosed towards the end of the survey. Invited to speak at a university symposium on South Africa, he was heckled by students for being a ‘wicked honky’, who, in the Economist, had opposed the immediate implementation of black majority rule. ‘Dreamy, liberal intellectuals in Washington still held some idealistic notions of what a planned disturbance of this kind would be like’, he scoffed. ‘What I found was the dreariest old Nazism … the cult of violence, the cult of youth, the cult of proclaiming that one is ruled by a plutocracy … anyone over the age of 45 knows when and where in Europe youth was last asked to bathe in these emotions.’ Students roamed the hallways carrying buckets ‘into which obviously non-revolutionary middle-aged gentleman were requested to put entirely unaudited dollars “to finance the South African revolution”’. Macrae was petrified. First he tried to run. Then he pretended to be a friendly journalist asking sincere-sounding questions about Vietnam, which the students, he felt, answered stupidly. Later, at an assembly, he saw ‘black-power-uniformed thugs seize [the university president] by the scruff of the neck as a band of black drummers beat an accompaniment’. ‘A man of decency and international eminence’ surrounded by a black drum circle – his overwrought memory of this scene never left him.60
By the turn of the 1970s, Macrae could not hide his contempt for anything that smacked of counter-culture – from the Beatles to black radicals, hippies, feminists, environmentalists, the New Left and gays (he once proposed an Economist leader on a spray to ‘cure’ homosexuals by reversing their aversion to the smell of their mothers). These people were not just enemies but lightweights, who well-meaning liberals mistakenly wished to engage in dialogue. In the end, his economic position dovetailed with Beedham’s politics: in a backward country like Brazil or Chile, or in a poor black neighbourhood in America or Britain, democracy could easily become the enemy of liberal capitalism. Richard Nixon, with scant respect for the former, received barely a slap on the wrist over Watergate. The Economist viewed the affair as a mildly amusing intrigue almost up to the day the president resigned.61 Macrae, at any rate, looking to escape from the corset of fixed exchange, praised Nixon for dismantling Bretton Woods between 1971 and 1973.62
Andrew Knight: Special Relationships, 1974–86

The Economist may have applauded the delinking of the dollar from gold and the effective end of the Bretton Woods system of fixed exchange in 1973. But this drastic step also pointed to a deep, rumbling crisis of the liberal capitalist order that America had built after 1945. In one sense, this was a testament to its success, in particular in Germany and Japan. Two decades after their wartime defeat, newer, lower-cost industries in both countries – making everything from cars to consumer electronics – began to capture market share from American firms abroad and at home. For the first time in the twentieth century, the US recorded a trade deficit in 1971. The decline in profitability suffered by US manufacturers soon engulfed their foreign rivals too, while attempts to restore profit rates unleashed trade union militancy across the advanced economies. The problem was not just economic, but political and imperial. Mired in Vietnam, Washington had little to show for its efforts there besides monetary chaos. In the context of low interest rates, dollars spent on ‘butter and guns’ sloshed through the global economy, joining huge pools already ‘offshored’ in the City of London, where investors used them (among other things) to bet against the US currency. Nixon’s devaluation in 1973 was a defensive strike, meant to wind up a long, losing battle to maintain confidence in the gold convertibility of the dollar, and restore competitive capacity against German and Japanese exporters. As a means of reviving the world economy, it came to grief immediately. The oil price quadrupled after the Yom Kippur War, and a new word was coined to describe the effects this had down the decade: stagflation. Perhaps most alarming of all, these very developments seemed to strengthen the Soviet Union, which gained hard currency from surging oil prices and a freer hand abroad after America’s geopolitical setback in Southeast Asia.63
At this moment of apparent crisis for the American-led liberal world order, Andrew Knight became editor of the Economist. In contrast to past occupants of this position, Knight found it more difficult to get hired in the first place than to obtain the top job. On his second try in 1964, Brian Beedham thought him ‘brooding’ but ‘with the large advantage of not being a smooth young man’, and ‘worth bearing in mind’. Two years later Fred Hirsch, the intellectually distinguished finance editor, was about to end a third interview, dismissing a bungled explanation of monetary policy with, ‘I don’t think much of that’, when Knight rejoined, ‘Well, what do you expect for £1250 a year?’64 Quick wits won him a spot covering investing. But he had a bumpy ride. The business editor, Mary Goldring, criticized his knowledge of the money markets, and foisted him on the American Survey in 1968. Knight enjoyed this – too much for his superiors John Midgley and Nancy Balfour, who wanted less socializing and more business articles; he was recalled from Washington after just two years. On top of this, Knight was ‘basically illiterate’, according to one section editor, ‘his command of grammar left something to be desired’.
Yet two chances appeared and Knight seized them. The first was an opening in Europe, which he began to write about in 1970 as an assistant editor – lobbying for British membership of the EEC as well as a separate section devoted to it, to be edited by him from Brussels. There in 1973, his address book swelled: Valéry Giscard d’Estaing, the French presidential hopeful, was just one of the illustrious friends he made in the bureaucratic capital of Europe. Knight’s second break came that year when Burnet opted to leave and caused an uproar by pushing Beedham as his successor. ‘There was a strong feeling among younger members of staff that it would be nice to have someone more accessible and less right-wing’, recalled Johnny Grimond.65 Balfour and Mary Goldring protested to the board of directors, though in opposing Beedham, none had in mind the alternative of Knight, with Goldring resigning at the prospect. During this row, Knight crossed the Channel to make his case – most forcefully to the new chairman, the financier Evelyn de Rothschild, as well as to the board member and grocery magnate John Sainsbury, and assistant editor David Gordon. Knight’s pitch? He would conquer America, a challenge for which his two years of hobnobbing in Washington now seemed an asset. ‘The American Survey had given us a great reputation in the US. I could go to the White House anytime I wanted’, Knight told them. ‘The Economist could fulfil a unique function: analytical, opinionated, with distance’. It offered ‘something Newsweek and Time couldn’t’. Rothschild agreed that ‘exposing the Economist, at the risk of loss, to the American market was worth a shot’; Sainsbury, ‘the most prestigious board member’, clinched the consent of the rest of this ‘mildly obstructionist’ group.
At age thirty-four, Knight became the second youngest person ever to edit the Economist. Despite serious scepticism from many staff, he was uniquely suited to the mission he had set himself: transforming the Economist from a fellow traveller into an active participant in the political and economic debates that mattered in America. What had prepared him for this role? Though born in New Zealand, Knight was bundled off to England as a child. His father, an air force officer, chose Ampleforth, the elite Catholic public school, where Knight rose to head boy and became a favourite of his housemaster Cardinal Basil Hume. At Balliol, Oxford, he took a second in Modern History, before being sent, again by his father, to a merchant bank in the City. Knight did not like being a banker and tried a lateral move to what seemed the more exciting world of financial journalism. In 1964, he joined the Investors Chronicle, before stepping up and up: editor of the Economist, chief executive of the Daily Telegraph, the chairman of News International. If the Economist greatly enhanced Knight’s standing, this reflected his success in raising its profile, too.
In every written account of Knight, the word ‘ambition’ appears repeatedly – almost as if it were a physical attribute, to be noted along with his height or eye colour. ‘Written in neon’, said a former section editor. ‘He even worked funeral services.’ Profiles tend to place him behind closed doors, partly obscured, amidst padded leather and polished wood. The journalist and military historian Max Hastings recalled their first meeting in 1985 at Brooks, a private club in Saint James. ‘A man of striking pale, ascetic good looks … he had long ago shed any evidence of his family roots in New Zealand … and could have been mistaken for a youthful ambassador or Whitehall permanent secretary.’ Hastings observed Knight carefully as they changed parlours. ‘He acquired an almost oriental look when his eyes narrowed as he smiled. His meticulous courtesy also held a touch of the East. He had always possessed the ability to make the mighty feel safe in his hands.’66 Andrew Neil, another journalist who served under Knight at the Economist and then at News International, called him ‘an accomplished courtier to the rich and powerful, especially outsiders who needed help with the British establishment’.67 These included Canadian mogul Conrad Black, whom Knight advised to buy the Daily Telegraph in 1986, in a deal Evelyn de Rothschild underwrote, and all three toasted atop the Economist tower (asked who he intended to make managing director of the Telegraph, Black replied, ‘Our genial host, Andrew S. B. Knight, Esquire, peerage anticipated’); and Rupert Murdoch, the Australian who purchased the Sunday Times in 1983, briefly making Knight chairman of his growing media empire in 1989.68
At the Economist, Knight turned a transatlantic love affair into a new business model. The strategy rolled out in 1977 when Clive Greaves, head of advertising, went to New York to ‘spend money’. ‘There was no market research, just intuition based on my years in Washington. I get and deserve credit for getting into America.’ Greaves consulted advertisers with a goal to double circulation in time for the 1980 presidential election, at the same time hiring subscriber acquisition mailings expert Beth O’Rorke.69 In 1987, Abbott Mead Vickers BBDO devised a white-on-red ad campaign that began to appear in taxis, buses, subways and airports in cities in Europe and North America: ‘Would you like to sit next to you at dinner?’; ‘Protects against foot-in-mouth disease’; ‘World domination without the laser death ray master plan’. ‘We lost money for six months when we expected losses for the first two years’, Knight recalled with pride, ‘27,500 subscribers were there when I started. That was 125,000 when I left.’ Today more than half of all circulation flows through the US and Canada, about 850,000 copies. But making it in America was not just about sales; it also affected the layout (the American Survey moved ahead of Britain) and the outlook of the paper. On taking over, Knight assured Beedham that ‘I basically agreed with him’ and ‘history bore him out, if not on Vietnam, certainly on the need to resist the Soviets’. For Moss he had the highest regard, entrusting him for the next seven years with some of the highest profile leaders on foreign affairs.70
The Economist against Détente

What then was the view of the American empire at the Economist – from now on not just devoted, but increasingly sold to the people running it, at the height of the Cold War? The first indication came with the Portuguese Revolution in 1974. The Economist was intensely worried by the sudden collapse of the Estado Novo dictatorship in Lisbon, and the land seizures, factory occupations and street protests that broke out in popular revolt against it; in particular, it feared the influence of radical socialist and communist elements among officers in the Movimento das Forças Armadas, many of whom had refused to go on with the regime’s brutal colonial wars in Angola, Guinea and Mozambique. Portugal may have been poor and undemocratic, but it was also a member of NATO of global importance, as a still extant imperial power in Africa and Asia. The paper’s choice to take this volatile situation in hand was the aristocratic, monocled General Spínola: considered a moderate, Spínola had served as a volunteer under Franco and as an observer with Hitler’s armies, before experiencing a de Gaulle–like epiphany about the need for ‘reforms’ as military governor of Guinea. After Spínola was pushed out of the provisional government, launched a failed coup and fled in March 1975, the Economist denounced the direction of the Carnation Revolution in purple prose: ‘completely controlled by Marxists’, it was using Nazi ‘Reichstag fire techniques’ to erect a ‘totalitarian state’, with ‘wider repercussions’ than ‘the failed Marxist experiment in Chile’ that could lead to the break-up of NATO.71
Moss was the unmistakable author of these lines. Months later, he wrote in the same alarmist tones about ‘the southern flank’ of the NATO alliance. In July, the Greek junta launched a coup against the leader of Cyprus, Archbishop Makarios III. Long a thorn in the side of the British, who retained huge sovereign military bases on the island, Makarios had fought for national self-determination against them: first as Enosis, or union with Greece, backed by 96 per cent of Greek Cypriots in a referendum in 1950; and then for independence, which arrived in neutered form ten years later, when Makarios became the first elected president. The Economist not only justified his ouster, reminding readers that Makarios had been a pest – ruling with AKEL, the Communist Party, while pursuing a non-aligned foreign policy (under him Cyprus was one of only four non-Communist states to trade with North Vietnam), outside NATO. It also glossed over the bloody consequences: Turkey’s invasion of Cyprus, with the connivance of Kissinger as well as Wilson and Callaghan in London, which in addition to 4,000 dead and 12,000 wounded, drove 180,000 Greek Cypriots from their homes, amidst similar reprisals against the Turkish community.72 The paper even attributed the collapse of the junta in Athens to deft American diplomacy – which had ‘presided over a radical change for the better in the politics of the eastern Mediterranean’, and hoped for more decisiveness of this sort going forward. If not, Spain and Italy could be next in line for subversion, ‘providing the greatest opportunity for the westward spread of communist governments in Europe’ since 1945.73
Outside Europe, the Portuguese Empire rapidly disintegrated, posing immediate questions for US policymakers about what should – and should not – replace it. In December 1975, they gave their answer in East Timor. Hours after getting the green light from Ford and Kissinger in person, on a layover in Jakarta, the Indonesian dictator Suharto invaded the island, which had just proclaimed independence from Lisbon under the banner of the leftwing Front for the Liberation of East Timor. The Economist not only refused to criticize Indonesia’s annexation, but turned a blind eye to the genocidal death toll of some 100,000 in eighteen months, roughly a sixth of the Timorese population.74 In Angola, Kissinger tried to prevent the Marxist-inspired MPLA from taking over as the date set for independence approached, by sending money, weapons and advisors to its two smaller rivals, the FNLA and UNITA. In October, mere weeks before the Portuguese were due to leave, South Africa took a more direct approach – invading from the south at the same time as a coordinated assault from Zaire to the north, converging on Luanda. Only Cuban troops – ferried from Havana at the last moment on ageing Britannia turbo props, without prior consultation with Moscow – allowed the MPLA to hold out and then to win.75 As the Economist warned, however, this was not the end of the story. South Africa could not allow a victory for black radicalism to go unchecked, threatening its hold over Namibia, and the apartheid regime itself in Pretoria. Nor could the US tolerate the defeat of its clients. The Economist suggested several possible chess moves to American leaders: sweetened aid to Angola if it kicked out the Soviets, a ‘total naval blockade’ of Cuba, mining its main ports. Plans to bomb and invade the island could also be prepared, though might be ‘slow to take effect’ and ‘arouse anti-Americanism’.76
From this swashbuckling perspective, the election of Jimmy Carter in 1976 seemed like the start of a strategic unravelling, given the new president’s naïve pursuit of arms control and misty rhetoric about human rights. For the Economist, Carter showed just how dangerously inept he was in his handling of the Iranian Revolution. By 1979, this mass mobilization had forced out the Shah, whose family had reigned for twenty-six years at the pleasure of Washington. To anti-imperialism, the new leader, Shiah cleric Ruholla Khomeini, added religious fundamentalism. In November, students overran and took hostage the US embassy. The Economist called for swift retribution: capture the islets of Abu Musa and the Tumbs; embargo food; if nothing else worked, invade.77 Instead, the hostage crisis dragged on for over a year, during which the Soviets sent troops into Afghanistan. Seeking to prop up a teetering communist regime in Kabul, Moscow intervened after the murder of President Taraki by his second, Hafizullah Amin, who it feared might defect to the American camp; and just as the Iranian revolution unleashed a potent new form of Islamic radicalism, which threatened to spread to Muslim republics inside the Soviet Union.78 At this the Economist exploded, seeing proof of a total loss of nerve. ‘Who invited 40,000 Russian soldiers complete with their Quisling [Babrak Karmal] into Afghanistan? Answer: President Carter, the American congress and American opinion – and those American allies who have not believed, and have done little to remedy or reverse a crumbling of America’s willingness to exercise power.’ At a minimum, the US and NATO must arm the holy warriors, or mujahedin, who were resisting Soviet forces, with the latest tank-busting missiles.79
This excoriation of American fumbling from the right carried over with a vengeance to Central America, where that same year Sandinista guerrillas drove the brutal Somoza dynasty from power in Nicaragua. The paper did not advise direct intervention to prop up this US client, bombing its citizens in the slums of the capital city of Managua for the world to see. But that could change. ‘If Cuban silhouettes do emerge through the murk in Nicaragua, the Americans will have to act.’80 Nor did it apply to the leftwing revolts sparked in neighbouring El Salvador and Guatemala, where ‘American arms will be required to uphold democracy’, as bodies piled up from the rightwing death squads in each.81 Soon it did not apply to Nicaragua either. Ronald Reagan had begun to orchestrate a covert war against the Sandinistas there in 1981, eventually arming more than 15,000 Contras in Honduras and Costa Rica to harry the new regime. Five years later, the Iran-Contra scandal exposed the money-laundering operation, violating American law itself, that was used to finance this – tragic news for the Economist, less because it implicated the president and his advisors in a criminal conspiracy, than for endangering congressional funding for counter-insurgency efforts.82 In the meantime, the Economist had backed an outright invasion of tiny Grenada in 1983, and the toppling of its revolutionary government. In ‘Licensed to Kill’, it airily defended this act, on the grounds that ‘adversaries of the west should live in a state of uncertainty’, while brushing off critics in Britain, troubled by US treatment of a commonwealth member. ‘Superpowers do not need allies’, it told them, ‘only cheerleaders.’83
What they needed was the Economist. By 1983 it was not a proponent so much as a pillar of the special relationship, which Knight carefully erected out of his friendships with veterans of the Nixon administration. None was more important than Kissinger, who became a sort of informal housemaster; so at ease, he did a playful TV spot for the Economist in 1996, in which an airline passenger, Mr Burnside, in suspenders and French cuffs, drinks champagne serenely until someone takes the seat next to him. ‘Hey, it’s Henry Kissinger! Ready for a good chat?’ Mr Burnside looks queasy; having failed to read the Economist he is unprepared for the most fateful small talk of his life. In 1979, the tone was graver. That February, the former US secretary of state sat down with Knight for a two-part exclusive interview about the second strategic arms limitation treaty; the discussion also roamed widely over the Cold War. Who would emerge in better shape after a nuclear showdown? The US. How many civilian deaths could be expected? ‘100m’, Kissinger replied, ‘but it will nevertheless leave us politically paralyzed.’ ‘Or could do so … ’, Knight interjected hopefully. ‘Probably would do so.’ Kissinger dismissed the idea that treaties could usher in world peace; if the West did not raise its ‘counterforce capabilities’, it ‘could be entering a period of maximum peril’. Should the ratification of SALT-II, the arms control treaty, be linked to ‘good behaviour’ from Moscow? Yes, Kissinger replied:
Look at what has happened since 1975, in the space of a little more than four years: we have had Cuban troops in Angola, Cuban troops in Ethiopia, two invasions of Zaire, a communist coup in Afghanistan, a communist coup in South Yemen, and the occupation of Cambodia by Vietnam, all achieved by Soviet arms, with Soviet encouragement and in several cases protected by Soviet veto in the United Nations. In addition Soviet advanced aircraft piloted by Soviet personnel are protecting Cuba – presumably against us – so that Cuban pilots and aircraft are operating all round Africa – also presumably against us. That cannot go on and have Salt survive.84
Soon after this call for ending détente, the Economist ran a savagely hostile review of Sideshow: Kissinger, Nixon and the Destruction of Cambodia, which accused its author William Shawcross of writing a ‘sleazy and distasteful’ piece of ‘propaganda’ blaming Kissinger for ‘destroying that beautiful country, Cambodia’. Shawcross wrote an angry letter, to which Kissinger wrote a long, angrier reply, denying one of the central claims of the book – that he had any hand in the coup against Prince Sihanouk in 1970 which eventually brought the Khmer Rouge to power in Phnom Penh. It ‘took us completely by surprise; at first I even thought he had engineered it himself in order to stage a dramatic comeback’.85 Samuel Thornton, a naval intelligence officer in Saigon at that time, then wrote a letter to the Economist in which he described his own part in planning the coup with the full approval of the White House. Knight refused to publish it, privately assuring Thornton that he had investigated these allegations and found them untrue. The investigation seems to have consisted of asking the former director of the CIA Richard Helms, two admirals and Kissinger himself. ‘If all journalists used Knight’s method of asking those at the very top about their possible misdeeds’, Seymour Hersh observed, ‘none of the major investigative stories of the past two decades would have become public.’86
Clubbiness is the appropriate term to describe these relationships, which worked in both directions, in ways large and small. Kissinger might have been the biggest fish. But George Shultz was of greater practical importance, as both a Labour and Treasury Secretary under Nixon; he resigned in time to take over the Bechtel conglomerate in 1974 and a post at Stanford, where he acted as conduit to Reagan. It was on Knight’s visit to California in 1978 to attend the exclusive, all-male Bohemian Grove retreat that Shultz convinced him that ‘Reagan was an intelligent, viable alternative to Carter, who I hated in almost every respect.’ Four years later, Shultz was having dinner with Knight in London. ‘Andrew said, “What’s new?” I said “I’ll tell you at 6 o’clock.”’ At half past seven Knight’s phone rang. ‘He came back and said, “That was the Economist reporter in Washington breathlessly telling me you had been named Secretary of State.” And I said, “Well, what did you do, tell him you were having dinner with me?” He said, “No, I didn’t want to one-up him that badly.”’87 Shultz regularly consulted the Economist during his seven years at the US State Department – taking heart from its position on Iran-Contra, mulling over its advice on his Middle East peace initiative.88
Late to Neoliberalism?

Since the 1960s, the Economist had played a key role in debates over British economic decline via Norman Macrae, who set relatively disappointing figures for output, productivity and growth in a global and comparative context. But his treks abroad aimed to find solutions to these shortfalls, in optimistic and eclectic admixtures – of Japanese banking, German industrial relations, American entrepreneurialism or French indicative planning. In the 1970s, the onset of a worldwide economic downturn and the crises of Vietnam and Watergate changed the tenor of Economist coverage, which became much darker. Macrae’s frantic accounts of Columbia student protestors, or the unruly poverty of black neighbourhoods in New York and Washington, DC, were illustrations of this mood. In Britain, the ongoing confrontation between trade unions and the Heath government, and the trail of uncollected trash and candlelit offices and homes it left behind in 1974, also drew dire warnings; indeed, that ‘Britannia’s dream of apocalypse is now horribly near to coming true’, with inflation soon to reach Weimar levels.89 But for just these reasons, Macrae was reluctant to embrace what became the standard neoliberal solutions to the crises of profitability and inflation that swept the advanced Western economies – and at first neither he nor many other Economist editors thought that Margaret Thatcher and Ronald Reagan were the best leaders to see liberalism through this turmoil. Given that the Economist has become a byword for the neoliberal revolution these two politicians embodied, why was the paper so late to rally to it?
Although gaining ground, in the 70s neoliberalism was not yet the hegemonic system of thought it would become by the century’s end. Weakest post-war in the universities, its adherents had long gathered outside of these to spread their message in think tanks and ‘thought collectives’ – nowhere more successfully than in Britain. This reflected the strength of classical liberalism in its world historic home, from which neoliberals had always derived inspiration. In the 30s, the stiffest resistance to Keynes had after all come from the LSE, where before departing for the US, Hayek wrote The Road to Serfdom as a call to reject ‘foreign ideas’ about the state, and return to the classical conceptions of Smith and Mill; and the economics department had ties from its inception to the most important international association of neoliberal thinkers, the Mont Pelerin Society in Switzerland, founded in 1947.90 The launch in 1955 of the Institute for Economic Affairs further cemented these connections. Arthur Seldon and Ralph Harris developed the IEA into a powerful corporate fundraiser in Britain, inviting leading US academics to give talks, and publishing pamphlets to win those whom Hayek deemed ‘second-hand dealers in ideas’ – teachers, journalists, doctors, lecturers, politicians and businessmen – to its principles.91 By 1974, many were converts. That year Keith Joseph and Margaret Thatcher founded the Centre for Policy Studies inside the Conservative Party, in order to convert it to ‘rigorous free-market ideas’ and policies. Five years later the Adam Smith Institute relocated from the US to London, where it exerted pressure from outside the formal party structures.92
Through these and other transnational channels, the neoliberals had crafted a broad philosophical account of individual liberty, the state and the law in relation to markets – and fought against the trammelling of these by socialists of all shades.93 But it was on a far narrower point that much of the argument was carried in the run-up Thatcher’s election in 1979: the doctrine of monetarism – which posited monetary growth as the cause of inflation, one that governments could measure and should restrict – as the key to restoring order to the economies of the West. It was this belief that the Economist resisted, amidst a broader shift in ideological sentiment towards the IEA that it had done much to bring about. A long-time critic of the post-1945 consensus when it came to welfare and nationalizations, Macrae did accept one pillar of it: full employment. This made him hesitant to endorse the deflationary shock that a tight money policy and balanced budgets might induce, unless mitigated by other forms of government intervention. It also made him and the paper a target of Milton Friedman – the televisual neoliberal economist at the University of Chicago, whose ‘standard lecture’ in the 1970s (according to Macrae) included the quip, ‘The Economist as a newspaper has practically every virtue, except that it believes in incomes policies.’ Macrae explained why in a dialogue with Friedman in 1974, when the latter was in Britain at the behest of the IEA for the October general election. ‘There is not a very great difference between the money supply policies favoured by Mr. Friedman and by the Economist’, Macrae began. ‘And almost all economists now accept one part of Mr. Friedman’s teaching: that when governments are trying to restimulate demand they habitually and erratically expand money supply by too much.’ The ‘main difference between Mr. Friedman and us is over the alternative to much higher rates of unemployment, which we think is incomes policy’.94 Four years on, Macrae made another attempt to meet the ‘prophet of monetarism’ partway, in ‘Towards a Keynesian Friedmanism’. This macroeconomic hybrid would have three gear shifts: Keynesian demand management ‘one year in five’; interest rate adjustments to control the money supply every year; and ‘instant bank rate monetarism’, to direct the flow of credit on the model of the nineteenth century Bank of England, or twentieth century Bank of Japan.95 But the present crisis just ‘could not be cured by monetarist discipline’ alone, and ‘monetarists are cheating when they say that “only rises in money supply can cause inflation”’.
The issue was not just whether monetarism could tame inflation, but how much unemployment it would produce. For Macrae, employment was not so much a moral good or even an economic, demand-sustaining necessity, as the literal cost of doing business in post-war democracies. Such a justification was contingent: when Thatcher won again in 1983, despite unemployment rates unseen since the Depression, the calculus changed. A year later, with growth at 3 per cent, ‘something in the British economy is defying Keynesian convention, and it is time for Keynesians to accept that’.96 The shift in economic policy was not simply about convincing arguments, however. As in the 1930s, it came with a shove from concatenated national and international crises.
Thatcher and Reagan

Britain had felt the effects of the oil price spike and sputtering global growth with special force in the 1970s. Balance of payment and currency crises battered the country again in 1976, now with annualized inflation at around 24 per cent, leading the Wilson-Callaghan government to seek an IMF bailout. While spending cuts attached to the IMF loan (then the largest ever made) helped bring down the rate of inflation, this was also due to the acceptance by workers of pay caps – an incomes policy that collapsed two years later, when public sector unions struck against another round of real-term wage cuts. Inflation shot up, unemployment climbed above a million, and growth fell to a post-war low. The ‘winter of discontent’ ended in a narrow election win for the Conservatives under Margaret Thatcher – who campaigned on the promise that monetarist medicine could cure the economy of inflation by restricting the money supply. Ronald Reagan captured the White House in 1980, with similar plans to restore ‘morning in America’, as the swing to the right picked up speed across the OECD. Here the Economist hesitated, with the newsroom divided about the best – the most liberal – solution to the crisis.
While Thatcher’s program of lower direct taxes, smaller government and weaker trade unions was precisely what the paper wanted, that was not ‘reason by itself to vote for her’ in 1979. ‘Visceral’, ‘unreflective’, ‘frightening’, her rhetoric seemed to promise a repeat in office of Edward Heath: provoke the trade unions, lose, then hand the reins to ‘a perfectly awful Labour government by 1984 – one far worse than the respectable alternative available today, a house-trained party gone rabid again in the kennels of opposition’. The good dog in this metaphor? The current occupant of Number 10, James Callaghan, who had already moved Labour away from Keynesianism by 1976, soliciting the IMF loan in exchange for budget cuts of 20 per cent, while informing his party that governments could no longer ‘spend their way’ to full employment.97 The Economist worried that his defeat risked moving Labour in the wrong direction, towards the ‘loony’ far left represented by MPs like Tony Benn or Michael Foot. Truly to ‘switch emphasis back to private wealth creation and private choice’ in Britain, the Conservatives must win not one but two or three elections in a row against Labour, turning it into a well-behaved opposition of the centre-left; but for that, a Tory leader had to show ‘continuity, dare we say a sense of national consensus’. In effect, the paper wanted what would become the hegemonic project of Thatcherism, without being sure that Thatcher was the right leader to offer it. ‘There is a chance that office will temper her convictions’, but ‘all this is to be proved. None of it yet can be proved. We are not confident that it will be proved, but we would like to see it tried.’ For those confused by what this meant, it added, ‘The Economist votes for Mrs. Thatcher being given her chance.’98
Reagan formed a partial contrast. In 1980 the paper gave him more decided backing, focusing on the issue that mattered most to it: foreign policy. On that score, Jimmy Carter was so ‘dangerously second rate’ that ‘an ally trembles at the prospect of his return’.99 Reagan would be the better president when it came to showing ‘firmness with Russia’, unleashing ‘American arms-making resources in full’ and exposing Soviet economic and political frailties. Yet on other scores the Economist had some doubts. Reagan had a crude view of government in which all regulations and taxes formed a hindrance to innovation, as if its duties were simply ‘to balance the budget – otherwise inflation results – and to hold back the excessive demands of abortionists, drug addicts, homosexuals and women’. But it took ‘an act of Lafferesque faith in buoyant tax revenues to believe that the American economy could simultaneously withstand a 30 per cent tax cut, a large increase in defence spending and a balanced budget’; while the old-fashioned conservatism of Reagan’s Supreme Court choices risked ‘making America a less liberal society’.100
On one level, the paper’s conflict of emotions may seem surprising. After all, the Economist had in many ways prepared the ground for Reagan and Thatcher. In both the US and Britain, it had worked hard to undermine détente, offering a platform for Kissinger to preach ‘unilateral rearmament’ during the Carter years. In Chile, Robert Moss had discovered how American power could do more than score propaganda points against Moscow; it could eradicate a left with no links to it, whose socialism had previously constituted a legitimate political opposition. Indeed, Moss honed this point over many years on the Economist, repeatedly invoking the danger that democracy posed to the economy, the rule of law and individual liberty, in a formula intentionally open-ended – so as to apply to Britain. ‘What has happened in Chile under Sr. Allende’s government suggests that, in the long term, political democracy is inconceivable without economic pluralism’, he wrote in 1972.101 A year later he added, ‘the Allende government’s programme of nationalisation cannot be regarded as “reform” in an economic sense, since it did not result in better management, higher productivity, the introduction of new technology, or imaginative new investment.’102 By 1975, in The Collapse of Democracy, Moss was explicit about the lessons Chile held for Britain (‘a singularly depressing example of the abuse of democratic institutions by the enemies of a free society’), whose decay could only be halted by ‘reasserting the rule of law in industrial relations’, stiffening the backbones of government and business, where ‘every major economic decision was being taken in fear of the trade unions’, and shrinking the state, except ‘in the realm of defence’. This was published by the National Association for Freedom (NAFF), which Moss helped to found, and then talked up in the Economist.103 Given the creeping ‘Sovietization of Britain’ – Moss had a good word for authoritarianism: ‘in the event a democratic society breaks down irretrievably’, it was preferable to ‘totalitarian rule’.104 Three years later, Thatcher brought this Chilean baggage with her to 10 Downing Street: not just Moss and Crozier, but Hayek and Friedman, the economists invited to clean up Allende’s ‘Marxist experiment’. Once in office, one historian has remarked, Thatcher quickly sidelined Moss and her other ‘eccentric’ advisers on ‘counter-subversion’.105 But this mischaracterizes their impact. What they had done in the Economist and elsewhere was to heighten ideological tensions through constant intimations of disaster and campaigns of misinformation, creating a climate in which authoritarian solutions to disarm the left became respectable. Liberals, they hammered home, had to accept the need for a political reckoning with the trade unions and the Soviets, in a combined assault at home and abroad. Less significant than their missed chance to exercise power was their powerful justification of the neoliberal turn up to 1979.
Divided Counsels: Newsroom Shakeouts

While Brian Beedham exercised near-complete control at the foreign desk, beyond it Economist journalists were divided about the right response to the crises of the 1970s. In this, the newsroom reflected a larger breakdown of consensus, helping to explain the strange hesitance of tone in the political endorsements of Thatcher and Reagan on their first outings: neither the foreign editor nor Andrew Knight could exercise full control on these questions, and other voices made themselves heard. Editors like Edmund Fawcett, Johnny Grimond and Barbara Smith all clashed with Knight, who in turn recalled a series of brave stands against them. ‘I can remember horrid weeks of isolation over Angola, as an early disbeliever in Carter; in the first Reagan election; over the Falklands and Grenada … on all of which I can now feel quite smugly comfortable that I was right not to give into the first wave of lemmings declaring the world should jump over the precipice in an orgy of despairing condemnation.’106 Though ‘far more suspicious of Thatcher than Reagan’, Knight regretted the ambivalent notes he was forced to insert in his praise of the latter. ‘I was lobbied so hard by Grimond and Fawcett, I had to hedge’. Barbara Smith, leading the Washington bureau, also pushed back, and Edmund Fawcett, the correspondent there, remembered, ‘I called Knight up and argued with him – Why was the Economist endorsing a candidate in a foreign election? – but I lost.’ Their efforts explain the question mark appended to what was meant to be a bold cover declaration: ‘Anyone but Carter?’
Knight need not have worried. Reagan invited him to dinner promptly after the election. ‘Reagan wanted to thank me. He thought the endorsement of this respectable English publication, which came at a difficult moment in the campaign, had been a big deal in getting him elected.’ All the guests at this memorable repast, including the conservative columnist George Will and Carter’s outgoing trade representative, Robert Strauss, were invited to ask a question. Knight held his until dessert.107 ‘Whereas I know we have to take on the Soviets, and show them that Vietnam hasn’t diminished us, and what to do on the economy, reducing government’, Knight remembered Reagan saying in reply to his question on Israel-Palestine, ‘I don’t know what to do on the Middle East because I think they’re both right.’ Knight commented, ‘This impressed me tremendously.’ Edmund Fawcett and his Economist colleague Tony Thomas – unable to insert more than a few caveats in the endorsement of Reagan, and unconvinced by his declarations of impartiality on Israel-Palestine – published The American Condition in 1980, expanding on their doubtful impressions of ‘middle-aged America’ outside the paper.108
Back in London, the newsroom saw similar shakeouts. Dick Leonard, assistant editor, was a link to the liberal, free-trade socialists of the 1930s, when the likes of Douglas Jay wrote for the paper; indeed, as a Labour MP from 1970–74 and personal private secretary to Anthony Crosland (author of The Future of Socialism, the revisionist classic), Leonard was a lineal descendent of this tradition on the right of Labour. Knight offered Leonard the Britain section of the paper in 1974 after a boundary redrawing cost him his parliamentary seat – a bridge to the Wilson government formed that year. Leonard was unsure if he could take a job at a publication that had been so close to Edward Heath and the Tories under Burnet. ‘Nonsense! I’m going to bring it back to the centre’, Knight told him. ‘But after two or three years’, Leonard recalled, ‘the paper drifted insidiously to the right. Knight got closer and closer to Thatcher, and I found myself writing fewer and fewer political leaders’. One was a signed tribute to Anthony Crosland, who died suddenly in 1977, ‘the first time people found out I worked there’.109 Pro-European, Leonard was then eased into the Brussels bureau; a section downsized two years after he left it in 1985, with no full-time correspondent for seven years, Beedham insisting on priority for America. Leonard’s eventual replacement as editor of the Britain section captures the rightward shift of the Economist in these years.
Andrew Neil, a Burnet hire in 1973, played several roles at the Economist at the start – reporting on the Troubles in Northern Ireland, the House of Commons, and on the trade unions. He also appeared on TV, where his truculence and distinctive haircut earned him the nickname ‘Brillo’ from the satirical weekly Private Eye. In 1979 Knight sent him to the US, a three-year sojourn that changed him profoundly. ‘I revelled in its dynamic, can-do culture, the ease with which new technology was introduced and exploited and the free and fast social mobility between the classes.’110 He grew close to Irwin Stelzer, a free-market economist and consultant, who argued deregulation was the wave of the future – first in airlines, then being divvied up under Carter. No fan of Thatcher when he left – ‘I had not voted for her: she had yet to discover her radical-right market economics (as had I)’ and seemed ‘an unsavoury amalgam of bourgeois prejudices and simplistic monetarism from the reactionary right’ – all had changed on his return. As Britain editor, ‘I was now seeing our ills through a strong free-market prism’, urging ‘privatization and deregulation and exposés of expensive and debilitating state intervention’. Rupert Murdoch was impressed and lured him away to edit the Sunday Times in 1983.111 A pushy, ambitious man, Neil was a significant voice, whose departure says a lot about the paper when he left. He titled his final report on the TUC conference in Blackpool, ‘The Unions Don’t Know Where They Go Now – Except Down’. Predicting that unionized employment in Britain, still at roughly 50 per cent, would follow the lead of the US – where it had fallen from 34 per cent in 1965 to less than 20 – he quipped that nobody had phoned in a bomb threat at this year’s conference: ‘now that’s a real sign of lost status’.112 Knight solemnly announced his departure to a packed meeting. ‘We are losing Neil.’ ‘Everyone applauded’, recalled one Economist editor of the relief that swept the room. ‘Neil thought we were congratulating him!’
Notwithstanding a degree of personal loathing for Neil, the Economist as a whole was moving in his direction. By 1982, the paper was swept up in patriotic euphoria over the Falklands War, in which ‘Britain has said something to itself’, the ‘free world’ and ‘the old men of the Kremlin’. Long in need of ‘its own sort of cultural revolution’, Britain had dispelled the ‘malaise’ of the post–Second World War and post-Vietnam generations that saw ‘military values and men as out-of-date jokes’. ‘A younger generation’ had witnessed ‘an affair of principle’ and soldiers ‘a bit more handsome and heroic than Mr. David Bowie’.113 Such sentiments helped to turn a possible election defeat into a second, larger victory for Thatcher in 1983, which had been uncertain before the war with Argentina, in the wake of a severe recession provoked by her government’s ratcheting up of interest rates to a historic high. After four years, inflation fell back to roughly 4 per cent, but at a terrible cost, eviscerating manufacturing in the north of England and Scotland, and raising unemployment above 3 million.114 ‘This newspaper, which had difficulty in coming down narrowly against Mr. Callaghan’s government four years ago, has no hesitation in condemning Labour today’, it wrote. ‘As to who should win this election, we have no doubt: we favour the return of Mrs. Thatcher to Downing Street.’ Her manner was not always genial, but her policies were realistic and if there was a strain of ‘economic masochism’ in her, ‘she is buying the chance of future tolerance in British society by forcing it to endure her economic intolerance today.’115
If some doubters remained, they had less and less influence over editorial policy. Emma Duncan, later deputy editor, recalled that Neil almost got her fired when she started at the paper in the early 1980s – ‘furious’ that she had failed to produce a piece that ‘said that every truck and every car in the British rail network ought to be sold off in one go’. Remarkably, Seumas Milne – much later to serve as chief of staff for Jeremy Corbyn – was on staff at the same time. He recalled editorial meetings between 1981 and 1984 in which Beedham expressed ‘suspicion of monetarism, neo-liberalism and the like’ because he ‘wanted the working class to stay strong and contented, if only to fight the Cold War’.
But the most vocal critic of Thatcher at editorial meetings was Simon Jenkins, hired by Knight as the Economist’s political editor in 1979 after the Evening Standard fired him. Reliably Conservative up to then, Jenkins was one of several editors to back the alliance between a new Social Democratic Party – breakaway challenger to Labour on the centre left – and the Liberals, as the choice most consistent with Economist tradition. For this reason, the Economist ran a small article on ‘anti-Tory tactical voting’, designed to benefit the alliance.116 Jenkins also criticized Thatcher’s decision to fight Argentina over a ‘few rocks’ in the South Atlantic, which Britain had been preparing to return, as a foolish act of imperialism. Knight kept both criticisms from this ‘brilliant, eccentric journalist’ out of lead articles, however, while allowing him to fire shots elsewhere. For the 1982 Christmas issue, Jenkins wrote a mock Shakespearean history play in which Thatcher storms against her ministers and allies – telling her to ‘forget, forgive, conclude and be agreed’ – as spineless.117 When Jenkins’s book with Max Hastings, The Battle for the Falklands, appeared the next year, Knight reviewed it himself in the Economist. ‘The Falkland Islands are not about “colonial Britain” – despite what Mr Jenkins, Mr Hastings and others keep saying. There are no Red, Mayan, Aztec or sub-continental Indian masses being subjugated, no African tribes, no imported slave races, no debauched Polynesians or Aborigines.’ Rather, in a moral tone borrowed from Thatcher, it was ‘a dispute over international principle in which right vanquished wrong’.118
Rupert Pennant-Rea: Cold War on a High Note, 1986–1993

Under Rupert Pennant-Rea the Economist, no longer a latecomer to neoliberalism, became one of its advance guards. As a former Bank of England economist, Pennant-Rea was well aware of the deregulatory dynamics that had made the City of London an offshore haven for foreign money and foreign banks since the late 1950s. This training also distinguished him from his predecessors, who made no secret of their innumeracy: Burnet had hired the first economics editor at the Economist, Brian Reading; next came Sarah Hogg, who with Macrae often ‘inserted the economic spine’ into leaders written by Knight; and after Pennant-Rea left this post to become editor, the influential Clive Crook took up the position. Like Knight, Pennant-Rea was born to an aviator father beyond the British Isles, in the colony of Rhodesia. In 1934 Peter Pennant-Rea had moved from Britain to South Africa, and then on to Rhodesia to work as an aircraft engineer for the British firm de Havilland, returning briefly to England to fly for the RAF in 1943. As Rhodesia’s director of civil aviation, he refused to recognize Ian Smith’s unilateral declaration of independence in 1965, which ignited a fourteen-year war between the white minority regime in Salisbury and the black majority.119 Pennant-Rea was a teenager when the family returned to Britain. Bypassing Oxbridge for Trinity College in Dublin and Manchester University, he went to work for a trade union and a business lobby. In 1973, he joined Britain’s central bank as a junior economist, just as the collapse of Bretton Woods and the surge in Middle East oil revenues sent fresh waves of capital pouring into London. Four years on, Sarah Hogg made him economics correspondent for the Economist. By the time he succeeded her in 1981, Pennant-Rea had turned from the centre-left into an ‘anti-government, anti-inflation zealot’, and in his own estimation the paper as a whole was not far behind.120 In 1986, he beat out three rivals in the contest to replace Knight: his mentor Sarah Hogg, the political editor Simon Jenkins, and Nico Colchester, then foreign editor of the Financial Times, whom he made his deputy at the Economist.
If this was an unusual path to the editorship, it was also a different character walking it. ‘Rangy, goofy-looking, with a dead-pan demeanor, pre-fashionable sideburns’ and a comb-over, Pennant-Rea reminded one profiler of Monty Python’s John Cleese – but serious, opinionated, speaking in a ‘nasal drawl’ with ‘notes of Rhodesia and Dublin’.121 Pennant-Rea had even found time to write an economics thriller in 1978, the novel Gold Foil. In it, the US and the Soviet Union hatch plots to corner the market on bullion in South Africa (the former to tame inflation by returning to the gold standard, the latter to pay for imported grain). Financial journalist Caroline Manning, ‘endowed with beauty and brains’, a taste for ‘Vidal Sassoon’ and ‘Fifth Avenue clothes’, and a bit of a leftist, senses a story. James Glendinning, charming but oafish advisor to the Bank of England’s chief cashier, is charged with implementing the secret gold plan, liaising with the Bank of South Africa, the IMF and the State Department. After some chasing, Glendinning accidentally leaks the scheme to Manning during a night of extramarital bliss in Johannesburg. Her story makes the Guardian front page, halting geopolitical connivances of West and East, and pushing black and white South Africans into a power-sharing agreement.122 A Danish book club adopted it, but otherwise Gold Foil ‘sank without a trace, probably deservedly’, said Pennant-Rea modestly. The book was a response to opponents of apartheid he met in Britain, who failed to distinguish Afrikaners from English-speaking whites, ‘their roots in Africa (including mine) being much shallower. I imagined the day when white Afrikaners and black South Africans could reach a rapprochement, irrespective of the rest of the world … as things turned out, my sense was pretty accurate.’123
Truth proved almost as strange as fiction on Pennant-Rea’s departure from the Economist. In 1993, he followed Sarah Hogg into the Conservative government of John Major, who in 1990 had made her head of his Policy Unit. At her urging, Norman Lamont, the Chancellor of the Exchequer, gave Pennant-Rea the job of deputy governor of the Bank of England. The two now occupied the highest political posts of any editors since the first, James Wilson – a testament to the immense prestige of the Economist, and its deep historic relationship to City and state. For Pennant-Rea, however, life behind the pink-liveried doormen of Threadneedle Street was cut short. In 1995, the financial journalist Mary Ellen Synon revealed that she and ‘Roo’ had been having an affair on the premises. Coming at a moment of crisis for one of the City’s oldest private investment houses, Barings – as acting governor he refused to bail it out – Pennant-Rea was forced to resign.124 Public service may have ended on a sour note, but private affairs flourished. He began a career in the City, and based in part on his success in raising revenue and readership as editor, became non-executive chairman of the Economist Group in 2009. Today, he works from one of the glass towers that ring the north edge of the Square Mile, non-existent before the burst of financial liberalization he strongly backed during his first months as editor.
Big Bang: Finance, Innovation, Integration

Pennant-Rea made a number of changes to the paper – expanding its coverage of finance, starting a new Asia section, and creating new, more personalized columns, such as Lexington on American life and Bagehot on British politics. His most important editorial contribution related to finance and in particular to Big Bang – the name given to the moment on 27 October 1986 when rules governing financial transactions in Britain were torn up, with the aim of increasing the volume, variety and value of market trading done in the City. That included eliminating fixed brokerage commissions and barriers to foreign entrants, looser ownership rules, even laxer regulation and screen-based trading – moving and expanding the centre of exchange out from the trading floor of the Stock Exchange.125 The Economist hailed the event, seeing its significance in terms of the domestic and international standing of the City. London was already an attractive place to do business, of course. Investment banking had never been divided from commercial or retail banking, as in Japan or the US; time zones and language were right for the twenty-four-hour trading cycle that now ran between Tokyo and New York; and it possessed 400 years of international expertise and lax taxation. All it needed was to offer a welcome mat for newcomers and make markets for them even bigger and more liquid – achieved by removing what barriers remained between London’s gilt and share markets (1985 turnover, $476 billion) from ‘the much larger and wonderfully competitive Euro-equity markets (1985 turnover, $2,250 billion)’. While this might ‘crack the cake’ of domestic custom and upset the ancient guild-like structures and personal relationships that still dominated these sectors – British financial firms were smaller than foreign counterparts, and even hallowed names would fail when challenged on home ground – ‘British authorities must let most of them, even quasi-banks, go under.’ ‘Lombard Street, Wall Street, or Patrice Lumumba Street, Timbuktu’, it now mattered much less where the head office was: ‘what really matters for Britain is that the City expands its financial resources, financial knowhow and financial jobs.’ This would reduce the gentility of the place, and the personal power of the Bank of England governor. But what was the alternative? Japan’s Nomura had a stock market capitalization of $30 billion, the US bank Solomon $6 billion, compared with way under $1 billion for prestigious old City investment and merchant banks like Warburg, Kleinwort Benson, Hill Samuel, Hambro. Even before Big Bang, the paper pointed out, only eight of twenty top brokerage firms were still in British hands.126 This insistence that the City must also feel the chill draught of the global market, come what may for its national brands, linked finance to the overall Thatcherite project. Like British industry and public services, British banking would be subject to the fortifying effects of competition. Combined with minimal oversight – who supervised banking and who securities could be worked out later – the City was set to be transformed.127
Pennant-Rea wrote three books on economics along the road to Big Bang, which supplied simple theoretical arguments for it: Who Runs the Economy? in 1979, The Pocket Economist in 1983, and The Economist Economics in 1986. Each one gave greater weight to the free market, with the second pair – co-authored with Bill Emmott and Clive Crook, respectively – so fervent that they received testy reviews in the Economist itself. ‘They identify the dead hand of restrictive practices and market distortion everywhere’, wrote Howard Davies in 1983. ‘But even the best of causes can suffer from overstatement.’ Of the sequel, Rudiger Dornbusch wrote, its authors went ‘beyond intuition, and occasionally even beyond prejudice (“trust markets, overrule them at your peril”)’. He cited a breezy dismissal of Keynesianism from the conclusion: ‘Few economists now believe that government can or should “fine-tune” demand. That way of thinking is dead, its death a tribute to the power of the rational-expectations approach.’ But, Dornbusch interjected, ‘that thinking surely is not dead, as any chancellor of the exchequer, six months from an election, can attest.’128 Neither outside reviewer – Davies, future deputy governor of the Bank of England; Dornbusch, a Chicago-trained economist – were particularly leftwing.
No matter: with regulatory bonfires ablaze, the Thatcher Revolution was said to be delivering at last. GDP growth rose to 4 per cent in 1986 and 4.5 in 1987 and 1988, as inflation dropped to 2.5 per cent. Unemployment remained high at 11 per cent, but rising real income for those still in work, as well as ‘gains’ from privatization – more homeowners, given the chance to buy council flats by taking out mortgages; more shareholders (5.5 million), offered shares as the state sold off profitable public utilities like British Telecom – meant ‘more money, more security, more independence for ordinary Britons’.129 In 1992, the Economist backed Thatcher’s handpicked successor on this record, after a party revolt over Europe toppled her as leader. If it worried John Major was ‘too relaxed about spending and borrowing’, this tacitly acknowledged the difficulties Thatcher had left him: inflation was back at 8 per cent and rising in 1988, interest rates touched 15 per cent in 1989, recession set in by 1990.
Far from questioning the policies of the last decade, for the Economist this simply demonstrated the need to press ahead – in particular for Britain to join the European Exchange Rate Mechanism. Pegging sterling to the Deutschmark, the paper argued, would oblige British governments to defend the pound sterling on the open market, placing strict limits on the level of inflation it could tolerate. Thatcher only agreed to try it in 1990; in the event, recession and high interest rates (again touching 15 per cent to defend parity) forced a humiliating exit and devaluation five months after Major’s election in 1992. Black Wednesday was not the fault of deregulation or the lifting of the last barriers to capital mobility, the Economist insisted, which were like genies that could not be put back in their bottles. ‘Rebuilding capital controls is beyond the wit of governments, and even if it could be done, the cost in misallocation of resources would be huge.’130 For this stalwart backing of John Major’s exchange rate policy, some journalists groused, Pennant-Rea was ‘rewarded’ with the Bank of England job the next year.131
Ends of the Cold War: Interpreting Liberalism’s Triumph

By then another revolution was underway in Eastern Europe, which turbocharged the neoliberal dynamic at the Economist, and seemed to stamp it with an almost providential seal. The collapse of the Soviet Union and its satellites took place with breathtaking speed between 1989 and 1991, opening up new vistas for capital overnight. The 1980s had been a decade of reversals for Moscow, which saw a crash in oil prices and thus its export earnings, squeezing imports of basic goods as well as the technology needed to modernize production; at the same time Reagan threatened it with a new arms race, even as it strained to spend more than twice what the US did on defence as a share of GDP, with half its per capita income. In this context, the arrival of a younger, idealistic reformer in the Kremlin, pledged to economic and political liberalization and dialogue, should have been music to the ears of the Economist. Not so: wary of Mikhail Gorbachev, it enjoined Reagan and his ‘overcautious’ understudy George Bush Sr. not to compromise with him, even as his chaotic management of glasnost and perestroika set the disintegration of the Soviet system in motion.
If the paper greeted all signs of this with glee – ‘we just sat back and enjoyed the ride’, according to Pennant-Rea – it also brought a characteristic ferociousness to its coverage of events, closing out the Cold War as it had waged it. For peacefully dismantling the Warsaw Pact and pulling the Red Army out of Europe, Gorbachev deserved nothing. No new Marshall Plan: ‘it has to change itself fundamentally before it can be helped’. No strategic reciprocity: the US should leave its armed forces and missile bases in Western Europe, and expand NATO east at top speed, for the alliance ‘had woven itself into the fabric of European stability’.132 In 1990, with American ‘freedom of regional manoeuvre greatly enhanced’, the Economist called for a war in the Persian Gulf before Bush did – as an unbeatable chance for America to lead ‘the world into a time of real peace and economic progress.’133 One journalist called the office a hothouse with no debate. ‘In a crucial meeting we spent our time arguing about fish quotas, not war.’ For Gorbachev, however, this meant the end of the line: he had been ‘immensely helpful in building up the coalition against Saddam Hussein’, but ‘not indispensable’ and ‘when the fighting is over, will not be needed … the west should be looking for a better man.’ By the turn of 1991, that was Boris Yeltsin, who promised not to reform communism but to hasten its breakdown at the centre by raising the same cry for Russian national sovereignty as the Baltic, Caucasian and East European states had done.134
The Economist did more than comment or give advice on these events. It supplied philosophical reflections on the meaning of liberalism’s victory, with Beedham and Macrae offering panoramic views of its past, present and future on the eve of their retirements. Beedham started out cautiously in the summer of 1989, peeking behind the Iron Curtain in ‘Long Live Spring’. Predicting the consequences of perestroika, in particular its reduction of imports from Eastern Europe, he explained how to push reform further: as step one, privatize and split up state enterprises, end subsidies, and force them to compete with one another; allow the market to set prices, even if runaway inflation resulted; found private banks to lend money based on expected return, not planning targets; start stock markets; solicit Western investment through debt swaps and joint ventures. Unleashing economic freedom – at a minimum the legal right to own, protect and pass on private property – was a precondition for rolling back totalitarianism, which was looking far more vulnerable than he anticipated. Stalin’s henchmen had not ‘found a way to stay on top forever’, he decided, ‘happy liberals are declaring that Hannah Arendt must have been wrong after all’ and ‘Leninism can finally be lowered into the grave.’ How long would this take? Based on interviews with Politburo members in Poland, Hungary and Yugoslavia, Beedham guessed that Gorbachev was unlikely to intervene as they moved from economic reform to multi-party elections, effectively giving up Communist control. If Bush bargained hard, most Soviet satellites might be allowed to leave the Warsaw Pact – though this also risked provoking a coup to oust the pliable ‘Gorby’. But by then it might not matter: its armies withdrawn, economy in tatters, an ethnic crisis or two on its hands in the south, and the Russians would be too vulnerable to turn back the tide. ‘The case for drastic change is strong, and the chances of getting away with it not bad.’135
Beedham became even bolder as the disarray in Moscow mounted, Gorbachev refusing to intervene to prop up embattled regimes anywhere, apparently just as in thrall to liberal ideals as the apparatchiks in Poland or Hungary. Four months later, Beedham wrote a valedictory that read like Herodotus on speed, his vision of world history punctuated by a dozen ‘really top-ranking’ dates. ‘One of history’s biggest mistakes began to be rubbed out … and this makes 1989 even better than 1945, when Hitlerism was erased’ (though neither year made the list, since in great years ‘something new is written in the human ledger’). Ranging from 457 BC, when ‘Pericles got Athenian democracy firmly on its feet’, to 1775 when America gave us ‘liberal democracy, plus self-determination’, he admitted to a distorted timeline. But ‘no apology is needed for the fact that most are Euro-American dates’. Was any needed for imperialism? Empire received just one mention, and that was to the civilized manner in which it was wound up. ‘The post-1945 freeing of the colonial empires was carried out in the name of self-determination and liberal democracy, though it achieved little of the second.’ America’s record since was as a beacon of liberty. ‘In 1989 yet another echo from Lexington has been crashing, this time more efficiently, round Eastern Europe.’ In rejecting one form of historical causation, Beedham praised another, Whiggishly optimistic about human progress, inflected by Christianity. The death of Christ was crucial, for ‘people who have been told that God became one of them, and let himself be crucified to help them, feel rather better about the human condition afterwards.’136 The religious leitmotif grew even stronger after the Soviet Union disappeared from the map, with a survey on ‘Islam and the West’ in 1994 shocking even his friend Samuel Huntington for its simplistic view of cultural and religious difference.137
Yet the foreign editor also revealed a kind of nostalgia for a fading world, as source for a satisfying argument. In one survey, he ‘stitched together’ five conversations with communist leaders who in 1989 admitted to seeing history roughly as he did. ‘Despite the lying and brutality of the past 40 years, this region still has some of the world’s most attractive politician-intellectuals’, he suddenly announced. What, he asked his composite communist, did socialism really mean? ‘The attempt to create a society, maybe several hundred years from now, in which people can be prosperous, free and equal.’ Was there still a big difference between this and capitalism? ‘Not all that much, especially if you take the social-democratic version of the Western system.’ Then what was distinctive about Marxism? ‘Marxism is one part of a long tradition, which goes back to the Bible, the Reformation, the French Revolution.’ Had it accomplished anything? ‘It may have stirred capitalism into becoming more civilized.’138 Beedham might as well have had this conversation with himself, so closely did it hew to thirty years of advice served up to his foes. By having surprisingly reasonable communists confess to their own errors, he consummated his victory over them in the realm that mattered most – ideas.
A strange upshot of his argument was that positive changes were not being made by dissidents, but by the national communist parties themselves. Even in Poland, where trade union opposition to its rule was fiercest, the party ‘was probably still strong enough to suppress any opposition … if there is to be change it will be because the party has grown tired of refusing.’ This hardly matched the rhetoric about totalitarianism. Nor did he suspect his adversaries of being quite as spineless as his dialogue with some of them suggested. Beedham worried that Gorbachev was trying to dislodge West Germany from NATO, balancing out disintegration in his half of Europe. ‘If he succeeded, “the West” would no longer mean what it has meant for the last 40 years’; while the DDR in East Germany, its economy ‘long the best in the region’, its Politburo (whose members, implicitly, refused to talk to him) most in tune with its leader, Erich Honecker, ‘looks as if it could go on forever’.139 Less than six months off, he never imagined the fall of the Berlin Wall. Even after it crumbled, a sense of disorientation pervaded his articles. Rejecting the idea that history was at an end, as Francis Fukuyama first opined in 1989, Beedham pointed to real threats – from terrorism to Iraq to Russia – but without his trademark enthusiasm. ‘Perhaps history got its timing wrong’, he mused in 1990. ‘A generation later, the countries of democratic Europe might have been cohesive enough to cope with the consequences’ of the collapse of communism in Europe.140 Could the West retain its edge with no competitors? ‘The old war of principle, the contest between grand ideas, is over. The new politics is full of dull detail.’ Perhaps direct democracy could revitalize it, plebiscites counteracting apathy among voters in the new age of ideological vacuum, while fending off the armies of lobbyists, ‘freebooters of the modern political world’, ‘literally corrupting’ since ‘the many are harder to diddle or bribe than the few’.141 By 1993, his mood had darkened. Could it be that victory was purchased at the price of a decline in civic energies, and a descent into complacency and corruption?
Macrae was free from these gloomy afterthoughts, in part because the technological trends which interested him showed every sign of accelerating after 1989. Not for him the cloak and dagger of geopolitics or the millennial lifecycle of civilizations. History interested him less than the future, and it was as a frenetic prophet of progress that he skipped through the pages of the Economist. He too took personal delight in being on the winning side of a long, strenuous argument. ‘During the brief civilian working lives of us returning soldiers from the second world war’, he wrote in 1988, ‘we have added seven times as much to the world’s producing power as was added during all the previous millennia of Homo sapiens’ existence.’142 Given how unlikely that seemed on his joining the paper in 1949, he wondered how anyone younger could ‘dare to sound pessimistic’. As Beedham basked in the disgrace of communism, so Macrae gave notice to its feeble Western imitators.
‘A Future History of Privatisation, 1992–2022’ claimed co-credit for coining the term thirty years earlier, when, everywhere but in the Economist, privatisation seemed a ‘hopeless crusade’. In the 1960s, ‘it was hard to persuade even sensible people how wrong were those like Galbraith, who told eager politicians that the interests of the poor could be served best by spending much more of GDP through politician-dictated monopolies instead of market-leading common sense.’ In a normal enterprise, if a middle manager found his boss was ‘making a horlicks of his job’, he could leave and start a new firm; under state ownership in Britain, he could file a piece of paper and never be promoted; ‘in Russia he got shot’. In council houses, ‘life deteriorated into drugs, hopelessness, squats’ – a ‘vicious circle of hell’; state schools in poor areas turned kids into ‘drug-addicted delinquents’; welfare created ‘illegitimacy, dependency, lack of neighbourliness, crime, drugs, riot so as to loot’.143 Like Beedham, Macrae also proposed a timeline of important dates, but his stretched into the future: in a few years all but three coal pits would close; in five, the railways would be sold off, including the safety and signal controls, making them safer and more efficient, ‘rather like an airport’; the same went for power plants and the electric grid, whose new owners would innovate by ‘discovering ever cheaper ways of releasing energy from storage in matter’; telephones and TVs ‘will leave the public sector’ and in ‘tones similar to today’s lessons about 19th century child labour, sociologists will tell with horror of the exploiting classes’ device named the BBC’. Schools and health care would be privatized next, but in ‘some disguised form of the “voucher” system’. Between 2000 and 2010, prisons and police would also go private; the former paid more if their inmates did not recommit crimes, the latter permitted to release criminal records in order ‘to throw them open to investigation by many competitors’. Computers would replace expensive lawyers and error-prone judges, and companies would race each other to punish criminals, with the goal of preventing recidivism at attractive rates. In 2010, local elections would have ‘multinational corporations appear on the ballot’, campaign promises transformed into legal contracts.144
The possibilities for privatization were as varied as the human experience. By 2015, children and the old, sick, or disabled would take out insurance on their ‘conditions’; charity would be replaced by ‘bidding for contracts to try to help “endangered people”’. War could use rationalizing too. Southeast Asia was a lesson in what didn’t work: ‘the inefficiency of state spending was shown when the mighty United States began to lose a war to slightly ridiculous North Vietnam.’ The Gulf War was instruction in what did: a coalition, using automated, precision-guided rockets. By 2020 this alliance would fold together NATO and the former Warsaw Pact, import cheap bombs from Japan, vet arms sales to the global south, and recruit soldiers from ‘the cheapest high-quality markets: Gurkhas, Britain’s SAS, sons of old soldiers from villages with fighting in their blood’.145 Some of these musings read like reworked science fiction narratives, only cheerful, and without a shred of social critique – as if the 1987 film Robocop were told from the perspective of the corporation that built cyborgs to police Detroit. In fact, Macrae’s predictions have mostly come true, or look like they will.
If the new era caused him fewer pangs than Beedham, Macrae too showed signs of being out of step with it. Asking famous minds to assess ‘Mrs. Thatcher’s place in history’ in 1989, the paper carried a revealing note from him. (In strangely appropriate proximity to Anthony Burgess, author of A Clockwork Orange, who dismissed ‘ten years of a middle-class lady with an affected accent who chills the heart’.) ‘Margaret Thatcher and Ernie Bevin are the only two I have known’, Macrae wrote warmly, ‘who have always in government simply asked: “which decision do I think will have the best effects?” That is why they are most intensely disliked by exactly the same sad sorts of people.’146 An eccentric vantage-point on a half-century: praise for a rightwing trade unionist boss and Labour bully at the time Macrae joined the Economist in 1949, and the union-busting leader of the Conservatives when he left it. By 1990, Macrae even had unflattering things to say about banks, whose irresponsible behaviour was to blame for an upsurge in financial crises in the past decade – over-investing in Latin American debt, then corporate buyouts, now property loans. ‘For bankers’, he predicted, who were sure to be overexposed when the latest real estate bubble burst, ‘the future has to look bleak’. Their coming unemployment would be wholly salutary, reducing risky bets (abetted by national deposit insurance schemes), and downsizing the global financial sector – at 10 per cent of world GDP, grown too big for its own good. ‘In the 1980s bright graduates streamed on that conveyor belt into banking and financial services. Their prospects, by the time they retire, seem on par with those of 1950s coalminers.’147 This prediction was not just at odds with the editorial bottom line, but spectacularly wrong. Endorsing fresh-faced Bill Clinton in 1992, ‘standard-bearer of a new Democratic party: fiscally responsible, socially hard-headed’ – and set to fatten the Wall Street banks with repeal of the Depression-era Glass-Steagall Act and thin the welfare rolls – the new generation of Economist journalists were all aboard for the new world order.148