Enoch was wrong: the attempted rehabilitation of a racist

For a man so clever, he brought a lot of misery to a lot of people's lives.

On Saturday morning, in an item on Radio 4’s Today programme to mark the centenary of Enoch Powell’s birth, presenter Justin Webb asked Daily Mail writer Simon Heffer, “Was Enoch Powell racist?” Heffer paused for a moment while he pretended to weigh the question up and then replied, inevitably, “No, not at all.”

We live in a time where nobody will admit to being racist, even people who say and write the kind of things that a racist might well say or write. In 2012, if a Grand Wizard of the Ku Klux Klan were caught mid-cross-burning, he would swiftly explain that of course he isn’t racist and he has a black friend and he was just drunk and he’s very sorry for any offence caused and obviously racism is a terrible thing. But surely the man famous for the most notorious speech in the history of British race relations can still safely be described as racist?

Apparently not. Heffer, who published a mammoth biography of Powell in 1998, maintained on Today that Powell’s 1968 “rivers of blood” speech wasn’t about race at all, but immigration, as if the two could be cleanly separated. I would like to have seen Heffer explain to one of the black families persecuted after Powell’s speech that the issue wasn’t the colour of their skin — oh dearie me, no — but their presence in Britain. I’m sure the distinction would have cheered them up as they scrubbed the graffiti from their front door. (Inconveniently for Heffer, fellow guest Michael Cockerell remembered Powell telling him. “What’s wrong with racism? Racism is the basis of nationality.” Oops.)

Heffer went on to point out that Powell loved India and had hoped, pre-independence, to be appointed viceroy. See, he loved brown people so much he wanted to be their colonial overseer! He mentioned that Powell read ancient Greek at the age of 15 and could speak 14 languages, at one point stuttering the mantra, “He was a very clever man,” as if racism were the exclusive domain of the stupid. I wonder if he’s ever seen this clip from The Simpsons:

Webb somewhat apologetically suggested that the speech might have been “pretty incautious” but declined to press the point, and the item ended with everyone laughing about Powell’s love of doing impressions of people on Antiques Roadshow. Good times.

Heffer is no crank pariah. There’s an ongoing effort on the right to rehabilitate Powell. In a mealy-mouthed piece in the Telegraph on Saturday, Ed West did the “very clever man” routine (Powell picked Wagner, Beethoven and Haydn on Desert Island Discs, don’t you know?), threw in some flattering anecdotes and skipped daintily past the rivers of blood to focus on one area where Powell might feel vindicated: his Euroscepticism. Let’s remind ourselves of what West left out.

Firstly, the speech was no gaffe or unguarded remark but a calculated provocation. A few days earlier, Powell had told a friend, “I’m going to make a speech at the weekend and it’s going to go up ‘fizz’ like a rocket; but whereas all rockets fall to the earth, this one is going to stay up.” Secondly, he chose to quote the most explosive and alarmist comments from his constituents: “In this country in 15 or 20 years’ time the black man will have the whip hand over the white man”; “When she goes to the shops, she is followed by children, charming, wide-grinning piccaninnies.” If he were not interested in race-baiting, he need not have used that language. Thirdly, he wasn’t merely expressing reservations about multiculturalism — he was saying that immigrants had no right to be here in the first place. Fourthly, racial assaults, both verbal and physical, increased immediately after the speech, as if Powell had given racists the green light — in one instance white youths attacked Asians with metal bars outside a school in Southall. The likes of MP Paul Boateng and actor Sanjeev Bhaskar have talked about the mood in the playground and the street changing the very next day. In a piece for the Institute of Race Relations Jenny Bourne writes: “The point that is missed by almost every commentator to date is that Powell, though he might have echoed sentiments of his West Midlands voters, actually went on to create the Rivers of Blood he warned against. The blood shed was not that of the White English – clearly what Powell feared in the wake of US ‘race riots’ in the late 1960s – but of the Black newcomers, which is why it went largely unreported.”

It was hardly the most progressive era and yet the establishment rounded on Powell. Edward Heath sacked him from the shadow cabinet while the Times editorial called it “an evil speech” which “appealed to racial hatred”. To Ed West, it seems, they were all a bunch of politically correct lefties. One section of his piece begs to be quoted in full:

Certainly it was inflammatory in tone, and when a West Indian christening party was attacked soon after by yobs heard to shout “Powell”, the media was quick to erect a cordon sanitaire around his views. Yet there was, if anything, more violence from the Left. Powell’s constituency home was attacked, there were bomb threats when he was due to address universities, an edition of Any Questions had to me moved, and a planned visit to his old school was abandoned for fear of disruption.

Yes, you read that correctly. Never mind the people who had their faces slashed at a christening — they had to move Any Questions!

West stops short of spraying “Enoch Was Right” on the wall but only just. “Was he right? To a certain extent.” Really? To what extent? He was wrong to compare the British situation to race riots in America and communitarian tensions in India. He was wrong to say that the only solution to racial tension was to stop non-white people entering the country. He was wrong to predict race war, although he kept at it, cropping up like a crazy old uncle in 1976 (saying race war would make the Troubles in Northern Ireland “enviable”) and 1981 (saying that the summer’s riots threatened “civil war”). Wrong every time, unless you’re Anders Behring Breivik.

Back to West. “And yet the profound cultural changes following 1968 made it impossible to address these issues, with the rise of television as the dominant political medium and the decline of religion. A new generation wanted their politics to make them feel good about themselves, and to define moral worth.”

Ah, so we don’t like Enoch Powell because we’re all godless telly addicts who can’t handle the truth? No, it’s because of Powell’s hysterical talk of “piccaninnies” and “the whip hand” and “the River Tiber foaming with much blood” that the subject became toxic in mainstream politics. Enoch Powell’s biggest enemy wasn’t Ted Heath or students picketing Any Questions: it was Enoch Powell. By mistaking his own extreme pessimism and racist paranoia for fearless clarity, he brought misery to the lives of many British citizens, ruined his political career and even damaged his own cause. For a man who could speak 14 languages, that doesn’t seem very clever after all.

Dorian Lynskey is a critic for the Guardian. This post originally appeared on his blog here. You can follow him on Twitter as @DorianLynskey

Enoch Powell in 1969. Photograph: Getty Images

Dorian Lynskey is a journalist living in London. He blogs at:

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?