Golden Brown

The next Labour leader should learn the lessons of 1992, says Steve Richards.

Even at the end of a long leadership campaign, there is no clear sense that any of the candidates fully understands why Tony Blair and Gordon Brown won three elections, and there has been only a vague attempt to explain what went wrong. Yet until lessons are learned, positive and negative, Labour will struggle to win again. A key to Labour's victories after its calamitous defeat in 1992 was Brown's determined, ruthlessly disciplined development of an economic policy. It commanded wide support (for a time) and gave him space to increase public spending while redistributing fairly extensively.

As shadow chancellor in the early 1990s, Brown faced a nightmarish dilemma: voters did not want Labour to spend any more of their money and yet the decrepit public services were in need of huge investment. It has become fashionable to attack Brown for having been too dependent on tax receipts from the financial services industry to fund the increases in spending. But politicians, especially Labour ones, function in tiny amounts of space most of the time, and if anyone cares to look back at the public and media mood in the mid-1990s, few would argue that there was an alternative route. Nonetheless, by 2002, Brown was in a strong enough position to propose openly a tax rise to pay for big increases in spending on the National Health Service. This formed the centrepiece of the most popular Budget since polling began, even winning the backing of a majority of Conservative voters.

Brown's career peaked before his overwhelming desire to replace Blair led him to make some terrible misjudgements. But, for ten years, from 1992 to 2002, he was the biggest figure in British politics.

It is strange, therefore, that in the retelling of New Labour history, only passing reference is made to economic policy, and this is invariably done out of context. So Blair's memoirs refer fleetingly to the increased investment in public services as if it were a policy as peripheral as opening a new chip shop in Southend. In Peter Mandelson's account, the economy barely features until he gets to the dramas of the financial crisis of 2008-2009.

Labour ministers came and went, more interested in pouring poison into the ears of influential columnists about "reform", and the importance of remaining New Labour, than they were in advancing economic policy. (What was a Blairite economic policy? Actually, Blair answered that question in the postscript to his memoirs. It is the same as George Osborne's, which does not get the new Labour leader very far.)

Contrary to current mythology, Brown was more ambitious than Blair in what he sought to achieve in policy. And he shared with Blair an instinct that Britain was a centre-right country, but had a unique way of coping with it. His public narrative was apolitical. He spoke of Britishness, prudence, purpose, fairness and consensus - who could possibly be against any of this? Behind the narrative, he was taxing stealthily, targeting help on poorer areas and over time vastly increasing public spending. Only after the policies were implemented did he put the case for them; look in vain for arguments about increases in spending in 1997.

By 2005, Brown was retrospectively hailing increases that he did not argue for in advance. Working on the assumption that the British media would not report such arguments fairly, he adopted words and phrases that the Tory-supporting newspapers could not oppose. Crucially, he did not put the case for the 2002 tax increases during the 2001 election. It is true that he refused to rule out National Insurance increases - resisting pressure from some timid Blairites to do so - but that was as far as he went. Similarly, the decision to increase taxes on high earners was made only after the 2005 election. During that campaign, which culminated in Labour's third victory, he pledged not to increase income-tax rates.

The tax factor

The new Labour leader and shadow chancellor will face challenges similar to those that Brown confronted in 1992, and while it has become orthodox to cast the former PM as a disaster, the next Labour generation can learn much from him - especially his days in opposition. Consider that, for newspaper support, Labour can rely only on the Daily Mirror: hostility towards the party is similar to that of the early 1990s. Consider, too, the media consensus that any move to the left of David Cameron is a lurch back to the vote-losing ways of the 1980s. The papers are not as influential as they were, but their power to shape opinion remains significant.

Meanwhile, the new leader will face a coalition that has a political strategy as much as an economic one. Cameron and Osborne hope to propose tax cuts at the next election. They note that Margaret Thatcher won landslides, with little over 40 per cent of the vote, using a tax-cutting strategy. They might not be in a position to make such a move, but what if they are?

During the contest, most of the leadership candidates put the argument for higher taxes rather than spending cuts. There is a strong case for such a balance. But can Labour win an election on such a basis, and without the support of most newspapers? The question that Brown had no choice but to address in 1992 is back.

Steve Richards's book "Whatever It Takes" is published by Fourth Estate (£14.99). His series "The Brown Years" is running for another two Tuesdays at 9am on BBC Radio 4

This article first appeared in the 27 September 2010 issue of the New Statesman, The 50 people who matter

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The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.