Book review: Vince Cable “Money and Power”

Despite his many years at the pinnacle of British politics, Vince Cable has always managed to maintain an impressive literary output. In 2009, while the party’s deputy leader and shadow chancellor, he published The Storm, an accessible analysis of the 2008 financial crash. This was followed in 2015 by After the Storm, a look at the aftermath of the crisis on British economic policy from the perspective of Cable’s five years in the Cabinet as Business Secretary. Most recently during his time as party leader, Cable even managed to find the time to publish a political thriller, Open Arms, set at the intersection of Westminster politics and the Indo-Pakistani conflict.

Cable’s latest work, Money and Power, marks a return to non-fiction and the serious economic themes that are his bread and butter. Inspired by Keynes’ oft-quoted remark that “practical men…are usually the slaves of some defunct economist”, the book is a survey of leading politicians over the past few centuries that – consciously or unconsciously – have through their actions changed or deepened our understanding of political economy. As both a trained economist and former government minister, Cable is better placed than most to take on this ambitious task.

The sixteen figures profiled by Cable are genuinely global in their breadth, and include Alexander Hamilton and Franklin Delano Roosevelt in the US, Bismarck, Lenin, and Thatcher in Europe, and Lee Kuan Yew, Deng Xiaoping and Shinzo Abe in Asia. Yet just as compelling are Cable’s profiles of lesser known yet nonetheless influential individuals, such as Ludwig Erhard, an economist turned politician who was instrumental in designing Germany’s post-war economic model, and Leszek Balcerowicz, another economist turned statesman who developed the thinking behind Poland’s largely successful “shock therapy” transition from communism to capitalism.

As one has come to expect from Cable, Money and Power is detailed and analytically rigorous without sacrificing on lucidity and readability. It is full of fascinating insights and anecdotes from across the history of political economy, such as the revelation that Deng Xiaoping – the architect of China’s shift to a market economy – was partly inspired by witnessing in person – five decades earlier – Lenin’s own ill-fated experiment to achieve this in the Soviet Union with the New Economic Policy (NEP). We also learn that despite his subsequent associations with Keynesian economics via the New Deal, Roosevelt was actually an instinctive fiscal conservative who repeatedly hampered the US’s recovery from the depression with unnecessary austerity, and that Bismarck – while better-known for his militarism and right-wing politics – laid the foundations for Germany’s welfare state.

The book also provides some food for thought with regards to the present day. Cable’s profile of Lee Kuan Yew, the man responsible more than any other for modern Singapore’s prosperity, reminds us of the former Prime Minister’s penchant for state intervention and ownership – his policies ensured that 90% of land in Singapore is state-owned – and makes a mockery of Brexiteer notions of a “Singapore-on-Thames” based on a deregulatory race to the bottom. Looking towards the future, the book’s chapter on Abe’s attempts to wake Japan out of its multi-decade economic slumber (so-called “Abenomics”) and adapt to a rapidly aging population concludes by encouraging the West – which is facing similar challenges – to learn from these experiments.

Money and Power’s breadth is at times also a source of weaknesses. In covering so many different leaders and parts of the world, some of which will be unfamiliar even to the most informed readers, Cable is required to devote significant chunks of each chapter to providing the wider economic and political context necessary to situate each figure. This naturally limits the book’s ability to profile each leader in depth, and in some instances has the effect of making them appear less influential – in comparison to their surrounding environment – than may actually have been the case.

Additionally, in focusing as heavily as he does on establishing the historical facts, Cable spends less time than this reader would have liked in setting out a theory for why economic ideas have a greater impact on politics at certain times than at others. A final concluding chapter drawing together the book’s different strands provides some intriguing observations along these lines, but – given Cable’s unique experience as both an academic and a practitioner – one wishes he had developed these further.

Nonetheless, Money and Power is an informative and enjoyable read that provides a genuinely unique perspective on the deeply intertwined histories of politics and economics. It is also a reminder, at a time of unprecedented economic challenges and growing economic nationalism, of the crucial role played by sound economic analysis in good decision-making – and the tragic consequences when it is absent.

* Max von Thun is a former economic adviser to Sir Vince Cable. He currently advises on technology policy at Global Counsel, a political risk consultancy chaired by Lord Mandelson.

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2 Comments

  • Great review. Thank you. A must-read for me!

  • Peter Hirst 12th Feb '21 - 5:53pm

    If I can digress, democracy was invented so those with money do not have power. This is because usually few have money and the many have power. If we stick to this mantra we can see how much our democracy has strayed from this ideal.

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