Lamont's 'seven wise men' fall out as professor goes on the attack: Robert Chote argues that an internal split in the panel advising the Chancellor could let others off the hook
Sunday 07 March 1993
Professor Tim Congdon, of the City firm Gerrard & National and Cardiff Business School, launches a blistering attack this week on the wisdom of his fellow panellists. One of the targets, Professor Wynne Godley of Cambridge University, has already described the assault as 'crazy and possibly libellous'.
Professor Congdon tells the other members in an open letter that their deliberations dismayed him. He likens them to 'literary critics who read prose but never look at poetry, or mathematicians who understand arithmetic but are bewildered by algebra'.
Professor Congdon was alone among the seven in arguing that taxes should rise in this month's Budget. Doug McWilliams, of the Centre for Economics and Business Research, said: 'The weakness of the panel is that the others are wrong. The only justification to ask outsiders for public advice is to make the Government take tough decisions - instead they have given it an excuse not to.'
One by one, Professor Congdon savages the six for the alleged inadequacy of their economic theories and policy conclusions. Even Professor Patrick Minford, fellow monetarist at Liverpool University, does not escape. Professor Congdon takes issue with his belief that selling government bonds to banks will not boost the money supply.
'If Minford is baffled by my views, I am much more baffled by his,' he writes. 'There are many interesting and controversial questions in economics, but this is not one of them.'
Professor Congdon's views come as no surprise, but the apparent intemperance with which he has expressed them has taken the rest of the panel aback.
Professor Congdon said yesterday that he had no intention of resigning and that it was perfectly possible to be outspoken in debate, while being friendly in person.
The seven's meetings have indeed been friendly so far, but they include some large yet fragile egos, so friction can be expected. Gavyn Davies, panel member and chief economist at the City firm Goldman Sachs, argues: 'Get seven doctors together in a room and present them with the same patient. They will try roughly the same tests but have different ideas about the right treatment. Economists are no different.'
So where does all this excitement leave poor Mr Lamont, yearning as he is for wise economic advice? Policy- making certainly has little to gain from another squabble about the importance of money - this argument has been rumbling on inconclusively since at least the 1920s.
But cynics might argue that this sort of disagreement - accompanied if possible by divergent forecasts of the economy's prospects - is just what the Treasury wants.
Having been pilloried for its past errors, the Treasury can point to the seven wise men and say: 'If they can't get their act together, don't blame us if we don't get it right.'
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