Letter: Let's be honest about the economics of trade

Click to follow
The Independent Online
Sir: Yesterday you carried Sir Alan Walters' article "A secret member of the ERM?", opposing a single currency and commending himself on his own infallibility. Since Sir Alan is standing against Kenneth Clarke in Sir James Goldsmith's Referendum Party in the next election, presumably with a view to replacing him as Chancellor, the views of Sir James - his backer and putative Prime Minister - are pertinent.

Sir James's excellent book The Trap shows that Sir Alan and himself are out of step on the fundamental questions of international economics. I chanced to read The Trap both in French (Le Piege) and English. For reasons best known to Sir James, his study defence of the ERM was omitted from the English version. Sir Alan should know that Le Piege included the words:

If we want a free market in Europe it is imperative to accept a monetary discipline. You know, the ERM, as it was conceived, worked well. It was a flexible mechanism ... It is necessary to prevent competitive devaluations which would completely skew the market.

The latter sentiment is identical with that of the French government, whose policies Sir Alan derides in his article.

On the ERM side, Sir Alan has an excuse, though he should read Le Piege in the original, but there is no excuse for his failure to declare his disagreement with Sir James on something even more fundamental than the ERM: namely free trade. Sir Alan speaks and writes like a free-trade fetishist. Sir James - an intelligent, experienced and reflective man - takes a wider view. The main strength of his book was that it asked questions about the consequences of unrestrained global free trade, not just for European employment, but for Europe's culture, communities, institutions and ecology.

I suspect I know why Sir James adapted his book somewhat for Anglo-Saxon consumption: the British abhor paradox, and Sir James's opposition to a single currency and support for the principle of the ERM, though perfectly logical, were thought too confusing for an English audience .

None of this features in the Walters/Goldsmith election manifesto, which is simplistic stuff. It is easy to ask loaded questions about domination by Brussels and a single currency; many of us, myself included, are against both. It is infinitely harder to pose the real questions, such as the long-term effects of competitive devaluations, and where global free trade is taking us. Sir James has done this in his book. Why feel shy about it? And why sponsor candidates who dodge fundamental issues?

Yours faithfully,

George Walden

MP for Buckingham (Con)

House of Commons

London, SW1

30 October