Tuesday, June 13, 2006

Mervyn King Does a Greenspan

Mervyn King, Governor of the Bank of England (Mr Greenspan’s UK equivalent) addresses a dinner meeting of Scottish Financial Enterprise (an academic and finance practitioners’ think tank) and the Chamber of Commerce in Edinburgh, saying he was in ‘no hurry to raise interest rates’ writes Ian McConnell, Business Editor of The Herald (Glasgow);

It seems mandatory for speeches in Scotland today for the speakers to make reference to the Scottish Enlightenment, especially its prominent luminaries such as David Hume and Adam Smith. Mervyn King duly obliged.

King said: "Just as the Monetary Policy Committee meets monthly to decide on interest rates, so David Hume and Adam Smith met regularly in the Poker Club (in Edinburgh) to debate the policy issues of the day.”

The Poker Club was formed to ‘ignite’ debate on the formation of a militia in Scotland on the grounds that the enforced disarmament of Scotland following the failed 1745 rebellion by some of the Highland clans in support of the ‘pretender’ to the British throne (led by ‘Bonnie Prince Charlie’, who was neither ‘bonnie’ nor a ‘prince’, though he proved to be a bit of a ‘charlie’) had left the country undefended (evidenced by John Paul Jones appearing off Leith in the Firth of Forth and frightening the populace with his unspecified menace). There was also the fact that the loyal Scottish Regiments were serving with the British Army abroad (it was ever thus, and still is today) and the 'Red Coats' that were in Scotland from the standing army did not have a 'helpful' public image in the Highlands.

Smith, originally in favour of a militia because he entertained the view, presented more strongly by a fellow academic at Edinburgh University, Adam Ferguson, sometimes referred to as the first sociologist, a title that may belong more properly to Smith, that commerce undermines a nation’s ‘martial spirit’, considered to be important by Smith. The American Rebellion showed that a militia that spends some years in the field, as George Washington demonstrated, could become a match for a standing army, hence Smith, ever pragmatic, changed his mind (see Book V, Wealth of Nations).

"Hume was an officer of the Club with the unusual title of the Assassin's Assessor, 'without whose assent nothing could be done', and whose role was to ensure that in meetings 'there was likely to be no bloodshed'.

"So I take it that Hume at least would have been content with last week's decision to leave interest rates unchanged. There is no Assassin's Assessor on the Monetary Policy Committee, nor - you will be relieved to hear - any bloodshed. But, month by month, we shall be debating the prospects for the economy in order to decide in which direction, if any, interest rates need to move.


I think that is a fair ‘hook’ that King created between the Monetary Committee and Hume. Though I must say, no one could be further from being an Assassin that David Hume, the gentle philosopher, who never raised his voice in anger, even against some of the more idiotic of the religious zealots who tried to torment him, which is, perhaps, why he was accepted so warmly by many Church Ministers who disagreed with his scepticism about all things religious but admired him as a very polite gentleman.

It may also explain his attraction to so many ladies, some of whom he entertained in quiet consultations at his house St David’s Street just off Princes Street and close to St Andrew Square, in Edinburgh.


Post a Comment

<< Home