IF YOU read and relish, as I do, books written between the wars, you blink in disbelief when money gets specified.

We all know in theory it isn’t what it was, but when you read that Lord Peter Wimsey, to the scandal of his servants, paid as much as 12 shillings and sixpence (60p) for a bottle of the finest vintage port, and shocked the neighbourhood by building the largest house in the county at a cost of no less than £2,000, well, you blink.

It is, of course, the government and the semi-independent Bank of England that bring this about.

The bank in the last few years has conjured up £895 billion out of nothing by “Quantitative Easing”; the only difference between this and printing money is that the new money is supposed to be reversible, though this has never been done.

The way the new money gets into circulation is that the bank buys government securities from the commercial banks which therefore have more money to lend out.

The benefit is supposed to “trickle down” to us common herd.

The eminent economist J.K. Galbraith said the theory is like saying if you feed a horse enough oats, some will get through to feed sparrows on the other side.

The bank appears to have been surprised that the desired inflation did not appear for many years, but any young couple trying to get on the housing ladder could have told them it was going into assets, which soared in value without forming part of the cost of living indices.

At the same time, as always, the government was borrowing money in order to give us a standard of living we could not afford, thus building up debts which will have to be paid by our children and grandchildren. (I am not talking here of the special measures due to the Covid pandemic — history will give that verdict).

We are always being told we are one of the richest countries in the world — wouldn’t it be like a breath of fresh air if the government said “From now on we will live within our income!”

Others do: in Singapore the laws state that over the term of a government, the borrowing must be zero.

The parties of course blame us, saying if they tried to keep money honest we would vote them out.

I don’t believe this to be true if the politicians pointed out the burdens we are loading future generations with, voters would be shocked into agreement.

  • In my last article, the quote “... we are the people of England... “ was from G. K. Chesterton.

Now who wrote “The art of government is to make two-thirds of a nation pay for the other third.”