Lord William Rees-Mogg on Sound Money, Austrian Economics and British Government Reform
By Anthony Wile - February 07, 2010

Introduction: Former London Times editor Lord William Rees-Mogg attended Charterhouse and Balliol College, Oxford and was President of the Oxford Union in 1951. He became a writer for The Financial Times in 1952, and then moved to The Sunday Times in 1960. He was first Deputy Editor and then editor of The Times (from 1967 to 1981). He was also a member of the BBC's Board of Governors and chairman of the Arts Council, With James Dale Davidson, he authored such popular, free-market oriented books as The Sovereign Individual, The Great Reckoning, and Blood in the Streets. He is Chairman of The Zurich Club and also of the London publishing firm Pickering & Chatto Publishers.

Daily Bell: Thanks for speaking to us. We appreciate the opportunity to ask you questions.

Rees-Mogg: My pleasure.

Daily Bell: How did you become interested in free markets and economics?

Rees-Mogg: I became interested in economics and history when I was in university. Later I became more interested in the free market and economics because of the monetary strain of what you would call Keynesian economics. This was mustered to deal with the growing pressure of inflation in the 1960s and more in the 1970s, and to explain them. The longer that these pressures went on, the more dissatisfied I became with the explanations of economics, which I had previously accepted.

Daily Bell: Fill us in some more on your career and professional interests.

Rees-Mogg: I went to the Financial Times in March 1952 after coming back from Oxford and doing an American debating tour. By 1955, I was named the principal leader writer for the Financial Times. After having done a spell in the Parliamentary lobby, that naturally developed my interest in the questions of economic policy.

Daily Bell: Would you characterize yourself as an Austrian economist?

Rees-Mogg: Yes. I am an Austrian economist more than anything else. I knew Friedrich von Hayek and liked him very much. I don't say I went as far as he did but I was very sympathetic to his point of view.

Daily Bell: Is it hard to be pro-free markets in Britain these days?

Rees-Mogg: No, I don't think so. I think the majority of people who are connected to the more right wing view of politics or the liberal view of politics in the old sense, would describe themselves as pro free market. I think people are more reflective. That is to say, these were great battles that were fought, and they are more apparent when we have had a major recession. The gaps between what Keynes thought , and what Milton Friedman thought, is much less wide than we used to assume.

Daily Bell: Why isn't the British House of Lords more pro-free market? Or is it?

Rees-Mogg: Well, the British House of Lords is a rather elderly body of people. You are appointed for life, and usually get appointed in your early 60s and therefore they are a generation of people who learned their economics from Keynes. Keynesian ideas are still reacting in essence to the subjects at hand in the 1930s. So you have a fair number of Peers whose ideas belong to the Keynesian theory. Then you have people such as Nigel Lawson, who is an ex-Chancellor, who is a free-market economist.

Daily Bell: Why is there so much corruption in the British political system?

Rees-Mogg: I don't think there is more corruption in the British political system than there is on average in others. The reason that a particular kind of corruption or near corruption evolves was that the government of the day, and this goes back to the 1960s, thought it would be better to give pay increases to members of parliament in terms of expense allowances rather than in terms of salary increases. This was done in order to avoid having to make concessions to trade unions on various issues. It started in the 1960s when Harold Wilson was the Prime Minister. I don't think people realized that this would come to be regarded as money that belonged to Members of Parliament to be spent how they wished. Suddenly that was how it was administered, and the Members of the House of Commons who drew on these allowances had the idea that this was their own money. I think that is the explanation of why there is that particular scandal.

Daily Bell: Is the parliamentary system failing?

Rees-Mogg: No but I think it needs a bit of reform. I think we should have a reform of the House of Lords and that it will become an elective body.

Daily Bell: You have been a great predictor of what is actually happening in Britain and the EU – the inflation, the debt, the instability of the currency. Why haven't you written any more books like the ones in the early 1990s that had such an impact on people?

Rees-Mogg: Well, we wrote three books, Jim Davidson and myself. I think three books are quite enough to write. (Chuckling) Speaking on futureology.

Daily Bell: All right, speaking of predictions, then, have you been surprised by the growth of the free-market movement in America?

Rees-Mogg: No. I think one of the first places I came across the sound money movement was in the United States, which is always much stronger than the comparable movement in Britain.

Daily Bell: Why is Britain, the seat of the first industrial revolution and generally free-market republican culture, so entranced by what Samuel Johnson would call leveling?

Rees-Mogg: I think these are the difference not so much between Britain and the United States as between Europe and the United States, Great Britain in a mid position between the two. Europe basically has a Bismarckian state run welfare structure, which was not adopted in Britain until after the 1945 election. The American Constitution has on the whole limited similar populist movements in the United States. At any rate, with the exception of the period when Franklin Roosevelt was president, and since then the United States has not gone as far in that direction.

Daily Bell: Does the Royal Family contribute to a perception of British socialism as a natural state of things?

Rees-Mogg: No. The Royal Family does not intervene in the party divide. I think what we have to remember, since 1979 when Margaret Thatcher became Prime Minister, there have been very strong elements in the British government itself that are basically free market.

Daily Bell: How has Britain fallen to the state it is in – the ferocious debt, the endless regulatory elaborations and general economic difficulties?


Rees-Mogg: Well, I think they have made some of the same mistakes as the United States with the monetary policy. I think we are far too reluctant to deal with asset bubbles. But so is Allan Greenspan. It is the worldwide mistakes of allowing quantities of money to be so pumped up.

Daily Bell: Yet there seems so much subdued – and frank, as well – authoritarianism in Britain.

Rees-Mogg: I think it is the result of having the ideas of the government dominating the political class. We have now had the past 13 years with people who think they have a right as a government to engage in, perhaps a duty to engage in, social engineering on a massive scale.

Daily Bell: Is the British caste system an impediment to change and to entrepreneurialism?

Rees-Mogg: No, I don't think so. I think that entrepreneurs have always come from outside the class structure. I think a few major entrepreneurs have been born into what we call the upper class environment, a few have, but most have come from independent minded groups inside our society.

Daily Bell: Is there an element of paternalism in Britain that makes it hard for free markets to continually prosper?

Rees-Mogg: There certainly is an element of paternalism in Britain but I think I would prefer to call it welfarism. The British form of health service is, for instance, very strongly supported by British public opinion and any government which is not protecting the basic structure of health service, would find they are politically very unpopular. But that runs right through our society, it's not particularly paternalism from the top.

Daily Bell: Why did the elites seemingly stick Britain with the EU? Why won't the British elites allow a vote?

Rees-Mogg: The British elites won't allow a vote because they would lose it. If they had a vote, and they won't at the moment, it would have gone against the Lisbon Treaty. As to why, well, in the early 1970s, Europe was a much more dynamic economy than Britain. The British felt they needed to trade inside a very large and more efficient community. It was a loss of confidence at that point.

Daily Bell: Why was there such animosity toward Margaret Thatcher when she was very obviously the best British politician in years?

Rees-Mogg: Well, of course, this is perfectly true and there was a lot of animosity toward her and there was also a lot of support and she had considerable support on side with even Tony Blair himself. But the reason for the animosity was mainly political. I mean broad issues, like the future of the mining industry. Where there was the miner's strike, which our government won and defeated the miners, obviously that left behind bitter memories about the mining community and the monetary unions.

Daily Bell: Was Thatcher kicked out when she decided to oppose the EU?

Rees-Mogg: No that happened after she left office. She thought that there were more benefits to be gained from the EU in terms of a large free market and the costs of doing it. I don't think she thinks that now but that is what she thought in the middle of her period of office as Prime Minister.

Daily Bell: Is there a group of banking families in Britain and Europe that secretly exerts power over sociopolitical events. Could this group, in its larger form, be called a power elite?

Rees-Mogg: No, is the answer to that. There are powerful bankers but even the largest of the family banks, banking groups, which I suppose would be the Rothschilds, don't have as much power as the people who happen to become the chief executives of the larger International banks. The family banks do have access of course.

Daily Bell: Is there generally an unelected Anglo-American power elite (money power) that attempts to steer world events?

Rees-Mogg: No, I don't think so. I think they may try, I can see that the Bilderberg group for instance is fueled with such motivation. Only twice in my life, have I been invited to attend one of the Bilderberg weekends and they didn't seem to me to be particularly important. They have their views and their objectives and it was quite interesting to hear what they have to say. But it was all sort of general power being exalted from what I could see.

Daily Bell: Is the British elite anti-British and pro-EU?

Rees-Mogg: No, the group that is pro-EU largely consists of retired members of the foreign service.

Daily Bell: Is the idea of an Anglo-American elite to undermine republicanism and create global socialist bodies they can control behind the scenes?

Rees-Mogg: No, I don't think there is. I don't think Republicanism exists in Britain. The Republican party and the Conservative party can't be equated. There are in fact several Republicanisms in the United States and in my lifetime always have been.

Daily Bell: Why is the Labour party popular in Britain when it has brought such disaster on the country?

Rees-Mogg: Well, the Labour Party has brought disaster to the country by being a tax-and-spend party. Tax-and-spend tends to be popular when it comes in, but it doesn't work at all well and it gets thrown out again. That has happened to the Labour Party on several occasions in the last hundred years.

Daily Bell: Is the Internet gradually exposing the anti-free market bias of European and American elites?

Rees-Mogg: I wouldn't think so. The Internet seems to me to get a very wide spread of views, some very thoughtful and some prankish or even crazy. The range of views of people who do blogs, ranges from serious and informed to basically anarchist.

Daily Bell: Will the Internet have the impact of the Gutenberg press that resulted in the Reformation and galvanized free societies in Europe and eventually America?

Rees-Mogg: I would not have thought so. I think the weaknesses of the Internet basically come down to segments of the Internet not meeting what you would call the Peer Review Principal. Statements of fact should be accurate and should be known to be accurate – [and that they are not] have greatly weakened its influence.

Daily Bell: What do you foresee happening over the next 20 years in the West?

Rees-Mogg: I think that the lines of the economic power of the two great, large and dense populations, the Asian powers, China and India, is going to change the West a good deal.

Daily Bell: Is China the emergent power?

Rees-Mogg: I think China has more than emerged! India I regard as more of an emerging power.

Daily Bell: Will the EU subside?

Rees-Mogg: I think the EU will survive but the EU in its present shape probably won't. The strain the Euro is putting on the weaker economies is more than they want to be able to sustain.

Daily Bell: Are you generally hopeful about an increase of freedom in the West or not?

Rees-Mogg: Yes, I am. I find that younger people tend to hold increasingly liberalist views. Liberalist is a difficult word because it means different things in different places. In the classical sense the meaning that liberty is the essence of sound political structure.

Daily Bell: What papers and books of yours would you recommend to our readers?

Rees-Mogg: I haven't got any books in print I think, at the moment. A book almost impossible to get is a book I wrote about the gold standard in 1974, called the Reigning Error. I suppose it may be possible to find a copy somewhere but I don't know where.

Daily Bell: How about general readings on free markets? What are some important books and articles?

Rees-Mogg: I think people should get hold of the classical basics. Economist John Adam Smith has a great deal of importance to say, Locke on Politics, both core documents.

Daily Bell: Any general last thoughts?

Rees-Mogg: Thank you very much, happy to have done the interview.

After Thoughts

Long ago, we remember reading books that Rees-Mogg co-authored, and they were tough on government and fiat money generally – much tougher sounding, in fact, than the above interview. They were certainly Austrian in tone and free-market in substance. Yet Rees-Mogg is and was a very important man in the communications industry in Britain. From the standpoint of a historical record, this interview, somewhat late in life, is both interesting and instructive.

In a larger sense, this interview set us thinking about how far the free-market movement has come since the late 1980s and early 1990s when we read one of his co-authored books, so different from the prevailing wisdom. The book showed us a different kind of society and a different path – at a time when big government was resurgent and socialism was the preferred political path. How far we have come!

Today, the entire socialist structure of the Western world seems to be in some sort of slow-motion collapse – and the free-market visions propounded by Rees-Mogg and James Dale Davidson seem distinctly closer. The power elite – visible and invisible – has for too long manipulated society through a variety of intricate fear-based promotions. The Internet (as the Gutenberg press before it) has been relentless about exposing these dominant social themes for the propaganda they are.

The collapse of the global warming meme has been especially startling, but there many other themes of the elite are under attack as well. The whole idea of central banking – in which a handful of individuals fix the price of money for the Western world – is gradually deflating into incoherence and, generally, rhetorical confusion. The idea of Keynesian monetary stimulation has lost credence throughout Western society as has the idea that government can "solve" the various problems of humanity.

We have, for instance, recently noted the attacks on Dr. Andrew Wakefield over the idea that vaccines contribute to autism. It is quite remarkable that literally hundreds if not thousands of mainstream publications carried the calumny that Wakefield's now-retracted paper (published by The Lancet) authoritatively linked vaccines to autism when it only SUGGESTED such a link. The spectacle of the mainstream press solemnly repeating what can only be characterized as a lie over and over again was a startling reminder of the "bad old days" when there was only the mainstream press and nothing more.

Click here to see the Daily Bell article: Questioning Wakefield Lancet-Vaccine Retraction.

How times have changed. Because of the Internet, Wakefield's suggested link between autism and vaccines will not die. Too many parents have experienced for themselves the cause and effect between vaccines and autism. Of course, mainstream publications and mainstream medicine are clear that such correlations are unproven and cannot seem to be proven – and yet among parents with autism skepticism remains.

Pre-Internet the suspicions of these parents would not have been broadcast beyond their immediate peer-group via blurry faxes and Xerox copies, etc. But today thanks to modern electronic communication, if a thing seems truthful and enough people feel strongly about it, then it will be written about regardless of mainstream media gatekeepers.

This increasingly terrifies the elite, in our opinion. Wakefield's crucifixion – an inaccurate one at that – will likely have no impact on the debate over vaccines and autism except to further polarize the debate. Twenty or thirty years ago, the end result might have been quite different, with Wakefield, who now runs an autism clinic in Texas, being driven out business and deprived of any way to make a livelihood – and with his viewpoints thoroughly discredited. Instead there is this, a highly visible Internet statement from Jennifer McCarthy (who has an autistic child) and famous comedian Jim Carrey:

Dr. Andrew Wakefield is being discredited to prevent an historic study from being published that for the first time looks at vaccinated versus unvaccinated primates and compares health outcomes, with potentially devastating consequences for vaccine makers and public health officials. It is our most sincere belief that Dr. Wakefield and parents of children with autism around the world are being subjected to a remarkable media campaign engineered by vaccine manufacturers reporting on the retraction of a paper published in The Lancet in 1998 by Dr. Wakefield and his colleagues. …

For the past decade, parents in our community have been clamoring for a relatively simple scientific study that could settle the debate over the possible role of vaccines in the autism epidemic once and for all: compare children who have been vaccinated with children who have never received any vaccines and see if the rate of autism is different or the same.

Few people are aware that this extremely important work has not only begun, but that a study using an animal model has already been completed exploring this topic in great detail.

Dr. Wakefield is the co-author, along with eight other distinguished scientists from institutions like the University of Pittsburgh, the University of Kentucky, and the University of Washington, of a set of studies that explore the topic of vaccinated versus unvaccinated neurological outcomes using monkeys.

The first phase of this monkey study was published three months ago in the prestigious medical journal Neurotoxicology, and focused on the first two weeks of life when the vaccinated monkeys received a single vaccine for Hepatitis B, mimicking the U.S. vaccine schedule. The results … were disturbing. Vaccinated monkeys, unlike their unvaccinated peers, suffered the loss of many reflexes that are critical for survival.

Dr. Wakefield and his scientific colleagues are on the brink of publishing their entire study, which followed the monkeys through the U.S. childhood vaccine schedule over a multi-year period. It is our understanding that the difference in outcome for the vaccinated monkeys versus the unvaccinated controls is both stark and devastating.

There is no question that the publication of the monkey study will lend substantial credibility to the theory that over-vaccination of young children is leading to neurological damage, including autism. The fallout from the study for vaccine makers and public health officials could be severe. Having denied the possibility of the vaccine-autism connection for so long while profiting immensely from a recent boom in vaccine sales around the world, it's no surprise that they would seek to repress this important work.

Thus, we see a message emerging on the Internet distinctly different than the one portrayed by the mainstream media. As we wrote previously, we are not in a position to comment on the efficacy of vaccines or their culpability regarding autism. But what we do work hard at doing is analyzing elite memes and their ongoing impact. Whether it's global warming, the hitherto unquestionable efficacy of vaccines, central banking or even the phony war on terror, these promotions are struggling.

We have noticed, by the way, a resultant upsurge in rhetorical and legislative efforts to "bring the Internet under control." It is obvious that the foundering of the global warming meme has caught the attention of some powerful folks. If they didn't take the impact of the Internet seriously previously they do now. And yet, deliciously, it is probably too late. The damage is done. The knowledge is disseminated. People are waking up. The matrix is decaying and we don't see how the power elite will return its promotions to 20th century effectiveness.

We have pointed out before that the crisis management of the elite — the pit-bull attacks on this or that inconvenient individual or the marshaling of experts on government TV programs to defend the promotion du jour — are symptomatic of the power elite's current difficulties. This was the old way of handling problems. Crisis management. Promotional credibility must be maintained.

But there are no crises to defend. There are no "outbreaks of reality" that need to be summarily dealt with – as they could be in the 20th century. There is only the Internet and the steady drip-drip-drip … of what would seem to be truths emerging. And what do you do about that? What can you do? King Leonidas asked.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

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