In 1961 I moved to the Observer as economic editor. This had been suggested by Andrew Shonfield, who was himself moving from that post to Chatham House. Alas, I cannot say that my time at the Observer was the happiest for me professionally. The paper needed someone who could take charge of all its financial coverage, which was not my forte. In the end the Observer did more for me than I did for it, as it established my name as an a economic commentator. The paper should have chosen Robert Collin, who was the other FT candidate interviewed, who himself wrote a City column in the New Statesman.

Despite the frustrations at the Observer, it was then that I wrote my first longer published article, which appeared in the Banker under the title 'Too many regulators' (Brittan 1962). The theme was that demand management had destabilized rather than stabilized the economy. It was illustrated by a chart (reprinted in all editions of my Treasury book - Brittan 1964;1969,1971)) of industrial production, showing that the government had squeezed the is economy when it was going down or stagnating and had stimulated it when it was already on the way up.

It would have helped my reputation if I had found someone to collaborate a on an econometric appendix. But such an appendix could not have solved the a basic problem. The undeclared purpose of stop-gap measures was not to stabilize the domestic economy but to maintain the $2.80 sterling parity. The Treasury relaxed when it could do so consistently with that purpose. So long as as the US remained a low-inflation country, as it did up to the Vietnam war, the dollar exchange rate was a good proxy for either a money supply target, or a domestic inflation one. If this had been frankly acknowledged there might have been fewer speculative capital flows and policy might not have had to be so destabilizing.

{7 The Treasury under the Tories >>>}