Sunday, 8 July 2012

What we need today: the wisdom of Solomon

It’s enthralling to see the increasingly frequent and bad-tempered spats between George Osborne, British Chancellor of the Exchequer, and his opposite number and would-be successor Ed Balls, Finance spokesman for the Opposition Labour Party. 

Ed Balls isn’t much liked, and it’s not just down to his name. His opponents find him insufferable. He doesn’t suffer fools gladly and ‘fools’ in his book seems to embrace anyone who disagrees with him. In the long run, that suggests the non-fools probably come down to just one person.

He also has the unbearable defect of having been proved right. He said the present government’s policies would take Britain back into recession without doing much to reduce government debt. Since that’s exactly what’s happened, it’s not surprising Osborne is becoming increasingly shrill in his denunciations of Balls. It’s horrible to have someone saying ‘I told you so’ even if he doesn’t say it out loud. Particularly if it’s true. 

But Osborne has even bigger problems

This is a government that prides itself on its Christian credentials. So let’s open our Bibles and take a look at the opening chapters of the First Book of Kings. 

This is the story of Solomon, that paragon of wisdom down the ages. And what marked his reign? Why, a massive programme of public works. The temple, first of all. Seven years in the building. The palace too, which took almost twice as long, but, hey, he was funding the project, he needed something special.

King Solomon at the opening of the temple.
Iconic King and paragon of wealth, wisdom and Keynesian economics

It didn’t stop there either. There were other major construction jobs in Jerusalem and also in other cities, such as Hazor, Megiddo and Hezer, as 1 Kings 9 makes clear. And 1 Kings 8 tells us that for the opening of the temple, Solomon sacrificed 22,000 oxen and 120,000 sheep. In what was a small population by modern standards, the impact on demand and prices in the agricultural sector must have been substantial.

In other words, Solomon was a Keynesian three millennia before Keynes.

But this investment programme, and all the benefits it brought to the Israelite economy, had to be financed somehow. He had to turn to the banks.

In Solomon’s time that meant the Phoenicians, wily traders who'd enriched themselves by Mediterranean commerce. Like his father David, Solomon cultivated good relations with Hiram King of Tyre. Hiram provided the wood, the stone, the gold for all that splendid construction work. Israel must have been an attractive investment, particularly as Assyria to the North and Egypt to the South were having a bad time politically which negatively impacted their credit rating. Hiram saw a literally God-sent opportunity in Solomon and extended easy terms.

Not easy enough, though. Solomon hit difficulties. Hiram foreclosed and Solomon had to hand over some extensive real estate in Israel, evaluated by him as 20 ‘cities’ though, judging by Hiram’s reaction, they were probably little more than villages (I Kings 13). In the end, Solomon had to come up with 120 talents of gold as well.

In passing, it’s interesting that at the time ‘talent’ was a term in the financial sector. We don't see much of it these days.

But the real measure of Solomon’s failure was the price paid for it by his son, Rehoboam. When he came to the throne, the people appealed to him to reduce a burden of taxation they saw as intolerable. Against the advice of his leading counsellors, he replied (1 Kings 12) ‘And now whereas my father did lade you with a heavy yoke, I will add to your yoke; my father hath chastised you with whips, but I will chastise you with scorpions.’

A remorseless, unbending mindset. Like austerity heaped on austerity. Making the poor pay for the profligacy of the rich. It worked no better then than it’s working today. The rebellion that followed left Rehoboam with only a rump of his father’s kingdom to rule and ended his flamboyant ambitions.

What he’d needed was a moderate programme of reflationary investment in infrastructure coupled with careful control of public expenditure, reducing its level over a period of years without choking off the potential for growth. That’s the prescription favoured by Ed Balls.

And isn’t it obvious that the book of Kings is saying the same? Solomon did well to stimulate the economy but shouldn’t have let things get out of hand. When they turned sour, the disastrous reaction was to slam on the brakes far too brutally. That’s what Rehoboam did and what Osborne’s doing.

George Osborne, even the Bible’s against you. Having a go at Ed Balls might sound like a smart move, but what if he has God in his corner? Are you sure it's wise?


Anonymous said...

The analogy with Rehoboam was serendipitous!

I am on my 6th+4 attempt as I seem unable to prove that I am not a robot!
I am giving up shortly


David Beeson said...

Seems to have worked though...

Awoogamuffin said...

That was great — seems like the bible really does have a lot to teach us after all. Though I still don't understand why it worries so much about foreskins...