member of the british parliament talks about his book war and goldie 50gold a 500 year historf adventures and that. he discusses the history of money and its relationship to the board and the effect capital house on free markets. he sat down with toby the sunday times of london on booktv after words. >> host: welcome to "after words." i am toby of the sunday times of london and with me today is kwasi a conservative born in london and he's here to discuss a superb new book war and goldie 500 year history of the entire and back and has received great reviews already. it's a history that turns the

past 500 years into a narrative. >> this strikes me as not really a politician's book. this isn't designed to get you further up. why did you write it? >> guest: when we look at what happened in 2008 financial crisis huge amount of debate and loads of books they all were a short-term perspective area to bcreatedthey were looking at ths and hedge funds. about the current see that we have and also the nature of gold as well because one of the features of the book is to remind people that for 400 years

with a 500 year period we had to go back to the currency in 1971 when richard nixon shocked the gold window. >> host: one of the things i love about this isn't a dramatic moment. tell me about that moment. >> guest: the key moments in any history that will be key moments when people step back and think this is what happened. and it was one of those moments when richard nixon essentially appeared on national television which is a great cowboy show bonanza. maybe the viewers will remember that show and he interpreted to say we are not going to allow the dollar to be converted into gold and this is one of the most sick mythic and events and

things have happened in the history of money. i think it was a very decisive moment where is angeli it shuts the gold window where people couldn't simply coming to fort knox metaphorically and assay here is $100. i want to get the gold value and that was a consequence of the big bad problems that the america federal government got into with its back in the vietnam war and to pay for the great society and it just didn't work out. there was a trade deficit and people like the french and bad people like the breasts who were coming to and the chairman of, the head of the federal reserve was very skeptical about that. he was an old-school kind of balanced-budget conservative guy he and he was very fond of stopping the dollar in that way.

>> host: and in a dramatic moment lloyd george in the house of commons of 1914 is another big year. >> guest: thing about the british public finance for the 100 years before the first world war before 1914 was essentially they ran balanced budgets. it's difficult to imagine that they'll hold victorian era in the 19th century and very stabe interest rates and very stable fiscal policy and what happened in the first world or this is one of the key moments of the book is that all of that went to pieces. in order to defeat germany british parliament had to go through massive spending and he stands up and says this is an extraordinary thing that we've done. we will have billions generated hundreds of millions of the budget up to that point. but so they borrow huge amounts and the national debt went up ten times if you can imagine more than ten times for about

700 million over 11 million. and the house of commons went through because they would do whatever it took defeat germany. that was the attitude. >> host: i don't see a thread right away. is this sort of a push and pull effect? >> guest: absolutely. >> host: you contemplating holding the book order and chaos. >> guest: order is by the gold standard or a commodity standard where you could see that this is how much my dollar or pound is worth and its link to some sort of external value. chaos and one of the arguments i put forward in the book is when you don't have any commodities, you have paper money and essentially you are at the mercy of the printing press and there's a strand of opinions in this country probably more than any other that says that was a

mistake we should get back to the gold standard and it associated with people like ron paul. i'm not trying to write a narrative to explain where we are but i think there is a force of the argument that we need something more structured than just the ability of the government prints money. >> host: quotes from the co-author, the ten-year experiment. it's how we could all talk about that initially. the only way we can get back and i mentioned that in the book is for the chinese eventually to decide unilaterally. they could institute the gold standard tomorrow they run and

export model so they did that and the export led growth policy where they want to keep the value of the one low so that the experts are cheap and when we combined them he essentially said that would be a complete reversal but in terms of actually introducing the gold standard they can do it because they have the reserves and one of the points i make about the gold standard is that if you look at the 19th century, it was britain who largely sort of guaranteed it. britain was running experts and britain was the manufacturer of the world. it's in america, south america and the reserves that britain acquired through its export. remember they could keep the gold standard. the british themselves was never really have that much gold but everyone sort of relied on the

stability and the export strength. similarly for much of the 20th century the united states wherein the account. it was unbelievable to think that. from 1970 the u.s. was exporting more than it was importing so it was building up reserves and gold and a guaranteed gold standard after the first world war and the whole settlement was based on this value of the dollar at $35 an ounce. that was the ounce of gold and that was the relationship and that lasted from 44 to 71 as we were talking about earlier. given where they've come from the last 25 years they have

forced the courtesy to be much lower in the outline that in the book if you look at 1980 i think that it was 1.5 to dollar and then over 20 years it went down as low as about eight and a half and now it is six and a half, that sort of thing but they had a very cheap low value for the currency so they could arrive at the export so you are right to suggest if they went to gold that would be a complete reversal of how they have been building their economy through this export growth. i think it is in practical. what i'm saying is the current system is very vulnerable and in a way it explains what happened in 2008, and i talk about that. i mentioned the fact that many economists actually predicted this would happen when you have a system where you have the currency backed essentially just

pushing enter and printing money. you get a very vulnerable and unstable system and that is something that we have to consider. >> host: obviously 9/11 earlier but your argument is that it wasn't just about 9/11 and the war spending. >> guest: it wasn't that complicated but if you remember i was on the floor in 2001. i was at j.p. morgan. that's right. i hope that isn't a swear word here. [laughter] i was a banker and the first thing that happened was the index went down 10%. the dow jones went down a depreciable amount and its response to the banks was to lower interest rates. they had been coming down all through that year from about six and a half. they went down to 1% and this is really cheap money. my argument was if you followed what happened as a consequence

of the lowering of the interest rate to a lower degree what happened is that people wanted the yield. if you were getting the treasury if 10% and a banker in the midwest you were thinking i need to get more than 2% -- it pushes you i can only get 2% buying treasuries. i've got to get some interest rates. and that is the phrase that was used at the time. and the yield i think rove a lot of the subprime lending and a lot of the poorer credit decisions in terms of expanding the credit and giving people huge loans they could never afford to pay and that is what caused this. and this is where the long view is interesting because i found exactly the same thing happened in england in the 1820s. it was south american.

so what happened is the napoleonic war and the defeat of napoleon. but after that they went back to gold and there was a consequence of that. the government spending went down and giv there was again to searcthesearch for the yield. they would say that if we die the uk government debt, we are only going to get a small interest rate on that so let's look for something that is going to get us for interest rates and so it was a search for the yield which they ended up with the government bonds paying 7% speculative sort of argentinian stocks and all that kind of thing. >> host: how do we lower the currency and stock another bubble? >> guest: the main thing that is missing and this is what people in the markets feel is

that there should be more leadership and international coordination. if you look at bulletin boards, that lasted three weeks. there was two years of operation before that but essentially you have delegates from about 50 countries that came to brandon woods as a result of new hampshire and they decided that the international architecture would be. and that was a very responsible and very effective. it lasted from 44 to 71. in this current crisis, we haven't really been able to reach the level of international cooperation. there has been a sort of lack of leadership perhaps. people are feeling less confident and there is less of an idea of what can be done. and i think that that has really come about in the last sort of four or five years. one of the things about that is in a way i think it's come at a time that the 2008 crisis came at the time that global leadership the u.s. feeling

perhaps unsure of itself, the u.s. itself is running huge deficits which we can talk about later and the u.s. has been slightly burned by perhaps overextension. so the capacity of the u.s. to provide the kind of global leadership is much lower now than certainly as was the case in 44 in the postwar period. >> guest: i'm always a very robust defender of the free enterprise system and defender of finance. if you look at my hometown london it's been the center of internationaa center ofinternat0 years. arguably today. it's still the leading international center. and the idea that british politicians should try to close down the city of london.

that's been a great strength to the british economy and i think that it's borne out by the historical record. >> host: there is a fascinating chapter where was went out of the window was the balanced budget and it was almost maybe a fetish in and of itself and i think to a lesser extent thatcher and maybe reagan talk about this fiscal response ability that india and -- >> guest: ronald reagan was a great figure. on parallel he had the gift of communications that he could boil things down very simply so people could relate to that. his father had been an alcoholic and if you look at the speech he

keeps talking about how we've been on this massive binge and we have a terrible hangover and we need to sort ourselves out and that is the metaphor that he used. you are right because of the defense spending and the cold war. certainly people on the conservative side of the argument here in america were very focused on tax cuts regardless of expenditure. and my argument is that right through really to the 60s that u.s. conservatives were balanced-budget people so what they did if you look at the korean war, that was a democrat president but certainly eisenhower continued they were not reelected to reach expenditure to raise the income or taxes to cover expenditure. so, i think in the korean war

the president to congress and they raise taxes and paid for that because they wanted to balance the budget and that was a very much old school conservative approach in both eisenhower and truman stuck to that. it was only in the 60s you started getting this deficit and in a way my argument is that the conservative movement in america wanted endless tax cuts because they said they would increase revenue but they didn't really focus on the expenditure side. and i think if you're going to reduce taxes you have to try to reduce expenditure. it's no good reducing taxes hoping you will get more money for that while keeping the expenditure rising. and this argument cut this sort of supply-side argument with jack kemp in the 70s and obviously very famously they focus on tax cuts but in order to balance the budget, you have to address the expenditure on the tax cuts alone and even though i'm -- in the ideal world i would reduce taxes and

expenditure but that you have to go together. >> host: george w. bush described fiscally -- >> guest: bush is an extraordinary president because he's attacked from the left and the right because of his fiscal incontinence so if you look at the period from 2001 the u.s. started running deficits quite aggressive and those deficits were compounded by the foreign affairs that the bush government went into and i think people on the left and on the right were saying what happened to this? we are supposed to be the balanced budget on the public expenditure. under public expenditure. we want to reduce the federal government and its impact in terms of spending. but the spending is out of control. and it was a lot of the guys from the think tanks, the heritage foundation and that sort of thing at the time and

before 2008 were criticizing bush for spending too much mon money. i think it was a legitimate protest at this endless cycle of the deficit expenditure and the federal debt was going through the roof cut the deficit was going through the roof and you forget. people forget and america the budget was borrowed. in my country and version as well. i remember when i started work in the 19 '90s they were saying the 30 year bond would be abolished because the government wasn't carving any more money. serving 15 years we've gone through the complete reversal of the position. and i think the bush administration had a part to play in that.

if you just look at the numbers and you just look at where the budget was it was quite a responsible time in the sense of the public expenditure it grows a little bit but not as fast as it would subsequently. the revenues were because of the booming economy were increasing. and the budget was largely balanced. a lot of his opponents would say a lot of the problems were deep-seated that he didn't address in terms of entitlements into social security and that sort of thing. but yet year on year the budget was very balanced and i quote c-span when he came to congress in 2001 and when you read what he was saying it was extraordinary that we are going to abolish the national debt. that was the environment and thousand and in 2001. somehow we discovered that u.s. economy was growing at three to

4% every year. public expenditure wasn't going up very fast. >> host: that was based on very optimistic estimates which were not shared by everybody at the time. >> guest: but the fact that they could come and speak at the event in 2001 the summer before 9/11 is extraordinary given where we are now. it is extraordinary that 15 years ago people actually thought that they would have abolished the national debt, the federal debt certainly by 2014. >> host: what is your view of alan greenspan? >> guest: i'm a historian, so i look at what people do and they're sort of personalities, that's very important. and one of the interesting things about him is he loved jazz music. he played the saxophone in the

40s and he would suggest that he took the jazz approach to managing the economy. it was a very improvised. i quote people that worked with him and he said there was no plan. he was very savvy about markets and he responded very quickly to what the markets were doing and the most important thing in terms of his career was very early on in 87 in his tenure as the chairman of the federal reserve essentially in his own mind he saved the western world because of the crash of 87. the big wall street crash. >> host: which prompted a degree of self-confidence. >> guest: that was tricky at that time. you put huge amounts of liquidity into the system and effort the 29th by a disaster. once you do that early on in your career and you play those

tunes again if you are successful doing one policy very early on, the temptation is to keep repeating it pushes essentially what he did. and now i would argue by 2002 and 2003 that the very cheap money policy stored its own problems as we talked about and the low interest rates again to search for the yield. that is what created the instability. >> host: ben bernanke comes across as an obsessive interventionist. >> guest: i think that greenspan sent the rolling and 87 and one thing that you have to remember about all of these people running the federal reserve is that they are obsessed with 1929 and the one lesson they learned from 1929 -- he ran the papers and he did research and they are obsessed with the idea that in 29 the federal reserve had the authority if you like it didn't

do enough. and they contracted the money supply and all the rest of it, so the pumping liquidity into the system was very much there response from what they learned. >> host: dvd was the right response? >> guest: to do that willy-nilly if they did was perhaps slightly risky. i think that perhaps there was an overload on the wrong lessons of 29. and what people pointed out is that in 29 they made it worse by shrinking the money supply. they didn't need to do that, but the endless bailouts and huge amounts of money people can't even comprehend, i think that created potentially its own stability. and also it emulated the section of middle america. it was very much initiated were given fuel by the endless

bailouts and printing of money and spending and that's what people got ross about and we are still seeing the ramifications of this now. >> host: you talked about >> host: is from the balanced budget but now we have a system where you have a currency in the approach managing it and it's a huge trillions that we begin to comprehend. and so how -- i guess the average american -- how do we get back to some sort of sanity and people can understand? >> guest: what i argue in my book and all people on the political spectrum get is you

have to balance the budget at some point. in the uk and in my country the argument isn't about whether we balanced the budget but how quickly we get to balance because the deficit simply isn't sustainable. and i think there is more of a consensus about that and people might realize. how do you balance the budget and what timeframe he's our political discussions. all of that is very important, but i think certainly if we are going to get back to stability over the next ten or 20 years i think the balanced budget is something people are beginning to focus on. even though the rhetoric might suggest otherwise would end with dates in congress that we followed about the budget and all the rest of it. that's not even the most extreme democrat is suggesting that we run deficits from now until kingdom come.

>> host: someone like paul ryan or anybody -- >> guest: they should. as you said it's getting great reviews and i think it's an important book because it is trying to bring back this idea of the balanced budget straight into the vertical mainstream of trying to show the balanced budget of what made britain and americans very powerful countries over the time in which they held the global affairs so i think that it is important and in one aspect one or two people were asked about this and we tend to have on the conservative side i tended to be more hawkish on the public spending and perhaps some of my other colleagues but this is definitely something that is being talked about. >> host: [inaudible] >> guest: it is a crazy way of looking at it. the argument about growth was a

very new argument in the context of 500 years. but people started saying and it was lyndon johnson, jfk words the end of his brief tragic tenure of the presidency they started saying we shouldn't worry about balancing the budget because if we run the deficit we will get more growth and we will be able to balance the budget. so what do i do? i have a deficit. but we get more money in and to pay off the deficit and the debt and it is a circular argument and you didn't really hear it until the early 60s and that iis the point a point i make ino read is associated in the name. but the deficit spending was an exceptional thing and when there was a slump he said you could spend more money but he do never dreamt of people running the

deficits year in and year out and that only came into the 60s when we would i-india with the deficit because we needed to have growth in order to deal with it so we had to run the deficit to get growth. iit's a slightly crazy argument and you hear is now a lot. keynes himself grew up in the victorian era and was 31 so his hold to be -- whole framework. he said in exceptional times you could borrow money but he wasn't envisioning that all the time. but you can't watch television ever. his view was okay you can watch two hours when you need to.

and now we use it all the time. so just invoke him for that deficit you keep bringing to get the ideas i think is wrong to cause you could understand him and his historical context and that historical context as i outlined in the book they balanced the buck and the budget and that was the key function of the government and that was actually agreed by both sides. >> host: we talked about china earlier. where is this and it's interesting you talk about some of the rhetoric from the republican politicians come in mitt romney talked about naming and shaming and trying on day number one. he talked about some economic

nationalism. >> guest: are people like pat buchanan that talk about this that have been on the fringes of the debate but if you look at the 19th century america was the great country and that is a historical fact. we could argue about whether it was the right thing or the wrong thing to the fact is as someone described to me the american industrial base was built at the height ^-caret war. that is just what happened and so the argument on the right is very much as you said the economic nationalism and actually it's not just about economic nationalism but it's about having a level playing field. so i probably have a 15%. where you get a 15% subsidy and

so a lot of the trade argument is about equalizing that playing field. he's portrayed as a betrayer but i think it was a 30% tariff people remember flooding america and harley-davidson was getting dust and he's got the care of these motorbikes so the domestic industry. >> host: if china had been named and shamed in that way would it have just been domestic populism? >> guest: there is much demand as the chinese goods and you cannot legislate against that. the naming and shaming this is a greenspan argument. if we impose tariffs and we own

china and southeast asia industrial if you like what provided the goods anyway. it wouldn't help the u.s. many factors. but if you look at the way that china started from and we mentioned this earlier in 1980, there were one and a half to the dollar. about 20 years that went up to about 8.5. this wasn't an accident. this wasn't just something that happened. it was an act of the deliberate policy and what would strengthen the chinese compared to ourselves and the west and britain and america if you like is they have a very long-term leader so american politicians were accusing the chinese currency manipulation in the early '90s. bush won was saying you are manipulating your currency and drive the currency down to flood the market of course there is a new president and there's always

a new cycle. they kept doing the same thing. they may have a steady plan and that's what i try to outlined in the book with their own currency which may be easy to forget this. but as late as the sort of late '80s about 85 or 86, china was running a trade deficit if you could imagine that. they were importing more than they were exporting. and i agree for two that in "the new york times" from the period that was saying they have a trade deficit and you could argue that because they devalued it to trade deficit became a trade surplus which it has remained. >> host: you have a sophisticated knowledge of experience in the united states historically but you also spent the year -- >> guest: i spent a year in boston and cambridge

massachusetts. so i kind of lived through a lot of that. it was an interesting time because a lot of my classmates and people who were my age were going through big salaries and this was just before the boom and a lot of them went into that. so those were the years with all that sort of thing. consumption of the high living and all of that sort of thing. there was a wild west period and because all of that came to a halt certainly after 9/11 there was a very long market that was a short and sharp when the bubble burst and people forget that it was a difficult time for the market. >> host: given the personal experience what is striking in the differences between the sort of economic and political debates on either side of the

aisle? >> guest: people are much but conscious of the expanding idea. and i was amazed. i used to cover the debate and look for sort of journal newspapers in britain. what amazed me about the congressional debate was i think that you were arguing about $300 million which sounds like a lot of money but the budget was something like 1.6 trillion or 1.3 trillion this was a very, very focused and very passionate debate and i think that level of the budget scrutiny doesn't quite exist in britain and western europe into the whole language and culture about the earmarks and all that. these are not terms they used in europe.

read you could argue that it was relevant because people talked about all this stuff but they continued spending all the money so you could argue all of that. and the scrutiny didn't amount to much, but i think that having a conscious approach was a very critical approach to the tax dollars. people have a more fundamental sense of the idea that taxation comes from the people and is spent by the government whereas i think in europe there is more of the acceptance of the government spending. they didn't really make the connection. you are absolutely right. the people and the government which is extracting money and

beneficiary getaway. that is the kind of tea party view of life whereas in europe european and british people have decidedly more benign and so that view needs more of the government spending for us and there isn't that sense of this is my money. >> host: what is the joke i'm from the government of -- there are deep-seated reasons for that. if you look at the origins of the united states it was a revolt against the government. absolutely. but that is very much deep-seated in the american consciousness than it is in europe. we mentioned that he party at the times. the big political story for the moment is the rise of the uk

independence party. what is your view on this? are we in a three or four party system but we haven't had before? >> guest: we had the elections last week in which the four party if you like talk to the polls and that's the first time since 1986 when neither conservative or labour, the two main parties have won the nationwide election. we don't actually know where this will end up. ostensibly the main reason is to target britain away from europe. the political class they feel is out of touch or doesn't connect to ordinary people or is in its own bubble or is very much drawn from the same hyper person even though they are different parties they are all pretty much the same.

it's very much a kind of antiestablishment. in the america i think people are very familiar with it. they are for parallels. it has the same sort of resonance. these are people that go to fancy restaurants, they wear fancy suits, they speak a language that we do not understand. they've completely cut off the constituents and regardless of who is in power whether it is to make it or republican to spending goes up and there is no responsibility or accountability and these guys in wall street say we've had enough and there is a sort of popular insurgent aspects to it. the leader -- he's a smoking and

drinking -- he can get in a fight after a pint of beer that no politician would dream of doing. and so there is the view that these people are out of touch and it's time for direct action and he calls his army the people's army, his troops, his party and that is the pitchfork over the hill and they say they've had enough. >> host: is it going to be bringing them in? >> guest: this is a 64,000-dollar question. i think that respect for the center-right this is my own private view. it means to have some sort of accommodation with uk because it is difficul difficult in the pat resistant to see how a conservative party can get an overall majority without a lot of the uk voters coming back.

there is a conservative disposition. i know that people argue about this, but if you look at the counselors and the activists, a lot of them have come from the conservative party. what we are seeing at the moment in the u.s. 2014 primary is a lot of tea party losing but the ideas being bought out and really about the establishment but it was if the primary are the candidates -- >> guest: they are not a part of the conservative party. the tea party generally as far as i can see is followed within the republican party. they are fighting the primaries and the republican party within the republican party.

whereas you are fielding the other candidates. it could be a challenge and if that were the case i think they would have a serious problem because the century instead of suggesting the primaries, you would have the democrats and the republicans and the kind of tea party representative. you had that i think with ross perot. i was very much a similar situation where the third-party -- i think that he killed bush in 92 and that is very much the danger. >> host: we talked about the sort of political class. it's been four years and i am an established writer and historian and worked in the bank for ten years doing something and i think it is quite unhealthy actually to have professional politicians. i can see why they evolved, but

i think that you need to have politicians with a wider perspective and that was always a great strength. there were people in all sorts of backgrounds and so i'm talking at the mid-20th century with people like winston churchill who was a journalist writer and eccentric characters and people from different walks of life and different professions and i think that added to a sort of diversity in a variety you didn't just hear the same voices. people are more specialized with the huge culture of being a pecial adviser in the american case working on the hill and ofe back has branded its own momentum. >> host: the three party leaders are a socially special politicians. >> guest: if you look at them this is a fact. they were all born within three years of each other between 1966 and 1969 created a were all

exactly the same age. they went to oxford or cambridge and as they drop out of the universities and worked in politics and that is a fact. the head of the uk comes along. but he doesn't have a degree. he could say i am not like these guys. i work like a commodity trader and that may be false. he's been a politician as long as i can remember actually. but they had a sort of grain of truth. they are not looking for the friends of truth, they are looking to analyze all of the seconds of the story and his story is quite convincing.

>> host: i'm always very struck at the obsession may be for the british class in the schooling and use your self in the public meeting private board of -- >> guest: i have a different background because my parents were immigrants from ghana which is part of the old british empire so my first book was about the entire. so i have an unusual relationship with the british establishment insofar as my parents were immigrants that came to britain in the 60s and i was brought up in london but then i went through these elite institutions. i was at cambridge university. and so, i kind of got both sides if you see what i mean. my pairings were very much from the old colonial empire. it's very common maybe more now. but i could see sort of both sides if you like. but with that i would say there

was a problem. there is potentially a problem that people from the more marginal backgrounds do struggle to get a voice and i think it's very important that as a political class we open ourselves up, people that are active. they should be more open and it should be an easier way for it to come through and get representation and be represented for themselves. but the nature of the media and of the modern communications and modern life if you like beans have to be quite specialized and decide to do that at a relatively young age and that creates this i suppose. >> host: is of three books you've written? >> guest: i've cowritten a couple of others. >> host: i noticed that you haven't tweeted since 2010. [laughter]

how do you manage to write something as thoughtful and wide-ranging? >> guest: the two things about writing a book the smartest thing ever said about writing as winston churchill it's like building a house. you have to work out how many houses and the structure of the house, how many rooms and bedrooms. before you worry about -- you have to work up the structure before how the sofa is going to appear. you have to look at the actual structure so once you have a structure com, then the second g about writing the book is if you want to eat an elephant you have to chop it up into little pieces. [laughter] so once you have the house you have to take the approach and the like that it took about six

years. i was thinking about it even before. >> host: i've done quite a bit here and when i spent my year away in boston so these have been evolving for quite a while. from the african continent and my home country was called the gold coast so there was always that sort of interest and looking at politics in terms of finance. and all of that came together and took a very gradual approach. it must have taken three months. >> host: >> guest: monday mornings are quite good and then into recess

i try to allocate a bit of time every day. then you just do that steady as you go. if you have an idea of what sort of book you want to write you can get there. you need a structure and a plan but if you don't have a plan it is impossible given the pressures and the constraints that you have and at the time tt you spend in the constituency, but it is a i' construct i've bumped into constituents and thr family history and it is a hobby. people have hobbies if they work very hard, so it is not something that i see as work. into historical perspective it is something a lot of politicians like. >> guest: i think that it is the key to try to understand the

modern politics you have to understand where we have come from and he said if you don't read the past continue to make the same mistakes and i think that is very true. >> host: i said at the beginning this isn't a politician's book. it's not a problematic. you are not judgmental, but does this help? history and understanding history is a more than medium to long-term thing to try to get appointments week by week. i think that in the long run you have to set out what your beliefs are, where you are coming from in the intellectual hinterland if you like and that is going to help the political career in the end. and i think that's certainly in

britain -- i'm not sure about the united states but there's been a big connection between understanding history and politics. we have a long tradition of historians in politics and politicians throughout history. churchill who i mentioned many times is the greatest example. he wrote a lot of history throughout his career and if he was on the show -- y. i have no idea how he managed to do that but other people, he was a writer and the secretary has written excellent biographies. it's something that is quite connected in britain. the link between history and politics and i think that is quite healthy actually. >> host: basic politicians don't have the luxury of expressing doubt.

>> guest: i think if you look at this whole idea of government spending, what i was amazed at is the extent that we are living on the unchartered territories. as i say from hundreds of years before 71 it was a gold standard. it was in the 60s that people kind of challenged britain and america. we have to balance the budget every year and so this idea that we were running the continual deficits or we have a paperback currency it is quite new. this just wasn't something that happened before 1951 and certainly after 1971, the extent to which we were spending more money wasn't as pronounced as it is today in the bailout. >> host: so it is a new normal but it doesn't have to be that way. >> guest: it was less than ten years ago.

i think i first heard it in 2007, that phrase and then it became one of these received supportive phrases that you would think that existed but it didn't. it was new and the extent to which the circumstances are relatively new was something that struck me. i think that you have been floated as -- >> guest: every politician of color black and ethnic, whatever and britain is touted as a british which isn't -- i mean, given the polling. we have to get through the 2,015th election i'm not going to hold my seat as i hope to do.

>> host: >> guest: the majorities can come and go but that is something i have to keep an eye on. let's see where we are after 2015. the whole political career debate in terms of where people are going is depending on the party success and hoping that they are resounding as my career will go in a different direction. if we are out who knows what will happen. i'm very interested in margaret thatcher because she was a key figure in the book. it was a great book. i know charles wells. he'd been working on that for a long time. but i think that it was one of the figures in british life that immediately became a kind of iconic figure. he knew that she was someone people were going to argue about for decades to come.

i'm nearly 40 but there are very few people in my lifetime in britain who have that sort of iconic status. he died 50 years ago before my time. but for my generation, whether you love her or loathe her was a key figure but i'm very interested in her leadership style not just that she was a woman. she had a lot of sort of religious imagery that she used. she was almost like a sort of preacher in terms of her style and she was a big inspiration to you. >> guest: she was. she was an inspiration. so, she became when i was 4-years-old so i didn't remember that i remembered the day that she left i was probably 15 and a half so that was a very long time when she was the sort of dominant figure in the politics. a whole decade when the sheep is the prime minister. and i liked her style of politics and the conviction