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Politics, power and the simple economics behind inequality

'In politics, the first rule is to survive," says Labour's longest-serving Cabinet minister, Jack Straw, "and you don't survive by being too interesting." It's not been a great year for political books.

But sometimes bad books can be more interesting than your run-of-the-mill masterpiece. Straw's Last Man Standing (Macmillan, £20) tells us more than we needed to know about hypocrisy, the pettiness of politics and just how easy it is to start a war you didn't want. Straw, it turns out, wasn't actually in favour of the invasion of Iraq in 2003. This might come as a surprise to many since, as foreign secretary, he was directly responsible for Britain's participation in it.

But the way Jack tells it, it was all the fault of the French and the Germans for not backing the second UN resolution authorising the invasion. If only they had agreed to back the war, he argues, then Saddam would have been put back in his box and invasion would not have been necessary. You have to marvel at the perverse logic of blaming a war on the people who tried to stop it.

Is a capacity for holding contradictory views a prerequisite for holding high office in modern government, or is it just that politics turns people slightly mad? Straw tells us he has suffered from depression, nearly had a nervous breakdown and was in psychoanalysis for 10 years. He says he suffers from "imposter syndrome" – a condition, apparently, which makes you feel that you are constantly in danger of being found out. Perhaps in his case it wasn't entirely a delusion.

Another political depressive, Alastair Campbell, released more unreliable memoirs in 2012. Can it really be nearly a decade since he resigned as Tony Blair's spin doctor? Burden Of Power: Countdown To Iraq (Hutchinson, £25) is the fourth volume of his infamous journal and covers the crucial period from 9/11 to the invasion of Baghdad in 2003. But, as with Straw's account, you almost get the impression that Campbell was an innocent bystander. His diary entries are remarkably un-illuminating on the countdown to Britain's greatest military disaster since the second world war. What comes across is Campbell's abiding loathing of the media with its "culture of negativity" and "constant crapola". He is a master of the vindictive put-down. And he doesn't spare himself either. We learn a lot more about Alastair Campbell's own psychological upheavals, his rows with his partner, his thoughts of suicide. This is politics as misery lit.

We also learn about the pathological rivalry between his nominal masters, Gordon Brown and Tony Blair. Of course Brown fares badly, coming over as neurotic, scheming, paranoid, over-ambitious and under-equipped for leadership. Blair had resolved to sack him at the end of 2002, apparently, but decided to wait until after the Iraq invasion. The trouble with all this is that we never hear Brown's side of the story because he has not joined in the memoirs game. It is unfortunate that such testimony as we have about Brown's years is from such an unreliable witness.

At least Brown understood the nature of the financial crisis of 2008 and tried to do something about it. His leadership of the G20 nations in the aftermath of the crash, along with his championing of a co-ordinated financial stimulus to revive the world economy, was a considerable achievement. Unfortunately, after he left, the urgency drained from the G20, and we rarely hear of it now. Countries have retreated into their shells, printing money and manipulating exchange rates to try to gain short-term advantage. The Nobel Prize-winning economist Joseph Stiglitz laments this capitulation to depression economics in what is for me the most important book of the year, if not the decade: The Price Of Inequality: The Avoidable Causes And Invisible Costs Of Inequality (Allen Lane, £25).

Stiglitz shows how the rising inequality over the last 30 years has undermined economic growth. Rich people don't spend money in the shops; they speculate with it. As more of the economy's output is commandeered by the top 1%, the middle and lower classes buy less. Hence, a crisis of effective demand, factory closures, unemployment and recession. It's no accident that the most dynamic decades of American consumer capitalism after the second world war coincided with relatively high taxation, which spread wealth around and created markets for new industries like washing machines, cars and television sets.

It's simple, when you think about it. Pity that almost every country in the world is pursuing austerity policies that are taking us in precisely the reverse direction. Roll on New Depression.

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