We have had The State We’re In, and then The Welfare State We’re In, and later, The Rotten State of Britain. Notice a trend? Well, now a book about our predicament hits the shelves titled The Mess We’re In, written by the investment professional and economics writer and lecturer Guy Fraser-Sampson.

Of all the books I have reviewed for this publication lately, Fraser-Sampson’s is the most “British” in its focus although he draws on global examples and puts the UK issues in a global context. What I particularly liked about this book is that he is not frightened to put some politically unpalatable reform options on the table and is frank enough to concede that they may not be accepted. For example, he calls for a drastic reduction in the UK’s defence expenditure, moving our armed forces to a purely defensive posture (no more foreign adventures, in other words.) Fraser-Sampson states that Britain’s post-war Welfare State is unaffordable and unsustainable; he also points to the many errors and policy blunders that have wrecked the UK’s once-envied final-salary private pension system. He even calls for a constitutional rule about balanced budgets. And he is notably unimpressed by the Bank of England, even suggesting a new approach to reining in banks from unwise lending practices.

Not surprisingly, given Fraser-Sampson’s professional background in areas such as private equity and asset allocation, one of the most satisfying parts of the book is how he tackles a topic that some other studies of the credit crunch have ignored: pensions. Pension affordability remains arguably the biggest social and economic issue facing modern industrialised nations. The financial hurricane that blew away Lehman Brothers and nearly destroyed many other firms may have obscured these issues to some extent, but they remain formidable.

History

The book has plenty of history lessons. Fraser-Sampson takes us on a short tour: we learn about the Weimar hyper-inflation disaster, Britain’s “New Jerusalem” policies of the Attlee post-war Labour government, and the failure of subsequent governments – with some exceptions – to really change course. This will be controversial: the author is not afraid to damn what he sees as much of the post-war consensus. This is, in other words, quite a “Thatcherite” sort of book. (People of a left-of-centre political persuasion who are attracted by the red dust jacket might be in for a shock.)

Perhaps its single most impressive quality is its honesty and rigour. Fraser-Sampson (full disclosure: he is a friend of mine) has a sharp grasp of modern finance and economics and pays the reader the compliment of assuming a familiarity with certain terms and ideas without dumbing it down. His verdicts may be severe, but this is not a tub-thumping sort of book.

I also rather enjoyed how he paid respect to different economists such as JM Keynes, Milton Friedman and others, recognising that we can and should learn from these men, despite their faults and errors, and avoid turning them into caricatures. This is very grown-up and so much better than some of the name-calling that goes on in some quarters. For example, Fraser-Sampson damns the way in which governments have taken Keynes’ name in vain and run deficits year after year when, as Keynes pointed out, deficit spending in a recession needs to be offset by surpluses in the good times. That did not happen.

This book is a thoughtful contribution to how modern economies must change in the face of such huge problems. It does not promise utopia, nor hide the difficulties. I hope those in power heed its lessons.