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There are few more powerful depictions of the brutality of the mob than Henrik Ibsen's play An Enemy of the People. Trouble erupts when the central character, Dr Thomas Stockmann, warns his fellow villagers that the public baths they have just opened are poisoning them. But no one listens. A baying crowd denounces him as a madman, the enemy of the people of the play's title. Ibsen concludes that "the strongest man in the world is he who stands most alone".
David Blanchflower knows intimately what it is to stand alone. The 56-year-old British-born economist, who now lives in New Hampshire on the east coast of the US, has spent much of the past year doing a Stockmann. In his case the village is the whole of the UK and the polluted water of which he has warned is the threat of a looming recession. Blanchflower consistently argued that unless the Bank of England cut interest rates to stimulate the economy, the country would pay a heavy price by falling into a deep and prolonged downward spiral. But nobody listened. He faced, as one commentator put it, a "tyranny of consensus", that inflation, not recession, was the looming evil. He was denounced as a maverick, a crank, and his views were widely discounted.
The dispute was one of the starkest disagreements at the highest levels of policy making to have been made public. And it was of supreme significance. Blanchflower is one of the nine "Wise Men" (even though one is a woman) who sit on the Bank of England's monetary policy committee. In them is vested the power - delegated by Gordon Brown in that dramatic first act of the incoming Labour government in 1997 - to set interest rates, and by so doing steer the nation's economy towards monetary stability. The decision those nine people make every month in Threadneedle Street directly touches the lives of millions, playing a crucial role in determining the UK's rate of growth, consumer spending levels and cost of living. If you are thinking of buying a new house, worried about hanging on to your job, struggling to pay off your credit-card debt, then your future partly hangs on Blanchflower and his colleagues getting it right.
Just how lonely things got for Blanchflower is illustrated by an Excel spreadsheet on the bank's website. It gives the month-by-month voting record of each of the MPC's members. In May this year he voted for a 0.25% cut in interest rates; all the other eight, led by the governor of the Bank of England, Mervyn King, voted no change. June: same again. July and August: same again, except that this time one member, Tim Besley, actually voted for an increase of 0.25%. September was the coldest month: Blanchflower, by now convinced that without a sharp reduction in interest rates Britain was heading over a cliff, voted for an extraordinary 0.5% cut. The other eight voted for no change.
"It was not a comfortable place to be in. It was not a comfortable time," Blanchflower says. "Within the MPC we had a debate. Externally though they called me bonkers. Various former members of the MPC said I didn't know what I was talking about. I was shocked by how many commentators went along with the consensus, and how little thought there was about alternatives. Newspapers were saying: 'Oh, here he goes again! Who listens to him? He's on his own.'"
Then came the collapse of Lehman Brothers, a seismic shock that radiated out from Wall Street and rapidly rumbled across the Atlantic and around the world. As panic spread, and Britain's own financial institutions came under massive pressure, the man who had for 12 consecutive months been warning of just this sort of crisis turned overnight from lonely maverick into sage with the crystal ball.
Again, the Bank of England spreadsheet tells the story. In October, all nine members of the MPC voted for a 0.5% rate cut - precisely the whopping reduction Blanchflower had advocated the previous month. November: the MPC acted unanimously again to slash interest rates by an astonishing 1.5%, the biggest cut in 27 years, bringing the rate to its lowest level since 1955. Stockmann had been vindicated.
There has always been a streak of the loner in Blanchflower, though he prefers to call it individualism. His mother reminded him recently that when he was about six the other children in his street in Brighton would say, "Let's go off this way," and he would promptly set off in the opposite direction.
It was at school that he acquired the nickname by which he is now universally known. When he was 10 the most famous footballer in Britain was Danny Blanchflower, so naturally his schoolmates latched on to that. Today, his mother is the only person who calls him David: even Mervyn King calls him Danny.
At school he also gained his lifelong passion for economics, which he went on to study at Leicester University as the first member of his family ever to go to college. After Leicester, he taught the subject for a while in schools in a poor area of Wolverhampton before deciding that he wanted to practise economics in his own right.
He calls himself a micro-economist, or more prosaically, a "data guy". "What people will say about Blanchflower," says Blanchflower, "is that I'm really good with data. I've been working with data for ever. That's my skill."
The data he knows best relates to labour and the workplace. The theme running through all his work, first in British universities and for the past 19 years in an American academic institution, has been a concern for the wellbeing of ordinary working families. For Blanchflower, economics is not just an intellectual challenge but a toolbox for improving the lot of people, or at least, when times are bad, to diminish their pain.
"I always think that we should worry about the wellbeing of the man on the Clapham Omnibus. How do you get people out of unemployment and into good jobs? I come from a data-driven tradition, the economics of walking about. You ask people what's going on in their lives, and you take seriously what answers they give you."
But first he had to take seriously his own economic wellbeing. At the age of 38, by now a lecturer at Surrey University, he came to the conclusion that the life of an impecunious British academic wasn't for him. Paradoxically, what drove him out of the country and across the Atlantic was high interest rates: at 14%, his salary was barely paying the mortgage. "I had two choices - leave academia and join the City, which I didn't want to do, or move to the much more lucrative academic environment of America." In 1989, he chose the latter.
It's easy to see why he abandoned his home country for the new world. We are sitting in his office on Dartmouth college campus, an Ivy League private university in rural New Hampshire. The office itself is sparse, lined with volumes of economic journals punctuated only by a biography of Jim Callaghan. But the minute you step out on to the campus the place oozes money. Its elegant Oxbridge-style quads are spacious and immaculate, its libraries lavishly stocked, and its art collection runs to 65,000 works of art and artefacts, including pieces by Goya, Picasso and William Blake.
The benefits to Blanchflower of such largesse were instant. Upon arrival, he had access to computing power that simply didn't exist at that time in the UK. If he lacked for anything, he only had to ask. When he wanted to write a book, Dartmouth gave him a decent salary, an office, a research assistant and all the time he needed to complete his seminal 1990 study of the relationship between wages and unemployment, The Wage Curve.
Since then he has settled into the life of an American academic with apparent ease. Now a dual British-American citizen, he is burdened little with administrative duties, teaches a bit, but has ample time and resources to pursue his own studies. He plays golf in the summer and in winter goes snowmobiling with his friend Bill Bryson. The author met Blanchflower while he was living in nearby Hanover, and has written a story about their escapades in which he notes: "Danny's a real smart guy, except for one thing. He is crazy about snowmobiling."
Blanchflower radiates a contentment that has found its way into his work. Over the years he has developed a research sideline that involves the study of happiness. He has attempted to calculate the relative worth of such variables as income, health and marriage. He once even put a figure to the value of a regular sex life - $50,000 a year - which got the press excited, even if he seems a little embarrassed about it now.
As for his own happiness quotient, there have been bleaker moments. In 2003 his wife left him for a woman. He filed for divorce on the grounds of adultery but the court ruled against him, with the controversial logic that there could have been no adultery because there is no such thing as sexual intercourse between women. He is understandably unenthusiastic about going into details. "It's in the past and not relevant to anything I do. Honestly, I've moved on."
And then came the knock on the door three years ago from Gordon Brown. Would he be interested in taking a seat on the MPC? "They told me it was going to be a part-time, boring occupation. Neither turned out to be true."
From the moment he joined the committee in June 2006, he was the outsider. All other eight members of the MPC had been to Oxbridge and lived in London; he had gone to a redbrick university and lived in New England. Yet in the early days his involvement with the committee was notable only for its lack of drama. Through 2006 and most of 2007 he voted with the majority to keep interest rates as they were - a reflection of the general opulence and stability of those times. How long ago they seem.
Several factors conspired to turn Blanchflower into Stockmann. As an economist living in the US, he was aware of the progressive collapse of the American economy. Having written many papers comparing the US and UK economies, he was also aware that the two had moved closer together in the past 20 years and that what happened in the US was very likely to be echoed in the UK a few months later.
One other great influence on his thinking was that he had studied previous economic downturns, from the Great Depression of 1929 to those of the 70s and 80s, and was attuned to recognising tell-tale signs of a downturn. While everyone else was fretting about high oil prices, and the risk they posed of an inflationary spiral, he was alarmed by signals suggesting the opposite was about to happen: the UK was heading for a slump. The more data he looked at, the more small business owners he talked to, the more convinced he became that unless the MPC acted quickly and decisively to cut interest rates, disaster lay ahead.
"In my transatlantic way of putting it, I felt an awesome responsibility. This matters, this really matters. I felt a tremendous pressure to get it right, and to convince the others. It was like the weight of the British people on my shoulders." There were moments of intense self-doubt. "I had a lot of sleepless nights. Maybe I shouldn't be doing this. Maybe I'm completely wrong."
The doubts were amplified by his isolation. All other members of the MPC, from King down, were of the opinion that the hike in oil prices was a far more pressing problem than any hypothetical future downturn. Inflation had to be curbed. But to Blanchflower that thinking ignored the evidence. Yes, oil prices were historically high, but that was outweighed by the dwindling supply of capital that was already hitting the US. With no money to borrow, people couldn't buy houses, fridges, new cars. House prices were falling; businesses were retrenching. Wherever he travelled in America and the UK, he heard the same thing: people were worried and hurting.
"So I dissented from virtually everyone else in Britain, and as it happens, I was probably the one who got it right. It seemed so obvious, but everybody else seemed to think I was kooky."
The difference of opinion between Blanchflower and the consensus was sharp and increasingly strongly worded. In January, he caused a stir when he told the Guardian that worrying about inflation was "fiddling while Rome burns". In April he predicted house prices could fall by a third. In May he said the number of jobless in Britain could reach 2 million by Christmas. Meanwhile, King and the others continued to vote for a strategy of glorious inaction.
When the crash came, was it sweet vindication? Far from it, he says: "I'm very upset that I got it right. I think of it as the winner's curse. This is not something I wanted to get right. That's why I warned that this was going to happen unless we acted - I wanted to prevent the crisis. I'm not saying everything would have been wonderful, but at least if we'd acted earlier we would be ahead of events and not reacting to them."
The good news, he says, is that "we are now doing the things we should be doing. All hands are to the pump and I get the sense that people have absolutely got it."
There is implicit criticism in that statement - that until recently people didn't get it, and all hands were not to the pump - but Blanchflower is not in the mood to speak explicitly about "the tyranny of consensus" that he suffered for so many months. All he will say is: "We are where we are. Recriminations are past; they are over with."
Does King owe him an apology?
"No, not at all. Not at all."
Blanchflower's stint on the MPC ends in May, and he may or may not be invited to stay on for a second term. Until then, there's a crisis to be fought, public confidence in the economy to rebuild, the prospect of surging unemployment still looming. The next MPC vote is fast approaching. Soon it will be time once more to cast his vote. The strongest man in the world is he who stands most alone.
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