Mehreen Khan Tuesday June 06 2023, 12.01am BST,

The Times In the United States, “critical race theory” has become a catch-all slur wielded by right-wing commentators and Republicans as the source of many of America’s ills. Internet memes poke fun at how the academic discipline is apparently responsible for US school shootings, social unrest and even the country’s hasty withdrawal from Afghanistan in 2021, according to Mike Pompeo, the former secretary of state.

The populist variant of this moral panic is known as “wokeism” and has long since made its way across the Atlantic. The targets are diffuse, but the “war on woke” generally rails against the degradation of institutions and wider society from “leftist” calls for racial and gender diversity, climate change awareness and LGBTI rights.

These culture wars also have begun to engulf the world of central banking and from some unlikely sources. Larry Summers, a former US treasury secretary, blamed the Federal Reserve’s failure to foresee the threat of inflation in 2021 on its obsession with wokeness.

Lord King of Lothbury, a former governor of the Bank of England, also has become an anti-woke warrior, criticising the composition of his former employer’s monetary policy committee. Last month King said the MPC was “at risk of having moved to a world with much less diversity of thinking”.

“What I worry about is that the diversity of gender and ethnicity is given a prominence that ought to be given to diversity of thinking about how monetary policy works,” King said on a panel with Isabel Schnabel, an executive board member at the European Central Bank, and Hyun Song Shin, the South Korean head of research at the Bank of International Settlements.


The ex-governor’s call for more debate on the MPC is laudable, but his argument on diversity is particularly misplaced when it comes to the Bank. The nine-strong committee, which sets interest rates, has become a more diverse and divided body since King’s day. There are three women on the MPC, who serve as external members. Swati Dhingra is an Indian national, Silvana Tenreyro is British-Argentine and Catherine Mann is an American national who also has worked for the Fed.

Without them, the MPC would be far poorer when it comes to diversity of thought. Tenreyro and Dhingra have voted consistently against the majority of ratesetters in calling for a hold on more interest rate rises this year. Mann has long been a hawk who wants more aggressive tightening than the male governor and his deputies, who largely have voted on the same line for two years.

King also falls for the fallacious idea that women or ethnic minorities are appointed to positions based on their diversity credentials rather than on merit or experience. Tenreyro is one of the most distinguished macroeconomists of her generation, while Dhingra is a rare trade economist to have a seat on the MPC. Megan Greene, an American economist who is joining the committee this summer, has spent her career following financial markets, a hinterland that is welcome at a time when investors’ keep second-guessing the Bank.

Swati Dhingra is one of three women sitting on the Bank of England’s nine-member monetary policy committee
Swati Dhingra is one of three women sitting on the Bank of England’s nine-member monetary policy committee
Anti-wokeists are loath to admit that their sacred intellectual diversity is often enhanced by recruiting people from non-traditional backgrounds and specialisms. The present MPC should be held up as a resounding success on this front.

There is an extra irony in King batting for intellectual dissent when his reign as governor was plagued by accusations of group-think. One former senior Bank official described King’s MPC meetings as attempts to convince the governor he was wrong, and usually failing.

There are plenty of legitimate reasons to criticise the Bank’s dismal recent record on inflation, including its blindsidedness on food prices. But pinning it on the precedence of more women or minorities inside the Bank is as ludicrous as the scapegoating of critical race theory.

Mehreen Khan is Economics Editor of The Times to book her email [email protected]