As the late Frankie Howerd used to say: we shouldn’t mock. It’s not easy saving the world from financial disaster. I wouldn’t know where to start – in my days as a Lex columnist for the Financial Times I struggled to penetrate the mysteries of the balance sheet. Actually, I’m convinced that Gordon Brown has always been a complete stranger to the true meaning of numbers; but this seems to assist him in his mission – he can make up all the figures while convincing himself that he’s telling the truth.

Thus the prime minister emerged from the G20 meeting to declare that he and his fellow leaders had come up with “$1 trillion” of “new money”, to save countless jobs and companies. The figure of $1 trillion duly made the headlines, but on closer examination – always a good idea with Brown – it transpired that the “new money” (as opposed to re-announcements of existing pledges) amounted not to the magical trillion but the equivalent of $250 billion in so-called “special drawing rights” from the International Monetary Fund. Even this is an off-balance-sheet item (another Brown favourite) since the IMF’s special drawing rights do not count as “real money” in the books of any of the lending nations.

An annexe to the G20 communiqué reveals, further, that “$250 billion” of additional export finance committed to in London last week actually amounted to no more than – wait for it – $4 billion. Thus the G20’s “extra $1 trillion” to rescue us from a slump has about as much solidity as those shadowy Wall Street financial instruments that allegedly caused the credit crunch in the first place.

As a matter of fact, the London meeting did not even attempt to address the true geopolitical fault line beneath the unsustainable US credit boom, which prefigured the crash that followed: the colossal Chinese trade surpluses. Rather than allow their currency to float up against the dollar – the normal consequence of a trade surplus, which would make Chinese exports less competitive – the government of the People’s Republic kept buying US dollar debt, real trillions of the stuff. That, combined with the complacent acquiescence of the US Federal Reserve, created the monetary conditions for disastrous sub-prime lending, and was presumably what the new US Treasury secretary, Timothy Geithner, was thinking of when in January he accused China of “manipulating its currency”.

Since it was decided before the G20 meeting that it would not do for the leaders to disagree in public – heaven forbid that anything be done which might further worry the markets – this was simply not discussed in London. We might describe it as the panda in the room. It’s a pity, really, not least because it would have demonstrated that in one crucial respect it was not unfettered free markets that underwrote the credit boom, but the attempt by a notionally communist government to fix the market for its own mercantilist ends.

This, however, would not sit well with the message that an assembly of politicians naturally wanted to get across: that the bankers and the bankers alone were to blame for all the ills that had befallen the world. Thus the communiqué says that they agreed to endorse “tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate responsibility of all firms”. This was mere windbaggery – the word “sustainable” is conveniently vague, as ever; and students of the glossy annual reports of our failed banks will know that it was generally those who paid most lip-service to “corporate responsibility” – notably RBS and Northern Rock – that managed to do the greatest damage to their own shareholders.

At the same time, President Nicolas Sarkozy of France managed to get his bête noire named and shamed: the communiqué proclaims that regulation will extend “for the first time, to systemically important hedge funds”. This is a real joke: no hedge fund has required bailing out by the taxpayer, and, as a matter of fact, none of them could individually be described as “systemically important”. However, politicians were furious about the way a number of the hedge funds had “shorted” the shares of the big banks – a classic case of blaming the messenger for the bad news.

Please note, however, that there is not a single proposal in the communiqué – even in the small print – outlining how such new regulation would work. There is just enough for Sarkozy to tell the people of France that he has delivered a blow to “Anglo-Saxon” finance – without actually detailing any specific measures at all.

The true point is that despite The Guardian, the Daily Mail and BBC Online, united in describing the outcome with the headline “Brown’s new world order”, it is no such thing – if by this is meant a decisive break with the post-cold-war consensus that free markets alone can bring the greatest economic benefits to the greatest number. Indeed, the opening preamble of the communiqué declares unambiguously: “We believe that the only sure foundation for sustainable globalisation and rising prosperity for all is an open world economy based on market principles.”

There is, of course, the mandatory guff about building “an inclusive, green and sustainable recovery”, but that apart, there was a sensible refusal even to acknowledge the views of the protesters outside the conference, who, if one could establish a common thread at all, might be described as atavistic supporters of a return to the values of the ancient pagan agrarian era.

In their proclamation to “promote global trade and investment and reject protectionism”, the G20 leaders demonstrate with particular clarity that they have nothing to replace the principles that have dominated politics since the Reagan-Thatcher era, despite all soundbites to the contrary.

One can only hope that this reaffirmation of faith in the global market is more honoured than was an almost identical proclamation at the previous meeting of the G20 last November. In the few months since then, 17 of the member states have implemented new trade protection measures, of which the most notable are the “Buy American” provisions that, among other things, restrict spending on iron and steel in President Obama’s recovery package to that produced by US firms.

This is where the hypocrisy of the G20 is at its most revolting. It talks grandly of giving billions of dollars via the IMF to finance trade in developing economies, yet since the US is the primary market for African iron and steel products, it is deliberately obstructing the very arteries through which such trade might pass.

In this sense, as in others, the London G20 meeting masterminded by Gordon Brown bore some resemblance to what JK Galbraith, in his book on the 1929 crash and its aftermath, characterised as “the meeting which is called not because there is business to be done, but because it is necessary to create the impression that business is being done. Such meetings are more than a substitute for action. They are widely regarded as action”.

The point of such “no-business meetings”, as Galbraith observed, was that “a solemn sense of assembled power gives significance to the assemblage”. In this regard, at least, Brown’s choreographing of the London G20 meeting was masterful – with Barack Obama in the starring role. It was designed to instil confidence that those in power were all agreed on what must be done; and that as a result things would get better. The stock markets across the globe duly rose in acclamation.

So perhaps I shouldn’t mock. Even if it takes a confidence trick to make people feel better, in such anxious times this amounts to some sort of achievement. But a new world order? Even Gordon Brown surely can’t believe that.

dominic.lawson@sunday-times.co.uk

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