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Authors: Tony Judt

Tags: #History, #Modern, #20th Century

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BOOK: Ill Fares the Land
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In that case, how
we talk about the way we choose to run our societies? In the first place, we cannot continue to evaluate our world and the choices we make in a moral vacuum. Even if we could be sure that a sufficiently well-informed and self-aware rational individual would always opt for his own best interests, we would still need to ask just what those interests
. They cannot be inferred from his economic behavior, for in that case the argument would be circular. We need to ask what men and women want for themselves and under what conditions those wants may be addressed.
Clearly we cannot do without
. If we truly did not trust one another, we would not pay taxes for our mutual support. Nor would we venture very far outdoors for fear of violence or chicanery at the hands of our untrustworthy fellow citizens. Moreover, trust is no abstract virtue. One of the reasons that capitalism today is under siege from so many critics, by no means all of them on the Left, is that markets and free competition also require trust and cooperation. If we cannot trust bankers to behave honestly, or mortgage brokers to tell the truth about their loans, or public regulators to blow the whistle on dishonest traders, then capitalism itself will grind to a halt.
Markets do not automatically generate trust, cooperation or collective action for the common good. Quite the contrary: it is in the nature of economic competition that a participant who breaks the rules will triumph—at least in the short run—over more ethically sensitive competitors. But capitalism could not survive such cynical behavior for very long. So why has this potentially self-destructive system of economic arrangements lasted? Probably because of habits of restraint, honesty and moderation which accompanied its emergence.
However, far from inhering in the nature of capitalism itself, values such as these derived from longstanding religious or communitarian practices. Sustained by traditional restraints and the continuing authority of secular and ecclesiastical elites, capitalism’s ‘invisible hand’ benefited from the flattering illusion that it unerringly corrected for the moral shortcomings of its practitioners.
These happy inaugural conditions no longer obtain. A contract-based market economy cannot generate them from within, which is why both socialist critics and religious commentators (notably the early 20th century reforming Pope Leo XIII) drew attention to the corrosive threat posed to society by unregulated economic markets and immoderate extremes of wealth and poverty.
As recently as the 1970s, the idea that the point of life was to get rich and that governments existed to facilitate this would have been ridiculed: not only by capitalism’s traditional critics but also by many of its staunchest defenders. Relative indifference to wealth for its own sake was widespread in the postwar decades. In a survey of English schoolboys taken in 1949, it was discovered that the more intelligent the boy the more likely he was to choose an interesting career at a reasonable wage over a job that would merely pay well.
Today’s schoolchildren and college students can imagine little else but the search for a lucrative job.
How should we begin to make amends for raising a generation obsessed with the pursuit of material wealth and indifferent to so much else? Perhaps we might start by reminding ourselves and our children that it wasn’t always thus. Thinking ‘economistically’, as we have done now for thirty years, is not intrinsic to humans. There was a time when we ordered our lives differently.
The World We Have Lost
“All of us know by now that from this war there is no way back to a laissez-faire order of society, that war as such is the maker of a silent revolution by preparing the road to a new type of planned order.”
he past was neither as good nor as bad as we suppose: it was just different. If we tell ourselves nostalgic stories, we shall never engage the problems that face us in the present—and the same is true if we fondly suppose that our own world is better in every way. The past really is another country: we cannot go back. However, there is something worse than idealizing the past—or presenting it to ourselves and our children as a chamber of horrors: forgetting it.
Between the two world wars Americans, Europeans and much of the rest of the world faced a series of unprecedented man-made disasters. The First World War, already the worst and most intensely destructive in recorded memory, was followed in short order by epidemics, revolutions, the failure and breakup of states, currency collapses and unemployment on a scale never conceived by the traditional economists whose policies were still in vogue.
These developments in turn precipitated the fall of most of the world’s democracies into autocratic dictatorships or totalitarian party states of various kinds and tipped the globe into a second World War even more destructive than the first. In Europe, in the Middle East, in east and southeast Asia, the years between 1931 and 1945 saw occupation, destruction, ethnic cleansing, torture, wars of extermination and deliberate genocide on a scale that would have been unimaginable even 30 years earlier.
As late as 1942, it seemed reasonable to fear for freedom. Outside of the English-speaking lands of the north Atlantic and Australasia, democracy was thin on the ground. The only democracies left in continental Europe were the tiny neutral states of Sweden and Switzerland, both dependent on German goodwill. The US had just joined the war. Everything that we take for granted today was not only in jeopardy, but seriously questioned even by its defenders.
Surely, it seemed, the future lay with the dictatorships? Even after the Allies emerged triumphant in 1945, these concerns were not forgotten: depression and fascism remained ever-present in men’s minds. The urgent question was not how to celebrate a magnificent victory and get back to business as usual, but how on earth to ensure that the experience of the years 1914-1945 would never be repeated. More than anyone else, it was Maynard Keynes who devoted himself to addressing this challenge.
“In those years each one of us derived strength from the common upswing of the time and increased his individual confidence out of the collective confidence. Perhaps, thankless as we human beings are, we did not realize then how firmly and surely the wave bore us. But whoever experienced that epoch of world confidence knows that all since has been retrogression and gloom.”
he great English economist (born in 1883) grew up in a stable, prosperous and powerful Britain: a confident world whose collapse he was privileged to observe—first from an influential perch at the wartime Treasury and then as a participant in the Versailles peace negotiations of 1919. The world of yesterday unraveled, taking with it not just countries, lives and material wealth but all the reassuring certainties of Keynes’s culture and class. How had this happened? Why had no one foreseen it? Why was no one in authority doing anything effective to ensure that it would not happen again?
Understandably, Keynes focused his economic writings upon the problem of
: in contrast to the confident nostrums of classical and neoclassical economics, he would insist henceforth upon the essential unpredictability of human affairs. To be sure, there were many lessons to be drawn from economic depression, fascist repression and wars of extermination. But more than anything else, as it seemed to Keynes, it was the newfound insecurity in which men and women were forced to live—uncertainty elevated to paroxysms of collective fear—which had corroded the confidence and institutions of liberalism.
What, then, should be done? Like so many others, Keynes was familiar with the attractions of centralized authority and top-down planning to compensate for the inadequacies of the market. Fascism and Communism shared an unabashed enthusiasm for deploying the state. Far from being a shortcoming in the popular eye, this was perhaps their strongest suit: when asked what they thought of Hitler long after his fall, foreigners would sometimes respond that he did at least put the Germans back to work. Whatever his failings, Stalin—it was often said—kept the Soviet Union clear of the Great Depression. And even the joke about Mussolini making Italian trains run on time had a certain edge: what’s wrong with that?
Any attempt to put democracies back on their feet—or to bring democracy and political freedom to countries which had never had them—would have to engage with the record of the authoritarian states. The alternative was to risk popular nostalgia for their achievements—real or imagined. Keynes knew perfectly well that fascist economic policy could never have succeeded in the long-run without war, occupation and exploitation. Nonetheless, he was sensitive not just to the need for countercyclical economic policies to head off future depression, but also to the prudential virtues of ‘the social security state’.
The point of such a state was not to revolutionize social relations, much less inaugurate a socialist era. Keynes, like most of the men responsible for the innovative legislation of those years—from Britain’s Clement Attlee through France’s Charles de Gaulle to Franklin Delano Roosevelt himself—was an instinctive conservative. Every western leader in those years—elderly gentlemen all—had been born into the stable world so familiar to Keynes. And all of them had lived through a traumatic upheaval. Like the hero of Giuseppe di Lampedusa’s
, they understood very well that in order to conserve you must change.
Keynes died in 1946, exhausted by his wartime labors. But he had long since demonstrated that neither capitalism nor liberalism would survive very long without one another. And since the experience of the interwar years had clearly revealed the inability of capitalists to protect their own best interests, the liberal state would have to do it for them whether they liked it or not.
It is thus an intriguing paradox that capitalism was to be saved—indeed, was to thrive in the coming decades—thanks to changes identified at the time (and since) with socialism. This, in turn, reminds us just how very desperate circumstances were. Intelligent conservatives—like the many Christian Democrats who found themselves in office after 1945 for the first time—offered little objection to state control of the “commanding heights” of the economy; along with steeply progressive taxation, they welcomed it enthusiastically.
There was a
quality to policy debates in those early postwar years. Unemployment (the biggest issue in the UK, the US or Belgium); inflation (the greatest fear in central Europe, where it had ravaged private savings for decades); and agricultural prices so low (in Italy and France) that peasants were driven off the land and into extremist parties out of despair: these were not just economic issues, they were regarded by everyone from priests to secular intellectuals as tests of the ethical coherence of the community.
The consensus was unusually broad. From the New Dealers to West German “social market” theorists, from Britain’s governing Labour Party to the “indicative” economic planning that shaped public policy in France (and Czechoslovakia, until the 1948 Communist coup): everyone believed in the state. In part, this was because almost everyone feared the implications of a return to the terrors of the recent past and was happy to constrain the freedom of the market in the name of the public interest. Just as the world was now to be regulated and protected by a bevy of international institutions and agreements, from the United Nations to the World Bank, so a well-run democracy would likewise maintain consensus around comparable domestic arrangements.
As early as 1940, Evan Durbin (a British Labour pamphleteer) had written that he could not imagine “the least alteration” in the contemporary trend towards collective bargaining, economic planning, progressive taxation and the provision of publicly funded social services. Sixteen years later, the English Labour politician Anthony Crosland could write, with still greater confidence, that there had been a permanent transition from “an uncompromising faith in individualism and self-help to a belief in group action and participation”. He could even assert that “[a]s for the dogma of the ‘invisible hand’ and the belief that private gain must always lead to the public good, these failed entirely to survive the Great Depression; and even Conservatives and businessmen now subscribe to the doctrine of collective government responsible for the state of the economy”.
Durbin and Crosland were both social democrats and thus interested parties. But they were not wrong. By the mid-’50s English politics had reached such a level of implied consensus around public policy issues that mainstream political argument was dubbed “Butskellism”: blending the ideas of R.A. Butler, a moderate Conservative minister and Hugh Gaitskell, the centrist leader of the Labour opposition in those years. And Butskellism was universal. Whatever their other differences, French Gaullists, Christian Democrats and Socialists shared a common faith in the activist state, economic planning and large-scale public investment. Much the same was true of the consensus that dominated policy-making in Scandinavia, the Benelux countries, Austria and even ideologically-riven Italy.
In Germany, where social democrats persisted in their Marxist rhetoric (if not Marxist policies) until 1959, there was nevertheless comparatively little separating them from Chancellor Konrad Adenauer’s Christian Democrats. Indeed, it was the (to them) stifling consensus on everything from education to foreign policy to the public provision of recreational facilities—and the interpretation of their country’s troubled past—that drove a younger generation of German radicals into “extra-parliamentary” activity.
BOOK: Ill Fares the Land
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