[Britain] failed to develop a coherent policy response to the financial crisis of the 1930’s. Its political parties, rather than working together to address pressing economic problems, remained at each other’s throats. The country turned inward. Its politics grew fractious, its policies erratic, and its finances increasingly unstable.
In short, Britain’s was a political, not an economic, failure. And that history, unfortunately, is all too pertinent to America’s fate.Now there's no doubt that Britain's political parties (once they got over six years of intensive cooperation during the war) did engage in a debate about how to run the country. Partly about its role in the world, but more importantly the nature and extent of the welfare state, the kind of industrial policy to follow, and how the education system and the country's infrastructure should be built. Its most important decision about its "role in the world" was that it shouldn't be running other people's countries any more - a choice which I believe most people now agree with.
In fact, the fractious political debate was very healthy for the UK. Even if it led politicians to focus on other issues and prevented them from arresting the UK's economic decline - and it's unclear that they could have done so, anyway - it was absolutely necessary for us to debate the correct policies for Britain in a changed world. I wouldn't want to go back to the 1940s, in political, economic or social terms.
Two more things about this:
First, David Cameron has picked up the theme and is talking about it too. Prompted by that, Nick Robinson is talking about this issue over the course of the week.
Second, note Eichengreen's clever rhetorical device. By asking the question about America and not Britain (Is America Catching The "British Disease?") Eichengreen tricks us into not questioning the premise as we should. If we are busy thinking about whether America today matches the supposed pattern of 1940s Britain, we don't stop to ask ourselves whether 1940s Britain really matches it. Take notes, polemicists - if you are trying to persuade people of something, just ask a slightly different question and let your real argument be implicitly given:
- Instead of "Are markets irrational", ask "Are irrational markets really the main factor behind the financial crisis?"
- Instead of "Is Barack Obama a Muslim?", "Are Obama's Muslim roots really relevant to US defence policy?"
- And how about "If Jesus was black, what about Santa Claus?"