False Economy - Alan Beattie [1]
To my parents.
Time, that gives and takes our fame and fate
and puts say, Shakespeare's features on a plate
or a Persian poet's name on a Tandoori
can cast aside all we commemorate
and make Lot 86 or Lot 14
even out of Cardinal and Queen
and bring the holy and the high and mighty
to the falling gavel, or the guillotine.
Tony Harrison
The Blasphemers' Banquet
Preface
Franklin Delano Roosevelt, perhaps the greatest of all of America’s presidents, loved stories about himself. One of his favorites went like this: During the Great Depression of the 1930s, one Wall Street commuter had a daily morning ritual. He would buy the newspaper on the way into the train station. He would glance only at the front page and then, without taking another look, hand it back to the newsboy and board the train. Eventually, the boy got up the courage to ask him why he read only the front page. The commuter explained that he bought it solely for the obituaries. The newsboy pointed out that the obituaries were at the back. "Boy," the man said, "the son of a bitch I'm interested in will be on page one."
At the time, Roosevelt was busy trying to save the U.S. economy in the face of a colossal global dislocation. He was working to preserve the most powerful engine for creating wealth in the history of the world. To do so, he expanded radically the frontiers of American government. And a decade later, at the end of his presidency—and his life—he would help to create the institutions that led a global economy shattered by war and by misguided isolationism back on the road to openness and prosperity.
And yet he was vilified by some, like that New York commuter, who would continue to benefit from the success that FDR helped to restore. Roosevelt was trying to save capitalism from itself, and some of the capitalists were resisting. Knowing the right thing to do to enrich your nation and the world is hard enough. Bringing people with you to get it done is even harder.
The financial crisis that started in 2007 and exploded around the world in 2008 was a reminder of how fragile and reversible is the history of human progress. But it should also remind us that our future is in our own hands. We created this mess and we can get ourselves out of it.
To do so involves confronting a false economy of thought—namely, that our economic future is predestined and that we are helplessly borne along by huge, uncontrollable, impersonal forces. To explain the vast complexity of the economic history of the world, there is a rich variety of fatalistic myths on hand: that some economies (the United States, Western Europe) were always going to get rich and that others (Africa) were always going to stay poor; that certain religions are intrinsically bad for growth; that market forces are unstoppable; that the strutting vanguard of globalization cannot be routed and driven into retreat.
The aim of this book is to explain how and why countries and societies and economies got to where they are today—what made cities the way they are; why corruption destroyed some nations but not others; why the economy that fed the Roman empire is now the world's biggest importer of grain. But it will reject the idea that the present state of those economies, countries, and continents was predetermined. Countries have choices, and those choices have substantially determined whether they succeeded or failed.
Economic history is a challenging thing to explain, and to read, for two reasons. First, it involves forcing together disciplines that naturally fall out in different directions. History, in its most traditional form, lives on specifics and particularities—what the historian Arnold Toynbee (disapprovingly) called the study of "one damned thing after another." It stresses the importance of narrative in the way that countries develop, the role played by chance and circumstance, and the influence of important characters and events. Economics, by contrast, seeks to extract universal rules from the mess of data that the world provides—providing