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The burden of supporting the world economy can hardly rest indefinitely on the shoulders of Anglo-American shoppers and home owners.
The burden of supporting the world economy can hardly rest indefinitely on the shoulders of Anglo-American shoppers and home owners.
Samuel Brittan 11/5 2007
The central thesis on which the book stands or falls is that “debt – both public and to a much greater extent private – is the greatest domestic threat to the British economy”.
The thesis pays insufficient attention to the international context. The main contribution of Lord Keynes, who is favourably mentioned several times, to economic theory was the “paradox of thrift”.
This maintains that, in contrast to the teachings of the virtuous, an excess of savings can promote a slump.
This was surely a danger in the opening years of the 21st century in view of the extremely high savings of China and the oil producers.
A slump was averted partly by very low world long-term real interest rates and partly by the “dissaving” of the US, the UK and other English-speaking countries.
While carefully monitored deficit spending by governments can sometimes be a valid option, the burden of supporting the world economy can hardly rest indefinitely on the shoulders of Anglo-American shoppers and home owners.
There has long been a flourishing literature proclaiming that we are living in a fool’s paradise and that behind a façade of prosperity and good fun the cracks are beginning to emerge. This was, for instance, the message of Cato the Elder in ancient Rome, of Oliver Goldsmith in his 18th century poem, The Deserted Village, and of mid-twentieth century Labour critics of the UK’s supposedly candyfloss economy, epitomised by prime minister Harold Macmillan’s “you have never had it so good”. Larry Elliott and Dan Atkinson, two economics editors, present a worthy statement in this tradition. Their book Fantasy Island at Amazon.
The latest example of cultural conservatism is a book entitled Decadence edited by Digby Anderson and published by the Social Affairs Unit.
The editor proclaims on the first page: "Britain, Europe and the United States are decadent in a special sense of that word. They have traded in an old morality that served them well throughout their civilisation for a new, experimental quasi-morality." In place of "courage, love, fairness, honesty and prudence" we have the "bogus virtues of equality, anti-discrimination, environmental concern, self affirmation, a caring attitude and a critical mindset".
Samuel Brittan about Digby Anderson
A review of Decadence – The passing of personal virtue and its replacement by political and psychological slogans.
A collection of essays edited and introduced by Digby Anderson, The Social Affairs Unit, 2005