British-American historian (1948–2010)
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“Telling the truth”—which for so long was itself a problematic exercise thanks to competing “truths” and the cost of airing them publicly—now became a virtue in itself. And the bigger the truth you have to tell, the greater your claim upon the attention of fellow citizens and sympathetic observers. Thus, despite the obvious risk of appearing to compete with the ultimate truth of Jewish genocide, speaking openly about hitherto uncomfortable episodes in the recent German past opens the possibility of encouraging the telling of many stories.
The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek. Keynes, as I was saying, begins with the observation that under conditions of economic uncertainty we would be imprudent to assume stable outcomes and therefore had better devise ways to intervene in order to bring these about. Hayek, writing quite consciously against Keynes and from the Austrian experience, argues in the The Road to Serfdom that intervention—planning, however benevolent or well-intentioned and whatever the political context—must end badly. His book was published in 1945 and is most remarkable for its prediction that the post–World War II British welfare state already in the making should anticipate a fate similar to that of the socialist experiment in post-1918 Vienna. Starting with socialist planning, you would end with Hitler or a comparable successor. For Hayek, in short, the lesson of Austria and indeed the disaster of interwar Europe at large boiled down to this: don’t intervene, and don’t plan. Planning hands the initiative to those who would, in the end, destroy society (and the economy) to the benefit of the state. Three quarters of a century later, this remains for many people (especially here in the U.S.) the salient moral lesson of the twentieth century.
The two decades following the end of the late-nineteenth century economic depression were the first great age of globalization; the world economy was truly becoming integrated in just the ways Keynes suggested. For precisely this reason, the scale of the collapse during and after the First World War and the rate at which economies contracted between the wars is difficult for us to appreciate even now. Passports were introduced; the gold standard returned (in 1925 in the British case, reinstated by Chancellor of the Exchequer Winston Churchill over Keynes’s objections); currencies collapsed; trade declined.
In some sense it is my story, too. I grew up and read and became a historian and, I like to think, an intellectual. The Jewish question was never at the center of my own intellectual life, or indeed my historical work. But it intrudes, inevitably, and with ever greater force. One of the aims of this book is to allow such themes to encounter each other, to permit the intellectual history of the twentieth century to meet the history of the Jews. This is a personal as well as a scholarly effort: after all, many of us who have, in our work, kept these themes distinct are ourselves Jews.
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In writing this book, I hope I have offered some guidance to those—the young especially—trying to articulate their objections to our way of life. However, this is not enough. As citizens of a free society, we have a duty to look critically at our world. But if we think we know what is wrong, we must act upon that knowledge. Philosophers, it was famously observed, have hitherto only interpreted the world in various ways; the point is to change it.
Even in Scandinavia, where social democratic institutions were far more culturally ingrained, membership of the EU—or even just participation in the World Trade Organization and other international agencies—appeared to constrain locally-initiated legislation. In short, social democracy seemed doomed by that same internationalization which its early theorists had so enthusiastically adumbrated as the future of capitalism.
From this perspective, social democracy—like liberalism—was a byproduct of the rise of the European nation-state: a political idea keyed to the social challenges of industrialization in developed societies. Not only was there no ‘socialism’ in America, but social democracy as a working compromise between radical goals and liberal traditions lacked widespread support in any other continent. There was no shortage of enthusiasm for revolutionary socialism in much of the non-Western world, but the distinctively European compromise did not export well.
It would seem to follow that the ‘invisible hand’ is not much help when it comes to practical legislation. There are too many areas of life where we cannot be relied upon to advance our collective interests merely by doing what we think is best for each of us. Today, when the market and the free play of private interests so obviously do not come together to collective advantage, we need to know when to intervene.
The case for reviving the state does not rest uniquely upon its contributions to modern society as a collective project; there is a more urgent consideration. We have entered an age of fear. Insecurity is once again an active ingredient of political life in Western democracies. Insecurity born of terrorism, of course; but also, and more insidiously, fear of the uncontrollable speed of change, fear of the loss of employment, fear of losing ground to others in an increasingly unequal distribution of resources, fear of losing control of the circumstances and routines of our daily life. And, perhaps above all, fear that it is not just we who can no longer shape our lives but that those in authority have also lost control, to forces beyond their reach.
Political skepticism is the source of so many of our dilemmas. Even if free markets worked as advertised, it would be hard to claim that they constituted a sufficient basis for the well-lived life. So what precisely is it that we find lacking in unrestrained financial capitalism, or ‘commercial society’ as the 18th century had it? What do we find instinctively amiss in our present arrangements and what can we do about them? What is it that offends our sense of propriety when faced with unfettered lobbying by the wealthy at the expense of everyone else? What have we lost?
We are all children of the Greeks. We intuitively grasp the need for a sense of moral direction: it is not necessary to be familiar with Socrates to feel that the unexamined life is not worth much. Natural Aristotelians, we assume that a just society is one in which justice is habitually practiced; a good society one in which people behave well. But in order for such an implicitly circular account to convince, we need to agree on the meaning of ‘just’ or ‘well’.
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We face today two practical dilemmas. The first can be succinctly described as the return of the ‘social question’. For Victorian reformers—or American activists of the pre-1914 age of reform—the challenge posed by the social question of their time was straightforward: how was a liberal society to respond to the poverty, overcrowding, dirt, malnutrition and ill health of the new industrial cities? How were the working masses to be brought into the community—as voters, as citizens, as participants—without upheaval, protest and even revolution? What should be done to alleviate the suffering and injustices to which the urban working masses were now exposed and how was the ruling elite of the day to be brought to see the need for change?
The history of the 20th century West is in large measure the history of efforts to answer these questions. The responses proved spectacularly successful: not only was revolution avoided but the industrial proletariat was integrated to a remarkable degree. Only in countries where any liberal reform was prevented by authoritarian rulers did the social question rephrase itself as a political challenge, typically ending in violent confrontation. In the middle of the 19th century, sharp-eyed observers like Karl Marx had taken it for granted that the only way the inequities of industrial capitalism could be overcome was by revolution. The idea that they could be dissolved peacefully into New Deals, Great Societies and welfare states simply never would have occurred to him.
Unfortunately, pragmatism is not always good politics. The greatest asset of mid-20th century social democracy—its willingness to compromise its own core beliefs in the name of balance, tolerance, fairness and freedom—now looks more like weakness: a loss of nerve in the face of changed circumstances. We find it hard to look past those compromises to recall the qualities that informed progressive thought in the first place: what the early 20th century syndicalist Edouard Berth termed “a revolt of the spirit against . . . a world in which man was threatened by a monstrous moral and metaphysical materialism”.
We no longer have political movements. While thousands of us may come together for a rally or march, we are bound together on such occasions by a single shared interest. Any effort to convert such interests into collective goals is usually undermined by the fragmented individualism of our concerns. Laudable goals—fighting climate change, opposing war, advocating public healthcare or penalizing bankers—are united by nothing more than the expression of emotion. In our political as in our economic lives, we have become consumers: choosing from a broad gamut of competing objectives, we find it hard to imagine ways or reasons to combine these into a coherent whole. We must do better than this.
What did trust, cooperation, progressive taxation and the interventionist state bequeath to western societies in the decades following 1945? The short answer is, in varying degrees, security, prosperity, social services and greater equality. We have grown accustomed in recent years to the assertion that the price paid for these benefits—in economic inefficiency, insufficient innovation, stifled entrepreneurship, public debt and a loss of private initiative—was too high. Most of these criticisms are demonstrably false.