Two Hundred Years of Muddling Through: The Surprising Story of Britain's Economy from Boom to Bust and Back Again by Duncan Weldon
First of all, don’t be put off by the title and particularly the reference to the economy. I know nothing about the economy but found this an enlightening read. This is a history book first and foremost. Its aim is to explain clearly how the British economy has progressed, oscillating between boom and bust, since the catalyst of the industrial revolution at the end of the eighteenth century. When Weldon does introduce concepts such as fiscal and financial policy, government debt and deficit, macro and microeconomics, demand and supply side factors, he explains them clearly and concisely.
He takes the last two hundred years as his starting point because this is when the industrial revolution began. Prior to that event for scores of years economic growth and per capita earnings were relatively unchanging. Apart from those people he calls, with admirable clarity, Violence Specialist (the descendants of William The Conqueror and his supporters who owned the land) most people had subsistence lifestyles and most people would be living the same type of life as their grandparents, great grandparents and even further back. There was no expectation that their children would automatically have a better life.
Weldon has an interesting take on the industrial revolution and why it started here. What is clear, however, is that for a hundred years or so, because it did start in Britain, we were able to get a head start economically on our European peers. By the end of the first world war they had closed the gap and the USA overtaken us, but even in our late Georgian and Victorian pomp the country’s political leaders were arguing and complaining about the very issues that dominate today’s headlines – productivity, sound money, tariffs and protection of our markets, lack of required skills in the workforce, government spending.
The idea that many of today’s economic discussions would not seem strange to past generations is one of Weldon’s main conclusions. Coupled with that, he points out that even when the country was at the peak of its global status politicians and leader writers were worrying about the country’s impending decline. Yet as Weldon points out, not until the 20th century was well underway did the average income per capita in Germany and France, which had been significantly below that of English workers, begin to catch up.
I think that the main argument Weldon wants to develop is to show how we got where we are now from a period of relative strength built upon our colonial markets and our technological advantage – mind you the Napoleonic Wars had a massive impact on the country’s wealth and our borrowing was at an eye watering level in that late Georgian period. He suggests that historical factors would always have led to other countries, and especially comparable western democracies, catching up with us. However, the interplay of politics and economics with its short termism consequences is why he chose the title “200 Years of Muddling Through”. And that’s why the book is divided up into chronological sections that examine the political decisions and philosophies that have driven economic policies. In particular, the idea of a planned approach, utilising the power and influence of the state, constantly slugging it out with liberal economic approaches driven by market forces and de-regulation, becomes increasingly important in the 20<sup>th</sup> century.
As I began, economics made more sense to me thanks to Weldon’s clarity and his focus on the political and historical context that drives the endless discussions about such issues as tax cuts, or taxation for investment and redistribution in modern Britain. So yes, it is the economy stupid … and the politics.