‘Old economists’, Arthur Lewis once declared, ‘never die. They become economic historians.’ It is not a dictum that applies in my case since I was already an economic historian when I submitted my doctorate thesis on ‘Home and Foreign Investment 1870-1913’ at Cambridge sixty years ago. Indeed, it seems to me as I argue in the first of the papers that follow, that economists interested in policy rather than pure theory would be wise to steep themselves in the past if they want to offer useful guidance on the future. Not that the future is ever a simple extrapolation of the past. But if we can identify the main trends at work, find satisfactory explanations for them and weigh the chances that they will persist, we are better prepared for what lies ahead.
The score of papers in this volume have been written at intervals over the past half century. Several are unpublished; some virtually inaccessible; one or two have been much revised. They are all, with one exception (the paper on J & P Coats) contemporary history or deal with matter of contemporary interest. They start with a manifesto in praise of economic history as an intellectual discipline of particular value to economists and end with a paper, from which the book takes its title, reviewing some of the economic ideas that have influenced British governments since the war.
Between these two come first of all nine papers on postwar developments: the grave difficulties facing Europe in 1947 after the first two years of rapid recovery; the mastering of these difficulties thanks to the Marshall Plan and the avoidance of an early collapse such as bedevilled recovery after the First World War; the central role of Germany in the later stages of European recovery; and the beginnings of the later controversy over the role of monetary policy after its revival in 1951, in the years leading up to the Radcliffe Committee in 1957. These were years in which, after a flying start, the United Kingdom seemed to make slow progress and was overtaken by one European country after another.
The next section moves to the late 1960s and the 1970s, focusing first on the devaluation of sterling in 1967 and then on the IMF crisis of 1976. The picture is one of almost continuous crisis in the foreign exchanges and dependence on foreign borrowing, sometimes from foreign banks but in the