Essays on the historiographic practices of famous 19th- and early 20th-century historians, particularly Arnold Toynbee, whom Geyl disparages for introducing systems which effaces facts and events.
• Toynbee, asserting ‘civilizations’ not nation-states are the atomic unit of history and that climates produce innovation through challenge of necessity, habitually treats ‘mental convenience as objective fact’. His facts are but interpretations which can be seen in other ways. He is not a historian but a Christian prophet hoping to stem the modern West’s decline. The problem is not only looking for ‘laws’ but also treating eras by standards foreign to them (historicism); whereas the value of history is entering into each period on its own terms, to enlarge one’s own frames of understanding.
• Ranke’s firm insistence on removing the historian’s personal views is itself the imposition of a personal view. In disdaining such retrospective criticism as the left favors, the stance in inherently conservative, yielding each generation’s ‘immediacy to God’. Though not quietist, it presumes the practitioner’s taking events as fixed. Sometimes this is too accepting, too open-minded.
• Macaulay, the Whiggish progressive and critic, demonstrates more personal intellect than the moral imagination necessary to connect with the past.
• In Carlyle, not ideas but people are the indicators of events in trend; the ‘eternal truth’ appears in great personalities. He represents the puzzle of disavowing technocratic expertise without descending into cultural mayhem. Yet however beholden to power, he roused concern for 19th-century industrial blight more than anyone else.
• Michelet overlooked the totality of events in service of the French Revolution’s mythology, most notably Rousseau’s general will in action. Nothing is less historical than associating the struggle between good and evil with the course of events. French historians disavow Talleyrand for distinguishing between statist (i.e., Napoleonic) France and the conscience of a statesman: in fact he represents a flawed but individual pursuit of right and justice. Not only foreigners should be reminded to resist the dictator.
• America proved its claim itself to Western heritage by fighting a civil war to eradicate slavery. There was no majority for war yet it came because the sides would not be reconciled. Lincoln’s holding the abolitionists at arm’s length is comparable to William the Silent’s seeking to establish the Netherlands nation-state not Protestant religion. The essay dwells more on (lack of) inevitability in history (see below).
• Not Dutch religious attitudes but riverine geography held off Habsburg Spain.
• Subordinating facts and one’s imagination to system (ideology) is unforgiveable. Quoth Maitland: national spirit is the historian’s unacceptable deus ex machina.
• The historian’s entire mind, including the present, inevitably surfaces in his work. He does not accept inevitability; often the minority prompts the course of events. Whereas Hegel, the Romantics, and advocates of philosophy of history follow a metaphysical logic. Such determinism, when promoted by the professional historian, stems from the practitioner’s mind, said Berlin.
Month: September 2023
17. Bernanke, 21st Century Monetary Policy (25 August 2023)
Charts the course of the US Federal Reserve since the 1970s, highlight refinements prompted by the difficulties of operating at the lower bound of interest rates. Bernanke underlines the benefits of signaling and also macroprudential policy to address systemic instability. The celebrated economist seems not to have considered that his own successes may not be repeated by successors. Further, there is no principled assessment of where technocracy stops and democratic accountability takes over.
The Fed exists largely as founded in 1913 and reformed in 1935; it had failed to address the monetary side of financial stability, worsening the Depression. (Bernanke does not address Roosevelt’s fiscal policies). The 1951 Treasury-Fed Accord freed the latter of any financing responsibilities). The heart of the book focuses on inflation as it relates to unemployment (i.e., the Phillips curve), long-term decline in normal rate of interest (there is no natural rate of inflation since it reflects fiscal policy), and increased systemic instability.
In the 1970s, the Phillips curve was refined to segregate supply and demand shocks. Inflations having been tamed in the 1980s, financial disruption has since caused the major downturns, with credit-market failures generally worse than stock-market collapses.
Greenspan succeeded in risk management but was too involved in fiscal policy. The Global Financial Crisis was a classic bubble: a buildup in risky lending; loss of investor confidence in loans; runs on lenders by short-term funders; fire sales of trouble assets; and procyclical insolvencies. The difficulties of working at the lower bound of interest rates – a 1% reduction in the 10-year yield is equivalent to a 3% reduction in the Federal funds rate, thereby magnifying its stimulus – prompted the Fed to become lender of last resort: asset purchasing (quantitative easing) and related maneuvers.
Bernanke adjudges his own term as successful for introducing transparency and steerage (i.e., communications), paying closer attention to systemic stability, and introducing new policy tools (e.g., apart from purchasing assets, the need for ample lending reserves). The US entered the 2020 pandemic better prepared than 2008. Somewhat blithely, he rates Yellen highly.
The final quarter is given to emerging policy tools as well as the threats of populism (i.e., Trump), inequality, and so on. Apropos of the Fed’s cherished independence, Congressional oversight is hazing even though elsewhere the Fed is said to work for Congress and the president –mainly Trump – is the institution’s foe. Modern Monetary Theory is problematic not because ‘deficits aren’t important’ but as government spending crowds out private use of productive resources, productivity being limited: fiscal policy is responsive to politics whereas monetary policy, though blunt, is better insulated. Does risk taking always migrates to the least regulated part of the system?