History screams parallels. Is anybody listening?

To paraphrase Marx, history repeats itself first as a tragedy, then as a song. The one I have in mind contains these lyrics: ‘Once I built a railroad, made it run// Made it race against time// Once I built a railroad, now it’s done// Brother can you spare a dime?’

Applying the same sentiment to our situation and adjusting the language towards British usage, one finds the fit just about perfect. Thank you, Dave and George, for your bright idea to spend our money on another 800 miles of railways.

The song in question was written in 1931, quickly becoming a hit and the anthem of the Great Depression. And in 1933, America found a new leader at the helm. Franklin D. Roosevelt campaigned on the promise to end the depression, and, unlike Dave and George, he actually meant what he said. As he was a socialist, it’s only natural that he took the socialist route to prosperity: giant construction projects financed out of the public purse. (FRD’s fellow socialist took over Germany the same year and adopted the same anti-depression measures – but we won’t push this parallel to any logical conclusion.)

In America, the impression was that  Roosevelt, waving the megalomaniac Tennessee Valley Authority in one hand and National Relief Administration in the other, rode in on his white steed and saved the day. Alas, that impression proved to be wrong.

After Roosevelt’s ill-advised measures ran out of steam, trouble came back in force. By 1938 unemployment was again nearing 20 percent, recession returned, and suddenly even the intellectually challenged realised that the depression had not really gone away. It had merely been camouflaged, and confirmation of this came from unexpected quarters.

Henry Morgenthau, Roosevelt’s Treasury Secretary, admitted before the House Ways and Means Committee that the New Deal had failed: ‘We have tried spending money,’ he commiserated. ‘We are spending more than we have ever spent before and it does not work… We have just as much unemployment as when we started… And an enormous debt to boot!’

A little illustration can show that such an outcome was entirely predictable. Imagine, God forbid, that you find yourself out of a job. To solve the problem, you decide to pay yourself to build a new driveway and perhaps a conservatory. Even if you set your own remuneration at the minimum-wage level, sooner or later you’ll find that, as you become busier, you get poorer. Soon enough your money will run out, and you’ll have to counterfeit some more or go bust.

That’s precisely the situation in which both Roosevelt, with his Hoover Dam, and Hitler, with his autobahns, found themselves. Rather than reneging on his promises, Hitler found a more radical way of keeping the population occupied. And Roosevelt, overcoming a reluctant Congress and an even more reluctant populace, did everything he could to drag America into the war. That was the only realistic way to end the depression, once the cracks, papered over for a while by the giant public works, opened again.

It’s in this historical context that we must assess our government’s plan to spend £40 billion on infrastructure, including railways, roads, power stations and other such schemes. As most of the money is supposed to come out of our long-suffering pension funds, Dave and George possibly hope to achieve their three main goals in one go.

Goal 1: As history proves, this method of spending the country’s way out of trouble can work for a few years before backfiring spectacularly. What with the next election only 2.5 years away, Dave and George (or whoever has replaced him by then) may just find themselves back in power. What else can these selfless public servants possibly wish for?

Goal 2: By socialising even more of the economy, Dave and George (or whoever) will further increase the power of the state over the individual.

Goal 3: By depleting what’s left of our pension funds, they’ll make more of us dependent on the state (see Goal 2). Job done.

A mere £40 billion doesn’t sound like much compared with the trillion-pound debt our spivocrats have already saddled us with, but remember: that’s just a conservative (coalitional?) estimate, a point of departure for the moon. Anyone who follows HMG’s track record in tallying their actual and estimated bills will confidently multiply the estimate by at least four or five. For example, take the Olympics. Estimated cost: £2.5 billion. Actual cost: £11 billion so far and climbing. When we apply this sort of coefficient to the £40 billion, before long we’ll be talking serious money, and much of it will be counterfeited by the printing press.

All in all, Dave and George are treading a path well-trodden by others some 75 years ago. I don’t wish to be branded an alarmist, but we do remember exactly where that path led. Of course, Dave is a more benign leader than Hitler, and a less intelligent one than Roosevelt. For all we know, and this is only a very remote possibility, he may actually believe the twaddle spouted by his economic advisers. 

Query those chaps, and they’ll talk your ear off explaining their charts, graphs, models and paradigms. If we believe them, before long we’ll all be marching to the soup kitchens, singing, ‘Brother, can you paradigm?’





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