Lords of Finance: The Bankers Who Broke the World

by Liaquat Ahamed

No one changed his mind that night. There was considerable agreement about the facts. All accepted that British prices were too high and that to bring them down would involve some pain, although they disagreed about its extent. All acknowledged that tying Britain to the gold standard would mean tethering it to the United States, with all the risks that entailed. But whereas the “gold bugs” believed that the costs were worth bearing in order to reinstate the automatic mechanism of the gold standard, Keynes and McKenna thought otherwise. There were too many imponderables for anyone to be sure of the answer. Both parties were making a leap of faith. In that sense, the debate that evening, though dressed up as a technical discussion among experts, reflected, at bottom, a philosophical divide between those who believed that governments could be trusted with discretionary power to manage the economy and those who insisted that government was fallible and therefore had to be circumscribed with strict rules.