Short of Sir Mervyn King announcing that he's put every penny in the Bank of England on a 66-1 shot at Market Rasen, it is hard to see how he could have uttered more disturbing words than on did on Thursday. The present financial crisis, declared the Bank's governor, is the most serious since the 1930s, "if not ever", thus giving the impression that soon we will all be casting envious glances back to the Jarrow hunger marchers, wishing we, too, lived in a land where only one person in four was out of work and the "soup kitchen" was not an ironical name for a fancy restaurant but a branch of local voluntary services.
Now, it is entirely possible that Sir Mervyn, a man of undeniably large brain, knows something (possibly rather a lot of things) that we don't. But, before we all look up the Samaritans' number in the phone book, perhaps we should consider another possibility: that, as with so many economists, his use of historical analogies lacks a certain subtlety. There may well be, if Italy and Spain join Greece in defaulting, a financial crisis the like of which we have never seen, but it will not be an economic one, and it certainly won't be the Thirties Revisited.
The making of this point requires, I'm afraid, a few gloomy statistics, it being difficult to maintain a rib-tickling mood all the time when discussing the Great Depression. During that unfortunate time, world trade fell by more than 50 per cent, whereas here we are four years into our present unpleasantness, and global trade continues to grow, albeit not at the pace it was doing 10 years ago. Large parts of the world (step forward not only China and India, but also Turkey) have economies still full of vim and vigour.
Similarly, unemployment is about 9 per cent now, but was 25 per cent, or three million, in 1933. At one point, one-third of Glaswegian men were out of work, and unemployment in northern shipbuilding towns touched 70 per cent.
It was in 1931, as the economy plummeted downwards, that the government, mindful – possibly, as now, overly so – of our debts, cut public service wages by 10 per cent and made similar savings in unemployment benefits, a drive towards parsimony soon reinforced by the household means test. Martin Pugh, in his social history of the Thirties, quotes the example of the Liverpool widow with four children aged seven to 17 (one of whom disabled) who had £1.80 a week, out of which she had to pay 25p for rent, 15p for clothing, 18p for coal, and 5p for a burial club. Small wonder that her home of one-and-a-half rooms had no gas stove or oven and only two beds, the cooking utensils consisting of a small kettle, battered frying pan and saucepan with a hole in it, and that the family, who boasted one knife and four spoons between them, ate with their fingers.
But not all roads in the Thirties led to Wigan Pier and desolation. Amid the tramp of clogs on cobbles, there were other sounds: the launching of ocean liners, the crump of wrecking ball as slums were cleared, the hoot of Mallard as she set a new world speed record for trains, the snap of the first Kit-Kat, the chortles of young readers over the pages of the first Dandy and Beano, the rustle of Miss Marple's serviceable raincoat as she entered our lives, the first arias at Glyndebourne, the merry whistles as the pioneer members of the Ramblers Association went a-wandering, the clipped tones of Ethel Jane Cain, the speaking clock, the organs of the first Odeons rising through the floor, and the clamour in bookshops for the inaugural Penguin books.
The Thirties brought, like all crises, not only hardship but also a chance to scamper towards the future. We may find the same, if we cut out the lowering talk. Chin up, Sir Mervyn.Reuse content