Generation L and its fearful future

By Gideon Rachman
Published: January 12 2009 19:11 Last updated: January 12 2009 19:11
Pop sociologists like to divide people born since 1945 into different groups. There are the baby boomers, there is Generation X, we may even be on to Generation Y by now. But, as far as I am concerned, we are all members of Generation L – that is, L as in lucky.
Those of us born in western Europe or the US have never really experienced hard times. Our parents and grandparents lived through world wars and the Great Depression. We have had decades of peace and prosperity.
Could that change? Perhaps Generation L has just had the luxury of an extended “holiday from history”, which is now coming to an end.
There is no doubt that people are panicking. The flow of dire corporate news is so relentless that Boris Johnson, the mayor of London, has complained that: “Spending an hour with the FT is like being trapped in a room with assorted members of a millennialist suicide cult.” A CNN poll found that almost 60 per cent of Americans expect the current recession to turn into a depression.
If we had Depression-era economics, would we also get Depression-era politics? That would mean new extremist parties and ideologies, rising nationalism, the growing irrelevance of international organisations such as the League of Nations and the United Nations and – ultimately – war.
Amid all the gloom and the hype, it is worth remembering just how far we still are from the Great Depression – when unemployment hit 25 per cent in the US and 20 per cent in Britain, and hunger and homelessness were commonplace. But the return of mass unemployment is not impossible. Last year, the US experienced its biggest annual job losses since 1945. Imagine the impact on the wider American economy if General Motors and Ford really did go out of business this year.
We are told that our current leaders have learnt the lessons of the 1930s. Ben Bernanke, head of the US Federal Reserve, is a historian of the Great Depression and mainstream economists believe that their discipline has made real progress since the 1930s. Like modern doctors, modern economists have a whole range of new tools available to them that were unknown back then. Economic diseases that would once have proved fatal can now be effectively treated.
That is the theory. But economists largely failed to predict the scale of the current crisis. Since they did not diagnose the disease, there is little popular confidence that they know the cure. What if economics is, actually, at the same level as medicine was when doctors still believed in the application of leeches? Or what if economics has indeed made great progress, but we are facing a new type of economic virus for which we have not yet identified a cure – the H5N1 of economic crises?
A similar question applies to the politics of the current crisis. Does our knowledge of what went wrong in the 1930s make it less likely that we will make the same mistakes again?
There are some worrying signs. At the Group of 20 leading countries’ summit in November, all 20 governments solemnly promised to avoid protectionism, which is widely believed to have worsened the crisis of the 1930s. Yet within days of returning from Washington, India and Russia had pushed through new tariffs. One lesson of the 1930s is that international co-operation – so sorely needed in a global financial crisis – can disintegrate in a depression.
In the past, periods of economic dislocation have reliably led to the rise of new radical political and social movements. The only important democracy to have held an election since the collapse of Lehman Brothers last September is the US, and it voted for Barack Obama, a liberal internationalist. But in recent months there have been riots in Russia’s far east, in southern China and in Greece.
It is still a huge leap, however, to go from a little light rioting and some international trade tensions to the rampant nationalism and war of the 1930s. For my generation it seems almost unthinkable that we could return to an era of armed conflict between the world’s main powers.
But previous generations have felt the same way. In 1911, towards the end of another long period of peace, prosperity and globalisation, G.P. Gooch, an eminent British historian, wrote that: “We can now look forward with confidence to the time when war between civilised nations will be considered as antiquated as a duel.”
Some contemporary political scientists take a similar view. John Mueller, an American academic, crunched the numbers a couple of years ago and concluded: “Within a very few years there may be no war at all anywhere in the world.”
With bombs whistling down on Gaza as I write, that seems a little premature. But contemporary optimism about the disappearance of war between the world’s leading powers may be more sensible than it proved to be in the years before the first world war. It is almost 60 years since American and Chinese forces clashed in Korea.
The balance of terror did not exist in 1914 and it has made war less feasible. But so has the long period of economic integration and increasing wealth that now threatens to come to an end.
Long periods of peace and prosperity, however, are not always terribly interesting. Amid all the economic gloom, I do not think I am alone in feeling an odd excitement at the sense of living in uncertain and historic times. As Philip Larkin, a gloomy British poet, once wrote: “Life is first boredom/Then fear.” We have had the boredom. Now it is time for the fear.
gideon.rachman@ft.com