ABSTRACT

This book on the evolution of banking - particularly central banking - in Europe in the twentieth century is not to be regarded as simply a retrospect, looking at the past in a 'rear-view mirror' (the historian's professional viewpoint, with hindsight as his only professional advantage). Retrospection, perceptively analysed, can also utilize the past as a perspective through which to assess the present and likely future. This is particularly so when considering the evolution of institutions. Short of the cataclysms of total war and revolution, institutions evolve gradually, being deeply structured into society, economy and government, unlike the history of events - Vhistoire evenement - which is largely imposed upon this institutional matrix. The evolution of institutions is greatly 'path-dependent' in this way. Historians can therefore, with professional legitimacy, use their long-term perspective of the past to reduce (but never eliminate) the indeterminacy masking the options for future change. Knowing the path by which existing arrangements have evolved widens the awareness through which we view the present and what is to come. Perhaps this is what an educated guess means. But there is Lenin's salutary comment that 'history is more cunning than any of us' while the same truth is encapsulated by the old story of the fortune-teller's shop, abandoned and boarded up, with a notice pinned on the door which read: 'closed owing to unforeseen circumstances'.