ABSTRACT
As noted in Chapter 1, there is now a widespread belief that the ‘European project’ has been blown off course, if not sunk completely. In light of the apparent divide between Europe’s electorate and what might be termed-or what at least gives the impression of being-the political elite, it is interesting to evaluate the economic policy agenda of the past few years, dominated as it has been by the Maastricht Treaty and the unsuccessful attempt to transform the exchange rate mechanism (ERM) into a permanently inflexible system, in light of Keynes’s 1925 evaluation of The Economic Consequences of Mr Churchill:
The gold standard, with its dependence on pure chance, its faith in ‘automatic adjustments’, and its general regardlessness of social detail, is an essential emblem and idol of those who sit in the top tier of the machine. I think that they are immensely rash in their regardlessness, in their vague optimism and comfortable belief that nothing really serious ever happens. Nine times out of ten, nothing really serious does happen-merely a little distress to individuals or to groups. But we run a risk of the tenth time (and are stupid into the bargain), if we continue to apply the principles of an economics, which was worked out on the hypotheses of laissez-faire and free competition, to a society which is rapidly abandoning these hypotheses.
