This is a very strange Brad Delong piece

BERKELEY – Neville Chamberlain is remembered today as the British prime minister who, as an avatar of appeasement of Nazi Germany in the late 1930’s, helped to usher Europe into World War II. But, earlier in that fateful decade, relatively soon after the start of the Great Depression, the British economy was rapidly returning to its previous level of output, thanks to Chancellor of the Exchequer Neville Chamberlain’s reliance on fiscal stimulus to restore the price level to its pre-depression trajectory.


Our Neville became Chancellor in 1931.

Whereupon he got us off the gold standard and cut government expenditure.

It was a couple of years later, when the currency devaluation thing had done its stuff that he started to expand spending again.

I\’ve not got the numbers for the deficit or national debt in those years. But the idea that Our Nev did \”fiscal expansion\” in 31, 32, seems very strange indeed. Anyone know?

21 thoughts on “This is a very strange Brad Delong piece”

  1. JustAnotherTaxpayer

    I thought this was a all bit up in the air; there is some disagreement amongst the academics.

    Middleton himself says “fiscal policy was contractionary throughout the depression phase and well beyond”. Commenting on another study:

    Turner’s (1991, p. 521) final conclusion is that the magnitudes of the changes involved were so small that fiscal policy was broadly neutral during the depression years and that, since recovery was already under way before the fiscal stabnce became expansionary, then fiscal policy cannot be seen as a causal factor in either the slump itself or the subsequent recovery.

  2. Chamberlain was a superb Chancellor and personally a rather nice, albeit dull, man. Had it not been for the rather improbable Herr Hitler, Chamberlain would (to the extent he was remembered at all) be remembered fairly fondly.

  3. Yes, that is weird. Chamberlain did indulge in ECB-style ‘say one thing, do another’ and relaxed constraints from about 1933 onwards, but 1931-1932 he was opposed to deficit financing.

  4. Always thought old NC got undeserved history treatment for Munich. WTF was he supposed to do? If UK had got caught up in military posturing about over on France’s eastern border it would have delayed the military build-up even more. Troops in the field aren’t training recruits at home. Aircraft on patrol use up engine hours, spares..

    And Brit/France simply didn’t have an offensive capability at the time. A foray across the border would have got creamed. So any strident shouting would have had AH laughing through his moustache. You play the cards you’re dealt.

  5. @Bloke in Spain,

    Generally agree but he was not dealt a hand which forced him to step off a plane waving an agreement with AH like his signature was worth something. He didn’t have to declare an ‘end to boom and bust’ or whatever he said.

  6. Dumping the gold standard would have been a massive loosening of monetary, not fiscal policy.
    Is he mixing up them up?!

  7. Chamberlain was the convenient scapegoat; appeasement was not some policy he forced on a reluctant population. The British public consistently opposed rearmament during the thirties, with the Labour party voting for total disarmament even in 1936.

    Without an army what policy other than appeasement did Chamberlain have?

  8. Pingback: Smack Down Watch: Tim Worstall versus Brad DeLong « Left Outside

  9. To be pedantic, Labour’s Philip Snowden took us off the gold standard. He also pushed through the austerity budget that had caused the fall of the Labour administration and led to the formation of the National Government . He then stood down and Chamberlain took over after the worst of the dirty work had been done. As others have said, Neville was generally a good Chancellor,. He was also mainly responsible for successful policies of subsidised housebuilding and public health improvements.

  10. Labour, which controlled London County Council, scrapped the Cadet Corps in its schools. Damn near everyone was an appeaser/pacifist. They none of them knew what they were dealing with in Hitler.

  11. Toodle – luma luma Toodle – luma luma Toodle – oh lay Any umbrellas, any umbrellas To mend today?

    Although not mentioned by name everyone knew at the time the “Umbrella Man” was Neville Chamberlain.

  12. “Generally agree but he was not dealt a hand which forced him to step off a plane waving an agreement with AH like his signature was worth something.”

    Interesting how times change, politicians become more honest & nowadays you’d never hear one claim, for instance that Iraq had weapons of mass destruction or we won’t be loaning more money to the IMF to bail out the Euro or I never had sex with that woman……..

    Listen to the Chamberlain speech & maybe there’s more in it than history recalls. NC would have been limited to what he could say. Couldn’t really hop off the plane & tell the waiting world “I have met with the Austrian shortarse & he was lying through his teeth when he told me….” could he?
    So the speech goes something like “I have met with the German Chancellor & he has given me his solemn undertaking…..and I have on this piece of paper his signature………”
    So what’s he telling us there?
    He reports what Hitler says. Little more.
    The clue’s in the piece of paper. A piece of paper with some ink on. To be torn up in a moment. Discarded. Thrown in a puddle & ground underfoot.
    Of course we know what history records, but I wonder what was thought at the time?

  13. Chamberlain was used by people like Churchill and Hugh Dowding, who new we needed time to re-arm our forces and weren’t ready to go to war yet. He actually did us a favour by dithering, it gave us time to sort ourselves out.

  14. Bloke in Spain, I suggest Chamberlain is at least in part culpable. In 1938 the French were quite determined to resist Hitler, as were (rather naturally) the Czechs. Chamberlain’s lack of support for the French undermined the faction that was opposed to Hitler in France, and also made Britain more distrusted in France.

    Britain was certainly a lot weaker in 1938, but rearmament had begun (for example the Hurricane was in production, and the Spitfire had been authorised but few had actually been produced, and Naval rebuilding had started) and Germany too was far weaker, especially in mobile forces. A significant chunk of the armoured forces that invaded France in 1940 (and Poland in 1939) were Czech 38(t) units.

    We can’t tell what would have happened if Chamberlain had stood up to Hitler, but the Czechs could have given a better account of themselves than the Poles (who is must be said supported Hitler in this and received a portion of the dismembered Czechoslovakia as a reward), and France would almost certainly have been less defeatist and would have trusted Britain more. The British forces themselves though would have been weaker and less capable, although possibly relatively stronger compared to Germany than in 1940.

  15. “In 1938 the French were quite determined to resist Hitler”: not what I’ve read – can you direct me to a history on this?

  16. Well a couple of points Chamberlain cut the defense budget significantly, and in conjunction with no war in the next ten years plan meant that Britain had more or less disarmed itself. Re armament started in 1936ish and hadn’t really kicked in by 1938 so not sure what choices Chamberlain had at Munich, but his time as chancellor had helped to create this situation.

    And why should we fight for a state that was newly created after WW1 and wasn’t based on any historical state? It may have been judged as as part of the ongoing sorting of borders after WW1.

    And at the end of the day the czechs weren’t prepared to fight, and we know they weren’t as they didn’t, so why should we have? Even if no real chance of winning how many countries have not put up even a token resistance when invaded?

  17. It’s not that I see lack of culpability in NC, it’s just that I can’t see why he gets saddled with the blame.

    “In 1938 the French were quite determined to resist Hitler”: not what I’ve read – can you direct me to a history on this?

    A couple klicks across the fields from my french home is a blockhaus. It probably mounted a light artillery piece & machine guns. The rusted breech of one is still on the rail. There’s another one visible about a klick in each direction paralleling the Belgian border & every so often a much bigger fortification. These stretch from the N.Sea coast near Bray Dunes to Switzerland. That’s where the french intended to fight & the strategic thinking of the time was the reason they were built.
    The war memorial in my tiny village, too small to even have a boulangerie, has 47 names on it. Half civilian. The only recognisable thing in a photograph, taken in 1918 of the village, is an enormous water filled crater. The rest looks a lot like Hiroshima.

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