THE AFTERMATH OF WAR
89
complement the belief that the time had come to restore the classic
framework of international trade. It was indeed recognized that the
golden age of liberalism could not be restored all at once, and that
the whole operation would depend on the initiative of the United
States. With these qualifications the neo-liberal school around Keynes
saw no reason to despair of ultimate success. The Master had, it is
true, apostatized from economic orthodoxy, and his wartime pro–
posals for a managed international currency represented a compromise
between the older liberal and the younger socialist schools of thought
at Oxford and Cambridge. But similar processes had occurred in the
United States, and it seemed a plausible assumption that an America
committed to the basic principles of the New Deal would find suf–
ficient common ground with Britain and Western Europe to make a
workable partnership possible.
It
is now a commonplace that this
hope-never very firmly grounded-had already come to nothing
by 1946.
2
Its disappearance has recently been capped by the discovery
that even the more modest expectations of the school-e.g., the belief
that the United States would substantially alter its tariff policy–
are unlikely to be fulfilled in the measurable future. For practical
purposes this means that Britain cannot expect to trade on a much
enlarged scale with the dollar area. But the long-range implications
do not affect Britain alone. They point inexorably to a widening
gap between North America and the rest of the Atlantic world–
a gap in productivity, in living standards, in the ability to withstand
temporary recessions, and ultimately in the willingness to pursue
common aims. The muttered European protest over American restric–
tions on trade with the Eastern bloc is merely a symptom of this
divorce. Underlying it is the belief that the world is in essentials
drifting back to the situation which existed before the Axis threat
forced America and Europe to co-operate-the main difference being
that in the interval America has become far more powerful, both
absolutely and in relation to its partners. This is the background of
the resentful neutralism of which so much is heard in Europe today.
2 Cf. Roy Harrod,
John Maynard Keynes,
Macmillan, 1951. Mr. Harrod
was himself among the optimists at the time, and for some years continued to
assert that there was, for Britain, no true dollar shortage. Since the advent of
a Conservative Government, which has found the shortage just as real as its
predecessor, be is understood to have signified a change of mind.
