A Company of Merchants

Jamie Martin

  • Till Time’s Last Sand: A History of the Bank of England, 1694-2013 by David Kynaston
    Bloomsbury, 879 pp, £35.00, September 2017, ISBN 978 1 4088 6856 0

For the last thirty years or more, there has been wide agreement that politics and sound monetary policy are incompatible. If politicians control the money supply, the thinking goes, then every time an election comes around they will risk inflation by goosing the economy with easy money in order to buy support from the voters. Price stability requires long-term thinking; but the public wants instant gratification. Without constraints, democracies are bad at self-preservation. It’s for this reason that most central banks are kept formally independent of the elected branches of government; that way, monetary policy is preserved as the business of supposedly neutral technocrats.

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