The right kind of recovery

EVERY FEW decades in the 20th century the relationship between the state and the individual was reforged in the fire of crisis. Liberal reformers in Britain won the election of 1906 amid a loss of confidence in conservatism. In America the 1930s depression was followed by the New Deal. The second world war preceded the trente glorieuses, never-had-it-so-good Keynesianism, the expansion of welfare states and government-guaranteed full employment. In the 1980s Ronald Reagan and Margaret Thatcher banished stagflation and statism with a philosophy of individualism and economic discipline that gave birth to third-way politics.