INTRODUCTION

A constitution is a system of rules and beliefs that governs the behavior of a society or family of societies. The heart of a constitution incorporates the fundamental core belief, or a set of beliefs essential to the constitution. The “Atlantic Constitution” is the family of constitutions (both written and implicit) of the member states of the “Atlantic Coalition” together with those rules and understandings that govern interstate behavior. A quandary for a constitution is a situation where the core belief is destroyed, either because of an empirical disjunction or because of a philosophical or theoretical inconsistency. The key episodes in British and U.S. history (circa 1668, 1776, 1787, 1860 and 1964) discussed in this book can be seen as quandaries for their respective constitutions.

I contend that the periods leading up to 1944 and 1982 were also associated with constitutional quandaries. The quandary of 1944 was generated by the incompatibility of the economic equilibrium theorem and the events of the Depression. I suggest that the key insight of Keynes' The General Theory of Employment, Interest and Money (1936) was his denial of the relevance of the equilibrium theorem for asset markets. This insight allowed Keynes to conceive of a new core belief, involving a reconfiguration of both citizen rights and economic efficiency.

The post-1944 “Keynesian synthesis” may have perverted Keynes' insight. This macroeconomic synthesis led to a retreat to an economic equilibrium perspective that proved, by the 1970s, to be invalid.