Yet, as in 1912 Vienna, cultural genius coexists with a toxic populism. Back then, the fatal issue was the “Jewish question.” Today a quite different but potentially just as dangerous question is being asked about the large Muslim immigrant communities in northern towns like Rochdale, where a ring of nine Pakistani and Afghan men have been found guilty of “grooming” dozens of underage girls for what amounted to gang rape. The far-right British National Party is having a field day.
A century ago, Europe was torn apart by a combination of imperial decline, ethnic conflict, and economic volatility. Worryingly, all three ingredients are present in Britain today. Earlier this month we were reminded that if you want to blow a really large hole in an American financial institution, London is the place to do it. In 2008 it was AIG. This year it has been JPMorgan Chase, which has lost at least $2 billion by selling the terrifyingly named credit default swap index CDX.NA.IG.9. The man responsible for the megatrade—which earned him the nickname the “London Whale”—has the ineffably Habsburg name of Bruno Iksil.
Like much of Europe, the U.K. economy now finds itself in a double-dip recession. Last week the Bank of England once again revised its growth forecast downward. Although (mercifully) outside the euro zone, Britain will suffer even more if the crisis over Greece escalates into a full-scale breakdown of the European monetary union. International financial crises are not good for international financial centers.