An Idea Whose Time Has Gone


As an avid yet completely unschooled armchair economist, I am ading my way through Benn Steil’s ‘The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order’. I use the word wading, as lacking any training in economics, I find about half of it goes over my head. But far be that from creating impediment to my opinion formation, which I shall espouse in this space I created for that very purpose.

According to Steil, The much touted Gold Standard, oft wistfully harked after and seen as a panacea for our current financial ills, came into being officially only in the early nineteenth century, and spluttered in and out of existence between the early twentieth century and 1931 for Britain, and a bit later for other countries. According to Maynard Keynes, its demise was a good thing. That banks were leveraging off gold in the latter stages of its use meant that it had ceased to have the anchoring effect most of its current day proponents believe it enjoyed. Keynes apparently felt that it overly constricted money supply in any case, and placed a brake on economic development.

What struck me as interesting however, was Steil’s almost offhand reference to the demise of Laissez-faire capitalism in its true form toward the end of the nineteenth century. This was the period in which government control started to be exerted on the labour market, limiting exploitation of labour, including the outlawing of child labour below the age of 15 (if my memory serves) and restricting working hours to a bunny-hugging 16 hours a day. (I’ll check the facts and get back to you on the exact numbers). As Ha-Jooon Chang points out in his book ’23 Things They Don’t Tell You about Capitalism’ since that time, there has been no such thing as a Free-market economy. ANY form of government control against the exploitation of anyone or anything renders the notion of a Free-market obsolete. So the rise of the labour unions lead to the demise of Laissez-faire Capitalism as we know it, at least in places where the trade unions enjoy any form of legal support. The rights of the workers heralds the emergence of a middle class, the size and economic power previously unknown. The economic ravages of  the First World War effectively bankrupt Great Britain and most of Europe, pushing Great Britain from the position of cash-flush Bankers To The World, to debt-ridden charity cases. The great stately homes of Great Britain started to suffer after the first World War, as the armies of staff required to keep them running became simply unaffordable to all but a privileged few. Britain battled along during the 20’s, whilst the USA enjoyed a roaring time, right up until 1929, when things went a bit pear-shaped.

The USA’s economy tanked during the Great Depression, as it came to be known, and pulled Great Britain and Europe in with it. Just as it was recovering, World War II started, and Great Britain started the war off on a poor financial footing, unlike in the previous World War. America stayed out of the war, but sold munitions and armaments to Great Britain, sucking up whatever liquidity they still had left, and once Britain was sucked dry, entering the Loan/Lease arrangement, which placed Britain very heavily in the debt of the USA. The Bretton Woods conference saw the USA use that leverage, to push the US Dollar as the world reserve currency, against the British desire to create a separate international reserve currency. The USA won, and went on to become the financial superpower that they did, whilst the effectively bankrupt Great Britain lost most of its colonies and sank into its current status of being a US satellite.

The 50’s and 60’S were good days for the US, with a burgeoning manufacturing sector and unfettered access to world markets, thanks to the trade agreements drawn up at Bretton Woods. The US were the manufacturers, and the world was its market place. Strong trade unions and an affluent middle class kept the economic machinery spinning.

But by the late 70’s the powers that be were no longer satisfied with the money they were making, and wanted more. Ham-strung by unions, the Captains Of Industry started looking for ways to reduce input costs, particularly labour. They started externalizing labour and pollution to avoid legislation starting to come into effect, moving the problem to other countries. The era of Reagan and Thatcher saw the second coming of Laissez-faire Capitalsim, in the form of Globalization, championed later by Bush Snr and Clinton, then carried forward to its current extremes by Bush Jnr., ably abetted by Dave Cameron et al.

The Globalization push was a return to Laissez-faire Capitalism, circumventing the restrictions placed on business by government, all the while pushing for less and less government intervention, the results of which we saw played out in the 2008 crash. Since then, the world Stock Exchanges continue to post record highs, and companies are showing record profits, but the poor and middle class are being pushed further and further into the quagmire of debt.

So severe is this attack, that fully employed workers at stores such as Walmart are relying on food stamps for survival. The Working Poor, they are called. Yet Walmart is not a struggling company, if their share prices over the past five years are anything to go by:

WalmartSource: – accessed 6/5/2014

Corporate greed means more money for the investors, (whom we HAVE to keep happy), more money for the CEO’s, and less for everyone else. What would happen if we did away with publicly listed companies, and returned to privately listed or owned ones? – You could still own shares even if you weren’t an employee, but you would be part of the company, rather than merely riding it for profit.

Barclays Bank are currently squeezing ABSA bank, one of its subsidiaries, in South Africa. After ABSA announced that they were to reduce their workforce by some 3500 staff, I wrote to the CEO, Maria Ramos, telling her that I was closing my account with them. I told her that as a person who had been raised in a working class background, and married as she was to Trevor Manuel, a trade unionist who went on to become the longest serving Finance Minister in the world, and one of the shining starts of the ANC government, she should know that the bank was a part of the community. That the jobs she was doing away with meant 3500 homes losing a salary, to some or many, possibly the only salary they have. I said that there are things more important than money, and the bank’s place as a member of the community meant it was beholden to that community as much or more than to share holders. To  my surprise, she responded, telling me that the jobs to be deleted were posts of those retiring or being transferred elsewhere. We discussed it for a while, and I agreed to not withdraw my $2 savings from her bank, if she promised to honour her commitment to not put people out on the street.

The point of the above being that we have all bought into the Profits Above All Else ideology. Why is that? Why do profits matter more than people? Why do they matter more than our communities? Why is it okay for us that the Chinese labourers are being screwed in ways that we would not accept ourselves to be screwed, just so we can have the next new widget? That the Chinese government are prepared to allow their people to be abused is one thing. That we allow it is another. We have in many ways returned to where we were in the mid nineteenth century. It is time for a counter swing. What would that look like?

The Occupy Movement was a start. That it was quelled by the governments of the countries involved shows you where they see their bread buttered. More recently in South Africa, the Police turned on striking miners who were no risk to life or property and shot 34 of them in what appears to be a conspiracy to kill, as detailed in the documentary film currently on circuit: Miners Shot Down. That the Minister Of Police allegedly colluded with the Mine Bosses, one of whom, Cyril Ramaphosa, was a leading figure in the the Trade Unions during the fight against Apartheid, places large questions around the separation of powers. Why were the police involved in a labour dispute? What subsequently unfolded resulting in the unprovoked killing of 34 miners is a matter that should see decision makers facing jail time. We await the outcome of the Markiana Commission of Enquiry. The track record of these various Commissions investigating government complicity in crime does not inspire us with much confidence, yet hope springs eternal, and I digress.

Why do governments side with Big Business? Surely, they should side with the electorate, the people who put them into power? It is obvious that the relationship between Big Business and governments is far too cosy, and that the kind of people we have in power are from the breeding stock of the sort doing the screwing, so to speak. We’re being screwed, by the very types we then choose to represent our interests in government. What we need, is a parliament of Regular Joes. And Josephines. Follow the model of Sweden, and slash the big salaries, slash the perks, do away with the motorcades, the fancy houses and private jets. Politicians are not super-human. Many appear to be vaguely human at all. Lets get people who want to do the job because they care about the country, about our communities, about putting the world to rights, rather than lining their own pockets and setting themselves up for comfortable retirements with cushy jobs from indebted business pals. It’s enough now.

I believe that we are seeing the end stage of Globalization, and I’m looking forward to a good funeral. Let’s end this madness, take back our communities, and get a sense of priority rooted in life that matters. Let’s demand government accountability. Let’s break the stranglehold that business has on us. We are destroying our planet and our communities in the name of short-term profits. It’s insane and it must stop.



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