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Off with their blinkered heads
By Julian Delasantellis
The Quaker adage to "speak truth to power" can frequently seem easier in theory
than in practice. If you doubt that, ask Sir Thomas Moore. For most of his life
he was King Henry VIII's teacher and guide to the disciplines we now call the
enlightenment, but after Sir Thomas refused to go along with Henry's creation
of the Church of England in order that the monarch could legally marry Anne
Boleyn, it was off with Tommy's head, on July 6, 1535.
But that was 475 years ago, before the execution of Charles I for treason in
1649, before the Glorious Revolution of 1688 that made England forevermore a
parliamentary democracy. Surely, in this enlightened time, a courtier can offer
a true and heartfelt opinion, within the bounds of good taste and propriety,
and not have to
worry about those hard to remove bloodstains from his shirtcollar.
Then again, the Bank of England recently lowered short-term interest rates to
their lowest levels since the late 17th century. Who knows how far the retro
craze will go?
Last November, Queen Elizabeth, presiding with the Duke of Edinburgh at the
opening of a new building at the London School of Economics, surprised the
crowd at the United Kingdom's largest school of applied economics by asking why
didn't anyone foretell the scope and seriousness of the global economic crisis.
In her words, "Why did nobody notice it?"
Professor Luis Garicano, director of research at the LSE's management
department, did his best to answer. Apparently, no fears of the Tower of London
had he! "At every stage, someone was relying on somebody else and everyone
thought they were doing the right thing," Garicano said.
To which the queen replied, "Awful." We have no evidence that Professor
Garicano followed up his bravery by booking a clipper ship passage to America
under an assumed name; for all we know, he didn't even check the schedules of
the zippy TGV trains flying out of Waterloo Station to the continent.
A few weeks ago, three more of her majesty's loyal subjects at the LSE, among
the Tim Besley, a member of the Bank of England's monetary policy committee,
also apologized and begged their sovereign for forgiveness.
"Everyone seemed to be doing their job properly on its own merit. And according
to standard measures of success, they were often doing it well ... the failure
was to see how collectively this added up to a series of interconnected
imbalances over which no single authority had jurisdiction ... In summary, your
majesty, the failure to foresee the timing, extent and severity of the crisis
and to head it off ... was principally a failure of the collective imagination
of many bright people, both in this country and internationally, to understand
the risks to the system as a whole."
A few weeks later, in mid-August, another missive with pointing fingers arrived
before the queen. Signed by 22 mostly left-wing and Labour public
intellectuals, here it was claimed that the human race's continuing and
intensifying despoilment and rapine treatment of the planet's natural resources
that led to this sorry situation. Our premise is that our current
economic malaise is symptomatic of a far more serious systemic failure to
acknowledge what Archbishop Rowan Williams has identified in saying "It has
been said that the economy is a wholly owned subsidiary of the environment".
The earth itself is what ultimately controls economic activity because it is
the source of the materials upon which economic activity works. Energy
underlies everything - Scylla and Charybdis of peak oil and climate change. The
underlying cause of the current economic meltdown is a multi-generational
debt-binge inextricably linked to a concomitant multi-generational
energy-binge. The (LSE's) letter focuses on some "imbalances in the global
economy".
However, the key to addressing our current situation is to recognize the far
more serious imbalances between our insatiable hunger for energy, its finite
nature and the environmental pollution in its use. Energy is the lifeblood of
any economy. Our exponential debt-based money system is in turn based on
exponentially increasing energy supplies. It is therefore clear that the supply
of that energy deserves our very highest attention. That this attention doesn't
appear in the ( LSE's) analysis is deeply worrying . ... Thomas Freidman said
recently in the New York Times "Let's today step out of the normal boundaries
of analysis of our economic crisis and ask a radical question: What if the
crisis of 2008 represents something much more fundamental than a deep
recession? What if it's telling us that the whole growth model we created over
the last 50 years is simply unsustainable economically and ecologically and
that 2008 was when we hit the wall - when Mother Nature and the market both
said: 'No more'. It's pretty much a good thing that the queen
has retained little to no policy-shaping influence in the UK, since both the
LSE's and the environmentalists' recommendations boil down to being not much
more than to look out for humans acting like humans. It doesn't matter much
becausewhenever the actual financial crisis ends, Britain will still almost
certainly not be in such a powerful position in the world financial system that
its rules will carry much influence beyond its borders.
That's much different than is the case in the United States. Although it may
soon find the European Community's euro breathing hard on its heels to try to
become the world's new reserve currency, the US will still most likely emerge
from the crisis the world's single most dominant economic actor.
As George Orwell once remarked, "he who controls the past controls the future",
so the search for the crisis' one true scapegoat is taking on critical
importance in America, and this would be so even had the nation, in its
polarization, not morphed from a place that finds less interest in finding
solutions to problems than it does in affixing blame.
In 1994, the Rolling Stones released a music video for the song Love is Strong,
the first single from the album Voodoo Lounge. In it, Mick, Keith,
Charlie, and a few other of the boys, along with some nubile young things who
must have been hanging around the Stones' New York hotel room that morning in
their underwear, appear as giants, 50 meters tall or more, peeking over the
tops of tenements, cavorting across Manhattan's streets and sights.
In much the same way, for the final three quarters of the 20th century, and the
first six years or so of the 21st, two other giants strode and lorded above
just about every economics department and finance secretariat of the free, and
a whole lot of the unfree, world. I've written about the pair, John Maynard
Keynes and Milton Friedman, many times before on these pages, but it is not
only in their own intellects and characters, but in the teeter-totter
relationship between their competitive influences, can her majesty be provided
with a comprehensive account of just how badly things were allowed to have gone
wrong.
Of the two, it's probably easier to see Keynes as a giant lording over lesser
mortals with casual ease. Tall, cultured, civilized and charming, as able to
discuss intelligently modern art or music as modern finance, he was a perfect
exemplar of Britain's turn of the 20th century Bloomsbury Group, salon
intellectuals who frequently acted as if sleeping with each other was their
preferred way to see socialism installed as the ruling philosophy in Britain.
Once he had his bowler back on and his watchfob firmly in place, Keynes set
about working on the most critical theories of his time, those concerning
unemployment. By late in the previous century, it had been seen how capitalist
advances in industrial productivity were producing more goods than people who
could afford to buy them. When the items went unsold, the workers would soon be
laid off until supply and demand could be better balanced at a lower level.
Continued 1
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