Bretton Woods

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pages: 710 words: 164,527

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order by Benn Steil

activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, Asian financial crisis, banks create money, Bretton Woods, British Empire, business cycle, capital controls, Charles Lindbergh, currency manipulation / currency intervention, currency peg, deindustrialization, European colonialism, facts on the ground, fiat currency, financial independence, floating exchange rates, full employment, global reserve currency, imperial preference, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, lateral thinking, low interest rates, margin call, means of production, Michael Milken, money: store of value / unit of account / medium of exchange, Monroe Doctrine, New Journalism, Nixon triggered the end of the Bretton Woods system, open economy, Paul Samuelson, Potemkin village, price mechanism, price stability, psychological pricing, public intellectual, reserve currency, road to serfdom, seigniorage, South China Sea, special drawing rights, Suez canal 1869, Suez crisis 1956, The Great Moderation, the market place, trade liberalization, Works Progress Administration

July 6, 1944. Notes on Bretton Woods Conference. Bretton Woods Conference Collection, International Monetary Fund, Box 15. ———. July 13, 1944. Notes on Bretton Woods Conference. Bretton Woods Conference Collection, International Monetary Fund, Box 15. Bureau of Economic Analysis. Aug. 2010. GDP and Other Major NIPA Series, 1929–2010: II. Available at http://www.bea.gov/scb/pdf/2010/08%20August/0810_gdp_nipa_series.pdf. Chambers, Whittaker. 1952. Witness. New York: Random House. ———. Dec. 2, 1953. “The Herring and the Thing.” Look. Chicago Tribune. June 12, 1944. “Babes in Bretton Woods.” ———. July 2, 1944.

Robust economic recovery in the 1950s and ’60s served to make Bretton Woods synonymous with visionary, cooperative international economic reform. Seven decades on, at a time of great global financial and economic stress, it is perhaps not surprising that blueprints for revamping the international monetary system from the likes of hedge fund guru George Soros, Nobel economist Joseph Stiglitz, and policy wonk Fred Bergsten all hark back to Bretton Woods, and the years of Keynes-White debate that defined it. But can the story of Bretton Woods actually light the way? To be sure, there were major flaws in the monetary framework that emerged from Bretton Woods, which contributed directly to its final collapse in 1971.

As for the Russians, who had put up the greatest obstacles to securing an agreement at Bretton Woods, there were no hard feelings: “The Russian Delegation is on the golf tee, wherever that is, waiting for us,” Morgenthau announced, ending the meeting.140 “The broadcasting companies … made arrangements for a broadcast at the end of the Bretton Woods Conference, with White explaining what we had accomplished,” Bernstein recalled many years later, but “Morgenthau did not let White make that broadcast.” The Secretary told Bernstein to step in—once again anonymously. “Mr. Morgenthau had always had an ambivalent attitude toward Harry White, and he was jealous at Bretton Woods because more attention was paid to White than to him.”141 That evening, the massive, elegant dining hall played host to the conference’s closing banquet and ratification ceremony.


pages: 376 words: 109,092

Paper Promises by Philip Coggan

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, bond market vigilante , Bretton Woods, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, carried interest, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, delayed gratification, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, falling living standards, fear of failure, financial innovation, financial repression, fixed income, floating exchange rates, full employment, German hyperinflation, global reserve currency, Goodhart's law, Greenspan put, hiring and firing, Hyman Minsky, income inequality, inflation targeting, Isaac Newton, John Meriwether, joint-stock company, junk bonds, Kenneth Rogoff, Kickstarter, labour market flexibility, Les Trente Glorieuses, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market clearing, Martin Wolf, Minsky moment, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, negative equity, Nick Leeson, Northern Rock, oil shale / tar sands, paradox of thrift, peak oil, pension reform, plutocrats, Ponzi scheme, price stability, principal–agent problem, purchasing power parity, quantitative easing, QWERTY keyboard, railway mania, regulatory arbitrage, reserve currency, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, Suez crisis 1956, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, time value of money, too big to fail, trade route, tulip mania, value at risk, Washington Consensus, women in the workforce, zero-sum game

The development of the Eurobond market was also an early sign of the international flows of capital that were eventually to help bring down the Bretton Woods system. Money was being transferred across borders and between currencies, and that meant it could switch out of currencies about which investors had doubts. After years of government control, the capital markets were slowly asserting their independence. Bretton Woods survived for just thirteen years after the first easing of capital flows. However, governments played a bigger part in the killing of Bretton Woods than the private sector. Charles de Gaulle, the French President, had enjoyed an uneasy relationship with the American authorities during the Second World War; President Roosevelt had repeatedly attempted to sideline him in favour of less prickly generals.

Sure enough, within four days President Nixon had suspended the convertibility of gold, accompanying the move with a 10 per cent surcharge on imports – a blatant attempt to force other countries to revalue their currencies. The Bretton Woods system was over. It could be argued that Bretton Woods was doomed by the attempt to combine fixed exchange rates with a full employment policy. Arguably these two aims were not compatible for all countries all the time. The switch to floating exchange rates in the 1970s was followed by much higher rates of unemployment than had occurred under Bretton Woods, and the monetarists were accused of being callous about the plight of the unemployed because of their obsession with inflation.

Ramsay MacDonald, Manchester, 1987. 18 Ibid. 19 Because one event occurred before another, the former must have caused the latter. 5. DANCING WITH THE DOLLAR 1 Quoted in Armand van Dormael, Bretton Woods: Birth of a Monetary System, New York, 1978. 2 Quoted in ibid. 3 Quoted in ibid. 4 Quoted in Filippo Cesarino, Monetary Theory and Bretton Woods: The Construction of an International Monetary Order, Cambridge, 2006. 5 Quoted in van Dormael, Bretton Woods. 6 Charles Kindleberger, A Financial History of Western Europe, London, 1984. 7 Quoted in David Marsh, The Euro: The Politics of the New Global Currency, New Haven, Conn., 2008. 8 Interview with Fred Hirsch, 1965. 9 Robert Triffin, Gold and the Dollar Crisis, New Haven, Conn., 1960. 10 Tim Congdon, ‘America’s Deficit, the Dollar and Gold’, World Gold Council Research Study No. 28, 2002. 11 Marsh, The Euro. 12 Cesarino, Monetary Theory. 6.


pages: 632 words: 159,454

War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt by Kwasi Kwarteng

accounting loophole / creative accounting, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, Atahualpa, balance sheet recession, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, California gold rush, capital controls, Carmen Reinhart, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, Deng Xiaoping, discovery of the americas, Etonian, eurozone crisis, fiat currency, financial engineering, financial innovation, fixed income, floating exchange rates, foreign exchange controls, Francisco Pizarro, full employment, German hyperinflation, Glass-Steagall Act, guns versus butter model, hiring and firing, income inequality, invisible hand, Isaac Newton, it's over 9,000, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, land bank, liberal capitalism, low interest rates, market bubble, money: store of value / unit of account / medium of exchange, moral hazard, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, plutocrats, Ponzi scheme, price mechanism, quantitative easing, rolodex, Ronald Reagan, South Sea Bubble, subprime mortgage crisis, Suez canal 1869, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, The Wealth of Nations by Adam Smith, too big to fail, War on Poverty, Yom Kippur War

It was only that, during the 1930s at any rate, a thinker and writer of real quality, in the form of John Maynard Keynes, had lent an intellectual respectability to them. 10 Bretton Woods Bretton Woods is a phrase which denotes an entire era in the monetary management of the world’s economy. If the inter-war period can be called the ‘age of Keynes’, the conference held at the affluent mountain resort town of Bretton Woods, in New Hampshire, was perhaps his most enduring practical legacy. Keynes, however, did not dominate the proceedings at Bretton Woods as much as he would have liked. The American delegation, under the direction of Harry Dexter White, was composed of tough, legally trained bureaucrats who would not be bamboozled by the world-famous Englishman.

It was only a week after Pearl Harbor, on 14 December 1941, that Henry Morgenthau, the US Treasury Secretary, asked White to prepare a memorandum on the establishment of an ‘inter-Allied stabilization fund’ which, in Morgenthau’s words, ‘should provide the basis for postwar international monetary arrangements’.6 The actual final outcome of Bretton Woods was, to many radicals who did not want to get back to the 1930s, surprisingly conservative. There were respects in which it differed from the old pre-war gold standard, but the Bretton Woods Agreement did, to a certain extent, preserve the fetish of gold worship. According to a modern economic historian of the era, there were three distinct areas in which the Bretton Woods settlement was different from the operation of the gold standard in its classical form. Firstly, instead of each currency being directly convertible to gold, currencies would be pegged to the dollar, which remained convertible to gold, at the rate established by President Roosevelt in 1934 of $35 an ounce.

This meant that the exchange rates of each currency were pegged indirectly to gold. The peg to the dollar was adjustable when what the negotiators at Bretton Woods called ‘fundamental disequilibrium’ took place. Secondly, capital controls were allowed to limit movements of international capital. The third new element was a new institution, the International Monetary Fund, which was designed, in the first instance, to stabilize the exchange rates set up by Bretton Woods.7 The World Bank would be the other institution associated with Bretton Woods and it would be largely a development bank. The discussions had been dominated, however, by the dispute between Keynes and White.


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, bank run, banking crisis, Bear Stearns, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, classic study, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, export processing zone, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, Multi Fibre Arrangement, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, precautionary principle, price stability, profit maximization, race to the bottom, regulatory arbitrage, Savings and loan crisis, savings glut, Silicon Valley, special drawing rights, special economic zone, subprime mortgage crisis, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

Keynes and White realized that it was better to accept this and build the safety valves into the system than to ignore it and risk total collapse. The Bretton Woods Model The system they crafted came to be called the Bretton Woods regime, after the New Hampshire resort town at which Keynes, White, and other officials from forty-four nations met in July 1944 at a conference to draft the new rules. The Bretton Woods agreement was an amazing piece of institutional engineering. In about three weeks, Keynes and White supplied the world economy with a new economic philosophy and created two new international organizations: the International Monetary Fund and the World Bank. The deal struck at Bretton Woods would govern the world economy for the first three decades following World War II.

This fateful decision, taken on August 15, 1971, sealed the fate of the global regime of fixed exchange rates, the monetary cornerstone of the Bretton Woods regime. Once again, the domestic economy had triumphed over the needs of the global economy. In subsequent years there were various attempts to establish new currency parities, but none proved durable. The move to floating currencies was officially sanctioned in 1973. The Dissolution of the Bretton Woods Consensus The success of the Bretton Woods regime contained the seeds of its undermining. As world trade and finance expanded, the “policy space” that the existing controls afforded shrank and external constraints began to play a larger role.

The world economy grew at roughly 3 percent per year on a per capita basis between 1950 and 1973, nearly triple the rate prior to the 1930s and double the rate since the late 1970s. Post-1990 economic performance looks very good in historical perspective, but it still falls short of the Bretton Woods standard. The world economy simply has not performed as well during the era of financial globalization as it did under Bretton Woods. And third, the growth champions of the last three decades, just as those of the immediate postwar decades, were countries such as China that played the globalization game by Bretton-Woods rules rather than deep integration rules. They maintained capital controls, kept foreign finance at bay, and used their policy space for domestic economic management (as we shall see in chapter Seven).


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

If there was ever a case where the advantages of relative autonomy were manifest, allowing a capitalist state to act on behalf of capital but not at its behest, it was in the extensive public campaign the US Treasury undertook to get the Bretton Woods agreement endorsed by Congress over the bankers’ opposition. In “one of the most elaborate and sophisticated campaigns ever conducted by a government agency in support of legislation,” the Treasury presented Bretton Woods as a “good business deal for the United States” as well as “the symbol for a new kind of cooperation.”50 The Treasury argued that Wall Street’s portrayal of the Fund as a vehicle for capital controls was substantially incorrect. Its official “backgrounder” to the Bretton Woods Agreement emphasized that it “would be incorrect to assume that most capital exports are prohibited under the Fund’s provisions” and that a “careful examination of the fund proposal will reveal that most capital exports can probably take place freely, and only in a minority of cases will exchange restrictions have to be imposed.”51 This was in fact the way the Treasury expected the Fund to operate—and the way it actually did.52 Even so, passage by Congress was not assured until the Treasury struck a last-minute agreement with the representatives of the American Bankers Association and leading Wall Street banks whereby the Treasury agreed to various amendments in a compromise Bill which set up mechanisms such as the National Advisory Council, to ensure that US representatives to the Fund would act in such a way as to impose greater conditionalities on governments that were given access to its resources.

Just as the temporary US capital controls were a response to the strength of finance as speculation built up around possible adjustments in interest rates to cope with the emergence of simultaneous recessionary and inflationary pressures in both Europe and the US, so coordinated central bank interventions to protect fixed exchange rates became more and more onerous. The basis was laid for the dollar crisis of August 1971 and the final abandonment of the Bretton Woods system.61 And just as the US Treasury had been central to the establishment of new forums and mechanisms for the international management of the “dollar crisis” within the Bretton Woods framework, so was it now central to that framework’s dismantling. This did not involve withdrawing from the multilateral management of the contradictions and tensions in the Bretton Woods institutions, but rather bringing into play—as the US inexorably moved towards breaking the dollar’s link to gold—all the links the Treasury and the Fed had developed with other states’ finance ministries and central banks.

American State Capacities: From Great War to New Deal From Wilson to Hoover: Isolationism Not The Great Depression and the New Deal State From New Deal to Grand Truce with Capital PART II: THE PROJECT FOR A GLOBAL CAPITALISM 3. Planning the New American Empire Internationalizing the New Deal The Path to Bretton Woods Laying the Domestic Foundations 4. Launching Global Capitalism Evolving the Marshall Plan The American Rescue of European Capitalism “The Rest of the World” PART III: THE TRANSITION TO GLOBAL CAPITALISM 5. The Contradictions of Success Internationalizing Production Internationalizing Finance Detaching from Bretton Woods 6. Structural Power Through Crisis Class, Profits, and Crisis Transition through Crisis Facing the Crisis Together PART IV: THE REALIZATION OF GLOBAL CAPITALISM 7.


pages: 394 words: 85,734

The Global Minotaur by Yanis Varoufakis, Paul Mason

active measures, Alan Greenspan, AOL-Time Warner, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business climate, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, declining real wages, deindustrialization, Easter island, endogenous growth, eurozone crisis, financial engineering, financial innovation, first-past-the-post, full employment, Glass-Steagall Act, Great Leap Forward, guns versus butter model, Hyman Minsky, industrial robot, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market fundamentalism, Mexican peso crisis / tequila crisis, military-industrial complex, Money creation, money market fund, mortgage debt, Myron Scholes, negative equity, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, paper trading, Paul Samuelson, planetary scale, post-oil, price stability, quantitative easing, reserve currency, rising living standards, Ronald Reagan, special economic zone, Steve Jobs, structural adjustment programs, Suez crisis 1956, systematic trading, too big to fail, trickle-down economics, urban renewal, War on Poverty, WikiLeaks, Yom Kippur War

In 1944, the New Dealers’ anxieties led to the famous Bretton Woods conference. The idea of designing a new global order was not so much grandiose as essential. At Bretton Woods a new monetary framework was designed, acknowledging the dollar’s centrality but also taking steps to create international shock absorbers in case the US economy wavered. It took fifteen years before the agreement could be fully implemented. During that preparatory phase, the United States had to put together the essential pieces of the jigsaw puzzle of the Global Plan, of which Bretton Woods was an important piece. Bretton Woods While the war was still raging in Europe and the Pacific, in July 1944, 730 delegates converged on the plush Mount Washington Hotel located in the New Hampshire town of Bretton Woods.

But before long it had developed into something bigger and supposedly better. To give Bretton Woods a strong backbone, the New Dealers were determined to support the dollar by creating, within the Bretton Woods fixed exchange system, at least two additional strong currencies that would act as shock absorbers in case the American economy took one of its many periodic downturns. The idea was to find ways to absorb such shocks until Washington managed to reverse the downturn in its own backyard. Without these supporting pillars, the Bretton Woods system, they feared, would be too precariously balanced. However, strong currencies cannot be willed into existence.

Bretton Woods While the war was still raging in Europe and the Pacific, in July 1944, 730 delegates converged on the plush Mount Washington Hotel located in the New Hampshire town of Bretton Woods. Over three weeks of intensive negotiations, they hammered out the nature and institutions of the post-war global monetary order. They did not come to Bretton Woods spontaneously, but at the behest of President Roosevelt, whose New Deal administration was determined to win the peace, after having almost lost the war against the Great Depression. The one lesson the New Dealers had learned was that capitalism cannot be managed effectively at the national level.


pages: 405 words: 109,114

Unfinished Business by Tamim Bayoumi

Alan Greenspan, algorithmic trading, Asian financial crisis, bank run, banking crisis, Basel III, battle of ideas, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, buy and hold, capital controls, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, currency peg, Doha Development Round, facts on the ground, Fall of the Berlin Wall, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Greenspan put, hiring and firing, housing crisis, inflation targeting, junk bonds, Just-in-time delivery, Kenneth Rogoff, liberal capitalism, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, market bubble, Martin Wolf, moral hazard, oil shale / tar sands, oil shock, price stability, prisoner's dilemma, profit maximization, quantitative easing, race to the bottom, random walk, reserve currency, Robert Shiller, Rubik’s Cube, Savings and loan crisis, savings glut, technology bubble, The Great Moderation, The Myth of the Rational Market, the payments system, The Wisdom of Crowds, too big to fail, trade liberalization, transaction costs, value at risk

The Versailles Treaty agreed in the aftermath of the war unsuccessfully tried to patch up the pre-war economic order while punishing the Germans with large reparation payments. It led to serial financial and economic instability—and also to World War II. By contrast, the more radical revamp of the global economic order after World War II at the Bretton Woods conference ushered in a long period of growth and prosperity. The crucial question is whether the response to this crisis is a new Versailles or a new Bretton Woods. The first section of this book, “Anatomy of the North Atlantic Financial Crisis”, explains how the North Atlantic financial system became so brittle. There was indeed a powerful anti-regulatory lobby in the United States comprising the large banks, the Federal Reserve, and (to a lesser extent) the Securities and Exchange Commission (SEC).

Within Europe, interest in wider European integration faded as policymakers grappled with the task of achieving exchange rate stability across the expanded Community despite continuing pressure for Deutsche mark (or D-mark as the Germans called it) appreciation.13 As early as March 1972, the European Community Council of Ministers (ECOFIN) launched a plan to limit intra-European currency fluctuations via the “snake”—a system in which European Community currencies limited their fluctuations to within 2¼ percent of each other’s central parities, half the amount allowed under the Smithsonian Agreement that attempted to resuscitate the doomed dollar-based Bretton Woods fixed exchange rate system. The snake was also widened to include prospective new members of the Community, with the United Kingdom, Ireland, Denmark, and Sweden joining the arrangement. However, the United Kingdom and Ireland left after only two months. On March 11, 1973, European finance ministers reaffirmed the 2¼ percent fluctuation margins between European currencies while ending any efforts to stabilize their currencies against the dollar. This marked the moment when the Bretton Woods exchange rate system was replaced by a global float of the major currencies overlaid by attempts to stabilize intra-European exchange rates via the snake.

Since the outflows at the end of one crisis have been rapidly followed by the start of inflows into the next one, the history of the international financial system since 1970 can be told through the lens of footloose international debt flows that have ebbed and flowed across regions. The Center Cannot Hold: Collapse of the Bretton Woods Fixed Exchange Rate System The collapse of the Bretton Woods fixed exchange rate system in the early 1970s was a watershed event.10 It marked the end of international efforts to maintain fixed exchange rates across major currencies that had characterized the century since the advent of the classical gold standard in the 1870s.


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

90 percent rule, airline deregulation, Alan Greenspan, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, Dr. Strangelove, ending welfare as we know it, financial deregulation, financial engineering, financial innovation, fixed income, flag carrier, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, It's morning again in America, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Les Trente Glorieuses, long and variable lags, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, plutocrats, precautionary principle, price stability, profit motive, public intellectual, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Silicon Valley, Simon Kuznets, starchitect, Steve Bannon, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now

Among other things, the federal government paid scientists to gather twenty-two samples of a plant called marsh horsetail to investigate a rumor that there was gold inside.16 All the while, the end of Bretton Woods drew nearer. The United States had made a promise it could not keep. By 1969, West Germany alone held enough dollars to drain Fort Knox. Milton Friedman worked to end the Bretton Woods system almost from the hour of its creation, telling anyone who would listen that nations should let financial markets determine exchange rates.* He was among the first to call attention to the fact that Bretton Woods was buttressed and preserved by limits on trade. He also warned, with considerable prescience, that the stability of the system was maintained only by deferring necessary economic adjustments.

His opening salvo came in 1948, on a radio panel with the deputy governor of the Bank of Canada, to whom Friedman offered the unsolicited advice that Canada should float its currency, effectively withdrawing from the Bretton Woods Agreement, which it had only just signed.17 Friedman offered the same advice to every other nation in a 1953 paper, “The Case for Flexible Exchange Rates.” Terminating Bretton Woods in favor of floating rates, he wrote, was “absolutely essential for the fulfillment of our basic economic objective: The achievement and maintenance of a free and prosperous world community engaging in unrestricted multilateral trade.”18 Under the Bretton Woods system, an American business was willing to accept 360 yen instead of $1 because the Japanese government guaranteed that 360 yen could be exchanged for $1.

Those prices, in turn, theoretically reflect the relative strength of the two economies because each dollar, or each yen, is a claim on that nation’s economic output. Friedman said relying on markets would correct the flaw at the heart of Bretton Woods, because exchange rates would adjust without political impediments. Better yet, he said these adjustments would be gradual and smooth, reflecting the slow pace of change in the relative strength of major economies. Reliance on the market, he said, would support trade and increase prosperity. In other words, markets would achieve the goals of Bretton Woods better than Bretton Woods. Friedman and the policy-making establishment once again were wrestling over the best way to deal with uncertainty.


pages: 263 words: 80,594

Stolen: How to Save the World From Financialisation by Grace Blakeley

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, basic income, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, bitcoin, bond market vigilante , Bretton Woods, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, cryptocurrency, currency peg, David Graeber, debt deflation, decarbonisation, democratizing finance, Donald Trump, emotional labour, eurozone crisis, Extinction Rebellion, extractivism, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, full employment, G4S, gender pay gap, gig economy, Gini coefficient, global reserve currency, global supply chain, green new deal, Greenspan put, housing crisis, Hyman Minsky, impact investing, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Jeremy Corbyn, job polarisation, junk bonds, Kenneth Rogoff, Kickstarter, land value tax, light touch regulation, low interest rates, low skilled workers, market clearing, means of production, Modern Monetary Theory, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, paradox of thrift, payday loans, pensions crisis, Phillips curve, Ponzi scheme, Post-Keynesian economics, post-war consensus, price mechanism, principal–agent problem, profit motive, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Right to Buy, rising living standards, risk-adjusted returns, road to serfdom, Robert Solow, savings glut, secular stagnation, shareholder value, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, the built environment, The Great Moderation, too big to fail, transfer pricing, universal basic income, Winter of Discontent, working-age population, yield curve, zero-sum game

White emerged victorious, and the US gained the “exorbitant privilege” of controlling the world’s reserve currency.5 In other words, as well as constraining international finance, Bretton Woods also institutionalised American imperialism.6 The Bretton Woods conference marked the dawning of a new era for the global economy. Europe set about the long processes of post-war reconstruction and decolonisation, and the multinational corporations of the world’s newest superpower profited handsomely.7 Trade flows increased after the years of autarky during the war, and a new age of globalisation began. Whilst Bretton Woods provided the international framework for this economic renewal, it was at the level of national economic policy that the transition from pre-war laissez-faire economics was most evident.

Realising that there were far too many dollars in circulation to keep up the pretence, in 1971 Nixon announced that dollars would no longer be convertible to gold. Bretton Woods was finally over. Many expected a sharp devaluation of the dollar at this point, but this didn’t happen. In fact, the dollar — strong as ever — continued to be used as the global reserve currency, even in the absence of any link with gold. Finally, the real foundations Bretton Woods had been exposed: American imperial power. The gold peg established at Bretton Woods was not the source of the dollar’s value; the source of its value was a collective agreement that dollars would be used as the default global currency, much as English had by that point become the default global language.

Meanwhile, the capital that had been stored up within states like the UK under Bretton Woods was desperate to be released into the global economy. It pushed and strained against the continued existence of capital controls, finding ever more ingenious ways of getting around the system. Finance capital had returned with a vengeance, and it sought to remove all obstacles to its continued growth. But it would take a national crisis for the remnants of the post-war order finally to fall. The Political Consequences of Social Democracy Just as Bretton Woods was collapsing, the social democratic model was starting to show signs of strain.17 Bretton Woods created a global economy, with global corporations, global supply chains, and global competition.


pages: 381 words: 101,559

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, buy and hold, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, deal flow, Deng Xiaoping, diversification, diversified portfolio, Dr. Strangelove, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, Great Leap Forward, guns versus butter model, high net worth, income inequality, interest rate derivative, it's over 9,000, John Meriwether, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, Network effects, New Journalism, Nixon shock, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, one-China policy, open economy, paradox of thrift, Paul Samuelson, power law, price mechanism, price stability, private sector deleveraging, proprietary trading, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, short squeeze, sovereign wealth fund, special drawing rights, special economic zone, subprime mortgage crisis, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, vertical integration, War on Poverty, Washington Consensus, zero-sum game

Nixon, 1972 As World War II wound down, the major Allied economic powers, led by the United States and England, planned for a new world monetary order intended to avoid the mistakes of Versailles and the interwar period. These plans were given final shape at the Bretton Woods Conference held in New Hampshire in July 1944. The result was a set of rules, norms and institutions that shaped the international monetary system for the next three decades. The Bretton Woods era, 1944 to 1973, while punctuated by several recessions, was on the whole a period of currency stability, low inflation, low unemployment, high growth and rising real incomes. This period was, in almost every respect, the opposite of the CWI period, 1921–1936. Under Bretton Woods, the international monetary system was anchored to gold through a U.S. dollar freely convertible into gold by trading partners at $35 per ounce and with other currencies indirectly anchored to gold through fixed exchange rates against the U.S. dollar.

Countries could only devalue their currencies with IMF permission and that would generally be granted only in cases of persistent trade deficits accompanied by high inflation. Although conceived in the form of a grand international agreement, the Bretton Woods structure was dictated almost single-handedly by the United States at a time when U.S. military and economic power, relative to the rest of the world, was at a height not seen again until the fall of the Soviet Union in 1991. Despite the persistence of Bretton Woods into the 1970s, the seeds of Currency War II were sown in the mid- to late 1960s. One can date the beginning of CWII from 1967, while its antecedents lie in the 1964 landslide election of Lyndon B.

Despite the centrality of U.S. policies and U.S. inflation to the course of CWII, the opening shots were fired not in the United States but in Britain, where a sterling crisis had been brewing since 1964 and came to a boil in 1967 with the first major currency devaluation since Bretton Woods. While sterling was less significant than the dollar in the Bretton Woods system, it was still an important reserve and trade currency. In 1945, UK pounds sterling comprised a larger percentage of global reserves—the combined holdings of all central banks—than the dollar. This position deteriorated steadily, and by 1965 only 26 percent of global reserves were in sterling.


pages: 665 words: 146,542

Money: 5,000 Years of Debt and Power by Michel Aglietta

accelerated depreciation, Alan Greenspan, bank run, banking crisis, Basel III, Berlin Wall, bitcoin, blockchain, Bretton Woods, British Empire, business cycle, capital asset pricing model, capital controls, cashless society, central bank independence, circular economy, collapse of Lehman Brothers, collective bargaining, corporate governance, David Graeber, debt deflation, dematerialisation, Deng Xiaoping, double entry bookkeeping, energy transition, eurozone crisis, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, forward guidance, Francis Fukuyama: the end of history, full employment, German hyperinflation, income inequality, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, joint-stock company, Kenneth Arrow, Kickstarter, land bank, liquidity trap, low interest rates, margin call, means of production, Money creation, money market fund, moral hazard, Nash equilibrium, Network effects, Northern Rock, oil shock, planetary scale, plutocrats, precautionary principle, price stability, purchasing power parity, quantitative easing, race to the bottom, reserve currency, secular stagnation, seigniorage, shareholder value, special drawing rights, special economic zone, stochastic process, Suez crisis 1956, the payments system, the scientific method, tontine, too big to fail, trade route, transaction costs, transcontinental railway, Washington Consensus

We will show how different these systems were in terms of the rules that defined them and the contradictions that ultimately swept them away. This historical detour should also enable us to find some bearings for the era of financial globalisation that has followed the disappearance of the Bretton Woods system. If we do not have accepted rules, is there a system or not? Does the dominant role set for the dollar in the Bretton Woods system endure today? If so, how? In this era, international relations have been affected by something of an Unidentified Flying Object in the monetary landscape: namely, the euro. This is a supranational currency that claims to be uniting nations monetarily but does not rest on any sovereignty compatible with the space in which it circulates.

These principles were transformed into rules and procedures under the aegis of a consultation forum set up for this very purpose: the International Monetary Fund (IMF). The IMF was created at the Bretton Woods conference as a common subsidiary of the member countries’ governments. It had three responsibilities: to be the guardian of mutually accepted rules; to provide financial aid for the accepted adjustments; and to drive debates on monetary questions. The Bretton Woods accords of July 1944 came at the end of long and complex negotiations. Indeed, these talks saw a clash between two visions for the future. On the one hand was the vision of the US Treasury under Secretary Harry White; on the other hand was that of Lord Keynes, who represented the UK Treasury.

In the end, reaching a compromise required an increase in the amount that was being shared out. The global conference at Bretton Woods was nonetheless one of a kind, in the sense that it did indeed produce results. None of the previous conferences, from Paris in 1865 to London in 1933, had managed to do so. Of course, the system’s rules were an expression of the situation of US dominance at the end of the war. There lay the seeds for problems that would later haunt the Bretton Woods system, when the European economies’ restored competitiveness made it possible to re-establish current account convertibility from 1958 onwards.


Global Governance and Financial Crises by Meghnad Desai, Yahia Said

Asian financial crisis, bank run, banking crisis, Bretton Woods, business cycle, capital controls, central bank independence, corporate governance, creative destruction, credit crunch, crony capitalism, currency peg, deglobalization, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, floating exchange rates, frictionless, frictionless market, German hyperinflation, information asymmetry, Japanese asset price bubble, knowledge economy, liberal capitalism, liberal world order, Long Term Capital Management, low interest rates, market bubble, Meghnad Desai, Mexican peso crisis / tequila crisis, moral hazard, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Post-Keynesian economics, price mechanism, price stability, Real Time Gross Settlement, rent-seeking, short selling, special drawing rights, structural adjustment programs, Tobin tax, transaction costs, Washington Consensus

Capital markets were heavily regulated, exchange rates were fixed in the Bretton Woods framework and convertibility of currencies was restored even among developed countries only by 1960. But thanks to Keynesian macro policies, cycles in each country were quite mild. Depressions were replaced by recessions and sustained growth became the norm rather than cyclical swings. It was only after convertibility had been restored that the US excess spending during the later years of the 1960s spread US inflation to other countries.7 As the economies began to be painfully reintegrated, the Bretton Woods system failed. Exchange rates became variable.

The metamorphosis has brought more active players in the international arena and woven more channels of interdependence: competing currencies, influential financial centers, the momentous common beliefs of financial markets, the rising economic power of Asian countries. The complexity of such a world was not foreseen in the Bretton Woods Agenda. The IMF has had to adapt its doctrine and missions while keeping its identity. A broader concept of hegemony is needed to account for this evolution. 44 Michel Aglietta Even if tilted towards the American interests of the time, the outcome of the Bretton Woods Conference and of the lengthy prior preparation was an AngloSaxon compromise. Not only the US and UK governments had different views on postwar challenges, but the main negotiators, Harry White and Lord Keynes, had quite distinctive conceptions on international money.

Furthermore, capital controls were circumvented by the growth of the Eurodollar market, so that speculative pressures on Sterling became overwhelming in October 1967. This episode originated the agony of the Bretton Woods monetary order, whose coup de grâce was struck by President Nixon on August 15, 1971, when he shut the gold window once and for all. This purely opportunistic political move gave rise to a sea change in the advent of a market-led system. Rejuvenating the IMF after the demise of the Bretton Woods order Following the deceitful Smithsonian Institute Agreement in December 1971, which reset the exchange rate ladder, the IMS had been laid out on a pure Dollar standard.


pages: 488 words: 144,145

Inflated: How Money and Debt Built the American Dream by R. Christopher Whalen

Alan Greenspan, Albert Einstein, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, British Empire, business cycle, buy and hold, California gold rush, Carl Icahn, Carmen Reinhart, central bank independence, classic study, commoditize, conceptual framework, Cornelius Vanderbilt, corporate governance, corporate raider, creative destruction, cuban missile crisis, currency peg, debt deflation, falling living standards, fiat currency, financial deregulation, financial innovation, financial intermediation, floating exchange rates, Ford Model T, Fractional reserve banking, full employment, Glass-Steagall Act, global reserve currency, housing crisis, interchangeable parts, invention of radio, Kenneth Rogoff, laissez-faire capitalism, land bank, liquidity trap, low interest rates, means of production, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, oil shock, Paul Samuelson, payday loans, plutocrats, price stability, pushing on a string, quantitative easing, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, special drawing rights, Suez canal 1869, Suez crisis 1956, The Chicago School, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, Upton Sinclair, women in the workforce

When the military and strategic threat of the Cold War is layered atop this existing propensity to embrace statist solutions and mechanisms, the Bretton Woods framework has a certain logic—but only so long as the United States itself maintains fiscal discipline. Unfortunately, the United States never embraced fiscal discipline after WWII and instead created a culture of debt and deficits that has only grown with the succeeding decades. Under Bretton Woods, all of the major currencies of the world were defined in dollars, thus when chronic external deficits brought the need to devalue the U.S. dollar, the entire pegged arrangement disintegrated. The beginning of the end of Bretton Woods started in the late 1960s, as the Federal Reserve Board attempted to balance the inflationary impact of the Vietnam War spending with the powerful domestic political imperative for growth.

Time magazine wrote in 1971: “Welfare reform, cutbacks in defense spending, advocacy of deficit spending, and Keynesian economics were difficult enough for Nixon’s conservative supporters to tolerate, but for many, rapprochement with Communist China was the final straw.” But Nixon’s repudiation of Bretton Woods and devaluation of the dollar had far more significant impact on issues that conservatives hold dear, particularly the value of the dollar and the stability of the U.S. economy. Under the Bretton Woods arrangement, gold and dollars had been established as the reserve for all of the nations outside the Communist sphere. Since in the 1940s there was not sufficient gold to underpin global trade and financial flows except in a fractional way, Keynes and the other Bretton Woods framers essentially made the dollar equal to gold as a backstop for the global economy.

Truman eventually proposed the expenditure of $17 billion in 1947 and after months of lobbying by its namesake, Secretary of State George Marshall, it was adopted in 1948. Marshall later reported that American women were vastly in favor of the plan and “electric” in persuading the Congress to go along with the proposal.75 Bretton Woods and Global Inflation The Marshall Plan to rebuild Europe, followed by the creation of the International Monetary Fund and the World Bank, created the conditions for European recovery and eventually political union in Europe. Under the Bretton Woods accord, the financial and economic discussions that had been ongoing through the war years were brought together in an ambitious effort to impose a multilateral model on the world and particularly on Europe.


pages: 354 words: 105,322

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Bayesian statistics, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Benoit Mandelbrot, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, blockchain, Boeing 747, Bonfire of the Vanities, Bretton Woods, Brexit referendum, British Empire, business cycle, butterfly effect, buy and hold, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, cellular automata, cognitive bias, cognitive dissonance, complexity theory, Corn Laws, corporate governance, creative destruction, Credit Default Swap, cuban missile crisis, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, disintermediation, distributed ledger, diversification, diversified portfolio, driverless car, Edward Lorenz: Chaos theory, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, fiat currency, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, Fractional reserve banking, G4S, George Akerlof, Glass-Steagall Act, global macro, global reserve currency, high net worth, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Isaac Newton, jitney, John Meriwether, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, Long Term Capital Management, low interest rates, machine readable, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Minsky moment, Money creation, money market fund, mutually assured destruction, Myron Scholes, Naomi Klein, nuclear winter, obamacare, offshore financial centre, operational security, Paul Samuelson, Peace of Westphalia, Phillips curve, Pierre-Simon Laplace, plutocrats, prediction markets, price anchoring, price stability, proprietary trading, public intellectual, quantitative easing, RAND corporation, random walk, reserve currency, RFID, risk free rate, risk-adjusted returns, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, sovereign wealth fund, special drawing rights, stock buybacks, stocks for the long run, tech billionaire, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transfer pricing, value at risk, Washington Consensus, We are all Keynesians now, Westphalian system

The seminal event was the July 1944 Bretton Woods conference. The conference itself was the end result of two years of intense behind-the-scenes struggles between the United States and United Kingdom, represented by Harry Dexter White and John Maynard Keynes respectively, as vividly described by Benn Steil in his book The Battle of Bretton Woods. An alternative to periodic panic and lockdown is a system that is coherent, controlled, and rigorously rule based. That was the case under the classic Bretton Woods system from 1944 to 1971. During that twenty-seven-year golden age, signatories to the Bretton Woods agreement pegged their currencies to the U.S. dollar at fixed exchange rates.

Latin America was subordinate to U.S. hegemony. As long as oil flowed, only Europe, Japan, and Canada mattered to U.S. economic interests, and they were locked in to the Bretton Woods system. No ice-nine solution was imposed because it already existed. The Bretton Woods system was a global ice-nine. The United States controlled over half the world’s gold, as well as the dollar—the only forms of money that mattered. The Bretton Woods system began to wobble badly beginning in 1965. The system suffered combined blows from U.S. inflation, sterling devaluation, and a run on U.S. gold. The United States was unwilling to make structural adjustments it required of other nations.

Somary not only foresaw the First World War, the Great Depression, and the Second World War before others, but he accurately warned about the deflationary and inflationary consequences of those cataclysms. He lived through the demise of the classical gold standard, the currency chaos of the interwar period, and the new Bretton Woods system. He died in 1956 before the Bretton Woods era came to an end. Somary’s success at forecasting extreme events was based on analytic methods similar to ones used in this book. He did not use the same names we use today; complexity theory and behavioral economics were still far in the future when he was engaged with markets.


pages: 354 words: 92,470

Grave New World: The End of Globalization, the Return of History by Stephen D. King

"World Economic Forum" Davos, 9 dash line, Admiral Zheng, air freight, Alan Greenspan, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, Brexit referendum, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, currency risk, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, Global Witness, Great Leap Forward, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, Jeremy Corbyn, joint-stock company, Kickstarter, Long Term Capital Management, low interest rates, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, middle-income trap, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, plutocrats, post-truth, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Savings and loan crisis, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, The Rise and Fall of American Growth, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

They hoped also to get rid of the nineteenth-century empires, which, in their view, had substantially contributed to the carnage seen in the first half of the twentieth century. That meant, in particular, dismantling the British Empire. It is no mere chance that the conditions Washington laid down for helping the British financially during and after the Second World War were notably tough. The Bretton Woods Conference – which took place in July 1944 in the Mount Washington Hotel in Bretton Woods, New Hampshire – appeared to represent a marked departure from previous behaviour. There was a strong desire to avoid the foolishness of the interwar period, during which time attempts to return to the gold standard at pre-war exchange rates had led to both painful austerity and ultimate economic and financial chaos.

Still, there has been no shortage of – mostly technical – proposals to make the world a better place. It’s not clear, however, whether any of them really deals with the underlying sense of discontent expressed with increasing frequency at the ballot box. ANOTHER BRETTON WOODS? Yanis Varoufakis, the former Greek finance minister and scourge of ‘conventional’ European politics, advocates what he calls a new, technologically advanced, green Bretton Woods.3 In a bid to kill off financial speculation and limit cross-border capital flows, he proposes the creation of an international clearing system based loosely on Keynes’ 1944 bancor. Unlike Keynes, however, he thinks currencies should be able to float against one another and that capital controls should be kept to a minimum.

As Churchill said to his foreign secretary, Anthony Eden, ‘The future of my people is at stake and when I have to choose between my people and the German people, I am going to choose my people.’ See B. Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White and the making of a new world order, Princeton University Press, Princeton, 2013. 2.J.M. Keynes, A Treatise on Monetary Reform, Macmillan, London, 1924. 3.The arrangement was agreed at the 1932 Imperial Economic Conference in Ottawa, Canada. 4.Ben Steil’s The Battle of Bretton Woods repeats an oft-made claim that White was a Soviet spy. Others, however, have serious doubts. In a 2013 review of Steil’s book for The Nation, James M.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Alan Greenspan, Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, Great Leap Forward, high-speed rail, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, low interest rates, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, Money creation, money market fund, mortgage debt, New Urbanism, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

Cut off from the international financial system, the Nazi regime resorted to barter trade to get what it needed by selling advanced manufactures for raw materials, often from the Soviet Union, its ostensible ideological adversary. By the end of the decade, the last vestiges of both the prewar gold standard and the interwar gold-exchange standard had ended.11 Bretton Woods, the Rise of the Dollar, and the Birth of “Exorbitant Privilege” Less than a month after the landings at Normandy, 720 delegates representing forty-four Allied countries met in Bretton Woods, New Hampshire, to discuss what international trade and finance would look like after the war. Everyone agreed that the gold-exchange standard of the 1920s had been a failure and that the monetary anarchy of the 1930s had exacerbated the breakdown in trade and the rise of militarism.

The London price of gold had crossed $40 by May, and the Bundesbank decided to let the deutschmark float against the dollar. By August, continued threats to American gold holdings, rising unemployment, and the sharp deterioration in the U.S. trade balance convinced President Richard Nixon to end the convertibility of dollars into gold. The Bretton Woods regime had finally ended.18 The Bretton Woods system could have lasted much longer if foreign holders of U.S. dollars had declined to convert their holdings into gold. The world’s bank would have kept growing its balance sheet, accumulating more and more long-term claims on the rest of the world while selling more and more short-term reserve assets.

BIS, Annual Report, 2017, “Understanding Globalization,” https://www.bis.org/publ/arpdf/ar2017e6.htm; BEA, “National Income and Product Accounts,” table 4.1, https://apps.bea.gov/iTable/. 17. Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, N.J.: Princeton University Press, 2013); “Resolution VII: International Economic Problems” and “Closing Address by Henry Morgenthau, Jr. [July 22, 1944],” in Proceedings and Documents of the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1–22, 1944, ed. U.S. State Department (Washington, D.C.: U.S. Government Printing Office, 1944), available at https://fraser.stlouisfed.org. 18.


End the Fed by Ron Paul

affirmative action, Alan Greenspan, Bear Stearns, Bernie Madoff, Bernie Sanders, Bretton Woods, business cycle, crony capitalism, currency manipulation / currency intervention, fiat currency, Fractional reserve banking, guns versus butter model, hiring and firing, housing crisis, illegal immigration, invisible hand, Khyber Pass, Long Term Capital Management, low interest rates, market bubble, means of production, military-industrial complex, Money creation, moral hazard, Ponzi scheme, price mechanism, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, Savings and loan crisis, too big to fail, tulip mania, We are all Keynesians now, Y2K

August 15, 1971, was a major event in the history of the American dollar. In many ways, it was saying the U.S. government was insolvent—it could not meet its monetary commitments. The worldwide run on the American system arrived and the United States refused to pay. A fiat dollar reserve standard replaced the Bretton Woods pseudo-gold standard. There was nothing unexpected here. The failure of Bretton Woods was predicted early on by the Austrian economists, especially Henry Hazlitt, who was writing daily articles for the editorial page of the New York Times. 2 Austrian school economists also knew, even in 1971, that the new paper standard would not provide stability to the financial system.

Though the dollar survives for now, the international financial system built over the past thirty-eight years has been brought down by market forces. The fiat dollar reserve standard that evolved out of the breakdown of Bretton Woods in 1971 has come to an end. That is the significance of the economic crisis in which we find ourselves. Continuation of the same inflationary policies that led to this disaster cannot revive the current system or bring back the Bretton Woods system of 1944. They are finished. What it can do is destroy the dollar. Unfortunately, since the housing bubble burst, signaling the end of a monetary era, everything Congress and the Fed have done has set the stage for a dollar crisis.

In allocating scarce resources, imposing wage and price controls is the last thing we need government to do. 1 It only exacerbates the problem, as I well remember. We really never learn much from our mistakes. Wage and price controls were used again during the Korean War and in the early 1970s, after the breakdown of the Bretton Woods Agreement, the unstable gold-exchange standard system established in haste after World War II. I remember my dad as being straitlaced. He believed that we should all follow the rules and obey the government. Yet I do remember being with him on Saturday afternoons when a butcher shop in town had all the meat you wanted, at a price—and without ration stamps.


pages: 363 words: 98,024

Keeping at It: The Quest for Sound Money and Good Government by Paul Volcker, Christine Harper

Alan Greenspan, anti-communist, Ayatollah Khomeini, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, central bank independence, corporate governance, Credit Default Swap, Donald Trump, fiat currency, financial engineering, financial innovation, fixed income, floating exchange rates, forensic accounting, full employment, Glass-Steagall Act, global reserve currency, income per capita, inflation targeting, liquidationism / Banker’s doctrine / the Treasury view, low interest rates, margin call, money market fund, Nixon shock, oil-for-food scandal, Paul Samuelson, price stability, proprietary trading, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Ronald Reagan, Rosa Parks, Savings and loan crisis, secular stagnation, Sharpe ratio, Silicon Valley, special drawing rights, too big to fail, traveling salesman, urban planning

Postwar peace and prosperity seemed to depend on maintaining the agreements reached at the summit, the so-called Bretton Woods system. Gold, still seen at the time as the underpinning of all currency, was set at $35 an ounce. All other currencies’ foreign exchange values were fixed against the dollar and the US Treasury promised to convert any nation’s dollars to gold at the $35 price on demand. Williams, however, doubted that the International Monetary Fund created in Bretton Woods could sustain and enforce the new exchange-rate system. In his view, more informal cooperation would be needed, beginning with an understanding between the United States and Britain because their two currencies were globally accepted, used around the world as so-called reserve currencies.

Was the dollar in jeopardy at its fixed gold price of $35 an ounce embedded in the Bretton Woods agreement? I wasn’t prepared. I parroted the conventional view: Europe and Japan, our main trading partners, still had a long way to go to recover from the war even if their industries were becoming more competitive. They still needed to import from the United States. There was a chronic dollar shortage outside the United States. The fixed foreign exchange rates established at the end of the war were here to stay. There was no danger to America’s promise at the 1944 Bretton Woods monetary conference that it would convert dollars held by foreign governments to gold on demand.

Milton Friedman, openly and loudly, had been advocating much more radical action: a system of freely floating exchange rates which, in his view, would let the markets rapidly and efficiently correct international payment imbalances and better reconcile differences in national monetary policies. In effect, he was proposing to discard a major part of the Bretton Woods agreement and leave currencies to the whim of the (in his view, perfectly rational) market, without any concern for other countries’ wishes. His principal intellectual opponent was Bob Roosa, who argued that the 1930s experience amply demonstrated the instability that floating exchange rates could create, the very antithesis of the order embodied in the Bretton Woods agreement. In the United States and abroad there was still little support for simply abandoning fixed exchange rates.


pages: 209 words: 53,236

The Scandal of Money by George Gilder

Affordable Care Act / Obamacare, Alan Greenspan, bank run, behavioural economics, Bernie Sanders, bitcoin, blockchain, borderless world, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, Claude Shannon: information theory, Clayton Christensen, cloud computing, corporate governance, cryptocurrency, currency manipulation / currency intervention, currency risk, Daniel Kahneman / Amos Tversky, decentralized internet, Deng Xiaoping, disintermediation, Donald Trump, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, glass ceiling, guns versus butter model, Home mortgage interest deduction, impact investing, index fund, indoor plumbing, industrial robot, inflation targeting, informal economy, Innovator's Dilemma, Internet of things, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jeff Bezos, John Bogle, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, Law of Accelerating Returns, low interest rates, Marc Andreessen, Mark Spitznagel, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Money creation, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Nixon triggered the end of the Bretton Woods system, obamacare, OSI model, Paul Samuelson, Peter Thiel, Ponzi scheme, price stability, Productivity paradox, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, reality distortion field, reserve currency, road to serfdom, Robert Gordon, Robert Metcalfe, Ronald Reagan, Sand Hill Road, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, secular stagnation, seigniorage, Silicon Valley, Skinner box, smart grid, Solyndra, South China Sea, special drawing rights, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, time value of money, too big to fail, transaction costs, trickle-down economics, Turing machine, winner-take-all economy, yield curve, zero-sum game

Believing that reliable monetary values were a necessary complement to low tax rates in enabling economic growth, Mundell was an enthusiast for the monetary stability achieved under the Bretton Woods system. Named after the New Hampshire resort where the agreement was negotiated in 1944, toward the end of World War II, Bretton Woods ushered in twenty-five years of global economic growth of 2.8 percent per year, unequalled before or since. The golden age of Bretton Woods ended in 1971, when for the first time in more than two centuries most of the world’s economies, including the United States, cut all ties to gold. Counseling President Nixon on this historic decision was Milton Friedman, who believed that currencies should float against one another as they do today.

Crucially complementing these deregulatory policies was an era of relatively sound and reliable money. The framework for this worldwide ascent from depression and war was the gold exchange standard. Negotiated in 1944 among all the Allied Powers at Bretton Woods, it made currencies convertible into dollars, which in turn were convertible into gold at thirty-five dollars an ounce. The fixed exchange rates of Bretton Woods provided the stability that lengthened the horizons of global investment and enterprise. Remaining in place throughout the postwar boom, they provided the monetary backing for global growth that averaged 2.8 percent per year for twenty-five years, a level unequaled before or since and almost double the growth rate since 1971.

See also China, Chinese currency trading and, 67, 80, 101, 104–10, 128–29, 146 Dodd-Frank Act and, 5–6, 93–94 Great Depression and, 99 Great Recession and, xii–xiii, xvi, 32, 57, 90, 132–33 information technology and, 67 regulations and, 129–32 relationship with the Fed, xxii, 26, 32, 57–58, 123–24, 127, 132, 134 Baotou Steel Rare-Earth Hi-Tech Company, 48 BASF, 158 Beckworth, David, 35 Bernanke, Ben, xvii, 99, 114 Between Debt and the Devil (Turner), 88–89 Bezos, Jeff, 122 Bilton, Nick, 122 bin Laden, Osama, 121 bitcoin, 69–77, 79, 172–73 similarity to gold, 63–67, 72, 74, 78, 85–86, 158, 160–61, 163, 167 Boltzmann, Ludwig, 143, 173–74 bonds, 11, 15, 80, 101, 109, 114, 132, 137, 156, 162–63 Boston Consulting Group, 18 Brazil, Brazilians, 111, 118 Bretton Woods Conference, 2, 49, 151 Bretton Woods standard, 12, 41, 44, 151, 155 Buffett, Warren, 98, 130 Bush, George H. W., xvi Bush, George W., xvi C Canadians, 5 capital gains taxes, xi, xxii, 6, 94, 118, 152, 159 Capital in the Twenty-First Century (Piketty), 88 capitalism, xii, xviii, 4, 22, 25, 31, 48, 85, 89, 116–18, 124, 131, 151, 168 alleged failure of, 5 central rule of, 19 in China, 39, 45, 47–51, 69, 154 criticisms of, 56, 88, 93, 141 government harm to, 59, 110, 124 information theory of capitalism, 20, 24, 84 innovation and, 83 learning curves and, 18–19 Piketty and, 3 Capitalism and Freedom (Friedman), 31 Carnot, Sadi, 142 Carter, Jimmy, 11 Cato Institute, 29, 150 central banks, 20–21, 36–38, 48, 79, 94–95, 105, 116, 123, 136, 151, 155–57, 163 digital currencies as threat to, 44–45, 69, 79, 146–47 Keynesianism and, 171 monetarism and, 29, 31, 33–35, 51, 171–72 in New Zealand, 152 profits from seigniorage, 12, 79–80 quantitative easing and, 80, 123, 147 Turner and, 92 Chávez, Hugo, 46 Chicago Mercantile Exchange, 11 China, Chinese, 29, 39–51, 54, 76, 158 American criticisms of, 40–41, 45–47, 154 currency tied to the dollar, xvi, 14 economy of, 33, 38–51, 92, 106, 110, 116, 118, 154 Friedman’s and Gilder’s advice to, 29–30, 33, 42, 154 recovery from Great Recession, xvi Robert Mundell and, 43–44 Christianity, Christians, 39, 43 Cisco, 119, 160 Citibank, 104, 127 Clinton, Bill, xi, xvi, xxi, 51, 101, 115 Clinton, Hillary, xxii, 6 Coates, Ta-Nehisi, 4 Cold War, xi Communications Act of 1934, 5 communism, communists, 23, 30, 39, 42–43, 47, 50–51, 100 Congress, 26, 33 Connally, John, 99 conservatism, conservatives, xi, xvi–xviii, xx, 35–36, 58, 86, 88, 92 in Israel, 153 Consumer Financial Protection Bureau, 6 consumer price index (CPI), 58, 81–82 Cook, Tim, 122 crash of 2007–2008, xi, xvi–xvii, xxi, 36, 55, 89, 105, 132, 135.


pages: 248 words: 57,419

The New Depression: The Breakdown of the Paper Money Economy by Richard Duncan

Alan Greenspan, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Ben Bernanke: helicopter money, Bretton Woods, business cycle, currency manipulation / currency intervention, debt deflation, deindustrialization, diversification, diversified portfolio, fiat currency, financial innovation, Flash crash, Fractional reserve banking, Glass-Steagall Act, income inequality, inflation targeting, It's morning again in America, Joseph Schumpeter, laissez-faire capitalism, liquidity trap, low interest rates, market bubble, market fundamentalism, mass immigration, megaproject, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, Nixon triggered the end of the Bretton Woods system, private sector deleveraging, quantitative easing, reserve currency, risk free rate, Ronald Reagan, savings glut, special drawing rights, The Great Moderation, too big to fail, trade liberalization

CHAPTER 2 The Global Money Glut The balance of payments commands, the balance of trade obeys, and not the other way round. —Eugen von Boehm-Bawerk1 When the Bretton Woods international monetary system broke down in 1971, something extraordinary began to happen. The central banks of some countries began printing fiat money and using it to buy the currencies of other countries. Before 1971, currencies were pegged either directly or indirectly to gold. Therefore, there was nothing to be gained by creating fiat money in order to buy any other country’s currency. When the fixed exchange rate system ended with the collapse of the Bretton Woods system, however, that changed. Gradually, it became apparent that a country could gain an export advantage if its central bank created fiat money and used it to buy the currencies of its trading partners.

Since countries could not manipulate gold’s value, trade imbalances were resolved by market-determined adjustments to the price level of both countries. The deficit country experienced falling prices and the surplus country experienced inflation. Those price trends continued until the balance of trade was restored. After the Bretton Woods system broke down in the early 1970s, however, currency values began to move up and down relative to one another—that is to say that currencies were floating rather than fixed. In this post–Bretton Woods arrangement, trade balances are the most important fundamental factor determining the long-term direction of exchange rate movements. A country with a trade surplus will normally experience an appreciating currency, while the currency of a country with a trade deficit will tend to depreciate.

Financial Account Balance, 1970 to 2007 Source: IMF An imbalance of investments on this scale was not possible under a gold standard. It would have involved the outflow of huge quantities of gold from the countries making the foreign investments. At a time when gold was money, the loss of so much gold would have caused a sharp contraction of the money supply and that would have created an economic crisis. In the post–Bretton Woods’ world, however, where money can be created on demand and without limit, the constraint previously imposed by a finite amount of money is no longer a concern. The investments that resulted in the extraordinary surplus on the U.S. financial account were funded with fiat money created by central banks outside the United States.


pages: 466 words: 127,728

The Death of Money: The Coming Collapse of the International Monetary System by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Asian financial crisis, asset allocation, Ayatollah Khomeini, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, BRICs, business climate, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, centre right, collateralized debt obligation, collective bargaining, complexity theory, computer age, credit crunch, currency peg, David Graeber, debt deflation, Deng Xiaoping, diversification, Dr. Strangelove, Edward Snowden, eurozone crisis, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, G4S, George Akerlof, global macro, global reserve currency, global supply chain, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Herman Kahn, high-speed rail, income inequality, inflation targeting, information asymmetry, invisible hand, jitney, John Meriwether, junk bonds, Kenneth Rogoff, labor-force participation, Lao Tzu, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market design, megaproject, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shale / tar sands, open economy, operational security, plutocrats, Ponzi scheme, power law, price stability, public intellectual, quantitative easing, RAND corporation, reserve currency, risk-adjusted returns, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Satoshi Nakamoto, Silicon Valley, Silicon Valley startup, Skype, Solyndra, sovereign wealth fund, special drawing rights, Stuxnet, The Market for Lemons, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, trade route, undersea cable, uranium enrichment, Washington Consensus, working-age population, yield curve

The contemporary EU motto, “United in diversity,” could as well have been Charlemagne’s. ■ From Bretton Woods to Beijing The euro project is a part of the more broadly based international monetary system, which itself is subject to considerable stress and periodic reformation. Since the Second World War, the system has passed through distinct phases known as Bretton Woods, the Washington Consensus, and the Beijing Consensus. All three of these phrases are shorthand for shared norms of behavior in international finance, what are called the rules of the game. The Washington Consensus arose after the collapse of the Bretton Woods system in the late 1970s. The international monetary system was saved between 1980 and 1983 as Paul Volcker raised interest rates, and Ronald Reagan lowered taxes, and together they created the sound-dollar or King Dollar policy.

When the world returns to a gold standard, either by choice to create inflation, or of necessity to restore confidence, it will be crucial to have support from all the world’s major economic centers. A major economy that does not have sufficient gold will either be relegated to the periphery of any new Bretton Woods–style conference, or refuse to participate because it cannot benefit from gold’s revaluation. As in a poker game, the United States possessed all the chips at Bretton Woods and used them aggressively to dictate the outcome. Were Bretton Woods to happen again, nations such as Russia and China would not permit the United States to impose its will; they would prefer to go their own way rather than be subordinate to U.S. financial hegemony.

Participants were given conventional military scenarios and then asked to assess the financial impact and show how financial weapons might be used as a force multiplier. On October 25, 2012, the Boeing Corporation conducted a financial war game during an offsite conference in Bretton Woods, New Hampshire. The conference was held at the historic Mount Washington Hotel, famous as the site of the 1944 Bretton Woods conference that established the international monetary system, which prevailed from the end of the Second World War until President Nixon closed the gold window in 1971. Although Boeing is a corporation and not a sovereign state, its interest in financial warfare is hardly surprising.


pages: 364 words: 112,681

Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back by Oliver Bullough

Alan Greenspan, banking crisis, Bernie Madoff, bitcoin, blood diamond, Bretton Woods, Brexit referendum, BRICs, British Empire, capital controls, central bank independence, corporate governance, cryptocurrency, cuban missile crisis, dark matter, diversification, Donald Trump, energy security, failed state, financial engineering, Flash crash, Francis Fukuyama: the end of history, full employment, Global Witness, high net worth, if you see hoof prints, think horses—not zebras, income inequality, joint-stock company, land bank, liberal capitalism, liberal world order, mass immigration, medical malpractice, Navinder Sarao, offshore financial centre, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, rent-seeking, Richard Feynman, risk tolerance, Sloane Ranger, sovereign wealth fund, Suez crisis 1956, WikiLeaks

In this dull but important introductory section (spoiler alert: Bond does succeed in defeating Goldfinger, but not before he gets entangled with the Chicago mob, foils a daring raid on Fort Knox and seduces a lesbian who has ‘never met a man before’), Colonel Smithers dissects the philosophical question at the heart of the Bretton Woods system. By modern standards, Goldfinger wasn’t doing anything wrong, apart perhaps from dodging some taxes. He was buying up gold at a price people were prepared to pay for it, then selling it in another market, where people were prepared to pay more. It was his money. It was his gold. So what was the problem? He was oiling the wheels of commerce, efficiently allocating capital where it could best be used, no? No, because that wasn’t how Bretton Woods worked. Colonel Smithers considered the gold to belong not only to Goldfinger, but also to Great Britain.

Without trust, liberal democracy cannot function. When representatives of the Allied powers met in Bretton Woods, New Hampshire, in July 1944, they had a keen awareness of the danger of the flow of uncontrolled money, and the power it has to spread instability and damage democracy. ‘A breach must be made and widened in the outmoded and disastrous economic policy of each-country-for-itself,’ wrote the US delegate, Harry Dexter White, in a memo to Treasury Secretary Henry Morgenthau, two years earlier. When Morgenthau himself addressed the opening conference at Bretton Woods, he reflected on the same theme: ‘the thread of economic life in every nation is inseparably woven into a fabric of world economy.

As the British journalist Ed Conway points out in The Summit, his 2014 history of the Bretton Woods meeting and its aftermath: between 1948 and the early 1970s, the world enjoyed progress and stability never rivalled before or since. The world’s gross domestic product expanded by an average of 2.8 per cent a year, more than the equivalent rates for the preceding and succeeding periods. For those charmed two and a half decades, there was not a single global recession. Since the system collapsed, there have been four. The Bretton Woods participants’ dream of locking speculative money behind national borders is dead.


pages: 352 words: 98,561

The City by Tony Norfield

accounting loophole / creative accounting, air traffic controllers' union, anti-communist, Asian financial crisis, asset-backed security, bank run, banks create money, Basel III, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, capital controls, central bank independence, colonial exploitation, colonial rule, continuation of politics by other means, currency risk, dark matter, Edward Snowden, Fall of the Berlin Wall, financial innovation, financial intermediation, foreign exchange controls, Francis Fukuyama: the end of history, G4S, global value chain, Goldman Sachs: Vampire Squid, interest rate derivative, interest rate swap, Irish property bubble, Leo Hollis, linked data, London Interbank Offered Rate, London Whale, Londongrad, low interest rates, Mark Zuckerberg, Martin Wolf, means of production, Money creation, money market fund, mortgage debt, North Sea oil, Northern Rock, Occupy movement, offshore financial centre, plutocrats, purchasing power parity, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Ronald Reagan, seigniorage, Sharpe ratio, sovereign wealth fund, Suez crisis 1956, The Great Moderation, transaction costs, transfer pricing, zero-sum game

These strengths allowed the US to set the agenda and largely determine the outcome of the July 1944 Bretton Woods conference, held in a big hotel north of New York. Bretton Woods was a landmark event that established the financial institutions of the post-1945 world order and the rules for how the international monetary system would work. It signalled the transition from the broken, pre-war and formerly British-led system to one now dominated by the US. Henry Morgenthau, Treasury Secretary at the Bretton Woods negotiations, set out the US objectives clearly: Now, to me it boils down to this … that the financial centre of the world is going to be New York and we don’t want to postpone this thing until another day where we may not be in as advantageous a position and maybe have them [the British] to get in a horse-trading position and maybe end up by having it in London.4 At this point, nobody really questioned the idea that the key decisions were going to be made by the US, so Morgenthau was able to ensure that the new International Monetary Fund and World Bank were based in Washington, DC.

It is ironic that Skidelsky, Keynes’s biographer, notes this important imperial dimension when his subject does not. 3House of Commons Debate, ‘Return to Gold Standard’, Hansard, Vol. 183, cc 52–8, 28 April 1925, available at hansard.millbanksystems.com. 4Cited in Steil, The Battle of Bretton Woods, p. 224. 5Keith Kyle, Suez: Britain’s End of Empire in the Middle East, London: Weidenfeld & Nicolson, 1991. 6Clive Ponting, Churchill, London: Sinclair-Stevenson, 1994, p. 734. 7Britain’s concern about rising US power was also an important factor in the government’s decision to return to the Gold Standard in 1925, as previously noted. 8Clive Ponting, 1940: Myth and Reality, London: Cardinal, 1990, pp. 202–4. 9Steil, The Battle of Bretton Woods. 10Christopher Bayly and Tim Harper, Forgotten Wars, London: Allen Lane, 2007. 11Cain and Hopkins, British Imperialism, 1688–2000, p. 625. 12The $4.03 exchange rate per one pound sterling applied only for a relatively short period.

Secondly, as suggested earlier, my stress on the critical importance of financial operations for modern capitalism means moving away from the common, almost exclusive, focus on the United States. America’s dominant economic position means that it is understandably the centre of attention when it comes to finance. The US set the ground rules for the Bretton Woods world monetary system after 1944, designing it in a way that promoted its interests,15 and US financial and economic power has remained strong, even after a series of crises in the 1960s that ultimately led to the collapse of the system in the early 1970s.16 However, this focus often leads to the assumption that other capitalist powers are, at most, only minor accomplices in America’s plans, ignoring how their own interests are also promoted by their actions.


pages: 234 words: 63,149

Every Nation for Itself: Winners and Losers in a G-Zero World by Ian Bremmer

airport security, banking crisis, barriers to entry, Berlin Wall, blood diamond, Bretton Woods, BRICs, capital controls, clean water, creative destruction, Deng Xiaoping, Doha Development Round, energy security, European colonialism, failed state, global rebalancing, global supply chain, Global Witness, income inequality, informal economy, information security, Intergovernmental Panel on Climate Change (IPCC), Julian Assange, Kickstarter, Martin Wolf, mass immigration, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, Nixon shock, Nixon triggered the end of the Bretton Woods system, no-fly zone, nuclear winter, Parag Khanna, purchasing power parity, reserve currency, Ronald Reagan, smart grid, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, trade route, uranium enrichment, Washington Consensus, WikiLeaks, Yom Kippur War

First, they wanted to build trade ties abroad to avoid a slide back into depression at home, to help create jobs for 11 million returning soldiers, and to extend the economic gains of the war. Second, they sought to promote democracy and thwart communism by containing the risk that European misery might provoke a third and even more destructive world war. At Bretton Woods, Treasury Secretary Henry Morgenthau Jr. delivered the closing remarks: We are at a crossroad, and we must go one way or the other. The Conference at Bretton Woods has erected a signpost—a signpost pointing down a highway broad enough for all men to walk in step and side by side. If they will set out together, there is nothing on earth that need stop them.8 The proposed destination was universal peace and prosperity, and the road was mapped and paved by the United States and its European allies.

How did we reach this breakdown in the international order? FROM THE ASHES The road to the G-Zero begins at the height of American dominance. At the end of World War II, much of Europe lay in ruins for the second time in less than thirty years. Even before the war ended, representatives of forty-four nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, to lay the foundation for a new global economy. From the agreement signed there in July 1944 came the International Monetary Fund, the International Bank for Reconstruction and Development (which soon became part of what would be the World Bank), and a plan to establish new commercial and financial relations among nations and set exchange rates that tied the currencies of each member to the U.S. dollar.

Some critics charge that by conditioning financial support to needy countries on adoption of democratic, free-market reforms—an agenda dubbed the “Washington Consensus”—these institutions exist mainly as tools of U.S. foreign policy.10 That’s a caricature, but beyond the succession of Western leaders who have run these organizations, no one can deny that the U.S. and European governments retain formal and informal powers within them that no longer reflect the size of their contribution to the global economy’s strength. These baked-in Western advantages are no accident. At Bretton Woods, most of the other forty-three participating countries gathered around the negotiating table depended on Washington for wartime aid. Call them a coalition of the broke and hungry. As for the American agenda, President Franklin Roosevelt opened the conference with a call for U.S.-led international cooperation.


pages: 270 words: 73,485

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Apart from being the sixtieth anniversary of Indian independence, it was also the thirty-sixth anniversary of the day on which President Richard Nixon announced that the US would renege on its obligation to buy gold at $35 an ounce. That obligation had been the foundation of the postwar system of exchange rates known as the Bretton Woods system. It was named after the town in New Hampshire where in July 1944 the Allies had met and hammered out the postwar order for international monetary relations. The Bretton Woods system kept all exchange rates fixed in relation to the dollar, while the dollar was fixed in terms of gold. This was the Dollar Exchange Standard. It replaced the Gold Standard that had been around for 300 years prior to World War II.

He believed that countries running surplus should make an equal effort at importing more, whereby their surpluses would go down and help the deficit countries to export more. The Americans, who were going to be the sole surplus country in the immediate postwar period, did not fancy being compelled to adapt their policy to outside diktats. Keynes’s version of the Bretton Woods system was not accepted in its entirety. Keynes’s plan of creating a common currency for the world was also not acceptable in the circumstances. At Bretton Woods, instead of the Gold Standard, the outcome was the dollar exchange standard, with the dollar’s value fixed in terms of gold. The US agreed to buy and sell gold at $35 an ounce, as the Bank of England had done before World War I (at £3 17s 10½d).

Their long-run aim was “an ever closer union.” Later they moved forward in an Exchange Rate Mechanism (ERM) where currencies had to maintain their level with each other within a fixed band of deviation of 2.5 percent. This was a revival of the Bretton Woods system for the small number within the EEC. The deutschmark was most often the strongest currency. It began to play the role the dollar had played in the Bretton woods system. But there was a crucial difference. The German Bundesbank had always followed orthodox monetary policy with strict control over money supply. There was no support for government debt through printing money.


pages: 700 words: 201,953

The Social Life of Money by Nigel Dodd

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", accounting loophole / creative accounting, bank run, banking crisis, banks create money, behavioural economics, Bernie Madoff, bitcoin, Bitcoin Ponzi scheme, blockchain, borderless world, Bretton Woods, BRICs, business cycle, capital controls, capitalist realism, cashless society, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computer age, conceptual framework, credit crunch, cross-subsidies, currency risk, David Graeber, debt deflation, dematerialisation, disintermediation, Dogecoin, emotional labour, eurozone crisis, fiat currency, financial engineering, financial exclusion, financial innovation, Financial Instability Hypothesis, financial repression, floating exchange rates, Fractional reserve banking, gentrification, German hyperinflation, Goldman Sachs: Vampire Squid, Herbert Marcuse, Hyman Minsky, illegal immigration, informal economy, interest rate swap, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, Kickstarter, Kula ring, laissez-faire capitalism, land reform, late capitalism, liberal capitalism, liquidity trap, litecoin, London Interbank Offered Rate, M-Pesa, Marshall McLuhan, means of production, mental accounting, microcredit, Minsky moment, mobile money, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, Neal Stephenson, negative equity, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, Occupy movement, offshore financial centre, paradox of thrift, payday loans, Peace of Westphalia, peer-to-peer, peer-to-peer lending, Ponzi scheme, post scarcity, post-Fordism, Post-Keynesian economics, postnationalism / post nation state, predatory finance, price mechanism, price stability, quantitative easing, quantitative trading / quantitative finance, remote working, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, Satoshi Nakamoto, scientific management, Scientific racism, seigniorage, Skype, Slavoj Žižek, South Sea Bubble, sovereign wealth fund, special drawing rights, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, Veblen good, Wave and Pay, Westphalian system, WikiLeaks, Wolfgang Streeck, yield curve, zero-coupon bond

Harvey cites Roosevelt’s New Deal as one major example of these forces at work. Two more recent instances that I want to discuss here are the aftermath of the collapse of the Bretton Woods regime, which saw major struggles between capital and labor being waged against the background of a new international regime of floating exchange rates, and the ongoing crisis within the Eurozone, whose devastating effect across classes and generations is still being played out. One of the classic analyses of the Bretton Woods crisis from the perspective of Marx’s theory of money and credit was advanced by Christian Marazzi in his 1976 paper, “Money in the World Crisis” (Marazzi 1995).

There is, in short, a structural connection among money, credit, and class politics, which in the first instance is expressed through wage costs.30 Marazzi deals with the issue of how to define the monetary base in the absence of gold by focusing on power. He suggests that sterling, and subsequently the dollar, had already displaced gold as the “money of all monies” long before the Bretton Woods system collapsed. Increasingly the international power of states, not gold, determined the value of all currencies.31 Credit was increasingly being created ex nihilo, no longer based on accumulated surplus value but on no existing value whatsoever. The demise of Bretton Woods made it impossible for money to maintain even the appearance of being detached from basic struggles over wages. Money and credit now had to take sides in social struggle because their underlying value increasingly depended not on a relationship with gold, however tenuous that relationship might have been, but—directly and explicitly—on their capacity to command labor.

In other words, if the underlying value of money was to be sustained, workers would have to pay the price through lower wages. This arrangement, Marazzi argues, was the key problem that states increasingly faced after Bretton Woods. Money became the site of an explicit assertion of state power against the working class. Money lost its mystical appearance. Its apparent independence from politics, and its quality as a thing, were exposed as illusory. Money’s social life, in all of its depth and complexity, came brutally to the fore. Given that the Bretton Woods system was international in scope, the international ramifications of its collapse must also be understood. The demonetarization of gold had had a direct negative effect on Italy, France, and Portugal, whose reserves were dependent on the gold price, and upon the Soviet Union, which used gold to settle its accounts with the outside world.


pages: 183 words: 17,571

Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

Alan Greenspan, banking crisis, banks create money, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, bond market vigilante , Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, compensation consultant, corporate governance, corporate raider, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency risk, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, Glass-Steagall Act, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, junk bonds, labor-force participation, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, market bubble, market clearing, Martin Wolf, means of production, Michael Milken, mobile money, Money creation, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Nixon triggered the end of the Bretton Woods system, Paul Volcker talking about ATMs, Ponzi scheme, profit motive, proprietary trading, prudent man rule, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, Savings and loan crisis, seigniorage, shareholder value, Silicon Valley, SoftBank, Solyndra, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra, zero-sum game

eBook <www.wowebook.com> world economy was based on a set of arrangements worked out at the conference of allied finance ministers (which effectively meant the United States and the United Kingdom) at Bretton Woods, New Hampshire, in 1944, with Lord Keynes providing many of the key concepts. To grossly simplify, in the Bretton Woods system, the world’s currencies were effectively pegged to the US dollar in place of the old gold standard, but the US dollar had to maintain a link to gold. Bretton Woods created a new international institution, the International Monetary Fund (IMF), which pooled resources of participating countries in order to make funds available to help them make adjustments necessitated by balance-of-payment problems. The key weakness in the Bretton Woods system was that it required monetary discipline on the part of the United States, whose dollar was in effect the new gold, the anchor for all other currencies.The United Kingdom understood its role as issuer of the global reserve currency and played it well until it could no longer afford it.

The simple fact was (and remains) that the US government could print money without limit if it chose to, and in the 1970s it did so with a vengeance to finance a vast expansion of social spending and the Vietnam War without raising taxes. Other countries got stiffed as America paid its bills in dollars of diminishing value. The Bretton Woods deal included a gold window, where dollar claims could be converted, but the United States lacked the gold. So, over a weekend, with no consultations, the United States blew up the Bretton Woods system, closing the gold window. This kicked off the Great Inflation, and it ushered in an era of floating exchange rates that we are still living with today. OPEC, an attempt by oil producers to use cartel tactics to raise the price of their commodity (priced in dollars) in nominal terms to make up for the fall in the real value of the dollar, was a key side effect.

However, everyone had cheerfully lived with this way of settling foreign exchange trades for generations up to 1971.There just wasn’t that much business under the stable rates of Bretton Woods or the gold standard before. Then, overnight, the global foreign exchange market grew by leaps and bounds as currencies were allowed to float against each other in market trading. This is where the revolution in technology comes into play. If there is a great deal of friction in making a market transaction, as Nobel Prize–winning economist Ronald Coase pointed out 80 years ago, it will tend to be replaced by bureaucratic command and control or not occur at all. This is why so much “business” takes place within huge corporations instead of free markets. Bretton Woods was very much a bureaucratic solution worked out between governments.


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, Alan Greenspan, anti-communist, bank run, banking crisis, Basel III, Bear Stearns, benefit corporation, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, export processing zone, failed state, fake news, falling living standards, family office, financial deregulation, financial engineering, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, Global Witness, high net worth, Ida Tarbell, income inequality, index fund, invisible hand, Jeff Bezos, junk bonds, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, megaproject, Michael Milken, Money creation, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, stock buybacks, Suez crisis 1956, The Chicago School, Thorstein Veblen, too big to fail, Tragedy of the Commons, transfer pricing, two and twenty, vertical integration, Wayback Machine, wealth creators, white picket fence, women in the workforce, zero-sum game

This was no coincidence, for it was a reflection of the age-old clash between finance and other parts of the economy. The Bretton Woods restrictions, preventing speculative financial flows across borders, brought this clash into the sharpest possible relief. By the 1950s, members of the City of London could only look with envy at the giant, fragmented yet fast-growing global marketplace which the Bretton Woods controls had now mostly placed out of their reach. Bottling up City activities inside Britain’s war-shattered domestic economy plus the remaining British territories and outposts that still used the pound sterling was bad enough for City profits, but the Bretton Woods system also gave the British government the freedom to impose high taxes on the rich, and strong financial regulations.

The system had a shaky start: from 1945 to 1947 Wall Street interests forced through a brief financial liberalisation which caused huge waves of capital flight from war-shattered Europe, as rich Europeans sent their wealth overseas to escape having to pay for reconstruction. But fears of a communist takeover in Europe soon focused policymakers’ minds, and the Bretton Woods system was at last given teeth. Bretton Woods was a remarkable system and almost unimaginable today. Cross-border finance was heavily constrained, while trade remained fairly free. So cross-border financial flows were permitted if they were to finance trade or real investment or other specified priorities, but cross-border speculation was not.

In the depths of this torpor, in 1951, three senior British officials hatched a top-secret plot to bust the City of London out of the Bretton Woods straitjacket, in order to restore the City to its former glory and dominance. The plot was named Operation Robot after its three top conspirators: Sir Leslie Rowan at the Treasury, Sir George Bolton at the Bank of England and Otto Clarke also at the Treasury. Their idea was suddenly to float sterling, which was then fixed at around four dollars to the pound, and make it freely convertible against other currencies. Had this taken place, Operation Robot would have thrown a grenade into the entire Bretton Woods architecture and might have changed the course of world economic history.


Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies by Nik Bhatia

Alan Greenspan, bank run, basic income, Bear Stearns, bitcoin, blockchain, Bretton Woods, British Empire, central bank independence, Cornelius Vanderbilt, Credit Default Swap, cryptocurrency, distributed ledger, fiat currency, fixed income, Fractional reserve banking, interest rate derivative, interest rate swap, Isaac Newton, joint-stock company, Kickstarter, Long Term Capital Management, margin call, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, offshore financial centre, quantitative easing, reserve currency, risk free rate, Satoshi Nakamoto, slashdot, smart contracts, time value of money, tulip mania, universal basic income

Pound sterling abandoned a gold standard in 1931 and officially ended its reign as world reserve currency. The void was filled by the currency of the world’s newest superpower: United States of America. In 1944, world leaders gathered at a hotel in Bretton Woods, New Hampshire and formalized that all currencies besides the dollar were forms of third-layer money within the dollar pyramid. The Bretton Woods agreement would come to be known as the dollar’s world reserve currency coronation. The agreement didn’t impact the relationship between the first and second layers of money in any way: Federal Reserve notes still promised the bearer gold coins on demand at $35 per ounce.

This means that going forward, there are two possible relationships between monetary instruments within the layered framework: balance sheet hierarchy and price hierarchy. Destined to Fail Unfortunately for the international monetary system, the Bretton Woods agreement was doomed. The most prescient thinker on the burden of world reserve currencies during this era was Robert Triffin, a Belgian-born economist who conducted research at the Federal Reserve and International Monetary Fund in its early years. Triffin correctly predicted the end of the Bretton Woods agreement over a decade before it collapsed. While United States citizens were banned from owning gold, foreign nations were still allowed to convert their accumulated dollar reserves to metal.

While United States citizens were banned from owning gold, foreign nations were still allowed to convert their accumulated dollar reserves to metal. Triffin predicted that these nations would eventually deplete the United States gold stock, making a fixed price of $35 per ounce of gold impossible to maintain. He warned that gold convertibility would not survive without an adjustment to the framework held in place by the Bretton Woods agreement. Most importantly, he identified that being the world reserve currency was a burden, not a blessing. Foreign countries would accumulate dollars because of its reserve status. This would strengthen the dollar and cause trade imbalances that otherwise would not exist without this extra source of world reserve currency demand.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

When the carnage was over, one dollar bought only half as many deutsche marks as it had six years earlier, and just two-thirds as many yen. The dollar-based Bretton Woods system of fixed exchange rates was dead.5 Central bankers were prominent among the mourners, for many of them held a nearly religious belief in the importance of fixed exchange rates. “The Sunday meeting of the governors was marked by an atmosphere of gloom that could not be wholly attributed to the weather,” US Federal Reserve governor Jeffrey Bucher reported after meeting with his counterparts in Switzerland. But the central bankers’ concerns didn’t much matter: the decision to abandon Bretton Woods was irreversible. More consequential was the displeasure of the oil-exporting countries.

From his ornate ground-floor office in Threadneedle Street, opening onto the monastic stillness of an interior garden planted with mulberry trees, the governor of the Bank of England may have exercised greater authority than any other central banker in the world.3 But as Richardson took charge at the Bank, that authority was under threat. Under the Bretton Woods system, governments had maintained a host of regulations to control interest rates and limit the movement of money in order to keep exchange rates fixed. As Bretton Woods blew apart in the early 1970s, however, many of those restrictions were abandoned. Disregarding national borders, money began flowing to places where it could earn higher returns or go untaxed. Much of it ended up in London, the premier international banking center, in accounts denominated in US dollars.

See also central banks; global financial system; International Monetary Fund; specific banks; under specific countries; World Bank Banque Parabas, 214–215 Basel banking meetings, 1975, 92–95 Basel Concordat, 95 Begin, Menachem, 92 Belgium, 1–2, 23, 30, 124, 127; anti-inflation policy in, 53; income per person in, 160; welfare state in, 17–18 Bension, Joshua, 90–91, 92 Bergman, Ingmar, 164–166 Berlusconi, Silvio, 10–11, 267 Beveridge, William, 17 Bismarck, Otto von, 17 Blair, Tony, 194 Blunden, George, 93 Bolivia, 44, 244 Brandt, Willy, 34, 35, 156–157, 160, 163 Brazil, 46, 111, 224; bank loans to, 241; debt crisis in, 245, 249–250; economy of, 37; Prebisch and, 38 Bretton Woods conference (July 1944), 52–55 Bretton Woods system: collapse of, 67, 72, 83, 117, 181, 201–202, 222; foreign-exchange rates and, 52–55, 117, 248 British Telecom, 114 Brittan, Samuel, 158, 160 Brookings Institution, 107 Brunner, Karl, 184 Bucher, Jeffrey, 67 budget deficits, 9, 176, 249, 252; in France, 202, 208, 209, 215; in Great Britain, 182, 184; in Japan, 150; in United States, 47, 150, 226, 230, 234; in West Germany, 32, 150 Burns, Arthur, 48, 65, 75, 77, 82, 86, 92, 96, 134, 173, 180, 222, 240; economic policy of, 47–49; inflation and monetary policy and, 51–56; loans to Third World and, 242; public psychology and, 51; wage and price controls and inflation and, 53–54 business sector, 201, 258–259 Callaghan, James, 168, 169–171, 172 Canada, 124, 125; anti-inflation policy in, 53; auto industry in, 127, 129; banks/banking systems in, 94 (see also Bank of Canada; banks/banking systems); economy at close of World War II in, 18; environmentalism in, 62; income distribution in, 140; income per person in, 160; income tax in, 147, 150; inflation and buying power in, 56; labor share in, 141; oil crisis of 1973 in, 2, 71, 240; productivity bust in, 258–259, 260; ungovernability in, 155, 156; welfare state in, 17, 144 capital: banks/banking systems and, 95–97; destruction of, and income distribution, 138 capitalism, 25, 101, 162, 187; late, and ungovernability, 160; late, crisis of, 267–268 car-free Sundays, 1–2, 3 Carson, Rachel, 60 Carter, Jimmy, 75, 126, 163, 172–174, 175, 234; economic policy of, 219–224, 261; Iranian hostage crisis and, 225; trade sanctions against Japan and, 128–129 central banks: foreign-exchange rates and, 67.


pages: 215 words: 64,460

Shadows of Empire: The Anglosphere in British Politics by Michael Kenny, Nick Pearce

battle of ideas, Berlin Wall, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, colonial rule, corporate governance, Dominic Cummings, Donald Trump, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, Francis Fukuyama: the end of history, full employment, global reserve currency, imperial preference, informal economy, invention of the telegraph, Khartoum Gordon, labour mobility, Les Trente Glorieuses, liberal capitalism, Mahatma Gandhi, mass immigration, Monroe Doctrine, Neal Stephenson, Nixon shock, public intellectual, quantitative easing, reserve currency, Ronald Reagan, Steve Bannon, Suez canal 1869, Suez crisis 1956, trade route, Washington Consensus

Nixon's Shock Therapy While the fate of New Zealand dairy farmers was being debated, Nixon administered his ‘shock’ to the global economy, unilaterally detaching the dollar from its fixed value against gold and breaking apart the fixed currency exchange rates that had anchored the Bretton Woods system. The USA had designed the Bretton Woods framework when it was a creditor country. By the 1960s it was a deficit nation, whose very success in reconstructing the post-war capitalist world economy had led to persistent trade deficits with Western Europe and Japan. It was simultaneously embarking on major rises in military and social spending under conditions of full employment and, in so doing, putting enormous pressure on the dollar.

As the 1970s ended, Britain and the USA began the process of constructing a new neo-liberal political economy, with the financial sector at its heart. The collapse of the Bretton Woods system also brought to a close an extended period of transition for Great Britain, the Commonwealth and her former colonies. By the early 1970s, little was left of the late Victorian doctrines that had shaped Churchill's worldview. The post-war world saw the gradual, but inexorable, diminution of economic ties with these countries, hastened in the late 1950s by currency convertibility and the rise of Western European markets. Britain had shared in the management of the Bretton Woods system, since the United States had an interest in the stability of sterling.

The Roosevelt administration subscribed to the vision, which had first emerged in the 1930s, of a new economic order which would tear down the tariff barriers and remove the protectionist practices that had inhibited capitalist development in the interwar period. These issues were thrown into relief by the deal struck with the Americans at the Bretton Woods negotiations of 1944, which sought to establish the template for a new economic settlement based upon the convertibility of the dollar and the American ambition to build new global institutions – notably the IMF and the World Bank – under their own tutelage, and indeed on their own soil. The British delegation, led by the celebrity economist John Maynard Keynes, proved unable, in the face of their American counterparts' support for a more extensive liberalisation of the international economy, to make headway with their proposals for an open, world trading system suitably modified to protect Britain's imperial interests: ‘At every step to Bretton Woods, the Americans had reminded [the British], in as brutal a manner as necessary, that there was no room in the new order for the remnants of British imperial glory.’14 The deal agreed at this summit lasted only a short period of time, giving way in 1947 to the Marshall Plan launched by the USA with the goal of reconstructing Western Europe's shattered economies.


pages: 247 words: 60,543

The Currency Cold War: Cash and Cryptography, Hash Rates and Hegemony by David G. W. Birch

"World Economic Forum" Davos, Alan Greenspan, algorithmic management, AlphaGo, bank run, Big Tech, bitcoin, blockchain, Bretton Woods, BRICs, British Empire, business cycle, capital controls, cashless society, central bank independence, COVID-19, cross-border payments, cryptocurrency, Diane Coyle, disintermediation, distributed ledger, Donald Trump, driverless car, Elon Musk, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, global reserve currency, global supply chain, global village, Hyman Minsky, information security, initial coin offering, Internet of things, Jaron Lanier, Kenneth Rogoff, knowledge economy, M-Pesa, Mark Zuckerberg, market clearing, market design, Marshall McLuhan, mobile money, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, new economy, Northern Rock, one-China policy, Overton Window, PalmPilot, pattern recognition, Pingit, QR code, quantum cryptography, race to the bottom, railway mania, ransomware, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social distancing, sovereign wealth fund, special drawing rights, subscription business, the payments system, too big to fail, transaction costs, Vitalik Buterin, Washington Consensus

The demise of that global financial system was brought about by the pressures of global conflict and depression, which ultimately led Britain to abandon it permanently in 1931 after a temporary suspension that began in the middle of World War I and lasted until 1925. After World War II, we had the Bretton Woods system, named after the resort where a gathering of 730 delegates29 from the 44 Allied nations worked out the IMFS for a new peaceful world (Conway 2014). Bretton Woods lasted until 1973, when the European countries that were still tied to the US dollar announced they would sever the link. The system was over, replaced by what economists have since labelled the Bretton Woods II era. This era has been one in which the US dollar dominated international trade, was kept overvalued by emerging-market purchases and boosted the competitiveness of emerging-market exporters.

We understand that if money can allow trade between different groups of people (and different generations of people), then it allows common rules to be put into place to increase net welfare (Chadha 2018). This does not mean, however, that state provision of money, Bretton Woods and the dominance of the US dollar are the only, or the best, ways to deliver that benefit across societies. Nevertheless, there are many reasons why a managed transition to future monetary arrangements, rather than panics, crashes and busts, is desirable. And we are where we are, as they say. While it is hardly for me to suggest a defence strategy for the dollar, in light of comments on the post-Bretton Woods world made by people better qualified than I am, I have a few suggestions about how developed nations as a whole might proceed.

Proposal for an IMF Staff Executive Board Paper on promoting market SDRs. The Bretton Woods Committee, 19 February. URL: https://bit.ly/3boeR0r. Cœuré, B., and J. Loh. 2018. Bitcoin not the answer to a cashless society. Financial Times, 13 March. Cohen, B. 2015. Currency Power: Understanding Monetary Policy. Princeton University Press. Cohen, B., and T. Benney. 2014. What does the international currency system really look like? Review of International Political Economy 21(5), 1017–1041. Conway, E. 2014. The Bretton Woods system. In The Summit: The Battle of the Second World War, pp. 365–385.


pages: 438 words: 109,306

Tower of Basel: The Shadowy History of the Secret Bank That Runs the World by Adam Lebor

Alan Greenspan, banking crisis, Basel III, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, central bank independence, corporate governance, corporate social responsibility, deindustrialization, eurozone crisis, fiat currency, financial independence, financial innovation, foreign exchange controls, forensic accounting, Glass-Steagall Act, Goldman Sachs: Vampire Squid, haute cuisine, IBM and the Holocaust, Kickstarter, low interest rates, Occupy movement, offshore financial centre, Ponzi scheme, power law, price stability, quantitative easing, reserve currency, special drawing rights

In July 1944 more than seven hundred delegates from the forty-four Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, for the United Nations Monetary and Financial Conference. Henry Morgenthau and Harry Dexter White led the American delegation. The conference agreed on the creation of the International Monetary Fund (IMF) and an International Bank for Reconstruction and Development (BRD), which became part of the World Bank. The IMF would monitor exchange rates and lend reserve currencies to indebted countries. The new bank would provide loans to underdeveloped countries. Bretton Woods also gave its name to a new international currency exchange system, where currencies were linked to the US dollar.

See Bank for International Settlements The BIS at Work (Eleanor Dulles), 32 BIS committees Basel Committee on Banking Supervision, xx, xxi–xxii, 207–208, 240–242, 256, 257 Committee on Gold and Foreign Exchange, 189 Economic Consultative Committee, xii–xiii, 259 German Credits Arbitration Committee, 74, 76 Global Financial System, xxii, 239, 250 Markets Committee, xvi, 189 Black, Edwin, 105 Black, Eugene, 142, 144, 192 Blair & Company, 169 Blessing, Karl arrest and imprisonment of, 185 as board member of Kontinental-Öl, 184–185 Coombs’ opinion of, 181 on own career, 194 powerful allies of, 185, 186, 187 role of in Nazi Germany, 182–183 view of BIS as political institution, 27–28 Blondheim, David, 32 Bod, Peter Akos, xiii, xxi, 248 Bogni, Rudi, 265 Boisanger, Yves Bréart de, 85 Bonaparte, Napoleon, 29 Booktab, 102 Bosch company, 118 Boughton, James M., 141 Bracken, Brendan, 62 Brazil, xi Bretton Woods Accord, xvi Bretton Woods Conference (1944), 121–125 Brinckmann, Rudolf, 149–151, 176, 192, 197–198 Brinckmann, Wirtz and Company bank, 149–150, 176, 197 Britain BIS, attitude toward, 89, 123–124, 139 in European Payments Union, 167 as founding member of BIS, xvii, 20 gold reserves of, 55 gold standard and, 42 n London Gold Pool, 188 Spanish civil war, view of, 56 World War I reparations, 5, 28, 39 British Security Coordination, 101–102 British Treasury, 110 Brown Brothers Harriman bank, 145–146 Bruning, Heinrich, 28 Bütefisch, Heinrich, 184 Bulgaria, 87, 184 Buna, 100 Bundesbank, xx, 191, 219, 244, 263, 264 Burckhardt, Martin, 199 Burgess, W.

Their decisions shape our lives. The BIS’s tradition of secrecy reaches back through the decades. During the 1960s, for example, the bank hosted the London Gold Pool. Eight countries pledged to manipulate the gold market to keep the price at around thirty-five dollars per ounce, in line with the provisions of the Bretton Woods Accord that governed the post–World War II international financial system. Although the London Gold Pool no longer exists, its successor is the BIS Markets Committee, which meets every other month on the occasion of the governors’ meetings to discuss trends in the financial markets. Officials from twenty-one central banks attend.


pages: 453 words: 122,586

Samuelson Friedman: The Battle Over the Free Market by Nicholas Wapshott

2021 United States Capitol attack, Alan Greenspan, bank run, basic income, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, business cycle, California gold rush, collective bargaining, coronavirus, corporate governance, COVID-19, creative destruction, David Ricardo: comparative advantage, Donald Trump, double helix, en.wikipedia.org, fiat currency, financial engineering, fixed income, floating exchange rates, full employment, God and Mammon, greed is good, Gunnar Myrdal, income inequality, indoor plumbing, invisible hand, John von Neumann, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, light touch regulation, liquidity trap, lockdown, low interest rates, Machinery of Freedom by David Friedman, market bubble, market clearing, mass immigration, military-industrial complex, Money creation, money market fund, Mont Pelerin Society, moral hazard, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, paradox of thrift, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, price stability, public intellectual, pushing on a string, quantitative easing, rent control, road to serfdom, Robert Bork, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, seminal paper, Simon Kuznets, social distancing, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, too big to fail, trickle-down economics, universal basic income, upwardly mobile, urban renewal, War on Poverty, We are all Keynesians now, Works Progress Administration, zero-sum game

The pressing problem for Nixon was that the Vietnam War, a widening trade deficit, growing labor problems, and a 10 percent increase in the money supply had left the dollar profoundly weakened, undermining the basis of Bretton Woods, which depended upon a strong dollar. Bretton Woods obliged the United States to sell gold to other nations at $35 an ounce, and, as the dollar continued to weaken, an alarming drain on U.S. gold reserves began that suggested that the vast stock of ingots stored in Fort Knox28 would soon run out29 as nations dumped their stocks of diminishing dollars and sheltered their assets in gold bought from the U.S. at a bargain price. In May 1971, West Germany withdrew from Bretton Woods rather than devalue the mark. In July, Switzerland traded $50 million in dollars for gold.

And in early August, France sent a warship to New York Harbor to take delivery of its purchase of $191 million in gold held in the vault of the New York Federal Reserve Bank. Nixon finally agreed with Friedman that Keynes’s Bretton Woods agreement should be brought to a swift end. Friedman and other market economists had always favored a free-floating dollar, one that would allow the market rather than the administration to settle on the price of the nation’s currency. Nixon’s August 1971 declaration effectively killed off Bretton Woods by allowing the U.S. monetary authorities to end their promise to exchange dollars for gold. In March 1973, Nixon formally ended Bretton Woods, leaving the dollar to float freely on the open market. As a means of addressing the balance-of-payments deficit, caused by Americans buying more from abroad than they sold in exports, Nixon also announced in August 1971 the immediate imposition of a 10 percent tariff on all imports.

He put to one side his monetarist theory and urged on Nixon another of his favorite ideas that directly challenged John Maynard Keynes’s legacy: the dismantling of the Bretton Woods currency-fixing agreement that abandoned the gold standard in favor of fiat currencies, set up under Keynes’s auspices in 1944 to moderate the wild swings in world currency prices that in the Thirties had caused economic turbulence. By agreeing to limit the range of prices within which currencies traded, Bretton Woods ensured that national economies stayed in step with each other and that no nation was tempted to devalue its currency to win a short-term advantage in pricing its goods more cheaply on the world market.


pages: 491 words: 131,769

Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945 (New York: Oxford University Press, 1999). 24 Many nations in Europe: Charles P. Kindleberger, The World in Depression, 1929-1939 (Berkeley: University of California Press, 1986); Reinhart and Rogoff, This Time Is Different, 71-73, 111. 24 Bretton Woods: Michael D. Bordo and Barry J. Eichengreen, eds., A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform (Chicago: University of Chicago Press, 1993), 3-108. 25 All good things: Peter M. Garber, “The Collapse of the Bretton Woods Fixed Exchange Rate System,” ibid., 461-494. 25 Every silver lining: Timothy Curry, “The LDC Debt Crisis,” in FDIC Division of Research and Statistics, History of the Eighties: Lessons for the Future (Washington: FDIC, 1997), 1:191-210. 26 the Great Moderation: James H.

For all its horrific consequences, World War II made possible a wholesale transformation of the world’s financial system. In 1944, as the end of the war drew near, economists and policy makers from the Allied nations met in Bretton Woods, New Hampshire, to hammer out a new world economic order. Their deliberations gave rise to the International Monetary Fund, as well as the forerunner of the World Bank, and a new system of currency exchange rates known as the Bretton Woods system or dollar exchange standard. In this system, every nation’s currency would be exchanged into dollars at a fixed rate. Foreign countries that held dollars then had the option of redeeming them for U.S. gold at the price of thirty-five dollars an ounce.

All good things come to an end, and the postwar era was no exception: the Bretton Woods system fell apart in 1971, when the United States finally went off the last vestiges of the gold standard. The reason? The twin U.S. fiscal and current account deficits (which we will discuss in chapter 10) triggered by the Vietnam War caused an accumulation of dollar reserves by the creditors of the United States—primarily Western Europe and Japan—that became unsustainable. In effect, the creditors of the United States realized that there wasn’t enough gold to back up the dollars in circulation. When that happened, Bretton Woods collapsed, the dollar depreciated, and the world moved to a system of flexible exchange rates.


pages: 586 words: 160,321

The Euro and the Battle of Ideas by Markus K. Brunnermeier, Harold James, Jean-Pierre Landau

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, battle of ideas, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, Brexit referendum, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, cross-border payments, currency peg, currency risk, debt deflation, Deng Xiaoping, different worldview, diversification, Donald Trump, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, financial deregulation, financial repression, fixed income, Flash crash, floating exchange rates, full employment, Future Shock, German hyperinflation, global reserve currency, income inequality, inflation targeting, information asymmetry, Irish property bubble, Jean Tirole, Kenneth Rogoff, Les Trente Glorieuses, low interest rates, Martin Wolf, mittelstand, Money creation, money market fund, Mont Pelerin Society, moral hazard, negative equity, Neil Kinnock, new economy, Northern Rock, obamacare, offshore financial centre, open economy, paradox of thrift, pension reform, Phillips curve, Post-Keynesian economics, price stability, principal–agent problem, quantitative easing, race to the bottom, random walk, regulatory arbitrage, rent-seeking, reserve currency, risk free rate, road to serfdom, secular stagnation, short selling, Silicon Valley, South China Sea, special drawing rights, tail risk, the payments system, too big to fail, Tyler Cowen, union organizing, unorthodox policies, Washington Consensus, WikiLeaks, yield curve

But France did not like the extent to which it relied on the US dollar, and General de Gaulle famously tried to revive gold as an alternative. Greatly influenced by the economist Jacques Rueff, de Gaulle had repeatedly insisted that a genuine gold standard would work better than the mixed gold-dollar system of the Bretton Woods regime. The Bretton Woods regime allowed for occasional realignments, but still—as in any fixed exchange rate system—the adjustment problem always loomed large. Tensions particularly rose in the later stages of the Bretton Woods system, especially in the later 1960s, as Germany increasingly built up trade surpluses that reflected a favorable development of productivity gains as well as the containment of wage costs through a collaborative and collective approach to wage setting.

In a world where trade deficits can be financed via credit extended from surplus to deficit countries, however, this mechanism does not work anymore as there is no compulsion to adjust. Explicit policy interventions are thus needed to move the price levels in the desired directions. This important caveat illustrates well the importance of capital flow considerations in the analysis of international monetary arrangements. Bretton Woods After World War II, the gold standard was succeeded by the Bretton Woods system, a system of fixed exchange rates (with occasional realignments) and constraints on capital flows that was explicitly designed to give more monetary policy autonomy. At the heart of this system was the US dollar as its leading currency. All currencies were fixed against the dollar, and the dollar itself traded at a fixed rate against gold.

Meanwhile, Germans often complained that the structure and training of their civil service made it difficult to get high-level representation in international institutions, including the IMF. Since the IMF was created at the International Monetary Conference of the United Nations in 1944, held in Bretton Woods, New Hampshire, there have been eleven managing directors (heads of the IMF), all of them European. The fact that all managing directors (MD) were European was a matter of chance: the principal American architect of the Bretton Woods agreement, Harry Dexter White, was the obvious candidate to be the first MD, but he was accused of being a Soviet spy, with the result that an American became head of the World Bank and a non-American—in practice always a European—headed the IMF.


pages: 554 words: 158,687

Profiting Without Producing: How Finance Exploits Us All by Costas Lapavitsas

Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, computer age, conceptual framework, corporate governance, credit crunch, Credit Default Swap, David Graeber, David Ricardo: comparative advantage, disintermediation, diversified portfolio, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, false flag, financial deregulation, financial independence, financial innovation, financial intermediation, financial repression, Flash crash, full employment, general purpose technology, Glass-Steagall Act, global value chain, global village, High speed trading, Hyman Minsky, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, job satisfaction, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, London Interbank Offered Rate, low interest rates, low skilled workers, M-Pesa, market bubble, means of production, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Network effects, new economy, oil shock, open economy, pensions crisis, post-Fordism, Post-Keynesian economics, price stability, Productivity paradox, profit maximization, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Robert Solow, savings glut, Scramble for Africa, secular stagnation, shareholder value, Simon Kuznets, special drawing rights, Thales of Miletus, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, total factor productivity, trade liberalization, transaction costs, union organizing, value at risk, Washington Consensus, zero-sum game

An asymmetry has emerged between the sphere of production and the ballooning sphere of circulation. The rise of finance has been predicated on a radical alteration of the monetary framework of capitalist accumulation, both internationally and domestically. International monetary conditions have been stamped by the collapse of the Bretton Woods Agreement in 1971–73. Bretton Woods had enforced the convertibility of the US dollar into gold at $35 to the ounce, thus fixing exchange rates during the long boom. Its collapse led to the gradual emergence of alternative international monetary arrangements based on the US dollar functioning as inconvertible quasi-world-money.

The second reason for the decline of financial repression was the collapse of the Bretton Woods Agreement in 1971–73. Its demise was due in part to the accumulation of US dollars abroad which propelled the growth of ‘Euromarkets’. International dollar hoards increased as the US economy registered persistent trade deficits, leading to growing inability of US authorities to honour the pledge of converting the dollar into gold at a fixed price. The accumulation of dollars became even greater after the first oil shock of 1973, thus catapulting the Euromarkets toward further growth.9 The failure of Bretton Woods was a reflection of the changing balance in the world market as the relative weight of the US economy declined.

The accumulation of dollars became even greater after the first oil shock of 1973, thus catapulting the Euromarkets toward further growth.9 The failure of Bretton Woods was a reflection of the changing balance in the world market as the relative weight of the US economy declined. For our purposes, however, what matters is that the collapse of Bretton Woods eventually led to lifting controls on the capital account. Once the pledge of convertibility had been dishonoured by the US, a series of developments followed, including the disappearance of the gold anchor, the impossibility of maintaining fixed exchange rates, the introduction of flexible exchange rates, and the eventual lifting of controls on international capital flows. The period that followed the demise of Bretton Woods has been characterized by great volatility of exchange rates; moreover, inflation rose sharply in the 1970s contributing to volatility of interest rates.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, classic study, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, eat what you kill, Edward Glaeser, electricity market, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, geopolitical risk, George Akerlof, global rebalancing, Goodhart's law, Great Leap Forward, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, long and variable lags, Long Term Capital Management, low interest rates, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, military-industrial complex, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, Paul Volcker talking about ATMs, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, systems thinking, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Such an effort to reconcile market prices with social values could surprise politicians with its economic effects: On any reasonable measure of economic performance, putting high prices on public goods and environmental resources would lead to higher, not lower, economic growth. Currencies and Financial Relations: Will There Be a New Bretton Woods? A comprehensive reform of the global currency system has been widely demanded in the aftermath of the crisis. The French, Chinese, and many other governments have called for a new Bretton Woods and for a new international reserve currency to replace the dollar. These calls have sometimes been endorsed by such prominent U.S. and British policymakers as Paul Volcker and Gordon Brown. Yet a diminution in the international role of the dollar, or a return to the fixed currencies of the postwar period, are extremely unlikely in the decades ahead.

Exchange rate flexibility gave governments around the world the freedom to cut interest rates and to support their economies with fiscal stimulus that could never have been imagined in the days of Bretton Woods. Conversely, the financial turmoil that engulfed the eurozone after the worst of the banking crisis was over in other countries reminded the world of the dangers of long-term commitments to fixed exchange rates and of the immense costs of defending currencies in a system disturbingly reminiscent of the gold standard of the 1930s. Any reversion to fixed exchange rates, still less to a gold-based system such as Bretton Woods, therefore seems out of the question. Since 1971, the world has lived without any monetary standard for the first time in history, and this is not about to change.

The Myth of National Bankruptcy The Myth of Burdening Our Grandchildren The Real Case for Tackling Deficits Japanese-Style Paralysis and Zombie Banks The Great Rebalancing of Global Growth Stagflation CHAPTER SEVENTEEN - Politics in Capitalism 4.0 Conservatives Will Keep Winning Until Progressives Find a Narrative More Government Means Smaller Government Democracy Means Less Power for Public Opinion Bigger Deficits Are Necessary but Impossible Priorities: Less Spending and More Taxes International Experience: Learning from Others’ Mistakes Commanding Heights: As Socialism Has Retreated, It Has Won Health Reform: More Government and More Market Health Care Reform Will Become a Conservative Issue Progressives Will Fight for Less Progressive Taxes CHAPTER EIGHTEEN - Finance and Banking in Capitalism 4.0 Finance Is Indispensable Uncertainty and Guarantees Regulation Capital Structures Accounting Credit Ratings and Macroeconomic Assumptions Mortgage Market Reform Fiduciary Duty and Government as a Silent Partner Bankers’ Earnings and Bank Profits Talent and Plunder CHAPTER NINETEEN - The World of Capitalism 4.0 Global Competition between the United States and China Convergence between the United States and Europe The Rivalry of Western and Asian Values Business Interests Will Embrace the New Model Trade and Industrial Structures Limits to Growth and Physical Resources The Environment Can Become a Positive Economic Story Prosperity without Growth Currencies and Financial Relations: Will There Be a New Bretton Woods? Will Global Governance Be Strengthened to Resolve Global Problems? Notes Bibliography Acknowledgements Index Copyright Page In memory of my late parents, Jacob and Esther Kaletsky, who experienced true calamities and crises—the Russian Revolution, the two world wars, the Holocaust, the purges of Stalin—but whose joyful and indomitable spirits lived on.


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Postcapitalism: A Guide to Our Future by Paul Mason

air traffic controllers' union, Alan Greenspan, Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Bletchley Park, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, business process, butterfly effect, call centre, capital controls, carbon tax, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, commons-based peer production, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, disinformation, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, false flag, financial engineering, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, fulfillment center, full employment, future of work, game design, Glass-Steagall Act, green new deal, guns versus butter model, Herbert Marcuse, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, late capitalism, low interest rates, low skilled workers, market clearing, means of production, Metcalfe's law, microservices, middle-income trap, Money creation, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, power law, precariat, precautionary principle, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, scientific management, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, technological determinism, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, Twitter Arab Spring, union organizing, universal basic income, urban decay, urban planning, vertical integration, Vilfredo Pareto, wages for housework, WikiLeaks, women in the workforce, Yochai Benkler

THE POWER OF EXPLICIT RULES On 1 July 1944, a special train delivered a cargo of economists, statesmen and bankers to White River Junction, Vermont, from where they were ferried to a hotel in New Hampshire. ‘All trains, regular or scheduled, had to look out for us,’ the train’s fireman remembered, ‘we had the right over everything.’14 Their destination was Bretton Woods. There they would design a global monetary system that, like the train, had ‘the right over everything’. The Bretton Woods Conference agreed a system of fixed exchange rates designed to restore pre-1914 stability, only this time with explicit rules. All currencies would be pegged against the dollar, and the USA would peg the dollar to gold at $35 an ounce.

Because the banking regulations acted as an effective tax on financial assets, economists calculate they raised the equivalent of a fifth of all government income during the boom, even more in the UK.18 The result was to shrink advanced country debts to a historic low of 25 per cent of GDP by 1973. In short, Bretton Woods achieved something unprecedented: it shrank the debts run up during a global war, suppressed speculation, mobilized savings into productive investment and enabled spectacular growth. It pushed all the latent instability of the system into the sphere of relationships between currencies, but US dominance ensured these were, at first, contained. Right-wing outrage over the inflationary aspect of Bretton Woods was overcome by the greatest period of stability and full production ever known. Keynes had emphasized, at the design stage the importance of explicit rules – going beyond the gentlemen’s agreement that lay behind the Gold Standard.

The post-war arrangements had effectively locked away instability into two zones of control: relations between currencies and relations between classes. Under the Bretton Woods rules, you were not supposed to devalue your currency to make your exports cheap and boost employment. Instead, if your economy was uncompetitive, you could either protect yourself from international competition through trade barriers, or impose ‘internal devaluation’ – cutting wages, controlling prices, reducing the amount spent on welfare payments. In practice, protectionism was discouraged by the Bretton Woods rules and wage cutting was never seriously attempted until the mid-1970s – which left devaluation.


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Crashed: How a Decade of Financial Crises Changed the World by Adam Tooze

"there is no alternative" (TINA), "World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Apple's 1984 Super Bowl advert, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bond market vigilante , book value, Boris Johnson, bread and circuses, break the buck, Bretton Woods, Brexit referendum, BRICs, British Empire, business cycle, business logic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, company town, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, dark matter, deindustrialization, desegregation, Detroit bankruptcy, Dissolution of the Soviet Union, diversification, Doha Development Round, Donald Trump, Edward Glaeser, Edward Snowden, en.wikipedia.org, energy security, eurozone crisis, Fall of the Berlin Wall, family office, financial engineering, financial intermediation, fixed income, Flash crash, forward guidance, friendly fire, full employment, global reserve currency, global supply chain, global value chain, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, high-speed rail, housing crisis, Hyman Minsky, illegal immigration, immigration reform, income inequality, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, Kenneth Rogoff, large denomination, light touch regulation, Long Term Capital Management, low interest rates, margin call, Martin Wolf, McMansion, Mexican peso crisis / tequila crisis, military-industrial complex, mittelstand, money market fund, moral hazard, mortgage debt, mutually assured destruction, negative equity, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, old-boy network, open economy, opioid epidemic / opioid crisis, paradox of thrift, Peter Thiel, Ponzi scheme, Post-Keynesian economics, post-truth, predatory finance, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, Steve Bannon, structural adjustment programs, tail risk, The Great Moderation, Tim Cook: Apple, too big to fail, trade liberalization, upwardly mobile, Washington Consensus, We are the 99%, white flight, WikiLeaks, women in the workforce, Works Progress Administration, yield curve, éminence grise

For the original, see “Zhou Xiaochuan: Reform the International Monetary System,” March 23, 2009, http://www.pbc.gov.cn/english/130724/2842945/index.html. 34. J. Zhongxia, “The Chinese Delegation at the 1944 Bretton Woods Conference: Reflections for 2015,” https://www.omfif.org/media/1067515/chinese-reflections-on-bretton-woods-by-jin-zhongxia.pdf. 35. M. P. Dooley, D. Folkerts-Landau and P. Garber, “The Revived Bretton Woods System,” International Journal of Finance and Economics 9, no. 4 (October 2004), 307–313. 36. On the China rebalancing effort, see B. Setser, “The Balance of Financial Terror, Circa August 9, 2007,” https://www.cfr.org/blog/balance-financial-terror-circa-august-9-2007. 37.

But money and credit and the structure of finance piled on them are constituted by political power, social convention and law in a way that sneakers, smartphones and barrels of oil are not. At the apex of the modern monetary pyramid is fiat money.28 Called into existence and sanctioned by states, it has no “backing” other than its status as legal tender. That uncanny fact became literally true for the first time in 1971–1973 with the collapse of the Bretton Woods system. Under the Bretton Woods agreement of 1944, the dollar, as the anchor of the global monetary system, was tied to gold. This was itself, of course, no more than a convention. When it became too hard for the United States to live with—upholding it would have required deflation—on August 15, 1971, President Nixon abandoned it.

It was by way of London that the dollar was made global.19 Driven by the search for profit, powered by bank leverage, offshore dollars were from the start a disruptive force. They had scant regard for the official value of the dollar under Bretton Woods and it was the pressure this exercised that helped to make the gold peg increasingly untenable. When the final collapse of Bretton Woods coincided in 1973 with the surge in OPEC dollar revenue, the rush of offshore money through London’s eurodollar accounts became a flood. By the early 1980s both Britain and the United States had abolished all restrictions on capital movements and this was followed in October 1986 by Thatcher’s “Big Bang” deregulation.


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SUPERHUBS: How the Financial Elite and Their Networks Rule Our World by Sandra Navidi

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, assortative mating, bank run, barriers to entry, Bear Stearns, Bernie Sanders, Black Swan, Blythe Masters, Bretton Woods, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, commoditize, conceptual framework, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, digital divide, diversification, Dunbar number, East Village, eat what you kill, Elon Musk, eurozone crisis, fake it until you make it, family office, financial engineering, financial repression, Gini coefficient, glass ceiling, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google bus, Gordon Gekko, haute cuisine, high net worth, hindsight bias, income inequality, index fund, intangible asset, Jaron Lanier, Jim Simons, John Meriwether, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Roose, knowledge economy, London Whale, Long Term Capital Management, longitudinal study, Mark Zuckerberg, mass immigration, McMansion, mittelstand, Money creation, money market fund, Myron Scholes, NetJets, Network effects, no-fly zone, offshore financial centre, old-boy network, Parag Khanna, Paul Samuelson, peer-to-peer, performance metric, Peter Thiel, plutocrats, Ponzi scheme, power law, public intellectual, quantitative easing, Renaissance Technologies, rent-seeking, reserve currency, risk tolerance, Robert Gordon, Robert Shiller, rolodex, Satyajit Das, search costs, shareholder value, Sheryl Sandberg, Silicon Valley, social intelligence, sovereign wealth fund, Stephen Hawking, Steve Jobs, subprime mortgage crisis, systems thinking, tech billionaire, The Future of Employment, The Predators' Ball, The Rise and Fall of American Growth, too big to fail, Tyler Cowen, women in the workforce, young professional

Another influential think tank is the Council on Foreign Relations, whose board of directors includes former U.S. treasury secretary Robert Rubin, Larry Fink of BlackRock, and Steve Schwarzman of Blackstone. The ones I am personally most familiar with are the Group of Thirty, the Bretton Woods Committee, and the Institute of New Economic Thinking (INET). The Group of Thirty18 focuses on economic issues, and its board includes the heads of the ECB, the Bank of England, BlackRock, and UBS. The Bretton Woods Committee19 examines international economic cooperation and counts Larry Summers, George Soros, Klaus Schwab, and many central bank governors on its board. Both the Group of Thirty and the Bretton Woods Committee congregate during the meetings of the IMF, therefore taking advantage of all the power players being in one place.

“Networking Can Make Some Feel Dirty Says New Study,” Rotman School of Management, press release, September 10, 2014, http://www.eurekalert.org/pub_releases/2014-09/uotr-ncm091014.php. 17. Adam M. Grant, Give and Take: Why Helping Others Drives Our Success (New York: Penguin Group, 2013), Kindle edition. 18. “Current Members,” Group of Thirty, http://group30.org/members. 19. “About the Bretton Woods Committee,” The Bretton Woods Committee, http://www.brettonwoods.org/page/about-the-bretton-woods-committee. CHAPTER 7 1. Adam Smith, The Money Game: Lunch at Scarsdale Fats’ (New York: Open Road Media, 2015), Kindle location 2874, Kindle edition. 2. Susan Pulliam, Kate Kelley, and Carrick Mollenkamp “Hedge Funds Try ‘Career Trade’ Against Euro,” Wall Street Journal, February 26, 2010, http://www.wsj.com/articles/SB1000142405274870379500457508774184807439. 3.

It was founded by George Soros, and the organization quickly found support from other financiers. Its gatherings are prime examples of executive networking, as they attract a truly mind-blowing assortment of Nobel Prize laureates and otherwise überaccomplished academics, central bankers, and top financial executives. INET: Connecting the Connected at Bretton Woods The first INET conference I attended took place in Bretton Woods, in New Hampshire’s White Mountains. Together with George Soros and his team, I took a private plane from Teterboro Airport in New Jersey and arrived an hour later at Mount Washington Regional Airport. It was early April, and the majestic Appalachian Mountains were still covered in snow.


Rogue States by Noam Chomsky

"there is no alternative" (TINA), Alan Greenspan, anti-communist, Asian financial crisis, Berlin Wall, Branko Milanovic, Bretton Woods, business cycle, capital controls, classic study, collective bargaining, colonial rule, creative destruction, cuban missile crisis, declining real wages, deskilling, digital capitalism, Edward Snowden, experimental subject, Fall of the Berlin Wall, floating exchange rates, land reform, liberation theology, Mahbub ul Haq, Mikhail Gorbachev, Monroe Doctrine, new economy, Nixon triggered the end of the Bretton Woods system, no-fly zone, oil shock, precautionary principle, public intellectual, RAND corporation, Silicon Valley, strikebreaker, structural adjustment programs, Tobin tax, union organizing, Washington Consensus

A second was the political order articulated in the UN Charter; the third the economic order formulated at Bretton Woods. Let us take a brief look at these components of the projected international system, focusing on the human rights dimension. The Bretton Woods system functioned into the early 1970s, a period sometimes called the “Golden Age” of post-war industrial capitalism, marked by high growth of the economy and progress in realizing the socioeconomic rights of the UD. These rights were a prominent concern of the framers of Bretton Woods, and their extension during the Golden Age was a contribution to translating the UD from “pious phrases” and a “letter to Santa Claus” to at least a partial reality.

But that luxury was no longer available in the more democratic Bretton Woods era, so that “limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures.” It is therefore natural that the dismantling of the post-war economic order should be accompanied by a sharp attack on substantive democracy and the principles of the UD, primarily by the US and Britain. There is a great deal to say about these topics, but with regard to the human rights aspect, the facts seem reasonably clear and in conformity with the expectations of the founders of the Bretton Woods system. The Political Order and Human Rights The third pillar of post-World War II world order, standing alongside the Bretton Woods international economic system and the UD, is the UN Charter.

These issues, although they’re very real and are affecting a huge number of people in the world, are actually secondary to other modalities to reduce sovereignty in favor of private power. Most important, I think, was the dismantling of the Bretton Woods system in the early 1970s by the United States, Britain, and others. That system was designed by the US and Britain in the 1940s. It was a time of overwhelming popular support for social welfare programs and radical democratic measures. In part for those reasons the Bretton Woods system of the mid-’40s regulated exchange rates and allowed controls on capital flow. The idea was to cut down wasteful and harmful speculation, and to restrict capital flight.


Globalists: The End of Empire and the Birth of Neoliberalism by Quinn Slobodian

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, classic study, collective bargaining, David Ricardo: comparative advantage, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Doha Development Round, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, full employment, Garrett Hardin, Greenspan put, Gunnar Myrdal, Hernando de Soto, invisible hand, liberal capitalism, liberal world order, Mahbub ul Haq, market fundamentalism, Martin Wolf, Mercator projection, Mont Pelerin Society, Norbert Wiener, offshore financial centre, oil shock, open economy, pattern recognition, Paul Samuelson, Pearl River Delta, Philip Mirowski, power law, price mechanism, public intellectual, quantitative easing, random walk, rent control, rent-seeking, road to serfdom, Ronald Reagan, special economic zone, statistical model, Suez crisis 1956, systems thinking, tacit knowledge, The Chicago School, the market place, The Wealth of Nations by Adam Smith, theory of mind, Thomas L Friedman, trade liberalization, urban renewal, Washington Consensus, Wolfgang Streeck, zero-sum game

And if the IMF was designed, in part, to expose individual nations to the discipline of the world market, its innovation was in permitting nations to insulate themselves against the vagaries of international speculation and so-­called hot money flows. Policy autonomy—­the ability to tailor economic policy ­toward the goal of the welfare state—­was the hallmark of what was called the Bretton Woods system. The Bretton Woods system realized parts of the neoliberal dream while also deviating radically in other ways. Of more concern was the transformation of the predominant world authority from the League of Nations to the United Nations. Based on the princi­ple of one-­country-­ one-­vote, the UN would usher in the very politicization of economic activity that neoliberal visions of federation sought to prevent.

., 35 Belgium, 170; Benelux countries, 181; and Eu­ro­pean integration, 184 Bellagio Group, 129, 317n35 Beltrán, Pedro, 165 Berlin, 74, 82; Berlin Conference of 1884–1885, 94, 195; Berlin Wall, 263–264 Bertalanffy, Ludwig von, 227 Bevan, Aneurin, 139 Beveridge, William, 63, 96 Bhagwati, Jagdish, 219 Bilderberg meetings, 129 Biology, 227; neurobiology, 229; physiology, 238–239, 254; sociobiology, 237 Blacks, as a group, 152, 168–169, 171 Böhm, Franz, 7, 114–115, 189, 205, 248, 355n199; critique of democracy, 251; on cybernetics, 233; on decisionism, 257; on economic constitution, 115, 204, 210–213, 253; on “idea of Ordo,” 268; on role of law, 226; as teacher, 208 Böhm-­Bawerk, Eugen, 75 Bonn, Moritz, 95–99, 113, 118, 310n19 Booth, Willis H., 36 Boulding, Kenneth, 227 Boycotts, 179. See also Embargoes; Sanctions Brandt, Karl, 154, 166–167 Brandt, Willy, 258 Brazil, 84, 193, 199, 201, 283, 339n111 Brentano, Lujo, 74 Bretton Woods: Conference, 134, 199; post–­Bretton Woods system, 242; system, 22, 23, 119, 125, 129, 147, 177, 241, 252 Bristol, Lee H., 129–130 Bristol-­Meyers, 129 Britain, 14, 27, 43, 109, 128, 194; and Eu­ro­pean integration, 184, 188, 201 Brussels, 36–37, 191, 195, 197, 352n138 Buchanan, James M., 8, 333n212, 354n188; on constitutional constraints, 237, 294n36; on federalism, 267, 295n43; on Hayek, 235 Buchanan, Pat, 178 Buckley, William F., 263; and Röpke, 162, 165–166, 324n44; on South Africa, 150, 154, 168, 174, 325n49 Bulgaria, 69, 109 Bullock, Charles J., 64, 75 Burma, 201, 339n111 Burnham, James, 179 Bush, George H.

In the 1930s and 1940s, neoliberals devised their own schemes for large-­scale order, drawing up plans for international federation in blueprints of double government that would encase the ineffable market. In place of empire, Robbins, Hayek, and Mises proposed “a world of federations” (Chapter 3). The Bretton Woods system devised in 1944 offered scarce hope to neoliberals that it would function as a guardian of the world economy. The United Nations’ solution to the end of empire—­granting votes to the proliferating nations of the non-­European world—­t hreatened the balance between dominium and imperium.


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The Ascent of Money: A Financial History of the World by Niall Ferguson

Admiral Zheng, Alan Greenspan, An Inconvenient Truth, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Bear Stearns, Black Monday: stock market crash in 1987, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, classic study, collateralized debt obligation, colonial exploitation, commoditize, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, equity risk premium, financial engineering, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, Future Shock, German hyperinflation, Greenspan put, Herman Kahn, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, iterative process, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Meriwether, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour mobility, Landlord’s Game, liberal capitalism, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, Nelson Mandela, Nick Bostrom, Nick Leeson, Northern Rock, Parag Khanna, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, risk free rate, Robert Shiller, rolling blackouts, Ronald Reagan, Savings and loan crisis, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, stocks for the long run, structural adjustment programs, subprime mortgage crisis, tail risk, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Bayes, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, transaction costs, two and twenty, undersea cable, value at risk, W. E. B. Du Bois, Washington Consensus, Yom Kippur War

., p. 46. 56 Greg Behrman, The Most Noble Adventure: The Marshall Plan and the Time when America Helped Save Europe (New York, 2007). 57 Obstfeld and Taylor, ‘Globalization and Capital Markets’, p. 129. 58 See William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics (Cambridge, MA., 2002). 59 Michael Bordo, ‘The Bretton Woods International Monetary System: A Historical Overview’, in idem and Barry Eichengreen (eds.), A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform (Chicago / London, 1993), pp. 3-98. 60 Christopher S. Chivvis, ‘Charles de Gaulle, Jacques Rueff and French International Monetary Policy under Bretton Woods’, Journal of Contemporary History, 41, 4 (2006), pp. 701-20. 61 Interview with Amy Goodman: http://www.democracynow.org/ article.pl?

Thus, for the next quarter century, did governments resolve the so-called ‘trilemma’, according to which a country can choose any two out of three policy options:1. full freedom of cross-border capital movements; 2. a fixed exchange rate; 3. an independent monetary policy oriented towards domestic objectives.57 Under Bretton Woods, the countries of the Western world opted for 2 and 3. Indeed, the trend was for capital controls to be tightened rather than loosened as time went on. A good example is the Interest Equalization Act passed by the United States in 1963, which was expressly designed to discourage Americans from investing in foreign securities. Yet there was always an unsustainable quality to the Bretton Woods system. For the so-called Third World, the various attempts to replicate the Marshall Plan through government-to-government aid programmes proved deeply disappointing.

., Jr. 256-8 Blankfein, Lloyd 1-2 Bleichroeder (Arnhold & S.) 315 Bloch, Ivan 297 Bloomfield, Arthur 305 Blunt, John 155-6 BNP Paribas 272 Bolivia 2 Bolsheviks 107 bonds and bond markets 64 benefits of 3 bond insurance companies 347 boom 332 bundled mortgages see securitization collateral for 94 compared with mortgages (spread) 241-2 compared with stock markets 124-5 cotton-backed 94-6 crises and defaults 73 definitions 65-9 emerging market bonds see emerging markets face value (par) 73 future of 115-16 government see government bonds history 65-7 importance and power of 67-9 inflation and 105 insurance companies and 198 interest rates 67 liquidity 71 and mortgage rates 68 and pensions 67 perpetual bonds 76 Right- and Left-wing critics of 89-90 Rothschilds and 80-91 and savings institutions 116 and taxes 68 vulnerability of 99 war and 69-75 widening access to 100 bonds and bond markets - cont. and First World War 297 Bonn Consensus 312 bookkeeping 44-5 Borges, Jorge Luis 111 borrowing see credit; debt Boston 266 Botticelli, Sandro 42 ‘bottomry’ 185 Brady, Nicholas 165 Brailsford, Henry Noel 298 Brazil 18. see also BRICs Bretton Woods 305-8 Bretton Woods II 334 Briand, Aristide 159 BRICs (Brazil, Russia, India, China: Big Rapidly Industrializing Countries) 284 Britain: and American Civil War 94-5 banknotes 27 banks and industrialization 48-9 business failures 349 colonies see British Empire compared with France 141 compared with Japan 209-11 cost of living 26 cotton industry 94-6 East Indies trade 134; see also East India Company economy 210-11 finances for Napoleonic wars 80-84 financial ignorance 11-12 financial sector’s contribution to GDP 5 fiscal system 75 foreign investment 287 foreign investment in 76 Glorious Revolution 75-6 house prices and property ownership 10.


pages: 225 words: 61,388

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa by Dambisa Moyo

affirmative action, Asian financial crisis, belling the cat, Bob Geldof, Bretton Woods, business cycle, buy and hold, colonial rule, correlation does not imply causation, credit crunch, diversification, diversified portfolio, en.wikipedia.org, European colonialism, failed state, financial engineering, financial innovation, financial intermediation, Hernando de Soto, income inequality, information asymmetry, invisible hand, Live Aid, low interest rates, M-Pesa, market fundamentalism, Mexican peso crisis / tequila crisis, microcredit, moral hazard, Multics, Ponzi scheme, rent-seeking, risk free rate, Ronald Reagan, seminal paper, sovereign wealth fund, The Chicago School, trade liberalization, transaction costs, trickle-down economics, Washington Consensus, Yom Kippur War

Aid transfers in these early periods were as much about donor largesse as they were about political control over the colonial domain, and only later, in the 1940 British Colonial Development and Welfare Act, was the programme expanded to allow funding of social sector activities. Post-war aid can be broken down into seven broad categories: its birth at Bretton Woods in the 1940s; the era of the Marshall Plan in the 1950s; the decade of industrialization of the 1960s; the shift towards aid as an answer to poverty in the 1970s; aid as the tool for stabilization and structural adjustment in the 1980s; aid as a buttress of democracy and governance in the 1990s; culminating in the present-day obsession with aid as the only solution to Africa’s myriad of problems. The main agenda of the Bretton Woods conference was to restructure international finance, establish a multilateral trading system and construct a framework for economic cooperation that would avoid a repeat of the Great Depression of the 1930s.

., ‘How to Keep Developing Countries in their Place: Cut Them Off from Capital’, Ashmore Investment Management Ltd, 4 October 2001 —, ‘Promoting Development’, Pension and Fund Management, Winter 2002, at http://www.publicservice.co.uk/pdf/tlr/winter2002/p66.pdf —, ‘Emerging Market Local Currency Debt’, AME Information, 23 September 2003 —, ‘Emerging Market Debt: Asset Class Characteristics, Alpha Generation: The Case for Protection’, Ashmore Investment Management Ltd presentation, 4 February 2005 Bordo, Michael D., ‘Is There a Good Case for a New Bretton Woods International Monetary System?’, American Economic Review, 85 (1995), 2, pp. 317–22, at http://links.jstor.org/sici?sici=00028282%28199505%2985%3A2%3C317%3AITAGCF%3E2.0.CO%3B2-A BRAC, Ultra Poor Programme in Bangladesh, at http://www.brac.net Braithwaite, John and Peter Drahos, ‘Bretton Woods: Birth and Breakdown’, Global Policy Forum, April 2001, at http://www.globalpolicy.org/socecon/bwi-wto/2001/braithwa.htm Brenner, Reuven, The Force of Finance: Triumph of the Capital Markets, New York: Texere, 2002 Broadman, Harry G., Africa’s Silk Road: China and India’s New Economic Frontier, Washington, DC: The World Bank, 2007 Brookins, Carole, ‘Anticorruption efforts of the MDBs’, testimony before the Senate Foreign Relations Committee, 13 May 2004, JS-1550 at www.senate.gov/~foreign/testimony/2004/BrookinsTestimony040513.pdf Bulow, Jeremy, ‘First World Governments and Third World Debt’, Brookings Papers on Economic Activity (2002), 1, pp. 229–55 Burkett, Paul, review of ‘The Age of Diminished Expectations: U.S.

It is these billions that have hampered, stifled and retarded Africa’s development. And it is these billions that Dead Aid will address. 2. A Brief History of Aid The tale of aid begins in earnest in the first three weeks of July 1944, at a meeting held at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA. Against the backdrop of the Second World War, over 700 delegates from some forty-four countries resolved to establish a framework for a global system of financial and monetary management.1 As discussed later, it is from this gathering that the dominant framework of aid-infused development would emerge.


pages: 605 words: 169,366

The World's Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations by Sebastian Mallaby

"World Economic Forum" Davos, Alan Greenspan, Alvin Toffler, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, Bretton Woods, capital controls, clean water, Dr. Strangelove, Dutch auction, export processing zone, failed state, financial independence, Francis Fukuyama: the end of history, gentleman farmer, guns versus butter model, Hernando de Soto, Kenneth Rogoff, Kickstarter, land reform, land tenure, lateral thinking, low interest rates, market bubble, Martin Wolf, microcredit, oil shock, Oklahoma City bombing, old-boy network, Paul Samuelson, plutocrats, purchasing power parity, radical decentralization, rolodex, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the new new thing, trade liberalization, traveling salesman, War on Poverty, Westphalian system, Yom Kippur War

He took a dim view of White’s proposal to convene an international conference to discuss plans for a new world bank; observing that forty-four governments would come, he warned of “the most monstrous monkey-house.”5 But White insisted on the gathering, and Keynes swallowed his distaste: he knew that Britain depended upon American support, both economic and military. In July 1944, when the Allied forces had still not broken out of their Normandy beachhead, several hundred delegates convened in the sprawling Mount Washington Hotel in Bretton Woods, New Hampshire. Even then, the creation of an international bank was by no means certain. The conference invitation proclaimed currency stabilization as the primary goal; creating a bank for reconstruction was a secondary objective.6 Keynes headed the commission charged with discussing the potential bank’s design; he liked the idea of a fresh source of reconstruction funds for Europe, and saw no positive harm in lending whatever might be left to Latin America or India.

After a few days of deliberation on whether the new creation might best be termed a “corporation” rather than a “bank,” a drafting committee drew up the Bank’s Articles of Agreement, opening the way for the long process of amendment. On the last day of the conference, the Soviet delegation demanded five changes—an affront that in retrospect seems doubly irksome, since the Soviets subsequently refused participation in the Bretton Woods institutions. But the Soviets were contained. The drafting was finished. And the conference ended with an agreement on a new International Bank for Reconstruction and Development to work alongside the International Monetary Fund. The link between security and poverty had been stressed throughout the conference.

The link between security and poverty logically applied to developing countries as well as the developed ones; and the statesmen of the time could see this. “The economic health of every country is a proper matter of concern to all its neighbors, near and distant,” said the message read out to delegates at the start of the Bretton Woods conference; “there is no wall,” it might just as well have stated. That message—a premonition of Wolfensohn’s response to twenty-first-century terror—came from none other than Franklin Roosevelt. • • • JAMES DAVID WOLFENSOHN knew all about walls: he had spent his life crashing straight through them.


pages: 338 words: 104,684

The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, Apollo 11, Asian financial crisis, bank run, Bernie Madoff, Bernie Sanders, blockchain, bond market vigilante , book value, Bretton Woods, business cycle, capital controls, carbon tax, central bank independence, collective bargaining, COVID-19, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, decarbonisation, deindustrialization, discrete time, Donald Trump, eurozone crisis, fiat currency, floating exchange rates, Food sovereignty, full employment, gentrification, Gini coefficient, global reserve currency, global supply chain, green new deal, high-speed rail, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, Jeff Bezos, liquidity trap, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, Mason jar, Modern Monetary Theory, mortgage debt, Naomi Klein, National Debt Clock, new economy, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, open economy, Paul Samuelson, Phillips curve, Ponzi scheme, Post-Keynesian economics, price anchoring, price stability, pushing on a string, quantitative easing, race to the bottom, reserve currency, Richard Florida, Ronald Reagan, San Francisco homelessness, shareholder value, Silicon Valley, Tax Reform Act of 1986, trade liberalization, urban planning, working-age population, Works Progress Administration, yield curve, zero-sum game

In the end, Volcker’s rate hikes drove many developing countries into crisis, fueling a rapid economic downfall from which some countries have yet to fully recover.27 Back when Bretton Woods was still in effect, the system established a host of international organizations, including the IMF, the World Bank, and the General Agreement on Tariffs and Trade (now the World Trade Organization or WTO). Within the Bretton Woods system, these organizations focused on actively governing the conditions of trade among countries. This involved a variety of tools, like tariffs and capital controls, aimed at keeping trade flows stable and national economies at least somewhat insulated from one another. When Bretton Woods ended, the global institutions it created remained.

Instead of directly pegging currencies to a fixed price of gold, the system was replaced by convertibility into the US dollar, reflecting the dominance of the US in world trade (and the fact that the Allies won the war!). This new system—known as the Bretton Woods framework—called for the US dollar to be pegged to the value of gold. Moreover, all other currencies in the system were then pegged to the US dollar’s value. The exchange rate applied at the time set the price of gold at $35 an ounce. In effect Bretton Woods recreated a gold standard system, one step removed, with the US dollar now providing the central link in the monetary chain. Governments could now sell gold to the United States Treasury at the price of $35 per ounce, and the US Treasury had to honor the terms of that exchange.

Abandoning fixed exchange rates and floating the currency gave currency-issuing governments like the US expanded policy space to sustain full employment. Notwithstanding the collapse of the Bretton Woods system of fixed exchange rates, gold standard thinking still dominates our discourse on trade policy, which is why so many politicians still regard trade deficits as inherently dangerous. On a gold standard the government can run out of gold. With the end of the gold standard and/or fixed global exchange rates, this kind of thinking is no longer valid. The only residual legacy left from Bretton Woods is that the US dollar still plays a central role in the global economy. When companies and governments around the world engage in trade with one another, they write an enormous portion of those contracts in US dollars—even when the country doing the buying and the country doing the selling don’t use dollars as their internal domestic currency!


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

"World Economic Forum" Davos, agricultural Revolution, Airbnb, Alan Greenspan, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-border payments, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, Dogecoin, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fake news, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, land bank, large denomination, low interest rates, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, Money creation, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, Suez canal 1869, technoutopianism, The future is already here, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

This mutiny caused a panic on the London Stock Exchange and a run on the pound, bringing Britain’s economic troubles to a head and finally forcing it off the gold standard for good on 21 September 1931. The United States left on 5 June 1933. As World War II drew to a close, the Allied nations decided to create a new international monetary system. Delegates from many nations came together in July 1944 in Bretton Woods, New Hampshire, and after three weeks of discussions drew up the Bretton Woods Agreement, which created the International Monetary Fund and the International Bank for Reconstruction and Development (now part of the World Bank). The goal from the beginning was to come up with some international infrastructure to use instead of the gold standard.

It failed because when countries found themselves with a balance of payments deficit, the painful adjustment was ‘compulsory for the debtor and voluntary for the creditor’.******** Thus, the Bretton Woods delegates decided to replace the old gold standard with a new system based on the US dollar, with that dollar backed by gold. Under the terms of the agreement the United States would sell gold at $35 per ounce to any foreigner who wanted it. Straightforward. However, the Bretton Woods system that came into being towards the end of the 1950s was a very different arrangement from the one Keynes and the other delegates had devised in 1944.

I spend much of my working life looking at ways for banks, payments companies and governments to exploit new technologies, and I often therefore have to think about how the digital economy will evolve. Money is an essential part of that economy, but a common assumption seems to be that it will carry on at it is now, as if the post-Bretton Woods fiat currency is a natural phenomenon or the final stage of a directed evolutionary process. Christine Desan, Leo Gottlieb Professor at the Harvard Law School, asks why, if industrial-age capitalism was the result of the seventeenth-century ‘redesign’ of money, we do not debate the design of money more, and I agree with her wholeheartedly (Desan 2014a).


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The Left Case Against the EU by Costas Lapavitsas

anti-work, antiwork, banking crisis, Bretton Woods, capital controls, central bank independence, collective bargaining, declining real wages, eurozone crisis, financial engineering, Francis Fukuyama: the end of history, global reserve currency, hiring and firing, low interest rates, machine translation, neoliberal agenda, offshore financial centre, post-work, price stability, quantitative easing, reserve currency, Ronald Reagan, Washington Consensus, Wolfgang Streeck

This fact has critically affected the ascendancy of neoliberalism in the EU, while strongly conditioning German hegemony. It has also muddied the waters for the Left. Creating the euro: a lever of neoliberalism and conditional German hegemony In the late 1960s the Bretton Woods system of fixed exchange rates and controls over capital flows and other international payments began to unravel, eventually coming to an end, as was noted above, in 1971–3. The disappearance of Bretton Woods put the governments of European countries – especially smaller ones – under considerable pressure to prevent major upheavals in exchange rates and to protect their international competitiveness.

Despite the relentless emphasis on competition and free markets during the last four decades, there is no competition in issuing this most important traded entity in contemporary capitalist economies. The state’s monopoly over the final means of payment has indeed become absolute in the years of neoliberalism as gold has fallen completely by the wayside since the collapse of the Bretton Woods Agreement in 1971–3. A dollar is a promise by the US government to pay a dollar, and no more. This self-referential relationship rests on the authority of the state and tremendously augments its power to intervene and shape economic policy. Neoliberalism as actual policy, rather than as ideology, has relied heavily on the state to alter the institutional structure of both economy and society in favour of markets.

Germany and France led the debates and typically were on opposing sides. This division, in one form or another, has marked the entire trajectory of the EMU, certainly among the countries of the core. Nonetheless, the Werner Report led to no concrete policy or institutional outcomes – it had come before its time. After the collapse of Bretton Woods and the turmoil that followed in the global markets in the 1970s, the pressures to manage exchange rates in Europe accumulated further. The instability caused by greatly fluctuating rates was felt particularly severely by the smaller countries of Europe. The ‘Snake in the Tunnel’ was adopted in 1972–3, followed for a period by the ‘Snake out of the Tunnel’.


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

1960s counterculture, accelerated depreciation, activist lawyer, affirmative action, airline deregulation, Alan Greenspan, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business cycle, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, do well by doing good, Dr. Strangelove, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Gunnar Myrdal, guns versus butter model, Ida Tarbell, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, Les Trente Glorieuses, liberal capitalism, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, Martin Wolf, new economy, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, Simon Kuznets, strikebreaker, three-martini lunch, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

Other countries have allowed exports to lead their economic growth and enjoyed the U.S. deficit while complaining about it.”40 To return to a pegged exchange rate system, which they claimed to prefer, Europeans would have to agree to symmetrical adjustment, imposing obligations on surplus and deficit countries alike. But the Bretton Woods system had come to depend on adjustment by deficit countries alone, and that is why it broke down. Like the Chinese position today, the Europeans and Japanese rejected the notion that surplus countries should bear their share of adjustment. They feared that revaluations of their currencies would depress exports, output, and employment. The United States looked at the situation differently. During the Kennedy-Johnson years, the government supported the value of the dollar, fixed by the Bretton Woods agreement. Now government officials questioned that policy because they came to believe that the dollar was overvalued, leading to declining exports and jobs.

Paul Volcker was sent to London to brief the financial ministers and chief bankers of the big countries. He reported “that they [the Europeans] did not feel anger as much as anguish that the United States had not arrived with a prepared solution to save the system [Bretton Woods].”86 The administration was divided on the fate of the fixed exchange system. Shultz, like his monetarist mentor Milton Friedman, wanted flexible rates. Volcker and Burns sought to salvage as many of the trees of Bretton Woods as they could. Connally and Nixon, who had neither institutional nor ideological loyalties, were agnostic. Both just wanted to get the job done— reverse the balance of payments, produce prosperity, and reduce unemployment.

William A. Lovett, Alfred E. Eckes Jr., and Richard L. Brinkman, U.S. Trade Policy: History, Theory, and the WTO (Armonk, N.Y.: M. E. Sharpe, 1999), 14–15. 119. Martin Wolf, “Why Obama Must Mend a Sick World Economy,” Financial Times, Jan. 20. 2009; Nouriel Roubini, “Bretton Woods III?” http://www forbes.com/2009/04/19/bretton-woods-economic-ecrisis-renminbi-opinions. CHAPTER 3. 1972 1. Arthur H. Miller, Warren E. Miller, Alden S. Raine, and Thad A. Brown, “A Majority Party in Disarray: Policy Polarization in the 1972 Election,” The American Political Science Review, 70 (Sept. 1976), 755. 2.


Green Economics: An Introduction to Theory, Policy and Practice by Molly Scott Cato

Albert Einstein, back-to-the-land, banking crisis, banks create money, basic income, Bretton Woods, Buy land – they’re not making it any more, carbon footprint, carbon tax, central bank independence, clean water, Community Supported Agriculture, congestion charging, corporate social responsibility, David Ricardo: comparative advantage, degrowth, deskilling, energy security, food miles, Food sovereignty, Fractional reserve banking, full employment, gender pay gap, green new deal, income inequality, informal economy, intentional community, Intergovernmental Panel on Climate Change (IPCC), job satisfaction, land bank, land reform, land value tax, Mahatma Gandhi, market fundamentalism, Money creation, mortgage debt, Multi Fibre Arrangement, passive income, peak oil, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, reserve currency, Rupert Read, seminal paper, the built environment, The Spirit Level, Tobin tax, tontine, University of East Anglia, wikimedia commons

We now have a much broaderbased and democratic way of deciding whether the solutions to Iraq’s problems will be solved by a US invasion, or about policies to tackle climate change. But 4 GREEN ECONOMICS Photo 1.1 The men who devised the existing financial system: US Secretary of the Treasury Morgenthau addressing the opening meeting of the Bretton Woods Conference, 8 July 1944 Source: Photo from the US National Archives made available via the IMF website now we need to extend this further, to include all the other species with whom we share this planet in our decision making. We need a representative from the deep-sea fish, the deciduous trees, the Arctic mammals, and so on.

Chapter 4 focuses on work, which from a green perspective should be a fulfilling and community-building activity, not just a means of earning money for survival. Schumacher’s idea of ‘right livelihood’ and James Robertson’s thinking about ‘ownwork’ are explained. Chapter 5 explores how money shapes and controls the global economy, beginning with the establishment of the current monetary system at Bretton Woods at the end of the Second World War and moving on to consider empowering local alternatives. To round off this part, Chapter 6 offers a green perspective on economic development. How would local economies look within a green vision? Which economic sectors would thrive in the low-carbon world of the future?

The relationship revolves around the system of reserve currencies – the dollar, euro, yen and pound sterling – which countries are prepared to accept from one another, or from third countries outside the charmed circle, in settlement of external trade balances.8 This system clearly gives the countries that control these currencies a huge advantage in trade terms, especially the US, which negotiated that its currency should have the supreme advantage of being acceptable alongside gold as the international reserve asset during the Bretton Woods negotiations that established this system at the end of the Second World War. Although the US then undertook to maintain gold reserves to support the dollar, this agreement was unilaterally suspended by President Nixon during the Vietnam War in 1971. So since that time the US has been in a situation where it can print dollars and then exchange them for imported goods at virtually no cost.


pages: 309 words: 85,584

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit by William Keegan

Alan Greenspan, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, capital controls, congestion charging, deindustrialization, Donald Trump, Etonian, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial innovation, financial thriller, floating exchange rates, foreign exchange controls, full employment, gig economy, inflation targeting, Jeremy Corbyn, Just-in-time delivery, light touch regulation, liquidity trap, low interest rates, Martin Wolf, military-industrial complex, moral hazard, negative equity, Neil Kinnock, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, North Sea oil, Northern Rock, oil shock, Parkinson's law, Paul Samuelson, pre–internet, price mechanism, quantitative easing, Ronald Reagan, school vouchers, short selling, South Sea Bubble, Suez crisis 1956, The Chicago School, transaction costs, tulip mania, Winter of Discontent, Yom Kippur War

These days people think nothing of movements in one day of several per cent in, say, the sterling/dollar or sterling/euro rate. But in the late 1960s and early ’70s, under the Bretton Woods system of ‘fixed but adjustable exchange rates’, I would find myself writing front-page stories about changes of a fraction of 1 per cent between, say, the pound and the dollar or D-Mark or French franc. In a sense, I was brought up as an economic journalist on the Bretton Woods system, which had been set up under the influence of Keynes in reaction to the economic horrors of the interwar years. To work properly, it required controls on movements of capital: such movements can far outweigh the impact of currency flows precipitated by ordinary trade.

But the price of Wilson’s stand was, as his biographer Ben Pimlott pointed out, giving moral support for American foreign policy, not least in Vietnam, because propping up the pound required US intervention in the foreign exchange markets. Moreover, US officials were concerned that a devaluation of the pound could have repercussions elsewhere – which did eventually happen later, at the turn of the decade, when the cost of the Vietnam War put strains on the dollar, opening the floodgates, and ending with the break-up of the Bretton Woods fixed exchange rate system (see Crisis 6). However, despite the fact that UK support for American foreign policy was deeply unpopular at home, instigating many an anti-war demonstration on the streets of London, Wilson does go down in history with credit for resisting American demands for him to send British troops to Vietnam.

It had been because oil was so cheap that successive Chancellors saw the price of petrol at the pumps as a ready milch cow for extra duty. But the quintupling of what was known as ‘the posted price’ was, as they say, ‘something else’. There were two factors behind this quite dramatic increase in the price of oil. The first was that, after the devaluation of the US dollar associated with the break-up of the Bretton Woods fixed exchange rate system in 1971–73, the oil producers were noticing the impact on their revenue – the price being quoted then, as now, in dollars. But the real force was imparted by the outbreak of the Yom Kippur War between Arab states and Israel between 6 and 25 October 1973. Israel was invaded by Egyptian and Syrian forces.


pages: 571 words: 106,255

The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

"World Economic Forum" Davos, Airbnb, Alan Greenspan, altcoin, bank run, banks create money, bitcoin, Black Swan, blockchain, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, Charles Babbage, conceptual framework, creative destruction, cryptocurrency, currency manipulation / currency intervention, currency peg, delayed gratification, disintermediation, distributed ledger, Elisha Otis, Ethereum, ethereum blockchain, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, global reserve currency, high net worth, initial coin offering, invention of the telegraph, Isaac Newton, iterative process, jimmy wales, Joseph Schumpeter, low interest rates, market bubble, market clearing, means of production, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, Paul Samuelson, peer-to-peer, Peter Thiel, price mechanism, price stability, profit motive, QR code, quantum cryptography, ransomware, reserve currency, Richard Feynman, risk tolerance, Satoshi Nakamoto, scientific management, secular stagnation, smart contracts, special drawing rights, Stanford marshmallow experiment, The Nature of the Firm, the payments system, too big to fail, transaction costs, Walter Mischel, We are all Keynesians now, zero-sum game

They did not, of course, and in practice, the exchange rates were anything but fixed and provisions were made for allowing governments to alter these rates to address a “fundamental disequilibrium.”12 In order to manage this global system of hopefully fixed exchange rates, and address any potential fundamental disequilibrium, the Bretton Woods conference established the International Monetary Fund, which acted as a global coordination body between central banks with the express aim of achieving stability of exchange rates and financial flows. In essence, Bretton Woods attempted to achieve through central planning what the international gold standard of the nineteenth century had achieved spontaneously. Under the classical gold standard the monetary unit was gold while capital and goods flowed freely between countries, spontaneously adjusting flows without any need for central control or direction, and never resulting in balance of payment crises: whatever amount of money or goods moved across borders did so at the discretion of its owners and no macroeconomic problems could emerge.

Table of Contents Cover Title Page About the Author Foreword Prologue Notes Chapter 1: Money Notes Chapter 2: Primitive Moneys Notes Chapter 3: Monetary Metals Why Gold? Roman Golden Age and Decline Byzantium and the Bezant The Renaissance La Belle Époque Notes Chapter 4: Government Money Monetary Nationalism and the End of the Free World The Interwar Era World War II and Bretton Woods Government Money's Track Record Notes Chapter 5: Money and Time Preference Monetary Inflation Saving and Capital Accumulation Innovations: “Zero to One” versus “One to Many” Artistic Flourishing Notes Chapter 6: Capitalism's Information System Capital Market Socialism Business Cycles and Financial Crises Sound Basis for Trade Notes Chapter 7: Sound Money and Individual Freedom Should Government Manage the Money Supply?

The nations that had prospered together 40 years earlier, trading under one universal gold standard, now had large monetary and trade barriers between them, loud populist leaders who blamed all their failures on other nations, and a rising tide of hateful nationalism that was soon to fulfill Otto Mallery's prophecy: “If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky.”8 World War II and Bretton Woods From the sky the bombs did drop, along with countless heretofore unimaginable forms of murder and horror. The war machines that the government‐directed economies built were far more advanced than any the world had ever seen, thanks to the popularity of the most dangerous and absurd of all Keynesian fallacies, the notion that government spending on military effort would aid economic recovery.


The Future of Money by Bernard Lietaer

agricultural Revolution, Alan Greenspan, Alvin Toffler, banks create money, barriers to entry, billion-dollar mistake, Bretton Woods, business cycle, clean water, complexity theory, corporate raider, currency risk, dematerialisation, discounted cash flows, diversification, fiat currency, financial deregulation, financial innovation, floating exchange rates, full employment, geopolitical risk, George Gilder, German hyperinflation, global reserve currency, Golden Gate Park, Howard Rheingold, informal economy, invention of the telephone, invention of writing, John Perry Barlow, Lao Tzu, Lewis Mumford, low interest rates, Mahatma Gandhi, means of production, microcredit, Money creation, money: store of value / unit of account / medium of exchange, Norbert Wiener, North Sea oil, offshore financial centre, pattern recognition, post-industrial society, price stability, Recombinant DNA, reserve currency, risk free rate, Ronald Reagan, San Francisco homelessness, seigniorage, Silicon Valley, South Sea Bubble, The Future of Employment, the market place, the payments system, Thomas Davenport, trade route, transaction costs, trickle-down economics, two and twenty, working poor, world market for maybe five computers

The criticism of ‘undue complexity' is valid only if habit makes us overlook the inefficiencies and complexities of the money system of 1999. This system involves some 170 different national currencies, disorganised in eight different types of monetary systems according to the IMF's own reports. In any case, the record of the post-Bretton Woods monetary modus vivendi is clearly unsatisfactory. During the nearly three decades since the demise of the Bretton Woods arrangements, the annual rate of economic growth in developed countries has fallen by a third, and the incidents of international financial crises have increased sharply - to the point where even countries that follow sound economic policies are often stricken along with the profligate.

Foreign exchange markets are certainly now much more open and free than they were in the 1960s, when the Bretton Woods fixed-exchange-rate system was operational. However, an OECD (the Organization of Economic Co-operation and Development based in Paris) statistical study came to some sobering conclusions, directly contradicting the theoretical forecast. The past 25 years of floating exchanges have revealed an average foreign exchange volatility four times higher than under the Bretton Woods fixed-exchange system. It does not require a statistical rocket scientist to understand why the volatility increases with the speculative volume of the trades.

Initially designed as a clearinghouse for transactions among central banks, it has evolved into a meeting ground for central bankers and a research centre about issues of interest to the monetary system as a whole. Website: http://www.bis.org/ Barters: The direct exchange of goods or services unmediated by any type of currency. Bonds: Financial instrument sold by a borrower against periodic payment of interest and of the principal at maturity. Bretton Woods: Township in New Hampshire where the Bretton Woods Agreement was finalised in 1945 after negotiations mainly between the British and the US. The system agreed upon has also been called the dollar gold equivalence standard, because it gave the status of official global reserve currency to the US$, on condition that the US guaranteed the convertibility of dollars into gold on demand of other central banks, at a fixed rate of 535 per ounce.


pages: 338 words: 106,936

The Physics of Wall Street: A Brief History of Predicting the Unpredictable by James Owen Weatherall

Alan Greenspan, Albert Einstein, algorithmic trading, Antoine Gombaud: Chevalier de Méré, Apollo 11, Asian financial crisis, bank run, Bear Stearns, beat the dealer, behavioural economics, Benoit Mandelbrot, Black Monday: stock market crash in 1987, Black Swan, Black-Scholes formula, Bonfire of the Vanities, book value, Bretton Woods, Brownian motion, business cycle, butterfly effect, buy and hold, capital asset pricing model, Carmen Reinhart, Claude Shannon: information theory, coastline paradox / Richardson effect, collateralized debt obligation, collective bargaining, currency risk, dark matter, Edward Lorenz: Chaos theory, Edward Thorp, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, Financial Modelers Manifesto, fixed income, George Akerlof, Gerolamo Cardano, Henri Poincaré, invisible hand, Isaac Newton, iterative process, Jim Simons, John Nash: game theory, junk bonds, Kenneth Rogoff, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, Market Wizards by Jack D. Schwager, martingale, Michael Milken, military-industrial complex, Myron Scholes, Neil Armstrong, new economy, Nixon triggered the end of the Bretton Woods system, Paul Lévy, Paul Samuelson, power law, prediction markets, probability theory / Blaise Pascal / Pierre de Fermat, quantitative trading / quantitative finance, random walk, Renaissance Technologies, risk free rate, risk-adjusted returns, Robert Gordon, Robert Shiller, Ronald Coase, Sharpe ratio, short selling, Silicon Valley, South Sea Bubble, statistical arbitrage, statistical model, stochastic process, Stuart Kauffman, The Chicago School, The Myth of the Rational Market, tulip mania, Vilfredo Pareto, volatility smile

In 1968, when Nixon was elected president, Friedman wrote him a letter urging him to abandon the so-called Bretton Woods system. Bretton Woods, named for the town in New Hampshire where the system was devised in July 1944, was the international monetary agreement put in place at the end of World War II. The Bretton Woods conference led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (now part of the World Bank). More important for our story was the fact that under the Bretton Woods system, major world currencies were valued at fixed exchange rates, based on the value of the U.S. dollar (and ultimately on gold, because the dollar was freely exchangeable for gold, at least for foreign governments).

Changes in these exchange rates were infrequent, involving a long diplomatic process. By 1968, however, when Friedman wrote to Nixon, the Bretton Woods system was beginning to show cracks. The main problem was that there simply wasn’t enough gold in the world to back the explosion in postwar international trade. While the United States held most of the world’s gold supply, gold continued to be traded on the open market, where its price could fluctuate. As long as the United States and its allies could keep open-market gold prices in line with the Bretton Woods price, there was no problem. But if the price of gold on the open market rose too high, as it naturally would with growing demand and a limited supply, there would be a risk of a run on the dollar (in the sense of a rush to convert dollars to gold), as foreign governments sought to settle their own debts by buying U.S. gold and selling it for a profit on the open market — in which case the system would simply collapse.

Such a rush in fact occurred in late 1967, which was the impetus for Friedman to write his letter. But for a thinker like Friedman, the Bretton Woods system was ill conceived from the start: it was hopeless for governments to try to set exchange rates at all. Exchange rates, like anything else, should be determined freely in an open market. Nixon didn’t listen to Friedman at first, but by 1971, with increased spending in Vietnam accelerating the accumulation of U.S. debt, he saw the writing on the wall. First West Germany and Japan pulled out of the Bretton Woods agreement and announced their currencies would no longer maintain parity with the dollar.


pages: 454 words: 134,482

Money Free and Unfree by George A. Selgin

Alan Greenspan, asset-backed security, bank run, banking crisis, barriers to entry, Bear Stearns, break the buck, Bretton Woods, business cycle, capital controls, central bank independence, centralized clearinghouse, Charles Lindbergh, credit crunch, Credit Default Swap, crony capitalism, disintermediation, Dutch auction, fear of failure, fiat currency, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, foreign exchange controls, Fractional reserve banking, German hyperinflation, Glass-Steagall Act, Hyman Minsky, incomplete markets, inflation targeting, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, large denomination, liquidity trap, Long Term Capital Management, low interest rates, market microstructure, Money creation, money market fund, moral hazard, Network effects, Northern Rock, oil shock, Paul Samuelson, Phillips curve, plutocrats, price stability, profit maximization, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, Robert Gordon, Robert Solow, Savings and loan crisis, savings glut, seigniorage, special drawing rights, The Great Moderation, the payments system, too big to fail, transaction costs, Tyler Cowen, unorthodox policies, vertical integration, Y2K

In two respects at least, the Bretton Woods arrangement was even more vulnerable to speculative attacks than its interwar predecessor had been. The Bretton Woods exchange rate commitments were, first of all, known to be subject to change. Secondly, interwar devaluations, and the devaluation of the U.S. dollar itself especially, gave speculators more reason than ever before to distrust the new regime’s commitments—to view them, not as so many binding contractual obligations, but as a mere exercise in government price fixing that might be abandoned with relative impunity. For these reasons, the Bretton Woods system was especially likely to come under attack in the event of a perceived shortage of gold cover.

Such a violent contraction may be provoked that gold will be brought into disrepute as a standard of value” (Johnson 1997: 133). This is, in fact, precisely what happened. 46. Although prospects for any such revival can only be judged remote, World Bank president Robert Zoellick (2010) prompted renewed discussion of the merits of such a move by arguing that proponents of a new Bretton Woods–type world monetary system (“Bretton Woods II”) should consider using the price of gold “as an international reference point of market expectations about inflation, deflation and future currency values.” Zoellick added that “Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.” 47.

D. (1986) “Financial Crises, Banking Crises, Stock Market Crashes and the Money Supply: Some International Evidence, 1870–1933.” In F. Capie and G. E. Wood (eds.), Financial Crises and theWorld Banking System, 190–248. London: MacMillan. ——— (1993) “The Bretton Woods International Monetary System: A Historical Overview.” In M. D. Bordo and B. Eichengreen (eds.), A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform. Chicago: University of Chicago Press and National Bureau of Economic Research. ——— (2008) “Comment on Charles Calomiris’ ‘The Subprime Turmoil: What’s Old, What’s New, and What’s Next?”’


pages: 913 words: 219,078

The Marshall Plan: Dawn of the Cold War by Benn Steil

Albert Einstein, Alistair Cooke, An Inconvenient Truth, anti-communist, Berlin Wall, Bretton Woods, Brexit referendum, British Empire, business cycle, Carmen Reinhart, centre right, currency manipulation / currency intervention, deindustrialization, democratizing finance, disintermediation, Dissolution of the Soviet Union, Donald Trump, eurozone crisis, facts on the ground, Fall of the Berlin Wall, foreign exchange controls, full employment, imperial preference, invisible hand, Kenneth Rogoff, kremlinology, land reform, Mikhail Gorbachev, Monroe Doctrine, new economy, open economy, Potemkin village, RAND corporation, Ronald Reagan, scientific management, structural adjustment programs, the market place, trade liberalization, Transnistria, Winter of Discontent, Works Progress Administration, éminence grise

When bankrupt Britain had been holding the fort alone against Nazi Germany in 1941, Congress still demanded economic “consideration” for Lend-Lease aid—which was merely in the form of loans, and not grants. When in 1945 Morgenthau and White fought to justify the Bretton Woods monetary and financial agreements before Congress, they were again touting only loans, and not grants, to revive the collapsed international trading system. That vision would be challenged by the new International Bank for Reconstruction and Development (IBRD), whose 1946/47 annual report observed, understatedly, that “the problem [of recovery] is deeper and more difficult than was envisioned at Bretton Woods.”86 Even just a few days before the president’s address, Truman had delivered a major speech on foreign economic policy at Baylor University that, having been written largely before the Greek and Turkish crisis, went little beyond calling for reciprocal agreements to boost trade.

His previous book, the prize-winning The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, was called “a triumph of economic and diplomatic history” by the Financial Times, “a superb history” by The Wall Street Journal, and “the gold standard on its subject” by The New York Times. He lives in New York with his wife and two boys. MEET THE AUTHORS, WATCH VIDEOS AND MORE AT SimonandSchuster.com Authors.SimonandSchuster.com/Benn-Steil @simonbooks * * * ALSO BY BENN STEIL * * * The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order We hope you enjoyed reading this Simon & Schuster ebook

Not having policy ideas of his own so much as instincts, Morgenthau relied on his ambitious, obliquitous deputy, Harry Dexter White, to give them form and substance. White, one of the most enigmatic American political figures of the twentieth century, boosted Treasury’s global influence through his mastery of the forty-four-nation Bretton Woods Conference, which created the IMF in 1944, and the war-aid terms imposed on the penurious British. Yet like Henry Wallace—who who would tap him as a future treasury secretary during his 1948 presidential campaign—White was also a great admirer of the Soviet Union and its economic system. He would, over the course of twelve years in Washington, to a much greater degree than Wallace, use his position to aid Moscow materially and with secret intelligence.25 He would also give substance to the so-called Morgenthau Plan to deindustrialize postwar Germany—effectively to render the country pastoral and infirm.


pages: 429 words: 120,332

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens by Nicholas Shaxson

Asian financial crisis, asset-backed security, bank run, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, collapse of Lehman Brothers, computerized trading, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, Double Irish / Dutch Sandwich, export processing zone, failed state, financial deregulation, financial engineering, financial innovation, Fractional reserve banking, full employment, Glass-Steagall Act, Global Witness, Golden arches theory, high net worth, income inequality, Kenneth Rogoff, laissez-faire capitalism, land reform, land value tax, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, Martin Wolf, Money creation, money market fund, New Journalism, Northern Rock, offshore financial centre, oil shock, old-boy network, out of africa, passive income, plutocrats, Ponzi scheme, race to the bottom, regulatory arbitrage, reserve currency, Ronald Reagan, shareholder value, Suez crisis 1956, The Spirit Level, too big to fail, transfer pricing, vertical integration, Washington Consensus

It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it.” On this broad point his American colleagues were with him: Morgenthau said that the aim must be “to drive the usurious money-lenders from the temple of international finance.”13 Keynes’s negotiations culminated in the Bretton Woods Conference in 1944, the outcome of which would shape the international financial architecture for decades. The conference involved many nations but was an American production: The U.S. Treasury stage-managed the drafting committees and the conference to produce the desired results. U.S. Commission chairmen would prevent a vote on anything they didn’t want voted on and would arrange the discussion to stop inconvenient topics from being aired.14 It was hard to see what the international “monkey house” of delegations from other countries would do, Keynes archly commented: “Acute alcohol poisoning would set in before the end.”

He did not get his wishes, and when these matters were decided at a subsequent meeting in 1946, Keynes said acidly that he hoped “there is no malicious fairy, no Carabosse”—a reference to the wicked fairy-tale godmother figure of Sleeping Beauty, popularized in Tchaikovsky’s and later Diaghilev’s ballet—“whom he has overlooked and forgotten to ask to the party.” Fred Vinson, a top U.S. negotiator, who felt he was the target of the remark, was heard to say in response, “I don’t mind being called malicious—but I do mind being called a fairy.”15 Many people today see the IMF and World Bank—the children of the Bretton Woods Conference—as the handmaidens of globalization, of unfettered trade and capital flows, and the instruments of Wall Street bankers. This was not the original idea. Keynes did want open trade, but finance was to remain tightly regulated: otherwise, surges of flighty capital would generate recurrent crises that would hamper growth, disrupt and discredit trade, and possibly drive fragile European economies into the arms of the communists.

Capital controls would give governments more room to pursue objectives like maintaining full employment: Instead of limiting the scope of democracy in the interests of speculators and financiers, the plan was to limit the international mobility of capital: Finance would be society’s servant, not its master. “Let goods be homespun whenever it is reasonably and conveniently possible,” he wrote. “Above all, let finance be primarily national.” The Bretton Woods plan, for all its faults, was designed to tame the forces of international finance.17 Capital controls can be hard to imagine for those who have not experienced them. To get foreign exchange for overseas trips, for example, you needed official permission. Frequent international travelers, for instance, would have a section in their passports, “Foreign Exchange Facilities—Private Travel,” that would be filled with official stamps and signatures authorizing access to sums of foreign exchange.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

Reluctant to raise taxes soon after the Kennedy tax cut of the previous year and lacking congressional support as well, he overheated the economy and put great pressure on the value of the dollar, fixed at that time by the Bretton Woods system that regulated international commerce after the Second World War. The postwar dollar shortage turned into a dollar glut.1 President Nixon set himself up in opposition to Johnson. He won election to the presidency through a Southern Strategy that appealed to Southern racism and opposition to the Civil Rights Movement. He abandoned Johnson’s War on Poverty and declared a War on Drugs in 1971. He also abandoned the fixed exchange rate of the Bretton Woods system to deal with the strain on the dollar exerted by the expanding war in Vietnam.2 Nixon switched the United States to a floating exchange rate, transferring responsibility for the domestic economy from the federal government, which controls fiscal policy, to the Federal Reserve System, which controls monetary policy.

The draft had become difficult as the Vietnam War dragged on, and conservatives argued against the idea of forced service. This was an early step in the privatization of the military.4 The Oil Shock also raised the question of how the members of OPEC were going to hold their newly acquired wealth. The highly regulated financial system established at Bretton Woods in the 1940s could not easily absorb this large inflow of cash, and the cash found a temporary home in the arrangement for dollar deposits outside the United States. These dollar deposits in European banks were known as Eurodollars, and they were not heavily regulated by either the United States or Europe.

In contrast, households in the bottom quintile experienced inflation-adjusted after-tax income growth of 1.2 percent per year, on average. Consequently, inflation-adjusted after-tax income was 48 percent higher in 2011 than it was in 1979 for that income group.”21 The most important part of the new program was the deregulation of finance. Instead of bringing the Eurodollar system into the Bretton Woods system, new policies made American finance more like the Eurodollar system. There was a great need for financial help as the gyrations of prices and exchange rates in the 1970s and early 1980s took a fearsome toll on American industry. Resources needed to be shifted from one industry to another, and finance was needed to buy and sell companies in this process.


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, classic study, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial engineering, financial innovation, financial intermediation, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Glass-Steagall Act, Great Leap Forward, Hyman Minsky, inflation targeting, invisible hand, Japanese asset price bubble, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, no-fly zone, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Solow, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

In the evolving multi-polar world, there are few remnants of the idealism of Bretton Woods. The combination of free trade and American power was a stabilising force. As the financier and historian James Macdonald puts it, ‘The unspoken bargain was that the United States would exercise a near monopoly of military force. However, it would use its force not to gain exclusive economic advantages, but as an impartial protector of Western interests. Under the American umbrella, the non-Communist world flourished.’17 The world of Bretton Woods passed away a long while ago, and with it the effectiveness of the post-war institutions that defined it – the International Monetary Fund, the World Bank and the Organisation for Economic Cooperation and Development (OECD).

Such bonds have been issued by a number of industrialised countries over the past thirty years (King and Low, 2014). 23 Germany, with its own objective of promoting its export sector, was a notable exception. 24 Charles Dumas (2004, 2006 (with Chovleva)) provided an early analysis of this problem. 25 Its reversal was a striking feature of what came to be known as the Bretton Woods II international monetary system. Although some foreign direct investment did move from advanced to emerging economies, it was more than offset by financial flows in the opposite direction. This analysis of the Bretton Woods II system was first put forward by Dooley, Folkerts-Landau and Garber (2003). Those authors refined and extended the analysis in a series of papers over the following decade. A key part of their argument is that China wanted to lend large sums to advanced economies so that, in the event of a major economic or political disturbance, these claims would act as ‘collateral’ against the foreign direct investment made by the same economies in China.

As the former outstripped the latter, the result was inflation. On the other side of the Atlantic, the growing cost of the Vietnam War in the late 1960s also led to higher inflation. Rising inflation put pressure on the internationally agreed framework within which countries had traded with each other since the Bretton Woods Agreement of 1944, named after the conference held in the New Hampshire town in July of that year. Designed to allow a war-damaged Europe slowly to rebuild its economy and reintegrate into the world trading system, the agreement created an international monetary system under which countries set their own interest rates but fixed their exchange rates among themselves.


Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

As we have seen, his International Clearing Union plan of 1941 set up a system of sanctions against persistent creditor hoarding. But the United States rejected the Keynes plan, and at the Bretton Woods conference of 1944 substituted an institution of its own devising – the International Monetary Fund – which upheld the orthodox policy of debtor adjustment, finance for deficits being confined to short-term help. The American motive was clear: they had no wish to place their hard-earned dollars automatically at the disposal of profligate debtors. The IMF thus provided no limit on persistent reserve accumulation. Bretton Woods laid the intellectual basis for the ‘structural adjustment’ programmes which the IMF would insist on as the condition of its loans to Latin America and East Asia in the 1980s and 1990s, and which the ‘troika’ of the IMF, European Central Bank and European Commission would demand as the condition of financing the foreign debt of Mediterranean countries following the crisis of 2008–9.

What was intended to be restored was the nineteenth-century free trade/gold standard system, improved by experience of the interwar years. This reflected the American conviction that the troubles of that period had been brought about by trade and currency wars. Keynes influenced Harry Dexter White, the architect of the Bretton Woods system, but there were more parochial influences. Keynes’s own specific idea – ‘the doctrine of creditor adjustment’ (pp. 127–8) – was not accepted at Bretton Woods. This meant that the 1944 Agreement provided no mechanism for dealing with the ‘dollar gap’ that resulted from a quasi-permanent US current account surplus. In the 1920s, America’s export surplus had been a deflationary drag on the world economy.

The Mild Recession of 1970–71 Modestly restrictive policies in 1968–9, designed to reverse the rise of inflation, produced a mild recession in 1970–71 on both sides of the Atlantic, which failed to eliminate the higher inflation but nearly doubled the rate of unemployment. 2. The Breakdown of Bretton Woods, 1971 The rise in unemployment, and looming elections in a number of OECD countries, prompted a simultaneous shift to expansionary policy in the early 1970s. The Bretton Woods system was already under strain from the late 1960s as the growing size of the United States payments deficits ‘effectively removed the balance-of164 t h e k e y n e si a n a s c e n da n c y payments constraints in other OECD countries, and facilitated a massive expansion of money supplies’.45 However, the Triffin paradox now came into play.


pages: 829 words: 187,394

The Price of Time: The Real Story of Interest by Edward Chancellor

"World Economic Forum" Davos, 3D printing, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, asset allocation, asset-backed security, assortative mating, autonomous vehicles, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, bitcoin, blockchain, bond market vigilante , bonus culture, book value, Bretton Woods, BRICs, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cashless society, cloud computing, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, commodity super cycle, computer age, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cryptocurrency, currency peg, currency risk, David Graeber, debt deflation, deglobalization, delayed gratification, Deng Xiaoping, Detroit bankruptcy, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, double entry bookkeeping, Elon Musk, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, everywhere but in the productivity statistics, Extinction Rebellion, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global reserve currency, global supply chain, Goodhart's law, Great Leap Forward, green new deal, Greenspan put, high net worth, high-speed rail, housing crisis, Hyman Minsky, implied volatility, income inequality, income per capita, inflation targeting, initial coin offering, intangible asset, Internet of things, inventory management, invisible hand, Japanese asset price bubble, Jean Tirole, Jeff Bezos, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, land bank, large denomination, Les Trente Glorieuses, liquidity trap, lockdown, Long Term Capital Management, low interest rates, Lyft, manufacturing employment, margin call, Mark Spitznagel, market bubble, market clearing, market fundamentalism, Martin Wolf, mega-rich, megaproject, meme stock, Michael Milken, Minsky moment, Modern Monetary Theory, Mohammed Bouazizi, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, Northern Rock, offshore financial centre, operational security, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, peer-to-peer lending, pensions crisis, Peter Thiel, Philip Mirowski, plutocrats, Ponzi scheme, price mechanism, price stability, quantitative easing, railway mania, reality distortion field, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk free rate, risk tolerance, risk/return, road to serfdom, Robert Gordon, Robinhood: mobile stock trading app, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, Second Machine Age, secular stagnation, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, stock buybacks, subprime mortgage crisis, Suez canal 1869, tech billionaire, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Haywood, time value of money, too big to fail, total factor productivity, trickle-down economics, tulip mania, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, Walter Mischel, WeWork, When a measure becomes a target, yield curve

There wasn’t even a stable link between demographics and interest rates.fn3 Instead, the BIS suggested that interest rates were influenced by monetary regimes. Just as Babylonian interest rates had been higher than those in Ancient Greece, so real interest rates were higher on average under the Gold Standard (pre-1914) than under the Bretton Woods system (after 1945), and lowest of all after Bretton Woods (from 1971 onwards). Borio’s research pointed to the conclusion that market interest rates were greatly influenced by the actions of central bankers, that interest rates were indeed a ‘policy variable’. An obvious point to the layman, but one strenuously denied by the central bankers themselves.

To find a specific word or phrase from the index, please use the search feature of your ebook reader. 3G Capital, 161, 169 AEG (German company), 159 African American households, 211 AIG (insurance giant), 175, 221 Alberti, Leon Battista, 21 Alexander the Great, 12 Alibaba, 283 Altman, Edward, 223 Amazon (company), 203 AmeriCredit Corp, 167* Amsterdam, 35–6, 39, 47 Anbang Insurance, 285–6 Anderson, Benjamin, 87, 88, 90, 91, 92 Anglo-Dutch Wars, 33 annuities, 26, 69, 195, 197, 229 Antiphanes (Athenian playwright), 18 Antiphon (Greek orator), 20 Apple, 54, 149, 166, 176, 241 Aquinas, Thomas, Summa Theologica, 19, 25 Arab Spring (2011), xxiii, 255–6 Argentina, 79–80, 79*, 242–3, 263 aristocracy/landed classes: in Ancien Régime France, 49, 51; in ancient Mesopotamia, 200; and price of land, 34–5, 39, 42, 44 Aristotle, 9, 18, 19, 20, 28, 40 Arnd, Karl, 4 art market, 180, 208–9, 271 Artemis Capital, 231 Asian economic development model, 267, 278; Asian crisis, 114, 252, 278 asset price bubbles: before 2008 crisis, xxiii, 32, 44, 111–19, 204; and Arab Spring, 255–6; bond market in 2010s, 226; and Borio’s financial cycle, 132–3, 134, 135; bubble economy term, 184–7; Cantillon’s view, 58, 60–61; Chinese real-estate bubble, xxiii, 271, 272–4, 282, 288, 289; in commodities (from 2010), 173–4, 255–6, 257; construction booms, 62–3, 69, 74, 90, 112, 144, 148, 258–60, 273–9; crypto bubbles, 177–9; Dotcom bubble, 111–12, 136–7, 176, 204; Everything Bubble in post-crisis decade, 44, 138–9, 173–80, 180, 181–3, 185, 193–5, 206–10, 215, 306–9; expansive monetary policy as common feature, xxiii, 116*, 123, 135, 172–87, 180, 220; idea of creating a bubble to deal with, 113*; Japanese economy in 1980s, xxiii, 105–8, 145, 182, 184, 271, 273, 279, 285–6; misallocation of capital during, 43, 114, 148–50, 266–81, 289; relation to real economy, 182–3, 185, 237; stock market bubble in 1920s USA, xxiii, 87–91, 90*, 92–4, 96–8, 98*, 112, 203; at times of low inflation, xxiii, 134, 135; unstable bubbles in China, 270, 271–4, 282, 288; vast investment boom in China, xxiii, 128, 267–81, 280*, 282–9; and wealth illusion, 193–5 see also Mississippi bubble asset-backed securities, 175, 225, 226–7 Assyrian empire, 12 AT&T, 167, 168 Augsburg, 202 Augustus, Roman Emperor, 12, 15 Australia, 175, 192, 239 Austria, 93, 93*, 97, 261; Wörgl’s currency experiment, 243, 294 Austrian economists, 32, 94–6, 100, 108 see also Hayek, Friedrich; Schumpeter, Joseph Ayr Bank, collapse of (1772), 63 Azerbaijan, 262 Babylonia, 3–4, 5–8, 9–12, 13, 13, 14–15 Bacon, Francis (artist), 208 Bacon, Sir Francis, ‘On Usury’ (1612), 34, 35, 40, 43, 44 Bagehot, Walter, 62, 63–4, 66–8, 70–71, 72, 74, 149, 155, 251; Bagehot rule, xxiii, 74–6, 80; and dangers of foreign lending, 66, 77, 78; on foreign lending craze, 78; warnings over easy money, 64, 66, 67, 68, 69, 72, 78, 80–81, 220, 233; Lombard Street (1873), 69, 74, 75, 76, 81 Bain Capital, 163 Balding, Christopher, 277* Bank for International Settlements (BIS), 11, 101, 107, 113–14, 131–4, 135–9, 144, 153, 168, 261 Bank of Amsterdam (Wisselbank), 47, 68 Bank of England: during 1920s, 82–3, 85–6, 92, 93; acquires foreign corporate securities (2016), 241†; Bagehot on role of, xxiii, 64, 66, 74, 75–6; Bank Charter Act (1844), 75–6, 76*; ‘corset’ in Bretton Woods era, 291; ‘credit easing’ policy, 242; dominion over credit markets, 292–3, 293*; and financialization, 168; founding of (1694), 47; and Gold Standard, 85, 251; inflation targeting, 119, 121, 241; as lender of last resort, 66, 74–6, 80; nationalization (1946), 172; NICE (non-inflationary consistent expansion), 112; in nineteenth-century, 42, 65, 66, 70, 71–2, 75–6, 79, 80; policies in post-crisis decade, 151, 153, 174, 233, 235, 241, 293; and regulation, 232, 233; and secular stagnation narratives, 126, 205–6 Bank of France, 82, 83, 92, 93 Bank of Japan (BOJ), 105–8, 119, 122, 146, 192, 224, 241, 242, 244–5, 271, 294 Bank of Spain, 117 banking: 1825 crisis, 64–7, 75; back-alley banking in China, 281–3; bankers as unpopular, 18; Casa di San Giorgio, Genoa, 47–8; development in Middle Ages, 22–4, 35; expansion in Britain during Napoleonic Wars, 69–70; and fountain-pen money, xxiv, 42, 269, 312; Law establishes General Bank (1716), 49–50; merchant banks in ancient world, 7, 8; National Banking System in USA, 157; ‘net interest margin’ eroded by ultra-low rates, 136; pre-twentieth-century panics/crises, 63, 64–8, 69, 70, 72–6, 79–81; repo market, 236*, 239, 245; UK and US economies shift towards, 167–8; vast expansion in China, 265–6; and zombification, 147, 148 see also financial sector Baoding Tianwei Group, 280 Baoshang Bank, 285 Baradaran, Mehrsa, 215* Barbon, Nicholas, 15 Barcelona, 23 Baring, Alexander, 65 Baring, Sir Francis, 74–5, 76 Baring Brothers, 74, 76, 80 Basel Committee, 232 basketball, shot clock, 141 Bastiat, Frédéric, xvii, xviii–xx, xxi, xxii, xxv, 9, 188–9, 215, 306 Batista, Eike, 257, 258 Bavarian Soviet Republic, 243 Bayer (German firm), 225 Bear Stearns, 175 behavioural research, 29 Belgium, 225 Benda, Julien, La Trahison des Clercs (1927), 297 Bentham, Jeremy, 30, 189 Berkshire Hathaway, 161 Berlusconi, Silvio, 293 Bernanke, Ben: actions during 2008 crisis, 76, 253–4; on causes of 2008 crisis, 114, 115–16, 118, 128–9; and easy money before 2008 crisis, 111–12, 113, 115–17, 115†, 118–19; evades consequences for 2008 crisis, 119; and inflation targeting, 119, 119*, 241; joins Federal Reserve (2002), 111–12; and legacy of John Law, 61; on monetary policy, 98, 98*, 115, 115*, 131, 155, 207, 230, 238; policy of dealing with aftermath of bubbles, 111–12, 114; and savings glut hypothesis, 128–9, 191; and taper tantrum (June 2013), 239, 256–7, 259, 263; and ultra-easy money after 2008 crisis, 124, 131, 133, 137–8, 153, 155, 181–3, 207, 215, 230, 238–40, 243–4, 262; view of Great Depression, 98, 98*, 99, 100, 101 Bernard, Samuel, 55* Bernardino of Siena, 25 Bernstein, Richard, 306 Bernstein, William, 128 Beyond Meat, 177 Bezos, Jeff, 203 bills of exchange, 22, 23, 24, 47, 50, 65‡, 71, 130 Bitcoin, 177–9, 307–8 BlackRock, 209, 227, 246 Blackstone Sir William, Commentaries on the Laws of England (1765), 17 BNP Paribas, 253† Bo Xilai, 288 Böhm-Bawerk, Eugen von, xxiii–xxiv, xxv, xxvi*, 13, 16, 19*, 29, 30, 31, 95, 246 Borio, Claudio, 132–4, 135–9, 153, 232–3, 240, 262–3, 269, 311 Borman, Frank, 143 bottomry loans, 6, 26 Bouazizi, Mohamed, 255 Bourbon, Duke of, 55 Brandeis, Justice Louis, 156, 158, 159, 202 Branson, Richard, 213 Braudel, Fernand, 21 Brazil, xxiii, 225, 254–5, 257–8, 291 Bretton Woods system, 133, 251, 290–91, 302 Bridgewater Associates, 229 Britain: 1825 banking crisis, 64–7, 75; building boom in mid-eighteenth-century, 62–3; calamities of 1660s, 33; decision to leave EU, 187, 241, 262; default on sovereign debt (1672), 33, 38; early twentieth century monopolies in, 159; economy in Bretton Woods era, 291, 302*; financial repression today, 292–3; foreign lending manias (1860s-80s), 77–8, 79–80; housing affordability crisis in, 212–13; loss of manufacturing jobs to China, 261*; low economic vitality in post-crisis decade, 124, 150–51, 153, 192; post-1571 debates on excessively high rates, 34–44; Productive Finance Working Group, 293, 293*; railway mania of 1840s, 70–72, 73; return to the Gold Standard (1920s), 43, 82, 85, 86; reversal of global capital flows (late-1920s), 93; Revolutionary/Napoleonic Wars, 41–2, 69–70; shift from manufacturing towards services, 167–8; South Sea Bubble (1720), 69; trade cycle from early eighteenth century, 62–4; usury in, 24, 26, 27, 34, 40, 42, 65‡, 65; zombification in, 146 see also Bank of England British Association of Recovery Professionals, 146 British Home Stores (BHS), 196–7 Brown, Brendan, 218 Brown, Gordon, 112 Brunnermeier, Markus, 236 Bryan, William Jennings, 99 bubble economy term, 184–7 Buchan, James, 54, 56*, 59 Buenos Aires Water Supply and Drainage Company, 80 Buffett, Warren, 126, 161, 225, 307, 308, 308* Bullard, James, 239 Burry, Michael, 198 buyout firms, 160–63, 183†, 204, 207, 222, 223, 237 Byzantium, 25 Calvin, John, 26 Campbell, Donald, 120–21 Canada, 119, 174–5, 192, 196*, 241 Canterbury, Justin Welby, Archbishop of, 17, 201 Cantillon, Richard, 58, 60–61, 60* capital flows, global: in 1920s, 82, 91, 261; Bretton Woods capital controls, 291; capital controls return after 2008, 262, 291; ‘commodity super-cycle (from 2010), 173–4, 255–6, 257; cross-border lending in Eurozone, 144–5; and Dollar Standard, 251–2, 253, 261, 262–3; foreign lending manias (1860s-80s), 77–8, 79–80, 79†; ‘global banking glut’ notion, 132, 252–3; global credit bubble in early 2000s, 252–3, 261; international carry trade, 137, 237–8, 252, 253–4, 256–7, 258; ‘persistent expansion bias’ of monetary system, 262; post-crisis flows into emerging markets, xxiii, 253–9, 262–3; protectionism of 1930s, 261–2; recirculation of in run-up to 2008 crisis, 115‡; recording/measuring of, 137; reversals of, 63, 93, 93*, 261; and role of interest, 139, 251–7, 259–61, 262–3; ‘second phase of global liquidity’ after 2008 crisis, 253–9, 262–3; taper tantrum (June 2013), xxiii, 137, 239, 256–7, 259, 263; Turkish debt, 258–60; and US interest rates, 137, 251–5, 256–7, 259–61, 262–3, 285 capitalism: Bastiat on broad consequences of actions, xix–xx; capital defined, 28, 28*; distortions/disruptions by unicorns, 148–50; distrust of in 1930s, 299; Hayek on, 96, 295–6, 298; Hazlitt on price system, xx; interest rates as at heart of, xxii, xxv, 16, 28, 141, 297; low marginal costs in New Economy, 127–8; Marxist-Leninist critique of, 159–60, 217*, 298; primacy of finance in modern era, 138–9; process of ‘creative destruction’, xx, 140–43, 143*, 153, 296–7; Proudhon on, xvii; role of risk in, 220, 298; Schumpeter on, 140, 153, 296–7; Adam Smith on mutual self-interest, 27–8; state capitalism, 280, 284, 292–5, 297, 298; takes off in medieval Italy, 21–3, 23 Cappadocia, 12 Carillion (construction company), 197 Carnegie, Andrew, 157–8 Carney, Mark, 235 Carroll, Lewis, 309, 311 carry trading, 220–22, 227, 229, 233, 234, 236; international, 137, 237–8, 252, 253–5, 256–7, 258; new regime emerges after 2008 crisis, 221–4, 253–5, 256–7, 258 cars, 173, 179, 210, 220; manufacture of, 142, 166–7, 176–7, 261; and revival of subprime market, 215, 224 Carstens, Agustín, 214* Carter, Jimmy, 108–9 Case, Anne, 213 Cassel, Gustav, xxvi, 36*, 88, 190, 192, 195, 246 Catholic church, 18–19, 23–4, 25–6 central banks: attitudes to risk, 230–31; Bagehot rule, xxiii, 74–6, 80; direct involvement in stock market, 172–3, 241–2, 293–4; dominion over credit markets, xxii, 292–3, 293*; double standards in approach to bail outs, 215; and duration risk, 225; fuelling of asset price bubbles by, 43, 60–61, 88, 110, 113, 115–16, 118–19, 132–6, 174–6, 181–2, 185, 194–5; goal of stable price level, xxiii, 42, 86–8, 94, 96–8, 105–8, 109–13, 133, 203; influence on long-term rates, 133, 134–5; issuing of ‘fiat money’, xxiv, 13, 312; Long Island meeting (1927), 82–3, 88, 92; and March 2020 crash, 305–6; money supply targets in 1980s, 121; move to ‘active’ monetary policy in 1920s, 84, 85–8, 85†, 92–4, 96–8; and responsibility for inequality, 214–17; ‘Taylor Rule’, 116–17 see also quantitative easing and also entries for individual institutions central planning: in Bretton Woods era, 291, 292–5; Hayek’s The Road to Serfdom (1944), 295–6, 298; and misallocation of capital, 264, 266, 269; and problem of regulation, 232–3; reappearance of, 297, 298, 302; during Second World War, 295, 302, 311; and ‘tyranny of metrics’, 120* da Certaldo, Paolo, 21 Chamberlain, Austen, 86 Chamberlen, Hugh, 59* Chan, Melissa, 274 Chang Ying, Remarks on a Regular Livelihood, 265 Chapman, D.

The rates on bank loans charged by banks far removed from money market centers and from ‘Big Business’ were relatively stable for long periods.43 Recent research from the Bank for International Settlements suggests that interest rates over the past hundred years or so have been more influenced by the nature of the various monetary regimes (Gold Standard, Gold Exchange Standard, Bretton Woods and Dollar Standard) than by economic factors such as individual savings and investment decisions.44 Yet it’s also clear that ancient interest rates were not solely determined by custom and law. Morris Silver maintains that the ancient loan market responded to changes in the supply and demand for credit.fn8 As we have seen, there were many private lenders in Mesopotamia – presumably they needed to be enticed into lending with the offer of a reasonably attractive reward.


pages: 275 words: 82,640

Money Mischief: Episodes in Monetary History by Milton Friedman

Bretton Woods, British Empire, business cycle, classic study, currency peg, double entry bookkeeping, fiat currency, financial innovation, fixed income, floating exchange rates, foreign exchange controls, full employment, German hyperinflation, income per capita, law of one price, Money creation, money market fund, oil shock, price anchoring, price stability, Savings and loan crisis, systematic bias, Tax Reform Act of 1986, transaction costs

For present purposes, we can simplify our attempt to demystify money by concentrating on the monetary arrangement that, while historically a very special case, is currently the general rule: a pure paper money that has practically no value as a commodity in itself. Such an arrangement has been the general rule only since President Richard M. Nixon "closed the gold window" on August 15, 1971—that is, terminated the obligation that the United States had assumed at Bretton Woods to convert dollars held by foreign monetary authorities into gold at the fixed price of $35 an ounce. Before 1971, every major currency from time immemorial had been linked directly or indirectly to a commodity. Occasional departures from a fixed link did occur but, generally, only at times of crisis.

In the major Western countries, the link to gold and the resulting long-term predictability of the price level meant that, until sometime after World War II, interest rates behaved as if prices were expected to be stable and neither inflation nor deflation was anticipated. Nominal returns on nominal assets were relatively stable, while real returns were highly unstable, absorbing almost fully inflation and deflation (as displayed in Figure 1). Beginning in the 1960s, and especially after the end of Bretton Woods in 1971, interest rates started to parallel rates of inflation. Nominal returns on nominal assets became more variable; real returns on nominal assets, less variable. CHAPTER 3 The Crime of 1873* I am persuaded history will write it [the Act of 1873] down as the greatest legislative crime and the most stupendous conspiracy against the welfare of the people of the United States and of Europe which this or any other age has witnessed.

After World War I the link between money and gold was progressively loosened, with a gold-exchange standard—a commitment by governments to redeem their money either in gold or in a foreign currency that was redeemable in gold—replacing a strict gold standard as the norm. After World War II, the Bretton Woods agreement setting up the International Monetary Fund gave gold an even smaller role, requiring convertibility into gold only for the United States and only for external purposes. This final link was ended by President Richard Nixon on August 15, 1971, when, in monetary jargon, he "closed the gold window" by refusing to honor the U.S. commitment under the International Monetary Fund agreement to sell gold to foreign central banks at $35 an ounce.


pages: 253 words: 79,214

The Money Machine: How the City Works by Philip Coggan

activist fund / activist shareholder / activist investor, algorithmic trading, asset-backed security, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, bond market vigilante , bonus culture, Bretton Woods, call centre, capital controls, carried interest, central bank independence, collateralized debt obligation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, disintermediation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, endowment effect, financial deregulation, financial independence, floating exchange rates, foreign exchange controls, Glass-Steagall Act, guns versus butter model, Hyman Minsky, index fund, intangible asset, interest rate swap, inverted yield curve, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", joint-stock company, junk bonds, labour market flexibility, large denomination, London Interbank Offered Rate, Long Term Capital Management, low interest rates, merger arbitrage, Michael Milken, money market fund, moral hazard, mortgage debt, negative equity, Nick Leeson, Northern Rock, pattern recognition, proprietary trading, purchasing power parity, quantitative easing, reserve currency, Right to Buy, Ronald Reagan, shareholder value, South Sea Bubble, sovereign wealth fund, technology bubble, time value of money, too big to fail, tulip mania, Washington Consensus, yield curve, zero-coupon bond

Just as the price of the goods being sold is central to the transaction, so the exchange rate (which is the price of one currency in terms of another) can determine whether the parties make a profit or a loss. BRETTON WOODS AND AFTER: THE ROLE OF FORECASTING TODAY The post-war system of fixed exchange rates was set up in 1944 at an international conference held in Bretton Woods, New Hampshire. Although not fully operational until 1958, the Bretton Woods system pegged the world’s major currencies at fixed rates to the dollar. In turn the dollar was given the strength to act as the linchpin of the world’s financial system because of its ‘convertibility’, at a set rate, into gold.

If they sold dollars and bought a strong currency such as the Deutschmark, they were highly unlikely to lose money, but if the dollar devalued, they would make substantial gains. The enormous scale of international capital flows today means that no central bank has the reserves to defend its currency against market speculation indefinitely. As a consequence, a Bretton Woods-type system is unlikely ever to return. Why have exchange rates been so unstable since the collapse of the Bretton Woods system? Many theories have been developed to explain why exchange rates change, but none has so far explained their movements in such a way that future exchange-rate moves can then be predicted with any degree of accuracy. Economic theories attempt to explain exchange-rate moves in the long run.

And, with governments round the world quailing in the face of the cost of state pension schemes, citizens are realizing that they may depend on the financial markets for their security in old age. Why has all this happened? In part, it is because of the breakdown of the financial system that prevailed from the end of the Second World War until the early 1970s. That system, generally known as Bretton Woods, combined fixed exchange rates with strict controls on capital flows, so restricting the scope for financial market activity. Under fixed exchange rates, currency speculation was only profitable at occasional times, such as when Britain was forced to devalue sterling in 1967. Foreign-exchange controls also made it difficult for investors to buy equities outside their home markets.


pages: 7,371 words: 186,208

The Long Twentieth Century: Money, Power, and the Origins of Our Times by Giovanni Arrighi

anti-communist, Asian financial crisis, barriers to entry, Bretton Woods, British Empire, business climate, business logic, business process, classic study, colonial rule, commoditize, Corn Laws, creative destruction, cuban missile crisis, David Ricardo: comparative advantage, declining real wages, deindustrialization, double entry bookkeeping, European colonialism, Fairchild Semiconductor, financial independence, financial intermediation, floating exchange rates, gentrification, Glass-Steagall Act, Great Leap Forward, income inequality, informal economy, invisible hand, joint-stock company, Joseph Schumpeter, Kōnosuke Matsushita, late capitalism, London Interbank Offered Rate, means of production, Meghnad Desai, military-industrial complex, Money creation, money: store of value / unit of account / medium of exchange, new economy, offshore financial centre, oil shock, Peace of Westphalia, post-Fordism, profit maximization, Project for a New American Century, RAND corporation, reserve currency, scientific management, spice trade, Strategic Defense Initiative, Suez canal 1869, the market place, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, trade route, transaction costs, transatlantic slave trade, transcontinental railway, upwardly mobile, vertical integration, Yom Kippur War

It was only with the crisis of US hegemony in the 1970s and, above all, in the 19805 that for the first time the Bretton Woods organizations rose to prominence in global monetary regulation. Similarly, in the early 19505 the UN Security Council and General Assembly were used instrumentally by the US government to legitimate its intervention in the Korean civil war, and subsequently lost all centrality in the regulation of interstate 70 THE LONG TWENTIETH CENTURY conflicts until their revitalization in the late 1980s and early 1990s. We shall return to the significance of this recent resurgence of the Bretton Woods and UN organizations. But for now let us emphasize that the instrumental use and partial atrophy of these organizations at the moment of maximum expansion of US world hegemony did not involve a return to the strategies and structures of British world hegemony.

But in spite of the close cooperation between Washington and Wall Street during the Second World War, at Bretton Woods bankers and financiers were conspicuous by their absence. Washington rather than New York was confirmed as the primary seat of “production” of world money, and security considerations remained paramount in the shaping of the post-war monetary world order. However, the fact that world liquidity was now centralized in the US banking system enabled the US financial elite to find enough support among economic nationalists in Washington to impose on the Bretton Woods institutions its unshakeable belief in the virtues of sound money in general and of the gold standard in particular (Van Dormael 1978: 97-8, 240-65).

Roosevelt’s revolutionary idealism, which saw in the institutionalization of the idea of world government the primary instrument through which the US New Deal would be extended to the world as a whole, was displaced by the reformist realism of his successors, who institutionalized US control over world money and over global military power as the primary instruments of US hegemony (cf. Schurmann 1974: 5, 67, 77). As these more traditional instruments of power came to be deployed in the protection and reorganization of the “free world,” the Bretton Woods organizations (the IMF and the World Bank) and the United Nations either became supplementary instruments wielded by the US government in the exercise of its world hegemonic functions or, if they could not be used in this way, were impeded in the exercise of their own institutional functions. Thus, throughout the 19505 and 19605 the International Monetary Fund (IMF) and the World Bank played little or no role in the regulation of world money in comparison with, and in relation to, a select ensemble of national central banks, led by the US Federal Reserve System.


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The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas by Janek Wasserman

"World Economic Forum" Davos, Abraham Wald, Albert Einstein, American Legislative Exchange Council, anti-communist, battle of ideas, Berlin Wall, Bretton Woods, business cycle, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, different worldview, Donald Trump, experimental economics, Fall of the Berlin Wall, floating exchange rates, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, housing crisis, Internet Archive, invisible hand, John von Neumann, Joseph Schumpeter, laissez-faire capitalism, liberal capitalism, low interest rates, market fundamentalism, mass immigration, means of production, Menlo Park, military-industrial complex, Mont Pelerin Society, New Journalism, New Urbanism, old-boy network, Paul Samuelson, Philip Mirowski, price mechanism, price stability, public intellectual, RAND corporation, random walk, rent control, road to serfdom, Robert Bork, rolodex, Ronald Coase, Ronald Reagan, Silicon Valley, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, union organizing, urban planning, Vilfredo Pareto, Washington Consensus, zero-sum game, éminence grise

Over twenty-seven meetings, Machlup and his colleagues reshaped the Bretton Woods landscape, providing the intellectual foundation for the shift from the postwar gold exchange standard to floating exchange rates and financial liberalization. In coordinating elite networks of academics, government officials, and financial leaders, the Machlup Group proved as significant to the neoliberal order as Hayek and the MPS or Haberler and GATT.72 By the time Machlup convened the first conference of scholars at the RF-owned Villa Serbelloni on Lake Como in Bellagio, Italy, in 1963, the Bretton Woods monetary system faced mounting problems.

The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. New York: Simon and Schuster, 1953. Heilbroner, Robert, and Irving Howe. “The World after Communism.” Dissent, Fall 1990, 429–35. Helleiner, Robert. Forgotten Foundations of Bretton Woods: International Development and the Making of the Postwar Order. Ithaca, NY: Cornell University Press, 2014. ———. States and the Reemergence of Global Finance: From Bretton Woods to the 1990s. Ithaca, NY: Cornell University Press, 1994. Hennings, Klaus. The Austrian Theory of Value and Capital. Cheltenham, UK: Elgar, 1997. Hilferding, Rudolf. “Böhm-Bawerk’s Criticism of Marx.” In Böhm, Karl Marx, 119–96. ———.

Haberler and Machlup took on leadership roles in incipient debates on globalization and trade liberalization by spearheading new policy initiatives. Haberler’s recasting of international trade signaled the beginning of a new “liberal international economic order.” Machlup starred in “reforming the world monetary system,” propelling the international monetary debates that overturned the Bretton Woods order. In the first decades after World War II, the Austrians shifted their attention to developing new thought collectives and epistemic communities, modifying and adapting earlier Austrian School traditions along the way.6 The Creation of the MPS The MPS was the most enduring postwar Austrian institution, drawing much of its appeal from the earlier ideas, interaction rituals, and ideological views of the school.


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More: The 10,000-Year Rise of the World Economy by Philip Coggan

accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Alan Greenspan, Andrei Shleifer, anti-communist, Apollo 11, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Bear Stearns, Berlin Wall, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Boeing 747, bond market vigilante , Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Babbage, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, cotton gin, credit crunch, Credit Default Swap, crony capitalism, cross-border payments, currency peg, currency risk, debt deflation, DeepMind, Deng Xiaoping, discovery of the americas, Donald Trump, driverless car, Easter island, Erik Brynjolfsson, European colonialism, eurozone crisis, Fairchild Semiconductor, falling living standards, financial engineering, financial innovation, financial intermediation, floating exchange rates, flying shuttle, Ford Model T, Fractional reserve banking, Frederick Winslow Taylor, full employment, general purpose technology, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, global value chain, Gordon Gekko, Great Leap Forward, greed is good, Greenspan put, guns versus butter model, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, hydroponic farming, Ignaz Semmelweis: hand washing, income inequality, income per capita, independent contractor, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Jon Ronson, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, Les Trente Glorieuses, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low interest rates, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, Modern Monetary Theory, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, TaskRabbit, techlash, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, world market for maybe five computers, Yom Kippur War, you are the product, zero-sum game

But the newly independent countries were dependent on commodity exports, and were often run by kleptocratic dictators. The per capita growth rate from 1950 to 1973 was 2%, below the world average, and half the growth rate of western Europe. The collapse of Bretton Woods In 1960, an economist named Robert Triffin predicted to the US Congress that the Bretton Woods system would eventually collapse. His argument related to the conflict between the dollar’s domestic and international roles. The dollar was the centrepiece of the Bretton Woods system since it was the currency to which others were pegged. That meant that central bankers in the rest of the world wanted to accumulate dollars as part of their foreign exchange reserves.

Among the first issues to be settled was the monetary system. A return to the full gold standard seemed out of the question, not least because the US economy was even more dominant than before. But politicians worried about adopting floating exchange rates, which seemed a recipe for chaos. A conference was duly organised at the Bretton Woods hotel in the mountains of New Hampshire. Harry Morgenthau, the US Treasury secretary, said at the opening ceremony that “We came here to work out methods which would do away with the economic evils – the competitive currency devaluations and destructive impediments to trade – which preceded the present war.”1 The British were represented by their top economist, John Maynard Keynes, and the Americans by Harry Dexter White, a Treasury official who was passing secrets to the Soviet Union, according to KGB archives.

The three options are a fixed exchange rate, an independent monetary policy, and free capital movement. Under the gold standard, the currency was fixed and capital could flow freely. But monetary policy had to be adjusted in order to maintain the currency peg, with interest rates rising or falling regardless of domestic economic conditions. The Bretton Woods system chose a different pairing. Exchange rates were fixed but countries had freedom (with some limits) to adjust their own monetary policy. The only way such a system could work was by restricting capital flows. If they had not been, investors would have been free to move their capital to whichever country had the highest interest rates, confident that they could not face a currency loss by devaluation.


Propaganda and the Public Mind by Noam Chomsky, David Barsamian

"World Economic Forum" Davos, Alan Greenspan, Albert Einstein, AOL-Time Warner, Asian financial crisis, Bretton Woods, business cycle, capital controls, deindustrialization, digital divide, European colonialism, experimental subject, Howard Zinn, Hyman Minsky, interchangeable parts, language acquisition, liberation theology, Martin Wolf, one-state solution, precautionary principle, public intellectual, Ralph Nader, RAND corporation, school vouchers, Silicon Valley, structural adjustment programs, Thomas L Friedman, Tobin tax, Washington Consensus

See The Bulletin of the Atomic Scientists 56: 2 (March-April 2000), pp. 22-41. 30. Tariq Ali, “The Panic Button,” Guardian, October 14, 1999, p. 21. 31. Marc L. Miringoff and Marque-Luisa Miringoff, The Social Health of the Nation: How America Is Really Doing (New York: Oxford UP, 1999). 32. Bretton Woods Commission, Bretton Woods: Looking into the Future (Washington, DC: Bretton Woods Commission, 1994). See Martin Wolf, “Bretton Woods at an Awkward Age,” Financial Times, October 7, 1994, p. 19, and Michael Prowse, “IMF and World Bank ‘Must Adapt to New Global Financial Landscape,’” Financial Times, July 7, 1994, p. 5. 33. UNCTAD, Trade and Development Report, 1999 (Geneva: UNCTAD, 1999).

That is that even the major economic indicators have deteriorated since the reforms began worldwide. A couple of years ago there was a Bretton Woods commission headed by Paul Volcker, the former head of the Federal Reserve Board, and a very respectable figure in the profession. Their report came out about five years ago.32 They studied what had happened to the global economy and the U.S. economy since the so-called reforms were instituted in the early 1970s, when the post-World War II Bretton Woods system was dismantled. Their conclusion was that in the industrial countries economic growth had declined by half. It was still growth, but half the rate of the previous period.

Its last annual report said that we have to approach these questions with “humility,” because nobody has a clue as to what’s going on.46 Jeffrey Sachs, an economist at Harvard, said in a recent article that we have to recognize that the international economy is “dimly understood.”47 In fact, every international economist who is even semihonest tells you, We don’t really understand what’s going on, but we have some ideas. So anything that’s said—certainly anything that I say—you want to add many grains of salt to, because nobody really understands. However, some things are moderately clear and there’s a fair consensus. Through the Bretton Woods era—roughly from the end of the Second World War up to the early 1970s—exchange rates were pretty close to fixed and capital was more or less controlled. So there weren’t extreme capital flows. That was changed in the early 1970s by decision. Capital flow was liberalized. There have been associated events, maybe consequences, maybe not.


pages: 353 words: 81,436

Buying Time: The Delayed Crisis of Democratic Capitalism by Wolfgang Streeck

"there is no alternative" (TINA), "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, air traffic controllers' union, Alan Greenspan, banking crisis, basic income, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collective bargaining, corporate governance, creative destruction, currency risk, David Graeber, deindustrialization, Deng Xiaoping, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial repression, fixed income, full employment, Garrett Hardin, Gini coefficient, Growth in a Time of Debt, income inequality, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, means of production, moral hazard, Myron Scholes, Occupy movement, open borders, open economy, Plutonomy: Buying Luxury, Explaining Global Imbalances, profit maximization, risk tolerance, shareholder value, too big to fail, Tragedy of the Commons, union organizing, winner-take-all economy, Wolfgang Streeck

The crisis of the tax state From tax state to debt state Debt state and distribution The politics of the debt state Debt politics as international financial diplomacy 3 THE POLITICS OF THE CONSOLIDATION STATE: NEOLIBERALISM IN EUROPE Integration and liberalization The European Union as a liberalization machine Institutional change: from Keynes to Hayek The consolidation state as a European multilevel regime Fiscal consolidation as a remodelling of the state Growth: back to the future Excursus on regional growth programmes On the strategic capacity of the European consolidation state Resistance within the international consolidation state 4 LOOKING AHEAD What now? Capitalism or democracy The euro as a frivolous experiment Democracy in Euroland? In praise of devaluation For a European Bretton Woods Gaining time BIBLIOGRAPHY INDEX INTRODUCTION Crisis Theory: Then and Now Buying Time is an expanded version of the Adorno Lectures I gave in June 2012 at the Institut für Sozialforschung, almost exactly forty years after I graduated in sociology from Frankfurt University.1 I cannot say that I was a ‘disciple’ of Adorno.

The underlying dynamic, allowing for local variations, is the same – even for countries considered as far apart from each other as Sweden and the United States. What becomes particularly visible in a study over time is the leading role of the largest and most capitalist of all the capitalist countries, the United States, where all the trend-setting developments originated: the ending of the Bretton Woods system and of inflation, the growth of budget deficits as a result of tax resistance and tax cuts, the rise of debt-financing of government activity, the wave of fiscal consolidations in the 1990s, finance market deregulation as part of a policy of privatizing government functions, and, of course, the financial and fiscal crisis of 2008.

International conflicts arise only if a country devalues its currency too often in too short intervals – a practice that, however, quickly loses more in trust than it would gain from the restoration of its export capacity. For this reason alone, there is no danger that countries will use devaluation in excess to improve their market position.23 FOR A EUROPEAN BRETTON WOODS The European Monetary Union was a political mistake. In a eurozone marked by great heterogeneity of member-states, it eliminated devaluation without also eliminating nation-states and democracy at national level.24 Instead of making things worse by rushing ahead to complement monetary union with ‘political union’ – which would in practice be nothing other than a final enthronement of the consolidation state – an attempt might be made, as long as the crisis keeps its future settlement open, to undo the euro and return to an orderly system of flexible exchange rates in Europe.25 Such a system, which would recognize the differences among European societies instead of trying to reform them out of existence along neoliberal lines, would be politically and economically far less demanding than monetary union.


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Empire by Michael Hardt, Antonio Negri

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", Berlin Wall, Bretton Woods, colonial rule, conceptual framework, disinformation, equal pay for equal work, European colonialism, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, global pandemic, global village, Haight Ashbury, Herbert Marcuse, informal economy, invisible hand, late capitalism, low skilled workers, mass immigration, means of production, Monroe Doctrine, Nelson Mandela, New Urbanism, open borders, post-Fordism, post-industrial society, postindustrial economy, scientific management, Scramble for Africa, social intelligence, The Wealth of Nations by Adam Smith, union organizing, urban planning, W. E. B. Du Bois

This Third Worldist perspective is implicit in much ofthe writing of Immanuel Wallerstein, Andre Gunder Frank, and Samir Amin. 8. For a thorough historical account ofthe events and the protagonists at the Bretton Woods Conference, see Armand Van Dormael, Bretton Woods: Birth of a Monetary System (London: Macmillan, 1978). For a historical account that gives a broader view ofthe comprehensive U.S. preparation for hegemony in the postwar period by posing the economic planning at Bretton Woods together with the political planning at Dum- barton Oaks, see George Schild, Bretton Woods and Dumbarton Oaks: American Economic and Political Postwar Planning in the Summer of 1944 (New York: St.

Capitalist Responseto theCrisis As the global confluence ofstruggles undermined the capitalist and imperialist capacities ofdiscipline, the economic order that had dominated the globe for almost thirty years, the Golden Age of U.S. hegemony and capitalist growth, began to unravel. The form and substance ofthe capitalist management ofinternational develop- ment for the postwar period were dictated at the conference at Bretton Woods, New Hampshire, in 1944.8 The Bretton Woods system was based on three fundamental elements. Its first characteris- tic was the comprehensive economic hegemony ofthe United States over all the nonsocialist countries. This hegemony was secured R E S I S T A N C E , C R I S I S , T R A N S F O R M A T I O N 265 through the strategic choice ofa liberal development based on relatively free trade and moreover by maintaining gold (of which the United States possessed about one third ofthe world total) as the guarantee ofthe power ofthe dollar.

The system ofU.S. monetary hegemony was a fundamentally new arrangement because, whereas the control ofprevious interna- tional monetary systems (notably the British) had been firmly in the hands ofprivate bankers and financiers, Bretton Woods gave control to a series ofgovernmental and regulatory organizations, including the International Monetary Fund, the World Bank, and ultimately the U.S. Federal Reserve.9 Bretton Woods might thus be understood as the monetary and financial face of the hegemony ofthe New Deal model over the global capitalist economy. The Keynesian and pseudo-imperialist mechanisms ofBretton Woods eventually went into crisis when the continuity ofthe workers’ struggles in the United States, Europe, and Japan raised the costs ofstabilization and reformism, and when anti-imperialist and anticapitalist struggles in subordinate countries began to under- mine the extraction ofsuperprofits.10 When the imperialist motor could no longer move forward and the workers’ struggles become ever more demanding, the U.S. trade balance began to lean heavily 266 P A S S A G E S O F P R O D U C T I O N in the direction ofEurope and Japan.


EuroTragedy: A Drama in Nine Acts by Ashoka Mody

Alan Greenspan, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, Basel III, Bear Stearns, Berlin Wall, book scanning, book value, Bretton Woods, Brexit referendum, call centre, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, credit crunch, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, fear index, financial intermediation, floating exchange rates, forward guidance, George Akerlof, German hyperinflation, global macro, global supply chain, global value chain, hiring and firing, Home mortgage interest deduction, income inequality, inflation targeting, Irish property bubble, Isaac Newton, job automation, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, Kickstarter, land bank, liberal capitalism, light touch regulation, liquidity trap, loadsamoney, London Interbank Offered Rate, Long Term Capital Management, low interest rates, low-wage service sector, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, mortgage tax deduction, neoliberal agenda, offshore financial centre, oil shock, open borders, pension reform, precautionary principle, premature optimization, price stability, public intellectual, purchasing power parity, quantitative easing, rent-seeking, Republic of Letters, Robert Gordon, Robert Shiller, Robert Solow, short selling, Silicon Valley, subprime mortgage crisis, The Great Moderation, The Rise and Fall of American Growth, too big to fail, total factor productivity, trade liberalization, transaction costs, urban renewal, working-age population, Yogi Berra

France, quite simply, had been unable to get its own house in order. three leaps in the dark 39 By the late 1960s, many countries found it impossible to live within the constraints of fixed exchange rates and the postwar Bretton Woods system of fixed-​but-​adjustable exchange rates was slowly breaking down. The United States, the linchpin of the system, struck the final blow. Running high inflation rates, it could not sustain its commitment to pay $35 for an ounce of gold. On March 15, 1968, a “two-​tier” system was introduced under which central banks would continue to transact with one another at the $35 price but would not interfere in the setting of gold’s market price. At that point, monetary historian Michael Bordo says, the Bretton Woods system effectively ended, although an attempt to stay within a fixed exchange rate regime continued for some years.79 In March 1969, another towering economist, Harry Gordon Johnson, repeated Friedman’s call for flexible exchange rates.

“Italy’s Youngest Prime Minister Promises Revolution on Twitter.” Times, February 23. Bordo, Michael. 1981. “The Classical Gold Standard: Some Lessons for Today.” Federal Reserve Bank of St. Louis Review 63, no. 6: 1–​17. Bordo, Michael. 1993. “The Bretton Woods International Monetary System: A Historical Overview.” In A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, edited by Michael D. Bordo and Barry Eichengreen. Chicago: University of Chicago Press. http://​www.nber.org/​ chapters/​c6867. Bordo, Michael, Angela Redish, and Hugh Rockoff. 2015. “Why Didn’t Canada Have a Banking Crisis in 2008 (or in 1930, or 1907, or . . .)?”

The single currency was a bad idea at a bad time. Having given up their own currencies, countries that adopted a single currency would permanently fix their exchange rates with one another. Global productivity growth was slowing down, and the global economy had become more turbulent. The post-​World War II Bretton Woods system of fixed-​but-​adjustable exchange rates was collapsing. Countries were required to keep their exchange rates fixed unless exceptional circumstances required adjustment. The exceptional circumstances were becoming more common and more disruptive. A consensus toward more flexibility, even floating, of exchange rates was emerging.


pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

Taken together, economists’ models are our best cognitive guide to the endless hills and valleys that constitute social experience. * Whether White was actually a Soviet spy has been an ongoing controversy. The case against White was made forcefully in Benn Steil’s The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, NJ: Princeton University Press, 2013). For the argument on the other side, see James M. Boughton, “Dirtying White: Why Does Benn Steil’s History of Bretton Woods Distort the Ideas of Harry Dexter White?” Nation, June 24, 2013. Whatever the facts of the case, it is clear that the International Monetary Fund and the World Bank served quite well the economic interests of the United States (as well as those of the rest of the Western world) in the decades following the end of the Second World War.

Last but not least, my greatest debt, as always, is to my wife, pınar Doan, who gave me her love and support throughout, in addition to helping me clarify my argument and discussion of economics concepts. Economics Rules INTRODUCTION The Use and Misuse of Economic Ideas Delegates from forty-four nations met in the New Hampshire resort of Bretton Woods in July 1944 to construct the postwar international economic order. When they left three weeks later, they had designed the constitution of a global system that would last for more than three decades. The system was the brainchild of two economists: the towering English giant of the profession, John Maynard Keynes; and the US Treasury official Harry Dexter White.* Keynes and White differed on many matters, especially where issues of national interest were at stake, but they had in common a mental frame shaped by the experience of the interwar period.

The system was eventually undermined in the 1970s by the growth of speculative capital flows, which Keynes had warned against. But it remained the standard for global institutional engineering. Through each successive upheaval of the world economy, the rallying cry of the reformers was “a new Bretton Woods!” In 1952, a Columbia University economist named William Vickrey proposed a new pricing system for the New York City subway. He recommended that fares be increased at peak times and in sections with high traffic, and be lowered at other times and in other sections. This system of “congestion pricing” was nothing other than the application of economic supply-demand principles to public transport.


pages: 333 words: 76,990

The Long Good Buy: Analysing Cycles in Markets by Peter Oppenheimer

Alan Greenspan, asset allocation, banking crisis, banks create money, barriers to entry, behavioural economics, benefit corporation, Berlin Wall, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, book value, Bretton Woods, business cycle, buy and hold, Cass Sunstein, central bank independence, collective bargaining, computer age, credit crunch, data science, debt deflation, decarbonisation, diversification, dividend-yielding stocks, equity premium, equity risk premium, Fall of the Berlin Wall, financial engineering, financial innovation, fixed income, Flash crash, foreign exchange controls, forward guidance, Francis Fukuyama: the end of history, general purpose technology, gentrification, geopolitical risk, George Akerlof, Glass-Steagall Act, household responsibility system, housing crisis, index fund, invention of the printing press, inverted yield curve, Isaac Newton, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kickstarter, Kondratiev cycle, liberal capitalism, light touch regulation, liquidity trap, Live Aid, low interest rates, market bubble, Mikhail Gorbachev, mortgage debt, negative equity, Network effects, new economy, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shock, open economy, Phillips curve, price stability, private sector deleveraging, Productivity paradox, quantitative easing, railway mania, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Shenzhen special economic zone , Simon Kuznets, South Sea Bubble, special economic zone, stocks for the long run, tail risk, Tax Reform Act of 1986, technology bubble, The Great Moderation, too big to fail, total factor productivity, trade route, tulip mania, yield curve

Exhibit 4.1 Equity vs. bond performance is closely linked to the business cycle; commodities tend to lag in a recession (average monthly, real total returns (since 1950)) Note: We use US NBER recessions. We further divide expansions and recessions if growth is positive or negative. Usually late expansion with positive growth is the longest phase in the cycle. Pre-1973 oil prices were regulated by the Texas Railroad Commission and gold prices were fixed by Bretton Woods until 1968. In the later phases of expansion, the best-performing assets remain equities, but these are dominated by equities with a higher beta, or those that tend to amplify movements in underlying fundamentals to a greater degree, such as EM equities. Commodities tend to be more neutral in this phase, and fixed income assets tend to underperform as a consequence of a higher investor tolerance for risk and, in most cases, higher inflation.

1961–1962 ‘Kennedy Slide’: Rising rates from 1959 Cold War tension No - 1966 Inflation following Johnson Great Society programme; Fed raised rates by approximately 1.5% in 1 year No - 1968–1970 Vietnam war and inflation; Fed raised rates to 9% from 4% 2 years before; between the start of 1968 and mid-1968 rates rose by 3% Yes Dec 1969 – Nov 1970 1973–1974 The crash after the collapse of the Bretton Woods system over the previous 2 years, with the associated ‘Nixon Shock’ and USD devaluation under the Smithsonian Agreement 1973 Oil Crisis: Price of oil rose from $3 per barrel to nearly $12 Yes Nov 1973 – Mar 1975 1980–1982 ‘Volcker crash’; the 1979 second oil crisis was followed by strong inflation; the Fed raised its rates from 9% to 19% in six months Yes Jan 1980 – July 1980 Jul 1981 – Nov 1982 1987 Black Monday: Flash Crash: computerised ‘programme trading’ strategies swamped the market; tensions between the US and Germany over currency valuations No - 1990 Gulf War: Iraq invasion of Kuwait; oil prices doubled Yes July 1990 – Mar 1991 2000–2002 Dotcom bubble; technology companies bankruptcy; Enron scandal; 09/11 attacks Yes Mar 2001 – Nov 2001 2007–2009 Housing bubble; sub-prime loan & CDS collapse; US housing market collapse Yes Dec 2007 – Jun 2009 Extending this analysis shows that, on the standard definition (of declines of 20% or more), there have been 27 bear markets in the S&P 500 since 1835 and 10 in the post-war period.

Although the economic environment was conducive to strong returns in the equity markets in this period, valuations also recovered from their post-war levels aided by a secular decline in the equity risk premium as many of the risks to the global system faded. New international institutions and a rule-based global trading system emerged.1 The setting up of the International Monetary Fund (IMF) and the World Bank, as part of the new international payments system known as the Bretton Woods monetary system, helped to reduce uncertainty. Meanwhile, global trade was strengthened and expanded by stronger institutional frameworks, such as the General Agreement on Tariffs and Trade (GATT), created in 1948, and the United Nations Conference on Trade and Development (UNCTAD), founded in 1964.


pages: 385 words: 128,358

Inside the House of Money: Top Hedge Fund Traders on Profiting in a Global Market by Steven Drobny

Abraham Maslow, Alan Greenspan, Albert Einstein, asset allocation, Berlin Wall, Bonfire of the Vanities, Bretton Woods, business cycle, buy and hold, buy low sell high, capital controls, central bank independence, commoditize, commodity trading advisor, corporate governance, correlation coefficient, Credit Default Swap, currency risk, diversification, diversified portfolio, family office, financial engineering, fixed income, glass ceiling, Glass-Steagall Act, global macro, Greenspan put, high batting average, implied volatility, index fund, inflation targeting, interest rate derivative, inventory management, inverted yield curve, John Meriwether, junk bonds, land bank, Long Term Capital Management, low interest rates, managed futures, margin call, market bubble, Market Wizards by Jack D. Schwager, Maui Hawaii, Mexican peso crisis / tequila crisis, moral hazard, Myron Scholes, new economy, Nick Leeson, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, oil shock, out of africa, panic early, paper trading, Paul Samuelson, Peter Thiel, price anchoring, proprietary trading, purchasing power parity, Reminiscences of a Stock Operator, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, risk/return, rolodex, Sharpe ratio, short selling, Silicon Valley, tail risk, The Wisdom of Crowds, too big to fail, transaction costs, value at risk, Vision Fund, yield curve, zero-coupon bond, zero-sum game

He learned a lot of his theory from his experience as an investor and this theory in turn modified his practice as an investor.” Keynes’ distaste of floating currencies (ironically his original vehicle of choice for speculating) eventually led him to participate in the construction of a global fixed currency regime at Bretton Woods in 1945.The post-World War II economic landscape, coupled with the ensuing Cold War–induced peace and the relative stability fostered by Bretton Woods, led to a boom in 500 450 Keynes 400 UK Broad Country Index Initial Base Value (100) 350 300 250 200 150 100 50 19 45 19 44 19 43 19 42 19 41 19 40 19 39 19 38 19 37 19 36 19 35 19 34 19 33 19 32 19 31 19 30 19 29 19 28 0 FIGURE 2.1 King’s College Cambridge Chest Fund and the UK Broad Country Equity Index Source: Motley Fool.

During that time, there were few better opportunities in the global markets than buying and holding stocks. It wasn’t until the breakdown of the Bretton Woods Agreement in 1971, and the subsequent decline in the U.S. dollar, that the investment universe again offered the opportunities that spawned the next generation of global macro managers. POLITICIANS AND SPECULATORS Recent history is riddled with examples of politicians attempting to place blame on speculators for shortcomings in their own policies, and the breakdown of Bretton Woods was no exception. When the currency regime unraveled, President Nixon attempted to lay blame on speculators for “waging an all-out war on the dollar.”

Underlying pressures combined with policy decisions drive market events. THE NEXT GENERATION OF GLOBAL MACRO MANAGERS The next round of global macro managers emerged out of the breakdown of the Bretton Woods fixed currency regime, which untethered the world’s markets. With currencies freely floating, a new dimension was added to the investment decision landscape. Exchange rate volatility was introduced while new tradable products were rapidly being developed. Prior to the breakdown of Bretton Woods, most active trading was done in the liquid equity and physical commodity markets. As such, two different streams of global macro hedge fund managers emerged out of these two worlds in parallel. 8 INSIDE THE HOUSE OF MONEY The Equity Stream One stream of global macro hedge fund managers emerged out of the international equity trading and investing world.


Super Continent: The Logic of Eurasian Integration by Kent E. Calder

"World Economic Forum" Davos, 3D printing, air freight, Asian financial crisis, Bear Stearns, Berlin Wall, blockchain, Bretton Woods, business intelligence, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, cloud computing, colonial rule, Credit Default Swap, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, disruptive innovation, Doha Development Round, Donald Trump, energy transition, European colonialism, export processing zone, failed state, Fall of the Berlin Wall, foreign exchange controls, geopolitical risk, Gini coefficient, high-speed rail, housing crisis, income inequality, industrial cluster, industrial robot, interest rate swap, intermodal, Internet of things, invention of movable type, inventory management, John Markoff, liberal world order, Malacca Straits, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, new economy, oil shale / tar sands, oil shock, purchasing power parity, quantitative easing, reserve currency, Ronald Reagan, seigniorage, Shenzhen special economic zone , smart cities, smart grid, SoftBank, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, Suez canal 1869, Suez crisis 1956, supply-chain management, Thomas L Friedman, trade liberalization, trade route, transcontinental railway, UNCLOS, UNCLOS, union organizing, Washington Consensus, working-age population, zero-sum game

Profile of the Current System of Global Affairs The major structural features of our current global political economy grew out of the World War II peace settlement, and hence strongly reflect the overwhelming position of political, economic, and military strength that the Toward a New World Order 207 United States enjoyed at that time. The core was the Bretton Woods system of international finance, established at a gathering of distinguished financial specialists in July 1944, led by Lord Maynard Keynes of Britain and Harry Dexter White of the United States. It was quintessentially a regulatory system in Lowi’s parlance—an elaborate, formalized structure of institutions and rules, with concentrated costs and diffuse, broadly distributed benefits. One single power—the United States—played a tortured hegemonic role. The historic Bretton Woods conference, setting forth a plan to reconfigure the international financial system so as to avoid repeating the coordination failures of the Depression years, proposed establishing multiple multilateral financial institutions, in each of which the United States was to hold veto power.

Our point of departure is the important analytical 18 chapter 1 distinction made by Theodore Lowi among three functional categories of policy decisions— distributive, regulatory, and redistributive.36 The costs and benefits generated in the three types of cases are, as Lowi points out, crucially different. Table 1.4 suggests implications for concrete systems of international order. ta b l e 1 . 4 Systems of international order Rules Based Leadership Structure Yes No Unitary REGULATORY (Bretton Woods System) TRIBUTARY (Traditional Chinese World Order) Plural CONCERT OF POWERS (Congress of Vienna) DISTRIBUTIVE REGIONALISM/ GLOBALISM (Belt and Road Initiative) Regulatory and redistributive policies diffuse benefits to broad categories of individuals but concentrate costs. While equitable in many ways due to their broad application to general classes of people and situations, policies in these categories tend to provoke conflict and implementation resistance precisely because costs are so clearly concentrated and benefits are diffuse.

China’s Belt and Road Initiative of recent years falls into this category, Eurasian Reconnection and Renaissance 19 and the US Marshall Plan of the late 1940s shared some of the same general characteristics. The foregoing categories are simply abstract types, and do not correspond precisely to any specific systems in the real world. They are, however, evocative. The classic Bretton Woods system of the early post–World War II years was clearly regulatory; China’s BRI of recent years is clearly distributive. This distinction, we suggest, has important consequences for both the normative acceptability and the political acceptability of both types of systems in the broader world. Distributive Globalism as a Resolution?


pages: 353 words: 148,895

Triumph of the Optimists: 101 Years of Global Investment Returns by Elroy Dimson, Paul Marsh, Mike Staunton

asset allocation, banking crisis, Berlin Wall, Black Monday: stock market crash in 1987, book value, Bretton Woods, British Empire, buy and hold, capital asset pricing model, capital controls, central bank independence, classic study, colonial rule, corporate governance, correlation coefficient, cuban missile crisis, currency risk, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, European colonialism, fixed income, floating exchange rates, German hyperinflation, index fund, information asymmetry, joint-stock company, junk bonds, negative equity, new economy, oil shock, passive investing, purchasing power parity, random walk, risk free rate, risk tolerance, risk/return, selection bias, shareholder value, Sharpe ratio, stocks for the long run, survivorship bias, Tax Reform Act of 1986, technology bubble, transaction costs, yield curve

There is a pervasive tendency for real exchange rates to have been more volatile in the recent floating-rate period, than in the earlier Bretton Woods era as demonstrated more formally by Taylor (2001). Increased currency volatility has come as a disappointment to the proponents of floating rates and to those who had accepted their arguments. On average, the fifteen non-US countries had a volatility of exchange rates relative to the dollar that was 2.4 times as large during the floating rate period, as compared to the Bretton Woods period. The average volatility of the fifteen non-UK countries’ sterling exchange rates was 2.1 times as large as in the Bretton Woods period (not shown in the chart), while that of the non-Japanese countries’ yen exchange rate, and of the non-German countries’ Deutschemark exchange rate were also much increased.

It was briefly reinstated from 1925–31 as the Gold Exchange Standard. However, competitive devaluations, beggar-thy-neighbor trade policies, and the destructive effects of wars punctuated the first half of the twentieth century. In 1944 at Bretton Woods, New Hampshire, the Allied nations created the International Monetary Fund (IMF) and the World Bank to instigate a new post-war monetary system. Implemented in 1946, the Bretton Woods Agreement required each government to peg its exchange rate to the dollar or gold. Since one ounce of gold was priced at $35, and the US Treasury stood ready to exchange dollars for gold, exchange rates were fixed against the dollar.

Though infrequent, devaluations 94 Triumph of the Optimists: 101 Years of Global Investment Returns and revaluations were often large. When the United States devalued the dollar in 1971, the Bretton Woods System collapsed. After some last-ditch attempts to set new fixed rates, the world turned in 1973 to the floating exchange rate system that persists to the present day. There were thus four exchange rate regimes over the twentieth century. During 1900–14 the gold standard was in effect. After that, apart from a brief return to the Gold Exchange Standard, the period 1914–45 contained the two world wars. The Bretton Woods fixed-rate system then operated from 1946–71. Finally, the period since has been one of floating exchange rates.


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, asset allocation, Basel III, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamond, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, fear index, financial engineering, financial innovation, Flash crash, forward guidance, Garrett Hardin, Gini coefficient, Glass-Steagall Act, global reserve currency, high net worth, High speed trading, hindsight bias, hype cycle, income inequality, inflation targeting, interest rate swap, inverted yield curve, Isaac Newton, Jaron Lanier, John Perry Barlow, joint-stock company, joint-stock limited liability company, junk bonds, Kodak vs Instagram, Kondratiev cycle, Large Hadron Collider, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, low interest rates, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Ponzi scheme, precautionary principle, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, trickle-down economics, two and twenty, Two Sigma, Tyler Cowen, Washington Consensus, wealth creators, working poor, yield curve

Ordinary members of the public hear much more about the equity market—the “stock market”—in the news and general chatter, but the bond market is much bigger and more important, in global financial terms: as an investor tells Michael Lewis in The Big Short, “The equity world is like a fucking zit compared to the bond market.”23 Bretton Woods The setting for a conference in July 1944 where the Allies set out the agreement to regulate international economic relations after the war. Countries agreed to fixed exchange rates, tied to the US dollar, which in turn was tied to the ownership of actual, physical gold; the conference also agreed to the creation of the International Monetary Fund and the International Bank of Reconstruction and Development, which was to become the World Bank.

Countries agreed to fixed exchange rates, tied to the US dollar, which in turn was tied to the ownership of actual, physical gold; the conference also agreed to the creation of the International Monetary Fund and the International Bank of Reconstruction and Development, which was to become the World Bank. The specific aim of the conference was to avoid the “beggar thy neighbor” policies between states that had played such a role in the turmoil of the twentieth century. The Bretton Woods system lasted from 1945 until President Nixon unilaterally took the USA off it on 15 August 1971, an event known as the “Nixon shock,” which reintroduced free-floating currencies. Nixon’s reasons for doing that were linked to the pressures on the US economy created by the Vietnam War and the growing trade deficit; his actions allowed the US dollar to drop in value, which was a help to industry and exports.

All the gold in the world would fit in a cube roughly twenty meters on each side. Those reasons add together to make gold historically the most popular underpinning for coinage and thence for paper money and modern currencies. Gold hasn’t played this role globally since 1971, when President Nixon ended the Bretton Woods system, in which the US dollar was underpinned by gold reserves and linked to foreign currencies through fixed exchange rates. The value of gold sharply declined after that, losing two-thirds of its value, but in the noughties, as global uncertainties rose, gold had an extraordinary ten years, surging in price from $271 an ounce in 2001 to a peak of more than $1,800 in 2011.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

The distinction was made because the credit crunch that began in 2007 cried out for a global solution; for a while, then, there was a commonality of interest. History suggests, however, that commonalities of interest do not last very long. Until and unless the G20 is able to confront the difficulties outlined in this book, it is likely to head the same way as the League of Nations and the Bretton Woods exchange-rate system – in other words, into the dustbin of history. The G20 doesn’t really have the teeth to offer the international rule of law which was, in effect, forced upon the world by the imperial powers in the nineteenth century. What might a new international order begin to look like?

During that decade, one economic disaster followed another, largely because there was no monetary discipline and, hence, no anchor for inflationary expectations. The commodity price surge at the beginning of the 1970s came about partly because the US over-stimulated demand in a bid to fund the Vietnam War. The collapse of the Bretton Woods exchange-rate system, and the volatility that followed, reflected the willingness to tolerate inflation as the ‘acceptable’ cost of delivering a low rate of unemployment. The quadrupling of oil prices at the end of 1973, as a consequence of the Arab oil embargo (itself a reaction to the Yom Kippur War), was only possible because the inflation genie was already out of the bottle.

The dollar’s rise in the 1920s was, in part, a reflection of the economic costs of the First World War: the Treaty of Versailles and subsequent hyperinflation put paid to the German mark’s reserve currency status, while economic upheavals in both France and the UK (with its General Strike in 1926) made the dollar a more attractive option. These were not happy times for globalization. Similarly, the dollar temporarily lost its way as a reserve currency in the 1970s alongside the collapse of the Bretton Woods exchange-rate system. The Deutsche Mark was suddenly in high demand while globalization was in trouble. Germany, unlike the US, wasn’t in the business of creating inflation. Thus, while it’s perfectly possible to have more than one reserve currency circulating simultaneously, it has typically been a sign of weakness rather than strength.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, Alan Greenspan, altcoin, Apple Newton, bank run, banking crisis, bitcoin, Bitcoin Ponzi scheme, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, Cody Wilson, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cross-border payments, cryptocurrency, David Graeber, decentralized internet, disinformation, disintermediation, Dogecoin, driverless car, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, Firefox, Flash crash, Ford Model T, Fractional reserve banking, Glass-Steagall Act, hacker house, Hacker News, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, off-the-grid, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, printed gun, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, Vitalik Buterin, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

After all, there is no fully endorsed international criminal court; the one in The Hague isn’t recognized by Washington. The international realm exists in a state of quasi anarchy—a perfect fit for borderless cryptocurrencies. Some international agreements do stick, such as the Bretton Woods system of pegged currencies established in 1944 amid the crisis of World War II (and ended when President Nixon squelched the gold standard in 1971). Might a cryptocurrency crisis goad governments into another such sweeping agreement? A Bretton Woods II? Those who’ve dreamed of the IMF’s playing an intermediary role in international commerce, who’ve wanted to free the world of its unhealthy dependence on the dollar and to reduce the excessive influence of the Fed and U.S.

Casey, September 12, 2014. Zurich-based investment manager and high-tech: Richard Olsen, interviewed by Michael J. Casey, December 11, 2013, and June 13, 2014. when the dollar goes digital, “national borders are”: Eswar Prasad, interviewed by Michael J. Casey, February 7, 2014. such as the Bretton Woods system of pegged: M. J. Stephey, “Bretton Woods System,” Time, October 21, 2008, http://content.time.com/time/business/article/0,8599,1852254,00.html. “If suddenly the entire world starts”: Roger Ver, speaking at the North American Bitcoin Conference, Miami Beach, January 26, 2014. Index The index that appeared in the print version of this title does not match the pages in your e-book.

Britain—led by the economist John Maynard Keynes—wanted an internationally based solution to be run by the newly created International Monetary Fund. But in the end, the United States, as the only major power not devastated by war and with its currency now globally dominant, called the shots. The U.S. dollar became the central pole around which the global economy would function. It remains so today. The pact signed at the Bretton Woods Conference in 1944 repegged the dollar to gold and then got the rest of the world to peg their currencies to the dollar. Foreign governments holding reserves in dollars were given the right to redeem them in gold at a fixed rate. It worked as a financial stabilizer for two and half decades, but by the late 1960s the system’s own constraints—in this case imposed directly on the Fed—made it unsustainable.


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The Corona Crash: How the Pandemic Will Change Capitalism by Grace Blakeley

Anthropocene, asset-backed security, basic income, Big Tech, bond market vigilante , Bretton Woods, business cycle, capital controls, carbon tax, central bank independence, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, crony capitalism, debt deflation, decarbonisation, degrowth, deindustrialization, don't be evil, financial deregulation, Francis Fukuyama: the end of history, full employment, gig economy, global pandemic, global value chain, green new deal, Greenspan put, income inequality, informal economy, inverted yield curve, invisible hand, Jeff Bezos, liberal capitalism, light touch regulation, lockdown, low interest rates, Martin Wolf, Modern Monetary Theory, moral hazard, move fast and break things, Network effects, North Sea oil, Northern Rock, offshore financial centre, pensions crisis, Philip Mirowski, post-war consensus, price mechanism, quantitative easing, regulatory arbitrage, rent control, reshoring, Rishi Sunak, savings glut, secular stagnation, shareholder value, social distancing, structural adjustment programs, too big to fail, universal basic income, unorthodox policies, Washington Consensus, yield curve

The one it replaced has variously been called the post-war, social democratic, or Keynesian consensus.23 Under this growth model – underpinned by an increase in the power of labour relative to capital that emerged from the Second World War and the institutionalisation of this political settlement both domestically through the rise of state planning and internationally with the creation of the Bretton Woods institutions – the state committed itself to promoting full employment through public spending. This commitment bolstered the power of organised labour, which developed a corporatist relationship with the nation-state. The system of capital controls and exchange rate pegging agreed upon at the 1944 Bretton Woods conference supported the development of social democracy in the West and facilitated the emergence of a unique period of high growth, low unemployment and falling inequality.

Controls on capital mobility were undermined by the emergence of the unregulated eurodollar markets in the City of London.24 With the world’s largest superpower facing new industrial competition abroad and an increasingly expensive war in Vietnam, Nixon in 1971 announced the end of the dollar’s convertibility to gold. Two years later the oil price spike sent inflation soaring and the distributional conflict between capital and labour broke into the open across the Western world. The collapse of the exchange rate pegging system developed at Bretton Woods and a decade of nearconstant industrial conflict, economic stagnation and political turmoil created space for certain actors – namely, neoliberal academics and politicians – to consolidate support for an alternative growth model, under the watchful eye of their supporters in international finance.

In reality its economic system and thus its political policy is directed from outside.’11 Neocolonial power is exercised through two interlinked processes: the domination of Western monopolies over the markets of the Global South (process 1), and the transfer of any profits that do accrue to domestic capital in the Global South to the Global North through extractive networks linked to major financial centres like the City of London (process 2). While process 1 dominated during the Bretton Woods era, process 2 has become much more important in the era of financial globalisation. The pivot came with the Third World debt crisis of the 1970s and 1980s, a result of oil-price shocks and rising interest rates in the West, which forced debtdistressed countries such as Ghana to implement promarket reforms in exchange for debt relief.12 The debt crisis was used as an opportunity to ‘open up’ poorer countries to international investment – a euphemism for preventing democratically elected governments from embarking upon state-led development programmes in favour of the external enforcement of ‘market friendly’ policies that would benefit international capital.


Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Pérez

agricultural Revolution, Alan Greenspan, Big bang: deregulation of the City of London, Bob Noyce, Bretton Woods, business cycle, capital controls, commoditize, Corn Laws, creative destruction, David Ricardo: comparative advantage, deindustrialization, distributed generation, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, Ford Model T, full employment, Hyman Minsky, informal economy, joint-stock company, Joseph Schumpeter, junk bonds, knowledge economy, late capitalism, market fundamentalism, military-industrial complex, new economy, nuclear winter, offshore financial centre, post-industrial society, profit motive, railway mania, Robert Shiller, Sand Hill Road, satellite internet, scientific management, Silicon Valley, Simon Kuznets, South Sea Bubble, Suez canal 1869, technological determinism, The Theory of the Leisure Class by Thorstein Veblen, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, trade route, tulip mania, Upton Sinclair, vertical integration, Washington Consensus

The event in question, though apparently small and relatively isolated, is experienced by the pioneers of the time as the discovery of a new territory, as a powerful announcement of what those technologies can offer far into the future and as a call for entrepreneurial action. By contrast, any attempt at indicating an ending date for each revolution would be relatively meaningless. It is true that certain events can be felt by society as announcing the ‘end of an era’, such as the 1973 oil crisis and the 1971 breakdown of the Bretton Woods agreement on the dollar. Nevertheless, as will be discussed in the next chapter, each set of technologies undergoes a difficult and prolonged period of stretching when the impending exhaustion of its potential becomes increasingly visible. This phenomenon is crucial to the present interpretation.

The Turning Point: Rethinking and Rerouting Development The notion of a ‘turning point’ is a conceptual device to represent the fundamental changes required to move the economy from a Frenzy mode, shaped by financial criteria, to a Synergy mode, solidly based on growing production capabilities. The turning point then is neither an event nor a phase; it is a process of contextual change. It can take any amount of time, from a few months to several years, it can be marked by clear-cut events such as the Bretton Woods meetings, enabling the orderly international Deployment of the fourth surge, or the repeal of the Corn Laws in Britain, facilitating the Synergy of the second. It could also be happening in the background with a series of changes that seem to come together as deployment begins. The turning point has to do with the balance between individual and social interests within capitalism.

Hours of work, salaries, health, social security, protection, the risk of invalidity and old age pensions stopped being a personal issue’ and became more and more a responsibility taken up by the state.211 For the full development of the Age of the Automobile, a wide range of institutions was set up. Many of them were to put order in international finance, investment and trade: The International Monetary Fund (IMF), the World Bank, the Bank of International Settlements (BIS), the Marshall Plan and supervisory agencies, the reserve role assigned to the US dollar in the Bretton Woods accords, the General Agreement on Tariffs and Trade (GATT) and others. Many more were to establish an orderly framework at the national level: Keynesian policies, separate regulatory bodies for banks, securities, insurance, savings (to avoid the mixed financial services that allowed risking people’s savings in 209.


pages: 268 words: 74,724

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank by John Tamny

Airbnb, Alan Greenspan, Apollo 13, bank run, Bear Stearns, Bernie Madoff, bitcoin, Bretton Woods, business logic, buy and hold, Carl Icahn, Carmen Reinhart, corporate raider, correlation does not imply causation, cotton gin, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Donald Trump, Downton Abbey, Fairchild Semiconductor, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, Glass-Steagall Act, Home mortgage interest deduction, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, Larry Ellison, liquidity trap, low interest rates, Mark Zuckerberg, market bubble, Michael Milken, Money creation, money market fund, moral hazard, mortgage tax deduction, NetJets, offshore financial centre, oil shock, peak oil, Peter Thiel, Phillips curve, price stability, profit motive, quantitative easing, race to the bottom, Ronald Reagan, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Solyndra, Steve Jobs, The Wealth of Nations by Adam Smith, too big to fail, Travis Kalanick, Uber for X, War on Poverty, yield curve

So incensed was Fed Chairman Eugene Meyer by FDR’s decision that he actually resigned.6 Let’s shift to 1944 and the Bretton Woods monetary conference at the Mount Washington Hotel. The U.S. delegation was led by members of the U.S. Treasury; assistant secretary Harry Dexter White was the lead U.S. delegate. With the dollar pegged to gold at 1/35th of an ounce, the currencies of the free world would peg theirs to a dollar that had a stable definition. At least from the standpoint of the United States, the global currency agreement, per Benn Steil’s The Battle of Bretton Woods (2013), was largely a creation of the Treasury and the Roosevelt White House.7 And while there were sometimes large wiggles in the dollar price of gold in the aftermath of 1944, the dollar was defined as 1/35th of an ounce right up until 1971.

INDEX Adapt (Harford), 32, 64–65 The Age of Reagan (Hayward), 49, 169 Allison, John, 119, 152, 172–73 Altig, David, 156 Amazon, 97–98, 108, 125, 143, 155 Ambassador Hotel, 34, 35–36 Apple Computer, 30–31, 125, 143 Apple Music, 9–10 Austin, Texas, 123, 148 Austrian School of economics, 79, 87, 88–89, 90, 91–95, 113–14, 141 See also von Mises, Ludwig Bain Capital, 126 Baker Hughes, 73 Baltimore, Maryland, 135, 139–40, 143 Baltimore Ravens, 17 The Baltimore Sun, 135 banking bank cash reserve and capital requirements, 98–102 federal deposit insurance, 101–2 housing boom and “easy credit,” 113–22 inability of banks to multiply money and credit, 86–92, 96 insolvent banks and necessity of the Fed, 164–65 interbank lending rates, 114–16, 156–58 lending practices, 86–90, 98–102, 109–10 necessity of traditional banks, 105–12 proposed Glass-Steagall reintroduction, 102–3 and Wall Street, 126, 129–31 Bank of America, 89, 103, 108, 120 Bank of Bird-in-Hand, 111 Bank of Japan, 152, 159 Bartley, Robert, 70, 71, 72 Bartley, Robert L., 157–58 The Battle of Bretton Woods (Steil), 95, 169 Bear Stearns, 120 Beatty, Warren, 23–24, 28 Beckworth, David, 138–39 Berkshire Hathaway, 62, 85 Bernanke, Ben, 41–47, 72, 106, 128, 149, 154, 164 Bezos, Jeff, 59, 97–98, 150 Biden, Joe, 59 billion-dollar “unicorn” companies, 28, 148 Biography of the Dollar (Karmin), 100 Bitcoin, 144 Blinder, Alan, 1 Bloomberg news organization, 42 Blumenthal, Michael, 117, 170 Bonnie & Clyde (film), 23 Brady, Tom, 16 Bretton Woods monetary conference, 95, 169 Brookes, Warren, 49, 50, 69, 72, 97 Brown, James, 25 Buffett, Warren, 59, 62, 78, 85, 150 Burns, Arthur, 169, 170 Bush, George W., 71, 72–73, 118–19, 121, 171 cab fares during periods of heavy demand, 11–12 Candy, John, 22 Capital City (Kessner), 30 capitalism credit and crowdsourcing, 110 failure as feature of, 58, 89, 100, 125 and filling of unmet needs, 112, 179 turning scarcity into abundance, 53–54, 81 car companies, 56–57 car manufacturing process, 65–66 Carroll, Pete, 18–20 Carter, Jimmy, 117, 170 Cassel, Gustav, 119 Cato Institute, 135 The CEO Tightrope (Trammell), 123–24 The Changed Face of Banking (Smith), 111, 129 Chinese economy, 94, 96, 118, 135–36, 137, 138 Chinese stock market, 152–53 Citadel hedge fund, 41, 42, 43 Citigroup, 128 Cleveland, Ohio, 137–38 Clinton, Bill, 51–52, 71, 72, 171 Clinton, Hillary, 48, 51–52, 59 coaching and recruiting of college athletes, 15–21, 78–79 Cochrane, John, 102 computer company failures, 57 Congress.

This isn’t to say that credit created in the real economy sat idle thanks to the Fed, but it is to say that the Fed itself, worried in Austrian fashion about too much credit creation, actually attempted to slam on the brakes. As economic historian Benn Steil recalls about the 1920s Fed in The Battle of Bretton Woods (2013), a history of the steps that led to the post–WWII gold standard: Unlike the Bank of England in the late nineteenth century, the U.S. Federal Reserve of the 1920s simply did not follow the cardinal rule of the gold standard—that is, to expand credit conditions when gold flowed in, and contract them when gold flowed out.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Their efforts to develop and to improve living standards provided further impetus for global expansion, but despite their new freedom, most initially found themselves continuing to provide raw materials, investment outlets, markets, and cheap labor for the industrialized countries of the West. The international monetary order and infrastructure of postwar economic expansion was provided by the Bretton Woods Agreement of July 1944. Bretton Woods sought to ensure that there would be no return to the conditions of the Great Depression, especially the collapse of growth, employment, and international trade, and the rise of protectionism that accompanied it. The focus was on establishing free trade based on the convertibility of currencies with stable exchange rates.

The West, moreover, did not want to confer any advantage on the communist Soviet Union, which controlled a sizeable proportion of known gold reserves and had emerged as a geopolitical rival to the US. Bretton Woods therefore established a system of fixed exchange rates using the US dollar as a reserve currency. The dollar was to have a set relationship to gold, at US$35 an ounce, and the US government committed to converting dollars into gold at that price. Other countries would peg their currencies to it, giving the US an unprecedented influence in the global economy that exists to this day. Supreme as the world's currency, the dollar was now as good as gold. Bretton Woods also established the International Bank for Reconstruction and Development (better known as the World Bank) and the International Monetary Fund (IMF).

In October 1973, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) proclaimed an oil embargo, in response to US backing for Israel during the Yom Kippur War and in support of the Palestinians. The price of oil rose from US$3 per barrel to nearly US$12. In 1979, in the wake of the Iranian revolution, oil output fell and the price rose to nearly US$40 per barrel. This resulted in higher inflation and a sharp global economic slowdown. This decade saw the collapse of the Bretton Woods international monetary system. The cost to the US of the Vietnam War and the Great Society programs had spurred sharp increases in prices, along with large budget deficits and increased dollar outflows to pay for the expenditures. Fearing devaluation of the US currency relative to the German Deutsche Mark and the Japanese yen, traders sought to change dollars into gold.


pages: 322 words: 87,181

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, behavioural economics, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, export processing zone, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, general purpose technology, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, open immigration, Pareto efficiency, postindustrial economy, precautionary principle, price stability, public intellectual, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, Solyndra, special economic zone, spectrum auction, Steven Pinker, tacit knowledge, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, Tyler Cowen, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

Well-functioning, sustainable markets are backed by a wide range of institutions that provide the critical functions of regulation, redistribution, monetary and fiscal stability, and conflict management. These institutional functions have so far been provided largely by the nation-state. Throughout the postwar period, this not only did not impede the development of global markets but it facilitated it in many ways. The guiding philosophy behind the Bretton Woods regime, which governed the world economy until the 1970s, was that nations—not only the advanced nations but also the newly independent ones—needed the policy space within which they could manage their economies and protect their social contracts. Capital controls, restricting the free flow of finance between countries, were viewed as an inherent element of the global financial system.

Trade liberalization remained limited to manufactured goods and to industrialized nations; when imports of textiles and clothing from low-cost countries threatened domestic social bargains by causing job losses in affected industries and regions, these, too, were carved out as special regimes. Yet trade and investment flows grew by leaps and bounds, in no small part because the Bretton Woods recipe made for healthy domestic policy environments. In fact, economic globalization relied critically on the rules maintained by the major trading and financial centers. As John Agnew has emphasized, national monetary systems, central banks, and financial regulatory practices were the cornerstones of financial globalization.12 In trade, it was more the domestic political bargains than GATT rules that sustained the openness that came to prevail.

China, which engineered history’s most impressive poverty reduction and growth outcomes, was, of course, a major beneficiary of others’ economic openness. But for its part, it followed a highly cautious strategy that combined extensive industrial policies with selective, delayed import liberalization and capital controls. Effectively, China played the globalization game by Bretton Woods rules rather than by hyperglobalization rules. Is Global Governance Feasible or Desirable? By now it is widely understood that globalization’s ills derive from the imbalance between the global nature of markets and the domestic nature of the rules that govern them. As a matter of logic, the imbalance can be corrected in only one of two ways: expand governance beyond the nation-state or restrict the reach of markets.


pages: 576 words: 105,655

Austerity: The History of a Dangerous Idea by Mark Blyth

"there is no alternative" (TINA), accounting loophole / creative accounting, Alan Greenspan, balance sheet recession, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, deindustrialization, disintermediation, diversification, en.wikipedia.org, ending welfare as we know it, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial repression, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, Gini coefficient, global reserve currency, Greenspan put, Growth in a Time of Debt, high-speed rail, Hyman Minsky, income inequality, information asymmetry, interest rate swap, invisible hand, Irish property bubble, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Long Term Capital Management, low interest rates, market bubble, market clearing, Martin Wolf, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Occupy movement, offshore financial centre, paradox of thrift, Philip Mirowski, Phillips curve, Post-Keynesian economics, price stability, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Solow, savings glut, short selling, structural adjustment programs, tail risk, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, Two Sigma, unorthodox policies, value at risk, Washington Consensus, zero-sum game

Formulated for and in Latin America during a period of chronic inflation following the debt crisis of the prior decade, these ideas quickly became the instruction sheet applied to any developing or transitioning (from communism) economy in the 1990s. Reinventing the Bretton Woods Institutions These Bretton Woods institutions (so named because they were set up in the aftermath of the 1944 Bretton Woods conference that reshaped the world economy after World War II) were, by the early 1980s, having a tough time of it.80 The IMF, in particular, had lost its original role and was struggling to find a new mission. The IMF was originally designed to provide offsetting finance to states facing exchange-rate shocks under the fixed-exchange-rate system that governed the world’s money from the 1940s until the 1970s—the Bretton Woods system that pegged the dollar to gold and everyone else’s currency to the dollar.

The IMF was originally designed to provide offsetting finance to states facing exchange-rate shocks under the fixed-exchange-rate system that governed the world’s money from the 1940s until the 1970s—the Bretton Woods system that pegged the dollar to gold and everyone else’s currency to the dollar. Once the United States shut down gold convertibility in 1971, Bretton Woods fell apart, and the world’s major currencies began to float against each other. The IMF, literally, had nothing to do. But large bureaucratic entities do not cease to exist the moment their mission is either accomplished or disappears. As the March of Dimes shows us so well, they invent new missions.81 In the case of the IMF, they became the provider of “firm-surveillance” of member states’ policies to increase global transparency, at least for the developed world.

Those alternative choices are, first, what is known as financial repression, and second, a renewed effort to seriously collect taxes on a global scale. These efforts to get us out of this mess may not be popular, but one, or both, is coming. The End of Banking The story of the crisis reconstructed in chapters 2 and 3 can, and perhaps should, be seen in a bigger context. At the end of the Bretton Woods era, when the United States finally went off gold in 1971, states around the world had to adjust to what Eric Helleiner has called “the reemergence of global finance.”3 Floating exchange rates, deregulation, disintermediation, and the rest, which made finance the most profitable sector of the American and British economies by the 2000s, was the new order of things.


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Making the Future: The Unipolar Imperial Moment by Noam Chomsky

Alan Greenspan, Albert Einstein, Berlin Wall, Bretton Woods, British Empire, capital controls, collective bargaining, corporate governance, corporate personhood, creative destruction, deindustrialization, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Frank Gehry, full employment, Glass-Steagall Act, Howard Zinn, Joseph Schumpeter, kremlinology, liberation theology, Long Term Capital Management, market fundamentalism, Mikhail Gorbachev, Nelson Mandela, no-fly zone, Occupy movement, oil shale / tar sands, precariat, public intellectual, RAND corporation, Robert Solow, Ronald Reagan, Seymour Hersh, structural adjustment programs, The Great Moderation, too big to fail, uranium enrichment, Washington Consensus, WikiLeaks, working poor

Investors and lenders can “vote” by capital flight, attacks on currencies and other devices offered by financial liberalization. That is one reason why the Bretton Woods system established by the United States and Britain after World War II instituted regulated currencies and permitted capital controls. The Great Depression and the war had aroused powerful radical democratic currents, ranging from the anti-fascist resistance to working-class organization. These pressures made it necessary to permit social democratic policies. The Bretton Woods system was designed in part to create a space for government action responding to public will—for some measure of democracy, that is.

The Bretton Woods system was designed in part to create a space for government action responding to public will—for some measure of democracy, that is. John Maynard Keynes, the British negotiator, considered the most important achievement of Bretton Woods to be establishment of the right of governments to restrict capital movement. In dramatic contrast, in the neoliberal phase after the breakdown of the Bretton Woods system in the 1970s, the U.S. Treasury now regards free capital mobility as a “fundamental right,” unlike such alleged “rights” as those guaranteed by the Universal Declaration of Human Rights: health, education, decent employment, security and other rights that the Reagan and Bush administrations have dismissed as “letters to Santa Claus,” “preposterous,” mere “myths.”

He explains that in the nineteenth century, governments had not yet been “politicized by universal male suffrage and the rise of trade unionism and parliamentary labor parties.” Therefore the severe costs imposed by the virtual parliament could be transferred to the general population. But with the radicalization of the general public during the Great Depression and the anti-fascist war, that luxury was no longer available to private power and wealth. Hence in the Bretton Woods system, “limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures.” The obvious corollary is that after the dismantling of the postwar system in the 1970s, democracy is restricted. It has therefore become necessary to control and marginalize the public in some fashion, processes particularly evident in the more business-run societies like the United States.


Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition by Kindleberger, Charles P., Robert Z., Aliber

active measures, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Black Monday: stock market crash in 1987, Black Swan, Boeing 747, Bonfire of the Vanities, break the buck, Bretton Woods, British Empire, business cycle, buy and hold, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, Corn Laws, corporate governance, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-border payments, currency peg, currency risk, death of newspapers, debt deflation, Deng Xiaoping, disintermediation, diversification, diversified portfolio, edge city, financial deregulation, financial innovation, Financial Instability Hypothesis, financial repression, fixed income, floating exchange rates, George Akerlof, German hyperinflation, Glass-Steagall Act, Herman Kahn, Honoré de Balzac, Hyman Minsky, index fund, inflation targeting, information asymmetry, invisible hand, Isaac Newton, Japanese asset price bubble, joint-stock company, junk bonds, large denomination, law of one price, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, market bubble, Mary Meeker, Michael Milken, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, new economy, Nick Leeson, Northern Rock, offshore financial centre, Ponzi scheme, price stability, railway mania, Richard Thaler, riskless arbitrage, Robert Shiller, short selling, Silicon Valley, South Sea Bubble, special drawing rights, Suez canal 1869, telemarketer, The Chicago School, the market place, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, very high income, Washington Consensus, Y2K, Yogi Berra, Yom Kippur War

However, there were no significant failures of US financial firms when the US stock prices declined by 40 percent between 2001 and 2003, and the ensuing recession was brief and shallow. The range of movement in the values of national currencies since the early 1970s has been much larger than ever before. In 1971 the United States abandoned the US gold parity of $35 an ounce that had been established in 1934. The effort to retain a modified version of the Bretton Woods system of pegged currencies that was formalized in the Smithsonian Agreement of 1972 failed and a floating exchange rate arrangement was adopted by default early in 1973. At the beginning of the 1970s, the dominant market view was that the German mark and the Japanese yen might appreciate by 10 to 12 percent because their inflation rates had been below the US rate in the previous few years.

The exceptional feature of the 1970s was the surge in the US and world inflation rates during peacetime; the two previous episodes of sharply rising prices in the twentieth century were during and after the First and Second World Wars. Payments imbalances surged in the late 1960s and early 1970s, which led to a massive increase in money supplies. The 1970s inflation followed from the breakdown in the Bretton Woods arrangement of parities for national currencies, which eliminated the national ‘anchors’ for monetary policies. One dramatic impact of the increase in the US inflation rate that began in the late 1960s was that interest rates on both short-term and long-term US dollar securities increased. The interest rates that banks in the United States could pay on their deposits bumped into the ceilings set by the Federal Reserve on US dollar deposits.

The second feature of the period since the early 1970s is that the differences in interest rates and in anticipated rates of return on similar securities denominated in different currencies have become much larger once countries were no longer committed to parities for their currencies. The divergences in national inflation rates were larger – although the departure from the Bretton Woods system of adjustable parities occurred because of differences between the United States, and Germany and several other European countries on the maximum acceptable inflation rate. Cross-border money flows occur when the differences in the anticipated rates of return on similar securities available in different countries does not correspond with the anticipated rates of change in the currency values.


pages: 494 words: 132,975

Keynes Hayek: The Clash That Defined Modern Economics by Nicholas Wapshott

airport security, Alan Greenspan, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, collective bargaining, complexity theory, creative destruction, cuban missile crisis, Francis Fukuyama: the end of history, full employment, Gordon Gekko, greed is good, Gunnar Myrdal, if you build it, they will come, Isaac Newton, Joseph Schumpeter, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, means of production, military-industrial complex, Mont Pelerin Society, mortgage debt, New Journalism, Nixon triggered the end of the Bretton Woods system, Northern Rock, Paul Samuelson, Philip Mirowski, Phillips curve, price mechanism, public intellectual, pushing on a string, road to serfdom, Robert Bork, Robert Solow, Ronald Reagan, Simon Kuznets, The Chicago School, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, trickle-down economics, Tyler Cowen, War on Poverty, We are all Keynesians now, Yom Kippur War

“Nixon agreed but said that it would first promote economic growth and assure that the economy was expanding before the 1972 election. I replied that it might not be worth winning the election at the cost of a major inflation subsequently. Nixon said something like, ‘We’ll worry about that when it happens.’”26 In August 1971, Nixon brought to an end the Bretton Woods fixed-currency regime. If Friedman, an inveterate opponent of Bretton Woods, was given cause to celebrate, it was short-lived: Nixon also imposed a legally binding price and income freeze. “The last time I saw Nixon in the Oval Office, with George Shultz,” Friedman recalled, “President Nixon said to me, ‘Don’t blame George for this silly business of wage and price control.’ . . .

Once that battle was lost, however, Keynes readjusted his thoughts to accommodate the new conditions and concluded that there was some virtue in harnessing all currencies to a single common measure, such as gold, once the turbulence in the world economy caused by World War I had passed. In A Treatise he went one stage further, proposing the formation of a new mechanism to link currencies together, a “Supra-national Central Bank,” a notion that would come to fruition in the Bretton Woods fixed-currency exchange agreement of 1944. Instead of fixing currencies to the price of gold, which Keynes argued was in reality little more than fixing them to the dollar, he proposed in A Treatise that it would be more equitable if currencies were aligned to a basket of sixty key internationally traded commodities and allowed to float annually up to 2 percent either side of their pegged value.

In particular, he was asked to negotiate war loans from America. He developed plans for a postwar economic order to replace the unbridled competition between nations that had fomented the war, and he invented a more orderly system of currency trading fixed around a revived gold standard, what became the Bretton Woods agreement. He was also instrumental in conceiving two other pivotal organizations, the International Monetary Fund and the World Bank. Hayek, meanwhile, set out on his pessimistic masterwork, The Road to Serfdom.28 As his biographer Alan Ebenstein observed, “‘The Road to Serfdom’ revolutionized Hayek’s life.


pages: 601 words: 135,202

Limitless: The Federal Reserve Takes on a New Age of Crisis by Jeanna Smialek

Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Colonization of Mars, coronavirus, COVID-19, crowdsourcing, cryptocurrency, decarbonisation, distributed ledger, Donald Trump, Fall of the Berlin Wall, fiat currency, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, George Akerlof, George Floyd, Glass-Steagall Act, global pandemic, Henri Poincaré, housing crisis, income inequality, inflation targeting, junk bonds, laissez-faire capitalism, light touch regulation, lockdown, low interest rates, margin call, market bubble, market clearing, meme stock, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Nixon shock, offshore financial centre, paradox of thrift, price stability, quantitative easing, race to the bottom, risk tolerance, Robinhood: mobile stock trading app, Ronald Reagan, secular stagnation, short squeeze, social distancing, sovereign wealth fund, The Great Moderation, too big to fail, trade route, Tragedy of the Commons, working-age population, yield curve

Banks and Politics in America from the Revolution to the Civil War. Princeton, N.J.: Princeton University Press. Harrington, Shannon D., and Craig Torres. 2020. “Fed May Target Commercial Paper Purchases, BofA Says.” Bloomberg, March 15. Hetzel, Robert L. 2013. “Launch of the Bretton Woods System.” Federal Reserve History, November 22. www.federalreservehistory.org/​essays/​bretton-woods-launched. Hetzel, Robert L., and Ralph F. Leach. 2001. “The Treasury-Fed Accord: A New Narrative Account.” Federal Reserve Bank of Richmond Economic Quarterly, Winter. https://www.richmondfed.org/​~/media/​richmondfedorg/​publications/​research/​economic_quarterly/​2001/​winter/​pdf/​hetzel.pdf.

The Roosevelt administration had first ended creditors’ right to demand repayment in gold and then taken a series of actions that nationalized the gold stock.[12] Legislation in 1933 and 1934 gave the president the power to set the price of gold: It had been at $20.67 per ounce in 1933, then was raised to $35 per ounce in early 1934, helping to devalue the dollar and fight back against Depression-era deflation. Other nations had also suspended their gold standards during the 1930s, and in 1944 delegates from forty-four countries met in Bretton Woods, New Hampshire, to hash out a new plan for global monetary governance that would foster cooperation and growth following World War II. Eccles, still Fed chair at the time, attended on America’s behalf, John Maynard Keynes on Britain’s. Despite sharing similar philosophies about the government’s role in stemming crises, they hated each other.

“It’s no wonder the man is Mormon. No single woman could stand him,” Keynes is said to have remarked. (It is worth noting that Eccles, though he professed himself to be a less-than-fabulous husband, was not a polygamist, and the Mormon church had banned the practice.)[13] What emerged from Bretton Woods was a system in which currencies were convertible into dollars, and dollars convertible to gold, at a set price, so that the United States had to adjust the global supply of dollars to maintain the desired value.[14] The plan required maintenance of the dollar’s link to gold at $35 per ounce, which at times curtailed the Fed’s ability to maneuver after the system became fully operational.[15] When Eccles resigned in 1951, he had played a central role in consolidating the Fed’s power in Washington, in establishing monetary independence from the White House and Treasury, and in witnessing the establishment of a new money standard that formally placed the dollar at the core of the entire global financial system


pages: 358 words: 119,272

Anatomy of the Bear: Lessons From Wall Street's Four Great Bottoms by Russell Napier

Alan Greenspan, Albert Einstein, asset allocation, banking crisis, Bear Stearns, behavioural economics, book value, Bretton Woods, business cycle, buy and hold, collective bargaining, Columbine, cuban missile crisis, desegregation, diversified portfolio, fake news, financial engineering, floating exchange rates, Fractional reserve banking, full employment, Glass-Steagall Act, global macro, hindsight bias, Kickstarter, Long Term Capital Management, low interest rates, market bubble, Michael Milken, military-industrial complex, Money creation, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, price stability, reserve currency, risk free rate, Robert Gordon, Robert Shiller, Ronald Reagan, short selling, stocks for the long run, yield curve, Yogi Berra

The key events that shaped the period from 1968 to 1982 were the demise of the Bretton Woods agreement and the acceleration in inflation. Speculation on the sustainability of the international monetary agreement had been growing for years. As early as 1960, Yale Professor Robert Triffin had warned, in his book Gold and the Dollar Crisis, that the US would be forced to run regular current account deficits to provide the rest of the world with the necessary liquidity to grow. [69] He pointed out that the long-term result of these deficits would be to undermine faith in the dollar as the world reserve currency and thus the stability of the Bretton Woods system itself.

Eleven years later, Triffin’s prediction came to pass when, on 15 August 1971, President Nixon declared the US was suspending the redemption of dollars for gold. The US dollar devalued in December 1971, from $35 to $38 an ounce of gold, and early in 1973 it was devalued to $42. By March 1973, any possibility of resurrecting Bretton Woods was dead and the dollar entered free float. With the gold link gone, a key factor for economic discipline to contain inflation was removed. The equity and bond markets had been worried by inflation in the late 1960s and the end of the Bretton Woods agreement exacerbated these concerns. Inflation, and the fight against it, drove the 1968-82 bear market. FIGURE 100. US CONSUMER PRICE INDEX (% CHANGE YEAR-ON-YEAR) Source: Datastream In 1969, investors were coping with a vicious decline in equity prices as the Fed pushed short-term interest rates above 9%.

Having determined its monetary target, in 2005 a level for the Fed funds interest rate, changes in the bank reserves are the mechanism through which the target is met. Investors regularly assess changes in the Fed’s balance sheet for the impact on bank reserves and, thus, monetary policy in general. Under the gold standard, the gold-exchange standard and the Bretton Woods agreements of July 1944, there were varying degrees of restraint placed on the Fed by the need to keep the dollar stable on the international exchanges. Since the 1970s, the Federal Reserve has been subject to no such fetters. Over the years investors have sought to assess whether monetary policy was loose, leading to potentially higher growth, but also higher inflation, or tight, leading to potentially lower growth and lower inflation.


pages: 278 words: 82,069

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, Glass-Steagall Act, green new deal, guns versus butter model, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, It's morning again in America, John Meriwether, junk bonds, kremlinology, Long Term Capital Management, low interest rates, margin call, market bubble, market fundamentalism, McMansion, Michael Milken, Minsky moment, money market fund, mortgage debt, Naomi Klein, new economy, Nixon triggered the end of the Bretton Woods system, offshore financial centre, payday loans, pets.com, plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, sovereign wealth fund, structural adjustment programs, subprime mortgage crisis, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

I would like the U.S. to consider going back to Bretton Woods basics—unfashionable though it may seem. It was not just Lyndon B. Johnson who opened the way to the Republicans’ “Southern Strategy” and nearly 40 years of conservative dominance: It was also Nixon’s abandonment of government-led economic disciplines through his suspension of Bretton Woods fixed exchange rates. Obama should propose the end of floating exchange rates and argue for a system of managed rates between the euro, dollar and yen to bring back more pre-dictability into the system. The American, EU and Japanese governments would undertake, as in Bretton Woods I, whatever economic action is needed to maintain stability between their exchange rates.

Nonetheless, it is an ambitious deadline. It took nearly two years of discussion before there was sufficient agreement to attempt the 1944 Bretton Woods Conference in New Hampshire that famously established the post-war international financial system and to which the current summit process is being compared. But shared awareness that the system is broken and that the world risks a credit-crunch-induced global depression is concentrating minds wonderfully. Where to start? The architects of Bretton Woods I knew they had to avoid the beggar-my-neighbor policies of the 1930s—economic autarchy and hyper-militarization—and that if the U.S. and Britain could clinch a deal, then everybody else would have to follow.

The dream of creating a system of global financial governance was passed up. Realpolitik had triumphed. The system then only lasted as long as the Americans thought the benefits of running it outweighed the costs. When in 1971 the Nixon administration was faced with the choice of increasing taxes to finance the Vietnam War or abandoning the Bretton Woods fixed-exchange-rate system that delivered pre-dictability and less risk in international financial relationships, it had no hesitation. The markets would do the job instead—and if other governments did not like the new risks, tough. For a long time, it looked as though private markets could step into the breach—recycling first petrodollars in the 1970s and then Asian dollars back into the global system.


pages: 287 words: 81,970

The Dollar Meltdown: Surviving the Coming Currency Crisis With Gold, Oil, and Other Unconventional Investments by Charles Goyette

Alan Greenspan, bank run, banking crisis, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, business cycle, buy and hold, California gold rush, currency manipulation / currency intervention, Deng Xiaoping, diversified portfolio, Elliott wave, fiat currency, fixed income, Fractional reserve banking, housing crisis, If something cannot go on forever, it will stop - Herbert Stein's Law, index fund, junk bonds, Lao Tzu, low interest rates, margin call, market bubble, McMansion, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, National Debt Clock, oil shock, peak oil, pushing on a string, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Saturday Night Live, short selling, Silicon Valley, transaction costs

If the fiscal policy of Bolivia is reckless, the global economy is unaffected. Not so with the United States. Since the end of World War II, the U.S. dollar has been the reserve currency of the world. Just as central banks including our own once held gold and issued their currencies as a marker for gold, under the Bretton Woods agreement, foreign central banks have held U.S. dollars against which they issue their own currencies. Despite the abrogation of the U.S. promise of dollar /gold redeemability, the dollar standard has persisted. Almost two thirds of foreign currency reserves are held in dollars. As the world’s leading reserve currency, the advantages for the United States are several.

Making the federal guarantee of the agencies’ bonds explicit in the face of the stock collapse shows concern for the bondholders, Chinese and Japanese among them. Ironically, however, except for inflation, those guarantees can only ever be effected by borrowing more money from . . . places like China and Japan! America’s bankers have a problem. Brand Name America Just as the costs of the Vietnam War were instrumental in the collapse of the Bretton Woods gold exchange monetary system, Bush’s elective war in Iraq will be noted as the straw that broke the dollar standard that has prevailed since 1971. There was always something inherently unstable about the neoconservative fantasy of a “unipolar world.” Empires do extend themselves into collapse.

One has to suspect that a pricing change might not be gradual in the face of escalating dollar inflation. Just as supermodel Gisele Bündchen may have preferred to be paid in euros, during the inflation of the 1970s singer Bette Midler demanded payment in gold South African Krugerrands to perform overseas. When it was inevitable that the Bretton Woods dollar gold exchange standard couldn’t last, France could send warships to pick up its gold in New York. Under the existing dollar standard, there is nothing to pick up. Those that get out early can preserve their capital; others will be left holding the “IOU Nothing.” There is reason to believe that Persian Gulf region money is moving out of dollars and into gold.


pages: 369 words: 94,588

The Enigma of Capital: And the Crises of Capitalism by David Harvey

accounting loophole / creative accounting, Alan Greenspan, anti-communist, Asian financial crisis, bank run, banking crisis, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, cotton gin, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, equal pay for equal work, European colonialism, failed state, financial innovation, Frank Gehry, full employment, gentrification, Glass-Steagall Act, global reserve currency, Google Earth, Great Leap Forward, Guggenheim Bilbao, Gunnar Myrdal, guns versus butter model, Herbert Marcuse, illegal immigration, indoor plumbing, interest rate swap, invention of the steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, Just-in-time delivery, land reform, liquidity trap, Long Term Capital Management, market bubble, means of production, megacity, microcredit, military-industrial complex, Money creation, moral hazard, mortgage debt, Myron Scholes, new economy, New Urbanism, Northern Rock, oil shale / tar sands, peak oil, Pearl River Delta, place-making, Ponzi scheme, precariat, reserve currency, Ronald Reagan, Savings and loan crisis, sharing economy, Shenzhen special economic zone , Silicon Valley, special drawing rights, special economic zone, statistical arbitrage, structural adjustment programs, subprime mortgage crisis, technological determinism, the built environment, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, Timothy McVeigh, too big to fail, trickle-down economics, urban renewal, urban sprawl, vertical integration, white flight, women in the workforce

The leading capitalist power of the time, the United States, used its dominant position to help create, along with its main allies, a new framework for the global order. It sought decolonisation and the dismantling of former empires (British, French, Dutch, etc.) and brokered the birth of the United Nations and the Bretton Woods Agreement of 1944 which defined rules of international trade. When the Cold War broke out, the US used its military might to offer (‘sell’) protection to all those who chose to align themselves with the non-communist world. The United States, in short, assumed the position of a hegemonic power within the non-communist world.

It led a global alliance to keep as much of the world as possible open for capital surplus absorption. It pursued its own agenda while seeming to act for the universal good. The support the US offered to stimulate the capitalist recovery in Europe and Japan immediately after the Second World War was an example of such a strategy. It ruled by a mix of coercion and consent. At the Bretton Woods conference of 1944, the British negotiator, the renowned economist John Maynard Keynes, had sought a global currency unit outside of any one nation’s control. The US rejected this idea, insisting that the US dollar play that role, backed by a fixed exchange rate of the dollar against gold. All other currencies would then fix their exchange rate against the dollar to facilitate global trade.

Then send it to create sweatshops in China or Vietnam. Capital surpluses in the Gulf States in the 1970s? Then send them to Mexico via the New York investment banks. For all of this to happen effectively ultimately requires the creation of state-like international institutions such as those set up under the Bretton Woods Agreement to facilitate and regulate the international flows of capital. The World Bank and the International Monetary Fund, along with the Bank of International Settlements in Basel, are central here, but other organisations, such as the Organisation for Economic Co-operation and Development (OECD) and the G7 (later the G8), now expanded to the G20, also play an influential role as the world’s central banks and treasury departments seek to coordinate their actions to constitute an evolving global financial architecture for an international version of the state–finance nexus.


pages: 182 words: 53,802

The Production of Money: How to Break the Power of Banks by Ann Pettifor

Alan Greenspan, Ben Bernanke: helicopter money, Bernie Madoff, Bernie Sanders, bitcoin, blockchain, bond market vigilante , borderless world, Bretton Woods, capital controls, Carmen Reinhart, central bank independence, clean water, credit crunch, Credit Default Swap, cryptocurrency, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, distributed ledger, Donald Trump, eurozone crisis, fiat currency, financial deregulation, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Fractional reserve banking, full employment, Glass-Steagall Act, green new deal, Hyman Minsky, inflation targeting, interest rate derivative, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land bank, Leo Hollis, light touch regulation, London Interbank Offered Rate, low interest rates, market fundamentalism, Martin Wolf, mobile money, Money creation, Naomi Klein, neoliberal agenda, offshore financial centre, Paul Samuelson, Ponzi scheme, Post-Keynesian economics, pushing on a string, quantitative easing, rent-seeking, Satyajit Das, savings glut, secular stagnation, The Chicago School, the market place, Thomas Malthus, Tobin tax, too big to fail

These tensions between private financial interests and society as a whole have throughout history been manifest in struggles for control over the money production system. Only intermittently has society succeeded in asserting democratic management of the system, by subordinating the interests of private wealth to wider interests. The Bretton Woods era (1945–71) was a time during which the private banking and finance sector acted as servant to and not master of the economy. Thanks largely to John Maynard Keynes’s theories, his understanding of the monetary system, and to the implementation of his monetary policies during this period, the financial system was made to work largely in the interests of wider society.

Public authority over finance and cheap money prevailed over the greater part of the world. The modern age With the exception of the five years of the 1945 Labour government in Britain, the decisiveness of this re-alignment of class interests was ruptured in the post-war age. The most obvious statement of intent was the United States’ rejection at the 1944 Bretton Woods Conference of the British Government’s proposal for Keynes’s International Clearing Union (ICA). The ICA was to be a global, independent bank that would hold all international reserves and would manage and ‘clear’ all debiting and crediting payments between countries, and by that means determine changes in exchange rates.

The commitment in the wartime White Paper to employment policy to maintain a high and stable level of employment had been achieved to an extent greater than anyone expected – and was reiterated both in the 1956 White Paper on the economic implications of full employment and in the Radcliffe Report in 1959. We had lived within the Bretton Woods arrangements – a little precariously at times but successfully.14 But the achievement of full employment was disregarded by economists and policymakers then, much as it is disregarded today: as a non-event. They promoted instead an agenda based on ‘growth’ and financial liberalisation. From the early 1960s with full unemployment at 2 percent, British policymakers echoed the OECD in setting an explicit target for real annual ‘growth’ of 4 percent.


pages: 444 words: 151,136

Endless Money: The Moral Hazards of Socialism by William Baker, Addison Wiggin

Alan Greenspan, Andy Kessler, asset allocation, backtesting, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Black Swan, bond market vigilante , book value, Branko Milanovic, bread and circuses, break the buck, Bretton Woods, BRICs, business climate, business cycle, capital asset pricing model, carbon tax, commoditize, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crony capitalism, cuban missile crisis, currency manipulation / currency intervention, debt deflation, Elliott wave, en.wikipedia.org, Fall of the Berlin Wall, feminist movement, fiat currency, fixed income, floating exchange rates, foreign exchange controls, Fractional reserve banking, full employment, German hyperinflation, Great Leap Forward, housing crisis, income inequality, index fund, inflation targeting, Joseph Schumpeter, Kickstarter, laissez-faire capitalism, land bank, land reform, liquidity trap, Long Term Capital Management, lost cosmonauts, low interest rates, McMansion, mega-rich, military-industrial complex, Money creation, money market fund, moral hazard, mortgage tax deduction, naked short selling, negative equity, offshore financial centre, Ponzi scheme, price stability, proprietary trading, pushing on a string, quantitative easing, RAND corporation, rent control, rent stabilization, reserve currency, risk free rate, riskless arbitrage, Ronald Reagan, Savings and loan crisis, school vouchers, seigniorage, short selling, Silicon Valley, six sigma, statistical arbitrage, statistical model, Steve Jobs, stocks for the long run, Tax Reform Act of 1986, The Great Moderation, the scientific method, time value of money, too big to fail, Two Sigma, upwardly mobile, War on Poverty, Yogi Berra, young professional

Gao Xiqing continues, “‘If China has $2 trillion, Japan has almost $2 trillion, and Russia has some, and all the others, then—let’s throw away the ideological differences and think about what’s good for everyone.’ We can get all the relevant people together and think up what people are calling the second Bretton Woods system, like the first Bretton Woods convention did.”33 The replacement might be gold-based, especially if China has a say in the matter, but the United States would be ill advised not to monetize its debt first, since there is nothing stopping it from doing so. It is also possible, but not desirable, that there would be a system such as between 1934 and 1971 (bracketing the Bretton Woods era) when international transactions occur in currency backed by gold, but paper dollars would continue to be used for legal tender domestically.

The price increase from $20.67 to $35 triggered a mining boom, and the United States bought more than the total production of the world’s mines through the Great Depression. By the early 1950s, the United States would own three-fourths of all monetary gold and half of cumulative world production since the beginning of time.50 The establishment of pegged exchange rates in the Bretton Woods Agreement of 1944 could be seen as a global gold-exchange standard pyramiding all the world’s money upon gold held by the United States, placing America in a position not unlike that of Britain at the height of its empire. Ironically, from that moment forward, the United States mimicked the actions of its aging parent, repudiating this backing of its currency and providing a beacon for the world to follow it down the path of adopting a purely paperbased currency system.

While by 1933 specie’s share of the money supply (M2) had dropped to 1.9 percent from 5.3 percent in 1913, when combined Flat-Earth Economics 89 with gold or silver notes, overall hard-backed currency still comprised 58 percent of currency in circulation.12 13 In the context of competitive devaluations from other countries, Roosevelt’s new U.S. peg may be understandable, but the government predation that occurred simultaneously is not. The torch for hard money, long carried by the Democratic Party, completely burned out by the end of the interwar period. After World War II, the Bretton Woods system would stabilize exchange rates, but domestic money creation would become nearly completely elastic. The grand success of the Marshall Plan era contrasted pleasantly with the sudden boom-bust cycle that followed World War I. Many if not most current day economists look at the increase in money supply in the late 1930s, which stemmed mostly from the monetization of government debt issued to fund the New Deal, as the impetus of the economic recovery.


pages: 225 words: 11,355

Financial Market Meltdown: Everything You Need to Know to Understand and Survive the Global Credit Crisis by Kevin Mellyn

Alan Greenspan, asset-backed security, bank run, banking crisis, Bernie Madoff, bond market vigilante , bonus culture, Bretton Woods, business cycle, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, deal flow, disintermediation, diversification, fiat currency, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, George Santayana, global reserve currency, Greenspan put, Home mortgage interest deduction, inverted yield curve, Isaac Newton, joint-stock company, junk bonds, Kickstarter, liquidity trap, London Interbank Offered Rate, long peace, low interest rates, margin call, market clearing, mass immigration, Money creation, money market fund, moral hazard, mortgage tax deduction, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, paradox of thrift, pattern recognition, pension reform, pets.com, Phillips curve, plutocrats, Ponzi scheme, profit maximization, proprietary trading, pushing on a string, reserve currency, risk tolerance, risk-adjusted returns, road to serfdom, Ronald Reagan, shareholder value, Silicon Valley, South Sea Bubble, statistical model, Suez canal 1869, systems thinking, tail risk, The Great Moderation, the long tail, the new new thing, the payments system, too big to fail, value at risk, very high income, War on Poverty, We are all Keynesians now, Y2K, yield curve

In 1971, the level and trend of inflation (which is to say, erosion of the real value of the dollar) had reached the point where the United States was experiencing a classic gold drain. Remember, under Bretton Woods, all currencies were pegged to the dollar and the dollar to gold. Foreign countries were getting tired of selling their stuff to the United States for dollars that kept shrinking. They increasingly demanded to convert their dollar reserves into gold. Since U.S. gold reserves were a tiny fraction of the dollars we had pumped overseas to buy everything from oil to whole companies, this could not go on very long. Nixon’s solution was to unilaterally dump the Bretton Woods system that had underpinned post-war recovery and growth.

World War II not only got America out of the Depression, but much of the demand it generated was replaced by more wholesome consumer and business spending as the invasion of Normandy was succeeded by the invasion of Levittown and the Baby Boom. Even if Keynes’ ideas were never properly tried, his reputation and influence allowed him to dominate the single most important economic conference of all time. The Fed Demystified A WORLD RESTORED: THE DOLLAR BECOMES THE NEW GOLD The Conference held at the Bretton Woods Hotel in New Hampshire during 1944 was a blend of British brain and American brawn acting to put the world economy back together. Keynes had the plan, and the United States had the money. The big idea was to turn the U.S. dollar into the global reserve currency, meaning the money that all central banks paid each other in to settle the ‘‘balance of payments’’ mismatches that always arose from cross-border trade and investment.

The big idea was to turn the U.S. dollar into the global reserve currency, meaning the money that all central banks paid each other in to settle the ‘‘balance of payments’’ mismatches that always arose from cross-border trade and investment. Under the old gold standard, the global reserve currency was the British Pound but only because it was fully convertible to gold at a fixed rate. The new Bretton Woods system pegged each country’s currency to the U.S. dollar within a fixed range and in turn pegged the dollar to gold. A machinery called the International Monetary Fund (IMF) was set up to police the whole system and provide dollar loans to countries having temporary balance of payments problems.


pages: 851 words: 247,711

The Atlantic and Its Enemies: A History of the Cold War by Norman Stone

affirmative action, Alvin Toffler, Arthur Marwick, Ayatollah Khomeini, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, British Empire, business cycle, central bank independence, Deng Xiaoping, desegregation, disinformation, Dissolution of the Soviet Union, European colonialism, facts on the ground, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, gentrification, Gunnar Myrdal, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Herbert Marcuse, illegal immigration, income per capita, interchangeable parts, Jane Jacobs, Joseph Schumpeter, junk bonds, labour mobility, land reform, long peace, low interest rates, mass immigration, means of production, Michael Milken, Mikhail Gorbachev, military-industrial complex, Mitch Kapor, Money creation, new economy, Norman Mailer, North Sea oil, oil shock, Paul Samuelson, Phillips curve, Ponzi scheme, popular capitalism, price mechanism, price stability, RAND corporation, rent-seeking, Ronald Reagan, Savings and loan crisis, scientific management, Seymour Hersh, Silicon Valley, special drawing rights, Steve Jobs, Strategic Defense Initiative, strikebreaker, Suez crisis 1956, The Death and Life of Great American Cities, trade liberalization, trickle-down economics, V2 rocket, War on Poverty, Washington Consensus, Yom Kippur War, éminence grise

Bohley, Bärbel Böhm, Karl Bokassa, Jean-Bédel Bolivia Bologna Bolsheviks: and bureaucracy and China Civil War Congress of the Peoples of the East (1920) lies of Revolution and science Bond, James (fictional character) Bonn Borinage Borland Software Corporation Borodin, Mikhail Boston Bourgès-Maunoury, Maurice BP (British Petroleum) Bradlee, Ben Braestrup, Peter Brandt, Willy: background and character elected Chancellor foreign minister mayor of West Berlin memoirs Nobel Peace Prize Ostpolitik resignation Braşov Bratislava author’s imprisonment in Braudel, Fernand Braun, Otto Brazil Breakfast at Tiffany’s (film) Brecht, Bertolt Brentano, Lujo Brescia Brest-Litovsk Bretherton, Russell Bretton Woods conference (1944) Bretton Woods system end of Triffin Dilemma Brezhnev, Leonid: and Afghanistan and arms limitiation talks background and character and de Gaulle death and East Germany and Helsinki conference (1975) and Johnson and Middle East nationalities policy and Orthodox Church ‘our common European home’ and Poland political reforms and ‘Prague Spring’ and Soviet satellite states and Stalin succeeds Khrushchev and Vietnam Brioni island Britain: agriculture atomic bombs automobile industry balance of payments banking system and Chinesewar civil service class system coal industry Communist Party council housing crime cultural institutions currency controls and Cyprus defence expenditure Department of Trade and Industry Depression (1930s) devaluation of sterling divorce rates economic and political decline education system (see also universities) and EEC/EU and Egypt emigration and establishment of NATO and European Exchange Rate Mechanism (ERM) Falklands War (1982) family breakdown film industry financial deregulation fishing industry general elections: (1945); (1950); (1951); (1959); (1970); (1974); (1979); (1983) gold reserves and GreekWar IMF bail-out (1976) import surcharges income per capita Industrial Revolution industrial wastelands inflation intelligentsia and Iran Lend-Lease aid and Malaya and Marshall Plan middle classes miners’ strike (1984-5) monarchy National Health Service nationalization of industry navy North Sea oil nuclear weapons oil imports Poll Tax post-war debt post-war shortages and rationing privatizations productivity levels property prices public transport race riots scientific and technological developments Second World War shipbuilding steel industry strikes Suez crisis taxation television textile industry trade unions underclass unemployment universities Welfare State Westland affair (‘Westgate’; 1986) winter weather of 1946-7 withdrawal of forces from Gulf (1971) zone of occupation in Germany British Airways British Commonwealth British Empire: American antipathy towards decline of decolonization revitalization attempts trade British Leyland (automobile manufacturer) British Petroleum (BP) British Steel British Telecom Brittan, Sir Samuel Bronfman, Edgar Brown, Andrew Brucan, Silviu Bruce, David Bruges Brussels Brussels Exhibition (1958) Brussels Pact (1948) Bryan, William Jennings Brzezinski, Zbigniew Bucak, Mehmet Celal Bucharest Buck, Pearl S.

The essential was trade liberalization, and that could not be managed unless there were some means of payment, i.e. recognition of the various paper currencies. The old Bank for International Settlements at Basle in Switzerland - originally set up to handle the Reparations payments of the First World War - was revitalized, with a European Payments Union (in 1950). This again followed an Atlantic example. In 1944, at Bretton Woods in New Hampshire, the Americans and British had developed institutions that were meant to stop the collapse of world trade that had occurred in the Great Slump of the 1930s. The collapse - two thirds - had been a disaster, causing unemployment in millions and millions, and bringing dictatorships in dozens, the worst of them Hitler’s.

The outstanding feature of post-war Europe was of course the ‘German economic miracle’: the moonscape of 1945 had been utterly transformed. As the Treaty of Rome took effect on 1 January 1958, the various restrictions on money exchange were dismantled, and the dollar could invade any market that its owners chose. Now, the institutions that had been thought up towards the end of the war came into their own: ‘Bretton Woods’ to run world trade and foreign exchange, through the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade (GATT), which regularly assembled to discuss the liberation of commercial exchange. The European Payments Union lost its function, though the Bank for International Settlements at Basle in Switzerland carried on as a sort of catch-all institution.


Hopes and Prospects by Noam Chomsky

air traffic controllers' union, Alan Greenspan, Albert Einstein, banking crisis, Bear Stearns, Berlin Wall, Bretton Woods, British Empire, capital controls, colonial rule, corporate personhood, Credit Default Swap, cuban missile crisis, David Ricardo: comparative advantage, deskilling, en.wikipedia.org, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Firefox, Glass-Steagall Act, high-speed rail, Howard Zinn, Hyman Minsky, invisible hand, liberation theology, market fundamentalism, Martin Wolf, Mikhail Gorbachev, Monroe Doctrine, moral hazard, Nelson Mandela, new economy, nuremberg principles, one-state solution, open borders, Plutonomy: Buying Luxury, Explaining Global Imbalances, public intellectual, Ralph Waldo Emerson, RAND corporation, Robert Solow, Ronald Reagan, Savings and loan crisis, Seymour Hersh, structural adjustment programs, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, trade liberalization, uranium enrichment, Washington Consensus

Furthermore, “the growth of labor, capital, and total factor productivity have all fallen precipitously since the 1960s in the OECD [Organisation for Economic Co-operation and Development] countries.”11 In brief, the twenty-five years of economic sovereignty, state-coordinated economic growth, and capital controls under the Bretton Woods system led to better social and economic results than the following twenty-five years of neoliberalism, by just about every relevant measure, and by significant margins. It is important to stress that the results include social indicators. In the United States, for example, growth during the Bretton Woods period was not only the highest ever over a lengthy period, but was also egalitarian. Real wages closely tracked increase in productivity, and social indicators closely tracked growth.

Financial liberalization made a potent contribution, whether by design or not. Under powerful public pressure, such measures for undermining democracy were restricted under the Bretton Woods system established after World War II. The Great Depression and the war aroused radical democratic currents, taking many forms, from the antifascist resistance to working-class organization. These pressures made it possible—and from a different point of view, necessary—to permit social democratic policies. The Bretton Woods system was presumably designed in part for that purpose, with the understanding that capital controls and regulated currencies would create a space for government action responding to public will—for some measure of democracy, that is.

We need not tarry on the force of their arguments, but the instincts of the classical economists were insightful.8 The post–World War II period conforms closely to these conclusions. There have been two phases. The first was under the economic regime established by the United States and Britain at Bretton Woods after the war, negotiated by Harry Dexter White for the United States and John Maynard Keynes for England. They shared the belief that economic sovereignty is a crucial factor in growth. The system they designed was based on capital controls and regulated currencies in order to protect economic sovereignty, and to permit state intervention to carry out social democratic measures.


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

Alan Greenspan, balance sheet recession, banking crisis, basic income, Bear Stearns, Bernie Sanders, Bretton Woods, business climate, business cycle, carbon tax, Carmen Reinhart, central bank independence, circular economy, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, degrowth, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, Ford Model T, forward guidance, full employment, G4S, general purpose technology, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, low interest rates, low skilled workers, Martin Wolf, mass incarceration, military-industrial complex, Modern Monetary Theory, Money creation, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, ocean acidification, paradox of thrift, Paul Samuelson, planned obsolescence, Post-Keynesian economics, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Solyndra, Steve Jobs, stock buybacks, systems thinking, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, Tragedy of the Commons, transaction costs, trickle-down economics, universal basic income, vertical integration, very high income

Money and monetary policy We observed earlier that the orthodox view of money is particularly concerned that an exogenously determined excess amount of money in the economy will lead to inflation. As Marvin Goodfriend has put it in relation to the ending of the gold-dollar standard underpinning international monetary relations in the early 1970s: ‘With the collapse of Bretton Woods, for the first time in modern history, all the world’s currencies were de-linked from gold or any other commodity. The lack of any formal constraint on money creation contributed to nervousness about inflation.’13 Orthodox economists, informed by the quantity theory of money, felt that monetary policy-makers should ensure that the quantity of money available in the economy did not contribute to inflation.

While in some countries this has occurred through public agencies, such as DARPA and NIH (discussed above), in others patient finance has been provided through publicly owned development banks, otherwise known as state investment banks. State investment banks (SIBs) have their historical roots in the monetary agreements of Bretton Woods and the reconstruction plans for Europe following World War II. The idea was to create an institution that promoted financial stability through a permanent flow of finance to fund the reconstruction plan and unleash agricultural production potential, thus preventing the deleterious effects that speculative private finance could have on post-World War II economic recovery.

Thus, the social safety net and suburbanisation, together with the Cold War, defined the optimal space for successful profitable innovation with dynamic, reliable and synergistic markets. On the global stage, complementary institutional innovations, such as the World Bank, the IMF, the GATT, the Bretton Woods agreement on the ‘gold dollar’, the UN (and, ironically, also the Cold War) stabilised international economies and trade, furthering the positive-sum game created between business and society. A similar process of state-enabled convergence in innovation has occurred during every deployment period.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

"there is no alternative" (TINA), Adam Curtis, Alan Greenspan, Alvin Roth, An Inconvenient Truth, Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, bond market vigilante , bread and circuses, Bretton Woods, Brownian motion, business cycle, capital controls, carbon credits, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, democratizing finance, disinformation, do-ocracy, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, Flash crash, full employment, George Akerlof, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, information asymmetry, invisible hand, Jean Tirole, joint-stock company, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, Phillips curve, Ponzi scheme, Post-Keynesian economics, precariat, prediction markets, price mechanism, profit motive, public intellectual, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, savings glut, school choice, sealed-bid auction, search costs, Silicon Valley, South Sea Bubble, Steven Levy, subprime mortgage crisis, tail risk, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, tontine, too big to fail, transaction costs, Tyler Cowen, vertical integration, Vilfredo Pareto, War on Poverty, Washington Consensus, We are the 99%, working poor

The Winter of Our Disconnect I remember when I first felt that chill shiver of recognition that the aftermath of the crisis might be suspended in a fugue state far worse than the somnolent contraction itself. I was attending the second meeting of the Institute for New Economic Thinking (INET) at Bretton Woods in New Hampshire in April 2011.2 There probably would have been better places to take the temperature of the postcrisis Zeitgeist and observe the praxis of the political economy than up in the White Mountains, but I had been fascinated by the peccadilloes of the economics profession for too long, and anyway had felt that the first INET meeting at Cambridge University in 2010 bore some small promise—for instance, when protestors disrupted the IMF platitudes of Dominique Strauss-Kahn in Kings great hall, or when Lord Adair Turner bravely suggested we needed a much smaller financial sector.

The range of economic positions proved much less varied than at the first meeting, and one couldn’t help notice that the agenda seemed more pitched toward capturing the attention of journalists and bloggers, and those more interested in getting to see some star power up close than sampling complex thinking outside the box. It bespoke an unhealthy obsession with Guaranteed Legitimacy and Righteous Sound Thinking. But, eventually, even the journalists and the bloggers sensed the chill in the proceedings. Here were a few contemporary responses: University economists, of the sort gathered at Bretton Woods, are now under relentless pressure to conform to a narrow, established paradigm. Inexplicably most supporters of that paradigm also feel that the crisis confirmed its validity.3 The last great crash caused a revolution in economics. Why hasn’t this one? . . . None of those theories appears to have appreciably shaped the economic policy proposals coming from the White House or Congress, where lawmakers draw much of their economic inspiration from think tanks built on dogma . . .

A man who reportedly earned millions for having advised hedge funds one day a week for a year shortly before serving in the Obama Administration (and who is quite likely, now that he’s out, to do so again), he ought to have been patriotic and intellectually honest enough to provide a real answer.6 The most interesting moment at a recent conference held in Bretton Woods, New Hampshire—site of the 1945 conference that created today’s global economic architecture—came when Financial Times columnist Martin Wolf quizzed former United States Treasury Secretary Larry Summers, President Barack Obama’s ex-assistant for economic policy. “[Doesn’t] what has happened in the past few years,” Wolf asked, “simply suggest that [academic] economists did not understand what was going on?”


pages: 286 words: 82,970

A World in Disarray: American Foreign Policy and the Crisis of the Old Order by Richard Haass

access to a mobile phone, anti-communist, Berlin Wall, Bretton Woods, carbon footprint, carbon tax, central bank independence, colonial rule, cuban missile crisis, currency manipulation / currency intervention, deindustrialization, Doha Development Round, Donald Trump, Edward Snowden, energy security, European colonialism, failed state, Fall of the Berlin Wall, floating exchange rates, global pandemic, global reserve currency, guns versus butter model, hiring and firing, immigration reform, invisible hand, low interest rates, Mikhail Gorbachev, Monroe Doctrine, moral hazard, mutually assured destruction, no-fly zone, open economy, quantitative easing, RAND corporation, reserve currency, Ronald Reagan, South China Sea, special drawing rights, Steven Pinker, Suez crisis 1956, UNCLOS, UNCLOS, uranium enrichment, Yom Kippur War

And there needed to be a mechanism for trade and investment and tourism to work, something that required a system for managing dozens of national currencies in a fashion that would spur growth and facilitate interactions of every sort. The result, to use the shorthand, was the Bretton Woods system, a set of arrangements along with a number of global institutions created when many of the world’s finance ministers gathered in 1944 at Bretton Woods, New Hampshire. One goal was to promote the recovery of war-ravaged countries and the development of poor ones; this became the province of the International Bank for Reconstruction and Development, more commonly known as the World Bank.

THE OTHER ORDER 1. G. John Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order (Princeton, NJ: Princeton University Press, 2011). 2. See Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, NJ: Princeton University Press, 2013); Harold James, International Monetary Cooperation Since Bretton Woods (New York: Oxford University Press, 1996); and Barry Eichengreen, Globalizing Capital: A History of the International Monetary System, 2nd ed. (Princeton, NJ: Princeton University Press, 2008). 3.

The International Monetary Fund (IMF) was established to provide loans on a temporary basis to governments running a net deficit so that they could meet their short-term spending needs and reach a point of fiscal balance.2 A related but distinct set of issues concerning trade was formally taken up not at the Bretton Woods gathering but separately by trade ministers. The intent was to create an entity called the International Trade Organization, but differences between countries (and the politics within them) precluded it at the time. Instead, a series of major meetings over the decades developed rules for global trade and led to a number of important pacts that reduced tariff barriers.


pages: 421 words: 120,332

The World in 2050: Four Forces Shaping Civilization's Northern Future by Laurence C. Smith

Boeing 747, Bretton Woods, BRICs, business cycle, clean water, climate change refugee, Climategate, colonial rule, data science, deglobalization, demographic transition, Deng Xiaoping, Easter island, electricity market, energy security, flex fuel, G4S, global supply chain, Google Earth, Great Leap Forward, guest worker program, Hans Island, hydrogen economy, ice-free Arctic, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, land tenure, Martin Wolf, Medieval Warm Period, megacity, megaproject, Mikhail Gorbachev, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, purchasing power parity, Ronald Reagan, Ronald Reagan: Tear down this wall, side project, Silicon Valley, smart grid, sovereign wealth fund, special economic zone, standardized shipping container, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, urban planning, Washington Consensus, Y2K

I only noticed it in 1998, but might this phenomenon be older than we think? Like rising world population and natural resource demand, the present global integration lifted off in the middle of the twentieth century. But unlike the first two, it happened deliberately. It all began with a big conference in the Mount Washington Resort near Bretton Woods, New Hampshire, in July 1944. Over seven hundred delegates from forty-four countries—including Britain’s John Maynard Keynes (whose ideas later found new life in the wake of the 2008 global credit meltdown)—were in attendance. World War II was drawing to a close. Governments were turning their attention to their shattered economies and how to rebuild them after two catastrophic wars, a global depression, a long escalation of protectionist tariffs, and some crazy currency devaluations.

Governments were turning their attention to their shattered economies and how to rebuild them after two catastrophic wars, a global depression, a long escalation of protectionist tariffs, and some crazy currency devaluations. Everyone at the conference wanted to figure out how to stabilize currencies, get loans to war-ravaged countries for rebuilding, and get international trade moving again. The outcome of this conference was something called the Bretton Woods Agreement. Among other things, it stabilized international currencies by pegging them to the value of gold (which lasted until 1971, when President Richard Nixon dropped the U.S. dollar from the gold standard). But its most persistent legacy was the birth of three new international institutions: the International Monetary Fund (IMF) to administer a new monetary system; the International Bank for Reconstruction and Development (IBRD) to provide loans—today, the World Bank; and the General Agreement on Tariffs and Trade (GATT) to fashion and enforce trade agreements—today, the World Trade Organization (WTO).

These three institutions guided much of the global reconstruction effort after the war; and during the 1950s their purpose expanded to giving loans to developing countries to help them industrialize. Today these three powerful institutions—the IMF, World Bank, and WTO—are the prime actors making and enforcing the rules of our global economy. Up until the demise of the Bretton Woods monetary regulatory system in the early 1970s, it presided for three decades over what some have called the “golden age of controlled capitalism.”29 But by the 1980s, “controlled capitalism” had fallen to a revolution of “neoliberalism”—the deregulation and elimination of tariffs and other controls on international trade and capital flows.


pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

air freight, Alan Greenspan, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, break the buck, Bretton Woods, business cycle, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, full employment, Glass-Steagall Act, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, Les Trente Glorieuses, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandatory minimum, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, very high income, winner-take-all economy, zero-sum game

Letter to Her Majesty the Queen, 22 July 2009, http://media.ft.com/cms/3e3b6ca8-7a08-11de-b86f-00144feabdco.pdf. 6. The NEC, founded under President William Jefferson Clinton, is distinct from the Council of Economic Advisers, founded in 1946 under President Harry Truman. 7. Lawrence Summers and Martin Wolf, ‘A Conversation on New Economic Thinking’, Bretton Woods Conference, Institute for New Economic Thinking, 8 April 2011, http://ineteconomics.org/video/bretton-woods/larry-summers-and-martin-wolf-new-economic-thinking. 8. Ben Bernanke, Chairman of the Federal Reserve, also stressed the intellectual debt of central bankers to the journalist, Walter Bagehot, in a lecture on the Federal Reserve’s response to the crisis.

Summers, Lawrence. ‘Why Stagnation Might Prove to Be the New Normal’, 15 December 2013, Financial Times. http://www.ft.com/cms/s/2/87cb15ea-5d1a-11e3-a558-00144feabdc0.html. Summers, Lawrence and Martin Wolf. ‘A Conversation on New Economic Thinking’, Bretton Woods Conference, Institute for New Economic Thinking, 8 April 2011. http://ineteconomics.org/video/bretton-woods/larry-summers-and-martin-wolf-new-economic-thinking. Taleb, Nassim Nicholas. Fooled by Randomness: The Hidden Role of Chance in Life and the Markets (London: Penguin, 2004). Taleb, Nassim Nicholas.The Black Swan: The Impact of the Highly Improbable (New York: Random House, 2007).

Nobody doubts the crisis has had macroeconomic consequences, the difference being only over what they are and how long-lasting they will prove to be. But the view that the crisis had macroeconomic roots is controversial. Michael Dooley of the University of California at Santa Cruz and Peter Garber of Deutsche Bank, two of the authors of the influential ‘Bretton Woods II’ hypothesis (which explained and justified the fixed exchange-rate regimes adopted by many developing countries, notably China, as a sensible way of achieving rapid export-led industrial growth), reject the notion out of hand.6 They argue that the blame lies ‘with ineffective supervision and regulation of financial markets in the U.S. and other industrial countries driven by ill-conceived policy choices’.7 This chapter will argue, in opposition to this view, that understanding the underlying economics of the crisis is crucial.


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Liberalism at Large: The World According to the Economist by Alex Zevin

"there is no alternative" (TINA), activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, anti-communist, Asian financial crisis, bank run, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, business cycle, capital controls, carbon tax, centre right, Chelsea Manning, collective bargaining, Columbine, Corn Laws, corporate governance, corporate social responsibility, creative destruction, credit crunch, David Ricardo: comparative advantage, debt deflation, desegregation, disinformation, disruptive innovation, do well by doing good, Donald Trump, driverless car, Edward Snowden, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, global supply chain, guns versus butter model, hiring and firing, imperial preference, income inequality, interest rate derivative, invisible hand, It's morning again in America, Jeremy Corbyn, John von Neumann, Joseph Schumpeter, Julian Assange, junk bonds, Khartoum Gordon, land reform, liberal capitalism, liberal world order, light touch regulation, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, means of production, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, new economy, New Journalism, Nixon triggered the end of the Bretton Woods system, no-fly zone, Norman Macrae, Northern Rock, Occupy movement, Philip Mirowski, plutocrats, post-war consensus, price stability, quantitative easing, race to the bottom, railway mania, rent control, rent-seeking, road to serfdom, Ronald Reagan, Rosa Parks, Seymour Hersh, Snapchat, Socratic dialogue, Steve Bannon, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade liberalization, trade route, unbanked and underbanked, underbanked, unorthodox policies, upwardly mobile, War on Poverty, WikiLeaks, Winter of Discontent, Yom Kippur War, young professional

Nicholas, Chicago 1981, pp. 493–94; Isaiah Berlin, 1 February 1945, in Flourishing: Letters 1928–1946, London 2004, p. 528. 57.Peter Clarke, The Last Thousand Days of the British Empire: Churchill, Roosevelt and the Birth of the Pax Americana, London 2008, pp. 146–48. 58.There was, in other words, no reason for the US to reject certain currency controls, or bilateral clearing schemes of the sort Britain had just signed with Belgium – a ‘miniature Keynes Plan’, designed to smooth payment imbalances between surplus and deficit countries, which the US rejected at Bretton Woods. Such controls would expand ‘the sum total of world trade’, as opposed to the bad kind of discrimination, which simply transferred ‘markets from one supplier to another’: ‘Peacetime Mutual Aid’, 13 December 1945. For Britain’s weak (and wishful) negotiating posture at Bretton Woods, and the acrimony it and the loan terms generated, see Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White and the Making of a New World Order, Princeton 2013. 59.Leo Amery to Layton, 23 January 1945, Layton Papers, TCC, Box 81.137–138. 60.This advice was given ‘against our better judgment’.

The Economist viewed the affair as a mildly amusing intrigue almost up to the day the president resigned.61 Macrae, at any rate, looking to escape from the corset of fixed exchange, praised Nixon for dismantling Bretton Woods between 1971 and 1973.62 Andrew Knight: Special Relationships, 1974–86 The Economist may have applauded the delinking of the dollar from gold and the effective end of the Bretton Woods system of fixed exchange in 1973. But this drastic step also pointed to a deep, rumbling crisis of the liberal capitalist order that America had built after 1945. In one sense, this was a testament to its success, in particular in Germany and Japan.

Philip Mirowski and Dieter Plehwe, Cambridge 2009, p. 89. 54.Eurocurrency markets undermined the Bretton Woods system, since they operated without reference to the official, gold-backed value of the US dollar. For the competitive deregulatory pressures they exerted on policymakers, and their role in the formation of a transatlantic ‘City-Bank-Treasury’ – ‘Federal Reserve-Wall Street-Treasury’ nexus, see J. Green, ‘Anglo-American Development, the Euromarkets, and the Deeper Origins of Neoliberal Deregulation’, Review of International Studies, July 2016, pp. 9–14; Eric Helleiner, States and the Reemergence of Global Finance, From Bretton Woods to the 1990s, Ithaca 1994, pp. 15–16.


Profit Over People: Neoliberalism and Global Order by Noam Chomsky

Alan Greenspan, Bernie Sanders, Bretton Woods, classic study, declining real wages, deindustrialization, full employment, invisible hand, Jim Simons, joint-stock company, land reform, liberal capitalism, manufacturing employment, means of production, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, public intellectual, Ronald Reagan, strikebreaker, structural adjustment programs, Telecommunications Act of 1996, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, Washington Consensus

Free flow of capital, in contrast, would create what some international economists call a “virtual senate,” in which highly concentrated financial capital imposes its own social policies on reluctant populations, punishing governments that deviate by capital flight.19 The Bretton Woods assumptions largely prevailed during the “Golden Age” of high levels of growth of the economy and productivity, and extension of the social contract, through the 1950s and 1960s. The system was dismantled by Richard Nixon with the support of Britain, and, later, other major powers. The new orthodoxy became institutionalized as part of the “Washington consensus.” Its outcomes conform rather well to the expectations of the designers of the Bretton Woods system. Enthusiasm for the “economic miracles” wrought by the new orthodoxy is ebbing, however, among the managers of the global economy, as the near disasters that have accelerated since financial flows were liberalized from the 1970s have begun to threaten the “domestic constituencies” as well as the general public.

By 1970 the “affluent alliance” of the post-war years was running on to the rocks, and there was growing pressure on corporate profits. Recognizing that the United States was no longer able to play the role of “international banker” that had been so beneficial to US-based multinationals, Richard Nixon dismantled the international economic order (The Bretton Woods system), suspending the convertibility of the dollar to gold, imposing wage-price controls and an import surcharge, and initiating fiscal measures that directed states power, beyond the previous norm, to welfare for the rich. These have been the guiding policies since, accelerated during the Reagan years and maintained by the “New Democrats.”

It helps bring about the “significant wage restraint” and “atypical restraint on compensation increases [that] appears to be mainly the consequence of greater worker insecurity” that so encourage Fed chair Alan Greenspan and the Clinton administration, sustaining the “economic miracle” that arouses awe among its beneficiaries and deluded observers, particularly abroad. There are few surprises here. The designers of the post–World War II international economic system advocated freedom of trade but regulation of capital; that was the basic framework of the Bretton Woods system of 1944, including the charter of the lMF. One reason was the (rather plausible) expectation that liberalization of finance would impede freedom of trade. Another was the recognition that it would serve as a powerful weapon against democracy and the welfare state, which had enormous public support.


pages: 483 words: 134,377

The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, classic study, clean water, colonial rule, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Ford Model T, Francisco Pizarro, fundamental attribution error, gentrification, germ theory of disease, greed is good, Gunnar Myrdal, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, low interest rates, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, public intellectual, risk/return, road to serfdom, Robert Solow, Silicon Valley, Steve Jobs, tacit knowledge, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, WikiLeaks, World Values Survey, young professional

An American government economist named Harry Dexter White had proposed an Inter-American Bank to cement economic and political alliances in Latin America at a conference in Havana in February 1940. Though the conference approved the plan, a backlash against regional blocs would later kill it off. But it would be replaced by an even larger proposal by the same Harry Dexter White to create a new organization: the World Bank. THE ORIGINAL SIN AT BRETTON WOODS The World Bank was founded in 1944 at the Bretton Woods conference, which had been set up by the soon-to-be victorious Allies to plan postwar economic cooperation. The Bank would provide long-term financing and expert advice to what would become known as “developing countries.” It would be the most powerful institution at the heart of the development community, which would include rich-country government aid agencies, international philanthropies, the United Nations and other international agencies, and the development experts advising all of the above.

It would be the most powerful institution at the heart of the development community, which would include rich-country government aid agencies, international philanthropies, the United Nations and other international agencies, and the development experts advising all of the above. The same Bretton Woods conference also founded the International Monetary Fund (IMF), which would bail countries out of short-term financial crises. Both the Bank and the Fund still have these powerful roles today. A key moment in the hardening consensus for technocratic development was the approval at Bretton Woods of one particular clause in the Bank’s 1944 Articles of Agreement. Article IV, Section 10, was a “nonpolitical clause,” as it became known, which would make it easier to overlook unlovely autocrats among America’s anti-Soviet allies during the Cold War: “The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in its decisions by the political character of the government of the member or members concerned.

Such loans subject to such an expert committee “will be based on more careful studies of their utility than has ever been true with most private investments made to foreign countries.” This made clear “the necessity for selecting the most able men to manage the Bank.” The Bank “should also have the authority to send the experts into the field.”32 When White as Morgenthau’s deputy became the key American decision-maker at Bretton Woods, White’s original 1941 draft became the basis for the Article IV, Section 10, nonpolitical clause for the World Bank. Harry Dexter White died in 1948, just as the World Bank began operations. But White had a former Harvard graduate school classmate and lifelong friend—Lauchlin Currie—to carry on his technocratic legacy at the World Bank.


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

Alan Greenspan, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, company town, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, flying shuttle, full employment, George Santayana, global village, Great Leap Forward, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Mahbub ul Haq, Marshall McLuhan, mass immigration, McJob, Meghnad Desai, microcredit, moral panic, Neal Stephenson, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pension time bomb, pensions crisis, Robert Solow, Ronald Reagan, Silicon Valley, Snow Crash, spinning jenny, The Death and Life of Great American Cities, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, Tragedy of the Commons, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

International investment came to comprise the American bankrolling of western Europe and to a far smaller extent the British subsidy of its colonies and commonwealth. For global markets, 1945 was year zero. Under the Bretton Woods system established after World War II — named after the location of its founding conference — international capital flows grew slowly, limited by exchange controls. Intermittent balance of payments deficits in some countries were the main force driving the flows. It was not until after the Bretton Woods arrangements began to crumble that the growth in the financial markets began to head up the graph. The birth of the Big Swinging Dick A brief history of the recent growth of the international markets will demonstrate why their power this past decade or so has been fuelled by the growth of government.

But the existing framework for international economic management is inadequate. The Bretton Woods system has broken down, and nothing has taken its place. Ad hoc interventions by a handful of the industrialised countries will not be powerful enough to govern the international financial markets. Even worse, they have neither clear aims nor political legitimacy. The underlying problem was diagnosed by Lawrence Summers, then number two at the US Treasury, at a conference called in 1995 for the 50th anniversary of Bretton Woods. He said: ‘With the passage of the communist threat an important adhesive binding industrial democracies to each other and their allies in the developing world has been lost’.

The payments on the borrowing will depend on tomorrow’s taxpayers financing them instead of today’s. This pattern of borrowing in the international capital markets is a phenomenon dating from the 1970s. International capital flows grew at a steady pace for the first quarter century after the post-war Bretton Woods confer- The Weightless World 174 ence in the summer of 1945, and the ‘offshore’ Euro-market for short-term lending and borrowing on a large scale was well-established by the mid-1960s. But the great leap forward stemmed from the OPEC oil crisis. The mainly Arab members of the Organisation of Petroleum Exporting Countries decided in 1973 as a result of the Middle East war to exercise their muscle by quadrupling the price of oil.


pages: 346 words: 90,371

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane

agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, book value, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, foreign exchange controls, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land bank, land reform, land tenure, land value tax, Landlord’s Game, low interest rates, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, Minsky moment, Money creation, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, Post-Keynesian economics, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Robert Solow, Second Machine Age, secular stagnation, shareholder value, subprime mortgage crisis, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

Discussion of more recent times tends to focus on England, as housing markets and policies have varied widely across the nations of the UK, particularly since devolution around the turn of the millennium. 2 A bushel is an old unit of volume which was used mostly for agricultural products such as wheat. 3 The Bretton Woods system was developed at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire, from 1 to 22 July 1944. The major outcome of the Bretton Woods conference was the introduction of an adjustable pegged foreign exchange rate system whereby all currencies were linked to the US dollar which, in turn, was made convertible to gold at a fixed price. The conference also saw the creation of two global institutions that still play important roles today – the International Monetary Fund (IMF) and the World Bank.

Economic policy making was dominated by Keynesian thought (see Box 4.3) and the pursuit of bold social reforms such as the establishment of the welfare state, the nationalisation of the railways and the creation of the National Health Service. This period is often described as the ‘Golden Age of Capitalism’, and lasted until the collapse of the Bretton Woods fixed exchange rate regime in 1971.3 In the mixed economy of the Keynesian era, state-sponsored house building by councils coexisted with development by private firms, and to a much lesser extent by non-profit housing associations. The years in which the state built most were also those in which the market built most, suggesting that state supply caused little if any crowding out of private investment.

Together, these changes created a major bias in favour of owner-occupation, and contributed towards the continued rise in homeownership in the 1970s and 1980s – against the headwinds of rising house prices. 4.4 1970 onwards: the emergence of ‘residential capitalism’ The 1970s was a period of huge change, socially, politically and economically. While an immediate shortage of housing was no longer a major concern following the large-scale building in the post-war era, the UK economy faced multiple challenges as the dynamics of the global economy were transformed following the collapse of the Bretton Woods system. These included runaway inflation, oil price shocks, high interest rates and increasing tensions between industry and trade unions. This ultimately led to the election of Margaret Thatcher as prime minister in 1979, along with the emergence of monetarism and a more market-orientated approach to social and economic policy (see Box 4.4).


China's Good War by Rana Mitter

"World Economic Forum" Davos, 9 dash line, Admiral Zheng, anti-communist, Berlin Wall, Bretton Woods, British Empire, colonial rule, COVID-19, Deng Xiaoping, do well by doing good, Donald Trump, Great Leap Forward, high-speed rail, Internet Archive, land reform, liberal capitalism, Mahatma Gandhi, Mikhail Gorbachev, Nelson Mandela, New Journalism, sexual politics, South China Sea, Washington Consensus

Recent scholarly work has seriously questioned the idea that the post-1945 order was entirely created in the rooms of a small number of American and European chancelleries. Eric Helleiner, for instance, has shown that a variety of actors, from Asia and Latin America in particular, were influential in shaping the Bretton Woods settlement at the end of the war.16 In order to create a new genealogy of China’s international status from 1945, however, China has had to grapple with the awkward reality that the regime that was involved in various aspects of China’s postwar settlement, including the Bretton Woods discussions, the establishment of economic and social organizations, and the war crimes trials, was the Nationalist regime of Chiang Kai-shek, not the Communist government of Mao Zedong.

The bargain struck by the United States was that China’s wartime contribution entitled it to a role in shaping the postwar world; the United States clearly expected this situation to last, since it would not otherwise have awarded China a permanent seat on the UN Security Council. Despite the brevity of the Nationalists’ postwar spell in power, China did influence a variety of international organizations—notably the United Nations, but also the institutions of the Bretton Woods system.52 Nationalist China also had strong views about its role in shaping the postcolonial world, particularly when much of it was not “post” at all, but still colonized. The Roosevelt administration was strongly opposed to traditional empires, and this opposition was translated into a project to raise the status of China in the world order.

Tom Mitchell, “China Struggles to Win Friends over South China Sea,” Financial Times, 13 July 2016. 15. For a revisionist global turn on Pearl Harbor, see Beth Bailey and David Farber, eds., Beyond Pearl Harbor: A Pacific History (Lawrence, KS, 2019). 16. Eric Helleiner, Forgotten Foundations of Bretton Woods: International Development and the Making of the Postwar Order (Ithaca, NY, 2014). 17. On the way in which historical ideas of victimhood have been used in Chinese nationalism, see Wang, Never Forget National Humiliation; Callahan, China. On the connections between history and politics in China, see Howard French, Everything under the Heavens: How the Past Helps Shape China’s Push for Global Power (New York, 2017); Peter Hays Gries, China’s New Nationalism: Pride, Politics, and Diplomacy (Berkeley, CA, 2004), ch. 3. 18.


pages: 457 words: 125,329

Value of Everything: An Antidote to Chaos The by Mariana Mazzucato

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, bank run, banks create money, Basel III, behavioural economics, Berlin Wall, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, business cycle, butterfly effect, buy and hold, Buy land – they’re not making it any more, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, clean tech, Corn Laws, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, European colonialism, Evgeny Morozov, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, full employment, G4S, George Akerlof, Glass-Steagall Act, Google Hangouts, Growth in a Time of Debt, high net worth, Hyman Minsky, income inequality, independent contractor, index fund, informal economy, interest rate derivative, Internet of things, invisible hand, John Bogle, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, laissez-faire capitalism, light touch regulation, liquidity trap, London Interbank Offered Rate, low interest rates, margin call, Mark Zuckerberg, market bubble, means of production, military-industrial complex, Minsky moment, Money creation, money market fund, negative equity, Network effects, new economy, Northern Rock, obamacare, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, peer-to-peer lending, Peter Thiel, Post-Keynesian economics, profit maximization, proprietary trading, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, rent control, rent-seeking, Robert Solow, Sand Hill Road, shareholder value, sharing economy, short selling, Silicon Valley, Simon Kuznets, smart meter, Social Responsibility of Business Is to Increase Its Profits, software patent, Solyndra, stem cell, Steve Jobs, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, transaction costs, two and twenty, two-sided market, very high income, Vilfredo Pareto, wealth creators, Works Progress Administration, you are the product, zero-sum game

In 1933, following the Wall Street Crash, the US had separated commercial banks (financial institutions which took deposits) from investment banks (financial firms raising money for companies through debt and equity issues, corporate mergers and acquisitions, and trading in securities for their own account) under the Glass-Steagall Act. The Act's regulations were in some respects strengthened by the Bretton Woods Agreement of 1944. In line with the so-called ‘Keynes Plan', the Bretton Woods system imposed tight curbs on international capital movements in order to preserve a system of fixed exchange rates - thereby ruling out most of the cross-border investments and currency trades which had previously been major sources of instability and speculative profits. The Bretton Woods Agreement also required governments to maintain tight restrictions on their domestic financial sectors - including high minimum ratios of capital to assets and liquid reserves to total bank assets, interest rate caps and, in the US, strict legal separation of commercial and investment banking.

The Bretton Woods Agreement also required governments to maintain tight restrictions on their domestic financial sectors - including high minimum ratios of capital to assets and liquid reserves to total bank assets, interest rate caps and, in the US, strict legal separation of commercial and investment banking. The cornerstone of the Bretton Woods currency system was the gold standard, under which the dollar was convertible into gold at $35 an ounce. Such measures made it hard for financial institutions to shift their business to low-tax or low-regulation jurisdictions. The rules reflected policymakers' consensus that financial institutions acted at best like a lubricant for the ‘real' motors of the economy - agriculture, manufacturing and business services - and were not significantly productive in themselves.

Bans on speculative derivatives trading, enacted in the US in the 1930s because of its role in magnifying the 1929 Crash and Great Depression, were effectively sidestepped by the growth of unregulated over-the-counter derivatives trading, which grew explosively in the 1980s and defied subsequent efforts at re-regulation.13 Banks' invention of ‘offshore' currencies, to sidestep cross-border capital controls, was especially effective. In 1944, the Bretton Woods system had pegged the value of the dollar to gold. But when the post-war boom, based on manufacturing, tailed off around 1970, ‘light-touch' financial regulation increasingly appealed to policymakers on both sides of the Atlantic. The financial sector reacted to this interest by developing a new currency, the Eurodollar.


pages: 489 words: 111,305

How the World Works by Noam Chomsky, Arthur Naiman, David Barsamian

"World Economic Forum" Davos, affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, Bernie Sanders, Bretton Woods, British Empire, business climate, capital controls, clean water, corporate governance, deindustrialization, disinformation, Fall of the Berlin Wall, feminist movement, glass ceiling, heat death of the universe, Howard Zinn, income inequality, interchangeable parts, Isaac Newton, joint-stock company, land reform, liberation theology, military-industrial complex, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, offshore financial centre, plutocrats, race to the bottom, Ralph Nader, Ronald Reagan, Rosa Parks, single-payer health, strikebreaker, Telecommunications Act of 1996, transfer pricing, union organizing, War on Poverty, working poor

That tended to shift the world balance. In any event, by the early 1970s, the US felt that it could no longer sustain its traditional role as—essentially—international banker. (This role was codified in the Bretton Woods agreements at the end of the Second World War, in which currencies were regulated relative to one another, and in which the de facto international currency, the US dollar, was fixed to gold.) Nixon dismantled the Bretton Woods system around 1970. That led to tremendous growth in unregulated financial capital. That growth was rapidly accelerated by the short-term rise in the price of commodities like oil, which led to a huge flow of petrodollars into the international system.

That led to a lot more pressure on corporate profits in the US and, consequently, to a big attack on social welfare gains. The crumbs that were permitted to ordinary people had to be taken away. Everything had to go to the rich. There was also a tremendous expansion of unregulated capital in the world. In 1971, Nixon dismantled the Bretton Woods system, thereby deregulating currencies. That, and a number of other changes, tremendously expanded the amount of unregulated capital in the world, and accelerated what’s called the globalization (or the internationalization) of the economy. That’s a fancy way of saying that you export jobs to high-repression, low-wage areas—which undercuts the opportunities for productive labor at home.

On the other hand, he also makes the common assumption that the market system is spreading, which just isn’t true. What’s spreading is a kind of corporate mercantilism that’s supported by—and crucially relies on—large-scale state power. Soros made his money by financial speculations that become possible when telecommunications innovations and the government’s destruction of the Bretton Woods system (which regulated currencies and capital flow) allowed for very rapid transfers of capital. That isn’t global capitalism. As we sit here, the World Economic Forum is being held in Davos, Switzerland. It’s a six-day meeting of political and corporate elites, with people like Bill Gates, John Welch of GE, Benjamin Netanyahu, Newt Gingrich and so on.


pages: 258 words: 77,601

Everything Under the Sun: Toward a Brighter Future on a Small Blue Planet by Ian Hanington

agricultural Revolution, Albert Einstein, Anthropocene, biodiversity loss, Bretton Woods, carbon footprint, carbon tax, clean water, Climategate, Climatic Research Unit, Day of the Dead, disinformation, do what you love, energy security, Enrique Peñalosa, Exxon Valdez, Google Earth, happiness index / gross national happiness, Hedy Lamarr / George Antheil, hydraulic fracturing, Intergovernmental Panel on Climate Change (IPCC), Medieval Warm Period, ocean acidification, oil shale / tar sands, planned obsolescence, precautionary principle, stem cell, sustainable-tourism, the scientific method, University of East Anglia, urban planning, urban sprawl

When economists and politicians met in Bretton Woods, New Hampshire, in 1944, they faced a world in which war had devastated countrysides, cities, and economies. So they tried to devise solutions. They pegged currency to the American greenback and looked to the (terrible) twins, the International Monetary Fund and the World Bank, to get economies going again. The postwar era saw amazing recovery in Europe and Japan, as well as a roaring U.S. economy based on supplying a cornucopia of consumer goods. But the economic system that was created in Bretton Woods is fundamentally flawed because it is disconnected from the biosphere, the zone of air, water, and land in which we live.

We are witnessing the collision of the economic imperative to grow indefinitely with the finite services that nature performs. It’s time to get our perspective and priorities right. Biocentrism is a good place to start. The first Bretton Woods conference helped us devise solutions for the challenges of the time. Now we have new challenges for new times. It’s time for a Bretton Woods II. The behemoth that wouldn’t stop growing HAVE YOU NOTICED that we describe the market and the economy as if they were living entities? The market is showing signs of stress. The economy is healthy. The economy is on life support.

—IH Index Numbers refer to pages in the print edition Aboriginal peoples, 23, 29, 183 Aesop’s fables, 256 Aflockalypse, 37–39 agribusiness, 178–79 agriculture, 179–82, 237–38, 255 Alberta, 23, 54, 67, 70, 74–77, 81–82, 83–86 alien species, 25–27 Amazon rainforest, 256 amphibians, 11–14 Anderson, Ray, 94–95 Antheil, George, 98 Anthropocene epoch, 93, 244 anthropocentrism, 103 anti-greenies, 239–41 aquaculture, 194–97 automobiles, 40–41, 44–45, 51–55, 219 bacteria, bedrock, 84, 146 bailouts, financial, 107–9 Baliunas, Sallie, 132 Banff Springs snail, 33 basking sharks, 173–75 Basking Sharks: The Slaughter of B.C.’s Gentle Giants (Wallace and Gisborne), 174 BBC, 166–67 bears, 7, 10, 28–29, 34 Beaufort Sea, 38, 165 bees, 17–19, 112 Benyus, Janine, 93–94 Bernal, Patricio, 160 berries, 112, 182–84 bicycling, 44, 46–48, 49–51 biocapacity, 89 biocentrism, 102 biodiversity, 9–11, 26, 139, 216 Biological Conservation, 14 biomimicry, 93–95 biophilia, 222 bitumen, 67–70 Blaser, Martin J., 204 blueberries, 112, 183–84 bluefin tuna, 199–201 boreal forest ecosystems, 22–24, 69, 183, 216 bovine growth hormone, 178 BPA (bisphenol A), 96 Bretton Woods, New Hampshire, 103–4 British Columbia. see also Vancouver, British Columbia: basking sharks, 174; bees, 112; caribou population, 15, 22–23; Hydro, 143; ocean management, 164; renewable energy moratorium, 142; salmon, 195–96; sardine fishing, 198; spotted owl habitat, 111; Transmission Corporation, 143; trophy hunt, 28–30 British Petroleum (BP), 70, 72, 76, 77 Budescu, David, 128–30 butterflies, 19–21 Canada: Atlantic, 10; bicycle use, 48; carbon capture and storage (CCS), 83–86; carbon dioxide, 44–45; caribou, 21–25; Department of Fisheries and Oceans (DFO), 164; Environment Canada, 26, 147; Fisheries and Oceans, 33; forest protection, 111, 216–17; genetically modified (GM) foods, 185; Health Canada, 96, 207; North Atlantic right whales, 32–34; nuclear power, 60; petro dollar, 73; science and politicians, 96–97; waste and recycling, 41–42 carbon: capture and storage (CCS), 83–86, 161; offsets and global warming, 117–19; sinks, 137–38; stewardship, 140–41; taxes, 119–21, 250 carbon dioxide, 44–45, 84, 137–38, 158, 159–60 car-centric urban areas, 40–41, 44–45 Carey, John, 147 caribou, 15, 21–25, 88 Carson, Rachel, 144, 223–24 CFCs (chlorofluorocarbons), 85, 127, 144, 149, 150, 235, 253 Chappell, Michael Jahi, 180 chemicals, 155–56 Chernobyl, 59–60 childhood lessons, 263–65 children, environment and, 228–30 children, outdoor activity, 221–23 children, schools, 223–25 children, teaching to be well, 225–28 China, 48, 54, 55 Christmas, 258–61 chytrid (fungus), 12–13 city dwelling, 43–46 climate change: carbon capture and storage (CCS), 83–86; caribou populations and, 23; city dwelling and greenhouse gases, 43–44; conspiracy to deny, 135–37; costs of, 108–9; economic madness, 122–24; human caused, 130–33, 152; mammal extinction and, 7; marine life, 155–57; oceans and, 160; science, 97–98; science and threat of, 128–30; species extinction, 38–39; technology fixes, 144–46; water and, 146–48 “Climategate,” 97, 132, 133 coal mining, 115 coffee, 189–92 Coleman, Eliot, 180–81 Collapse (Diamond), 245 Committee on the Status of Endangered Wildlife in Canada (COSEWIC), 171, 175 Condon, Patrick, 44–45, 45 consumer culture, 41, 156, 250, 259 Conway, Erik, 150 coral reefs, 158 corporate change, 173 cosmetics industry, 208–9 Coulter, Lindsay, 260 cruise ship industry, 168–70 Crutzen, Paul, 244 Cuccinelli, Kenneth, 97 Cullis-Suzuki, Severn, 226, 229–30 cycling. see bicycling David Suzuki Foundation, 33, 110, 120, 167, 189, 193, 209 Davis, Wade, 247 DDT, 85, 144, 178, 253 Deacon, Gillian, 209 DeChristopher, Tim, 74–76 Deepwater Horizon, 57, 72, 76, 79 Dene Nation, 24 deniers, 133–35, 151–53, 240 Diamond, Jared, 245 diethyl phthalate (DEP), 206–7 dinosaurs, 254 Earle, Sylvia, 167 earthquake crisis, Japan, 57–58 Earth Summit, 226, 229, 246 ecological footprint, 89, 237 economic crisis, 81, 105, 113, 219 economic growth, 104–7, 236 economic paradigm, 102–4 economy, 114–17, 122–24 ecosystem, 16, 34, 110–13, 157–59, 161–66, 203–5. see also ocean ecosystem ecotourism industry, 29 Enbridge, 77 energy, 44, 61–64, 64–66, 141–44, 263 environment. see also ecosystem; wildlife: children and, 228–30; crisis, 122–23; economy and, 114–17; green, being, 248–51; learning, 225; perceptions of, 246–48; protection, 125, 192–94, 203–5 environmentalists, 231, 239–40, 241–43 Ethical Oil (Levant), 69 European bailouts, 107–8 European Commission, 60–61, 206 European Union, 48, 117, 207 evolutionary change and hunting, 31 exercise, 227 extinction, 7–9, 11–14, 36, 37–39, 139, 155–57 Exxon Mobil, 70, 78, 131, 132 fables, 256–58 farmed seafood, 194–97 farming, 179–82, 189, 237–38 Fellmann, Andy, 50 financial bailouts, 107–9 First Nations, 24, 28, 70, 81–82, 111, 165, 182, 217 fisheries management, 174–75 fishing, 10, 31, 155, 162, 255 Flannery, Tim, 245 food, vegetables, 177–79 food production, local, 187–89 “Food Security and Biodiversity: Can We Have Both?”


pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"World Economic Forum" Davos, accounting loophole / creative accounting, affirmative action, Alan Greenspan, AOL-Time Warner, Asian financial crisis, barriers to entry, Benchmark Capital, book value, borderless world, Branko Milanovic, Bretton Woods, business cycle, California energy crisis, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, digital divide, electricity market, emotional labour, ending welfare as we know it, feminist movement, fulfillment center, full employment, gender pay gap, George Gilder, glass ceiling, Glass-Steagall Act, Gordon Gekko, government statistician, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, Larry Ellison, liquidationism / Banker’s doctrine / the Treasury view, low interest rates, manufacturing employment, Mary Meeker, means of production, Michael Milken, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, PalmPilot, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rewilding, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, stock buybacks, structural adjustment programs, tech worker, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, warehouse automation, women in the workforce, working poor, zero-sum game

-style financial structures. It's fairly simple to draw parallels from the brief financial history of the U.S. to a global scale. At the end of World War II, the international monetary system, known as Bretton Woods, was based on fixed exchange rates—the value of currencies were set relative to the U.S. dollar, and the U.S. dollar was set to a gold price of $35. The designers of the Bretton Woods system knew that fixed exchange rates were incompatible with fi-ee capital flows. International trade was encouraged by poHcy, but cross-border money flows weren't. Strains began building on this fixed arrangement in the 1960s.

Inflation rose, meaning that the dollar was effectively no longer worth the $35 an ounce that it was declared to be. Also, Western Europe and Japan were busily catching up to U.S. productivity levels, meaning that their currencies were chronically undervalued relative to the doUar.^ Starting in the 1970s, the U.S. began pressing for liberalization of capital accounts worldwide. The classic Bretton Woods system encouraged trade flows, as did repeated tariff" reductions agreed on through the mechanism of the General Agreement on Tariffs and Trade (GATT). But capital flows had been pretty tightly restricted. The lead designers of the fixed exchange rate system, John Maynard Keynes firom Britain and Harry Dexter White from the United States, thought it important to insulate countries fi-om the pressures of international capital markets.

"Learning to Love Globalization," The American Prospect, May 21 <www.prospect.org/print/V12/9/greif-m.html>. Hansell, Saul, and Judith H. Dobrzynski (2000). "eBay Cancels Sale in Auction of Abstract Painting," New York Times, May 11, p. Al. Helleiner, Erich (1994). States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca: Cornell University Press). Henderson, David (1999). The MAI Affair: A Story and Its Lessons (London: Royal Institute of International Affairs). Henry, David, and Michelle Conlin (2002). "Too Much of a Good Incentive," Business Week, March 4, pp. 38-9. Henwood,Doug (1998).


pages: 245 words: 75,397

Fed Up!: Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader by Colin Lancaster

"World Economic Forum" Davos, Adam Neumann (WeWork), Airbnb, Alan Greenspan, always be closing, asset-backed security, beat the dealer, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, Black Monday: stock market crash in 1987, bond market vigilante , Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, buy the rumour, sell the news, Carmen Reinhart, Chuck Templeton: OpenTable:, collateralized debt obligation, coronavirus, COVID-19, creative destruction, credit crunch, currency manipulation / currency intervention, deal flow, Donald Trump, Edward Thorp, family office, fear index, fiat currency, fixed income, Flash crash, George Floyd, global macro, global pandemic, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Growth in a Time of Debt, housing crisis, index arbitrage, inverted yield curve, Jeff Bezos, Jim Simons, junk bonds, Kenneth Rogoff, liquidity trap, lockdown, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, Masayoshi Son, Michael Milken, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, moral hazard, National Debt Clock, Nixon triggered the end of the Bretton Woods system, Northern Rock, oil shock, pets.com, Ponzi scheme, price stability, proprietary trading, quantitative easing, Reminiscences of a Stock Operator, reserve currency, Ronald Reagan, Ronald Reagan: Tear down this wall, Sharpe ratio, short selling, short squeeze, social distancing, SoftBank, statistical arbitrage, stock buybacks, The Great Moderation, TikTok, too big to fail, trickle-down economics, two and twenty, value at risk, Vision Fund, WeWork, yield curve, zero-sum game

In any event, the strategy’s modern roots really began after the Great Depression and WWII, when the international monetary system first left the gold standard, creating more trading variables in the fixed income and currency markets. In 1944, the Bretton Woods Conference addressed the financial order following WW2 to identify a replacement to the gold standard. This all resulted in a new system of exchange rates backed by the US dollar as its reserve currency. This new system all blew up in the early ‘70s. President Nixon killed the Bretton Woods Agreement and then a guy named Paul Volcker had to clean up the mess. The net result was that all major currencies began to float against each other.

He was chairman of the Fed under Jimmy Carter and Ronald Reagan from ‘79 to ‘87, back when you could work for both a Democratic and Republican boss. It was a messy time. America was dealing with oil shocks, the fallout from the Vietnam War, the end of the Bretton Woods system, and then massive tax cuts. Inflation spiked when Nixon decided to leave Bretton Woods, the gold standard. The US dollar’s status as the reserve currency of the world was in serious doubt. Investors were convinced that inflation would never come down and were dumping Treasuries at any price. They bought as much gold as they could. Volcker made a huge bet to fight inflation.

The gold standard meant that each country defined its currency in terms of a fixed weight of gold. Central banks held physical gold to ensure their currency could be converted to it. This meant that the currency had real value. It was backed by something more than a promise.” The Rabbi jumps in. “Nixon killed the gold standard, the Bretton Woods system, in 1971, back when impeachment was still a novelty. It was when inflation was choking our economy. This was replaced by freely floating fiat currencies.” “This was great for macro investors,” I say. “Just imagine all of these new freely floating instruments, like kids in a candy store.”


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

"World Economic Forum" Davos, 3D printing, Airbnb, Alan Greenspan, Albert Einstein, Amazon Mechanical Turk, anti-fragile, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, Big Tech, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, commons-based peer production, credit crunch, crony capitalism, cross-border payments, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, Evgeny Morozov, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, Garrett Hardin, gentrification, gig economy, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, housing crisis, income inequality, independent contractor, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, it's over 9,000, James Watt: steam engine, Jeremy Corbyn, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, low interest rates, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, megaproject, mini-job, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, Phillips curve, plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, SoftBank, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Tragedy of the Commons, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

But corporations and financiers have used their new power to induce governments and supranational financial institutions to build an infrastructure that favours their interests. Aided by the neo-liberal economics community, they have constructed a global framework of institutions and regulations that enable elites to maximise their rental income. It is anything but a ‘free market’. FROM BRETTON WOODS TO CRONY CAPITALISM In 1944, forty-four allied nations met at Bretton Woods, New Hampshire, in the USA to set up a trio of global institutions. The World Bank was established to rebuild capitalism, the International Monetary Fund (IMF) to maintain economic stability, and the General Agreement on Tariffs and Trade (later to become the World Trade Organization) to liberalise trade.

THE GLOBAL ARCHITECTURE OF RENTIER CAPITALISM The Great Transformation was built by national bureaucracies answerable to national politicians and financiers. But, after the first phase collapsed in the 1930s, bankers were so discredited that when it came to creating the institutions for managing economic issues for the post-1945 era, President Franklin Roosevelt and others excluded all bankers (except one who was regarded as tame) from the Bretton Woods negotiations of 1944. It was only when the Global Transformation took off in the 1970s that bankers and financiers became dominant again. They have played an increasing role in shaping the global economy, largely built by international bureaucracies based mainly in Washington DC and in Geneva.

The number of UNHCR staff worldwide has almost doubled since 1995 to over 9,300, while IOM now employs 8,400, nearly eight times as many as in 1995. It is symbolic that, on the edge of Geneva airport, a compound for private jets belonging to some of the world’s plutocrats abuts cramped temporary accommodation for a growing number of asylum seekers. On the other side of the Atlantic, in Washington DC, the Bretton Woods agencies have devoted considerable resources to their neo-liberal project. In 2015, the World Bank directly employed over 9,000 staff, a 50 per cent increase since 1995. It and the IMF have channelled huge amounts of money and technical assistance towards liberalising the global economy, through structural adjustment strategies in developing countries, shock therapy in ex-communist countries and supply-side economics in OECD countries.


pages: 361 words: 97,787

The Curse of Cash by Kenneth S Rogoff

Alan Greenspan, Andrei Shleifer, Asian financial crisis, bank run, Ben Bernanke: helicopter money, Berlin Wall, bitcoin, blockchain, Boris Johnson, Bretton Woods, business cycle, capital controls, Carmen Reinhart, cashless society, central bank independence, cryptocurrency, debt deflation, disruptive innovation, distributed ledger, Dr. Strangelove, Edward Snowden, Ethereum, ethereum blockchain, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial exclusion, financial intermediation, financial repression, forward guidance, frictionless, full employment, George Akerlof, German hyperinflation, government statistician, illegal immigration, inflation targeting, informal economy, interest rate swap, Isaac Newton, Johann Wolfgang von Goethe, Johannes Kepler, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, low interest rates, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, moveable type in China, New Economic Geography, offshore financial centre, oil shock, open economy, payday loans, price stability, purchasing power parity, quantitative easing, RAND corporation, RFID, savings glut, secular stagnation, seigniorage, The Great Moderation, the payments system, The Rise and Fall of American Growth, transaction costs, unbanked and underbanked, unconventional monetary instruments, underbanked, unorthodox policies, Y2K, yield curve

Instead of trying again to establish the gold standard after World War II, the international community set up the Bretton Woods system of fixed exchange rates with the dollar at the center. In principle, the dollar was linked to gold but only for official purchasers. Other countries, in turn, were obliged to fix their currencies to the dollar. Eventually, the system fell prey to inconsistencies of its own, particularly when inflation in the United States started making the dollar less and less attractive relative to gold, creating an unsustainable dynamic. The Bretton Woods regime finally shattered in 1973, breaking any last vestige of a link between paper currencies and commodities.

And even if it managed to avert default, a sharp rise in real interest rates would almost certainly lead in the long term to a massive shrinkage in currency demand. THE POLITICAL ECONOMY IMPORTANCE OF SEIGNIORAGE The development of much greater central bank independence in many countries over the past three decades has been perhaps the single most transformative change in global macroeconomic policy since the breakup of the Bretton Woods system of fixed exchange rates in the early 1970s. Therefore it is important that the central bank not be turned into a political punching bag in a currency phaseout, as its profits will sharply decrease. Aside from being a modest but nice source of income for the government, seigniorage revenue has an important political economy function in supporting central bank independence.

The late 1970s and early 1980s were perhaps the peak period of Friedman’s direct influence on monetary policy. His view that real-world activist monetary policy usually does more harm than good seemed to be utterly corroborated by blundering central bankers, who badly mishandled the 1970s breakup of the Bretton Woods system of fixed exchange rates, as well as the sharp concomitant rise in global commodity prices. The United States, which was supposed to make the US dollar the bedrock of the international financial system, was at the epicenter of the problem. Instead of maintaining a stable money supply and inflation rate, the Federal Reserve massively increased the money supply in the run-up to the 1972 presidential election, in part to stimulate growth and help incumbent US president Richard Nixon get re-elected.


pages: 364 words: 99,613

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

air traffic controllers' union, Alan Greenspan, back-to-the-land, Bear Stearns, benefit corporation, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, classic study, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, Glass-Steagall Act, guns versus butter model, high-speed rail, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kickstarter, lake wobegon effect, Long Term Capital Management, low interest rates, market fundamentalism, Martin Wolf, McMansion, medical malpractice, Michael Milken, military-industrial complex, Minsky moment, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, open immigration, Paul Samuelson, plutocrats, price mechanism, price stability, private military company, public intellectual, radical decentralization, Ralph Nader, reserve currency, rising living standards, Robert Shiller, rolodex, Ronald Reagan, Savings and loan crisis, school vouchers, Silicon Valley, single-payer health, Solyndra, South China Sea, statistical model, Steve Jobs, Suez crisis 1956, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War, you are the product

But World War I sapped Britain’s economic strength and destroyed its capacity to play the role of world creditor. As a result, the world had no new source of credit when the private banking sector collapsed in the 1930s. In July 1944, confident that Germany would be defeated, the United States and Britain hosted a forty-four-nation conference at Bretton Woods, New Hampshire, to design a new international monetary system. Keynes, who in 1919 had predicted the disastrous consequences of the reparations imposed on Germany by the Treaty of Versailles after World War I, headed the British delegation. He argued for an international currency to settle global trading accounts.

If the nation was not going to return to its historical protectionist policies, then it would have to increase the capacity of domestic production to compete. And if the dollar-to-gold connection would at some point have to be replaced in order for the world to have sufficient liquidity without an excessive burden on the United States, some new arrangement would have to be negotiated to succeed the Bretton Woods system. Given that the United States was still the world’s economic superpower, leading the noncommunist world to a new system should not have been a strenuous political challenge. But the demands of empire and the hubris of American exceptionalism blinded the U.S. elite to the early signs of the country’s economic vulnerability.

More dollars, increasing demand, and pursuit of the same supply of goods and services typically leads to inflation and a reduction in the value of a nation’s currency. Foreign investors had had faith that the purchasing power of the dollars they held would remain stable because of the U.S. government’s Bretton Woods’s commitment to buy back dollars for gold at a fixed price. So at first they were content to hold on to the dollars, generally in the form of U.S. Treasury bonds, which would pay interest. There was, of course, never enough gold at Fort Knox to redeem all of the dollars. This was not a problem as long as the world had confidence in the U.S. pledge.


pages: 435 words: 127,403

Panderer to Power by Frederick Sheehan

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, book value, Bretton Woods, British Empire, business cycle, buy and hold, California energy crisis, call centre, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversification, financial deregulation, financial innovation, full employment, Glass-Steagall Act, Greenspan put, guns versus butter model, inflation targeting, interest rate swap, inventory management, Isaac Newton, John Meriwether, junk bonds, low interest rates, margin call, market bubble, Mary Meeker, McMansion, Menlo Park, Michael Milken, money market fund, mortgage debt, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, Norman Mailer, Northern Rock, oil shock, Paul Samuelson, place-making, Ponzi scheme, price stability, reserve currency, rising living standards, Robert Solow, rolodex, Ronald Reagan, Sand Hill Road, Savings and loan crisis, savings glut, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, stock buybacks, stocks for the long run, supply-chain management, supply-chain management software, The Great Moderation, too big to fail, transaction costs, trickle-down economics, VA Linux, Y2K, Yom Kippur War, zero-sum game

Coombs, The Arena of International Finance (New York: Wiley-Interscience, 1976), p. 71. 8 Richard Timberlake, Monetary Policy in the United States: An Intellectual and Institu tional History (Chicago: University of Chicago Press, 1993), Table 21.1, p. 328. 9 Ibid., Table 21.2, p. 330. Reserve requirements of “central reserve city banks” as a percentage of deposits were lowered from 26 percent in 1948 to 16½ percent by 1960. 10 Bremner, Chairman of the Fed, pp. 144–145. The Bretton Woods Conference of 1944 instituted the “gold exchange standard.” The dollar served as monetary backstop for the world’s currencies. The dollar would remain pegged to gold at the value of 35 to the ounce. Balance would be preserved by the legal authority of foreign central banks. They could redeem their dollars for gold at that rate.

We are in the wildest inflation since the Civil War.”46 After that climactic finale, a troop of singers and dancers burst into the room to stage the evening’s entertainment: “The Decline and Fall of the Entire World as Seen through the Eyes of Cole Porter.”47 On August 15, 1971, President Nixon announced the United States’s unilateral decision to no longer pay gold to foreign governments for dollars. He blamed speculators.48 He did not give blame where it was due: to the American people and, perhaps foremost, to the decision makers in the Oval Office, who had done a bang-up job of destroying the Bretton Woods agreement. At no time did Nixon acknowledge that the United States had committed the shameful act of default. Nixon also used this opportunity to place wage and price controls on practically every American. The land of the free and the brave was looking anything but. Most Americans were in favor of this initiative by the government—the same government that had shown neither the knowledge nor the backbone to avoid the financial chaos that now engulfed the free world.

He now had the opportunity to develop kinships with other members, including Otto Eckstein [formerly a member of President Johnson’s Council of Economic Advisers (CEA)], Walter Heller (former chairman of the CEA), Arthur Okun (former chairman of the CEA), Beryl Sprinkel (future CEA chairman during the Reagan administration), and Robert Triffin (early forecaster of the Bretton Woods disaster). Greenspan would remain on the board until his turn as chairman of the Federal Reserve began in 1987, with the exception of his CEA years. These administration officials would come in handy during the Reagan presidency. By 1973, Greenspan was regularly appearing in public, at least where it mattered: in the pages of the New York Times.


pages: 497 words: 123,718

A Game as Old as Empire: The Secret World of Economic Hit Men and the Web of Global Corruption by Steven Hiatt; John Perkins

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, accelerated depreciation, addicted to oil, airline deregulation, Andrei Shleifer, Asian financial crisis, Berlin Wall, big-box store, Bob Geldof, book value, Bretton Woods, British Empire, capital controls, centre right, clean water, colonial rule, corporate governance, corporate personhood, deglobalization, deindustrialization, disinformation, Doha Development Round, energy security, European colonialism, export processing zone, financial deregulation, financial independence, full employment, global village, high net worth, land bank, land reform, large denomination, liberal capitalism, Long Term Capital Management, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, moral hazard, Naomi Klein, new economy, North Sea oil, offshore financial centre, oil shock, Ponzi scheme, race to the bottom, reserve currency, Ronald Reagan, Scramble for Africa, Seymour Hersh, statistical model, structural adjustment programs, Suez crisis 1956, Tax Reform Act of 1986, too big to fail, trade liberalization, transatlantic slave trade, transfer pricing, union organizing, Washington Consensus, working-age population, Yom Kippur War

Association for Accountancy & Business Affairs, http://aabaglobal.org. Publishes Accountancy Business and the Public Interest, a peer-reviewed free journal. See http://visar.csustan.edu/aaba/aabajournalpage.html. Bretton Woods Project. Established by British NGOs in 1995, BWP serves as a networker, information-provider, and watchdog to scrutinize and influence the World Bank and International Monetary Fund. Its newsletter, Bretton Woods Update, is available at www.brettonwoodsproject.org/update/index.shtml. Offshore Watch. Web site for researchers into corruption and offshore affairs: http://visar.csustan.edu/aaba/jerseypage.html.

Index Abacha, Sani 44, 125 Abedi, Agha Hasan 69, 70, 75, 77, 86, 87 Abu Dhabi 69, 73, 75, 76 Adham, Kamal 75, 86, 87, 88 Afghanistan 26 drug trade in 70 civil war in 70–71 African Development Bank 251 Africa Oil Policy Initiative Group 119 Akbayan 192–93 Alamieyeseigha, Diepreye 121, 123 Algeria 15, 200, 266 Allende, Salvador 27 al-Qaeda 77, 89 and offshore banks 24 al-Taqwa Bank 71, 89 Altman, Robert A. 78, 79, 86, 88 American Express Co. 268 American Mineral Fields 99 Amin, Idi 27 Annan, Kofi 126 AngloGold 244 Anglo-Iranian Oil Company 14 Angola 27, 95 foreign debt 243, 244 Aquino, Benigno 26 Aquino, Corazon 190 Arbusto Energy, Inc. 76 Argentina 236 defiance of IMF 273 foreign debt 228, 230, 233, 241, 244, 273 popular movements in 276 World Bank lending in 169–73 Asari, Alhaji 121, 123, 128–29 Asian “tiger” economies 21, 229, 257n16, 258n27 Azerbaijan 200 Bahamas, as offshore banking haven 45, 89 Baker, Howard 100 Baker, James 239, 256n12 Baker Plan 228, 239–40 Balfour Beatty 211 Banca del Gottardo 71 Banca Nazionale del Lavoro 72 Banco Ambrosiano 71 Bank of America 69–70, 74, 77 Bank of England 84 Bank of Credit and Commerce International 24 accountants and 83–84, 86 arms trade and 72–73, 90 CIA and 69, 70, 71–72, 73, 76 drug trade and 70, 80, 87, 90 indictments 86–88 Iran-Contra 72 money laundering 69, 79–81, 90 operations 73–75, 86 owners 69–70, 75, 76 as Ponzi scheme 75 terrorism and 70, 72, 73, 88–90 U.S. operations 77–79 Bank of New York-Inter-Maritime Bank 83, 88–89 Barrick Gold Corp. 99, 244 Bath, James R. 76 Bechtel Corp. 3, 99, 138, 278 Belgium 101, 104 Bello, Walden 186–87, 273 Ben Barka, Medhi 26 Benin, foreign debt of 249 Berlusconi, Silvio 54 Bernabe, Riza 191 “big-box” stores, campaigns against 278 bin Faisal al-Saud, Prince Turki 75, 78 bin Laden family enterprises 71–72, 89 bin Laden, Haydar Mohamed 89 bin Laden, Osama 26, 77, 88, 89, 42 and BCCI 71 Binladen, Yeslam 89 bin Mahfouz, Khalid 76, 77, 78, 86, 87, 88, 89 bin Sultan al-Nahyan, Sheikh Zayed 69, 75 Blair, Tony 219, 250 Blandón, José 80 Blum, Jack 79–81, 85–86 Bolivia 236, 273 foreign debt 230, 246, 247, 249 gas industry 154, 208 water privatization in 277 Boro, Isaac 122 Brady, Nicholas 80, 256n12 Brady Plan 221, 227, 228, 240–41, 259n35 Brazil 18, 27, 130, 208, 216, 236 foreign debt 227, 228, 230, 241, 244 Bretton Woods agreements 63 Bretton Woods institutions see World Bank, International Monetary Fund British Gas 139 British Petroleum 139, 144, 153 British Virgin Islands, as offshore banking haven 54 Brown & Root 99 Brown, Gordon 126, 127, 219, 250 Burkina Faso, foreign debt of 246, 249 Burundi 95, 247, 249 Bush, George H.W., and administration 27–28, 69, 72, 77, 80, 87, 88, 91n10, 100, 138, 206, 271, 272 Bush, George W., and administration 66, 271, 278 and Iraq War 13, 28 Bush Agenda, The (Juhasz) 4, 275 Cabot Corporation 104, 112n32 Cameroon, foreign debt of 249 Canada 99, 101, 201, 268, 271 Canadian Export Development Corp. 201, 202, 203, 204, 206 capital flight 24, 43–44, 231–36, 253, 258n27 Carter, Jimmy 76, 140 Casey, William 70, 82, 90 Cavallo, Domingo Felipe 238 Cayman Islands, as offshore banking haven 65, 72, 73, 74, 75, 86 Center for Global Energy Studies 145 Center for Strategic and International Studies 119, 120 Central African Republic 231 Central Intelligence Agency 3, 5, 15 Afghan rebels and 70–71 BCCI and 69, 70, 71–72, 73, 76, 78, 79–82, 85 Saudi intelligence services and 75 Chad, foreign debt of 249 Chavez, Hugo 3, 25, 273 Cheney, Dick 28, 133 Chevron Oil 135, 138, 139, 144, 153 in Nigeria 123–24 Chile 236 1973 coup in 27 China 4, 229, 236 foreign debt 222–23 Third World resources and 5, 117–18, 120–21, 124, 126–27, 130 Chomsky, Noam Hegemony or Survival 4 Christian Peacemaker Team 96, 106–8 Citibank, Citigroup 75, 100, 130, 138, 226, 238, 268 Clifford, Clark 78–79, 85, 86, 88 Clinton, Bill, and administration 119, 120, 126, 212, 271 Coalition of Immokalee Workers 272, 280 COFACE 201, 205, 212 Cogecom 100 cold war 4 and decolonization 16–17 Colombia, human rights in 107 colonialism, decline of formal 13–14 coltan: efforts to control 5, 26, 95 shortages of 95 uses for 94 Commission for Africa 251 Communism: appeal of 14 fall of 4, 13, 27, 137–38, 238 Confessions of an Economic Hit Man (Perkins) 1–4, 6, 17 Congo, Democratic Republic of (Zaire): civil war in 26, 94–96, 108n3 corruption in 24, 254 foreign debt 220, 230, 247, 249 human rights in 107–8 rape as a weapon of war in 93, 96–98 Western role in 98–105, 109n4, 111n29 World Bank and 158 Congo Republic 230, 247, 249 cooperatives 276–77 corporations, as legal persons 277 CorpWatch 278 corruption: culture of 51–54 IMF/World Bank and 24–25, 157–74 offshore banking and 44–45, 52- power and 24 privatization and 24–25, 256n12 COSEC 209–10 Council on Foreign Relations 119–20 dam projects, 209–12 Dar al-Mal al-Islami 89 Daukoru, Edmund 125–27, 128 Davos see World Economic Forum DeBeers Group 101, 103 decolonization 13, 16–17 debt/flight cycle 231–36, 253, 258n27 debt relief, campaigns for 246, 252–55, 268 in U.S. 235 debt, Third World 32, 35 amount of relief 224–29 banks and 226–27, 229, 232–34 business loans 35–37, 227 cold war strategy and 17 corruption and 230, 231, 232, 253, 254, 257n23 1982 crisis 39, 55 disunity among debtor nations 237–39 dubious debts and 230, 235, 247, 253, 257n23, 261n68 growth of 18–19, 181, 229–36 as means of control 17, 23, 183–84 payments on 19, 190–91, 223, 228, 231, 247–48, 275 relief plans 220–22, 225–29, 239–52, 274 size of 221–24, 259n37, 260n46 social/economic impacts of 190–91, 231–36, 247–48 democracy: debt crisis and 236 economic reform and 276–79 global justice and 279–81 in Iraq 151–54 Deutsche Bank 226 drug trade 70, 80, 87 Dubai 73 Dulles, Alan 15 Eagle Wings Resources International 104 East Timor 205 economic development strategies: “big projects” and 16–17 debt-led 18–19 state-led 16–17, 19 economic forecasting 3 economic hit men 5 definition 1, 3, 18 John Perkins and 1–4, 17 types of 5, 18 Ecuador 236, 266 foreign debt 244 Egypt 14 Suez Crisis 15–16 Eisenhower, Dwight, and administration 15 elites, wealthy 4, 18, 57, 176, 183, 228, 232, 253 use of tax havens 43–44, 54–56, 65–66, 226, 232–34 El Salvador 26 empire see imperialism Eni SpA 144, 153 Enron 53, 54, 208–9 Ethiopia 230, 249 European Union 51 agricultural subsidies 22 environment degradation: development projects and 199, 200–211, 257n23 oil production and 115–16 export credit agencies: arms exports and 204–5 campaigns against 209–16 corruption and 200, 202–3, 205, 207–8 debt and 200 environmental effects 199, 200–211 nuclear power and 202, 205–6 operation of 197–201 secrecy of 205, 210–12 size of 201 World Bank and 199, 201, 202, 204 Export Credit Group 210, 215 Export Credits Guarantee Department 201, 205, 211 Export Finance and Investment Corp. 203, 204 export processing zones 178 Export Risk Guarantee 203, 211, 213 ExxonMobil 144 fair trade movement 280 Faisal, Mohammad al-89 Faux, Jeff Global Class War, The 4 Federal Bureau of Investigation 71 Federal Reserve Bank of New York 87 Federal Reserve System 78, 82, 88 Ferguson, Niall 13 First American Bankshares 78, 79, 82, 83, 85, 88 First Quantum Materials 101 First, Ruth 26 Focus on the Global South 187, 273 foreign aid 19 in Congo civil war 99–100 France 236, 244 empire 13 Suez Crisis and 15 free trade 4, 19, 21–23, 268, 271 British development and 21 U.S. development and 21 Free Trade Area of the Americas 271 Friends of the Earth 104, 269 G8 summits 212, 213, 219–20, 221, 246, 250, 271, 275 Gambia 243, 249 García, Alan 74 Gates, Robert 85 Gécamines 100, 104 General Agreement on Tariffs and Trade agricultural trade 186–87 establishment of 267 TRIPS 23 Uruguay Round 23, 267 General Union of Oil Employees 135–36, 141–44 Georgia 207 Germany 212, 213, 216, 236 export credit agency 201, 202, 203, 205, 206, 207, 209–11, 212, 215–16 Green Party 206, 215 Ghana 16 development projects in 16, 207 foreign debt 230, 247, 249 impact of IMF SAP 5, 22 Giuliani, Carlo 271 Global Awareness Collective 278 Global Class War, The (Faux) 4 Global Exchange 278 globalization 3 alternatives to corporate 275–79 economic 176–79, 230, 236 impacts of 185–90, 234, 236, 263–65 of the financial system 55, 63–66 Globalization and Its Discontents (Stiglitz) 3, 4 Global justice movement: achievements of 276–79 campaigns 269–72, 274–75 in Global North 268–69, 271–72, 274 in Global South 271–74 origins of 268–69 proposals of 275–79 protests by 265–66, 270–71 Global South see Third World Gonzalez, Henry 72, 90 Gorbachev, Mikhail 137 Goulart, João 27 Groupement pour le Traitment des Scories du Terril de Lubumbashi 104 Guatemala 14, 236 Arbenz government 26 Guinea, foreign debt of 249 Guinea-Bassau 26, 247, 249 Guyana: export credit agencies and 203 environmental problems 203 foreign debt 241, 243, 244, 246, 247, 249 Haiti 236, 249 World Bank and 158 Halliburton 3, 133, 278 Hankey, Sir Maurice 145 Harken Energy Corp. 77, 78 Heavily Indebted Poor Countries initiative 221, 225, 226, 230, 242–48, 275 conditions of 243–45 results of 248–50 Hegemony or Survival (Chomsky) 4 Hekmatyar, Gulbuddin 70 Helms, Richard 82 Henwood, Doug 23, 177–79 Heritage Foundation 121 Heritage Oil and Gas 100 Hermes Guarantee 201, 202, 203, 205, 206, 207, 209, 211, 212, 215–16 Honduras, foreign debt of 249 Hope in the Dark (Solnit) 281 Hungary, Soviet intervention in 16 Hussein, Saddam 28, 90, 141–42 and BCCI 72 Hutu people 94–96 Hypovereinsbank 209 Ijaw people 116, 121–23, 128 Illaje people 123 immigrant rights movement 281 imperialism 13–14 coups d’état and 27 divide-and-rule tactics 25, 26, 265 post-cold war changes 4–5 pressure on uncooperative countries 25, 142 resistance to 28, 115–17, 121–30, 143–44, 151–54, 176, 191–92, 265–66 resources and 98–106, 118–21, 133–34, 136, 139–40, 145 as system of control 17–28, 176 use of force 5, 25–28, 111n22, 113–14, 115–17, 123, 111n22 India 16, 119, 229, 236, 266 foreign debt 222, 223 export credit agencies and 206, 208 Maheshwar Dam 209–10 Indonesia 236 corruption in 202–3 export credit agencies and 200, 202–3, 205, 207, 216 foreign debt 228, 230, 244 inequality 44 Institute for Policy Studies 278 International Bank for Reconstruction and Development 157 International Development Association 157, 242 International Forum on Globalization 266 International Monetary Fund 3, 4, 19, 135, 275 conflicts of interest 244 debt relief and 221–22, 224, 226, 237, 240, 243–46, 250–51, 252 Iraq and 151–53 Malaysia and 273 neoliberalism and 176–79, 222 offshore banking and 43, 234 protests against 266 structural adjustment programs 22, 23, 245, 265–66 Rwanda and 100 Uganda and 100 International Tax and Investment Center 134–35, 138–39, 144–54 International Trade Organization 267 Iran 14, 90, 145, 200 coup against Mossadegh 14–15 nationalization of oil industry 14 Iran-Contra affair 71–72 Iraq: BCCI and 72 foreign debt 152 Gulf War and 28, 72, 140, 141, 146 human rights in 105–6 oil production and reserves 135–36, 139–54 production sharing agreements in 147–54 sanctions against 72, 142 social conditions in 135, 142, 143 U.S. occupation of 28, 140, 141–42, 146, 250, 275, 278 Israel: and Suez Crisis 15 Yom Kippur War and 17 Ivory Coast 230 foreign debt 244, 249 “jackals” 25–26 James, Deborah 273 Japan 216, 236 Japan Bank for International Cooperation 201, 202, 203, 241 Jersey 88 banking boom in 46–47 impact on island 46, 51–52, 56–62 as offshore banking haven 43, 45, 56–61 Johnson, Chalmers Sorrows of Empire 4 Jordan 241, 266 Jordan, Vernon 100 JPMorganChase 226, 238 Jubilee South 190 Jubilee 2000 268 Juhasz, Antonia Bush Agenda, The 4, 275 Juma’a, Hassan 135–36, 140, 142–44, 154 Kabila, Joseph 96 Kabila, Laurent 94, 96, 99 Kagame, Paul 94, 98–99 ties to U.S. 99 Kazakhstan 138, 139, 144, 150 Keating, Charles 83 Kenya 236 foreign debt 243, 244 Kerry, John 76 investigation of BCCI 79–83, 87, 89 Kirchner, Nestor 273 Korea, Republic of 229, 272 Korten, David When Corporations Rule the World 4 KPMG 52 Krauthammer, Charles 13 Krushchev, Nikita 16 Kurdistan 211–12, 214 Kuwait 133, 141, 146, 152, 154 labor exports 235–36 Lake, Anthony 119–20 Lance, Bert 77 Lawson, Nigel 242 Lawson Plan 221, 242 Lee Kyung Hae 272 Liberia, World Bank lending to 159–67 Liberty Tree Foundation 276 Li Zhaoxing 117–18, 124 Lu Guozeng 117 Lumumba, Patrice 26 Luxembourg, as offshore banking haven 72, 73, 74 Madagascar, foreign debt of 249 Mahathir, Mohamad 273 Malawi 254 foreign debt 243, 249 Malaysia 41–43, 229 defiance of IMF 273 Mali, foreign debt of 246, 249 Marcos, Ferdinand 31, 48, 175, 176, 181–85 markets, corporate domination of 16 Martin, Paul 54 mass media, manipulation of 25 Mauritania, foreign debt of 247, 249 McKinney, Cynthia; hearing on Congo 98–99, 110n11 McLure, Charles 137–39 mercenaries: in Congo 111n22 in Nigeria 5, 25–26, 113–14, 115–17 Mexico 207, 256n14, 273 foreign debt 55, 227, 228, 230, 233, 240–41, 244 labor exports 236 Zapatista uprising 272 Middle East, and struggle for oil 27–28 military-industrial complex 99 military interventions 27–28 Mizban, Faraj Rabat 141 Mitterand Plan 221 Mobutu Sese Seko 24, overthrow of 94 Mondlane, Eduardo 26 Mongolia 207 Morales, Evo 277 Morganthau, Robert 69, 84–87 Moscow, John 58, 87 Mossadegh, Mohammad 3, 14–15, 27 Movement for the Emancipation of the Niger Delta 122–24, 129 Movimento dos Trabalhadores Rurais Sem Terra (Landless Workers’ Movement) 272 Mozambique 26, 27, 230 foreign debt 241, 246, 249 Mueller, Robert 87 mujahadeen (Afghanistan): and BCCI 70 and drug trade 70 Mulroney, Brian 100 Multilateral Agreement on Investment 269–70, 281 Multilateral Debt Relief Initiative 222, 225, 230, 250–52 Multilateral Investment Agreement 269 multinational corporations: export credit agencies and 209–11 export processing zones and 178 globalization, pressure for 138, 268, 275 mercenaries, use of 25–26, 111n22, 113–14, 115–17, 123 resources and 101–6, 111n29, 112n31, 112n32 scandals 5 transfer mispricing by 49–51 offshore banks, use of 24, 49–51 patents, control of 23 Museveni, Yoweri 95 Myanmar, foreign debt of 230 Nada, Youssef Mustafa 71–72 Namibia 95 export credit agencies and 207 Nasser, Gamal Abdel 15–16 National Commercial Bank of Saudi Arabia 88–89 National Family Farm Coalition 272 nationalism: pan-Arab 15 Iranian 14 Nehru, Jawaharlal 16 neocolonialism see imperialism neoliberalism 4, 19 critique of 176–79, 190–92, 234, 236 defined 176–77 economic development and 176–79, 232 economic strategies 178–81, 222, 230, 231, 236 Netherlands, overseas empire of 13 Newmont Mining Corp. 244 New World Order 27–28 Nicaragua 207 foreign debt 225, 230, 247, 249 U.S. proxy war against 26, 27, 79 Nicpil, Liddy 190–91, 192 Nidal, Adu 73 Niger, foreign debt of 241, 249 Niger Delta People’s Volunteer Force 121, 123 Niger Delta Volunteer Service 122 Niger Delta region: attack on oil platforms 116–17 as “Next Gulf” 118–21 pollution from oil production 115–16 struggle against Shell 115–16, 121–24 Nigeria 200, 266 China and 117–18 colonial rule 115 corruption in 44–45, 230 foreign debt 223, 230, 233, 243, 244 oil production 115–16, 125–27 World Bank lending in 158, 167–69 Nkrumah, Kwame 16 nongovernmental organizations 239, 250 Noriega, Manuel 80 and BCCI 72, 79 North American Free Trade Agreement 4, 268, 272 nuclear power 205–6, 210 Obasanjo, Olusegun 125, 127 Obiang, Teodoro 48 O’Connor, Brian 144–45 OECD Watch 105 offshore banking havens: arms trade and 71–73 campaign against 62–64 central role in world trade 44, 47–48, 64–65 corruption and 24, 44–45, 52–56, 64, 231–33, 253 drug trade and 70 extraction of wealth 43, 54–56, 64–65, 226, 231–33, 253, 258n58 financial centers and 234, ignored by academia 44, 234 secrecy and 47–48, 53, 66 tax evasion and 43, 48, 49–51, 54, 57–59, 64–65, 226, 232 terrorism and 71, 88 Ogoni people 122–23, 125 Okadigbo, Chuba 116 Okonjo-Iweala, Ngozi 118 Okuntimo, Paul 123 Oil Change International 278 oil price spikes 236 oil production and reserves: future shortages of 28, 140 Indonesia 207 Iraqi 135–36, 144–54 Nigerian 113–14, 128–29 strategies to control 25–26, 27–28, 139–40 OM Group, Inc. 104, 112n31 OPEC 125–26, 128 1973 oil embargo by 17 dollar deposits in First World 17–18 Organisation for Economic Co-operation and Development 135, 269 “Action Statement on Bribery” 216 export credit agencies and 210, 215 Guidelines for Multinational Enterprises 101, 102, 105–6, 112n31 “OECD Arrangement” 215 Overseas Private Investment Corp. 204, 206–9 Oxfam 43, 62–63, 250 Pakistan 90 Afghan mujahadeen and 70–71 BCCI and 70 export credit agencies and 207 foreign debt 244 Panama 3, 26, 72 as offshore banking haven 73, 74 Papua New Guinea: export credit agencies and 204 mining and environmental problems 204 Paris Club of creditors 220, 225–26, 227, 228, 242, 252 Peru 74 foreign debt 241 impact of IMF SAP 22 petrodollars, recycling of 17–18 Perkins, John 19 Confessions of an Economic Hit Man 1–2, 17 Pharaon, Ghaith 76, 77, 86, 87, 88 Philippines, the 31–34, 35–36 corruption in 181–82 democratic movements in 182–85, 236 economic decline in 187–89 emigration from 189, 236 foreign debt 181, 190–91, 230, 241, 244 Marcos regime 31, 34, 175, 176, 180–85, 261n61 martial law in 180–85 social conditions in 179–80, 185–86, 189–91 U.S. rule 175–76 World Bank and 158, 178–81 Pinochet, General Augusto 27, 45–46, 48 PLATFORM 140, 156n28 Portugal 209–10 Posada Carriles, Luis 26 poverty reduction strategy programs see structural adjustment programs Price Waterhouse 83–84 privatization 191 production sharing agreements 147–54 protectionism 21, 181, 186–87 proxy wars 27, 70–71 Public Citizen 269, 273 public utilities, privatization of 191, 261n61, 277 Rahman, Masihur 85 Reagan, Ronald, and administration 19, 79, 87, 136–37, 239 Iran-Contra affair 72 Rich, Marc 90 Rights and Accountability in Development 101, 104, 105 Rio Tinto Zinc 204 Ritch, Lee 79–80 Robson, John 138 Roldós, Jaime 3, 26 Roosevelt, Kermit 15 Rumsfeld, Donald 138 rural economic development 183, 186–87 Russia: debt relief and 225 oil industry 154 transition to capitalism 137–39, 258n28 Rutledge, Ian 149 Rwanda 94–96, 98, 249 massacre in 94, 99 SACE 201 Sachs Plan 221 Saleh, Salim 95 Saõ Tomé, foreign debt of 247, 249 Saud al-Fulaij, Faisal 86, 87 Saudi Arabia 3, 88 and BCCI 70, 75 Saro-Wiwa, Ken 125–26 Scholz, Wesley S. 104 Scowcroft, Brent 72 Senegal 16, 249 Senghor, Léopold 16 September 11, 2001, terrorist attacks 71 Shell Oil 144 Nigeria and 113–15, 122, 123, 125–29 at World Economic Forum 127 Shinawatra, Thaksin 54 Sierra Club 269 Sierra Leone 247 SmartMeme 276 Solnit, Rebecca Hope in the Dark 281 Somalia 251 Sorrows of Empire (Johnson) 4 South Africa 236 military interventions 27 Truth and Reconciliation Commission 26 Soviet Union 13, 14 de-Stalinization 16 Hungary, intervention in 16 influence in Third World 14 U.S. and 137 Stephens, Jackson 76, 77 Stiglitz, Joseph 24 Globalization and Its Discontents 3, 4 structural adjustment programs (SAPs) 19, 229–30 in Ghana 5, 22 in Peru 22 in the Philippines 176–79, 183–85, 190–92 in Zambia 22 Sudan 230, 251 Suharto 200, 202–3 Syria 211 Switzerland, as offshore banking haven 45, 65, 72 Taco Bell, boycott of 280 Tanzania, foreign debt of 247, 249 tax evasion 43, 48, 49–51, 54, 57–59, 64–65 Tax Foundation 137–38 tax havens see offshore banking havens Tax Justice Network 63 Tax Reform Act of 1986 138 Tenke Mining 99 terrorism: as EHM strategy 26, 72 financing of 42, 88–89 inequality and 44 Islamist 71–72, 89 Palestinian 73 Thatcher, Margaret 19, 138 Third World: as commodity producers 17, 23 conditions in 5, 96–97, 106–8, 116, 179–80, 185–90, 234, 236 development strategies 176–79 divisions among countries 265–68 elites in 25, 28, 43–44, 176, 226, 232–34 emergence of 14 lack of development in 232, 237 terms of trade and 22, 178–79 Third World Network 269 Tidewater Inc. 113 Torrijos, Omar 3, 26 Total S.A. 144, 153 trade unions 135–36, 141–44, 180, 186, 269, 274 transfer mispricing 49–51 cost to Third World 50 Transparency International 45 Turkey: export credit agencies and 206 Ilisu Dam 211–14 Turkmenistan 200 Uganda 94–96 foreign debt 241, 246, 249 Union Bank of Switzerland 57, 58, 77, 226, 250 United Arab Emirates 69, 73 United Fruit Company 15 United Kingdom 213 NCP for Congo 102–3 empire 13–14, 115, 129, 145 Iran and 14–15 Iraq occupation and 146, 151, 152 offshore banking and; Suez Crisis and 15 United Nations: trade issues and 265, 276 Panel of Experts, Congo 100–106, 112n32 United Nations Conference on Trade and Development 220, 265, 267 United States: agricultural subsidies 22 aid 98 as empire 13, 28 cold war strategy of 16, 17, 24, 26 in Congo 99, 104, 105 debt-led development strategy of 176–79 Iran coup and 14–15 Iraqi oil and 133–34, 136, 139–40 Iraq wars 72, 133, 141–42 Islamists and 26 Nigerian oil and 118–21 Philippines and 175–76, 180 strategic doctrines 27–28, 118–19 support of Contras 72 trade deficit 23 trade policies 267 U.S.

The offshore economy began to emerge as a significant feature in the 1960s when huge volumes of petrodollars started to accumulate in Europe. The globalization of the financial system was catalyzed by a variety of factors, most notably liberalization of financial transactions through the removal of international exchange controls, the demise of the fixed-rate exchange mechanisms conceived at Bretton Woods in 1944, the extensive deregulation of financial markets during the 1980s, and the emergence of new communication technologies that put money transfers into effect at the click of a mouse. The huge expansion of the financial services industry in the 1980s and 1990s saw the number of offshore tax havens increase from twenty-five in the early 1970s to seventy-two by the end of 2005.17 More countries are lining up to create their own offshore finance centers.


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The Price of Tomorrow: Why Deflation Is the Key to an Abundant Future by Jeff Booth

3D printing, Abraham Maslow, activist fund / activist shareholder / activist investor, additive manufacturing, AI winter, Airbnb, Albert Einstein, AlphaGo, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, Bretton Woods, business intelligence, butterfly effect, Charles Babbage, Claude Shannon: information theory, clean water, cloud computing, cognitive bias, collapse of Lehman Brothers, Computing Machinery and Intelligence, corporate raider, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, dark matter, deep learning, DeepMind, deliberate practice, digital twin, distributed ledger, Donald Trump, Elon Musk, fiat currency, Filter Bubble, financial engineering, full employment, future of work, game design, gamification, general purpose technology, Geoffrey Hinton, Gordon Gekko, Great Leap Forward, Hyman Minsky, hype cycle, income inequality, inflation targeting, information asymmetry, invention of movable type, Isaac Newton, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, late fees, low interest rates, Lyft, Maslow's hierarchy, Milgram experiment, Minsky moment, Modern Monetary Theory, moral hazard, Nelson Mandela, Network effects, Nick Bostrom, oil shock, OpenAI, pattern recognition, Ponzi scheme, quantitative easing, race to the bottom, ride hailing / ride sharing, self-driving car, software as a service, technoutopianism, TED Talk, the long tail, the scientific method, Thomas Bayes, Turing test, Uber and Lyft, uber lyft, universal basic income, winner-take-all economy, X Prize, zero-sum game

In fact, as we have discussed, many of the same actions with each country devaluing their own currency in an attempt to win the trade game in the early 1900s sowed the seeds of discontent that led to World War II. Vowing not to repeat those mistakes that led to mass unemployment, authoritarianism, and World War II, leaders of the world came together in 1944 to establish Bretton Woods—a framework for global cooperation. A key construct of Bretton Woods was an agreed-upon international monetary system where all countries tied exchange rates to the price of gold and the US dollar; the US dollar became the primary currency of the world and the US dollar was tied to gold through a fixed exchange rate. The new rules established trust in an international framework that allowed global trade to expand and increased global prosperity because it meant that countries could not artificially manipulate their currencies at will.

Again, as game theory predicts, the agreement showed that when countries work together with a clear understanding of the rules, prosperity was enhanced for all. But in 1971, the United States unilaterally terminated a critical aspect of the system—the conversion of the US dollar to gold—and with that change created a system where the US dollar, a fiat currency subject to domestic agenda, was the backbone of the world’s economic order. From here, Bretton Woods effectively ended. Since the US dollar became the primary currency of the world without a peg to gold, it gave the US tremendous influence in global affairs. It also enabled a single country to change the rules by printing more currency, and therefore set the stage to return to where we are now, where each country manipulates its currency for political gain while worsening a framework for fair trade.

It would need to be rolled out in a coordinated effort internationally, since with trade, one country alone taking this action would be at a disadvantage to other countries still manipulating their currencies. While I am sure that governments will not voluntarily give up control of their currencies, if there is not a coordinated international effort on a Bretton Woods type of framework that establishes rules around currency exchange rates, it will happen regardless—just in a different way. Remember, a currency only holds value because of the deemed trust we have in it. Beyond that, it is just a piece of paper with faces and numbers on it. That trust is just an agreed upon exchange of value and that government will keep its promises.


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The Asian Financial Crisis 1995–98: Birth of the Age of Debt by Russell Napier

Alan Greenspan, Asian financial crisis, asset allocation, bank run, banking crisis, banks create money, Berlin Wall, book value, Bretton Woods, business cycle, Buy land – they’re not making it any more, capital controls, central bank independence, colonial rule, corporate governance, COVID-19, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, Deng Xiaoping, desegregation, discounted cash flows, diversification, Donald Trump, equity risk premium, financial engineering, financial innovation, floating exchange rates, Fractional reserve banking, full employment, Glass-Steagall Act, hindsight bias, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, if you build it, they will come, impact investing, inflation targeting, interest rate swap, invisible hand, Japanese asset price bubble, Jeff Bezos, junk bonds, Kickstarter, laissez-faire capitalism, lateral thinking, Long Term Capital Management, low interest rates, market bubble, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, Michael Milken, Money creation, moral hazard, Myron Scholes, negative equity, offshore financial centre, open borders, open economy, Pearl River Delta, price mechanism, profit motive, quantitative easing, Ralph Waldo Emerson, regulatory arbitrage, rent-seeking, reserve currency, risk free rate, risk-adjusted returns, Ronald Reagan, Savings and loan crisis, savings glut, Scramble for Africa, short selling, social distancing, South China Sea, The Wealth of Nations by Adam Smith, too big to fail, yield curve

Once again from yesterday’s FT: In a speech to the New York Stock Exchange, Mr Blair said the international financial community needed to respond effectively to acute short-term liquidity crises, particularly those caused by loss of market confidence rather than by economic policy failures … Mr Blair said reform was not a matter of a few technical changes and urged other countries to commit themselves to “build a new Bretton Woods for the next millennium”. Now the use of the phrase “Bretton Woods” conjures up all sorts of terrible creatures for global capital. Of course the new structure need have no similarities, but it is only similar in that it is a new financial infrastructure. However, the problem with this new infrastructure is that last week the president of the United States told us that its aim would be to “tame and limit the swings of boom and bust” in the global economy.

However, the problem with this new infrastructure is that last week the president of the United States told us that its aim would be to “tame and limit the swings of boom and bust” in the global economy. Would the IMF’s stop-gap measures restricting capital movements be out of place in achieving that immense goal? So it would be scaremongering to say that capital movement restrictions of Bretton Woods proportions are being proposed. However, the wheel is still in spin and if the politicians’ aim is to tame the global business cycle then that huge political goal must have serious implications for the owners of capital. So far we’ve covered just two stories on page 9 of the international FT.

If citizens tire of waiting for democracy and free markets to deliver a better life for themselves and their children, there is a risk that democracy and free markets, instead of continuing to thrive together, will shrivel together. Nothing was done. Greenspan’s reduction in interest rates sparked a much more rapid economic improvement than the policy makers at the IMF in their ‘the world is coming to an end’ mode could have expected. The hard bargaining to “build a new Bretton Woods for the next millennium” never took place. As stability returned, the need to make difficult political decisions could be delayed. What remained was a new global financial architecture based upon exchange rate policy decisions taken in Asia that for two decades produced surpluses that moved jobs from West to East, depressed inflation and interest rates, and directly led to the biggest increase in leverage the world had ever seen.


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When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, An Inconvenient Truth, Asian financial crisis, Bear Stearns, Berlin Wall, Bob Geldof, Bretton Woods, BRICs, British Empire, classic study, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, flying shuttle, Francis Fukuyama: the end of history, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, lateral thinking, Malacca Straits, Martin Wolf, Meghnad Desai, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Westphalian system, Xiaogang Anhui farmers, zero-sum game

Bob Davis, ‘IMF Gives Poor Countries Scarce New Voting Count’, Wall Street Journal, 31 March 2008; Mark Weisbrot, ‘The IMF’s Dwindling Fortunes’, Los Angeles Times, 27 April 2008; Jeffrey Sachs, ‘How the Fund Can Regain Global Legitimacy’, Financial Times, 19 April 2006; George Monbiot, ‘Don’t Be Fooled By This Reform: The IMF Is Still the Rich Man’s Viceroy’, Guardian, 5 September 2006; Joseph Stiglitz, ‘Thanks for Nothing’, Atlantic Monthly, October 2001. 183 . ‘Fury as Zimbabwe Sanctions Vetoed’, 12 July 2008, posted on www.bbc. co.uk/news. 184 . Martin Wolf, ‘Why Agreeing a New Bretton Woods is Vital’, Financial Times, 4 November 2008. 185 . ‘Interview: Message from Wen’, Financial Times, 1 February 2009. 186 . For a pessimistic view of the prospects for a new Bretton Woods agreement, see Gideon Rachman, ‘The Brettons Woods Sequel Will Flop’, Financial Times, 10 November 2008. 187 . G. John Ikenberry, ‘The Rise of China and the Future of the West: Can the Liberal System Survive?’, Foreign Affairs, January/February 2008, p. 1 (available at www.foreignaffairs.org). 188 .

For example, after China and Russia vetoed the Anglo-American bid to impose sanctions on the Zimbabwe president Robert Mugabe and some of his regime in July 2008, the US ambassador to the UN, Zalmay Khalilzad, stated that Russia’s veto raised ‘questions about its reliability as a G8 partner’.183 From late 2008 there was much talk of a new Bretton Woods, but any such agreement would require far more fundamental reform than the West has hitherto entertained. At present the Bretton Woods institutions - the IMF and the World Bank - are dominated by the Western powers. The US still has 17.1 per cent of the quotas (which largely determine the votes) and the European Union an additional 32.4 per cent in the IMF as of May 2007, while China had just 3.7 per cent and India 1.9 per cent.184 If these institutions are to be revived as a result of any new agreement, the West will have to cede a large slice of its power to countries like China and India.

Britain’s version was the international gold standard system which, prior to 1914, encompassed a large part of the world in some shape or form. In the interwar period, as Britain declined, this gave way to an increasingly Balkanized system based on currency areas, protected markets and spheres of interest. After 1945 the United States became the world’s leading power and the new system that was agreed at Bretton Woods, and further elaborated in the years that followed, was essentially an American creation, made possible by the fact that the US economy was responsible for over one-third of global GDP at the end of the war. That system only became truly global when China joined the WTO in 2001 and the former members of the Soviet bloc queued up to join the international system following the collapse of the Soviet Union.


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Money Changes Everything: How Finance Made Civilization Possible by William N. Goetzmann

Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, banking crisis, Benoit Mandelbrot, Black Swan, Black-Scholes formula, book value, Bretton Woods, Brownian motion, business cycle, capital asset pricing model, Cass Sunstein, classic study, collective bargaining, colonial exploitation, compound rate of return, conceptual framework, Cornelius Vanderbilt, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, delayed gratification, Detroit bankruptcy, disintermediation, diversified portfolio, double entry bookkeeping, Edmond Halley, en.wikipedia.org, equity premium, equity risk premium, financial engineering, financial independence, financial innovation, financial intermediation, fixed income, frictionless, frictionless market, full employment, high net worth, income inequality, index fund, invention of the steam engine, invention of writing, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, laissez-faire capitalism, land bank, Louis Bachelier, low interest rates, mandelbrot fractal, market bubble, means of production, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, new economy, passive investing, Paul Lévy, Ponzi scheme, price stability, principal–agent problem, profit maximization, profit motive, public intellectual, quantitative trading / quantitative finance, random walk, Richard Thaler, Robert Shiller, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, spice trade, stochastic process, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, time value of money, tontine, too big to fail, trade liberalization, trade route, transatlantic slave trade, tulip mania, wage slave

The agreement resulting from negotiations among twenty-nine allied countries at Breton Woods, New Hampshire, in July 1944, established for the first time an international financial architecture. The conference had echoes of a “World Economic Conference” proposed by Keynes in his 1933 article “The Means to Prosperity,” in which the goal of such a conference would be the establishment of common world currency and an institutional structure for managing it. Eleven years later, at Bretton Woods, Keynes was on hand to represent British interests as well as his global vision. He proposed a plan that essentially interposed an international institutional framework between debtor nations and their creditors. While the final plan was not strictly the one offered by Keynes, it shared with it the basic structure.

While Keynes may not have been the only architect of this new structure, he was certainly a major force for it—and his conviction that it was the right thing to do stemmed from his early experience with the Paris negotiations in 1919. Modern Greece owes Keynes at least a little bit of thanks for laying the foundation of a messy bailout, but one that at least preserves its integrity as a nation. THE WORLD BANK The second major institution created at Bretton Woods was a bank designed to finance growth. As we saw above, the global financial markets essentially created the world’s infrastructure. Regulating investor access to collateral, while desirable from a political perspective, affects the willingness to lend. In the wake of new rules about international lending, how would big projects get financed?

Keynes, of course, posited a central role for government in solving the disjunctions caused by unchecked financial globalization and bad savings habits. His legacy is a financial architecture designed to blunt the potential for colonial exploitation by disintermediating lenders and sovereign borrowers—replacing that relationship with a collective institutional financial organization. Did Bretton Woods save the world from a revival of imperialism? Did it bring more nations into the fold of prosperity? Whether it did or not, it undeniably altered the way that nations interact with one another and with the capital markets. By introducing the IMF and World Bank as lenders of last resort, it blunted the sharp needs for nations to negotiate terms that reduced sovereignty.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, California energy crisis, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, gentrification, George Gilder, Gini coefficient, global reserve currency, Great Leap Forward, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low interest rates, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, military-industrial complex, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, Silicon Valley, special economic zone, structural adjustment programs, Suez crisis 1956, the built environment, The Chicago School, Tragedy of the Commons, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, We are all Keynesians now, Winter of Discontent

Both capitalism and communism in their raw forms had failed, they argued. The only way ahead was to construct the right blend of state, market, and democratic institutions to guarantee peace, inclusion, well-being, and stability.9 Internationally, a new world order was constructed through the Bretton Woods agreements, and various institutions, such as the United Nations, the World Bank, the IMF, and the Bank of International Settlements in Basle, were set up to help stabilize international relations. Free trade in goods was encouraged under a system of fixed exchange rates anchored by the US dollar’s convertibility into gold at a fixed price.

Unemployment and inflation were both surging everywhere, ushering in a global phase of ‘stagflation’ that lasted throughout much of the 1970s. Fiscal crises of various states (Britain, for example, had to be bailed out by the IMF in 1975–6) resulted as tax revenues plunged and social expenditures soared. Keynesian policies were no longer working. Even before the Arab-Israeli War and the OPEC oil embargo of 1973, the Bretton Woods system of fixed exchange rates backed by gold reserves had fallen into disarray. The porosity of state boundaries with respect to capital flows put stress on the system of fixed exchange rates. US dollars had flooded the world and escaped US controls by being deposited in European banks. Fixed exchange rates were therefore abandoned in 1971.

The gathering strength of neoliberal policies on international trade during the 1980s opened up the whole world to transformative market and financial forces. In so doing it opened up a space for China’s tumultuous entry and incorporation into the world market in ways that would not have been possible under the Bretton Woods system. The spectacular emergence of China as a global economic power after 1980 was in part an unintended consequence of the neoliberal turn in the advanced capitalist world. Internal Transformations To put it this way in no way diminishes the significance of the tortuous path of the internal reform movement within China itself.


pages: 708 words: 176,708

The WikiLeaks Files: The World According to US Empire by Wikileaks

affirmative action, anti-communist, banking crisis, battle of ideas, Boycotts of Israel, Bretton Woods, British Empire, capital controls, central bank independence, Chelsea Manning, colonial exploitation, colonial rule, corporate social responsibility, credit crunch, cuban missile crisis, Deng Xiaoping, drone strike, Edward Snowden, energy security, energy transition, European colonialism, eurozone crisis, experimental subject, F. W. de Klerk, facts on the ground, failed state, financial innovation, Food sovereignty, Francis Fukuyama: the end of history, full employment, future of journalism, high net worth, invisible hand, Julian Assange, Kickstarter, liberal world order, Mikhail Gorbachev, millennium bug, Mohammed Bouazizi, Monroe Doctrine, Nelson Mandela, no-fly zone, Northern Rock, nuclear ambiguity, Philip Mirowski, post-war consensus, RAND corporation, Ronald Reagan, Seymour Hersh, Silicon Valley, South China Sea, statistical model, Strategic Defense Initiative, structural adjustment programs, too big to fail, trade liberalization, trade route, UNCLOS, UNCLOS, uranium enrichment, vertical integration, Washington Consensus, WikiLeaks, zero-sum game, éminence grise

The United States has been able to use its political dominance since World War II to develop, in an often haphazard or self-defeating way, a globally integrated economy in which its businesses are dominant and have privileged access to key markets and resources. Schematically, in the postwar era we can see that the American empire has ruled through two international regimes: the Bretton Woods system, and what Peter Gowan calls the “Dollar–Wall Street regime.”12 Bretton Woods fixed international currencies to the gold standard in order to prevent destabilizing price fluctuations and enable an international economy to develop. The International Monetary Fund was the key institution set up to manage this global system and adjust currency prices based on a cooperative arrangement.

Instead They Caused a Tragedy,” Guardian, September 16, 2009. 6“A Gag Too Far,” Index on Censorship, October 14, 2009. 7Mark Sweney, “Bank Drops Lawsuit against Wikileaks,” Guardian, March 6, 2008; “Wikileaks Given Data on Swiss Bank Accounts,” BBC News, January 17, 2011; “WikiLeaks to Target Wealthy Individuals,” Daily Telegraph, January 17, 2011. 8Yochai Benkler, “A Free Irresponsible Press: Wikileaks and the Battle over the Soul of the Networked Fourth Estate,” Harvard Civil Rights-Civil Liberties Law Review 46 (2011); Lisa Lynch, “‘We’re Going to Crack the World Open’: Wikileaks and the Future of Investigative Reporting,” Journalism Practice 4: 3 (2010)—Special Issue: The Future of Journalism. 9John Vidal, “WikiLeaks: US Targets EU over GM Crops,” Guardian, January 3, 2011. 10See Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs Private Sector Myths (London/New York/Delhi: Anthem Press, 2013), Kindle loc. 2302–2320; and Leo Panitch and Sam Gindin, The Making of Global Capitalism: The Political Economy of the American Empire (London/New York: Verso, 2013), p. 288. 11https://wikileaks.org/tpp-ip2/pressrelease. 12Peter Gowan, The Global Gamble: Washington’s Faustian Bid for World Dominance (London/New York: Verso, 1999). 13Quoted in Leo Panitch and Sam Gindin, “Global Capitalism and the American Empire,” Socialist Register 40 (2004). 14Figure cited in Andrew G. Terborgh, “The Post-War Rise of World Trade: Does the Bretton Woods System Deserve Credit?” London School of Economics, Working Paper No 78/03, September 2003, available at lse.ac.uk. 15On the breakdown of Bretton Woods, see Fred L. Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley/Los Angeles: University of California Press, 1977).

In a 1945 US Department of State document, Saudi Arabia—a nation effectively constructed through the decisive intervention of the British Empire, US politicians, and oil companies—was deemed “a stupendous source of strategic power, and one of the greatest material prizes in world history.”51 Initially, the US strategic posture was to allow the empires to fold at their own pace, thus leaving them responsible for the deployment of military power and the maintenance of political order, while encouraging newly independent societies to adopt development strategies predicated on import substitution, in which countries would try to overcome their dependency on foreign imports by developing their own industrial base. As long as US capital was able to invest, the United States could gain access to these markets by other means than the “Open Door” that had been orthodoxy since the late nineteenth century.52 Within a developing global financial infrastructure underpinned by Bretton Woods, states were thus encouraged to develop markets that could be incorporated into a US-dominated world system. As more regional states won independence, the US gradually took more responsibility for military deployment. For example, a major asset to the United States was the development of the “Baghdad Pact”—a treaty organization linking a series of regimes to the United Kingdom in a strategic military alliance.


Phil Thornton by The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)

Alan Greenspan, availability heuristic, behavioural economics, Berlin Wall, bitcoin, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, Cass Sunstein, choice architecture, cognitive bias, collapse of Lehman Brothers, Corn Laws, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, double helix, endogenous growth, endowment effect, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, fixed income, Ford Model T, full employment, hindsight bias, income inequality, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, liquidity trap, loss aversion, mass immigration, means of production, mental accounting, Myron Scholes, paradox of thrift, Pareto efficiency, Paul Samuelson, Post-Keynesian economics, price mechanism, pushing on a string, quantitative easing, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, school vouchers, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Toyota Production System, trade route, transaction costs, unorthodox policies, Vilfredo Pareto, women in the workforce

While his superiors were delighted, thinking they could now buy the goods they needed, they were shocked to learn that Keynes had sold the money in a successful attempt to trigger a slump in the Spanish currency. This experience of administering external finance would act as a foretaste for his work after the Second World War in establishing the Bretton Woods international monetary system. After the end of the war, Keynes was appointed the Treasury’s official representative at the Paris Peace Conference that was responsible for deciding the level of reparations Germany would pay as part of the Treaty of Versailles. The 96 The Great Economists treaty was signed on 28 June 1919, but three weeks before, on 7 June, Keynes resigned, after it became evident that ‘hope could no longer be entertained of substantial modification in the draft Terms of Peace.

Unsurprisingly, given the US was the world’s largest creditor, Keynes’s American counterpart, Harry Dexter White, proposed a more modest exchange stabilisation fund that could make discretionary loans to troubled countries to prevent them devaluing their currencies and starting an exchange rate war. All members joining this International Monetary Fund would put in an initial subscription (which for the US would be capped at $3 billion). Chapter 5 • John Maynard Keynes109 After two weeks of intense negotiation at the Mount Washington Hotel in July and August 1944 in Bretton Woods, New Hampshire, the US and the UK negotiated a plan that broadly rejected Keynes’s clearing union and adopted White’s IMF. Keynes did secure the creation of an International Bank of Reconstruction and Development, now part of the World Bank Group, which would focus on economic development, and won some minor concessions.

Index A Theory of Moral Sentiments (Smith, 1759) 2, 5–6 Adelman, Irma 110 American Economic Association 170 An Inquiry into the Nature and Causes of the Wealth of Nations see The Wealth of Nations anarchism 156 apartheid system in South Africa 199 Ariely, Dan 234 Arrow, Kenneth 191, 213 AT&T 22 austerity versus stimulus debate 43–4, 140–1 Austrian School of Economics 121–2 autarky concept 184 bank bailouts in the financial crisis 162 Bank of England 161 Barro, Robert 43 Barro-Ricardo equivalence 43–4 Becker, Gary (1930– ) 193–216 approach to human behaviour 212–15 building human capital 200–2, 210 early life and influences 195–7 economic perspective on discrimination 196–7, 198–9 Economics of Discrimination (1957) 196–7, 198–9 economics of the family 213–15 family decision making 203–6 key economic theories and writings 197–212 long-term impact 212–15 new home economics 203–6 Nobel Prize (1992) 194, 195–6 on crime and punishment 207–10 on drug addiction 210–12, 215 rational choice model 197, 212– 15, 216 verdict 215–16 Becker–Posner Blog 215 behavioural economics 218–19, 233–6 Bentham, Jeremy 31, 181 Bergmann, Barbara 206 Bergson, Abram 182 Bergson–Samuelson social welfare function 182–3 Bernanke, Ben 77, 159, 162 Bernoulli, Daniel 229 bias in decision making 222–5 in financial decision making 225–32 Bitcoin currency 138 Black, Fischer 187 Blinder, Alan 215 Bloomsbury Group 94 Blunt, Anthony 94 boom and bust cycles see business cycles Bretton Woods agreement 95, 108–9 Brown, Gordon 3, 42 Burgess, Guy 94 Burns, Arthur F. 147 Bush, George H.W. 139 business cycles 57, 65 Hayek’s explanation 123–6 Samuelson’s oscillator model 174–5 Butler, Eamonn 162 Cambridge School of economics 74, 86 Cambridge spy ring 94 capital flow controls 113 capital-intensive goods, effects of increase in wages 33 capitalism exploitation of the working class (Marx) 56–8, 62–3 Index239 ‘fictitious capital’ concept (Marx) 62 seeds of its own downfall (Marx) 56–8, 61–3 capitalist production process (Marx) 54–6 Carlyle, Thomas 33 cartels evil of 10–11 regulation to prevent 21–2 central banks control of economic activity 161 over-expansion of credit 123–4 central state planning, Hayek’s opposition to 134–6, 140 certainty effect 229, 230 ceteris paribus approach to economic analysis 79–80 Chapman, Bruce 19 Chicago School of economic thought 146, 160, 194 China savings and investment imbalance with the US 113 trade imbalance with the US 45 choice architecture 234 Churchill, Winston 98 classical economics 40, 54 Coase, Ronald 73 cognitive biases (Kahneman) 222–5 communism 19, 50 Communist Manifesto (Marx and Engels) 52, 58–61 company bailouts in the financial crisis 162 comparative advantage 35–8, 183–4 complex adaptive systems, science of 138 complex financial products 61–2, 187 computer-games-based money 138 confirmation bias 227 consumer demand marginal rate of substitution 180 revealed preference theory 180–1 consumption smoothing concept 149, 163 Corn Laws, attack by Ricardo 33–5 costs of production, relationship to value 75–7 credit expansion, as a driver of boom and bust cycles 123–4 crime and punishment, views of Becker 207–10 Darling, Alistair 112 Das Kapital (Marx) 52, 53–4, 59–61, 62, 67–8 decision making biases and errors in financial decisions 225–32 heuristics and bias in 222–5 Prospect Theory (Kahneman) 228–32, 234 under risk 228–32 demand side economics 127 depression Keynesian interventionist view 92–3, 94, 105–6 see also Great Depression (1930s) dialectic style of analysis 52, 54 Diamond, Peter 179 diminishing marginal utility 82 discrimination economic perspective of Becker 196–7, 198–9 views of Friedman 157 distribution of economic value (Marx) 54–6 division of labour and productivity 11–14 car production 20–1 in daily life 20–1 divorce rates 205 drug addiction, views of Becker 210–12, 215 Dubner, Stephen 234 Eastern Europe, influence of Hayek 140 Ebenstein, Larry 158 Economics: An Introductory Analysis (Samuelson, 1948) 168, 171–3, 188–9 Economics of Discrimination (Becker, 1957) 196–7, 198–9 Efficient Market theory 111, 112, 187 240Index elasticity of demand 82–4 Elizabeth II, Queen 158 emerging markets, offshoring of jobs to 41 endogenous growth 202 endowment effect 232, 234 Engels, Friedrich 52, 58–61 ethical judgements in economics 182–3 European Central Bank 161 exchange rates, impact of trade on 185–6 expected utility theory (EUT) 228, 229–30, 232 externalities 85 factor price equalisation theorem 186–7 Fama, Eugene 160, 187 family decision making economic perspective 183, 203–6, 213–15 welfare decision making 183 fiat currency 152 ‘fictitious capital’ concept (Marx) 62 financial decision making, biases and errors in 225–32 financial economics, work of Samuelson 187 First World War 95 Folbre, Nancy 206 Ford Model-T car, assembly-line production system 21 Foundations of Economic Analysis (Samuelson, 1947) 168, 169–70 Fox, Charles James 23 Freakonomics (Levitt and Dubner) 234 free-market mechanism of supply and demand 8–9 free market system view of Adam Smith 13–14, 16–18 view of Hayek 131–3 view of Friedman 155–7 free rider problem in public goods 177–8 Free to Choose (Friedman and Friedman, 1980) 158 free trade, influence of Adam Smith 22–3 Freeman, Richard 201 frictional unemployment 155 Friedman, David 156 Friedman, Milton (1912–2006) 94, 110, 145–64, 190–1, 196 advocate of the free market 155–7 belief in individualism 155–7 criticism of Keynesianism 149–50 early life and influences 147–8 economics in action 160–3 fiat currency 152 Free to Choose (1980 ) 158 influence of the Great Depression (1930s) 148 influence on modern economic theory 158–60 limited role of government in the economy 152, 155–7 long-term legacy 157–63 monetarism 151–2 monetarist rule 152 monetary policy 151–2 ‘natural’ rate of unemployment 153–5 new explanation for the Great Depression 150–1 Nobel Prize in economics (1976) 146, 147–8, 154, 161 non-accelerating inflation of unemployment (NAIRU) 153–5 permanent income hypothesis 148–50 role of money supply in the economy 151–2 verdict 163–4 Friedman, Rose (formerly Rose Director) 147, 148, 157, 158, 160 FTSE-listed plcs 86 Funk, Walter 108 Funk Plan 108 Galbraith, J.K. 159 gambler’s fallacy (misconception of chance) 224 General Agreement on Tariffs and Trade (GATT) 40 Index241 general equilibrium theory 8 genetically modified foods 42 geographical effects in economics 84–6 Giffen goods 84 global financial crisis (2007–8) 92, 174 and Keynesianism 111–13 global stimulus package 113 Marxist view 61–3 global free trade influence of Adam Smith 22–3 influence of Ricardo 40–2 global public goods 177–8 global recession (2009) see Great Recession (2009) gold standard, criticism by Keynes 95, 98, 107 government debt and the Great Recession (2009) 43 taxpayer view of (Ricardo) 38–9 government role in the economy anti-central planning view of Hayek 134–6, 140 Keynesian view 92–3, 94, 105–6 view of Adam Smith 9, 10, 16–18 view of Friedman 152, 155–7 Great Crash (1929) 98, 99 Great Depression (1930s) 19, 22–3, 85, 92 explanation of Friedman and Schwartz 150–1 influence on Friedman 148 influence on Keynes 99–100 role of the Federal Reserve 159 Great Recession (2009) 23 and government debt 43 arguments against protectionism 42 austerity versus stimulus debate 43–4, 140–1 Greece, sovereign debt crisis 113–14 Greenspan, Alan 111–12, 235 Grossman, Michael 212 Hansen, Lars Peter 160 Hayek, Friedrich (1899–1992) 110, 111, 119–42 business cycle theory 123–6 clash with Keynes 120, 126–31 collapse of the Soviet Union 140 early life and influences 120 emphasis on individual freedom 134–6, 140 explanation for boom and bust cycles 123–6 First World War 121 focus on supply side economics 127 influence in Eastern Europe 140 influence on George H.W.


pages: 422 words: 113,830

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips

"World Economic Forum" Davos, Alan Greenspan, algorithmic trading, asset-backed security, bank run, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, collateralized debt obligation, computer age, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency peg, diversification, Doha Development Round, energy security, financial deregulation, financial engineering, financial innovation, fixed income, Francis Fukuyama: the end of history, George Gilder, Glass-Steagall Act, housing crisis, Hyman Minsky, imperial preference, income inequality, index arbitrage, index fund, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Rogoff, large denomination, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, Menlo Park, Michael Milken, military-industrial complex, Minsky moment, mobile money, money market fund, Monroe Doctrine, moral hazard, mortgage debt, Myron Scholes, new economy, oil shale / tar sands, oil shock, old-boy network, peak oil, plutocrats, Ponzi scheme, profit maximization, prosperity theology / prosperity gospel / gospel of success, Renaissance Technologies, reserve currency, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, shareholder value, short selling, sovereign wealth fund, stock buybacks, subprime mortgage crisis, The Chicago School, Thomas Malthus, too big to fail, trade route

A lot of the alternatives deemed plausible may be unrealistic. 33 Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon Press, 2001). 34 “Three Ways to Avoid Wall Street,” Money Morning, November 9, 2007. 35 Gillian Tett, “Japan Offers a Salutary Tale in Banking Crisis,” Financial Times, January 1, 2008. 36 Bill Gross, “Pyramids Crumbling,” Pimco Investment Outlook, January 2008. 37 “The Race Is On to Be Asia’s Number One for Finance,” Financial Times, July 5, 2007. 38 Noriel Roubini and Brad Setser, “Will Bretton Woods 2 Regime Unravel Soon?” www.rge.monitor.com, February 2005. 39 Chris P. Dialynas and Marshall Auerbeck, “Renegade Economics: The Bretton Woods II Fiction,” Pimco Viewpoints, September 2007. 40 “America’s Vulnerable Economy,” Economist, November 15, 2007. 41 “Dollar’s Last Lap as the Only Anchor Currency,” Financial Times, November 25, 2007. 42 John Authers, “The Short View: Weak Dollar,” Financial Times, September 10, 2007. 43 “Why Banking Is an Accident Waiting to Happen,” Financial Times, November 27, 2007. 44 Martin Wolf, “Why the Credit Squeeze Is a Turning Point for the World,” Financial Times, December 11, 2007. 45 “Mortgage Crisis Perplexes Even Shrewd Investor Warren Buffett,” San Francisco Chronicle, December 12, 2007. 46 “European Bosses Warming to Foreign Funds,” Financial Times, December 11, 2007. 47 Nassim Nicholas Taleb, The Black Swan (New York: Random House, 2007). 48 “Does Not Compute: How Misfiring Quant Funds Are Distorting the Markets,” Financial Times, December 9, 2007. 49 Richard Bookstaber, A Demon of Our Own Design (New York: John Wiley & Sons, 2007), pp. 5, 259-60. 50 Mike Muehleck, “Exit U.S.,” www.agorafinancial.com//afrude/.

A second, even more informal, had foreign nations aided or protected militarily by the United States—Japan, Korea, and Taiwan—indirectly share those costs by buying and holding huge quantities of U.S. treasury and agency debt in their reserves and otherwise supporting the dollar. In still another, even less formal arrangement nicknamed “Bretton Woods II” in 2003, China and other high-saving nations that exported vast quantities of goods to the United States, unofficially collaborated by holding large central bank balances in U.S. treasury debt to support the dollar. But as we will see in chapter 7, that unofficial burden sharing is now in doubt, politically and financially.

Pacific defense umbrella, generally cooperated with the United States in currency matters and kept much of their growing foreign currency reserves in U.S. treasury debt. In the late 1990s, as Chinese manufactures poured into the United States, Beijing’s mushrooming dollar accumulations became the focus. And in 2003, a trio of economists coined the term “Bretton Woods II” to describe a new benign state of affairs in which countries like Japan and China accumulated large reserves and recycled those reserves into treasury debt to provide low-cost financing for America’s huge current account deficits.38 These presumptions, in turn, led to a set of reassuring theories: that the United States was simply taking advantage of Asia’s excess savings, and that the huge U.S. current account deficit, being manageable for that reason, was harmless and not an economic and political vulnerability.39 The catalyst for a critical reassessment by foreign dollar-holders came in 2007 when the deterioration of the U.S. dollar, visible since 2002, began to accelerate, with the greenback tumbling roughly 10 percent against the euro and pound sterling in 2007 alone.


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, antiwork, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, capitalist realism, carbon footprint, carbon tax, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deep learning, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Evgeny Morozov, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, general purpose technology, housing crisis, housing justice, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Kiva Systems, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, megaproject, minimum wage unemployment, Modern Monetary Theory, Mont Pelerin Society, Murray Bookchin, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, Overton Window, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-Fordism, post-work, postnationalism / post nation state, precariat, precautionary principle, price stability, profit motive, public intellectual, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, synthetic biology, tacit knowledge, technological determinism, the built environment, The Chicago School, The Future of Employment, the long tail, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, warehouse automation, We are all Keynesians now, We are the 99%, women in the workforce, working poor, working-age population

Simultaneously, however, an inability or lack of desire to turn the more radical sides of these projects into hegemonic ones also had important consequences for the period of destabilisation that followed.42 While capable of generating an array of new and powerful ideas of human freedom, the new social movements were generally unable to replace the faltering social democratic order. OUTMANOEUVRED Just as the new social movements were on the rise, the economic basis of the social democratic consensus was beginning to fall apart. The 1970s saw surging energy prices, the collapse of the Bretton Woods system, the growth of global capital flows, persistent stagflation and falling capitalist profits.43 This effectively ended the basic political settlement that had supported the postwar era: that unique nexus of Keynesian economic policy, Fordist–corporatist industrial production and the broadly social democratic consensus that returned a part of the social surplus back to workers.

Alternative interpretations were available, alternative answers possible; in the moment, no one knew what the way out would be.47 The neoliberal narrative of the crisis, for instance, plays down the role of banking deregulation by UK Chancellor Anthony Barber in the early 1970s and the breakdown of the Bretton Woods system. These deregulations sparked a surge in the monetary base and a subsequent surge in price inflation, and then wage inflation.48 In other words, an alternative narrative was possible in which the problem was not strong unions, but rather deregulated finance. That the neoliberal story won out is in no small measure because of the ideological infrastructure that adherents to its ideas had constructed over decades.

In short, neoliberalism had become hegemonic. The decade after 1979 saw Margaret Thatcher elected as the British prime minister, Paul Volcker appointed as chairman of the Federal Reserve, and Ronald Reagan elected president of the United States. The IMF and World Bank, facing identity crises after the breakdown of the Bretton Woods system, were rapidly infiltrated and converted into crucibles of the true neoliberal faith by the 1980s. France undertook a neoliberal turn during the Mitterrand administration in the early 1980s, and the major economies of Europe became bound by the neoliberal policies embodied in the constitution of the European Union.


pages: 627 words: 127,613

Transcending the Cold War: Summits, Statecraft, and the Dissolution of Bipolarity in Europe, 1970–1990 by Kristina Spohr, David Reynolds

anti-communist, bank run, Berlin Wall, Bretton Woods, computer age, conceptual framework, cuban missile crisis, Deng Xiaoping, failed state, Fall of the Berlin Wall, guns versus butter model, Kickstarter, Kitchen Debate, liberal capitalism, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nixon shock, oil shock, open borders, Ronald Reagan, Ronald Reagan: Tear down this wall, shared worldview, Strategic Defense Initiative, Thomas L Friedman, Yom Kippur War, zero-sum game

Schmidt and Giscard, on the other hand, wanted to keep future discussions small and personal, with the emphasis on reaching real decisions. Over the next three years the G7, as it was known after the inclusion of Canada (1976), became institutionalized as an annual event—increasingly bureaucratized while also making policy. Faced with a highly volatile global financial system after the collapse of the Bretton Woods order of fixed exchange rates, the G7 leaders felt it essential for politicians to assume a greater role in the governance of international financial relations—what one scholar has called a regime of ‘surveillance’.5 Determined to avoid protectionist answers to the unprecedented combination of recession and inflation (‘stagflation’), the G7 saw one of its main tasks as being the coordination of national policies.

, The Spectator, 22 November 1975, 8; Klaus-Peter Schmid, ‘Wir fanden einen neuen Geist’, Die Zeit, 21 November 1975, 2; Ford, Remarks to the Press, 17 November 1975, The American Presidency Project (henceforth APP) website, http://www.presidency.ucsb.edu/ws/index.php?pid=5383&st=&st1. 5. Harold James, International Monetary Cooperation since Bretton Woods (Oxford, 1996), ch. 10, esp. 263. 6. Schmidt in Flora Lewis, ‘President of “the Club”’, New York Times, 17 July 1978, at A1. See generally Joan E. Spero and Jeffrey A. Hart, The Politics of International Economic Relations (London, 5th edn, 1997), 35–6. 7. Bonn Economic Summit Declaration Issued at the Conclusion of the Conference, 17 July 1978, APP website, http://www.presidency.ucsb.edu/ws/index.php?

By this time, too, America was in a weaker position compared with its postwar heyday. The long and divisive Vietnam War stirred up public debate about strategic over-commitment and eventually undermined the economy with high inflation and a massive trade and payments deficit. America’s crisis mirrored a larger Western economic malaise. In 1971 the Bretton Woods financial system collapsed into a chaos of fluctuating exchange rates and the 1973 oil price explosion shook the hitherto stable foundation of Western postwar growth based on cheap energy. This crisis of capitalism provoked self-doubt in the West’s capacity to sustain the Cold War contest. Geopolitical and economic shifts were thus preconditions for détente at the global level in the early 1970s.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Alan Greenspan, Albert Einstein, algorithmic trading, Andy Kessler, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, BRICs, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, carbon credits, Carl Icahn, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, Daniel Kahneman / Amos Tversky, deal flow, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Dr. Strangelove, Dutch auction, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial engineering, financial independence, financial innovation, financial thriller, fixed income, foreign exchange controls, full employment, Glass-Steagall Act, global reserve currency, Goldman Sachs: Vampire Squid, Goodhart's law, Gordon Gekko, greed is good, Greenspan put, happiness index / gross national happiness, haute cuisine, Herman Kahn, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", job automation, Johann Wolfgang von Goethe, John Bogle, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Michael Milken, Mikhail Gorbachev, Milgram experiment, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, National Debt Clock, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, Phillips curve, planned obsolescence, plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, Reminiscences of a Stock Operator, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk free rate, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, short squeeze, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, stock buybacks, survivorship bias, tail risk, Teledyne, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, two and twenty, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

Dylan Grice of Société Générale summed up the case for gold as a store of value: A fifteenth-century gold bug who’d stored all his wealth in bullion, bequeathed it to his children and required them to do the same would be more than a little miffed when gazing down from his celestial place of rest to see the real wealth of his lineage decline by nearly 90 percent over the next 500 years.16 The Hotel New Hampshire The Hotel New Hampshire, written by John Irving, the author of The World According to GARP, is populated with unlikely characters—Egg, Win, Iowa, Bitty Tuck, a Viennese Jew named Freud, and Sorrow, a dog repeatedly restored through taxidermy. In July 1944, a similarly dysfunctional group of politicians, economists, and bankers gathered in Bretton Woods, New Hampshire, at the Mount Washington Hotel, to establish the post-Second World War international monetary and financial order. The pivotal figures were John Maynard Keynes, representing the UK, and Harry Dexter White, representing the United States. Selected as one of Time’s 100 most influential figures of the twentieth century, John Maynard Keynes was the author of General Theory of Employment, Interest, and Money and one of the fathers of modern macroeconomics.

A study concluded that: “On the basis of modern portfolio evaluation measures...Keynes was an outstanding portfolio manager ‘beating the market’ by a large margin.”17 Harry Dexter White, a descendant of Jewish Lithuanian Catholic immigrants, was an economist and a senior U.S. Treasury department official. White may have also been a Soviet spy, who passed confidential information about the negotiations to the Russians. Bretton Woods took place against the background of a still raging brutal war, the rise of fascism, and the economic experience of the Great Depression. The focus was on establishing free trade based on convertibility of currencies with stable exchange rates. In the past, this problem was solved through the gold standard where the standard unit of currency was a fixed weight of gold.

We have taken the position of absolutely no.” The United States was the undisputed preeminent economic and military great power as well as the world’s richest nation and the biggest creditor. The British and the French, devastated by two world wars, needed American money to rebuild their economies. White’s view prevailed. Bretton Woods established a system of fixed exchange rates where countries would establish parity of their national currencies in terms of gold (the peg). All countries would peg their currencies to the U.S. dollar as the principal reserve currency and, after convertibility was restored, would buy and sell U.S. dollars to keep market exchange rates within plus or minus 1 percent of parity (the band).


pages: 816 words: 191,889

The Long Game: China's Grand Strategy to Displace American Order by Rush Doshi

"World Economic Forum" Davos, American ideology, anti-communist, Asian financial crisis, autonomous vehicles, Black Lives Matter, Bretton Woods, capital controls, coronavirus, COVID-19, crony capitalism, cross-border payments, cryptocurrency, defense in depth, deindustrialization, Deng Xiaoping, deplatforming, disinformation, Dissolution of the Soviet Union, Donald Trump, drone strike, energy security, European colonialism, eurozone crisis, financial innovation, George Floyd, global pandemic, global reserve currency, global supply chain, global value chain, Great Leap Forward, high-speed rail, Internet Archive, Internet of things, Kickstarter, kremlinology, Malacca Straits, middle-income trap, Mikhail Gorbachev, MITM: man-in-the-middle, Monroe Doctrine, Network effects, Nixon triggered the end of the Bretton Woods system, offshore financial centre, positional goods, post-truth, purchasing power parity, RAND corporation, reserve currency, rolodex, Ronald Reagan, South China Sea, special drawing rights, special economic zone, TikTok, trade liberalization, transaction costs, UNCLOS, UNCLOS, undersea cable, zero-sum game

As Jin Liqun notes, “The Chinese governmental institutions, the minister of finance, foreign affairs, the central bank and others, are involved in conceptualizing this new bank” and in deliberations “over the architect[ure] of this new bank [sic].”38 Other figures closely connected with the bank also link its establishment to the financial crisis. In an essay on the future of the Bretton Woods system, Jin Liqun strongly suggested that the bank’s origins were in the perceived decline of the United States after the Global Financial Crisis. “From day one, the function and sustainability of the Bretton Woods system were contingent on the power of the US,” he notes. But now, the United States is less able to reform and uphold the system and “risks forfeiting its international relevance while stuck in its domestic political quagmire.”39 He concludes with an extended mediation on US decline: Ever since Edward Gibbon’s magnum opus, the monumental The Decline and Fall of the Roman Empire, was produced, the phrase “decline and fall” has been applied to the saga of defunct empires in history, and indiscriminately to some nations that have lost much of their former luminous energy in recent history.

Declinism crested in a long, third wave in the 1960s and 1970s that tested the faith of Kissinger, Zumwalt, and countless others in the country’s resilience. The United States went through social unrest and political assassinations; the collapse of Bretton Woods and the arrival of stagflation; the impeachment of President Richard Nixon and the fall of Saigon—all set against the backdrop of Soviet advancement. But eventually even these developments brought adjustment and renewal. Social unrest propelled civil rights reforms, impeachment reaffirmed the rule of law, Bretton Woods’ collapse brought eventual dollar dominance, defeat in Vietnam ended the draft, and the Soviet Union’s Afghan invasion hastened its collapse.

Jin Liqun Was Elected as the Bank’s First President,” Asia Infrastructure Investment Bank, February 2, 2016, https://www.aiib.org/en/news-events/news/2016/The-AIIB-was-declared-open-for-business-on-January-16-2016-and-Mr-Jin-Liqun-was-elected-as-the-Banks-first-President.html. 17Jamil Anderlini, “Lunch with the FT: Jin Liqun,” Financial Times, April 21, 2016, https://www.ft.com/content/0564ce1e-06e3-11e6-a70d-4e39ac32c284. 18Brian Bremmer and Miao Han, “China’s Answer to the World Bank Wants Green, Clean Asian Infrastructure,” Bloomberg, April 8, 2018, https://www.bloomberg.com/features/2018-asian-infrastructure-investment-bank-jin-liqun-interview/; Anderlini, “Lunch with the FT.” 19Bremmer and Han, “China’s Answer to the World Bank Wants Green, Clean Asian Infrastructure.” 20Jane Perlez, “A Banker Inspired by Western Novelists Seeks to Build Asia,” New York Times, January 13, 2017, https://www.nytimes.com/2017/01/13/world/asia/china-aiib-jin-liqun.html. 21Ibid.; Jin Liqun, “Bretton Woods: The System and the Institution,” in Bretton Woods: The Next Seventy Years, ed. Marc Uzan (New York: Reinventing Breton Woods Committee, 2015), 211–16. 22Perlez, “A Banker Inspired by Western Novelists Seeks to Build Asia.” 23Jeffrey D. Wilson, “What Does China Want from the Asia Infrastructure Investment Bank?,” Indo-Pacific Insights Series (Perth USAsia Centre, May 2017), 4. 24David Dollar, “The AIIB and the ‘One Belt, One Road,’” Brookings, 2015, https://www.brookings.edu/opinions/the-aiib-and-the-one-belt-one-road/. 25Jin Liqun, “Building Asia’s New Bank: An Address by Jin Liqun, President-Designate of the Asian Infrastructure Investment Bank” (Washington, DC: Brookings, October 21, 2015), 10–11, https://www.brookings.edu/wp-content/uploads/2015/10/20151021_asia_infrastructure_bank_transcript.pdf. 26See Biswa Nath Bhattacharyay, “Estimating Demand for Infrastructure in Energy, Transport, Telecommunications, Water and Sanitation in Asia and the Pacific: 2010–2020,” ADBI Working Paper Series (Asian Development Bank, September 2010); Biswa Nath Bhattacharyay and Prabir De, “Restoring the Asian Silk Route: Toward an Integrated Asia,” ADBI Working Paper Series (Asian Development Bank, June 2009). 27Xingqiang (Alex) He, “China in the International Financial System: A Study of the NDB and the AIIB” (Centre for International Governance Innovation, 2016), 4–5;Mike Callaghan and Paul Hubbard, “The Asian Infrastructure Investment Bank: Multilateralism on the Silk Road,” China Economic Journal 9, no. 2 (2016): 117. 28Dani Rodrik, “Why Is There Multilateral Lending,” in Annual World Bank Conference on Development Economics 1995, eds.


pages: 334 words: 98,950

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang

"there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, export processing zone, falling living standards, Fellow of the Royal Society, financial deregulation, financial engineering, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

The IMF and the World Bank were originally set up in 1944 at a conference between the Allied forces (essentially the US and Britain), which worked out the shape of postwar international economic governance. This conference was held in the New Hampshire resort of Bretton Woods, so these agencies are sometimes collectively called the Bretton Woods Institutions (BWIs). The IMF was set up to lend money to countries in balance of payments crises so that they can reduce their balance of payments deficits without having to resort to deflation. The World Bank was set up to help the reconstruction of war-torn countries in Europe and the economic development of the post-colonial societies that were about to emerge – which is why it is officially called the International Bank for Reconstruction and Development.

Following the Third World debt crisis of 1982, the roles of both the IMF and the World Bank changed dramatically. They started to exert a much stronger policy influence on developing countries through their joint operation of so-called structural adjustment programmes (SAPs). These programmes covered a much wider range of policies than what the Bretton Woods Institutions had originally been mandated to do. The BWIs now got deeply involved in virtually all areas of economic policy in the developing world. They branched out into areas like government budgets, industrial regulation, agricultural pricing, labour market regulation, privatization and so on.

Although greater competition from manufactured imports and more foreign ownership could … help the Korean economy, Koreans and others saw this … as an abuse of IMF power to force Korea at a time of weakness to accept trade and investment policies it had previously rejected’.28 This was said not by some anti-capitalist anarchist but by Martin Feldstein, the conservative Harvard economist who was the key economic advisor to Ronald Reagan in the 1980s. The IMF-World Bank mission creep, combined with the abuse of conditionalities by the Bad Samaritan nations, is particularly unacceptable when the policies of the Bretton Woods Institutions have produced slower growth, more unequal income distribution and greater economic instability in most developing countries, as I pointed out earlier in this chapter. How on earth can the IMF and the World Bank persist for so long in pursuing the wrong policies that produce such poor outcomes?


pages: 347 words: 99,317

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity by Ha-Joon Chang

"there is no alternative" (TINA), "World Economic Forum" Davos, affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, export processing zone, falling living standards, Fellow of the Royal Society, financial deregulation, financial engineering, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

The IMF and the World Bank were originally set up in 1944 at a conference between the Allied forces (essentially the US and Britain), which worked out the shape of postwar international economic governance. This conference was held in the New Hampshire resort of Bretton Woods, so these agencies are sometimes collectively called the Bretton Woods Institutions (BWIs). The IMF was set up to lend money to countries in balance of payments crises so that they can reduce their balance of payments deficits without having to resort to deflation. The World Bank was set up to help the reconstruction of war-torn countries in Europe and the economic development of the post-colonial societies that were about to emerge – which is why it is officially called the International Bank for Reconstruction and Development.

Following the Third World debt crisis of 1982, the roles of both the IMF and the World Bank changed dramatically. They started to exert a much stronger policy influence on developing countries through their joint operation of so-called structural adjustment programmes (SAPs). These programmes covered a much wider range of policies than what the Bretton Woods Institutions had originally been mandated to do. The BWIs now got deeply involved in virtually all areas of economic policy in the developing world. They branched out into areas like government budgets, industrial regulation, agricultural pricing, labour market regulation, privatization and so on.

Although greater competition from manufactured imports and more foreign ownership could … help the Korean economy, Koreans and others saw this … as an abuse of IMF power to force Korea at a time of weakness to accept trade and investment policies it had previously rejected’.28 This was said not by some anti-capitalist anarchist but by Martin Feldstein, the conservative Harvard economist who was the key economic advisor to Ronald Reagan in the 1980s. The IMF-World Bank mission creep, combined with the abuse of conditionalities by the Bad Samaritan nations, is particularly unacceptable when the policies of the Bretton Woods Institutions have produced slower growth, more unequal income distribution and greater economic instability in most developing countries, as I pointed out earlier in this chapter. But how on earth can the IMF and the World Bank persist for so long in pursuing the wrong policies that produce such poor outcomes?


pages: 142 words: 45,733

Utopia or Bust: A Guide to the Present Crisis by Benjamin Kunkel

Alan Greenspan, Anthropocene, anti-communist, Bear Stearns, Bretton Woods, business cycle, capital controls, Carmen Reinhart, creative destruction, David Graeber, declining real wages, full employment, Hyman Minsky, income inequality, late capitalism, Lewis Mumford, liberal capitalism, liquidity trap, means of production, money: store of value / unit of account / medium of exchange, mortgage debt, Occupy movement, peak oil, price stability, profit motive, public intellectual, savings glut, Slavoj Žižek, The Wealth of Nations by Adam Smith, transatlantic slave trade, vertical integration, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, zero-sum game

So it is in Paper Promises, a brisk digest of changes in Western monetary policy over the last few centuries by the Economist writer Philip Coggan, and in Debt: The First 5,000 Years by the anthropologist and activist David Graeber, which situates the same stretch of modern history within the vast tidal shifts, across five millennia of Eurasian history, between monetary regimes founded on precious metals and those based on “virtual credit money.” In August 1971, Nixon suspended the convertibility of the US dollar into gold. Until then, foreign central banks had been entitled, under the terms of the Bretton Woods system established after World War II, to redeem dollar holdings at a rate of $35 an ounce. Whether or not this modified gold standard sponsored or merely accompanied the unprecedented expansion after 1945, it discouraged extravagance among international debtors. To sink too far into debt—in terms either of the national budget or the balance of accounts with trading partners—was to risk being sapped of gold.

For this reason among others, the first postwar decades saw steeply declining ratios of national debt to GDP across advanced economies. These years were also more or less free of the great, listing trade imbalances of the current era, which allow Americans, Spaniards, or Britons to buy so much more from foreigners than they sell to them. The debt-restraining trends of the Bretton Woods settlement were not reversed until, in the late 1960s, the US began to live—and kill—considerably beyond its immediate means, borrowing enormous sums to cover Johnson’s Great Society and the Vietnam War. It was to avert a run on American reserves that Nixon first disconnected the circuit between paper and bullion.

Although Paper Promises is essentially an extended piece of financial journalism, useful and efficient but captive to conventional wisdom, its treatment of the past 150 years nevertheless achieves a level of detail that Graeber must bypass. It’s from Coggan that one gets a picture of the workings of the pre-1914 gold standard, of interwar monetary chaos, and of the fragility of Bretton Woods. Yet in discussing the nature of money as the central reality of economics, both authors at times produce something like the illusion they are trying to dispel: as if currency, whether paper or metallic, were a thing apart from the social production and contestation of value. Both writers see 1971 as a watershed.


pages: 267 words: 74,296

Unhappy Union: How the Euro Crisis - and Europe - Can Be Fixed by John Peet, Anton La Guardia, The Economist

"World Economic Forum" Davos, bank run, banking crisis, Berlin Wall, Bretton Woods, business cycle, capital controls, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, debt deflation, Doha Development Round, electricity market, eurozone crisis, Fall of the Berlin Wall, financial engineering, fixed income, Flash crash, illegal immigration, labour market flexibility, labour mobility, light touch regulation, low interest rates, market fundamentalism, Money creation, moral hazard, Northern Rock, oil shock, open economy, pension reform, price stability, quantitative easing, special drawing rights, supply-chain management, The Great Moderation, too big to fail, transaction costs, éminence grise

As Nicholas Crafts showed in a 2013 paper for Chatham House, the early leavers did much better in terms of GDP and employment than the stayers – and France, which suffered a lot from clinging so long to gold, played a role equivalent to today’s Germany by hoarding the stuff and also insisting on running large current-account surpluses.7 Although the desire for currency stability carried through into the early years of the European project, the global system of fixed exchange rates linked to the dollar (and thus to gold) set up after the 1944 Bretton Woods conference that established the International Monetary Fund (IMF) and the World Bank seemed sufficient for most countries. But over time, and especially in France, the perception was growing that this system gave the Americans some sort of exorbitant privilege. This was one reason why the European Commission first formally proposed a single European currency in 1962.

Indeed, at a summit meeting of heads of government in Paris in December 1972, all nine national leaders, including the UK’s Edward Heath, signed up blithely not only to monetary union but also to political union by 1980. A last-minute attempt by the Danish prime minister to ask his colleagues exactly what was meant by political union was ignored by the French president, Georges Pompidou, who was in the chair.8 It was the final collapse of Bretton Woods, followed by the Arab-Israeli war and oil shock and then by the global recession of 1974–75, that upset most of these ambitious plans. Yet by then West Germany, always on the look-out for greater currency stability, had already set up a system linking most of Europe’s currencies to the Deutschmark, swiftly dubbed the “snake in the tunnel”.

However, it turned out that the snake had only a fitful and unsatisfactory life. The UK signed up in mid-1972, only to be forced out by the financial markets six weeks later. Both France and Italy joined and left the snake twice. Devaluations within the system were distressingly frequent. By 1978 there was still no sign of a general return to the Bretton Woods system of fixed exchange rates. So Europe’s political leaders came up with the idea of creating a grander version of the snake in the form of a European Monetary System (EMS). The EMS was mainly the brainchild of the French president, Valéry Giscard d’Estaing, and the German chancellor, Helmut Schmidt, although the president of the European Commission, Roy Jenkins, acted as midwife.


pages: 236 words: 77,735

Rigged Money: Beating Wall Street at Its Own Game by Lee Munson

affirmative action, Alan Greenspan, asset allocation, backtesting, barriers to entry, Bear Stearns, Bernie Madoff, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, call centre, Credit Default Swap, diversification, diversified portfolio, estate planning, fear index, fiat currency, financial engineering, financial innovation, fixed income, Flash crash, follow your passion, German hyperinflation, Glass-Steagall Act, global macro, High speed trading, housing crisis, index fund, joint-stock company, junk bonds, managed futures, Market Wizards by Jack D. Schwager, Michael Milken, military-industrial complex, money market fund, moral hazard, Myron Scholes, National best bid and offer, off-the-grid, passive investing, Ponzi scheme, power law, price discovery process, proprietary trading, random walk, Reminiscences of a Stock Operator, risk tolerance, risk-adjusted returns, risk/return, Savings and loan crisis, short squeeze, stocks for the long run, stocks for the long term, too big to fail, trade route, Vanguard fund, walking around money

Walking out of the bank he had only received in exchange a piece of paper saying the U.S. government was backing its value. Control versus Live Free or Die Now that citizens were not in control of the basic element that valued their money, it was easy for governments to control and regulate the currency markets. In 1944, The Bretton Woods (yes, in Bretton Woods, New Hampshire, the Live Free or Die state) agreement was signed, pegging 44 countries’ currency to the dollar. Since the dollar was tied to $35 for an ounce of gold, it essentially tied these other foreign currencies to gold. This is when the International Monetary Fund (IMF) was created.

If foreign governments doubted the United States’ ability to maintain the gold standard, they would express this by asking for the gold it was backed by. Called the gold window, it’s like a foreign country like Switzerland pulling up to the window and asking to cash in dollars for an equivalent amount of gold. Sounds like a good system. In fact, if signers of The Bretton Woods Agreement were confident in the United States, they would not need to use the gold window at all. Well, the United States has never been good at keeping a balanced budget, even though we were the economic superpower at the time. The 1960s had some great economic times for the stock market, but the gold window was starting to get some cracks in it.

Index 12b-1 fees 401(k) alternatives small business and A active investing active management Adaptive Market Hypothesis advice Advisers Act adviser advisory account, brokerage account versus alternative trading system (ATS) Amsterdam Stock Exchange animal spirits asks asset allocation asset class asset protection assets under management (AUM), fees on ATS. See alternative trading system AUM. See assets under management B bar charts, pie charts versus Barker, Bob basket Bear Stearns best price, deciding BHB. See Brinson, Hood, and Beebower bids Blodget, Henry Bloomberg terminals bond market bonds Bretton Woods Agreement Brinson, Hood, and Beebower (BHB) broker, cheapest broker-dealer brokerage account, advisory account versus brokerage fees, fixed brokerage programs, fee-based brokerage services, selling buy buy-and-hold example strategy C capital structure CBOE. See Chicago Board of Options Exchange CBOT.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

Albert Einstein, banking crisis, behavioural economics, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, foreign exchange controls, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, low interest rates, means of production, Meghnad Desai, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, Tragedy of the Commons, unorthodox policies, Vilfredo Pareto, zero-sum game

LONDON 1936 John Maynard Keynes ( 1 8 8 3 - 1 9 4 6 ) , B r i t i s h e c o n o m i s t and s t a t e s m a n , published his influential General Theory in 1936: "I believe myself to be writing a book which will largely revolutionise the way the world thinks about economic problems." Keynes was a financial wizard who made Keynes shocked his Bloom Keynes, meeting Harry Dexter W h i t e MIT Professor Paul Anthony at Bretton Woods, New Hampshire, in ( 1 9 1 5 - ) and his p o p u l a r 1944, helped frame the post-war inter-Economics (1948), made Ke national e c o n o m i c s y s t e m based on the standard theory in the p fixed exchange rates and the creation of riod. Samuelson was the fir: the International Monetary Fund and the to win the Nobel prize in E< World Bank. 1970.

On his sixtieth birthday, Keynes was made High Steward of Cambridge, an honorary post. He thrived on the adulation and elitist status. Near the end of the war, Keynes and his wife traveled to the United States to help negotiate a new international financial agreement. Keynes was one of the architects of the Bretton Woods agreement, which established a fixed exchange rate system based on gold and the dollar and created the International Monetary Fund (IMF) and the World Bank. Two years later, he died of a heart attack at the age of sixty-two. Keynes's Disdain for Karl Marx and Marxism Let us now turn to Keynes's approach to economics.

In Keynes's mind, the gold standard severely limited credit expansion and preserved the status quo of scarcity. Thus, gold's inelasticity—which the classical economists considered its primary virtue—stood in the way of Keynes's paradise and needed to be abandoned in favor of fiat-money inflation (1951 [1931], 360-73). The Bretton Woods agreement was the first step toward removing gold from the world's monetary system. Keynes would undoubtedly be pleased to see gold playing such a moribund role in international monetary affairs in the twenty-first century. In short, Keynes's goal was not to save Adam Smith's house, as his adherents contended, but to build another house entirely—the house that Keynes built.


pages: 290 words: 76,216

What's Wrong With Economics: A Primer for the Perplexed by Robert Skidelsky

additive manufacturing, agricultural Revolution, behavioural economics, Black Swan, Bretton Woods, business cycle, carbon tax, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, disruptive innovation, Donald Trump, Dr. Strangelove, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mahbub ul Haq, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, Modern Monetary Theory, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, Phillips curve, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, sunk-cost fallacy, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

The weakness of history as a school for statesmen comes out very clearly in the Treaty of Versailles in 1919, when the peacemakers fretted about frontiers and nationalities rather than with the need to reconstruct Europe economically. The much more durable results achieved after the Second World War stemmed from putting the economic rehabilitation of the war-shattered economies at the head of the peacemaking agenda – the task entrusted to the forward-looking economic technicians who devised the Bretton Woods system and Marshall Aid. The idea that social and economic life oscillates round some, not necessarily static, point of equilibrium has been common to both economists and historians. But they have very different views of cycles. For economists cycles result from some ‘shock’ to otherwise smoothly functioning systems producing cycles of business activity.

What emerged from the Second World War was the victory of collectivism in the milder form of social democracy. However, even before the crisis of collectivism in the 1970s, a swing back to liberalism had started, as trade, after 1945, was progressively freed and capital movements liberalised. The rule was free trade abroad and social democracy at home. The Bretton Woods system, set up with Keynes’s help in 1944, was the international expression of liberal/social democratic political economy. It aimed to free foreign trade after the freeze of the 1930s, by providing an environment that reduced incentives for economic nationalism. At its heart was a system of fixed exchange rates, subject to agreed adjustment, to avoid competitive currency depreciation.

The new generation of economists abandoned Keynes and, with the help of sophisticated mathematics, reinvented the classical economics of the self-regulating market. Battered by the inflationary crises of the 1970s, governments caved in to the ‘inevitability’ of free market forces. The swing back became world-wide with the collapse of communism. A conspicuous casualty of the swing back was the Bretton Woods system that succumbed in the 1970s to the refusal of the United States to curb its domestic spending. Currencies were set free to float and controls on international capital flows were lifted. This heralded a wholesale change of direction towards globalisation. This was, in concept, not unattractive.


pages: 572 words: 134,335

The Making of an Atlantic Ruling Class by Kees Van der Pijl

anti-communist, banking crisis, Berlin Wall, book value, Boycotts of Israel, Bretton Woods, British Empire, business cycle, capital controls, collective bargaining, colonial rule, cuban missile crisis, deindustrialization, deskilling, diversified portfolio, European colonialism, floating exchange rates, full employment, imperial preference, Joseph Schumpeter, liberal capitalism, mass immigration, means of production, military-industrial complex, North Sea oil, plutocrats, profit maximization, RAND corporation, scientific management, strikebreaker, Suez crisis 1956, trade liberalization, trade route, union organizing, uranium enrichment, urban renewal, War on Poverty

At the end of World War Two, American firms operating abroad were confronted with ‘discriminatory tax and labor laws, inability to withdraw profits, and the constant threat of expropriation’, notably in Europe.20 The Bretton Woods system centering on the IMF was meant to provide American capital (and capitals matching their accumulation conditions) with an integrated circuit of capital internationally, but it was unclear how to begin to implement currency liberalization, when it seemed that the British Empire might suddenly break apart. During the debate in the US Senate on Bretton Woods, the isolationist opponents led by Senator Taft wanted to insert a clause requiring that any IMF member wanting to use the Fund’s resources would have to remove all exchange restrictions first.

The prospect of the unconditional defeat of the Axis was coupled with the fear of a postwar Depression arising from the doubling of the productive capacity of the US economy. Atlantic unity was now subordinated to Roosevelt’s and Truman’s version of a new American universalism as announced in the United Nations Declaration and the Bretton Woods Agreements (which at this time still included the plan for an International Trade Organization). The ‘Atlantic’ predicate of Roosevelt’s global design, first articulated in the 1941 Atlantic Charter, foresaw the incorporation of both the British Empire and the Soviet Union in an overarching Pax Americana.

Thus, while General Motors head Sloan had followed the Du Pont representatives out of the BAC in 1935, a vice-president of the same firm in 1936 publicly declared that because of Hull’s trade policy he would vote for Roosevelt in the November election.72 As part of the same strategy, steps were taken towards monetary stabilization in the Atlantic area. The agreement with Britain of 1934, extended to France following the devaluation of the franc in 1936, prefigured the Bretton Woods system by stipulating mutual consultation in advance of parity changes as a means to facilitate the flow of trade and payments.73 However, the sphere-of-interest policy in international relations inherited from Hoover, still remained the overall framework of US foreign policy in the earlier New Deal period.


pages: 846 words: 250,145

The Cold War: A World History by Odd Arne Westad

Able Archer 83, Albert Einstein, American ideology, anti-communist, Ayatollah Khomeini, Berlin Wall, Bolshevik threat, Bretton Woods, British Empire, capital controls, collective bargaining, colonial rule, continuous integration, cuban missile crisis, Deng Xiaoping, disinformation, Dissolution of the Soviet Union, energy security, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, financial deregulation, full employment, Great Leap Forward, household responsibility system, imperial preference, Internet Archive, land reform, Les Trente Glorieuses, liberal capitalism, long peace, means of production, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Nelson Mandela, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shock, out of africa, post-industrial society, Ronald Reagan, Ronald Reagan: Tear down this wall, South China Sea, special economic zone, Strategic Defense Initiative, Suez crisis 1956, union organizing, urban planning, War on Poverty, women in the workforce, Yom Kippur War, young professional, zero-sum game

But it also wanted increased stability in the world economic system. At Bretton Woods in New Hampshire in July 1944, the main allied industrial countries had signed a set of agreements that led to the establishment of an International Monetary Fund (IMF), to provide loans that could bridge a country’s imbalance in payments, and an International Bank for Reconstruction and Development, which later became part of the World Bank. But the most basic element of the Bretton Woods system, as it came to be called, was tying all other major exchange currencies to the US dollar at fixed parities. The Bretton Woods agreements gave the United States a massive opportunity for international trade and for influencing the economies of other countries.

It thereby deliberately destroyed the Bretton Woods system, in which most other currencies had been pegged to the dollar at a fixed exchange rate. For the first time since 1945 US leaders looked more to their own bottom line than to preserving and integrating the world economic system. Of course, it could be argued that successive US Administrations had upheld that system, because it first and foremost served the American economy. But by the early 1970s this seemed to no longer to be the case. The global economy entered a new and turbulent era. The collapse of Bretton Woods had a significant effect on the Cold War.

The Bretton Woods agreements gave the United States a massive opportunity for international trade and for influencing the economies of other countries. But it should not be forgotten that, just like the political division lines in Europe and Asia, the agreements were the outcome of what the war had already created. In the longer run, the United States got neither the opportunity nor the stability that it wanted from Bretton Woods. But the agreements did provide a system, of sorts, to legitimize the advent of the United States as the world’s economic behemoth. Given its unique position, could the United States have done more to avoid international conflict in the wake of World War II? A lot of different countries resented the consequences of America’s rise but learned to live with it because they had to, for both political and economic reasons.


pages: 526 words: 160,601

A Generation of Sociopaths: How the Baby Boomers Betrayed America by Bruce Cannon Gibney

1960s counterculture, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, American Society of Civil Engineers: Report Card, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Lives Matter, bond market vigilante , book value, Boston Dynamics, Bretton Woods, business cycle, buy and hold, carbon footprint, carbon tax, Charles Lindbergh, classic study, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate personhood, Corrections Corporation of America, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, dark matter, DeepMind, Deng Xiaoping, Donald Trump, Downton Abbey, Edward Snowden, Elon Musk, ending welfare as we know it, equal pay for equal work, failed state, financial deregulation, financial engineering, Francis Fukuyama: the end of history, future of work, gender pay gap, gig economy, Glass-Steagall Act, Haight Ashbury, Higgs boson, high-speed rail, Home mortgage interest deduction, Hyperloop, illegal immigration, impulse control, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jane Jacobs, junk bonds, Kitchen Debate, labor-force participation, Long Term Capital Management, low interest rates, Lyft, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, medical bankruptcy, Menlo Park, Michael Milken, military-industrial complex, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Armstrong, neoliberal agenda, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, operation paperclip, plutocrats, Ponzi scheme, price stability, prosperity theology / prosperity gospel / gospel of success, quantitative easing, Ralph Waldo Emerson, RAND corporation, rent control, ride hailing / ride sharing, risk tolerance, Robert Shiller, Ronald Reagan, Rubik’s Cube, Savings and loan crisis, school choice, secular stagnation, self-driving car, shareholder value, short selling, side project, Silicon Valley, smart grid, Snapchat, source of truth, stem cell, Steve Jobs, Stewart Brand, stock buybacks, survivorship bias, TaskRabbit, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, War on Poverty, warehouse robotics, We are all Keynesians now, white picket fence, Whole Earth Catalog, women in the workforce, Y2K, Yom Kippur War, zero-sum game

And before the late 1960s, it didn’t need to be reflected in anything: Roughly balanced budgets created little fear of inflation, and any skeptics could simply exchange their dollars for gold, of which more than half the world’s supply was held by the United States. The gold-dollar system had been the centerpiece of the Bretton Woods agreement, which required major trading nations to adhere to the gold standard and created institutions like the International Monetary Fund and the World Bank to manage the system. Bretton Woods had successfully lubricated the postwar global economy, but the system always had weaknesses (involving problems with the American current account too technical to delve into here), and it certainly could not withstand a permanent deviation between the official price of gold and the market’s views on what the real price should be.

It’s not clear the economy needed much stimulating in the first place, any more than Nixon needed Watergate shenanigans to secure his 1972 landslide, but Nixon liked overkill. Between the Nixon stimulus, the collapse of the Bretton Woods system, Vietnam spending, and natural growth, the economy overheated and inflation accelerated. Compounding the problem were new “supply shocks” in the form of sudden rises in the price of essential commodities, especially oil and food. Oil was denominated in dollars, so a weakening dollar after the collapse of Bretton Woods lowered the incomes of the oil-producing nations. OPEC subsequently repriced oil in gold terms, which effectively raised the dollar price of oil.

Stimulus was provided (and less frequently, withdrawn) to moderate the business cycle, but any large deficits stimulus engendered were to be tolerated only in the short term, not as the permanent fixture they have become. As for the dollar, strength was maintained by a fixed link between gold and the dollar ($35 per ounce) and between the dollar and other currencies by the Bretton Woods exchange system. In theory, if you were concerned about the value of the dollar, you could simply go up to the Gold Window and exchange $35 for one ounce of gold, though in practice only foreign governments did this and usually through the account books. These constraints kept the greenback from depreciating, preserving purchasing power.


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Modernising Money: Why Our Monetary System Is Broken and How It Can Be Fixed by Andrew Jackson (economist), Ben Dyson (economist)

Alan Greenspan, bank run, banking crisis, banks create money, Basel III, Bretton Woods, business cycle, call centre, capital controls, cashless society, central bank independence, credit crunch, David Graeber, debt deflation, double entry bookkeeping, eurozone crisis, financial exclusion, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, Fractional reserve banking, full employment, Greenspan put, Hyman Minsky, inflation targeting, informal economy, information asymmetry, intangible asset, land bank, land reform, London Interbank Offered Rate, low interest rates, market bubble, market clearing, Martin Wolf, means of production, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, negative equity, Northern Rock, Post-Keynesian economics, price stability, profit motive, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, risk-adjusted returns, Savings and loan crisis, seigniorage, shareholder value, short selling, South Sea Bubble, technological determinism, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, unorthodox policies

America, fearing a similar call from the Middle East, declared it would no longer redeem dollar holdings for gold, defaulting on its Bretton Woods obligations and leading to the collapse of the Bretton Woods system. The final link between national currencies and gold was thereby abolished. The oil-exporting nations of the Middle East retaliated by cutting production and quadrupling the price of oil (resulting in the 1973 oil crisis), whilst other countries struggled to maintain the fixed exchange rates they had agreed at Bretton Woods. A decade of economic chaos ensued. By the end of the 1980s the current system had emerged, whereby the major trading currencies floated freely against each other.

Half a decade later as the Second World War drew to a close, a new arrangement was agreed such that all national central banks would hold accounts at the US Federal Reserve Bank, and the Fed would settle payments between accounts, which were redeemable, if necessary, in gold. This was the Bretton Woods agreement. Nations agreed to manage their currencies to maintain a fixed exchange rate against the dollar, and America agreed to fix the dollar against gold. Maintenance of the Bretton Woods exchange rates shifted focus onto the flow of capital into and out of countries. To prevent these flows interfering with the fixed exchange rates, the UK used a combination of capital controls (to limit the outflows due to the acquisition of foreign assets), quantitative and qualitative restrictions on bank lending, and control of interest rates (to limit the availability and demand for domestic credit which could fuel imports).


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The Divide: A Brief Guide to Global Inequality and Its Solutions by Jason Hickel

"World Economic Forum" Davos, Alan Greenspan, Andrei Shleifer, Asian financial crisis, Atahualpa, Bartolomé de las Casas, Bernie Sanders, Bob Geldof, Bretton Woods, British Empire, Cape to Cairo, capital controls, carbon credits, carbon footprint, carbon tax, clean water, collective bargaining, colonial rule, Cornelius Vanderbilt, David Attenborough, David Graeber, David Ricardo: comparative advantage, declining real wages, degrowth, dematerialisation, Doha Development Round, Elon Musk, European colonialism, falling living standards, financial deregulation, flying shuttle, Fractional reserve banking, Francisco Pizarro, full employment, Glass-Steagall Act, Global Witness, Hans Rosling, happiness index / gross national happiness, Howard Zinn, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Watt: steam engine, laissez-faire capitalism, land reform, land value tax, liberal capitalism, Live Aid, Mahatma Gandhi, Money creation, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, negative emissions, Nelson Mandela, offshore financial centre, oil shale / tar sands, out of africa, Phillips curve, planned obsolescence, plutocrats, purchasing power parity, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scramble for Africa, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, structural adjustment programs, TED Talk, The Chicago School, The Spirit Level, trade route, transatlantic slave trade, transfer pricing, trickle-down economics, Washington Consensus, WikiLeaks, women in the workforce, Works Progress Administration

Many politicians on the right were willing to go along with it, hoping that granting the working class a fairer deal would stave off the social discontent they feared might spark a Soviet-style revolution. They also hoped it might prevent the rise of fascism, which had attracted Germans beleaguered by their severe economic crisis. By ensuring stability and welfare across the industrialised world, Keynesian principles were designed to prevent another world war. In 1944, the Bretton Woods institutions were created with this goal in mind. The World Bank would finance reconstruction and development across war-torn Europe, and the IMF would finance state spending in countries experiencing economic slumps, to ensure that low demand in one nation wouldn’t trigger a crisis across the region.

Meanwhile, every other Western country followed the American System, as it was called by that time, line by line. During the first decades of the 20th century, protectionism was the norm across the industrialised world. But then the Great Depression hit, followed by the Second World War. In the wake of the war, when Western powers gathered at the Bretton Woods Conference in New Hampshire to decide how to prevent such a catastrophe from recurring, they set up the General Agreement on Tariffs and Trade (GATT). John Maynard Keynes, the key figure at the conference, argued that the rise of protectionism across the industrialised world had contributed to low aggregate demand: people weren’t buying enough stuff because prices were too high, and the economy ground to a halt.

The global flow of goods is an intimate part of our everyday lives. But there is another flow that liberalisation has unleashed, one that is much less known, for it is almost impossible to see: money. If the flow of goods has eroded democratic sovereignty around the world, the flow of money takes this process to another level altogether. The Bretton Woods system originally designed by Keynes was intended to grant states the power to control the flow of capital across their borders. In other words, states could decide the terms by which foreign investors were allowed to send capital in to set up businesses or buy up shares of local companies. And if those investors wanted to pull their money out, they had to go through a rigorous application process.


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The Accidental Theorist: And Other Dispatches From the Dismal Science by Paul Krugman

"World Economic Forum" Davos, Alan Greenspan, Bonfire of the Vanities, Bretton Woods, business cycle, carbon tax, clean water, collective bargaining, computerized trading, corporate raider, declining real wages, floating exchange rates, full employment, George Akerlof, George Gilder, Home mortgage interest deduction, income inequality, indoor plumbing, informal economy, invisible hand, It's morning again in America, Kenneth Arrow, knowledge economy, life extension, new economy, Nick Leeson, paradox of thrift, Paul Samuelson, plutocrats, price stability, rent control, Robert Solow, Ronald Reagan, Silicon Valley, trade route, very high income, working poor, zero-sum game

A Note on Currency Crises I often run into people who assert confidently that massive speculative attacks on currencies like the British pound in 1992, the Mexican peso in 1994–1995, and the Thai baht in 1997 prove that we are in a new world in which computerized trading, satellite hookups, and all that, mean that old economic rules, and conventional economic theory, no longer apply. (One physicist insisted that the economy has “gone nonlinear,” and is now governed by chaos theory.) But the truth is that currency crises are old hat; the travails of the French franc in the twenties were thoroughly modern, and the speculative attacks that brought down the Bretton Woods system of exchange rates in the early seventies were almost as big compared with the size of the economies involved as the biggest recent blowouts. And currency crises have been a favorite topic of international financial economists ever since the 1970s. In fact, it is one of my favorite topics—after all, I helped found the field.

It was a theoretical analysis of the reasons why attempts to maintain a fixed exchange rate typically end in abrupt speculative attacks, with billions of dollars of foreign exchange reserves lost in a matter of days or even hours. What I had in mind at the time were the attacks that brought down the Bretton Woods system in 1971 and its short-lived successor, the Smithsonian agreement, a year and a half later. It seemed to me then that the main interest of the paper would be historical; I did not expect to see attacks of that scale and drama again. Based on a talk at the Group of 30, London, April 1997.

Then you will be a serene floater: You will believe that freeing your currency from the shackles of a specific exchange rate target, so that you can get on with the business of pursuing full employment, is unambiguously a good thing. This was the view held by many economists in the late 1960s and early 1970s; indeed, I remember as an undergraduate picking up from my teachers a definite sense that they regarded the whole Bretton Woods system as a barbarous relic, a needless straitjacket on macroeconomic policy. You will be equally sure of yourself if you believe the opposite: that foreign exchange markets are deeply unreliable, dominated by irrational bouts of optimism and pessimism, while the monetary freedom that comes with floating is of little value.


pages: 736 words: 233,366

Roller-Coaster: Europe, 1950-2017 by Ian Kershaw

airport security, anti-communist, Apollo 11, Ayatollah Khomeini, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business cycle, centre right, colonial rule, cuban missile crisis, deindustrialization, Deng Xiaoping, Donald Trump, European colonialism, eurozone crisis, Exxon Valdez, failed state, Fall of the Berlin Wall, falling living standards, feminist movement, first-past-the-post, fixed income, floating exchange rates, foreign exchange controls, Francis Fukuyama: the end of history, full employment, Herbert Marcuse, illegal immigration, income inequality, Jeremy Corbyn, Johann Wolfgang von Goethe, labour market flexibility, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liberation theology, low interest rates, low skilled workers, mass immigration, means of production, Mikhail Gorbachev, mutually assured destruction, Neil Armstrong, Nelson Mandela, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open borders, post-war consensus, precariat, price stability, public intellectual, quantitative easing, race to the bottom, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Sinatra Doctrine, Suez crisis 1956, The Chicago School, trade liberalization, union organizing, upwardly mobile, washing machines reduced drudgery, Washington Consensus, Winter of Discontent, young professional

Until 1971 the economies of the Western world had been underpinned by the fixed convertible rates of currency exchange with the dollar – itself tied to the price of gold (at a fixed value, unchanged since 1934) – agreed at the Bretton Woods conference in July 1944. The complexities of putting such a system into practice meant that the Bretton Woods system was fully implemented only from December 1958 onwards. And within a decade it was encountering difficulties. Bretton Woods had essentially been a deal worked out by the United States and the United Kingdom. It reflected the post-war dominance of the dollar as the international reserve currency in place of the earlier pre-eminence of sterling.

This prompted a strong rise in the value of the mark and a flight from the dollar. The Bretton Woods system had been built around a fixed price of gold, 35 dollars per ounce. The weakness of the dollar fostered speculation that the price of gold would rise. It did. By the end of the 1960s gold was selling for more than double the official price. Bretton Woods was no longer sustainable. On 15 August 1971 President Richard Nixon suddenly announced a dramatic shift in American policy: amid a raft of anti-inflationary measures, he suspended the gold convertibility of the dollar. With that move, the Bretton Woods system – the basis of the post-war economy – was dead.

Economic growth was also spurred by the need to build new homes to cope with the acute housing shortage left by the war and the influx of refugees. Over five million homes were constructed during the 1950s, stimulating the myriad subsidiary industries that supplied the building trade. The resurgence of world trade, liberalized and regulated under the arrangements agreed at Bretton Woods, New Hampshire, in 1944, and the General Agreement on Trade and Tariffs (GATT) three years later, provided the international framework within which West Germany’s buoyant economy could flourish. The regulation of West Germany’s commercial debt, agreed in London in 1953, to pay off at low and completely manageable rates of interest a total amount of around $15 billion over more than thirty years, down to 1988 (what was owed from before and during the war to external creditors, mainly American firms), was a further important step in the recovery in firmly establishing the country’s debt-worthiness.


pages: 1,088 words: 228,743

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Black Swan, Bob Litterman, bond market vigilante , book value, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, carbon credits, Carmen Reinhart, central bank independence, classic study, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, deal flow, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global macro, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, inverted yield curve, invisible hand, John Bogle, junk bonds, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, pension time bomb, performance metric, Phillips curve, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, savings glut, search costs, selection bias, seminal paper, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stock buybacks, stocks for the long run, survivorship bias, systematic trading, tail risk, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

Following centuries of flat long-term price levels, with inflation followed by deflation, in the 1900s inflation became higher, less stable, and more persistent. Inflation risks began to dominate real risks, especially after the end of the postwar Bretton Woods regime in 1971 (which finalized the shift to fiat money) was followed by large fiscal deficits, productivity slowdown, and two oil crises. The economic costs of high and unstable inflation became apparent during the miserable decade following the Bretton Woods breakdown. The Great Disinflation began soon after Paul Volcker became the Fed chairman in 1979 and continued for over two decades as inflation expectations fell and became increasingly well anchored.

However, performance seems to be nearly as good for the preceding 30 years. Lustig–Verdelhan (2007) make available simulated carry-ranked portfolio returns going back deep into the Bretton Woods regime when most exchange rates were fixed, with occasional devaluations. They sort a broad and growing country set into eight portfolios, with only annual rebalancing. Applying my top-three, bottom-three weighting to their carry-ranked portfolios, I find a 0.51 SR for 1953–1982. Other sources also document positive carry returns for the post-Bretton Woods period before 1983. Over all these windows, currency carry provides better risk-adjusted returns than static asset class premia in equities or fixed income.

Carry strategy profits were not riskless, however; during financial crises the high-yielders suffered and the yen served as a valuable safe haven (see Chapter 13). The near-monotonic link between average returns and average yields in Figure 3.11 is not evident if I redo the analysis with available G8 data since 1971 (when the Bretton Woods system collapsed); the high-yielding British pound and Australian dollar earned average returns similar to those of the low-yielding Swiss franc and Japanese yen. However, this approach only looks at long-run average yields to determine the results from holding static positions for decades; more dynamic currency carry strategies did make money between 1971 and 1989 as well as thereafter.


America in the World by Robert B. Zoellick

Albert Einstein, anti-communist, banking crisis, battle of ideas, Berlin Wall, Bretton Woods, British Empire, classic study, Corn Laws, coronavirus, cuban missile crisis, defense in depth, Deng Xiaoping, Donald Trump, Douglas Engelbart, Douglas Engelbart, energy security, European colonialism, facts on the ground, Fall of the Berlin Wall, foreign exchange controls, Great Leap Forward, guns versus butter model, hypertext link, Ida Tarbell, illegal immigration, immigration reform, imperial preference, Isaac Newton, Joseph Schumpeter, land reform, linear model of innovation, Mikhail Gorbachev, MITM: man-in-the-middle, Monroe Doctrine, mutually assured destruction, Nixon triggered the end of the Bretton Woods system, Norbert Wiener, Paul Samuelson, public intellectual, RAND corporation, reserve currency, Ronald Reagan, Ronald Reagan: Tear down this wall, scientific management, Scramble for Africa, Silicon Valley, Strategic Defense Initiative, The Wealth of Nations by Adam Smith, trade liberalization, transcontinental railway, undersea cable, Vannevar Bush, War on Poverty

Clayton was the ideal man to carry on Hull’s trade work and to apply practical economic wisdom to the challenges of reconstruction and building a new international economic system.20 Clayton’s first priority was to shepherd congressional passage of the new Bretton Woods institutions: the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD, or World Bank). Harry Dexter White, an assistant to Secretary of the Treasury Henry Morgenthau, had led the U.S. teams that negotiated the charters, completing the work in July 1944. By the time President Truman signed the Bretton Woods legislation on July 31, 1945, the new president had pushed Morgenthau to resign and White’s influence waned. The lead role for U.S. international economic policy shifted to Clayton and the State Department.21 Benn Steil has emphasized the significance of the change in leadership.

See Fossedal, Our Finest Hour, 60–61 on trade and 65–82 on procurement. 20. Fossedal, Our Finest Hour, 108–9. In 1946, President Truman promoted Clayton to under secretary. 21. Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, NJ: Princeton University Press, 2013), 255–60; Fossedal, Our Finest Hour, 137–45. 22. Steil, Bretton Woods, 11. 23. Fossedal, Our Finest Hour, 182–83. 24. Fossedal, Our Finest Hour, 184–91. Britain made its final repayments in 2006. See Finlo Rohrer, “What’s a Little Debt Between Friends?” BBC News, May 10, 2006, http://news.bbc.co.uk/2/hi/uk_news/magazine/4757181.stm. 25.

Stalin’s turgid Marxist-Leninist analysis warned that capitalism, which he asserted had led to conflicts in 1914 and 1939, would inevitably do so again. Therefore, the Soviet Union must prepare itself for the dangers of capitalism’s violent demise. Kennan posted a summary. Washington wanted more. The Soviets had rejected the Bretton Woods system. Soviet espionage operations in the United States and Canada sought to steal atomic secrets. Stalin seemed to be maneuvering for advantage in the Middle East. The State Department’s Soviet desk asked Kennan for an “interpretive analysis.” Kennan’s response, the “Long Telegram,” at more than five thousand words, reiterated points he had made before: Russia’s historical and geographical insecurities, dressed up with Marxist-Leninist ideology, led it to seek even larger military power and a confrontation with the capitalist West.


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The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

The green economist Richard Douthwaite has suggested that this also be linked with a new international currency called EBCU (emissions-backed currency unit) that could be used for all international trade, not just for buying permits.23 Like SERs, EBCUs would be issued to each country on the basis of its population but, unlike the SERs, they would be given to each country’s central bank rather than to individuals. The system would be similar to the Bretton Woods system except that the right to burn fossil fuels replaces gold and EBCUs play the role of the US dollar. Its introduction would make sure that the level of economic activity around the world was always consistent with the ability of the Earth to cope with it, at least as far as greenhouse emissions were concerned. It would re-link the monetary system to reality and the world, though it may require a global re-negotiation akin to the original Bretton Woods conference to achieve. WHY ARE MALAWI VILLAGERS PAYING THE MORTGAGES OF STOCKBROKERS?

Policy needs to be directed at encouraging a multiplicity of experiments, and providing an explicit legal power to local authorities to set up currencies systems – regulated by a new e-money regulator – and to accept them for local taxes and fines. At the international level, the global financial system needs to be underpinned by a new global reference currency, along the lines of the bancor proposed by Keynes at the Bretton Woods summit, and backed by a basket of commodities. This will make currencies safer from sudden collapse, and will also provide an added underpinning to economies in developing countries that are wealthier in raw materials. 7 Create new public money, free of interest, where necessary to cope with unprecedented financial emergencies, and as the basis for loans to rebuild the infrastructure of productive local economies During the financial crisis of July 1914, David Lloyd George did this to underpin the banks.

www.neweconomics.org Index absolute poverty 81, 81–2 advertising 46–7 agriculture 26, 34, 119, 138 aid 34, 113, 136 AIDS 70, 111, 135, 148 altruism 65, 72 Annan, Kofi 110–11 anti-trust action 89–90, 116, 133 Argentina 26, 57, 58, 139 assets 15, 60, 105, 136–7, 153 of African-Americans 141, 142 people as 15, 57–8, 128–9, 130, 131 Audi 101 authenticity 2, 73, 74, 74–5 bancor (currency) 61 Bangladesh 3, 112, 141, 143–4 banking system 6, 7, 58–9, 147 see also banks bankruptcy 147 banks 6, 120, 139, 142, 146, 153 breaking up 57, 90, 146 money creation by 56, 58–9, 84, 90, 138, 147 see also financial crises barriers to development 138–43 barter 58, 59, 60, 154 behaviour 15, 29, 35, 67–8, 71 Belloc, Hilaire 19–20, 21 berkshares 57, 151–2 Beveridge, Sir William 19, 127 Bhutan 43 big currencies 53, 54, 55–6, 58, 59 biocapacity 12, 114, 158 Black Hawk (Colorado) 14, 15, 152 ‘black money’ 81 Blair administration 9, 41 Blake, William 18 blood donation 65, 70 Boesky, Ivan 135, 142 borrowing by governments 49–50, 58, 62, 141 see also debt Bowling Alone (Putnam, 2001) 126–7 Breed, Colin 125 Bretton Woods 148 Buddhist economics 18, 21, 22 Buffett, Warren 7 built-in obsolescence 98, 100, 101 Bush, George W. 28, 96, 154 business 74, 156 Butler, R. A. (Richard Austen, ‘Rab’) 36, 38, 40 Cahn, Edgar 54, 58, 88, 123, 127, 131 Campaign for Real Ale 118 Canada 51–2, 57 capital 89 capitalism 20, 155 carbon emission entitlements 45, 90, 117–18, 148 carbon emissions 114, 117, 148 carbon taxes 117 caring 86–7, 89, 91, 92, 132 182 THE NEW ECONOMICS Carville, James 27 casinos 14–15 cathedrals 79, 81 CDOs (collateralized debt obligations) 5–6 Central America 32–3 charities 13, 58, 129 Charles, Prince of Wales 23, 100 Chesterton, G.K.


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What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

Worse yet, Western economies could fall into the trap of what Jacques Rueff called “subsidizing expenditures that give no returns with money that does not exist,” a path which invariably leads to inflation. Even more disturbingly, such a path could conceivably lead to growing suspicion of the fiat monetary system, which, as Anatole Kaletsky indicates in Capitalism 4.0, has been the bedrock of the post–Bretton Woods economic miracle. Obviously, Asia has neither of the above two problems, which helps explain why most investors are keener to increase their risk in the East while decreasing their risk in the West. But of course this does not mean that Asia does not offer investors challenges. The First Challenge: Stepping into the Unknown A cliché among professional investors is that the four most expensive words in the English language are “This time it’s different.”

Importantly, the Federal Reserve was created in 1913, and by the 1920s bills or acceptances on New York (in US dollars) used as a means of financing international trade were as important as bills or acceptances on London (in sterling) had been before World War I. Second, the United Kingdom ceased to be a creditor nation due to the financial burden of the two world wars (1914–1918 and 1939–1945). Third, when the postwar monetary system was planned at Bretton Woods in 1944 and launched with the IMF and the World Bank as its core institutions, the system was built around the US dollar—not the pound sterling—as the key currency, with the dollar convertible to gold at a fixed price. Moreover, sterling’s reputation suffered significantly from the 30 percent devaluation of 1949 (although a number of other nations also devalued in line with Britain) and the subsequent exchange controls imposed within the sterling area.

Adding another US$101 trillion of stock market trading based on the World Federation of Exchanges statistics would give total annual financial trading, excluding bonds and other over-the-counter transactions, of roughly US$900 trillion. Using a turnover tax of 0.005 percent would yield US$45 billion, roughly equivalent to the US$50 billion of annual aid pledged to Africa. Global public goods are currently funded by equity (based on the Bretton Woods system that allocates weighted voting quotas to participating institutions) or by direct national grants. These mechanisms are not sustainable. We need a global tax to fund global public goods. But for a turnover tax to work, it is vital that all of the G-20 countries agree to impose a single, uniform rate of, say, 0.005 percent to avoid a race to the bottom from the onset.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Given the debate over low investment, low borrowing costs and concerns over growth, Keynes’s relatively lesser-known views on public investment could have a greater impact on the structure of an economy than his better-known arguments about government deficit spending. Keynes’s legacy Keynes passed away in 1946 after helping to construct the post-Second World War Bretton Woods System, which included the formation of the sister institutions of the IMF and the World Bank. His memorial service was held at Westminster Abbey, close to Parliament, where he had latterly become a member of the House of Lords. He was survived by his widow, Lydia Lopokova, who continued his work with the Arts Council of Britain and lived another thirty-six years.

Great Crash The collapse of the US stock market in October 1929. Also known as the Wall Street Crash. Great Depression The worldwide economic downturn that followed the Great Crash and lasted for most of the 1930s. Great Recession The recession that followed the global financial crisis in 2009. IMF (International Monetary Fund) A Bretton Woods institution focused on global economic stability. inclusive growth Economic growth that benefits everyone in a society. laissez-faire Literally ‘let (people) do’. Used to describe a policy of non-intervention by the state or government. Long Depression The global recession that occurred during the last quarter of the nineteenth century.

second-generation currency crisis The collapse of the European exchange rate mechanism (ERM) in 1992. STEM Science, technology, engineering and mathematics. third-generation financial and currency crisis The Asian financial crisis of 1997–98. Wall Street Crash See Great Crash. World Bank A Bretton Woods institution focused on alleviating poverty. WTO (World Trade Organization) An intergovernmental organization formed in 1995 that regulates international trade, which was preceded by the General Agreement on Tariffs and Trade (GATT), in force since 1947. Bibliography Please note that some of the links referenced throughout this work may no longer be active.


The Great Turning: From Empire to Earth Community by David C. Korten

Abraham Maslow, Albert Einstein, banks create money, big-box store, Bretton Woods, British Empire, business cycle, clean water, colonial rule, Community Supported Agriculture, death of newspapers, declining real wages, different worldview, digital divide, European colonialism, Francisco Pizarro, full employment, George Gilder, global supply chain, global village, God and Mammon, Hernando de Soto, Howard Zinn, informal economy, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, joint-stock company, land reform, market bubble, market fundamentalism, Monroe Doctrine, Naomi Klein, neoliberal agenda, new economy, peak oil, planetary scale, plutocrats, Project for a New American Century, Ronald Reagan, Rosa Parks, sexual politics, shared worldview, social intelligence, source of truth, South Sea Bubble, stem cell, structural adjustment programs, The Chicago School, trade route, Washington Consensus, wealth creators, World Values Survey

The plan, which is discussed in more detail in chapter 11, “Empire’s Victory,” centered on opening national economies to unfettered access 136 PART II: SORROWS OF EMPIRE by U.S. corporations and financial institutions, which at that point were unquestionably the most powerful on the planet. A set of three international institutions formed at U.S. initiative and known collectively as the Bretton Woods institutions — the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade (later replaced by the World Trade Organization) — would be key players in implementing the U.S. strategy. Easy Credit The Bretton Woods institutions played their roles well. As country after country emerged from colonialism, the World Bank encouraged them to spur the growth of their economies by accepting foreign loans to finance the purchase of goods and services from the industrialized nations.

We should cease to talk about vague… unreal objectives such as human rights, the raising of living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.”32 This was the real agenda, and the agencies of its implementation would be the Bretton Woods institutions: the World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT).33 In 1995, the World Trade Organization (WTO) replaced the less powerful GATT. The difference between the public and private visions was similar to the difference between the professed ideals of the U.S.

Declaration of 196 PART III: AMERIC A, THE UNFINISHED PROJECT Independence, which was a document intended to mobilize popular support, and the reality of the U.S. Constitution, which institutionalized the power and privilege of a ruling plutocracy. The United Nations had mostly a symbolic moral authority. The Bretton Woods institutions had the power to set rules and back them with economic sanctions. Competing Empires The very real threat of Soviet military power provided a democratic rationale for a buildup of military power by the United States, the provision of military assistance to trusted allies, and the positioning of military bases around the world.


pages: 497 words: 153,755

The Power of Gold: The History of an Obsession by Peter L. Bernstein

Alan Greenspan, Albert Einstein, Atahualpa, bread and circuses, Bretton Woods, British Empire, business cycle, California gold rush, central bank independence, double entry bookkeeping, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial innovation, floating exchange rates, Francisco Pizarro, German hyperinflation, Hernando de Soto, Isaac Newton, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, large denomination, liquidity trap, long peace, low interest rates, Money creation, money: store of value / unit of account / medium of exchange, old-boy network, Paul Samuelson, price stability, profit motive, proprietary trading, random walk, rising living standards, Ronald Reagan, seigniorage, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route

s inflation gathered steam during the course of 1968, the goldbased Bretton Woods system of fixed exchange rates loomed as .an intolerable restraint on politicians struggling to finance rising costs of government. The result was renewed interest in gold among the public as a safe haven destined to fulfill the proverb that Herbert Hoover had thrown at President-Elect Roosevelt in 1933: "We have gold because we cannot trust Governments." Yet governments were limited in what they could do if the value of their currencies in the foreign exchange markets were to remain rigidly fixed, as the Bretton Woods regime prescribed. Higher government spending tends to stimulate domestic demand, which often raises prices and sucks in imports, the very conditions that make people want to flee a currency and shift to countries with a more conservative style of managing their economic and financial affairs-or to gold.

The more that governments tried to find wriggle room around the constraints of the Bretton Woods system, the more the public and the speculators followed Hoover's dictum and turned to gold as the ultimate hedge against the irresponsibility of governments. Indeed, nobody was satisfied with the way conditions evolved. The creators of the postwar system had produced an artful design, but economic depression and deflation were the dominant influences on their work. The turbulent economic environment spawned by the overoptimism and aggressive governmental policies of the 1960s was still too novel for anyone to even suggest designing a replacement for Bretton Woods. Once the inflationary genie was out of the bottle, the system had no comfortable way to stuff it back in.

Instead of a world where each nation stubbornly pursued its own self-interest, the United Nations was created to manage a world of international cooperation and harmony; unlike the League of Nations, the plans for the United Nations featured the enthusiastic participation of the United States. The plans for a new international economic system were worked out by 730 delegates from 44 countries who gathered in the White Mountain resort of Bretton Woods, New Hampshire, in 1944. Most of the final design came from John Maynard Keynes, representing the British Treasury, and his counterpart, Harry White of the U.S. Treasury Department.* The scheme that Keynes and White concocted seemed like an obvious one for the times. Instead of an international economy where each nation was at the mercy of its stock of gold, the new system made the U.S. dollar the centerpiece of the structure.


pages: 452 words: 150,785

Business Adventures: Twelve Classic Tales From the World of Wall Street by John Brooks

banking crisis, belling the cat, Bretton Woods, business climate, Cornelius Vanderbilt, cuban missile crisis, Ford paid five dollars a day, Gunnar Myrdal, invention of the wheel, large denomination, lateral thinking, margin call, Marshall McLuhan, plutocrats, pneumatic tube, short selling, special drawing rights, Suez crisis 1956, tulip mania, upwardly mobile, very high income

The influence of market forces cannot be allowed to lower or raise the price more than a couple of cents below or above the pound’s par value; if such wild swings should occur unchecked, bankers and businessmen everywhere who traded with Britain would find themselves involuntarily engaged in a kind of roulette game, and would be inclined to stop trading with Britain. Accordingly, under international monetary rules agreed upon at Bretton Woods, New Hampshire, in 1944, and elaborated at various other places at later times, the pound in 1964, nominally valued at $2.80, was allowed to fluctuate only between $2.78 and $2.82, and the enforcer of this abridgment of the law of supply and demand was the Bank of England. On a day when things were going smoothly, the pound might be quoted on the exchange markets at, say, $2.7990, a rise of $.0015 from the previous day’s closing.

Just such a disaster followed the classic devaluation of all time, the departure of the pound from the old gold standard in 1931—an event that is still generally considered a major cause of the worldwide Depression of the thirties. The process works similarly in respect to the currencies of all the hundred-odd countries that are members of the International Monetary Fund, an organization that originated at Bretton Woods. For any country, a favorable balance of payments means an accumulation of dollars, either directly or indirectly, which are freely convertible into gold, in the country’s central bank; if the demand for its currency is great enough, the country may revalue it upward—the reverse of a devaluation—as both Germany and the Netherlands did in 1961.

On an official level, it got off to a halting start through the Financial Committee of the League of Nations, which was supposed to encourage joint action to prevent monetary catastrophes. The sterling collapse of 1931 and its grim sequel were ample proof of the committee’s failure. But better days were ahead. The 1944 international financial conference at Bretton Woods—out of which emerged not only the International Monetary Fund but also the whole structure of postwar monetary rules designed to help establish and maintain fixed exchange rates, as well as the World Bank, designed to ease the flow of money from rich countries to poor or war-devastated ones—stands as a milestone in economic coöperation comparable to the formation of the United Nations in political affairs.


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The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance by Eswar S. Prasad

access to a mobile phone, Adam Neumann (WeWork), Airbnb, algorithmic trading, altcoin, bank run, barriers to entry, Bear Stearns, Ben Bernanke: helicopter money, Bernie Madoff, Big Tech, bitcoin, Bitcoin Ponzi scheme, Bletchley Park, blockchain, Bretton Woods, business intelligence, buy and hold, capital controls, carbon footprint, cashless society, central bank independence, cloud computing, coronavirus, COVID-19, Credit Default Swap, cross-border payments, cryptocurrency, deglobalization, democratizing finance, disintermediation, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, eurozone crisis, fault tolerance, fiat currency, financial engineering, financial independence, financial innovation, financial intermediation, Flash crash, floating exchange rates, full employment, gamification, gig economy, Glass-Steagall Act, global reserve currency, index fund, inflation targeting, informal economy, information asymmetry, initial coin offering, Internet Archive, Jeff Bezos, Kenneth Rogoff, Kickstarter, light touch regulation, liquidity trap, litecoin, lockdown, loose coupling, low interest rates, Lyft, M-Pesa, machine readable, Mark Zuckerberg, Masayoshi Son, mobile money, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, offshore financial centre, open economy, opioid epidemic / opioid crisis, PalmPilot, passive investing, payday loans, peer-to-peer, peer-to-peer lending, Peter Thiel, Ponzi scheme, price anchoring, profit motive, QR code, quantitative easing, quantum cryptography, RAND corporation, random walk, Real Time Gross Settlement, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, risk/return, Robinhood: mobile stock trading app, robo advisor, Ross Ulbricht, Salesforce, Satoshi Nakamoto, seigniorage, Sheryl Sandberg, Silicon Valley, Silicon Valley startup, smart contracts, SoftBank, special drawing rights, the payments system, too big to fail, transaction costs, uber lyft, unbanked and underbanked, underbanked, Vision Fund, Vitalik Buterin, Wayback Machine, WeWork, wikimedia commons, Y Combinator, zero-sum game

Even major central banks have faced challenges in maintaining credibility for their money when it was unbacked. To address this problem, during the Bretton Woods era, which lasted from 1944 to 1971, the US dollar was backed by gold, while the exchange rates of other major currencies, and hence their values, were held fixed relative to the dollar. It soon became clear, though, that constraining the creation of money in this manner tied the hands of these central banks and prevented them from adjusting their money supplies in response to changing economic circumstances. This situation became untenable, and the Bretton Woods system broke down. Unbacked fiat currency is now the norm around the world, with major economies, for the most part, allowing their currencies to float freely in value against each other.

It is not obvious who would bear the costs and what incentive transacting parties would have to use a costlier medium of exchange that would put them at a competitive disadvantage. A Single Currency Taking the notion of an SHC a few steps further, one could consider the creation of a global currency. This is not a new idea. At the Bretton Woods conference in 1944, John Maynard Keynes proposed the bancor plan. The bancor, from the French for “bank gold,” was to be an international bank money to be issued by an International Clearing Union and meant only to settle international balances—that is, to be used as reserves. As conceived, the bancor would operate in parallel with domestic currencies and central banks.

Prasad (2014) makes the argument that a country’s institutional framework is key to its currency’s status as a safe-haven currency. New Safe Havens See Cœuré (2019). A Synthetic Global Digital Currency See Carney (2019). A Single Currency See Cooper (1984). Steil (2013) provides a nice overview of the debates and personalities involved in the creation of the Bretton Woods institutions. A Special Safe Haven SDRs as Reserves The IMF was established in 1944 but formally began operating in 1945. SDR allocations are reported in “Special Drawing Right (SDR),” International Monetary Fund, March 24, 2020, https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

activist fund / activist shareholder / activist investor, Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, bond market vigilante , bonus culture, Bretton Woods, business climate, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, Glass-Steagall Act, God and Mammon, Golden arches theory, Gordon Gekko, greed is good, Hyman Minsky, income inequality, industrial research laboratory, inflation targeting, information asymmetry, invention of the wheel, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, labour market flexibility, liberal capitalism, light touch regulation, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, mass immigration, means of production, Menlo Park, money market fund, moral hazard, moveable type in China, Myron Scholes, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Paul Samuelson, plutocrats, price stability, principal–agent problem, profit motive, proprietary trading, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, Veblen good, We are the 99%, Wolfgang Streeck, zero-sum game

It seldom happens that any man imprisons another but for debts which he suffered to be contracted in hope of advantage to himself, and for bargains in which he proportioned his profit to his own opinion of the hazard; and there is no reason why one should punish the other for a contract in which both concurred.153 Yet realpolitik stands in the way of balance in international discussions. At the Bretton Woods Conference in 1944, where the Allies laid the ground plan for the post-war international monetary order, Keynes tried to persuade US officials that there should be penalties for running persistent current account surpluses as well as for current account deficits. Since the US was then the world’s largest creditor country and likely to remain so for quite some time, it no longer saw a pro-debtor bias as being in the national interest.

The title of Gorton’s book is breathtakingly sweeping given how many people did see the crisis coming, but it provides a coherent explanation why so many mainstream economists, working with mathematical models, condemned themselves to a kind of myopia. 152 ‘The Debt We Shouldn’t Pay’, New York Review of Books, 9 May 2013. 153 Ibid. 154 The Battle of Bretton Woods, Princeton University Press, 2013. 155 ‘Banking on the State’, presentation delivered at the Federal Reserve Bank of Chicago twelfth annual international banking conference, 2009. 156 The Rise and Fall of the Great Powers, Unwin Hyman, 1988. 157 Reputedly from a speech delivered at Harvard University in 1998. 158 Memoirs of Sir Thomas More, Vol.

Wilson) 1, 2 Alberti, Leon Battista 1 Alessandri, Piergiorgio 1 Allen, Maurice 1 Ambassadors, The (Henry James) 1 Americans for Tax Reform 1 Anatomy of Change-Alley (Daniel Defoe) 1 Angell, Norman 1 Anglosphere 1, 2 Arab Spring 1 Aramaic 1 arbitrage 1 Argentina 1 Aristotle 1, 2, 3, 4, 5, 6, 7, 8, 9 art 1 Asian Tiger economies 1 Atlas Shrugged (Ayn Rand) 1 Austen, Jane 1 Austrian school 1 aviation 1 Babbitt (Sinclair Lewis) 1 Bair, Sheila 1 Balloon Dog (Orange) (sculpture) 1 Balzac 1 Bank for International Settlements 1, 2, 3, 4, 5, 6 Bank of England 1, 2, 3, 4, 5 bank runs 1 bankers 1, 2 bankruptcy laws 1, 2 Banks, Joseph 1 Banksy 1 Barbon, Nicholas 1, 2, 3 Bardi family 1 Barings 1 Baruch, Bernard 1, 2 base metal, transmutation into gold 1 Basel regulatory regime 1, 2, 3 Baudelaire, Charles 1 Baum, Frank 1 behavioural finance 1 Belgium 1, 2 Bell, Alexander Graham 1 Benjamin, Walter 1 Bernanke, Ben 1, 2, 3 Bi Sheng 1 Bible 1 bimetallism 1 Bismarck, Otto von 1 Black Monday (1987) 1 black swans 1 Blake William 1, 2, 3 Bloch, Marcel 1 Bloomsbury group 1, 2 Boccaccio 1 bond market 1 bonus culture 1 Bootle, Roger 1 Boston Tea Party 1 Boswell, James 1 Boulton, Matthew 1 Bowra, Maurice 1 Brandeis, Louis 1 Bretton Woods conference 1 British Land (property company) 1 British Rail pension fund 1 Brookhart, Smith 1, 2 Brunner, Karl 1 Bryan, William Jennings 1 Bubble Act (Britain 1720) 1 bubbles 1, 2, 3 Buchanan, James 1 Buffett, Warren 1, 2, 3 Buiter, Willem 1 Burdett, Francis 1 van Buren, Martin 1 Burke, Edmund 1, 2 Burns, Robert 1 Bush, George W. 1, 2 Butler, Samuel 1 Candide (Voltaire) 1 Carlyle, Thomas 1, 2, 3 Carnegie, Andrew 1 Carville, James 1 cash nexus 1 Cash Nexus, The (Niall Ferguson) 1 Cassel, Ernest 1, 2 Catholic Church 1, 2, 3 Cecchetti, Stephen 1 Centre for the Study of Capital Market Dysfunctionality, (London School of Economics) 1 central bankers 1 Cervantes 1 Chamberlain, Joseph 1 Chancellor, Edward 1 Chapter 11 bankruptcy 1 Charles I of England 1, 2 Charles II of England 1 Chaucer 1 Cheney, Dick 1 Chernow, Ron 1 Chicago school 1, 2 Child & Co. 1 China 1, 2 American dependence on 1, 2 industrialisation 1, 2, 3 manufacturing 1 paper currency 1 Christianity 1, 2, 3, 4, 5 Churchill, Winston 1 Cicero 1, 2 Citizens United case 1 Cleveland, Grover 1 Clyde, Lord (British judge) 1 Cobden, Richard 1, 2, 3, 4 Coggan, Philip 1 Cohen, Steven 1 Colbert, Jean-Baptiste 1, 2 Cold War 1 Columbus, Christopher 1 commodity futures 1 Companies Act (Britain 1862) 1 Condition of the Working Class in England (Engels) 1 Confucianism 1, 2, 3 conquistadores 1 Constitution of Liberty, The (Friedrich Hayek) 1 Coolidge, Calvin 1, 2, 3 Cooper, Robert 1 copyright 1 Cort, Cornelis 1 Cosimo the Elder 1 crash of 1907 1 crash of 1929 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 creative destruction 1, 2 credit crunch (2007) 1, 2, 3 cum privilegio 1 Cyprus 1, 2 Dale, Richard 1, 2 Dante 1 Darwin, Erasmus 1 Das Kapital (Karl Marx) 1 Dassault, Marcel 1 Daunton, Martin 1 Davenant, Charles 1, 2, 3 Davies, Howard 1 debt 1 debt slavery 1 Decameron (Boccaccio) 1 Defoe, Daniel 1, 2, 3, 4, 5, 6, 7, 8 Dell, Michael 1 Deng Xiaoping 1, 2 derivatives 1 Deserted Village, The (Oliver Goldsmith) 1, 2, 3 Devil Take the Hindmost (Edward Chancellor) 1 Dickens, Charles 1, 2, 3, 4, 5, 6, 7, 8, 9 portentously named companies 1 Die Juden und das Wirtschaftsleben (Werner Sombart) 1 A Discourse of Trade (Nicholas Barbon) 1 Ding Gang 1 direct taxes 1, 2 Discorsi (Machiavelli) 1 diversification 1 Dodd–Frank Act (US 2010) 1, 2, 3 ‘dog and frisbee’ speech 1 dot.com bubble 1, 2, 3, 4 Drayton, Harley 1 Dumas, Charles 1, 2 Dürer, Albrecht 1 Duret, Théodore 1, 2 Dutch East India Company 1 Duttweiler, Gottlieb 1 Dye, Tony 1 East of Eden (film version) 1 Economic Consequences of the Peace (Keynes) 1, 2 Edison, Thomas 1, 2 efficient market hypothesis 1 electricity 1 Eliot, T.


pages: 362 words: 95,782

Stephen Fry in America by Stephen Fry

"Hurricane Katrina" Superdome, Bretton Woods, Buckminster Fuller, call centre, Charles Lindbergh, Columbine, Donald Trump, illegal immigration, intermodal, jimmy wales, Jony Ive, junk bonds, Kickstarter, Mark Zuckerberg, Menlo Park, Neil Armstrong, Richard Feynman, Ronald Reagan, Rosa Parks, Saturday Night Live, Silicon Valley, Stephen Fry, Steve Jobs, Upton Sinclair, urban sprawl, Yogi Berra

Ready to be put on in order to be taken off again next time. Bretton Woods New Hampshire is more than just a political Petri dish, however; it is also home to some of the most beautiful scenery in America. The White Mountains are a craggy range that form part of the great Appalachian chain that sweeps down from Canada to Alabama, reaching their peak at Mount Washington, the highest point in America east of the Mississippi, at whose foothills sprawls the enormous Mount Washington Hotel at Bretton Woods. Damn–politics again. I never studied economics at school and for some reason I had always thought that the ‘Bretton Woods Agreement’ was, like the Hoare–Laval pact, the product of two people, one called Bretton and one called Woods.

I never studied economics at school and for some reason I had always thought that the ‘Bretton Woods Agreement’ was, like the Hoare–Laval pact, the product of two people, one called Bretton and one called Woods. No, the system that gave the world the International Monetary Fund, the World Bank and stable exchange rates based on a decided value for gold was the result of a conference in 1944 here in Bretton Woods, attended by all the allied and non-aligned nations who knew that the post-war world would have to be reconstructed and developed within permanent and powerful institutions. The economic structure of the world since, for good and ill, has largely flowed from that momentous meeting–if structures can be said to flow.


pages: 534 words: 15,752

The Sushi Economy: Globalization and the Making of a Modern Delicacy by Sasha Issenberg

air freight, Akira Okazaki, anti-communist, barriers to entry, Boeing 747, Bretton Woods, call centre, company town, creative destruction, Deng Xiaoping, Dutch auction, flag carrier, global supply chain, Golden arches theory, haute cuisine, means of production, Nixon shock, Nixon triggered the end of the Bretton Woods system, Saturday Night Live, Silicon Valley, special economic zone, standardized shipping container, telemarketer, trade route, urban renewal

In the 1950s, the Japanese focused on textiles, shipbuilding, and steel; in the following decade, it was more sophisticated products, such as electronics, automobiles, and manmade fibers. During the 1960s, the two countries’ economic fortunes flipped. In 1968, postwar American expansion came to an end, and two years later, the Japanese economy turned a corner: The country was in trade surplus. Since 1950, the yen had traded at 360 to the dollar under the Bretton Woods system of fixed currencies. By 1971, a trade imbalance of nearly $6 billion between the two countries made the exchange rate troubling to Washington: The strong yen meant American products would be yet more expensive to export, while the Japanese products increasingly popular with American consumers would only get cheaper.

By 1971, a trade imbalance of nearly $6 billion between the two countries made the exchange rate troubling to Washington: The strong yen meant American products would be yet more expensive to export, while the Japanese products increasingly popular with American consumers would only get cheaper. Nixon responded by devaluing the dollar; under an agreement signed in December 1971, it would trade at 308 yen. In Washington, this move was part of a package of moves to dismantle the postwar global-finance system—the abolition of the gold standard, which led to the end of the Bretton Woods system—that came to be known as “the Nixon Shock.” At Tsukiji, it meant one thing: Overnight, the cost of importing bluefin tuna into Japan fell by 15 percent. Allowed to float freely, Japan’s currency set off on a generation-long upward trajectory against the United States, eventually trading for fewer than 100 yen to the dollar.

Chapter Three “Seabrook, Hyannis, Gloucester”: Benfey. 34 “first commercial 34 Heppenheimer. “airport was transpacific opened flight”: in Anchorage”: 34 Sampson. “chosen instrument of the state”: Sampson. 35 “Boeing rolled out”: New house. 35 “designed with freight in mind”: Winchester. 36 “Nixon was in the Oval Office”: Schlosstein. “end of the Bretton Woods system”: 38 Frieden. “cost of importing bluefin”: Whynott. 38 “average daily high price”: historical price data from Helga Josupeit and Camillo C atarci , The World Tuna Industry: An 37 39 Analysis of Imports, Prices, and of Their Combined Impact on Tuna Catches, FAO March 2004. “JAL’s growth”: “JAL Moves Up the 39 International League Table,” by Charles Smith, Financial Times, January 10, 1984.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, Bonfire of the Vanities, bonus culture, book value, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, Cornelius Vanderbilt, corporate governance, Credit Default Swap, cross-subsidies, currency risk, dematerialisation, disinformation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jim Simons, John Meriwether, junk bonds, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, M-Pesa, market design, Mary Meeker, megaproject, Michael Milken, millennium bug, mittelstand, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, Paul Volcker talking about ATMs, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, reality distortion field, regulatory arbitrage, Renaissance Technologies, rent control, risk free rate, risk tolerance, road to serfdom, Robert Shiller, Ronald Reagan, Schrödinger's Cat, seminal paper, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, vertical integration, Washington Consensus, We are the 99%, Yom Kippur War

The rise of the trading culture has no single explanation but is the product of a series of developments, interrelated in origin and cumulative in impact. The globalisation of financial markets was part of the story, and so was the breakdown of the global financial architecture devised by the Allied Powers in 1944 in a conference at Bretton Woods (a beautiful location in remote New Hampshire intended to be difficult to access from New York or Washington). The creation of new markets in derivative securities, and the development of the mathematics of financial markets needed to analyse them, was another factor. Regulation and deregulation played a large, but partly accidental, role: few of the consequences of regulatory policy changes were intended.

The process of financialisation had its own internal dynamic. The USA’s abandonment of the gold standard in 1971 ushered in a new era of flexible exchange rates, which fluctuated far more than most economists had anticipated. There had always been speculative activity in foreign exchange markets. The post-war system of fixed rates established at Bretton Woods had come under more and more pressure, and currencies had suffered speculative attack: the Labour government elected in Britain in 1964 faced constant pressure on the fixed exchange rate of £1 = $2.80, prompting Prime Minister Harold Wilson’s famous denunciation of the ‘gnomes of Zurich’ who were supposedly responsible.

But the post-war settlement established regulated capitalism in most of the developed world, while the Soviet empire maintained financial stability, of a sort, in eastern Europe. The regulatory structures implemented in response to the Wall Street Crash and the global financial architecture created at the Bretton Woods conference served the world well for several decades. It was an age of prosperity and calm, although incipient inflation would become apparent as the era came to a close. While the USA was the dominant economic power, Germany’s recovery would earn the description of ‘economic miracle’, and in Japan a pace of economic growth never previously experienced anywhere would turn the country into a major industrial power.


pages: 91 words: 26,009

Capitalism: A Ghost Story by Arundhati Roy

activist fund / activist shareholder / activist investor, Bretton Woods, corporate governance, feminist movement, Frank Gehry, ghettoisation, Howard Zinn, informal economy, land bank, land reform, Mahatma Gandhi, means of production, megacity, microcredit, Nelson Mandela, neoliberal agenda, Occupy movement, RAND corporation, reserve currency, special economic zone, spectrum auction, stem cell, The Chicago School, Washington Consensus, WikiLeaks

Rockefeller bought the land on which the United Nations’ New York headquarters stands.36 All eleven of the World Bank’s presidents since 1946—men who have presented themselves as missionaries to the poor—have been members of the CFR. (The exception was George Woods. And he was a trustee of the Rockefeller Foundation and vice president of Chase Manhattan Bank.)37 At Bretton Woods, the World Bank and IMF decided that the US dollar should be the reserve currency of the world, and that in order to enhance the penetration of global capital it would be necessary to universalize and standardize business practices in an open marketplace.38 It is toward that end that they spend a large amount of money promoting Good Governance (as long as they control the strings), the concept of the Rule of Law (provided they have a say in making the laws), and hundreds of anticorruption programs (to streamline the system they have put in place).

Several senior officers of the McKinsey Global Institute (proposer of the Delhi Mumbai Industrial Corridor) are members of the CFR, the Trilateral Commission, and the Aspen Institute.40 The Ford Foundation (liberal foil to the more conservative Rockefeller Foundation, though the two work together constantly) was set up in 1936. Though it is often underplayed, the Ford Foundation has a very clear, well-defined ideology and works extremely closely with the US State Department. Its project of deepening democracy and “good governance” is very much part of the Bretton Woods scheme of standardizing business practice and promoting efficiency in the free market. After the Second World War, when communists replaced fascists as the US Government’s Enemy Number One, new kinds of institutions were needed to deal with the Cold War. Ford funded RAND (Research and Development Corporation), a military think tank that began with weapons research for the US defense services.


pages: 840 words: 202,245

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present by Jeff Madrick

Abraham Maslow, accounting loophole / creative accounting, Alan Greenspan, AOL-Time Warner, Asian financial crisis, bank run, Bear Stearns, book value, Bretton Woods, business cycle, capital controls, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, desegregation, disintermediation, diversified portfolio, Donald Trump, financial deregulation, fixed income, floating exchange rates, Frederick Winslow Taylor, full employment, George Akerlof, Glass-Steagall Act, Greenspan put, Hyman Minsky, income inequality, index fund, inflation targeting, inventory management, invisible hand, John Bogle, John Meriwether, junk bonds, Kitchen Debate, laissez-faire capitalism, locking in a profit, Long Term Capital Management, low interest rates, market bubble, Mary Meeker, Michael Milken, minimum wage unemployment, MITM: man-in-the-middle, Money creation, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, North Sea oil, Northern Rock, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, price stability, quantitative easing, Ralph Nader, rent control, road to serfdom, Robert Bork, Robert Shiller, Ronald Coase, Ronald Reagan, Ronald Reagan: Tear down this wall, scientific management, shareholder value, short selling, Silicon Valley, Simon Kuznets, tail risk, Tax Reform Act of 1986, technology bubble, Telecommunications Act of 1996, The Chicago School, The Great Moderation, too big to fail, union organizing, V2 rocket, value at risk, Vanguard fund, War on Poverty, Washington Consensus, Y2K, Yom Kippur War

The Nixon administration’s call for strong economic action appealed to him, and, as discussed, he and Murray Weidenbaum, who reported to him, eagerly developed their plan for the ninety-day freeze on wages and prices. He also became central to the Nixon plans to rewrite the rules of Bretton Woods. Volcker later wrote that he regretted that the Nixon administration did not have a better strategy to follow the ninety-day freeze. He also regretted dismantling the Bretton Woods system since he was more comfortable with a fixed-rate currency system than the floating rates that followed. Though a Democrat, he was not especially liberal, but he also did not trust the financial markets to sort out the complexities of currency values on their own, and did not believe, as Wriston vehemently did, that unregulated interest rates would result in the most efficient allocation of capital.

A high and stable U.S. dollar had been the cornerstone of international trade and enabled U.S. companies to expand foreign operations cheaply, as well as helping the U.S. government finance military bases around the world. But a deficit meant that a growing number of dollars were in foreign hands, and they were increasingly likely to cash them in for gold. What helped keep the dollar stable was that the U.S. Treasury agreed years earlier (in the Bretton Woods agreement signed by the victorious Allies in 1944) to buy back dollars from foreign central banks at a rate of $35 an ounce in gold in return. But America’s reserves of gold were now dwindling rapidly—only some $10 billion worth, one third of the amount of dollars in foreign hands. By late summer 1971, the adverse events were coalescing, in Nixon’s always anxious mind, into a frightening crisis.

It is one thing to freeze prices and wages when the economy is growing modestly, another when it has been stimulated to grow rapidly. Inflation rose quickly under Phase III of the controls program, and this put more pressure on exports and the dollar. The dollar had already been devalued further, and by October 1973 it was likely to be cut again. Finally, the fixed exchange rates of the Bretton Woods agreement were formally abandoned by the Nixon administration altogether. The United States would no longer redeem dollars for gold and the currency would float, as would most others, in an international financial market uncontrolled by government. This eventually led to further declines in the dollar, inflationary because it raised import prices.


pages: 708 words: 196,859

Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed

Alan Greenspan, Albert Einstein, anti-communist, bank run, banking crisis, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, centre right, credit crunch, currency manipulation / currency intervention, Etonian, Ford Model T, full employment, gentleman farmer, German hyperinflation, Glass-Steagall Act, index card, invisible hand, Lao Tzu, large denomination, Long Term Capital Management, low interest rates, margin call, market bubble, Mexican peso crisis / tequila crisis, mobile money, money market fund, moral hazard, new economy, open economy, plutocrats, price stability, purchasing power parity, pushing on a string, rolodex, scientific management, the market place

In contrast to the many international summits of the interwar period, which had been characterized by a corrosive atmosphere of mistrust, Bretton Woods was a collegial, almost jovial, affair. “The flow of alcohol is appalling,” wrote Keynes. With 750 delegates, and even more assistants, it was, according to Lydia Keynes, a “madhouse with most people . . . working more than humanly possible.” Committees met all day, broke for evening cocktails and rounds of dinner parties, reconvening thereafter till 3:00 a.m., only to resume at 9:30 the next morning. By the time of the Bretton Woods conference, Keynes’s wartime efforts had taken a severe toll on his health.

By 1944, with much of the design work done and with the two principal Western Allies in a position to present a united front, the United States felt ready to invite some forty-four countries to a conference to discuss reconstructing the postwar international monetary system. The United States chose to host the gathering at the Mount Washington Hotel at Bretton Woods in the White Mountains of New Hampshire. With its rural seclusion, mild summer weather, and cool high-country air, it was a perfect site for such a meeting. Built in 1902 to cater to rich Bostonians and New Yorkers escaping the summer heat of the East Coast, the hotel looked like a great Spanish castle, with white stucco walls, two large castellated turrets, and a red roof.

Nevertheless, she contributed her own part to the madhouse atmosphere by doing ballet exercises late at night in her room and keeping other guests awake, including Mrs. Morgenthau in the suite below. Much of the negotiating had been done prior to the conference between the Americans and the British. At Bretton Woods, the biggest controversy was over how much money each country would be eligible to borrow from what was now being called the International Monetary Fund. The Russians, who were there in strength though very few of them spoke English, demanded that their borrowing rights reflect not simply economic power but also military strength, and insisted on equality with the British; India wanted to be on a par with China; the Bolivians wanted parity with the Chileans and the Chileans with the Cubans.


pages: 540 words: 168,921

The Relentless Revolution: A History of Capitalism by Joyce Appleby

1919 Motor Transport Corps convoy, agricultural Revolution, Alan Greenspan, An Inconvenient Truth, anti-communist, Asian financial crisis, asset-backed security, Bartolomé de las Casas, Bear Stearns, Bernie Madoff, Bretton Woods, BRICs, British Empire, call centre, Charles Lindbergh, classic study, collateralized debt obligation, collective bargaining, Columbian Exchange, commoditize, Cornelius Vanderbilt, corporate governance, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, Doha Development Round, double entry bookkeeping, epigenetics, equal pay for equal work, European colonialism, facts on the ground, failed state, Firefox, fixed income, Ford Model T, Ford paid five dollars a day, Francisco Pizarro, Frederick Winslow Taylor, full employment, General Magic , Glass-Steagall Act, Gordon Gekko, Great Leap Forward, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, hiring and firing, Ida Tarbell, illegal immigration, informal economy, interchangeable parts, interest rate swap, invention of movable type, invention of the printing press, invention of the steam engine, invisible hand, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeff Bezos, John Bogle, joint-stock company, Joseph Schumpeter, junk bonds, knowledge economy, land bank, land reform, Livingstone, I presume, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, military-industrial complex, moral hazard, Nixon triggered the end of the Bretton Woods system, PalmPilot, Parag Khanna, pneumatic tube, Ponzi scheme, profit maximization, profit motive, race to the bottom, Ralph Nader, refrigerator car, Ronald Reagan, scientific management, Scramble for Africa, Silicon Valley, Silicon Valley startup, South China Sea, South Sea Bubble, special economic zone, spice trade, spinning jenny, strikebreaker, Suez canal 1869, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thorstein Veblen, total factor productivity, trade route, transatlantic slave trade, transcontinental railway, two and twenty, union organizing, Unsafe at Any Speed, Upton Sinclair, urban renewal, vertical integration, War on Poverty, working poor, Works Progress Administration, Yogi Berra, Yom Kippur War

When victory seemed certain in 1944, Keynes got his meeting on fiscal matters when 730 delegates with their staffs, representing forty-four countries, arrived on special trains at the newly refurbished Mount Washington Hotel at Bretton Woods, in New Hampshire’s White Mountains and hammered out an impressive agreement to end the nationalistic practices that had scuttled recovery from the Great Depression.2 Two catastrophic wars had crushed the spirit of vengeance. The pervasive influence of the United States carried the day. Hopes for an international trade organization faded, but at least countries were willing to buy into the General Agreement on Tariffs and Trade. GATT negotiations have been functioning ever since, now under the World Trade Organization. At Bretton Woods, the participants established the World Bank and the International Monetary Fund, the first to make the long-term investments in developments that private entrepreneurs balked at and the second to manage loans and monitor currencies.

At Bretton Woods, the participants established the World Bank and the International Monetary Fund, the first to make the long-term investments in developments that private entrepreneurs balked at and the second to manage loans and monitor currencies. The magnetic center of world trade moved permanently from London to New York. It actually had passed after World War I, just as London had taken over from Amsterdam in the eighteenth century and Amsterdam from Genoa in the seventeenth century. By 1958 the monetary system established at Bretton Woods worked so well that all major European currencies could be converted into dollars.3 Europeans did not experience the immediate prosperity that Americans enjoyed. War had plunged some people back into a primitive past. The winter of 1946–1947, the second since peace returned, was unusually severe, so severe that it ruined the potato crop.

Rather than raise taxes, President Lyndon Johnson preferred to have the Federal Reserve print money. This move exacerbated the ongoing weakening of the world’s major currency. The resulting glut made it difficult for the U.S. Treasury to continue to convert dollars into gold as it had promised to do in the Bretton Woods agreement. Johnson’s successor, Richard Nixon, pulled the dollar off the gold standard, in 1971. Now all currencies were free to float. In fact, agitated by worldwide inflation, they splashed around furiously for two years.45 Eroding even faster was American oil production. The United States had supplied almost 90 percent of the oil that the Allies used during World War II.


pages: 371 words: 98,534

Red Flags: Why Xi's China Is in Jeopardy by George Magnus

"World Economic Forum" Davos, 3D printing, 9 dash line, Admiral Zheng, AlphaGo, Asian financial crisis, autonomous vehicles, balance sheet recession, banking crisis, Bear Stearns, Bretton Woods, Brexit referendum, BRICs, British Empire, business process, capital controls, carbon footprint, Carmen Reinhart, cloud computing, colonial exploitation, corporate governance, crony capitalism, currency manipulation / currency intervention, currency peg, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, full employment, general purpose technology, Gini coefficient, global reserve currency, Great Leap Forward, high net worth, high-speed rail, hiring and firing, Hyman Minsky, income inequality, industrial robot, information security, Internet of things, invention of movable type, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land reform, Malacca Straits, means of production, megacity, megaproject, middle-income trap, Minsky moment, money market fund, moral hazard, non-tariff barriers, Northern Rock, offshore financial centre, old age dependency ratio, open economy, peer-to-peer lending, pension reform, price mechanism, purchasing power parity, regulatory arbitrage, rent-seeking, reserve currency, rising living standards, risk tolerance, Shenzhen special economic zone , smart cities, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, speech recognition, The Wealth of Nations by Adam Smith, total factor productivity, trade route, urban planning, vertical integration, Washington Consensus, women in the workforce, working-age population, zero-sum game

Surpluses were especially pronounced in the decade to 1952, after which smaller surpluses or balanced trade over several years continued until the 1970s. America’s agenda in the post-Second World War period comprised the reconstruction of the post-war economy, especially in Europe, trade liberalisation and the promotion of the Bretton Woods institutions. Throughout the period, capital flows, which were subject to controls for the most part, continued from the US. This suited both the US and the countries of war-ravaged Europe, which were desperate for US dollars to finance more trade. Over time, though, as Europe and Japan recovered their economic poise and embarked on successful export-led growth strategies, US trade deficits started to rise.

Concerns about shortages of US dollars gradually gave way to concerns about a glut. The build-up of US dollars in the rest of the world gave rise to doubts as to whether the US had the gold reserves ultimately to back the supply of US currency at the fixed price at the time of $35 an ounce. The eventual breakdown of the Bretton Woods system of fixed exchange rates and the subsequent liberalisation of capital flows around much of the world would then transform the US balance of payments position. Larger trade deficits became common from the 1980s onwards, and the trend was underpinned as emerging markets also took up their positions as export-led economies from the 1990s.

Xu Huang and Michael Harris Bond, Edward Elgar Publishing, 2012 Yasheng Huang, Capitalism with Chinese Characteristics: Entrepreneurship and the State, MIT Press, 2008 INDEX Unattributed entries, for example geography, refer to the book’s metatopic, China. 1st Five-Year Plan (i) 1st Party Congress (Chinese Communist Party) (i) 5G networks (i) 9/11 (i) 11th Central Committee, third plenum (i) 11th Party Congress (i) 13th Five-Year Plan advanced information and digital systems (i) aims of (i) BRI incorporated into (i) manufacturing and technology (i) pension schemes (i) transport (i) 14th Party Congress (i) 15th Party Congress (i) 18th Party Congress (i), (ii) third plenum (i), (ii), (iii), (iv) 19th Party Congress ‘central contradiction’ restated (i) supply-side reforms (i) Xi addresses (i), (ii), (iii) 21st-Century Maritime Silk Road see Belt and Road Initiative 2000 Olympic Games (i) 2008 Olympic Games (i), (ii) Abe, Shinzō (i) Acemoglu, Daron (i) Action Plan (AI) (i) Addis Ababa (i), (ii) Africa Admiral Zheng (i) BRI concept and (i) Chinese interest in (i) colonialist criticism (i) Japan and (i) loans to (i) metal ore from (i) Silk Road (i) Sub-Saharan Africa (i) ageing trap (i) see also population statistics birth rate (i) consequences of ageing (i) demographic dividends (i), (ii) family structures (i) healthcare (i) ‘iron rice bowl’ (i) mortality rates (i) non-communicable disease (i) old-age dependency ratios (i), (ii), (iii) pensions (i) retirement age (i) Agricultural Bank of China (i) Agricultural Development Bank of China (i) agriculture (i), (ii), (iii) Agriculture and Rural Affairs, Ministry of (i) AI (i), (ii), (iii) AI Innovation and Development Megaproject (i) AI Potential Index (i) Air China (i) Airbus (i), (ii) Aixtron SE (i) Alibaba (i), (ii), (iii), (iv) Alphabet (i) AlphaGo (i), (ii) Alsace-Lorraine (i) Amoy (i) Anbang Insurance (i), (ii), (iii) Angola (i) Angus Maddison project (i) Ant Financial (i), (ii) anti-corruption campaigns 2014 (i) in financial sector (i) Ming dynasty (i) Xi launches (i), (ii), (iii) Apple (i), (ii), (iii) Arab Spring (i) Arabian Sea (i) Arctic (i) Argentina (i), (ii), (iii) Armenia (i) Article IV report (IMF) (i) see also IMF ASEAN (Association of South East Asian Nations) (i), (ii) Asia China the dominant power (i), (ii) Global Innovation Index (i) Obama tours (i) Paul Krugman’s book (i) ‘Pivot to Asia’ (i) state enterprises and intervention (i) Asia-Pacific Economic Cooperation (i) Asian Development Bank (i), (ii) Asian Financial Crisis (1997–98) (i), (ii), (iii), (iv) Asian Infrastructure Investment Bank (i), (ii), (iii), (iv) Asian Tiger economies (i), (ii), (iii), (iv) Atatürk, Mustafa Kemal (i) Australia Chinese investment in (i) Chinese seapower and (i) free trade agreement with (i) immigration rates and WAP (i) innovation statistics (i) pushing back against China (i), (ii) Renminbi reserves (i) Austria (i), (ii) Austria-Hungary (i) automobiles (i), (ii) Babylonia (i) bad debt see debt bad loans (i), (ii) Baidu (i), (ii) Balkans (i) Baltic (i) Baluchistan (i) Bandung (i), (ii) Bangladesh heavy involvement with (i) Indian sphere of influence (i) low value manufacturing moves to (i), (ii) Padma Bridge project (i) Bank of China (i), (ii) Bank for International Settlements (i) banks (i) see also debt and finance; WMPs (wealth management products) assets growth, effects of (i) bad loans problem (i) bank failures (i) central bank created (i) major banks see individual entries non-performing loans (i), (ii), (iii), (iv), (v), (vi) regulators step in (i) repo market (i), (ii) shadow banks (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix) n18 smaller banks at risk (i) Baoneng Group (i) Baosteel (i) BBC (i) Bear Stearns (i) Beijing see also Peking 1993 (i) central and local government (i), (ii), (iii) Mao arrives (i) Olympics (i) pollution (i) price rises (i) US delegation (i) water supply (i) Beijing-Hangzhou Grand Canal (i) Belarus (i) Belgrade (i) Bell (i) Belt and Road Initiative (BRI) (i) debt problems in recipient nations (i) description, size and nature (i) economic drivers (i) financing and funding (i), (ii) first Forum (i) geopolitical drivers and disputes (i) Marshall Plan and (i), (ii) project investment (i), (ii) reordering of Indo-Pacific (i) Silk Road and (i), (ii), (iii) ways of looking at (i), (ii) benevolent dictators (i) Bering Strait (i) big data (i) birth rate (i) see also population statistics Bloomberg (i) Bo Xilai (i) Boeing (i), (ii) bond markets (i) Bosphorus Strait (i) Boxers (i), (ii) Brazil BRICS (i), (ii), (iii) middle income, example of (i), (ii), (iii) US steel imports (i) Bretton Woods (i) Brexit (i), (ii) BRICS (i) ‘Building Better Global BRICs’ (Goldman Sachs) (i) BRICS Bank (i), (ii) Britain (i) Boxer Rebellion (i) Brexit (i), (ii) Hong Kong (i) new claims (i) Renminbi reserves (i) Broadcom (i) Brunei Darussalam (i), (ii), (iii) Brzezinski, Zbigniew (i) Budapest (i) budget constraints (i), (ii) Bulgaria (i) Bund, the (Shanghai) (i) Bundesbank (i) bureaucracy (i), (ii), (iii), (iv) Bush, George W.


pages: 242 words: 71,943

Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity by Charles L. Marohn, Jr.

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, A Pattern Language, American Society of Civil Engineers: Report Card, anti-fragile, bank run, big-box store, Black Swan, bread and circuses, Bretton Woods, British Empire, business cycle, call centre, cognitive dissonance, complexity theory, corporate governance, Detroit bankruptcy, Donald Trump, en.wikipedia.org, facts on the ground, Ferguson, Missouri, gentrification, global reserve currency, high-speed rail, housing crisis, index fund, it is difficult to get a man to understand something, when his salary depends on his not understanding it, Jane Jacobs, Jeff Bezos, low interest rates, low skilled workers, mass immigration, megaproject, Modern Monetary Theory, mortgage debt, Network effects, new economy, New Urbanism, paradox of thrift, Paul Samuelson, pensions crisis, Ponzi scheme, quantitative easing, reserve currency, restrictive zoning, Savings and loan crisis, the built environment, The Death and Life of Great American Cities, trickle-down economics, Upton Sinclair, urban planning, urban renewal, walkable city, white flight, women in the workforce, yield curve, zero-sum game

If one country is in surplus, another must be in deficit. The friction that reality creates forces them to not get too far out of equilibrium. It can also force them into war. And when the entire world is at war, or is rebuilding from war, there is no surplus anywhere. The system breaks down. The Bretton Woods agreement, negotiated in July 1944, established a new international system of fixed exchange based on a gold-backed dollar. Keynes had argued against the gold-backing – some contend to free economies from the constraints of gold-backing, others as a cynical ploy to maintain the power of the British Empire’s sterling trading block – but the American negotiators, who literally had the gold, insisted on it.

In a manner similar to slash-and-burn agricultural practices, these newer cities gave the affluent a place to move when the signs of stagnation in their first-ring neighborhoods became overt. This locked in a pattern of growth, stagnation, and decline that would become one of the defining features of the current American development pattern. At the national level, the French were taking the United States at its word, demanding gold in exchange for dollars as promised under the Bretton Woods agreement. This was a smart move for the French as it was clear the United States was abusing its privilege as a reserve currency, creating more money than was supported by the store of bullion. In theory, declining gold reserves would prompt the government to raise interest rates, reduce the money supply, and slow growth in order to strengthen the currency.

Index A Accounting, for infrastructure, 70–71 Acre, value per, 135, 138–142 Alexander, Christopher, 8 Altruism, in community living, 6–7, 26 American Society of Civil Engineers (ASCE), 65–67 Amish society, 217 Anderson, Monte, 160–161 Antifragile (Taleb), 193 Anti-fragile systems, 4, 6 Appreciation, for maintenance staff, 180–183 Arnade, Chris, 214–215 ASCE (American Society of Civil Engineers), 65–67 Assessment process, 77 Automobile reliance: development based on, 27–30 and modern city development, 111–112 productivity and, 140 B Barbell investment approach, 148–150, 150f Better Block Foundation, 159 Bezos, Jeff, 102 Bias, confirmation, 69, 74, 183–186 Bicycles, 112 Big box stores: alternative uses of sites of, 169 productivity for, 136–137 Big project mentality, 184–186 The Big Sort (Bishop), 207–208 “Bipartisan Placemaking: Reaching Conservatives” panel, 210 Bishop, Bill, 207–208 The Black Swan (Taleb), 59, 120 Blighted areas, productivity of, 131–134, 140 Boise State University, 126 Boys & Girls Club of Santa Ana, x Brainerd, Minnesota, 16f, 18f development of infrastructure in, 30–31 experimental development pattern in, 125–126 founding and development of, 16–17 productivity at downtown vs. edge of town, 134–138 traditional vs. modern development in, 131–134 Bretton Woods agreement, 90 Brooklyn, New York, 213–214 Brown, Aaron, 211 Brown, Michael, 114 Budgeting, by cities, 50–57 Building code deficiencies, addressing, 194 Buildings, complex vs. complicated, 20–23 Bureaucracy, 172 Burnham, Daniel, 122 Bush, George W., 209 C California, government decision making in, 197–198 Capital investments, return on, 171–172 Carbon-reduction benefits, 74 Carlson, Curtis, 121 “Carlson's Law,” 121 Cash flow: and debt, 98, 187–192, 188f–190f over life cycle of development project, 52–57, 55f, 56f CBO (Congressional Budget Office), 78–80 Centralization, 198 Chaos, order vs., 121–122 Chicken problem, 195 Cities, 37–62 abandonment of, 109–110 accounting for infrastructure by, 70–71 budgeting and growth in, 50–57 contracting of, 154 Detroit, Michigan, 60–62 development of Pompeii, Italy, 5–10 economic stability of modern, 104–106 engineer's view of, 11 experimental development pattern in, 126–127 filling gaps in, 160–163 and illusion of wealth, 57–60 incremental growth in founding of, 15–20 as infinite game, 38–41 and infrastructure, 44–50 maintenance required for infrastructure in, 115 modern development of, 12 revenues and expenses, 41–44 traditional vs. modern development of, 1–3 Cities and the Wealth of a Nation (Jacobs), 101–102 City Council of Santa Ana, ix, x City engineer, 177t City halls, 43–44 City planner, 177t Class: and neighborhoods, 21–22 and re-urbanization, 116 Clinton, Bill, 209 Clinton, Hillary, 63 Cognitive Architecture (Sussman and Hollander), 8 Cognitive discounting, 65 Collaboration, between government officials and citizens, 195–197 Commers, Jon, 45 Common infrastructure, 130 Community living, 199–218 differing opinions in, 206–212 and extended family, 200–201 as infinite game, 39–40 meaning in, 212–218 in neighborhoods, 202–203 in Pompeii, Italy, 6–7 walking in, 203–206 Complex, adaptive systems: human habitats as, 3–4 and incremental growth, 168 incremental growth of, 15–16, 18–19 rational decision making with, 120–123 Complex buildings, 20–23 Complicated buildings, 20–23 Complicated systems, 11–14 Confirmation bias, 69, 74, 183–186 Conflicts, dealing with, 206–212 Congress for the New Urbanism, 210 Congressional Budget Office (CBO), 78–80 Constraints: and economic stability, 93–96 and gold standard, 90 growth as, 100 prudent, for investments, 164–168 removal of, in modern world, 59–60, 96 Construction costs, 136–137 Consumption, 215–216 Costa Rica, 126–127 The Crash Course (Martenson), 108 Critical systems, 182–183 Cross-generational civic collaboration, 187 D Dallas, Texas, 159 Darwin, Charles, 8 The Death and Life of Great American Cities (Jacobs), 8 Debt: and cash flow, 98 for federal government, 186 for government, 96–100 for local government, 113–114 for place-oriented government, 186–192 for projects with quality-of-life benefits, 187 for state government, 113–114 Debt to income ratio, 97 Decision making: rational, see Rational decision making subsidiarity in, 195–198 Default, on municipal debt, 191 Deneen, Patrick, 211 Density, as urban planning metric, 128–129 Depression economics, 86–89 Detroit, Michigan, 60–62 land values in, 24 renewal of urban, 117–119 Development projects: cash flow over life cycle of, 52–57, 53f, 55f, 56f decisions about failing, 115–120 Diamond, Jared, 58, 59, 84 Dig Deep, 211 Donjek, 45 Downtown, productivity of, 134–140, 139t, 143–144 Duany, Andres, 195 Duggan, Mike, 119 Duncanville, Texas, 160 E Economic development department, 178t Economics: and benefits of infrastructure spending, 72–73 in depressions, 86–89 Economic stability, 83–106 and auto-oriented development, 29–30 and constraints, 93–96 creating, 85–86 and depression economics, 86–89 and focus on growth, 100–102 following World War II, 89–91 and government debt, 96–100 growth vs. wealth, 102–104 of modern cities, 104–106 and post-war boom, 91–93 risk management strategies for, 83–85 Edges, 7–8 Edges of city: center vs., 28 city infrastructure necessary for, 115 productivity of, 134–138, 143–144 Efficiency, designing for, 174–176 Ehrenhalt, Alan, 116 Empire State Building (New York, New York), 129 Employment, in productive places, 133 England, 83 Expenses, and revenues, 41–44 Extended family, 200–201 F Failure, slow, 110–115 Failure to Act (ASCE report), 65–67 Family, extended, 200–201 Fannie Mae, 92 Farmers, risk management strategies of, 83–84 Federal Funds Rate, 97 Federal government: debt for, 186 impact of infrastructure on, 79 Federal Housing Administration (FHA), 89, 92 Federal Reserve, 99 Feedback, in local governments, 173–174 Ferguson, Missouri, 93, 114 FHA (Federal Housing Administration), 89 Financial status, local government's understanding of, 190–191 Finished states, neighborhoods built to, 21–23 “First ring” suburbs, 94 Form-based codes, 193–194 Fragile systems, 4 Franchises, productivity of, 133–134 Freddie Mac, 92 Future, predicting needs for, 19–20, 120–121 G Gaps, in cities, 160–163 Garcia, Anthony, 158 Gas tax, 75 Gawron, Stephen, 161 Gehl, Jan, 8 “General Theory of Walkability,” 206 Gentrification, of urban neighborhoods, 117 Goals, of individuals vs. communities, 40–41 Goland, Carol, 84 Gold reserves, 94 Gold standard, as basis for trade, 90 Government debt, 96–100 Government policies, prioritizing traffic, 29 Great Depression, 87–89, 191 The Great Inversion and the Future of the American City (Ehrenhalt), 116 Great Society, 93 Growth: economic stability and focus on, 100–102 in municipalities, 50–57 as objective of local governments, 176 wealth vs., 102–104 H Haidt, Jonathan, 208, 209, 215 Hardship, response to, 172–174 Hasidic Judaism, 213–214, 217 Hemingway, Ernest, 4 Henwood, Doug, 79 Hierarchies, in local government, 174–176 Highland neighborhood (Shreveport, Louisiana), 220 Highland Park (Shreveport, Louisiana), 220 High land values, 27–30 High Point, North Carolina, 161 Highway bypass corridor, 134–138 Hollander, Justin B., 8, 9 Homeless shelters, xi Homes, changing, 20 Hoover, Herbert, 87 Horizontal expansion, in California, 197 Housing: in California, 197–198 post-war changes in, 92 preference for single-family, 144–145 Housing authority, 178t How to Live in a World We Don't Understand (Taleb), 59 Human habitats, 1–14 as complex, adaptive systems, 3–4 in North America, 1–3 spooky wisdom in, 5–10 as systems that are complicated, 11–14 Hunter-gatherer existence, 58 Hurricane Katrina, 102–103 Hurricane Rita, 102–103 I Illusion of Wealth: and constant maintenance, 152 human response to, 57–60 Illusion of Wealth phase of development, 143 Improvement to Land (I/L) Ratio, 25, 25f, 117 Improvement value, 23–25, 25f Incentives, to fix problems, 113 Income taxes, 72 Incremental changes, implementing, 122–123, 156–157 Incremental growth, 15–35 and complex, adaptive systems, 168 complex vs. complicated buildings in, 20–23 constraints on, 164 and founding of cities, 15–20 good and bad development in, 34–35 and high land values, 27–30 and neighborhood renewal, 23–27 private and public investment in, 30–34 in traditional habitat development, 2 Infill projects, 160 Infrastructure, 63–81 accounting for, 70–71 and American Society of Civil Engineers, 65–67 calculating returns on investment for, 67–69 Congressional Budget Office on, 78–80 development of, 30–34 as investment, 41–42 in modern development, 32 and municipalities, 44–50 perception of need for more, 63–65 ratio of private to public investment in, 129–130 real return on investment, 74–78 secondary effects of, 72–74 Infrastructure Cult: development of, 65–67 paper returns calculated by, 69 Insolvency, 187–192 Interstate highway system, 92 Investment(s), 147–170 barbell investment approach, 148–150 capital, 171–172 conventional vs. strong towns thinking about, 185–186, 186t in filling gaps in cities, 160–163 impact of regulations on, 194 infrastructure as, 41–42 little bets, 150–160 low-risk investments with steady returns, 150–155 prudent constraints for, 164–168 public and private, 30–34, 31f, 32f returns on, see Return on investment in Suburban Retrofit, 168–169 Italy, walking in, 203–204 J Jacobs, Jane, 8, 101–102 Japan, 76 Jimmy's Pizza, 161–162 Job creation, 49, 72–73 Johnson, Neil, 12, 13 Junger, Sebastian, 216–217 K Keynes, John Maynard, 88 Keynesian economic policies, 88 Krugman, Paul, 63, 78 Kunstler, James, 110–111 L Lafayette, Louisiana, 101, 141–144, 151 Landau, Moshe, 213–214, 217 Land value: in declining suburbs, 113 and interstate highway project, 92 and neighborhood renewal, 23–25, 25f in neighborhoods with different types of properties, 165–167, 165f, 166f and suburban development, 27–30 Learning, from previous local investments, 187 Legacy programs, 173 Lifestyle choices, 202, 205–206 “Lifestyle enclaves,” 208 Little bets, 16–18, 150–160 Local economy: as basis for national economy, 101–102 national vs., 103 Local government: changes in, to maintain economic stability, 105–106 debt taken on by, 113–114 funded by state government, 95 impact of infrastructure on, 79–80 profit run by, 37–38, 147 relationship of state and, 198 Long declines, 110–115 “Long emergency,” 110–111 Long Recession of the 1870s, 77 Los Angeles, California, xi Lovable places, 10 Low-risk investments, with steady returns, 150–155 Lydon, Mike, 158 M Maintenance: ability to keep up with, 109 cash-flow debt to cover, 188–192, 188f–190f of development projects, 52–57 of infrastructure, 46–49 need for constant, 151–154 in place-oriented government, 180–183 required for single-family homes, 112 Maintenance department, 179t Manhattan, New York, 24 Martenson, Chris, 108 Meaning, life of, 212–218 Middle class, 92, 93, 144–145 Milan, Italy, 164 Mills Fleet Farm, 134–137 Minicozzi, Joseph, 138–140, 161 “Minnesota Miracle,” 95 Mixed-use neighborhoods, 163, 169 Modern city development: as high-risk investments, 149 as lead by pubic investment, 34–35 productive places in, 131–134 Modern Monetary Theory, 99 Mortgages, during Great Depression, 88–89 Mouzon, Steve, 10, 113 Muskegon, Michigan, 161 N National Association of Home Builders, 136 National economy, local vs., 103 Natural disasters, 102–103 Neighborhoods: abandonment of, 109–110 built to finished states, 21–23 changing in post-war era, 92–93 community living in, 202–203 decline of, 113 gentrification of urban, 117 mixed-use, 163, 169 renewal of, and incremental growth, 23–27 responses to improvements in, 158 structured around religions, 214 in transition sections of Detroit, 118 Neighbors, being involved with, 202–203 New Deal economics, 87–88 New Orleans, Louisiana, 102, 182 Nixon, Richard, 94 Noncritical systems, 182 O Oak Cliff neighborhood (Dallas, Texas), 159 Obama, Barack, 63 Obesity, among Pacific Islanders, 58–59 Options Real Estate, 160 Orange County, California, xi–xii Order, chaos vs., 121–122 The Original Green (Mouzon), 10, 113 Oroville dam (California), 182 Oswego, New York, 152 Oswego Renaissance Association, 152 P Pacific Islanders, 58–59, 183–185 Paper returns on investment, 67–69 Paradox of Avarice, 104 Paradox of Thrift, 88, 104 Pareidolia, 8–9, 9f Parks department, 178t Party analogy, 34–35 A Pattern Language (Alexander), 8 Pension funds, 56–57, 70, 98 Pequot Lakes, Minnesota, 44–46 Perception, of need for more infrastructure, 63–65 Personal preferences, 144–145 Peru, 84 Place-oriented government, 171–198 and confirmation bias, 183–186 designed for efficiency, 174–176 focus on broad wealth creation by, 176–180 maintenance as priority for, 180–183 and regulations, 192–194 response to hardship by, 172–174 subsidiarity in, 195–198 understanding of debt by, 186–192 Political differences, 207 Pompeii, Italy, 5–10 Post-war boom: and economic stability, 91–93 modern city development established in, 12 Power, subsidiarity principle and, 196–198 Prayer of Saint Francis, 218 Prioritization, of maintenance, 180–183 Private development, 40 Private investment: private to public investment ratio, 129–130 public and, 30–34, 31f, 32f Private sector (businesses): response to economic hardship in, 172–173 small, see Small businesses Problem solving, 13–14 Productive places, 125–146 downtown vs. edge of town, 134–138 in past, 125–127 and personal preferences, 144–145 productivity calculations for, 128–130 return on investment, 141–144 traditional vs. modern development in, 131–134 value per acre, 138–141 Productivity, calculations of, 128–130 Project teams, 179–180 Property taxes, 49 Property value, 23–25, 25f Public health, and walking neighborhoods, 205 Public investment: private and, 30–34, 31f, 32f private to public investment ratio, 129–130 returns required for, 147 Public safety department, 179t Q Quality-of-life benefits, 187 Quantitative Easing, 99 R Railroad companies, 77 Rational decision making, 107–123 about failing development systems, 115–120 about long declines, 110–115 within complex, adaptive system, 120–123 and lack of single solution, 107–110 Real return on investment, 74–78 Redevelopment, financial productivity after, 131–134, 139–140, 139t Redundant systems, 182 ReForm Shreveport, 219, 220 Regulations: from place-oriented government, 192–194 and subsidiarity principle, 195–198 Repealing regulations, 192–193 Republican Party, 209 Request for proposal (RFP), 50 Residents, learning concerns of, 156–157 Resources: assumption of abundance of, 12–14 wasted, in modern development, 19 Retreats, strategic, 108–109 Return on investment, 141–144 calculating, for infrastructure, 67–69 for capital projects, 171–172 in cities, 44 and debt taken on by local governments, 187 low-risk investments with steady, 150–155 paper, 67–69 real, 74–78 social, 78–79 Revenues, and expenses, 41–44 RFP (request for proposal), 50 The Righteous Mind (Haidt), 208 Risk management strategies, 83–85 Roaring Twenties, 87 Roberts, Jason, 159 Roosevelt, Franklin, 87, 88 Rotary International, 203 S St.


pages: 121 words: 34,193

The Hidden Wealth of Nations: The Scourge of Tax Havens by Gabriel Zucman, Teresa Lavender Fagan, Thomas Piketty

Berlin Wall, Bretton Woods, British Empire, Capital in the Twenty-First Century by Thomas Piketty, dematerialisation, Fall of the Berlin Wall, financial innovation, financial intermediation, high net worth, income inequality, means of production, new economy, offshore financial centre, proprietary trading, transfer pricing

In the 1970s the inflow of capital was such that it began to destabilize the Swiss economy. Although nonresidents for the most part owned foreign securities, they were also sometimes eager to invest in Switzerland. That had happened during World War II (when most of the international financial markets were closed), and the scenario was repeated at the time of the collapse of the Bretton Woods system (which put an end to fixed exchange rates for currencies). The problem was that there was so much hidden wealth that if too large a proportion was converted into Swiss francs, the local currency would appreciate dangerously and penalize the entire national economy. To avoid this scenario, in the 1970s the central bank on several occasions imposed negative nominal interest rates on deposits in francs held by nonresidents.

Index Africa, 31, 32–33, 53 Amazon, 104 Apple, 1, 104 arm’s-length pricing, 103 Austria, 69, 70 automatic exchange of data: EU savings tax directive and, 68, 69; FATCA and, 64–65, 66, 73–74; first international treaty for, 59; on inheritances in France, 57–59; progress toward a global system, 64–65; to end tax fraud, 5 Bahamas, 23, 35, 71, 85 Bank for International Settlements (BIS), 39 bank note wealth, 43 Bergier, Jean-François, 13 Bergier commission, 13, 15, 16, 20 Bermuda, 4, 103, 104, 105, 107, 109, 111 Birkenfeld, Bradley, 68 Bretton Woods, 23 British Virgin Islands, 1, 26, 28, 31, 33, 43, 45, 73, 77 BSI, 67 Cahuzac, Jérôme, 62 Caillaux, Joseph, 57, 58 Canada, 21, 53, 85 Capital in the Twenty-First Century (Piketty), 98 Cayman Islands: dominance in hedge funds, 27; financial wealth held in tax havens, 35; role in routine tax fraud, 10–11; role in world’s asset/liability imbalance, 38; trust registration in, 28 Clearstream, 4, 94–95 Common Consolidated Corporate Tax Base (CCCTB), 112 Congress of Vienna (1815), 9 Convention IV, 21 cost of offshore tax evasion.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

With the end of the war, a lot of new investments that use these technologies were made, first for post-war reconstruction and then for the meeting of consumer demands pent up during wartime austerity. There were also some important changes in the international economic system that facilitated economic development during the Golden Age. The 1944 meeting of the Allies in the Second World War in the New Hampshire resort of Bretton Woods established two key institutions of the post-war international financial system, which are thus dubbed the Bretton Woods Institutions (BWIs) – the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), more commonly known as the World Bank.23 The IMF was established to provide short-term funding to countries in balance of payments crises (balance of payments is the statement of a country’s position in economic transactions with the rest of the world – see Chapter 12 for full details).

It has not been bettered since the 1980s, when state intervention was considerably reduced, as I shall show shortly. The Golden Age shows that capitalism’s potential can be maximized when it is properly regulated and stimulated by appropriate government actions. 1973–9: The Interregnum The Golden Age started to unravel with the suspension of US dollar–gold convertibility in 1971. In the Bretton Woods system, the old Gold Standard was abandoned on the recognition that it made macroeconomic management too rigid, as seen during the Great Depression. But the system was still ultimately anchored in gold, because the US dollar, which had fixed exchange rates with all the other major currencies, was freely convertible to gold (at $35 per ounce).

When the US interest rates doubled, so did international interest rates, and this led to a widespread default on foreign debts by developing nations, starting with the default of Mexico in 1982. This is known as the Third World Debt Crisis, thus known because the developing world was then called the Third World, after the First World (the advanced capitalist world) and the Second World (the socialist world). Facing economic crises, developing countries had to resort to the Bretton Woods Institutions (the IMF and the World Bank, just to remind you). The BWIs made it a condition that borrowing countries implement the structural adjustment programme (SAP), which required shrinking the role of the government in the economy by cutting its budget, privatizing SOEs and reducing regulations, especially on international trade.


pages: 519 words: 148,131

An Empire of Wealth: Rise of American Economy Power 1607-2000 by John Steele Gordon

accounting loophole / creative accounting, Alan Greenspan, bank run, banking crisis, Bretton Woods, British Empire, business cycle, buttonwood tree, California gold rush, Charles Babbage, clean water, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, cotton gin, cuban missile crisis, disintermediation, double entry bookkeeping, failed state, Fairchild Semiconductor, financial independence, flying shuttle, Ford Model T, Frederick Winslow Taylor, full employment, Glass-Steagall Act, global village, Ida Tarbell, imperial preference, industrial research laboratory, informal economy, interchangeable parts, invisible hand, Isaac Newton, it's over 9,000, Jacquard loom, James Hargreaves, James Watt: steam engine, joint-stock company, joint-stock limited liability company, junk bonds, lone genius, Louis Pasteur, low interest rates, margin call, Marshall McLuhan, means of production, megaproject, Menlo Park, Mikhail Gorbachev, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, new economy, New Urbanism, postindustrial economy, price mechanism, Ralph Waldo Emerson, RAND corporation, rent control, rent-seeking, reserve currency, rolodex, Ronald Reagan, Savings and loan crisis, spinning jenny, Suez canal 1869, The Wealth of Nations by Adam Smith, three-masted sailing ship, trade route, transaction costs, transcontinental railway, undersea cable, vertical integration, Yom Kippur War

Its productive capacity had been hugely increased and its population enriched. Its economy, by far the largest on earth before the war, now produced fully 50 percent of the world’s gross product. Eighty percent of the world’s monetary gold belonged to the United States; most of the rest was stored in the vaults beneath the New York Federal Reserve bank. Under the Bretton Woods Agreement of 1944, the dollar, convertible into gold by central banks, would be the world’s primary reserve currency and the basis of world trade in the future. The American army was the best equipped in the world and second in size only to that of the Soviet Union; the navy and air force were larger than the navies and air forces of the rest of the world combined.

The trade balance, which had been strongly in favor of the United States in the early years after the Second World War, had inevitably shrunk as foreign economies recovered. In 1959 it had shown a small deficit. But it began to deteriorate rapidly in the late 1960s, and in 1971 it fell into deficit once more and continued to deteriorate. Because the dollar was the currency of world trade and, under the Bretton Woods Agreement, was convertible into gold at a fixed price of $35 to the ounce, dollars accumulated in foreign central banks and financial institutions. They often circulated abroad without ever returning to the United States. As American inflation increased, these “eurodollar” holdings began to seem precarious, and gold began to flow abroad in quantity for the first time since the early 1930s.

As American inflation increased, these “eurodollar” holdings began to seem precarious, and gold began to flow abroad in quantity for the first time since the early 1930s. The international currency market, a growing force in the international economy, began betting against the dollar. On August 15, 1971, President Nixon acted decisively, if not necessarily wisely, to solve the increasing economic problems that confronted the country. First, he renounced the Bretton Woods Agreement and severed the link between the dollar and gold. The dollar would now float in value, and the gold standard, after 150 years, was dead. Second, he froze all wages, rents, and prices for a period of ninety days, to be followed by strict wage and price controls. Wage and price controls have a long history, almost all of it bad.


pages: 586 words: 159,901

Wall Street: How It Works And for Whom by Doug Henwood

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, bond market vigilante , book value, borderless world, Bretton Woods, British Empire, business cycle, buy the rumour, sell the news, capital asset pricing model, capital controls, Carl Icahn, central bank independence, computerized trading, corporate governance, corporate raider, correlation coefficient, correlation does not imply causation, credit crunch, currency manipulation / currency intervention, currency risk, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, dematerialisation, disinformation, diversification, diversified portfolio, Donald Trump, equity premium, Eugene Fama: efficient market hypothesis, experimental subject, facts on the ground, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, George Gilder, Glass-Steagall Act, hiring and firing, Hyman Minsky, implied volatility, index arbitrage, index fund, information asymmetry, interest rate swap, Internet Archive, invisible hand, Irwin Jacobs, Isaac Newton, joint-stock company, Joseph Schumpeter, junk bonds, kremlinology, labor-force participation, late capitalism, law of one price, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, London Interbank Offered Rate, long and variable lags, Louis Bachelier, low interest rates, market bubble, Mexican peso crisis / tequila crisis, Michael Milken, microcredit, minimum wage unemployment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, oil shock, Paul Samuelson, payday loans, pension reform, planned obsolescence, plutocrats, Post-Keynesian economics, price mechanism, price stability, prisoner's dilemma, profit maximization, proprietary trading, publication bias, Ralph Nader, random walk, reserve currency, Richard Thaler, risk tolerance, Robert Gordon, Robert Shiller, Savings and loan crisis, selection bias, shareholder value, short selling, Slavoj Žižek, South Sea Bubble, stock buybacks, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Nature of the Firm, The Predators' Ball, The Wealth of Nations by Adam Smith, transaction costs, transcontinental railway, women in the workforce, yield curve, zero-coupon bond

That system collapsed in the 1930s, and there was no stable global monetary order until after World War II, when the Bretton Woods fixed exchange rate system was established. Unlike the classic gold standard, in which all countries expressed their national currency in terms of gold, the Bretton Woods system used the dollar as the central value, and the dollar in turn was fixed to gold. Countries could hold dollar reserves in their central bank for the settlement of international trade and finance on the knowledge that they could cash those dollars in for a fixed amount of gold. The dollar, as was said, was as good as gold. The designers of the Bretton Woods system feared floating rate systems were unstable, undermining trade through uncertainty and market over-reactions.

Viewed in this light, it appears somewhat anomalous that the United States has been the largest importer WALL STREET of capital for much of the 1980s; there is little evidence that the US rate of return on real assets was higher in the 1980s than that in other countries.'^ Turner surmises that this inflow was largely a function of the depth of U.S. capital markets. Well-developed markets, it seems, can pervert the allocation of capital as well as lubricate it. The increasing sophistication of the capital markets is a reaction to the post-Bretton Woods instability of the global system. Turner concludes that "the financial diversification and intermediation function of international capital markets has come to eclipse the classical allocation of capital function." Joan Robinson was right when she said that the financial markets are mainly "convenience for rentiers."

Treasury, 24, 25 international correlations, 107 junk bonds, 28 collapse of, 158 Jensen's celebration of, 271 and tree death, 274 and labor markets, 127, 128 love of sluggishness, 101, 122-123, 128, 232 municipal, 26-27 types of bonds, 22 bondholders, conflicts with stockholders, 248 Borio, Claudio, 137 Bradley Foundation, 185 Bradsher, Keith, 134 Brainard, William, 144 Brazil nuts, 313 Bretton Woods system, 43-44 Broderbund, 131 brokerage-house analysts, 99-101 brokers, salaries, 78 Bronfman family, 271 Brooks, John, 101 Brown, Norman O., 227-228 bubbles, 178 Buffett, Warren, 271 bulge bracket, 82 Bundesbank, 307 Bush, George, 90 Bush, Neil, 89 Business Conditions Digest, 136 business cycles changes in, 94 "disappearance" of, 136 duration, 54 financial markets and, 121-123 1990-92 vs. eariier cycles, 158-161 stock markets and, 148 buybacks, stock, 72, 74 California Public Employees Retirement System (Calpers), 289-290, 293 calls, 30 campaign contributions, 98 Cantor, Richard, 152, 153 capacity utilization, 124 capital cost of, 298 difficulty measuring, 140 as factor of production, 237 fictitious, 13 as imaginary (Ross), 237 vs. revenue (Marx), 245 capital asset pricing model, 162-163 flaws in, 167-169 political aspects, 185 capital controls, 315 IMF on, 107 capital expenditures, 72 explaining, 148 and financial structure, 153-155 internal finance, 3 and q ratio, 145-148 see also q ratio capital flows.


pages: 241 words: 81,805

The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis by Tim Lee, Jamie Lee, Kevin Coldiron

active measures, Alan Greenspan, Asian financial crisis, asset-backed security, backtesting, bank run, Bear Stearns, Bernie Madoff, Bretton Woods, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, currency risk, debt deflation, disinformation, distributed ledger, diversification, financial engineering, financial intermediation, Flash crash, global reserve currency, implied volatility, income inequality, inflation targeting, junk bonds, labor-force participation, Long Term Capital Management, low interest rates, Lyft, margin call, market bubble, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, negative equity, Network effects, Ponzi scheme, proprietary trading, public intellectual, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, rising living standards, risk free rate, risk/return, sharing economy, short selling, short squeeze, sovereign wealth fund, stock buybacks, tail risk, TikTok, Uber and Lyft, uber lyft, yield curve

The Federal Reserve System did not end bank runs; that required more political decisions, specifically the establishment of deposit insurance and effective bank supervision in 1933. The international system continued to adjust as well, first with failed attempts to return to gold, followed by the managed dollar-centric system of Bretton Woods, and followed eventually by the mostly open system of global capital flows we have today. Change in monetary arrangements, therefore, is not unprecedented, and the political nature of the process means that the resulting system ends up being a somewhat lagged reflection of society’s key economic concerns.

These clues include the behavior of financial market volatility and the presence or otherwise of inflationary pressures in the economy. Forewarnings of inflation may be apparent in central bank or other government responses to crisis. Ultimately, the verdict of history will likely be that the post–Bretton Woods experiment with fiat money failed. But technologies that have emerged could potentially provide the basis for future, workable monetary systems. Whatever it is that eventually arises from the ashes of the present monetary system, we have to hope it will be more effective in restraining the rise of carry.

Index Page numbers followed by f indicate figures; t indicate tables. anti-carry crashes, 170 anti-carry regimes, 165, 171–172, 210, 212 carry regime similarities to, 173–175 monetary perspective on, 168–170 signs of end of, 215 AQR Capital, 79 arbitrage, covered interest parity principle and, 21 Asian financial crisis, 23–25 global financial crisis compared with, 30 asset prices business cycle and, 126 carry regime and, 204 distortion of, 7 inflation of, 113–114 options and, 147 recessions and declines in, 6 assets under management (AUM), 74 by sovereign wealth funds, 75 Australia capital inflows, 40, 40f, 42 credit and net claims, 40, 40f credit growth, 40f, 41 interest rate spreads and, 41–42, 60–61 Australian dollar, 30 capital flows into, 62 returns on, 97, 97f bailouts, 197–199, 203 Bain and Company, 80 balance of payments, Turkey, 45 Bank for International Settlements (BIS), 15, 17, 22 carry portfolio position comparison with, 63, 63t on corporate use of carry strategies, 80 currency liquidity data, 62 net claims data, 41 Bank of Japan (BOJ), 26, 216 quantitative easing policies by, 31 Bank of Korea, 197 bank runs, 218 banking system, money creation by, 109 bank-run dynamics, 65 Bhattacharya, Utpal, 142 bid-ask spread, 158–159, 167 big breaks, 184 BIS. See Bank for International Settlements BOJ. See Bank of Japan Brazil, 19, 39, 55n6, 65–66 current account, 31 Brazilian real, 11, 30, 66 Bretton Woods system, 218 Brownian noise, 97, 97f Bruno, Valentina, 80–81 bubble-boom economies, carry bubble conditions and, 39 business cycle carry and global, 2 carry bubbles and, 127–134 carry crashes and, 127–134 carry influence on, 57, 69 carry regime and, 125–127 money supply and, 125–126 Caballero, Ricardo, 59 call options, 146–147 Cambridge Associates, 79 capital asset pricing model, 99 Capital in the Twenty-First Century (Piketty), 219 221 222 capital inflows, Australia, 40, 40f, 42 capitalism, 195, 219, 220 carry central banks’ role in, 5–8 compensation incentives for, 70–72 corporate use of, 80–83 as cumulative advantage, 181–184 defining, 2 as flow from weak to strong, 179–181 global business cycle and, 2 hedge funds as agents of, 72–73 insidious structural aspects of, 200–205 leverage importance to, 70–72 lost opportunity to lean against, 220 as luck compounded, 184–186 monetary policy and, 3 as naturally occurring phenomenon, 88 necessary amounts of, 174 omnipresence of, 190–191 as power, 191–192 as rent-seeking, 175–177 rise of, 1 volatility, 86 carry bubbles, 6, 7 business cycle and, 127–134 credit bubbles and, 37–38, 41 credit demand and, 114 disguised, 134–140 economic indicators distorted by, 44–45 economic problems obscured by, 44 inflation and, 39 monetary conditions and, 39 nonmonetary assets and, 169 Ponzi schemes and, 140–143 as risk mispricing, 142 Turkey, 42–46 carry crashes, 6 Asian financial crisis and, 23–25 bailouts limiting losses from, 203 business cycle and, 127–134 carry trade returns and, 36 deflation and, 7, 170 deflation shock and, 121–124 in emerging economies, 201 incentive changes and, 84 inevitability of, 34–35, 108 leverage and, 96–98 liquidity and, 128 money supply and, 122–123 INDEX of 1998, 25–26 Turkey, 42–46 Turkish lira, of 2018, 45 of 2008, 30, 31 Volmageddon, 98, 161 yen melt-up and, 23–24 carry portfolios backtesting, 65–67 BIS data comparison with, 63, 63t constructing, 49–50 lessons from historical study of, 64–65 losses in, 51–56, 54f carry regime, 2 anti-carry regime similarity to, 173–175 asset prices and, 204 business cycle and, 125–127 central bank policies and, 86–89, 107, 208, 210 central bank power and, 123 central banks and collapses of, 215–216 central banks weakened by, 7 debt levels and, 168 defining, 107–108 deflation and, 113–121, 203, 210, 213 development of, 127, 134 economic growth and, 209 economic imbalances from, 201 financial market structure and, 7 fragility of, 201 monetary equilibrium and, 169 monetary growth and, 169 monetary perspective on, 168–170 money in, 108–113 nonmonetary assets and, 112, 114, 122 resource allocation and, 114–115 risk mispricing and, 134–140 S&P 500 importance to, 86–87, 87f theoretical alternative to, 166–168 vanishing point and, 116, 195, 209–210 volatility signs of ending, 214–218 carry trade.


Where Does Money Come From?: A Guide to the UK Monetary & Banking System by Josh Ryan-Collins, Tony Greenham, Richard Werner, Andrew Jackson

bank run, banking crisis, banks create money, Basel III, Big bang: deregulation of the City of London, book value, Bretton Woods, business cycle, capital controls, cashless society, central bank independence, credit crunch, currency risk, double entry bookkeeping, en.wikipedia.org, eurozone crisis, fiat currency, financial innovation, fixed income, floating exchange rates, Fractional reserve banking, full employment, global reserve currency, Goodhart's law, Hyman Minsky, inflation targeting, interest rate derivative, interest rate swap, Joseph Schumpeter, low skilled workers, market clearing, market design, market friction, Modern Monetary Theory, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Northern Rock, offshore financial centre, Post-Keynesian economics, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, Real Time Gross Settlement, reserve currency, Ronald Reagan, seigniorage, special drawing rights, the payments system, trade route, transaction costs

The pound floated freely once again.94 Other countries had either already left the gold standard or would do so soon after.95 The rigid adherence to the standard, the consequent inability for exchange rates to adjust to reflect changes in international competitiveness and the high interest rates required to defend currencies from speculative attacks have been blamed for deepening the Great Depression, with some studies finding a correlation between the length of countries’ adherence to the standard and the severity of the depression in that country.96, 97 It has also been suggested that inter-war instability was in part a result of the shift of power from the pre-war dominance of sterling to the new global reserve currency – the US dollar – and hence the de facto governance of the global financial system passing to the US Federal Reserve, which was unaccustomed to and ill-prepared for such an undertaking. Following WWII, a 20-year period of relative financial stability ensued in much of the Western world, with the Bretton Woods agreement providing a fixed exchange rate against the US dollar, which in turn was convertible into gold at a fixed price. The system lasted into the 1970s until, just like Britain in 1931, the USA found itself unable to live up to the promise to convert dollars into gold. European commentators accused the USA of abusing the system by simply creating too many dollars, with which US firms then bought European companies and assets.

Hence monetary regulation became more subject to market forces and the goal of the bank turned to attempting to ensure the market rate of interest was reasonably close to the policy rate.107 In 1979, exchange controls which prevented any but authorised UK banks engaging in foreign exchange were lifted and, with the Bretton Woods fixed exchange rate system having been abandoned, as a result there was an explosion in international capital flows in and out of the UK. The UK became an international centre for foreign exchange with a flood of foreign banks opening up in London and the growth of the ‘euro-dollar’ market* which had begun to develop in the 1960s.108 The oil crises of the 1970s and rapid inflation helped usher into power the free-market-oriented governments of Margaret Thatcher and Ronald Reagan in the UK and USA, respectively, who, influenced by neoclassical free-market economics, began to further dismantle state controls on bank credit, including interest-rate caps.

INDEX A | B | C | D | E | F G | H | I | K | L | M N | O | P | Q | R | S T | U | V | W allocation, credit 105, 106, 109, 111, 141 anti-Bullionist school 43 Article 101 EC 118 Asset Purchase Facility see Quantitative Easing Babylon 34 bank accounts balances 15, 16 customers’ ownership of money in 11-12 government 153 importance of 138 Bank Charter Act 1833 43 Bank Charter Act 1844 43-5 bank deposits 15, 17, 20-1 Bank of England bank deposits, quotes about 17 bank reserves, control of 19 commercial bank money, little control over 21-2 creation of 41, 42 credit creation for public spending 143-4 demand-driven interest rates 150-1 effecting the market rate of interest 77 electronic money creation 14 foreign exchange reserves 160 Lender of Last Resort 24, 97, 103, 138 LIBOR and 70-1, 83n, 102 money supply 6, 20 Moral Suasion 47 regulation of credit 24 regulation of wider range of financial institutions 49 repurchasing agreements (repos) 78-9, 101 standing facilities 79-80 supply-driven interest rates 150-1 see also cash; central bank money; central bank reserves; liquidity Bank of International Settlements 61 Bank of Japan 80-1, 104, 112 banking central see Bank of England commercial see commercial banks confusion around 11 crises 42-3, 45 earliest systems 34-5 lending 7 liability 11-12, 16, 62, 63, 85, 106 misconceptions of 7 modern, origins of 37-42 online 52-3 perceptions of 11-14 reform, questions to consider 141-2 see also clearing system Banking school 43 banknotes liquidity of 60 sale of 72-4 bartering 29, 30, 32, 32n base money see central bank money Basel Committee on Banking Supervision (BCBS) 52, 93-4, 95 Bernanke, Ben 81n bilateral netting 165 bilateral settlement 64 Bills of Exchange 37, 38n, 137 bonds government 41, 78, 118, 120, 122, 124-5 issuance of 37, 40-2 liquidity of 60 purchase operations 81 Bradbury bills 45-6 Bretton Woods agreement 46, 50 broad money 48, 51, 60-1 building societies 16 Bullionist school 42-3, 44 capital equity 84-5, 87-8, 94 forms of 84 minimum levels required of banks 93-5 own 84, 85, 93-4 retained earnings 93-4 capital adequacy effect on bank credit creation 95 levels 100, 140 leverage ratios 96-7, 97n rules 93-5 capital flows, international 50, 52, 127-33 capitalism 32, 61, 137-8 cash decline in use of 52-3 definition 6, 14 on demand 71, 72 sale of banknotes 72-4 central bank see Bank of England central bank money banks’ liquidity requirements 74-5 comparison with commercial bank money 75-7 definition 6, 14, 60 ratio to commercial bank money 22, 75 central bank reserves definition 6, 14-15 economic growth, little impact on 22 intangibility 67 interbank payments 64-71, 102 lending to commercial banks 21 liquidity for clearing system 65 liquidity of 60 Chartalism 35, 36 Chinese economic reforms 111-12 classical economics 30-1 clearing system Bank of England 64-5 clearing banks 48-9 early banking systems and 34-5 electronic payments 16, 64 goldsmiths 38 interbank 68-9 ratio of reserves held 7 Cobbett, William 44 coinage exchange rates 45 holders and exchangers of 37 silver 37 value of 36 commercial bank money comparison with central bank money 75-7 definition 6, 15 liquidity of 60 modern, creation of 40 ratio of money in circulation 52-3 ratio to base money 22 supply, no limits to 23-4 commercial banks bank accounts with Bank of England 64-5 business loans 106, 107-8 confidence of 23-4, 140 corridor system of reserve targets 83n, 99, 150-1 credit controls 47 credit creation 6, 62-4 credit lending criteria 7-8 credit rationing 105-10 definition 13 deposits 6 determining quantity of central bank reserves 7, 21 fear of insolvency 23-4, 24 financial intermediaries 12-14, 19 IOUs see liability lending criteria 7-8 LIBOR and 70-1, 83n, 102 money creation see money creation mortgages 107 profits 87, 94 regional 42, 43-4 shadow banking 101-2 ‘special profit’ from interest on credit 74 see also capital; credit; liquidity; money creation commodity theory of money 30-3 Competition and Credit Control (CCC) 49-50, 98 compulsory cash-reserve requirements 21 compulsory reserve ratios 98 computer money 14 Consolidated Fund 153-4 Consolidated Fund Extra Receipts (CFERs) 153n Continuous Linked Settlement (CLS) Bank 165-6, 168 corridor system 83n, 99, 150-1 country banks 42, 43-4 crawling pegs 130 credit credit creation see credit creation deregulation of controls on 48-52 direct regulation of 24, 96, 110-12 lending criteria 7-8 leverage ratios 96-7, 97n rationing 105-10 see also Competition and Credit Control (CCC); goldsmiths credit creation allocation 105, 106, 109, 111, 141 bank lending 6 booms 49-50, 51 capital adequacy rules 93-5 fiscal policy links 126-7 liquidity regulation 97-100 money as 34 money created by banks 62-4 quantity theory of 109-10 window guidance 111-12 see also money creation; productive credit creation; unproductive credit creation credit theory of money 33-4 credit unions 16 crowding out 124-6 currency bands 130 Currency school 42-3 currency swaps 162 Davies, Glynn 34, 46, 50 Debt Management Account (DMA) 154-7 Debt Management Office (DMO) 122, 124, 154, 155n, 156 debts 34-5 declining marginal utility 106 deductive reasoning 33n Defoe, Daniel 10 deposits bank 15, 17, 20-1 commercial banks creation of 7 demand 15, 43-4, 64, 65, 138 facilities 79 insurance 76-7 rates 150 receipts 34, 37, 38, 39, 40 deregulation 48-52 digital money 52-3 Discount Window Facility 84 double-entry bookkeeping 63 East Asian Economic Miracle 111-12 electronic money 14, 52-3, 67 endogenous money 103-4, 106, 109 equation of exchange 31n equity capital 84-5, 87-8, 94 eurodollars 50 European Central Bank (ECB) 52, 120-1 European Union (EU) 118-21 eurozone economies 120-1, 132-3 Exchange Equalisation Account (EEA) 158-60 exchange rates foreign 127-33, 158-60, 161, 162-8 government intervention 130-2 regimes 45-53, 129-30 Exchequer Pyramid 153, 154, 156 exogenous money 103-4, 109 Federal Reserve Bank of Chicago 44 Ferguson, Niall 28, 36 financial crisis eurozone 120-1 key questions raised 5-6 North Atlantic 29 originate and distribute model of banking 100-1 as a solvency and liquidity crisis 102-3 subprime mortgages 101, 138 Financial Services Authority (FSA) 99 Financial Services Compensation Scheme (FSCS) 16, 76 fiscal policy see Government Fisher, L. 31n floating currency regimes 130 floor system 152 foreign exchange eurozone 132-3 government intervention 130-2 markets 127-9 payment system 162-8 regimes 129-30 reserves 158-60 trade and speculation 161 transactions 162 foreign interest rate swaps 162 forex transactions 162-8 forwards (forex transaction) 161, 162 fractional reserve banking 7, 37, 38-40, 44 Galbraith, Professor J.K. 58, 146 GDP transactions 24, 51-2, 83, 96, 109-10, 125-6 see also productive credit creation general equilibrium 32 Gilt Edged Market Makers (GEMMs) 122-3, 156 gilts 41, 82, 155-6 gold standard 45-7 Gold Standard Act 1925 46 Golden Period 45 goldsmiths 37, 38-9, 40 Goodhart’s law 61, 138 Government bank accounts 153-60 bonds 41, 78, 118, 120, 122, 124-5 borrowing 122-3, 124-6 intervention to manage exchange rates 130-2 linking fiscal policy to credit creation 126-7 monetary policy 42-5, 47, 49-50, 120-1, 141-2 money creation, bypassing restrictions 119-20 money creation, EU restrictions on 117-19 money-financed fiscal expenditure 144-5 money supply, effect of borrowing on 124-6 productive investment 125-6 spending 123-4 taxation 35-6, 41, 121, 139, 140 Government Banking Service 156 gross non-payment versus payment settlement method 163-4 hedging 161 Herstatt risk 164 high-powered money see central bank money hire purchase houses 48 ICP/Cobden Centre poll 11, 12 imperfect information 7, 105, 107, 140 see also perfect information Impossible Trinity 131-2 Independent Commission on Banking 13 Ingham, Geoffrey 119 Innes, Mitchell 35 insolvency explanation of 86, 87 protection against 93-7 see also solvency interest compound 39 debt, interest-bearing 144-5 legalisation of 41 savings accounts 12 interest rates crowding out 124-6 foreign rate swaps 162 government debt 119 interbank rate 102, 150, 152 LIBOR 70-1, 83n, 102 margin 12 market rate 50, 77 monetary policy and 80-1 negative 80 policy rate 50, 79, 150 intra-day clearing 68 investment banking 13 investors bonds 40-1 government 126 private 125 IOUs see liability Keynes, John Maynard 4, 33, 71 lending cycles of 18-19 facilities 79-80 fractional reserve banking 7, 37, 38-40, 44 rates 150 leverage ratios 96-7, 97n liability 11-12, 16, 62, 63, 85, 106 LIBOR 70-1, 83n, 102 liquidity Bank of England influence on 78 crisis 86-7 Discount Window Facility 84 expectations, centrality to 138-9 financial crisis and 102-3 regulation of 97-100 solvency and 84-7 loans Bank of England influence on 77 business 106, 107-8 central bank 65-6, 78-9 central bank reserves 78-9 commercial banks 6 confidence in borrower to repay 20-1, 140 credit unions 16 in economic downturn 71 goldsmiths 38 maturity transformation 12 risk rating 94 secured 106-7 securitisation 100-1 M0 see central bank money M1, broad money 60 M2, broad money 61 M3, broad money 61 M4, broad money 15, 61 Maastricht Treaty 118-19 margin 12 marginal utility 31-2 market-makers 155 Marx, Karl 32, 39 maturity transformation 12 McKenna, Reginald 4 medium of exchange 29, 35, 38, 52, 139 Mill, John Stuart 30 Minimum Lending Rate (MLR) 50 Minsky, Hyman 33 Modern Monetary Theory (MMT) 121n monetary policy early 42-5 government reforms 49-50 politics of 120-1 reform, questions to consider 141-2 review of 47 Monetary Policy Committee (MPC) 79, 150 money acceptability of 139-40 commodity theory of 30-3 credit theory of 33-4 definition 6, 138-9 efficiency of exchange 30 emergence of modern money 137-8 endogenous 103-4, 106, 109 exogenous 103-4, 109 functions of 29 as information 67 local currency 145-6 marginal utility 31-2 money creation see money creation neutrality of 30-2 role of state in defining 35-7 as social relationship 33-4, 139-40 see also cash; money creation money creation allocation of 105, 106, 109, 111, 141 capital adequacy ratios 95 commercial banks and 6, 61, 64, 139-40 confidence of banks 23-4 creation of, misunderstanding 5 endogenous and exogenous money 103-4, 106, 109 implications for economic prosperity and financial stability 7-8 link to central reserves 7 multiplier model 18-21 securitisation 100-1 shadow banking 101-2 see also credit; Quantitative Easing money supply Bank of England measures of 60-1 control of 20, 48 definition 15 effects on 71 expansion by governments 145 money creation creation see credit; money creation overview 6 money tax 74 Mosler, Warren 36 multiplier model 18-21 national currency 6 National Loans Fund (NLF) 154, 158 National Savings and Investments (NS&I) 154, 158 neoclassical economics 31-4, 51 new money see money creation non-GDP transactions 24, 109 non-PVP method 163-4 Northern Rock 103 Open Market Operations (OMOs) 78, 79, 151 Operational Lending Facility 79-80 options (hedging) 161, 162 orthodox economics 31-4 Outright Monetary Transactions (OMTs) 121 own capital 84, 85, 93-4 payment versus payment (PVP) systems 165-6, 167, 168 pegged exchange rate regimes 130 perfect information 31, 32, 77, 105 see also imperfect information policy rate 50, 79, 150 productive credit creation 24, 111, 142 see also GDP transactions promissory notes 37, 38 Promissory Notes Act 1704 40, 42 PVP systems 165-6, 167, 168 Quantitative Easing (QE) Bank of England 81 bond purchases 81 definition 80-1 effect on economy 82-3 financial assets, purchase of 152 lending, impact on 22, 23 Quantity Theory of Credit 24n, 51, 109-10, 141 real time gross settlement (RTGS) 76, 79 repurchasing agreements (repos) 78-9, 101 reserve accounts 64-5 reserve ratios 19, 20, 21, 49, 51, 98 reserve targeting 150-1 residential mortgage-backed securities (RMBSs) 100-1 retail banking 13 risk management systems 94 safe-deposit boxes 11 savings, investment of 12-13 savings accounts 60 Schumpeter, Joseph 10, 30-1 secondary banking crisis 1974 50 securities 40-1 securitisation 100-1 seigniorage 74 settlement 29, 59, 64, 76, 128n, 162-3, 167-8 shadow banking system 101-2 Simmel, Georg 28 solvency financial crisis and 102-3 regulation of 84-7 see also insolvency; liquidity speculators 161 spots (forex transaction) 162 sterling stock liquidity regime (SLR) 98-100 store of value 29, 33 subordinated debt 85 subprime mortgages 101, 138 supply and demand 31 T-accounts 63 tally sticks 34-5, 41 taxation 35-6, 41, 121, 139, 140 textbook model 18-21 traditional correspondent banking 163-4 Treaty of Maastricht 118-19 Tucker, Paul 21, 106 unit of account 29, 35, 36, 139 unproductive credit creation 24, 111 see also GDP transactions; productive credit creation On Us, with and without settlement risk 167 USA, gold standard 46-7 usury see interest value, measurement of 35 Walras, Leon 31 Ways and Means Advances 117n Wergeld 35 Werner, Richard 44, 81n, 109-10 wholesale banking 13 wholesale money markets 50 window guidance 111-12 WIR credit-clearing circle 145 * ‘Central bank money in the UK economy takes two forms: banknotes and banks’ balances with the Bank of England (reserves).


pages: 920 words: 233,102

Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State by Paul Tucker

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, Andrei Shleifer, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, Brexit referendum, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, conceptual framework, corporate governance, diversified portfolio, electricity market, Fall of the Berlin Wall, financial innovation, financial intermediation, financial repression, first-past-the-post, floating exchange rates, forensic accounting, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, Greenspan put, incomplete markets, inflation targeting, information asymmetry, invisible hand, iterative process, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, means of production, Money creation, money market fund, Mont Pelerin Society, moral hazard, Northern Rock, operational security, Pareto efficiency, Paul Samuelson, price mechanism, price stability, principal–agent problem, profit maximization, public intellectual, quantitative easing, regulatory arbitrage, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, road to serfdom, Robert Bork, Ronald Coase, seigniorage, short selling, Social Responsibility of Business Is to Increase Its Profits, stochastic process, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the payments system, too big to fail, transaction costs, Vilfredo Pareto, Washington Consensus, yield curve, zero-coupon bond, zero-sum game

After World War II, most countries more or less surrendered domestic monetary autonomy, tying themselves to a de facto dollar standard. To police the rules of the game agreed at the famous Bretton Woods conference in New Hampshire’s White Mountains, the International Monetary Fund (IMF) and the World Bank were created. At its heart, the system relied on the dollar holding its value against gold, but the US authorities proved unable to square that with their foreign and domestic policy priorities. The Bretton Woods framework collapsed in the early 1970s under the weight of US fiscal profligacy and inflationary incontinence. Since then, most countries have opted for a floating exchange rate with domestic (or, as in the euro area, regional) control of monetary policy.

Of course, CBI would increase their power and influence, but they did have arguments. Even under the Bretton Woods regime, under which most countries pegged their currency to the dollar, itself pegged to gold, Chicago economist Milton Friedman and others were making the case that floating exchange rates would permit smoother adjustment to international current account imbalances. But precisely because that would restore domestic monetary sovereignty, it posed the question of how politicians could be deterred from abusing the monetary power. After Bretton Woods collapsed, those issues could not be ducked, prompting a quarter-century-long debate about rules versus discretion (as told in the next chapter).

Then, governments quickly turned away from globalization and central bank–centered macroeconomic policies. Nationalism was the order of the day—autarky, propped up by barriers to trade, controls on capital flows, and financial repression.7 When at the end of World War II the international economic order was reconstructed at Bretton Woods, New Hampshire, central banks were largely bystanders. In the aftermath, they became backroom advisers and agents as the West was rebuilt and the Cold War negotiated. How different things are today. Notwithstanding financial disorder and economic stagnation on a grand scale, globalization has hardly been rolled back (as I write); and while the core program for reforming the monetary and financial system was once more forged in international gatherings, this time around central bankers were the leading players.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

In particular, the United States began to sell its public debt abroad to sovereign investors, especially to the governments of oil-producing countries looking for opportunities to ‘recycle’ their surpluses and in return gain military protection against regional adversaries and their own peoples. In subsequent years ‘financial services’ became the most important growth industry by far in both the United States and the United Kingdom.16 After the end of the Bretton Woods monetary regime, with the dollar continuing to be the leading global reserve currency, the United States enjoyed the ‘exorbitant privilege’ (Giscard d’Estaign) of being able to indebt itself internationally in its own currency and repay its debt, if need be, by printing basically unlimited amounts of it.

For this reason it is essential to stop sanctifying the single-currency regime and supercharging it – in ‘typical German’ fashion – with the expectations and attributes of a post-national salvation.35 It would then be possible to dispense with the usual horror scenarios – Angela Merkel’s ‘If the euro fails, then Europe fails’ was a particularly crass example – and start seeing the single currency for what it is: an economic expedient that will have lost its raison d’être if it fails to serve its purpose.36 In Buying Time, I tentatively proposed recasting the single currency along the lines of Keynes’ original Bretton Woods model: the euro as an anchor for national or multinational individual currencies, with agreed mechanisms to cancel out economic imbalances, including the possibility of resetting exchange rates. This would in practice do away with the ‘gold standard’ implicit in the single currency, which drains the democracies dry without helping to establish a supranational democracy.

The suggestions made range from a return to national currencies, via the temporary or permanent introduction of parallel currencies, together with capital controls, right through to a Keynesian two-tier currency system.37 No ‘nostalgia for the Deutschmark’ is required to see the urgent need for joint reflection on the reconstruction of the European single currency, in a way that might be beneficial for Europe, democracy and society. In principle, this theme might also emerge from the no less urgent search for a better global monetary system than exists at present – one that has become increasingly dysfunctional since the definitive dismantling of the Bretton Woods regime in the early 1970s, and almost brought the world economy to the point of collapse in 2008. The failure of the euro is just one development among many to dispel the illusion that arose from the anomalously peaceful conditions of the post-war period – the conviction that what money is and how it should be managed is a question that has been settled once and for all.


pages: 322 words: 84,752

Pax Technica: How the Internet of Things May Set Us Free or Lock Us Up by Philip N. Howard

Aaron Swartz, Affordable Care Act / Obamacare, Berlin Wall, bitcoin, blood diamond, Bretton Woods, Brian Krebs, British Empire, butter production in bangladesh, call centre, Chelsea Manning, citizen journalism, Citizen Lab, clean water, cloud computing, corporate social responsibility, creative destruction, crowdsourcing, digital map, Edward Snowden, en.wikipedia.org, Evgeny Morozov, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, Firefox, Francis Fukuyama: the end of history, Google Earth, Hacker News, Howard Rheingold, income inequality, informal economy, information security, Internet of things, John Perry Barlow, Julian Assange, Kibera, Kickstarter, land reform, M-Pesa, Marshall McLuhan, megacity, Mikhail Gorbachev, mobile money, Mohammed Bouazizi, national security letter, Nelson Mandela, Network effects, obamacare, Occupy movement, off-the-grid, packet switching, pension reform, prediction markets, sentiment analysis, Silicon Valley, Skype, spectrum auction, statistical model, Stuxnet, Tactical Technology Collective, technological determinism, trade route, Twitter Arab Spring, undersea cable, uranium enrichment, WikiLeaks, zero day

Whoever controls the largest device networks gets the most sensor data and manages the largest number of relationships between and among people and devices. The Roman Empire lasted because the Romans built roads. The British ruled the world because they built ships and robust trade alliances. The United States dominated because it had atomic bombs and engineered the post–World War II Bretton Woods system.4 While the internet may have started off as an American technology, its current users—and developers—come from all over the world. Digital media like mobile phones and the internet are tough to monopolize and control. They are the sources and conduits of modern political power, as the infrastructure of roads, ships, and weapons have served political power in years past.

Tarleton Gillespie, Wired Shut: Copyright and the Shape of Digital Culture, rpt. ed. (Cambridge: MIT Press, 2009). 3. Robert D. Putnam, Robert Leonardi, and Raffaella Y. Nanetti, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1994). 4. Steve Schifferes, “How Bretton Woods Reshaped the World,” BBC, November 14, 2008, accessed September 30, 2014, http://news.bbc.co.uk/2/hi/7725157.stm. 5. “Edward Gibbon,” Wikipedia, accessed June 27, 2014, accessed September 30, 2014, http://en.wikipedia.org/wiki/Edward_Gibbon; “The History of the Decline and Fall of the Roman Empire,” Wikipedia, accessed June 21, 2014, http://en.wikipedia.org/wiki/The_History_of_the_Decline_and_Fall_of_the_Roman_Empire. 6.

See also M-Pesa Barlow, John Perry, 163 behavior, prediction of, 141 Beinecke, Jessica, 194 Belarus, protests in, 85, 115 Belgium, minorities in, building collective identity, 145 Ben Ali, Zine el-Abidine, 50, 216, 221 Bennett, Lance, 138–39 Berners-Lee, Tim, 37–38 big data, 61, 295; analyzing, 176, 179, 180–81; in authoritarian regimes, 195; bringing stability, 68; collection of, overseeing, 112; definition of, 141; growth of, 179, 256; management of, 256; providing collective security, 112, 140–45; providing connective security through, 107; solving social problems with, 176, 178; taking down dirty networks, 99; tracking international criminal activity, 177–78 bin Laden, Osama, 38, 53, 60–61, 114, 176 Bitcoins, 56 Black Code (Deibert), 179 blogging, 76–78, 84–85, 127, 130, 171 Bloomberg News, 192 Blue Coat Systems, 215 Boeing, 115, 212 Boko Haram, 81, 83, 135 Bolivia, 215 Bosykh, Alexander, 198–99 botnets, 2–4, 202–3, 205 bots: attacking security companies, 32; dominating digital networks, 34; evolution of, 203–4; in financial markets, 34; identifying, 210–11; political, 204–11, 233, 234; as political tools, 29–33; pro-regime, 29–30; threats posed by, 208, 209–11; Twitter-based, 30–31; types of, 203; usage of, by country, 206–7; use of, 203–8; wartime use of, 34 bot wars, 53 Bouazizi, Mohamed, 50–51, 137, 221 Bouteflika, Abdelaziz, 92 Brazil: elections in, 128–29; internet rights in, 165 Breivik, Anders Behring, 216 Bretton Woods system, 231 Bring Back Our Girls, 81 British Empire, 1, 4–5, 15, 67, 107–8, 146–47, 231 broadcast licenses, 249–50 Brown Moses. See Higgins, Eliot Bulgaria, 41, 97 Burma, protests in, 86. See also Myanmar Bush, George W., 128 camps, international, 179 Canada: elections in, 205; minorities in, building collective identity, 145; surveillance in, 133 CANVAS, 164 Carna Bot, 3–4, 32, 203 Castels, Manuel, 126 Castro, Raúl, 92 Catalans, self-governance and, 145 CCTV, 201 censorship, 157; programs and systems for, 87, 133–34, 253 Center for Democracy and Technology, 163 Chad, 94 Chávez, Hugo, 92 Chiapas, uprising in.


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Birth of the Euro by Otmar Issing

accounting loophole / creative accounting, behavioural economics, Bretton Woods, business climate, business cycle, capital controls, central bank independence, currency peg, currency risk, financial innovation, floating exchange rates, full employment, inflation targeting, information asymmetry, labour market flexibility, labour mobility, low interest rates, market fundamentalism, money market fund, moral hazard, oil shock, open economy, price anchoring, price stability, purchasing power parity, reserve currency, Robert Solow, Y2K, yield curve

A short time afterwards, it was considered that this project should be completed over a period of ten years. This ambitious aim was basically doomed to failure from the outset. For one thing, the international environment was to be affected in the years that followed by major turbulences: the floating of the D-Mark on 19 March 1973 signalled the final collapse of the Bretton Woods system of fixed exchange rates, and the European partner countries differed markedly in their views on fundamental exchange rate issues. For another, although the Werner Plan was the first to elaborate on the need for progress on the economic and institutional front in parallel with monetary convergence, the positions taken were still relatively vague and marked by controversy.

Index accountability, of ECB 30–1, 33, 37, 60, 97, 99, 105, 113, 156–69 Adenauer, Konrad 38, 58 Andriessen, Frans 10 Asian crisis (1997) 138 asset price trends, and wealth effect 109 Austria 14, 15, 16, 26 citizens’ attitudes to euro 21 conversion rates 20 Balassa-Samuelson effect 210–11, 216 Banca d’Italia 147 Bank Deutscher Länder 23, 38 see also Deutsche Bundesbank Bank of England 76, 90 independence 58 and minimum reserves issue 120 Bank of Japan 76 Bank Lending Survey (ECB) 108, 152 banking central as an art 185 collaboration with ECB and national central banks 136 mortgage policies 218 Banque de France 156 Belgium 14, 15, 16, 26 conversion rates 20 as a critical case 16, 19, 25–6 Berès, Pervenche 37, 38 Beveridge, W. H. B. 41 Blinder, Alan 34–5, 40–1 Boyer, Miguel 10 Bretton Woods system 5 Brown, Gordon, as Chancellor of the Exchequer 58 budget deficits 193 (1990–8) 15 fig. 2 convergence criterion 17–18 limits on overall EU 196 reference values 196–8 budget policies automatic stabilisers 195, 198, 204 of euro area member states 55, 195 sustainable 196 Bulgaria 76 business cycles, synchronisation in euro area 209 fig. 14 Canada, exchange rate intervention 175 capital, free movement of 7, 8, 11 245 246 • Index central planning, vs. market economy 61–2, 75, 222 centralisation 30, 38, 234 Committee of Central Bank Governors 9–10 common market principles 7–8, 32 communication, and cross-checking 111–14 communication policy, of ECB 60, 72–4, 86–7, 116, 146, 156–69, 227 consensus principle 153–6, 160–3 Convention on the Future of Europe 224, 231 convergence and fixed exchange rates 6 in monetary policy instruments of national central banks 119–20, 134 process 13–20, 33 convergence criteria 11–12, 13–17, 48, 220 further issues 17–20 strict application of 19–20 convergence reports, by ECB General Council 75–6, 221–3 conversion rates, between euro and national currencies 20 table 1, 26 credit ceilings 119 collateral for 119, 123–4 credit institutions eligibility within euro area 123–4 minimum reserves 119, 128 and national central banks 119 standing facilities for 126–7, 130 cross-checking, and communication 111–14, 116, 155 cultural differences 228, 234 currencies anchor 75, 180–1, 183 common 3–4, 191 criteria for optimum currency area 48–9, 219 devaluations 6–7, 8, 215, 217 investment 178 invoicing 181 ‘lost’ 54–5 multi-currency system 183–4 reserve 178, 183 stateless 228 transaction 181, 183 and trust 33 see also euro; international currencies; national currencies current account balances financing 214–15 fig. 18 and unit labour costs 215–16 fig. 19 Cyprus 67, 220 Czech Republic 220 data collection for ECB 54 from government’s budget plans 205 time series problem 85–6, 94 uncertainty in ECB 82–4 defence policy, common 232, 240, 242 deficit spending policy 192–3 deflation, risk of 103, 115, 117 Delors Group 10 Report (1989) 11 Delors, Jacques 10, 23 democracy accountability and independence of ECB 30–1 and control of public finances 236 and independence of central banks 58–9, 164 democratic legitimacy 196 denarius 3, 32 Denmark 25, 75, 240 deposit facility 126–7, 134 Deutsche Bundesbank Act (1957) 58, 118–19 Index • 247 Central Bank Council 147 opinion on Stage III of EMU 18–19 statement (1990) 11 statement (1992) 12–13 ‘democratic deficit’ question 58 discount policy 121–2, 133 and EMS 6–7 established (1957) 23, 58 independence 37, 38, 56–8, 235 and minimum reserve issue 120–1 as model for European Central Bank 10, 25, 37, 42–3, 59, 85, 156 monetary policy after reunification 7–9, 78, 94–5 monetary targeting 93 Monthly Report 73 revaluation of gold reserves proposed 29 status of 22–3, 230 Deutschmark (D-Mark) 3, 4 as anchor currency 14, 75 ‘bloc’ 49 and EMS 6–7 floating (1973) 5 introduction (1948) 22–3 market outside Germany 121 performance (1950–98) 142 and resistance to euro 21–5 status of 57, 178 development indicators 109 Dichgans, Hans 229 Directorates General for Economics and Research 71–4, 85, 133, 184–5, 188–9 dollar (US) 1, 176, 178, 181, 183 euro exchange rate against (1999–2006) 172 fig. 12, 175, 178 ‘dollarisation’ 181 Duisenberg, Willem F. 26–7, 35, 41, 70, 72, 73, 99 Dutch central bank 156 ECB see European Central Bank ‘ECB and its Watchers’ conference (1999) 187–8 Ecofin (Council of EU Finance Ministers) 67, 137 economic growth development indicators 109 and inflation 63–4 fig. 5 sustainable 63–6 economic and monetary union proposal 4–5 see also European Economic and Monetary Union economic pillar, and monetary pillar 99–100, 105–11, 112, 116 economic policy coordination 38–9 economic research 184–90 economic theory, and monetary policy practice 184–90 ‘economistic’ position 6, 11–12 ECU see European Currency Unit efficiency 120, 226 elections, restrict time horizon for fiscal policy 193 EMI see European Monetary Institute employment employers and labour 204 levels 63–6 see also unemployment EMS see European Monetary System EMU see European Economic and Monetary Union energy prices 101, 208 epidemics 143 Erhard, Ludwig 58 ERM see exchange rate mechanism ESCB see European System of Central Banks Estonia 75 euro in 2008 1–2, 171 as an anchor currency 75, 180–1, 239 248 • Index euro – cont. as an international currency 176–84 table 5, 242 as an investment currency 178 as an invoicing currency 181 banknotes and coins 1, 24, 54, 136, 178, 181, 229 cash in circulation 181 as a catalyst for integration 47, 84, 232 citizens’ attitudes to 21–5 compared with US dollar 1, 176–83 conversion rates with national currencies 20 table I countdown to the 25–43 countries with exchange rates linked to the 182 table 7 a currency without a state 228–30 effects of decline in exchange rate on world economy 175 exchange rate 54, 169–76 exchange rate against US dollar (1999–2006) 172 fig. 12, 175, 178 German open letter on ‘coming too early’ 19–20 Germany’s adjustment to the 23–5 global reserves 1 historical background 3–51 non-participating countries 75 pacemaker role 229 real effective exchange rate (1999–2006) 173 fig. 13 as a reserve currency 178, 180 role as currency of denomination for credit 1 share in official foreign exchange reserves 178–80 table 6 share in world GDP 43 stability 1–2, 33, 141–6, 184, 234 stable in ECB monetary policy 131–90 as statutory unit of account (1999) 20 success of 2, 237, 240 symbol 135, 229 as a transaction currency 181 euro area 43–51, 171, 177, 184 ‘catching-up’ process 17, 216–18, 220 causes of divergence in economic conditions 207–12 compared with USA 43, 46–7, 83, 190, 209–10, 212 credit institution eligibility 123–4 criteria for an optimum 48–9, 219 data gap 83–4 economic growth at beginning of monetary union 138–41 economy 43–7 enlargement of the 219–27 equal treatment of all financial institutions 122–4 exogenous price shocks 143 growth rate differentials 209–10 fig. 15 HICP for 97–8 import prices 173, 174 inflation differentials 212, 216 key characteristics 44–5 table 2 living standards differences 17, 209–10 as a political vs. economic decision 47–51 price stability 150–1 price-setting in 189–90 synchronisation of business cycles 209 fig. 14 wage growth differentials 217 ‘Euro-DM market’ 121 Eurogroup (finance ministers of EMU member countries) 67, 176, 203 ‘euroisation’ 180 Europe the future 233, 237–44 monetary union 3–9 political unification 4, 242 Index • 249 social model 231, 238, 241 see also European integration European Central Bank (ECB) accountability 30–1, 33, 37, 60, 97, 99, 105, 113, 156–69, 168–9 appointments 26 catalogue for the posting of collateral 123 communication policy 60, 72–4, 86–7, 116, 146, 156–69, 188, 227 Convergence Report (2004) 221, 223 cooperation with national central banks 110, 131–3 credibility 86–7, 137–41, 144–6, 202 criticism 187–8 decision-making bodies 66–76 dispute over first President 26–7 draft statute for 10, 12 establishment (1998) 26, 76 evaluation of stability-oriented monetary strategy (2003) 114–18 Executive Board 25–8, 66, 70–4, 132, 226 membership 25, 26–8, 42, 70–1 terms of office 26–8, 56 and foundations of monetary policy 52–130 General Council 66, 74–6 Governing Council 66, 67–9, 111, 119 Briefing Note and Annexes 152 consensus principle in 153–6, 159 meetings 69, 97, 133, 136, 151, 152–3, 155–6 monetary policy-making in 146–56 number of members 155, 223–7 Orange Book 151–2 orientations in 131–5 reports 152 responsibility for monetary policy 135–41, 149–56 strategy review (2002) 114–18 timely information production 158 implementation of monetary policy 128–30 independence (Article 108) 30–1, 55–60, 87, 170, 192, 201 independence and inflation outcomes 37–8 independence and national legislation 13 independence and price stability 33, 234 instruments of monetary policy 118–30 modelled on Bundesbank 10, 25, 42–3, 59, 85, 156 monetary policy in EMU framework 191–236 monetary policy and exchange rates 169–76 monetary policy options 86–96 monetary policy for a stable euro 131–90 Monthly Bulletin 60, 72–4, 99, 104–5, 109, 117, 133, 153, 160, 167–8 neutrality 120, 183, 206 pillars of monetary policy strategy 54–66, 99–100, 105–11, 116–18, 139–40, 155 political pressure on 137, 162, 174, 202–3 preparations for the single monetary policy 76–85 President 26, 68, 226 President’s introductory statement 117, 158, 159, 167 press conferences 157–8, 167, 168 price stability mandate 33, 60–6, 87, 205, 234 publications 60, 72–4, 116, 156, 160 robustness 97 250 • Index European Central Bank (ECB) – cont. rotation and voting rights of national central bank governors 224–6 table 8 as scapegoat 37 seat in Frankfurt am Main 25, 29 and the single monetary policy 223–7 stability-oriented monetary policy strategy 96–118 fig. 7, 205 success of monetary policy 141–6 supranational status 122–4, 200–1 transfer of monetary policy responsibility to 11 transparency 31, 33, 42–3, 60, 84, 87, 97, 99, 113, 163–9 trust in 84, 86–7 vulnerabilities 241 Watchers Groups 187–8 see also Statute of the European System of Central Banks European Coal and Steel Community (1952) 4 European Commission 223, 224 ECB annual report to 60 proposal of member states to participate in monetary union 25–6 European Council 76 Brussels meeting (1998) 25–8 ECB annual report to 60 enabled to amend Statute of ECB 223, 224 stages in implementation of EMU 11 UK presidency 25 unanimity on price stability 170–1 European Currency Unit (ECU) 6 European Defence Community project 240 European Economic Community (EEC) (1958) 4, 233 European Economic and Monetary Union (EMU) constitution consultations 193–5 ECB and monetary policy in 191–236, 207 fiscal and monetary policy in 192–200 fiscal policy rules in 192–6 German resistance to 21–5 options for countries not joining 239–40 policy coordination in 200–7 political prerequisities for the success of 234–6 and political union 232, 242–4 possibility of a country’s exit from 239 preparedness for accession 219, 237 selection of participating countries 12–20, 25–6 Stage I 11 Stage II 11 Stage III 9–13 strengthening scenario 241–2 threats to 238, 243–4 vulnerability to asymmetric shocks 208 European integration 20, 32, 239–44 euro as a catalyst for 47, 232 and flexible exchange rates 8 functional 232 scenarios for possible 241–4 European Liberal, Democrat and Reform Party 39–40 European Monetary Institute (EMI) 72, 75, 76 established (1994) 11 European Monetary System (EMS) characteristics of 6–7, 8 established (1979) 5–6, 9 membership requirement for EMU participation 13 European Parliament 76, 223, 224 debate on symbolism of euro coin 229 Index • 251 debates on ECB 34–43 ECB annual report to 60 questionnaire and hearings for candidates for Executive Board of ECB 29–34 European People’s Party, Christian Democratic Group 36 European System of Central Banks (ESCB) 52–4, 97 see also Eurosystem European Union (EU) countries with euro 1, 20, 220 current status 219, 233 economic growth 220 enlargement 17, 75–6, 219–27 founder members 17 and monetary union 219–22 relationship with EMU 239–40 Eurostat 83, 101 Eurosystem 53–4, 67, 76, 135 basic tasks 53–4, 119, 205 euro-area and multi-country models for macroeconomic projections 110 expert reports 152 ‘information kit’ 168 and national central banks 150 operational framework 122–4, 129 price stability objective 63, 104–5 transmission mechanism 189 Eurosystem Inflation Persistence Network 189–90 exchange rate mechanism (ERM II) 75, 181, 222 exchange rate regime, significance of 169–71 exchange rates countries linked to the euro 182 table 7 crises 6–9 criterion for admission to EMU 13, 16, 222 ECB strategy ruled out 90–3 of the euro 54, 169–76 European views on issues 5–6 fixed 9, 169; see also Bretton Woods system; EMS floating (flexible) 8, 9, 169, 171–4 and monetary policy 169–76 ‘parity grid’ 6 pegging 181 and price stability 90–3 real 213–14 risk in public debt 194 stability 6, 7, 8, 30 exogenous shocks 48, 78, 104, 109, 113, 116, 138, 140, 243 asymmetrical 208, 214 ECB reaction to 204–5 euro protects against 237 and labour market flexibility 48–9 prices in euro area 143 expectations role of 57, 65, 166, 206–7 see also inflation expectations exports 208, 213–14 Fabio, Udo di 240 Feldstein, Martin 50 financial markets 18, 33, 166, 194 domestic openness 177 integration 214 international 84, 177 and monetary policy 167 financial sector economic analysis of data 109 and the monetary policy transmission mechanism 82 financial system, US compared with euro area 47 Financial Times 199 financing, of current account balances 214–15 fig. 18 Finland 14, 15, 16, 26 citizens’ attitudes to euro 21 conversion rates 20 First World War, Germany after 62 252 • Index fiscal policy institutional mechanisms to monitor 18 and monetary policy in EMU 192–200 and monetary policy relationship 30, 38–9, 109, 138, 191–2, 200–7, 237 national 200, 202, 203–4, 217 rules in EMU 192–6 stability 14, 18–20, 222 flexibility of markets 19, 35, 48–9, 208, 214, 218, 220, 231, 235, 241 food prices 101, 143 foreign exchange markets intervention 174–6, 181 and monetary policy 169–76 foreign policy, common 230, 232, 242 France 14, 15, 16, 26 conversion rates 20 infringement of Stability and Growth Pact 199 monetarism 6 presidential campaign (2007) 202 reservations on ECB 59 resistance to first President of ECB 26 single currency 4, 244 see also Banque de France Frankfurt am Main 25, 29 Frankfurt University, Center for Financial Studies 187 free market principle 120 Friedman, Milton 40, 88, 105 Funk, Honor 36 German Federal Ministry of Economics, Council of Experts report (1989) 10 Germany 14, 15, 16, 26 adjustment to the euro 23–5 benefits of economic integration 233, 244 citizens’ attitudes to euro 21–5, 36 consensus democracy 153–4 conversion rates 20 current account balance 214 customs borders (1790) 3 customs union (1834) 3 economic and political union 229 economistic position 6 government relations with Bundesbank 29 historical right to mint coinage 3 hyperinflation (1922–3) 22, 62 inflation rate 33 infringement of Stability and Growth Pact 199 interest rates 35 media debate over German candidacy for Executive Board of ECB 29 Nazism 22–3 real interest rate argument 212–13 Reich (1871) introduces Mark 3, 4, 229 restrained wage growth 217 reunification 7, 23, 78 and the Second World War 22–3, 38 stagflation 57 see also Deutsche Bundesbank global corporations 36 globalisation 78, 84, 144 gold standard 88 in Germany (1871–1914) 4, 22 government debt (1990–8) 15–16 fig. 3, 17–18 ceiling for 193–8 implicit and explicit 197 governments accountability to national parliaments for public finances 236 deficits (1990–8) 15 fig. 2 fiscal policy sovereignty 193–4 and ‘lost’ currencies 55 Great Britain see United Kingdom (UK) Index • 253 Greece 67, 75, 210 current account balance 214 infringement of Stability and Growth Pact 199 Guterres, Antonio 232 Hague summit (1969) 4–5 Hämäläinen, Sirkka 27–8, 70 Hanover summit (1988) 10 Harmonised Index of Consumer Prices (HICP) 83, 101, 138, and price stability 97, 98, 115, 141–2 table 4, 207 Hayek, Friedrich 234 Hendrick, Mark 34, 35 housing prices 101, 217–18 Hungary 220 income distribution 204 indexation 62, 101 measurement bias in 103 inflation 2 per cent rate over medium term 2, 103, 115, 116 (1970s) 37–8 convergence (1990–8) 14 fig. 1 convergence criterion 13–14, 41, 221 ‘core’ 101 differentials in euro area 212 fig. 17, 216 forecast and targeting 91–3 and growth of money supply 92–3, 105–6 fig. 6 perception vs. statistics 24 problems of measurement 41 and real economic growth 64 fig. 5 redistribution effect 62, 238 and unemployment 39–40 zero 102–3, 117 inflation expectations 1–2, 35, 40, 57, 84, 114, 207, 213 high 143–6 long-term in euro area 144 fig. 11 low-level 100–3 well-anchored 66, 87, 117, 140–1, 145–6 inflation targeting 30, 85, 90–3, 103 insolvency, of sovereign states 194, 196 interest rates at beginning of monetary union 138–41 criterion for admission to EMU 13, 17 deposit facility 126–7, 134, 139 long-term nominal 1–2, 144–5 main refinancing operation 124–6, 129–30, 134, 138–40 marginal lending facility 126–7, 130, 134, 139 and money market rates (1999–2006) 141 fig. 10 and money market rates at beginning of monetary union 139 fig. 9 real argument 212–13 standing facilities 126–7, 134–5 and zero inflation 102–3 interests commonality of 191 national 202–3 Intergovernmental Conference (2000) 171 international agreement, for ECB Statute 52–4 international currencies 176–7 euro as 176–84 table 5, 242 factors in 177 functions of 178–83 International Monetary Fund, World Economic Outlook 33 investment 35 risk-sharing 214 Ireland 14, 15, 16, 26, 213 conversion rates 20 as a model case 16, 210 254 • Index Issing, Otmar 28, 244 Directorates General for Economics and Research 71–4, 85, 133 early experiences in Brussels 28–43 on first Executive Board of ECB 27, 28 opening statement in hearing 32–4 responses to MEPs’ questions 34–43 responsibilities on Governing Council of ECB 152–3 Italy 14, 15, 16, 26 citizens’ attitudes to euro 21 conversion rates 20 as a critical case 16, 19, 25–6 devaluation of lira 8 fiscal policy 222 infringement of Stability and Growth Pact 199 interest rates 35 see also Banca d’Italia Japan euro currency area compared with 43, 138 exchange rate intervention 175 yen 183 see also Bank of Japan ‘k-per cent rule’ 40, 88 Katiforis, Giorgos 40–1 Kenen, Peter 48 Keynesianism 192–3 King, Mervyn 85 Kohl, Helmut 11, 25, 229 Kohn, Don 85 Kosovo 180 La Malfa, Giorgio 39–40 labour markets 192 female participation in euro area compared with USA 47 flexibility 19, 35, 48–9, 220, 231, 241 rigidity 39–40, 47, 238, 243 Lafontaine, Oskar 137 Lamfalussy, Alexandre 10, 11, 27 languages, official of EU 60, 155, 234 legislation ECB 13, 52–66 national compatibility with EU Treaty 223 Lenin, V.

B. 41 Blinder, Alan 34–5, 40–1 Boyer, Miguel 10 Bretton Woods system 5 Brown, Gordon, as Chancellor of the Exchequer 58 budget deficits 193 (1990–8) 15 fig. 2 convergence criterion 17–18 limits on overall EU 196 reference values 196–8 budget policies automatic stabilisers 195, 198, 204 of euro area member states 55, 195 sustainable 196 Bulgaria 76 business cycles, synchronisation in euro area 209 fig. 14 Canada, exchange rate intervention 175 capital, free movement of 7, 8, 11 245 246 • Index central planning, vs. market economy 61–2, 75, 222 centralisation 30, 38, 234 Committee of Central Bank Governors 9–10 common market principles 7–8, 32 communication, and cross-checking 111–14 communication policy, of ECB 60, 72–4, 86–7, 116, 146, 156–69, 227 consensus principle 153–6, 160–3 Convention on the Future of Europe 224, 231 convergence and fixed exchange rates 6 in monetary policy instruments of national central banks 119–20, 134 process 13–20, 33 convergence criteria 11–12, 13–17, 48, 220 further issues 17–20 strict application of 19–20 convergence reports, by ECB General Council 75–6, 221–3 conversion rates, between euro and national currencies 20 table 1, 26 credit ceilings 119 collateral for 119, 123–4 credit institutions eligibility within euro area 123–4 minimum reserves 119, 128 and national central banks 119 standing facilities for 126–7, 130 cross-checking, and communication 111–14, 116, 155 cultural differences 228, 234 currencies anchor 75, 180–1, 183 common 3–4, 191 criteria for optimum currency area 48–9, 219 devaluations 6–7, 8, 215, 217 investment 178 invoicing 181 ‘lost’ 54–5 multi-currency system 183–4 reserve 178, 183 stateless 228 transaction 181, 183 and trust 33 see also euro; international currencies; national currencies current account balances financing 214–15 fig. 18 and unit labour costs 215–16 fig. 19 Cyprus 67, 220 Czech Republic 220 data collection for ECB 54 from government’s budget plans 205 time series problem 85–6, 94 uncertainty in ECB 82–4 defence policy, common 232, 240, 242 deficit spending policy 192–3 deflation, risk of 103, 115, 117 Delors Group 10 Report (1989) 11 Delors, Jacques 10, 23 democracy accountability and independence of ECB 30–1 and control of public finances 236 and independence of central banks 58–9, 164 democratic legitimacy 196 denarius 3, 32 Denmark 25, 75, 240 deposit facility 126–7, 134 Deutsche Bundesbank Act (1957) 58, 118–19 Index • 247 Central Bank Council 147 opinion on Stage III of EMU 18–19 statement (1990) 11 statement (1992) 12–13 ‘democratic deficit’ question 58 discount policy 121–2, 133 and EMS 6–7 established (1957) 23, 58 independence 37, 38, 56–8, 235 and minimum reserve issue 120–1 as model for European Central Bank 10, 25, 37, 42–3, 59, 85, 156 monetary policy after reunification 7–9, 78, 94–5 monetary targeting 93 Monthly Report 73 revaluation of gold reserves proposed 29 status of 22–3, 230 Deutschmark (D-Mark) 3, 4 as anchor currency 14, 75 ‘bloc’ 49 and EMS 6–7 floating (1973) 5 introduction (1948) 22–3 market outside Germany 121 performance (1950–98) 142 and resistance to euro 21–5 status of 57, 178 development indicators 109 Dichgans, Hans 229 Directorates General for Economics and Research 71–4, 85, 133, 184–5, 188–9 dollar (US) 1, 176, 178, 181, 183 euro exchange rate against (1999–2006) 172 fig. 12, 175, 178 ‘dollarisation’ 181 Duisenberg, Willem F. 26–7, 35, 41, 70, 72, 73, 99 Dutch central bank 156 ECB see European Central Bank ‘ECB and its Watchers’ conference (1999) 187–8 Ecofin (Council of EU Finance Ministers) 67, 137 economic growth development indicators 109 and inflation 63–4 fig. 5 sustainable 63–6 economic and monetary union proposal 4–5 see also European Economic and Monetary Union economic pillar, and monetary pillar 99–100, 105–11, 112, 116 economic policy coordination 38–9 economic research 184–90 economic theory, and monetary policy practice 184–90 ‘economistic’ position 6, 11–12 ECU see European Currency Unit efficiency 120, 226 elections, restrict time horizon for fiscal policy 193 EMI see European Monetary Institute employment employers and labour 204 levels 63–6 see also unemployment EMS see European Monetary System EMU see European Economic and Monetary Union energy prices 101, 208 epidemics 143 Erhard, Ludwig 58 ERM see exchange rate mechanism ESCB see European System of Central Banks Estonia 75 euro in 2008 1–2, 171 as an anchor currency 75, 180–1, 239 248 • Index euro – cont. as an international currency 176–84 table 5, 242 as an investment currency 178 as an invoicing currency 181 banknotes and coins 1, 24, 54, 136, 178, 181, 229 cash in circulation 181 as a catalyst for integration 47, 84, 232 citizens’ attitudes to 21–5 compared with US dollar 1, 176–83 conversion rates with national currencies 20 table I countdown to the 25–43 countries with exchange rates linked to the 182 table 7 a currency without a state 228–30 effects of decline in exchange rate on world economy 175 exchange rate 54, 169–76 exchange rate against US dollar (1999–2006) 172 fig. 12, 175, 178 German open letter on ‘coming too early’ 19–20 Germany’s adjustment to the 23–5 global reserves 1 historical background 3–51 non-participating countries 75 pacemaker role 229 real effective exchange rate (1999–2006) 173 fig. 13 as a reserve currency 178, 180 role as currency of denomination for credit 1 share in official foreign exchange reserves 178–80 table 6 share in world GDP 43 stability 1–2, 33, 141–6, 184, 234 stable in ECB monetary policy 131–90 as statutory unit of account (1999) 20 success of 2, 237, 240 symbol 135, 229 as a transaction currency 181 euro area 43–51, 171, 177, 184 ‘catching-up’ process 17, 216–18, 220 causes of divergence in economic conditions 207–12 compared with USA 43, 46–7, 83, 190, 209–10, 212 credit institution eligibility 123–4 criteria for an optimum 48–9, 219 data gap 83–4 economic growth at beginning of monetary union 138–41 economy 43–7 enlargement of the 219–27 equal treatment of all financial institutions 122–4 exogenous price shocks 143 growth rate differentials 209–10 fig. 15 HICP for 97–8 import prices 173, 174 inflation differentials 212, 216 key characteristics 44–5 table 2 living standards differences 17, 209–10 as a political vs. economic decision 47–51 price stability 150–1 price-setting in 189–90 synchronisation of business cycles 209 fig. 14 wage growth differentials 217 ‘Euro-DM market’ 121 Eurogroup (finance ministers of EMU member countries) 67, 176, 203 ‘euroisation’ 180 Europe the future 233, 237–44 monetary union 3–9 political unification 4, 242 Index • 249 social model 231, 238, 241 see also European integration European Central Bank (ECB) accountability 30–1, 33, 37, 60, 97, 99, 105, 113, 156–69, 168–9 appointments 26 catalogue for the posting of collateral 123 communication policy 60, 72–4, 86–7, 116, 146, 156–69, 188, 227 Convergence Report (2004) 221, 223 cooperation with national central banks 110, 131–3 credibility 86–7, 137–41, 144–6, 202 criticism 187–8 decision-making bodies 66–76 dispute over first President 26–7 draft statute for 10, 12 establishment (1998) 26, 76 evaluation of stability-oriented monetary strategy (2003) 114–18 Executive Board 25–8, 66, 70–4, 132, 226 membership 25, 26–8, 42, 70–1 terms of office 26–8, 56 and foundations of monetary policy 52–130 General Council 66, 74–6 Governing Council 66, 67–9, 111, 119 Briefing Note and Annexes 152 consensus principle in 153–6, 159 meetings 69, 97, 133, 136, 151, 152–3, 155–6 monetary policy-making in 146–56 number of members 155, 223–7 Orange Book 151–2 orientations in 131–5 reports 152 responsibility for monetary policy 135–41, 149–56 strategy review (2002) 114–18 timely information production 158 implementation of monetary policy 128–30 independence (Article 108) 30–1, 55–60, 87, 170, 192, 201 independence and inflation outcomes 37–8 independence and national legislation 13 independence and price stability 33, 234 instruments of monetary policy 118–30 modelled on Bundesbank 10, 25, 42–3, 59, 85, 156 monetary policy in EMU framework 191–236 monetary policy and exchange rates 169–76 monetary policy options 86–96 monetary policy for a stable euro 131–90 Monthly Bulletin 60, 72–4, 99, 104–5, 109, 117, 133, 153, 160, 167–8 neutrality 120, 183, 206 pillars of monetary policy strategy 54–66, 99–100, 105–11, 116–18, 139–40, 155 political pressure on 137, 162, 174, 202–3 preparations for the single monetary policy 76–85 President 26, 68, 226 President’s introductory statement 117, 158, 159, 167 press conferences 157–8, 167, 168 price stability mandate 33, 60–6, 87, 205, 234 publications 60, 72–4, 116, 156, 160 robustness 97 250 • Index European Central Bank (ECB) – cont. rotation and voting rights of national central bank governors 224–6 table 8 as scapegoat 37 seat in Frankfurt am Main 25, 29 and the single monetary policy 223–7 stability-oriented monetary policy strategy 96–118 fig. 7, 205 success of monetary policy 141–6 supranational status 122–4, 200–1 transfer of monetary policy responsibility to 11 transparency 31, 33, 42–3, 60, 84, 87, 97, 99, 113, 163–9 trust in 84, 86–7 vulnerabilities 241 Watchers Groups 187–8 see also Statute of the European System of Central Banks European Coal and Steel Community (1952) 4 European Commission 223, 224 ECB annual report to 60 proposal of member states to participate in monetary union 25–6 European Council 76 Brussels meeting (1998) 25–8 ECB annual report to 60 enabled to amend Statute of ECB 223, 224 stages in implementation of EMU 11 UK presidency 25 unanimity on price stability 170–1 European Currency Unit (ECU) 6 European Defence Community project 240 European Economic Community (EEC) (1958) 4, 233 European Economic and Monetary Union (EMU) constitution consultations 193–5 ECB and monetary policy in 191–236, 207 fiscal and monetary policy in 192–200 fiscal policy rules in 192–6 German resistance to 21–5 options for countries not joining 239–40 policy coordination in 200–7 political prerequisities for the success of 234–6 and political union 232, 242–4 possibility of a country’s exit from 239 preparedness for accession 219, 237 selection of participating countries 12–20, 25–6 Stage I 11 Stage II 11 Stage III 9–13 strengthening scenario 241–2 threats to 238, 243–4 vulnerability to asymmetric shocks 208 European integration 20, 32, 239–44 euro as a catalyst for 47, 232 and flexible exchange rates 8 functional 232 scenarios for possible 241–4 European Liberal, Democrat and Reform Party 39–40 European Monetary Institute (EMI) 72, 75, 76 established (1994) 11 European Monetary System (EMS) characteristics of 6–7, 8 established (1979) 5–6, 9 membership requirement for EMU participation 13 European Parliament 76, 223, 224 debate on symbolism of euro coin 229 Index • 251 debates on ECB 34–43 ECB annual report to 60 questionnaire and hearings for candidates for Executive Board of ECB 29–34 European People’s Party, Christian Democratic Group 36 European System of Central Banks (ESCB) 52–4, 97 see also Eurosystem European Union (EU) countries with euro 1, 20, 220 current status 219, 233 economic growth 220 enlargement 17, 75–6, 219–27 founder members 17 and monetary union 219–22 relationship with EMU 239–40 Eurostat 83, 101 Eurosystem 53–4, 67, 76, 135 basic tasks 53–4, 119, 205 euro-area and multi-country models for macroeconomic projections 110 expert reports 152 ‘information kit’ 168 and national central banks 150 operational framework 122–4, 129 price stability objective 63, 104–5 transmission mechanism 189 Eurosystem Inflation Persistence Network 189–90 exchange rate mechanism (ERM II) 75, 181, 222 exchange rate regime, significance of 169–71 exchange rates countries linked to the euro 182 table 7 crises 6–9 criterion for admission to EMU 13, 16, 222 ECB strategy ruled out 90–3 of the euro 54, 169–76 European views on issues 5–6 fixed 9, 169; see also Bretton Woods system; EMS floating (flexible) 8, 9, 169, 171–4 and monetary policy 169–76 ‘parity grid’ 6 pegging 181 and price stability 90–3 real 213–14 risk in public debt 194 stability 6, 7, 8, 30 exogenous shocks 48, 78, 104, 109, 113, 116, 138, 140, 243 asymmetrical 208, 214 ECB reaction to 204–5 euro protects against 237 and labour market flexibility 48–9 prices in euro area 143 expectations role of 57, 65, 166, 206–7 see also inflation expectations exports 208, 213–14 Fabio, Udo di 240 Feldstein, Martin 50 financial markets 18, 33, 166, 194 domestic openness 177 integration 214 international 84, 177 and monetary policy 167 financial sector economic analysis of data 109 and the monetary policy transmission mechanism 82 financial system, US compared with euro area 47 Financial Times 199 financing, of current account balances 214–15 fig. 18 Finland 14, 15, 16, 26 citizens’ attitudes to euro 21 conversion rates 20 First World War, Germany after 62 252 • Index fiscal policy institutional mechanisms to monitor 18 and monetary policy in EMU 192–200 and monetary policy relationship 30, 38–9, 109, 138, 191–2, 200–7, 237 national 200, 202, 203–4, 217 rules in EMU 192–6 stability 14, 18–20, 222 flexibility of markets 19, 35, 48–9, 208, 214, 218, 220, 231, 235, 241 food prices 101, 143 foreign exchange markets intervention 174–6, 181 and monetary policy 169–76 foreign policy, common 230, 232, 242 France 14, 15, 16, 26 conversion rates 20 infringement of Stability and Growth Pact 199 monetarism 6 presidential campaign (2007) 202 reservations on ECB 59 resistance to first President of ECB 26 single currency 4, 244 see also Banque de France Frankfurt am Main 25, 29 Frankfurt University, Center for Financial Studies 187 free market principle 120 Friedman, Milton 40, 88, 105 Funk, Honor 36 German Federal Ministry of Economics, Council of Experts report (1989) 10 Germany 14, 15, 16, 26 adjustment to the euro 23–5 benefits of economic integration 233, 244 citizens’ attitudes to euro 21–5, 36 consensus democracy 153–4 conversion rates 20 current account balance 214 customs borders (1790) 3 customs union (1834) 3 economic and political union 229 economistic position 6 government relations with Bundesbank 29 historical right to mint coinage 3 hyperinflation (1922–3) 22, 62 inflation rate 33 infringement of Stability and Growth Pact 199 interest rates 35 media debate over German candidacy for Executive Board of ECB 29 Nazism 22–3 real interest rate argument 212–13 Reich (1871) introduces Mark 3, 4, 229 restrained wage growth 217 reunification 7, 23, 78 and the Second World War 22–3, 38 stagflation 57 see also Deutsche Bundesbank global corporations 36 globalisation 78, 84, 144 gold standard 88 in Germany (1871–1914) 4, 22 government debt (1990–8) 15–16 fig. 3, 17–18 ceiling for 193–8 implicit and explicit 197 governments accountability to national parliaments for public finances 236 deficits (1990–8) 15 fig. 2 fiscal policy sovereignty 193–4 and ‘lost’ currencies 55 Great Britain see United Kingdom (UK) Index • 253 Greece 67, 75, 210 current account balance 214 infringement of Stability and Growth Pact 199 Guterres, Antonio 232 Hague summit (1969) 4–5 Hämäläinen, Sirkka 27–8, 70 Hanover summit (1988) 10 Harmonised Index of Consumer Prices (HICP) 83, 101, 138, and price stability 97, 98, 115, 141–2 table 4, 207 Hayek, Friedrich 234 Hendrick, Mark 34, 35 housing prices 101, 217–18 Hungary 220 income distribution 204 indexation 62, 101 measurement bias in 103 inflation 2 per cent rate over medium term 2, 103, 115, 116 (1970s) 37–8 convergence (1990–8) 14 fig. 1 convergence criterion 13–14, 41, 221 ‘core’ 101 differentials in euro area 212 fig. 17, 216 forecast and targeting 91–3 and growth of money supply 92–3, 105–6 fig. 6 perception vs. statistics 24 problems of measurement 41 and real economic growth 64 fig. 5 redistribution effect 62, 238 and unemployment 39–40 zero 102–3, 117 inflation expectations 1–2, 35, 40, 57, 84, 114, 207, 213 high 143–6 long-term in euro area 144 fig. 11 low-level 100–3 well-anchored 66, 87, 117, 140–1, 145–6 inflation targeting 30, 85, 90–3, 103 insolvency, of sovereign states 194, 196 interest rates at beginning of monetary union 138–41 criterion for admission to EMU 13, 17 deposit facility 126–7, 134, 139 long-term nominal 1–2, 144–5 main refinancing operation 124–6, 129–30, 134, 138–40 marginal lending facility 126–7, 130, 134, 139 and money market rates (1999–2006) 141 fig. 10 and money market rates at beginning of monetary union 139 fig. 9 real argument 212–13 standing facilities 126–7, 134–5 and zero inflation 102–3 interests commonality of 191 national 202–3 Intergovernmental Conference (2000) 171 international agreement, for ECB Statute 52–4 international currencies 176–7 euro as 176–84 table 5, 242 factors in 177 functions of 178–83 International Monetary Fund, World Economic Outlook 33 investment 35 risk-sharing 214 Ireland 14, 15, 16, 26, 213 conversion rates 20 as a model case 16, 210 254 • Index Issing, Otmar 28, 244 Directorates General for Economics and Research 71–4, 85, 133 early experiences in Brussels 28–43 on first Executive Board of ECB 27, 28 opening statement in hearing 32–4 responses to MEPs’ questions 34–43 responsibilities on Governing Council of ECB 152–3 Italy 14, 15, 16, 26 citizens’ attitudes to euro 21 conversion rates 20 as a critical case 16, 19, 25–6 devaluation of lira 8 fiscal policy 222 infringement of Stability and Growth Pact 199 interest rates 35 see also Banca d’Italia Japan euro currency area compared with 43, 138 exchange rate intervention 175 yen 183 see also Bank of Japan ‘k-per cent rule’ 40, 88 Katiforis, Giorgos 40–1 Kenen, Peter 48 Keynesianism 192–3 King, Mervyn 85 Kohl, Helmut 11, 25, 229 Kohn, Don 85 Kosovo 180 La Malfa, Giorgio 39–40 labour markets 192 female participation in euro area compared with USA 47 flexibility 19, 35, 48–9, 220, 231, 241 rigidity 39–40, 47, 238, 243 Lafontaine, Oskar 137 Lamfalussy, Alexandre 10, 11, 27 languages, official of EU 60, 155, 234 legislation ECB 13, 52–66 national compatibility with EU Treaty 223 Lenin, V.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

air traffic controllers' union, Airbnb, Alan Greenspan, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carmen Reinhart, centre right, collective bargaining, company town, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, full employment, future of work, gig economy, Gini coefficient, green new deal, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, meta-analysis, mini-job, Money creation, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, public intellectual, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Solow, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Authorities can make the right to repossess conditional on having complied with the relevant macroprudential rules, regardless of where the lender is based. All contracts that require enforcement by domestic authorities create this sort of opportunity to make enforcement conditional on prior compliance, even when that compliance is extraterritorial. In doing this, financial regulators would be relearning a forgotten lesson from the Bretton Woods era. What is usually remembered from the monetary-financial history of the 1950s and 1960s are the international features of the system: fixed exchange rates and controls on capital mobility across national borders. It is less well known that domestic credit controls were used actively to manage credit conditions, especially to separate credit growth from the level of interest rates, which were sensitive to global conditions even then.22 This is possible in a world of capital mobility, too; indeed, macroprudential rules on credit growth could discourage destabilising cross-border capital flows, in effect substituting for limits on financial openness.23 The third step is to use credit policy to address regional inequality.

This research shows that good financial regulations improve growth, but that they do so less when the financial systems are more open. The authors suggest this is because of “greater opportunities to borrow abroad or increased scope for cross-border leakages in regulation.” 22. Eric Monnet, “Macroprudential Tools, Capital Controls, and the Trilemma: Insights from the Bretton Woods Era,” VoxEU, 13 June 2018, https://voxeu.org/article/macroprudential-tools-capital-controls-and-trilemma. 23. Hélène Rey, “International Channels of Transmission of Monetary Policy and the Mundellian Trilemma” (Mundell-Fleming Lecture, Fifteenth Jacques Polak Annual Research Conference, International Monetary Fund, Washington, DC, 13–14 November 2014), https://www.imf.org/external/np/res/seminars/2014/arc/pdf/Rey.pdf. 24.

See technology Autor, David, 77, 78, 71 Autor-Dorn-Hanson methodology, 78, 81 balance-of-payments crises, 218–20 Bank for International Settlements, 64, 155 Bank of Japan, 165 bankruptcy, 159–60 Bartik, Timothy, 203–4 Belgium, 172, 270n6 Berlin Wall, collapse of, 211 Big Data, 224 Blackpool, England, 193–94 Blair, Tony, 117 Blanchard, Olivier, 145 blue-collar aristocracy, 18, 22, 33 Brazil, 223 Bretton Woods era, 162 Brexit: business investment affected by, 102–3; empowerment sought by supporters of, 111; immigration as issue in, 214; income inequality as factor in support of, 31; political shock of, 7, 18; voter support for, 41, 45–46, 192–93 Britain: effect of global financial crisis on, 67–68; import regulations in, 222–23; social order upset in, 7; voter behaviour in, 31.


pages: 257 words: 80,698

Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals by Oliver Bullough

Alan Greenspan, Bellingcat, Big bang: deregulation of the City of London, Big Tech, bitcoin, Black Lives Matter, blockchain, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, capital controls, coronavirus, COVID-19, crowdsourcing, cryptocurrency, cuban missile crisis, Downton Abbey, Etonian, financial deregulation, financial innovation, full employment, Global Witness, John Bercow, Julian Assange, light touch regulation, lockdown, Nixon triggered the end of the Bretton Woods system, offshore financial centre, race to the bottom, rent-seeking, Ronald Reagan, Shoshana Zuboff, Silicon Valley, Suez canal 1869, Suez crisis 1956, surveillance capitalism, the High Line, WikiLeaks

Sterling remained a global currency, the only rival to the dollar, but Britain’s huge debts made sure it was under constant threat of speculative attack, and the restrictions put in the way of capital flows by the post-war financial system prevented City institutions from inventing new ways to respond. I described this post-war financial system, created at a conference in Bretton Woods in 1944, in Moneyland and won’t re-describe it here, except to say that it was very different to the one we have now. At the heart of the difference between then and now is an irreconcilable trilemma (like a dilemma, but with three possibilities instead of two). In inter-state financial relations, countries have three options to choose between: fixed exchange rates, which exporters and importers love because they make trade predictable; free capital flows, which banks love because they make investment overseas easy and profitable; and domestic autonomy, which governments love because it allows them to respond to the wishes of their electorates.

And the second, which interlocks elegantly with the first, is that there is no point refraining from bad behaviour until everyone else agrees to do so, because that would achieve nothing. If I don’t steal your money, somebody else will; and there’s no point in me stopping until everyone else does too. Together these two arguments spelled doom for the Bretton Woods system of capital controls. Five months later, President Richard Nixon, infuriated by his inability to control inflation by limiting the amount of currency in circulation, abandoned the US dollar’s peg to gold. From then on, the dollar would be worth whatever someone would pay for it. All dollars became Eurodollars, and the bankers got their solution to the trilemma.

INDEX A accountants regulators 185, 186 Suspicious Activity Reports 189 Acheson, Dean 58 Action Fraud 214, 218 Aliyev family 191–3 Aliyev, Nurali 199, 200, 202 Aliyev, Rakhat 198, 199, 200 Allard Prize 145 Aloi, Tony 229–30, 231 Altman, Oscar 52 Angola 155 Anguilla 198, 235, 243 Apple 223 Archbishop of Canterbury’s Faculty Office 186–8 Asquith, Lord Julian 234 Asquith, Raymond 159, 169, 173 Assad, Hafez al- 159 Assange, Julian 171 Assets Recovery Agency 204 Association of Accounting Technicians 135 Australia 19 visas 244 Austria 166, 170, 171 autonomy 31, 38, 57 Azerbaijan 191–3, 197 B BAE Systems 85–9 Ballester, Freddie 98–100, 104, 105, 114, 121 Bank of England 36–40 cultural uniformity 45–6 Eurodollars 45–7, 49, 50–1, 54–5, 58–9, 232 governors 32, 33, 36 and Midland Bank 42 Suez Crisis 44 banknotes 8 banks and money laundering 194 Suspicious Activity Reports 189–90 Baring, Evelyn, first Earl of Cromer 16, 32 Baring, George Rowland Stanley, third Earl of Cromer 32–3, 36, 39, 55, 232 Baring, Rowland, second Earl of Cromer 32 Barings Bank 57 Barker, Alison 183 Barkshire, John 34, 40, 229–31 BBC, Orwell statue 8 Bean, David 88 Bell, Geoffrey 45–6, 51 Bell, Lord 171 Bercow, John 163 Berry, Elspeth 138, 146–7 Betfair 115 Better Regulation Task Force 111 betting see gambling Betting and Gambling Council 119 Billion Bright Trading Limited 213 billionaires, and COVID-19 pandemic 58 Birnbaum, Eugene 54 Blair, Tony 109 blockchain 242, 243 Boeing 170 BOLSA (Bank of London and South America) 50, 57 Bolton, George 43, 50 Bossano, Joe 95, 96–7, 123, 124 Bretton Woods 30, 31 Brexit 12–13, 140, 142, 144, 248, 249 Bridgen, Andrew 140–1 British empire 18–20, 58 and City of London 30 British Private Equity and Venture Capital Association 142 British Syrian Society 159–60 British Ukrainian Society (BUS) 159–60, 172–3, 174 British Virgin Islands (BVI) 68–71, 74, 79–81, 91, 227 Firtash 161 Khassenov 209 shell companies 72–9, 81–5, 86–9, 90, 123, 124, 235, 238, 239, 240 Brompton Road Tube station 151–3, 164–5, 170, 172, 174, 176–7 Brown, Gordon 132 Brown, John 108, 109–10 Budapest Project 167–8, 169 Burma 20 Butler, Paul 71, 72–3, 75–6 butlers 4–6 Jeeves 6–7, 10–11 C Callaghan, James 36 Cambridge University 160–1, 162, 163, 169, 171–2, 237 Canada 19 visas 244 capital flows 31–2, 50, 51, 55, 59 Eurodollars 40–2, 44–57, 58–9, 232, 238 funk money 64–6, 78–9, 82, 208 capitalism 35 Cassidy, Rebecca 111–12, 113, 116–17, 119 Cayman Islands 233–5, 241, 243, 247 Ceylon 20 Chambers, Ajit 149–50, 151, 152, 153, 165, 176–7 Chandler, Victor 104–7, 108 Child & Child 192–3 China British investment in 19 cultural revolution 66 and Hong Kong 78, 82 money laundering 1–4 socialism 123 and Tanganyika 63 Church of England 186–8 Churchill, Winston 7, 21 City of London 29–30, 32, 57–8 Big Bang 56 cultural uniformity 32–4, 35–6 deregulation 56–7 Eurodollars 44–57, 58–9 financial innovation 48 and funk money 64, 65 Midland Bank 40–2 money laundering 182, 184 offshore finance 249 regulation 39–40 Scottish limited partnerships 137–9, 141, 142–3 and Suez Crisis 42–4 Clarke, Kenneth 240 Clinton, Bill 109, 121, 236 Cobbold, Cameron 33 Colston, Edward 7 Columbus, Christopher 69 communism 35 Tanganyika 62, 63 Coomes, Mr and Mrs 101 Coral 103, 107 Countrywide 193 COVID-19 pandemic 13, 15 and billionaires 58 Crimea 164 Cromer, Evelyn Baring, first Earl of 16, 32 Cromer, George Rowland Stanley Baring, third Earl of 32–3, 36, 39, 55, 232 Cromer, Rowland Baring, second Earl of 32 Crown Prosecution Service 204, 218 Cuban Missile Crisis 52 Curaçao 71–2, 198 Cyprus 19 Firtash 166 D Daily Telegraph 108 Danske Bank 144–5 Davies, Philip 115 defence against money laundering (DAML) SARs 195 Department for Culture, Media and Sport 110 Deripaska, Oleg 226 DF Foundation 161 dirty money see money laundering dollars 41–2, 44, 48 see also Eurodollars double taxation treaties 72, 75 E The Economist 151–2 Eden, Anthony 23, 24, 26 Edmonds, Tamlyn 219–20, 221, 222 Edmonds Marshall McMahon (EMM) 219–20, 225 Egypt, Suez Crisis 15–19, 20–7 Eisenhower, President 24 ELMER 195, 205 Envers 87, 88 estate agents 193 Suspicious Activity Reports 189 Eurobonds 45 Eurodollars 40–2, 44–57, 58–9, 232, 238 exchange rates 31–2, 38 F Fawcett, Millicent 8 FBI Budapest Project 168 Firtash 168–71, 200, 202 Federal Reserve 46, 48 Eurodollars 51, 53–4 Financial Action Task Force (FATF) 182–4 Financial Conduct Authority (FCA) 183, 185, 186 financial innovation 48 see also Eurodollars Financial Intelligence Unit (FIU) 190, 195 Financial Security Index (Tax Justice Network) 235 Financial Times 38 Firtash, Dmitry 157–66, 171–6, 177, 181, 219, 227 Brompton Road Tube station 164–5, 170, 172, 174, 177 Cambridge University 160–1, 162, 163, 169, 171–2, 237 FBI case 168–71, 200, 202 Firtash, Lada 163, 172 fixed-odds betting terminals (FOBTs) 112 Fonseca, Ramon 78 Foreign Affairs Committee 166, 179–81, 248 Fortuna United LP 128–30 France Eurodollars 49 overseas territories 243 prosecutions 216 Suez Crisis 23–4 Franco, Francisco 93, 95 Franklin, Professor Simon 161 Fraser, Ian 128–9 Freud, Jane McAdam 165 Fry, Richard 29–30, 57 funk money 64–6 Hong Kong 78–9, 82 Kazakhstan 208 G gambling 10, 102–5 deregulation 107–14, 236–7 gambling addiction 111, 116– 20, 121, 124 Gibraltar 98–102, 104, 105–7, 113, 114–17, 122–4, 242–3 Gambling Commission 118, 119, 185 Gambling with Lives 118 Gamesys 120 Garcia, Joe 122–3 Gartcosh 125–6 gas 153–5, 168 Gazprom 153, 155, 156, 157, 158, 161 Gazprombank 161 Germany, Eurodollars 49 ghost stations 149–53, 164–5 Gibraltar 91–8, 114–15, 122, 227, 235, 238, 241–3, 245 blockchain 242, 243 gambling 10, 98–102, 104, 105–7, 109, 110, 113, 114– 17, 119–20, 121–4, 242–3, 245 smuggling 92, 97 Global Witness 157–8, 169, 196, 198, 200, 205 golden visas 244–5 Goodman, Helen 172–3 Granovski, Vladimir 159 Greece financial crisis 31 visas 244 Green, Jeremy 57 Greenspan, Alan 46 Grogan, John 159, 160 Group DF 161 Grundy, Milton 233–4, 235–6 Guernsey 235 Guyana 19 H Hambro, Charles 49 Hambros Bank 57, 65 Hayek, Friedrich 35 Hayward, Mark 188 hedge funds Cayman Islands 234 and limited partnerships 138 Her Majesty’s Revenue and Customs 185 Herald 125, 147 Hitler, Adolf 21 Hodge, Margaret 239–40, 241, 247–8 Hodivala, Jama 223 Home Office, UWOs 197 Hong Kong and British Virgin Islands 78–9, 82 Khassenov 208–9, 211–12, 213, 220 Horrocks, Ian 210, 214–15, 218, 219, 220, 221 HSBC 189, 193 Hungary 166, 167–8, 169 Hunte, Lewis 76, 77 Huntington, Earl of 107 I India 19, 20 Institute of Chartered Accountants 194–5 Intelligence and Security Committee 175–6, 201 international business companies (IBCs) 77–8, 83–4 International Centres Forum 90 Ireland betting duty 106 petrol taxes 47, 54, 56, 236 Isle of Man 235, 243 Isola, Albert 241–2 Israel, Suez Crisis 23–4 Italy, visas 244 J Jaspert, Augustus James Ulysses 80–1 Jeeves, Reginald 6–7, 9, 11, 59, 101, 110–11, 232, 246 Jersey 235 Johnson, Boris Brexit campaign 225 London Underground 149–50, 151 and Russian influence in UK 175 Jowell, Tessa 110 Justice Committee 225 K Kazakhstan 198–201, 207, 208 Kennedy, John F. 63 Kenya 19, 61 Keynes, John Maynard 35 Khassenov, Argyn 207–15 private prosecution 215, 219– 23, 226 Kleinwort Benson 64 Kroll 126, 127, 128 Kulich, Aleksandr 209, 213 Kulich, Andrey 208–9, 210, 211, 213–14, 220, 221–3, 226 L Ladbrokes 103, 104, 107, 115 Laird, Judge Francis 220, 221 Lancet 124 Lasser Bros 229 Law Commission 190–1 Law Society of Scotland 136–7 lawyers 11–12 private prosecutions 223–4 regulators 185 Suspicious Activity Reports 188–9 Leask, David 125–6, 128, 131, 134, 135, 136, 144, 147 Lebedev, Yevgeny 248 legislative reform orders (LROs) 139–40 Levin, Carl 247 Li Ka-Shing 78–9 limited partnerships (LPs) 138, 143–4, 146–7 Northern Ireland 146 private fund limited partnerships 142, 145–6 Scottish limited partnerships 128–45, 227, 245, 246 London Kleptocracy Tours 162–3, 196 London Underground 149–51 Brompton Road Tube station 151–3, 164–5, 170, 172, 174, 176–7 M McMafia 179, 196, 214 Macmillan, Harold 20, 23 Malaya 19, 20 Malone, Jeff 17–18, 25–6, 34–5 Malta 242 Marx, Karl 35 May, Theresa 182 Mercantile House 229 merchant banks 36, 44 Metcalf, David 244 Micky Blue Eyes 230–1 Midland Bank 40–2, 44, 45, 51–2, 57 Migration Advisory Committee 244 Mills, Nigel 203 Ministry of Defence Brompton Road Tube station 152, 164–5, 172 Gibraltar 94–5, 114–15 Mishcon de Reya 199, 201 Mitchell, Andrew 239–40, 241, 247–8 Mkapa, Benjamin 89 Mogilevich, Semyon 157, 158, 167–8, 169 Moldova 126–7, 128, 129, 131, 132, 142, 143, 147 money laundering 1–4, 9, 179– 82, 196–8, 203–6, 246 Aliyev family 191–3 Cayman Islands 247 Financial Action Task Force 182–4 limited partnerships 128–45, 146, 245 Mogilevich 167–8 Nazarbayeva case 198–203 Panama Papers 191–2 UK regulation 184–96 Moneyland (Bullough) 30, 45, 130 Montado, Ernest 94, 95 Montegriffo, Peter 114 Moscow Narodny Bank (MNB) 41 Mossack Fonseca 78, 83, 191 Mullin, Roger 132, 134–6, 138– 42, 143–4 Mynors, Humphrey 39 N Nasser, Gamal Abdel 22, 23 National Crime Agency (NCA) 197, 201–4, 241 and Khassenov 214 Nazarbayeva case 199–201, 202, 203 National Lottery 103–4 Nazarbayev family 208 Nazarbayev, Nursultan 198, 201 Nazarbayeva, Dariga 198, 199, 200, 202 Ndibe, Okey 10 Netherlands 190 New Deal 31, 56 New York 229–31 New York Times 53, 89–90 New Zealand 19 Nigeria 155 healthcare 9–10 Nixon, Richard 55 Noriega, Manuel 78 Northern Ireland limited partnerships 146 petrol taxes 47, 54, 56, 236 notaries 187–8 Noyes, James 120 Nurse, Gwyneth 141–2, 143 Nyerere, Julius 62–3, 85, 89–90 O O’Brien, Leslie 54 Ogle, Vanessa 64 online gambling 114–17, 119– 20, 124 Only When I Larf 212 Orange Revolution 155–7, 159 Orban, Victor 169 Ormerod, David 191 Orwell, George 8 overseas territories 235, 239–41, 243, 245 see also British Virgin Islands; Cayman Islands; Gibraltar Owens, Lynne 201 P Panama 78, 82, 240 Panama Papers 83, 191–2 partnerships 132 see also limited partnerships Party Gaming 114, 121–2 Patel, Priti 181 Peel, Robert 7–8 Petfre 120 Philip, Prince 61, 161, 162, 169 police 216–17 and financial crime 218, 219– 20, 246 funding 224 Gartcosh 125–6 Hungary 168 and Khassenov 214, 219–20 and London Kleptocracy Tours 163 and private sector 202 and Scottish limited partnerships 126, 144, 146, 246 Portugal, visas 244 private equity, and limited partnerships 137–9, 142 private fund limited partnerships (PFLPs) 142, 145–6 private prosecutions 215–19, 223–8 Khassenov 215, 219–23, 226 problem gamblers 111, 116–20, 121, 124 Pryor, Henry 195 Public Accounts Committee 248 Purplebricks 193 Putin, Vladimir 155 and Ukraine 156, 164, 166 R Racing Post 106 Rankin, Ian 125, 134 Reagan, Ronald 56 Red Diamond Trading Limited 86, 88 Regulatory Reform Committee 139, 141–2 Rhodes, Cecil 7, 18–19 Riegels, Colin 71 Riegels, Michael in British Virgin Islands 68, 71, 73–4, 75, 76, 77, 78, 82, 83–5 in Tanzania 61–2, 63, 65–7, 85 and Tanzania radar contract 89 Riegels, Norma 67, 68, 73, 75, 84–5 Risby, Lord 159–60, 163–4, 173 Rock Turf Accountants 98, 100–1 RosUkrEnergo (RUE) 155, 156–7, 158, 169 Rothermere, Viscount 32 Royal Navy, Gibraltar 92, 93, 94–5 Russia money in UK 175–6, 179, 182, 222 organised crime 167 and Ukraine 154, 155, 164 S Saudi Arabia, and BAE Systems 87, 90 Scotland, police force 246 Scotsman 125 Scottish limited partnerships (SLPs) 128–45, 227, 245, 246 Scottish National Party 131–2 Scottish private fund limited partnerships 146 Scottish Property Federation 136, 142 Serious Fraud Office (SFO) 206 and BAE Systems 88–9, 90 Seychelles 128–9 Sharif, Khalid Mohammed 192–3 Shaw, David 84 shell companies 72–84, 86–9, 90, 123, 124, 130–1, 196, 237, 239–40 Scottish limited partnerships 128–32 Shetler-Jones, Robert 159, 171, 175 Shonfield, Andrew 37–9, 59 Shor, Ilan 127, 128 Short, Clare 86 Skripal, Sergei 179 Smith, Richard 128–9, 133–4 Solicitors Regulation Authority (SRA) 192–3 Soviet Union 153 see also Kazakhstan; Russia; Ukraine Spain, and Gibraltar 93, 95, 97–8, 124 Spink, Mike 162, 165 sportsbook.com 114 Spring, Richard (Lord Risby) 159–60, 163–4, 173 Standard Chartered 209, 210, 211–12, 220 Stark, Pete 75 sterling 30, 42–3 The Sting 212 Stoutt, Lavity 75, 76 Suez Crisis 15–19, 20–7, 34–5, 42–4, 58, 249 Suez Veterans’ Association (SVA) 15, 16–18, 22, 24, 25–6 suicides, and gambling addiction 118 surveillance capitalism 117 Suspicious Activity Reports (SARs) 2–4, 187–91, 192, 193, 194 ELMER 195, 205 Switzerland Eurodollars 49 Firtash 166 T Tanchel, Vivienne 225–6 Tanganyika 61–3 Tanzania 63, 65–7, 85 corruption 89–90 radar contract 85–9 tax havens 72, 84 see also British Virgin Islands; Cayman Islands; Curaçao Tax Justice Network (TJN) 235 taxation treaties 71–2, 75 Thank You, Jeeves (Wodehouse) 110–11 Thatcher, Margaret 56 Thompson, Mark 181, 206 The Times 131, 140 Tortola 69 Trainspotting 128 Transparency International 185, 194, 196 Transport for London (TfL) 149 Traynor, Brian 99–100 Treasury and Bank of England 37–8 limited partnerships 136, 139, 141–2, 143 Treaty of Utrecht 93 Tube see London Underground Turpin, Neil 187, 188 U UK Finance 190 Ukraine 131, 170, 174–5 British Ukrainian Society 159–60 corruption 155, 164 gas 153–5, 156–7, 158, 168 Orange Revolution 155–7, 159 unexplained wealth orders (UWOs) 196–202, 203–4 United Nations General Assembly, Suez Crisis 43 United States and BAE Systems 87 and British Virgin Islands 78, 82 and Cayman Islands 247 Eurodollars 51, 52, 55 financial deregulation 56–7 and Firtash 166, 168–71, 176, 177 gambling 102, 120–2, 236 and Gibraltar 96 and money laundering 189, 191, 193 New Deal 31, 56 offshore business 71–2, 73, 74–5 and organised crime 166–71 and Panama 78 Regulation Q 41, 56 Suez Crisis 24–5, 43–4 and Tanganyika 63 and Ukraine 164 visas 244 United States Virgin Islands (USVI) 70 V Venezuela 155 Vicious Games (Cassidy) 111– 12, 113, 116–17, 119 Virgin Islands 69, 70 see also British Virgin Islands visas 244–5 Vithlani, Shailesh 85–8 Volcker, Paul 46 W Walker, David 50–1 Wall Street Journal 168–9 Wallace, Ben 194, 196 Washington, George 63 welfare state 31, 56 Westwood, Neville 71, 73 Wheatley, Sowande 240 whistle-blowers 246–7 Whittingdale, John 173–4 Wilkinson, Howard 145 William Hill 103, 107, 108, 115 Without the Option (Wodehouse) 6–7 Wodehouse, P.


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Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Big Tech, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, clean tech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, confounding variable, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, general purpose technology, gentrification, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, middle-income trap, mirror neurons, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, radical decentralization, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, tacit knowledge, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, the strength of weak ties, too big to fail, trade liberalization, union organizing, urban decay, vertical integration, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

These developments can be seen as a consequence of three concerns: first, as discussed in the previous chapter, where wage bargaining is to some degree coordinated, but not fully centralized, as in most of the advanced economies of northern Europe, central bank independence and inflation targeting generates wage restraint. Related, it is arguably easier to fine-tune modern economies through short-term interest rates than through fiscal policy. And it is certainly true that after the macroeconomic turmoil from the ending of Bretton Woods to the early 1990s, the period from then until the financial crisis in 2007, the so-called Great Moderation, was marked by very low amplitude output-inflation movements (even if this partially masked the large financial cycle which was building). Second, given the requirement of open financial markets, and hence the absence of controls on capital movements, fixed exchange rates are problematic since markets can bet against them with little risk: the two effective options are therefore flexible rates or membership of a common currency.

That these two regulatory systems, however, should have proved dysfunctional would have been surprising to many commentators through the two decades before the crisis during which the systems took shape. The systems imposed something like international uniformity on macroeconomic management and national financial regulation for the first time since Bretton Woods. In the system of inflation targeting, independent central banks were given responsibility for macroeconomic management and used interest rates to return deviations of inflation and unemployment to their target or equilibrium values. They did so in the common New Keynesian macroeconomic framework that we discussed above.

Comparative Politics 25 (3): 275–96. Hall, Peter A., and David Soskice, eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press. Hallerberg, Mark. 2004. Domestic Budgets in a United Europe: Fiscal Governance from the End of Bretton Woods to EMU. Ithaca, NY: Cornell University Press. Hallerberg, Mark, and Jürgen von Hagen. 1999. “Electoral Institutions, Cabinet Negotiations, and Budget Deficits in the European Union.” In Fiscal Institutions and Fiscal Performance, eds. James M. Poterba and Jürgen von Hagen, 209–32. Chicago: University of Chicago Press.


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The Establishment: And How They Get Away With It by Owen Jones

anti-communist, Asian financial crisis, autism spectrum disorder, bank run, battle of ideas, Big bang: deregulation of the City of London, bonus culture, Boris Johnson, Bretton Woods, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, disinformation, don't be evil, Edward Snowden, Etonian, eurozone crisis, falling living standards, Francis Fukuyama: the end of history, full employment, G4S, glass ceiling, hiring and firing, housing crisis, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Dyson, Jon Ronson, laissez-faire capitalism, land bank, light touch regulation, low interest rates, market fundamentalism, mass immigration, Monroe Doctrine, Mont Pelerin Society, moral hazard, Neil Kinnock, night-watchman state, Nixon triggered the end of the Bretton Woods system, Northern Rock, Occupy movement, offshore financial centre, old-boy network, open borders, Overton Window, plutocrats, popular capitalism, post-war consensus, profit motive, quantitative easing, race to the bottom, rent control, road to serfdom, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, stakhanovite, statistical model, subprime mortgage crisis, Suez crisis 1956, The Wealth of Nations by Adam Smith, transfer pricing, Tyler Cowen, union organizing, unpaid internship, Washington Consensus, We are all Keynesians now, wealth creators, Winter of Discontent

After World War II, the advanced capitalist states had operated under the so-called Bretton Woods system, which governed rules of commerce and finance with a global system of fixed exchange rates. The exchange rate was kept constant by states tying their currency to the US dollar. However, the US economy faced a growing crisis as successive administrations refused to pay for the Vietnam War and domestic social programmes. And so abruptly, on 15 August 1971, US President Richard Nixon ended the convertibility of the dollar to gold. Bretton Woods was dead. ‘The Bretton Woods system provided for stability of exchange rates and stability of interest rates,’ says Professor Lapavitsas.

‘We hoped that one or two policies would be taken up and succeed and the success of those would lead to more being done; it would be a cumulative thing,’ he says. ‘We never at the time envisaged how completely successful those ideas would be.’ Pirie’s Adam Smith Institute would succeed beyond his wildest dreams. By the mid-1970s, the post-war consensus was beginning to totter. The international framework for global finance, the Bretton Woods system, was unilaterally dismantled in August 1971 by a United States reeling from the cost of the Vietnam War. Two years later, oil-producing countries announced an embargo, causing an ‘oil-price shock’. Inflation surged across the Western world while economies stagnated. Profit margins began to collapse.


pages: 756 words: 120,818

The Levelling: What’s Next After Globalization by Michael O’sullivan

"World Economic Forum" Davos, 3D printing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Toffler, bank run, banking crisis, barriers to entry, Bernie Sanders, Big Tech, bitcoin, Black Swan, blockchain, bond market vigilante , Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, business process, capital controls, carbon tax, Celtic Tiger, central bank independence, classic study, cloud computing, continuation of politics by other means, corporate governance, credit crunch, CRISPR, cryptocurrency, data science, deglobalization, deindustrialization, disinformation, disruptive innovation, distributed ledger, Donald Trump, driverless car, eurozone crisis, fake news, financial engineering, financial innovation, first-past-the-post, fixed income, gentrification, Geoffrey West, Santa Fe Institute, Gini coefficient, Glass-Steagall Act, global value chain, housing crisis, impact investing, income inequality, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", junk bonds, knowledge economy, liberal world order, Long Term Capital Management, longitudinal study, low interest rates, market bubble, minimum wage unemployment, new economy, Northern Rock, offshore financial centre, open economy, opioid epidemic / opioid crisis, Paris climate accords, pattern recognition, Peace of Westphalia, performance metric, Phillips curve, private military company, quantitative easing, race to the bottom, reserve currency, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Scramble for Africa, secular stagnation, Silicon Valley, Sinatra Doctrine, South China Sea, South Sea Bubble, special drawing rights, Steve Bannon, Suez canal 1869, supply-chain management, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, tulip mania, Valery Gerasimov, Washington Consensus

In that area, at least, one aspect of the IMF’s policy arsenal might still be useful. At the time of the initial Bretton Woods Conference in 1944 at the very charming Mount Washington Hotel in Bretton Woods, New Hampshire, the economist John Maynard Keynes suggested the creation of a supranational currency to be called “Bancor.” His idea was that Bancor would, especially in times of recession, create a world reference currency that would help regulate imbalances in trade among nations and would therefore stimulate commerce. In the end, the Bretton Woods Conference opted to reference, or peg, currency values to the value of gold, though this effectively laid the grounds for the emergence of the dollar as the first among currency equals.

See central banks BBC, 219–220 Berlin, Isaiah, 74 Bernanke, Ben, 65, 175 Bertelsmann Stiftung, 106 Bhagwati, Jagdish, 171 biometric program, 258 biopoliticians idea, 128, 129–131 birthrates and fertility, 50–51 Bismarck, Otto von, 227 “black swan” principle, 72 Blair, Tony, 107 Blinder, Alan, 108 blockchain, 273 Bloom, Nicholas, 143 Bloomberg, Michael, 272 Bloomberg Innovation Index, 260 Bo Xilai, 231 bodies (human), and inequalities, 48 bond markets, 181–183 Boston’s Big Dig, 150 “Boy’s Weeklies” (Orwell), 246–247 Brady, Nicholas, 190 Brady Plan, 190–191 Brat, David, 51 Bretton Woods Conference, 265 Brexit consequences for Britain, 244, 246, 248–251 debate, 247–248 and levelling, 246, 247–248 post-Brexit scenarios for UK, 250–256 “prophecy” of, 87 significance, 247, 252 Brown, Gordon, 107, 139–140 Brunel, Isambard, 251 Buffet, Warren, 167 Buolamwini, Joy, 46 Bush, George H.


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The Alchemists: Three Central Bankers and a World on Fire by Neil Irwin

"World Economic Forum" Davos, Alan Greenspan, Ayatollah Khomeini, bank run, banking crisis, Bear Stearns, Berlin Wall, Bernie Sanders, break the buck, Bretton Woods, business climate, business cycle, capital controls, central bank independence, centre right, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency peg, eurozone crisis, financial engineering, financial innovation, Flash crash, foreign exchange controls, George Akerlof, German hyperinflation, Google Earth, hiring and firing, inflation targeting, Isaac Newton, Julian Assange, low cost airline, low interest rates, market bubble, market design, middle-income trap, Money creation, money market fund, moral hazard, mortgage debt, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, Paul Samuelson, price stability, public intellectual, quantitative easing, rent control, reserve currency, Robert Shiller, Robert Solow, rolodex, Ronald Reagan, Savings and loan crisis, savings glut, Socratic dialogue, sovereign wealth fund, The Great Moderation, too big to fail, union organizing, WikiLeaks, yield curve, Yom Kippur War

September 21, 1931—Britain leaves the gold standard, facing economic collapse should it try to maintain the peg of the pound to the price of gold. July 22, 1944—Global economic leaders finish a conference in Bretton Woods, New Hampshire, where they agree to a world economic order for the post–World War II globe. August 15, 1971—With the United States struggling to maintain the peg of the dollar to gold as mandated by the Bretton Woods system, President Richard Nixon suspends the gold window. His advisers include Federal Reserve chairman Arthur Burns and Treasury official Paul Volcker. 1978—In Arthur Burns’s final year as Federal Reserve chair, inflation reaches 9 percent.

At the end of the weekend, each member of the fifteen-man team received a spiffy Camp David windbreaker embroidered with his name, and Nixon interrupted Bonanza to give an address from the Oval Office. The United States was putting in place wage and price controls, attempting to reduce inflation by legal fiat. And the nation was closing down the “gold window,” ending convertibility of the dollar to gold. The financial architecture that the world leaders had created in 1944 in Bretton Woods, New Hampshire, to prevent a recurrence of catastrophe that was the Great Depression was over. And what followed was the twentieth century’s other great failure by the world’s central bankers. The windbreaker bunch hoped that they had finally found a way to halt inflation that wouldn’t spark a recession.

See Outright Money Transactions (OMT); Securities Markets Programme (SMP) federal, as war financing, 37 government bonds, large-scale purchase. See Quantitative easing market, economic importance of, 370 rating AAA as safe, 103 Boxer, Barbara, 189 Boyle, Andrew, 59 Brainard, Lael, 346 Bretton Woods (1944), 63 Bridgewater Associates, 5 Brown, Gordon, 82, 238, 242 Brown, Scott, 188 Buck, Pearl S., 51 Bullard, James, 188, 265, 272, 385 Bundesbank ECB actions, opposition to, 229–32, 351, 381–84 ECB actions approved by, 231, 384 on longer-term remedies (2011), 351 as model for ECB, 77 presidents.


Understanding Power by Noam Chomsky

anti-communist, Ayatollah Khomeini, Berlin Wall, Bretton Woods, British Empire, Burning Man, business climate, business cycle, cognitive dissonance, continuous integration, Corn Laws, cuban missile crisis, dark matter, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, deskilling, disinformation, European colonialism, Fall of the Berlin Wall, feminist movement, gentrification, global reserve currency, guns versus butter model, Howard Zinn, junk bonds, Korean Air Lines Flight 007, liberation theology, Mahatma Gandhi, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, mortgage tax deduction, Nixon triggered the end of the Bretton Woods system, Paul Samuelson, Ralph Nader, reserve currency, Ronald Reagan, Rosa Parks, school choice, Strategic Defense Initiative, strikebreaker, structural adjustment programs, systems thinking, the scientific method, The Wealth of Nations by Adam Smith, union organizing, wage slave, women in the workforce

I suspect it had to do with the events of the summer of 1971, when the Nixon administration basically broke up the international economic arrangement that had existed for the previous twenty-five years [i.e. the so-called “Bretton Woods” system, established in 1944 at the United Nations Monetary and Financial Conference at Bretton Woods, New Hampshire]. See, by 1971 the Vietnam War had already badly weakened the United States economically relative to its industrial rivals, and one of the ways the Nixon administration reacted to that was by simply tearing apart the Bretton Woods system, which had been set up to organize the world economy after World War II. The Bretton Woods system had made the United States the world’s banker, basically—it had established the U.S. dollar as a global reserve currency fixed to gold, and it imposed conditions about no import quotas, and so on.

See, during the Second World War, the United States basically reorganized the world economic system and made itself into sort of the “global banker” [at the Bretton Woods United Nations Monetary and Financial Conference of 1944]—so, the U.S. dollar became the global reserve currency, it was fixed to gold, and other countries’ currencies were fixed relative to the dollar. And that system was pretty much what lay behind the very substantial economic growth rate that followed in the 1950s and Sixties. But by the 1970s, the “Bretton Woods” system had become unsustainable: the U.S. no longer was strong enough economically to remain the world’s banker, primarily because of the huge costs of financing the Vietnam War.


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GDP: A Brief but Affectionate History by Diane Coyle

Alan Greenspan, Asian financial crisis, Berlin Wall, big-box store, Bletchley Park, Bretton Woods, BRICs, business cycle, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, driverless car, en.wikipedia.org, endogenous growth, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, hedonic treadmill, income inequality, income per capita, informal economy, Johannes Kepler, John von Neumann, Kevin Kelly, Les Trente Glorieuses, Long Term Capital Management, Mahbub ul Haq, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, Phillips curve, purchasing power parity, Robert Shiller, Robert Solow, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population

The obvious answer is to use the exchange rate that prevailed between the two currencies at the time. The obvious answer is too easy. It is only since 1973 that many exchange rates have been set by trading them in the international currency markets (some, especially China’s, still are not). Prior to 1973, under the Bretton Woods system for managing international finance, the dollar-sterling exchange rate was fixed, at more than $4 to the pound sterling through World War II, but subsequently devalued to $2.80 and then $2.40. Suppose Americans were enjoying declining prices for something, say cars, which remained costly for British consumers.

Abramowitz, Moses, 113 Africa, 31–33, 72, 93, 138 Anders, William, 68 art, 127–28, 132 assets, contributing to sustainability, 134–35, 137 austerity measures, 23 Australia, 73, 109, 118 automation, 128–29 Bangladesh, 53 base year, in GDP calculations, 31, 33–34 Baumol, William, 127 Benford’s Law, 3, 143n3 Berners-Lee, Tim, 81 Bhalla, Surjit, 53 Bhutan, 112 Bos, Frits, 47–48 Boskin Commission, 35, 88 Brazil, 94, 125 Bretton Woods system, 48 BRIC economies, 94, 96 Brynjolfsson, Erik, 128–30 Burundi, 73 business, purpose of, 95 Campaign for Happiness, 112 Canada, 73, 89, 109 capabilities, 72–73, 134 capital consumption, 131 capitalism: 1970s crisis of, 59–75; 2008 crisis of, 93–118; achievements of, 5–6; innovation as hallmark of, 91; investment and depreciation, 131–33 capital widening, 132 Carson, Rachel, Silent Spring, 69 centrally planned economies, 46–47, 56, 60, 66–68 Central Statistical Office (United Kingdom), 18 Chad, 73 chain-weighted price indexes, 33–34 China: economic growth of, 94, 96–97; economic limitations of, 96–97; GDP of, 51–53, 96, 97; living standards in, 51, 57, 96; manufacturing and exporting in, 82, 97, 125; U.S. relations with, 97 Christophers, Brett, 104, 105 circular flow, 26–27, 27f, 57, 63 Clark, Colin, 12, 13, 17, 50, 84 Clean Water Act (1972), 69 Clegg, Nick, 110 Cobb, John, 116 Cold War, 46–47, 60, 66 communications technology, 81–82 communism, 46–47, 60, 66–68, 96 compound arithmetic, 64, 83, 130–31 comprehensive wealth, 133, 135 computers, 80–82, 87–88 conspicuous consumption, 112 consumerism, 45, 112 consumer spending (C), 27–28, 45 consumer surplus, 130 customization, of goods and services, 123–25 Cuyahoga River, 69 Daly, Herman, 116 Darling, Alastair, 102 dashboard approach, 118, 136 data collection, 33, 37, 51–53, 137–38 Data Resources, Incorporated (DRI), 21 Davenant, Charles, 8 David, Paul, 79 Defense Advanced Research Projects Agency (DARPA), 81 defense spending, 14–16 deferred stock options, 37 deflators, 31 Defoe, Daniel, 9 DeLong, Brad, 86, 117 Democratic Republic of Congo, 54, 73 Deng Xiao Ping, 96 depreciation, 25, 30, 131–33 developed/high-income countries: GDP of, 72, 93; informal economy in, 107 developing/low-income countries: economic growth/stagnation in, 61, 71–72; GDP of, 32–33, 51, 71–72; informal economy in, 107, 109; and PPP, 50–53 development aid, 72, 74 digital products and services, 129–31 disasters, GDP growth after, 43 Domar, Evsey, 55 double-entry bookkeeping, 8 Easterlin, Richard, 111 Eckstein, Otto, 21 econometric models, 20–21, 23 economic growth: critiques of, 60; in eighteenth and nineteenth centuries, 12; lack of, in developing countries, 61; meanings and measures of, 15; meanings of, 123; potential rate of, 82–83; problems arising from, 63–64; real, 30–31; significance of, 135–36; sustainable, 71, 116, 137; theories/models of, 55–57, 78–81; virtuous circle of, 57, 59, 64, 73, 79; well-being and welfare aided by, 135 economics, challenges to conventional, 59–61 economic welfare.


pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

"World Economic Forum" Davos, Airbnb, altcoin, Alvin Toffler, asset-backed security, autonomous vehicles, barriers to entry, behavioural economics, bitcoin, Bitcoin Ponzi scheme, blockchain, Blythe Masters, Bretton Woods, business logic, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, clean water, cloud computing, cognitive dissonance, commoditize, commons-based peer production, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, cryptocurrency, currency risk, decentralized internet, digital capitalism, disintermediation, disruptive innovation, distributed ledger, do well by doing good, Donald Trump, double entry bookkeeping, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Future Shock, Galaxy Zoo, general purpose technology, George Gilder, glass ceiling, Google bus, GPS: selective availability, Hacker News, Hernando de Soto, Higgs boson, holacracy, income inequality, independent contractor, informal economy, information asymmetry, information security, intangible asset, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, money market fund, Neal Stephenson, Network effects, new economy, Oculus Rift, off grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, QR code, quantitative easing, radical decentralization, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, search costs, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, Snow Crash, social graph, social intelligence, social software, standardized shipping container, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, systems thinking, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Soul of a New Machine, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Tyler Cowen, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, unorthodox policies, vertical integration, Vitalik Buterin, wealth creators, X Prize, Y2K, Yochai Benkler, Zipcar

Clark’s words embodied a philosophy for the leadership and governance of a global resource that was radically different from the norm, yet one that engendered a remarkably effective governance ecosystem. Since the end of World War II, state-based institutions have governed important global resources. Two of the most powerful—the International Monetary Fund and the World Trade Organization—were born at the Bretton Woods Conference in 1944. The United Nations and other groups under its umbrella, such as the World Health Organization, received a wide berth to exercise their monopoly on global problem solving. These organizations were hierarchical by design, because hierarchies were the dominant paradigm during the first half of a war-torn century.

Today, central bankers are asking important questions. Carolyn Wilkins said, “It’s easy to say that regulation should be proportionate to the problem, but what is the problem? And what are the innovations that we want?”50 These are great questions that we could address more effectively in an inclusive environment. Bretton Woods is a good model. How about a second meeting of the minds, not conducted in smoky rooms behind closed doors, but in an open forum where various stakeholders, including the private sector, the technology community, and governance institutions could participate? Wilkins said, “The Bank of Canada works with other central banks on understanding this technology and what it means.

We no longer need government officials to convene for the rest of us to align our goals and efforts. Second, businesses, academia, NGOs, and other nonstate stakeholders have gained the ability to play an important role in global cooperative efforts. There were no businesses, NGOs, or nonstate stakeholders at the table at Bretton Woods. Today, these stakeholders routinely engage with governments to address issues in all facets of society—from the governance of a global resource like the Internet to addressing global problems like climate change and human trafficking. The combination of these developments enables the new model.


Year 501 by Noam Chomsky

air traffic controllers' union, anti-communist, Bartolomé de las Casas, Berlin Wall, Bolshevik threat, Bretton Woods, British Empire, business cycle, capital controls, Caribbean Basin Initiative, classic study, colonial rule, corporate governance, cuban missile crisis, declining real wages, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, European colonialism, experimental subject, Fall of the Berlin Wall, Howard Zinn, invisible hand, land reform, land tenure, long peace, mass incarceration, means of production, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, offshore financial centre, plutocrats, price stability, Ralph Nader, Ralph Waldo Emerson, RAND corporation, Robert Solow, Ronald Reagan, scientific management, Simon Kuznets, strikebreaker, structural adjustment programs, the scientific method, The Wealth of Nations by Adam Smith, trade liberalization, trickle-down economics, union organizing, War on Poverty, working poor

Nevertheless, policies have to be adapted to changing contingencies. A change in world order of lasting importance was recognized officially in August 1971, when Richard Nixon announced his “New Economic Policy,” dismantling the international economic order established after World War II (the Bretton Woods system), in which the US served, in effect, as international banker, with the dollar as the world’s sole international currency, convertible to gold at $35 an ounce. By that time, “the affluent alliance had come to the end of the road” and “the disorder was getting too serious for aspirins,” international economist Susan Strange observed.

To the totalitarian mentality, even the slightest deviation is an awesome tragedy, and evokes the most impressive frenzy. And the spectacle makes a useful contribution to entrenching further the ideological controls that prevent the rascal multitude from attending to what is happening around them. 5. The “Vile Maxim of the Masters” The world economy has not returned to the growth rates of the Bretton Woods era. The decline of the South was particularly severe in Africa and Latin America, where it was accompanied by rampant state terror. It was accelerated by the neoliberal economic doctrines dictated by the world rulers. The UN Economic Commission for Africa found that countries pursuing the recommended IMF programs had lower growth rates than those that relied on the public sector for basic human needs.

See structural adjustment policies Austin, Stephen, 37 Australia, 76, 181, 187–90, 208 Avril, Propser, 288 Bailey, Thomas, 29 Baker, James, 61, 148, 195, 260, 348 Balaguer, Joaquín, 272 Ball, George, 173–74 Bangladesh, 15–16, 18, 86, 231, 354, 383 See also Bengal Baring, Evelyn (Earl of Cromer), 26 Barkin, David, 259 Barruel, Father, 243 Batista, Fulgencio, 198–99 Battuta, Ibn, 16 Bazin, Marc, 4, 288–89, 300–301 Beecher, Henry Ward, 393 Bekken, Jon, 394 Belgium, 28 Flemish colonialism, 28 Bemis, Samuel Flagg, 38 Bengal, 10, 15–16, 18, 26, 280 See also Bangladesh; India Benjamin, Jules, 199 Bentinck, Lord William, 17 Berle, Adolf, 198, 220, 229 Bernstein, Richard, 39 Bils, Mark, 145 biotechnology industries, 149, 158–61, 164, 208, 306 Bix, Herbert, 343 blackness, 5–6, 75, 274–76, 281–82, 302, 307 colonialism and, 30, 32–33, 37, 105, 193–194 first black republic, 271 in New World Order, 383 See also race; slavery Blaine, James, 214, 336 Blassingame, John, 282 Blatnik, John, 310 Blixen, Samuel, 242–43 Bohlen, Celestine, 111–12 Bohlen, Curtis, 161 Bolívar, Simón, 194–96, 215, 275 Bolivia, 107, 115–16, 214, 222 Bolts, William, 16 Boston Globe, 80–81, 154, 205, 210, 320, 351 Boucher, Richard, 148 Bourne, Peter, 117 Bowles, Chester, 200 Bradley, Omar, 62 Brady, Thomas, 8–9, 23 Brands, H.W., 172–76, 179, 184 Brazil, 7, 111, 135, 13–215, 280, 296 in New World Order, 58, 81, 143, 195, 208, 218–21, 223–33, 236–37, 254–56, 262–63, 392 Brenner, Robert, 23, 91 Bretton Woods system, 69, 76 See also liberalism Brewer, John, 12 Brezhnev, Leonid, 66, 123 British East India Company, 8, 10, 13, 15, 21, 313 Brittain, Victoria, 129–30 Brock, William, 132 Brooke, James, 236, 256 Brookings Institution, 142, 147 Bruce, David, 65 Brumberg, Abraham, 107, 112 Bryan, William Jennings, 276–77 Brzezinski, Zbigniew, 350 Buckley, Kevin, 359 Budiardjo, Carmel, 183 Bulgaria, 81, 112 Bundy, McGeorge, 367 Bunker, Ellsworth, 172 Burke, Melvin, 115–16 Burkina Faso, 86 Bush, George H.W., 122, 147–48, 157, 212, 245, 286, 326–27 drug war and, 80 Gulf war and, 31, 52–53, 253 Haiti policy, 292–93, 295–97, 301 health care policy, 320 Latin America policy, 118, 125, 127–28, 134, 210, 251, 268 New World Order and, 61, 82–83, 114–15, 130–31, 141, 164 Vietnam policy, 347–50, 370, 372 Butler, Smedley, 278 Butterfield, Fox, 359 Caffery, Jefferson, 198 Calderón Guardia, Rafael Ángel, 248 Callejas Romero, Rafael Leonardo, 249 Calleo, David, 71 Calley, William, 358–359 Cambodia, 104, 176, 187, 369 child labor in, 241–242 Khmer Rouge genocide, 238, 348–51 Vietnamese invasion of, 349–51, 349–52, 369 Canada, 77, 180, 194, 366 colonialism in, 30, 33 health care in, 320–21 in New World Order, 79–80, 133, 217 Canning, George, 194 Carey, Peter, 189 Caribbean colonialism in, 7, 30, 34, 194, 215, 275–76 in New World Order, 133, 250, 330 See also individual countries Caribbean Basin Initiative, 114 Carnegie, Andrew, 78, 106, 389–93 Carr, Caleb, 363, 420n48 Carter, Jimmy, 71, 105, 117, 157, 166, 201–02, 348–51, 382 China policy, 369 Korea policy, 140 Latin America policy, 59, 299 Vietnam policy, 346 Castro, Fidel, xi, 199–200, 202–11, 225 Ceausescu, Nicolae, 141 Center for Defense Information (CDI), 102, 104 Center for Defense Trade, 147 Center of Latin American Studies, 119 Central American Committee on Water Resources, 247 Central America Report (CAR), 41, 119–21, 248–49, 264–66 Central Intelligence Agency (CIA), 40, 54, 57, 98, 104, 105, 408n17 actions in Brazil, 223–24 actions in Cambodia, 350 actions in China, 410n3 actions in Cuba, 199, 202–03 actions in Indonesia, 169–71, 173–74, 182 actions in Nicaragua, 246 actions in Vietnam, 176 in New World Order, 55, 63, 215–16 Chalabi, Ahmad, 126 Chamorro, Violeta, 119–20, 263, 266, 300 Chandler, Alfred, 146 chemical warfare, 42, 189, 277, 346, 355–57 Cheney, Dick, x, 68, 149, 348 Cherokees, 36–37, 315–16 Chicago school, 254, 261 Chicago Tribune, 118, 382, 384–85 child labor, 82, 111, 232, 241–43 Childress, Richard, 347 Chile, 57, 105, 171, 208, 214, 225, 392 coup in, 49–50, 169 neoliberalism in, 254–55, 260–61, 269, 344 China, 18, 31–32, 95, 175, 178 colonialism in, 7, 10, 20 Cultural Revolution, 293 Japanese invasion of Manchuria, 328–31, 341 in New World Order, 47, 103, 104, 140, 143, 149, 154, 369 opium trade in, 19, 313–14, 410n13 rape of Nanking, 329 support for Khmer Rouge, 349–51 Christian Science Monitor, 119, 180 Chun Doo-hwan, 140–41 Churchill, Winston, 32, 45, 84, 98, 163, 277 Civil War (US), 33, 366 Clairmonte, Frederick, 18 Clapham, J.H., 18 class war, 61, 70, 74, 78, 156, 379, 384, 386 Cleveland, Grover, 392 Clinton, Bill, 320 Clive, Robert, 10, 16 Cobban, Alfred, 28 Cockburn, Alexander, 372 Colby, William, 40–41, 182 Cold War, 46, 60, 93, 101–06, 220 end of, 52, 112, 121–25, 130–31, 141, 147, 291, 294, 349 relation to North-South conflict, 91, 98, 212 US policy in, 64, 223, 234, 251–53, 269, 331, 340 Collins, Joseph, 261 Collor de Mello, Fernando, 111, 256 Colombia, 119–22, 244 colonialism, 48, 91–92, 101, 216, 307, 343 British colonialism, vii–viii, 4–6, 8–22, 26–28, 274–75, 314, 361–62 Dutch colonialism, 7, 9–11, 13–14, 19, 26, 168, 362 Flemish colonialism, 28 French colonialism, 28, 95, 271–75, 281, 341, 345, 369, 374 Japanese colonialism, 4, 341, 343 neocolonialism, 3, 60–61, 76, 130, 172, 219 Portuguese colonialism, 6–7, 9, 11, 19, 180 settler colonialism, viii Spanish colonialism, 6–7, 9–10, 17, 42–44, 195, 273–74 US colonialism, ix, 14, 30–38, 43, 105, 197, 276–82, 314–19, 328, 334–38, 372 See also imperialism Columbus, Christopher, 6, 271–74 Colombian era, 3, 42, 215 Native American policy, 44, 364–65 Committee of Concerned Asian Scholars, 339 Communism, 49–50 in Brazil, 220, 223–24, 230 in Chile, 50 in China, 143, 341 in Cuba, 199, 203–05 in Indonesia, 168–170, 174–75, 177–86 in Italy, 56 in Japan, 142 in Poland, 108 in Soviet Union, 111–13 in Spain, 101 US policy toward, 54, 66, 81, 93–98, 131, 150, 217, 235, 320, 331, 381, 388 in Vietnam, 346, 359–60, 366–70 See also Marxism; Soviet Union Conniff, Ruth, 384 Constable, Pamela, 205, 263, 295 Conyers, John, 300 Cooper, Marc, 269 Cortés, Hernán, 9, 15 Costa Rica, 119–20, 208, 245–48 Costigliola, Frank, 65 Council on Hemispheric Affairs (COHA), 272, 288, 293, 299 counterinsurgency, 40, 235, 247, 331, 372 Cowell, Alan, 126 Cromer, Lord.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

addicted to oil, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, carbon tax, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, cotton gin, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, drop ship, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low interest rates, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, Nixon triggered the end of the Bretton Woods system, obamacare, oil shock, PalmPilot, pension reform, precautionary principle, proprietary trading, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the long tail, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, vertical integration, WikiLeaks

On August 15, 1971, the U.S. government put an end to the international monetary system that the United States and Great Britain had devised at Bretton Woods, New Hampshire, in 1944. Under that system, the dollar was tied to the price of gold and international exchange rates were fixed, which imposed fiscal discipline on all participating countries, including the United States. The government couldn’t print and spend money as much as its leaders wanted. “When we collapsed Bretton Woods,” argues Stockman, “we took discipline out of the global economy. When the dollar was tied to fixed exchange rates, politicians were willing to administer the needed castor oil because the alternative was to make up for any trade shortfall by paying out our reserves, and this would cause immediate economic pain in the form of higher interest rates.”

When the dollar was tied to fixed exchange rates, politicians were willing to administer the needed castor oil because the alternative was to make up for any trade shortfall by paying out our reserves, and this would cause immediate economic pain in the form of higher interest rates.” President Richard Nixon scrapped the Bretton Woods system in order to avoid putting the country through a recession to pay for all of the excess government spending going to fund the Vietnam War. As Stockman put it: Nixon, listening to famed University of Chicago economist Milton Friedman, said, Let’s just let our currency and everyone else’s float and the free market will find the right exchange rates among us all.

-China Relations Associated Press Association for Computing Machinery Atlanta Atlanta Journal-Constitution Auburn University Auguste, Byron Australia Austria automation automobile industry, see cars; Ford Motor Company; General Motors Autor, David B Baathists Bachmann, Michele Baer, Don Baghdad Bahrain Bain & Company Baltimore Orioles baseball team Bangalore (India) Bangkok Bank of America bankruptcy; of municipal governments Bankruptcy Abuse Prevention and Consumer Protection Act (2005) Barber, Michael Battle Hymn of the Tiger Mother (Chua) Bayh, Evan Bay of Pigs invasion BBC Bear Stearns Beck, Glenn Becker, Dan Bell, Alexander Graham Bennett, Robert Benton, Thomas Berkshire Hathaway Berlin Berlin Wall; fall of Beta Bytes Bethesda Naval Hospital Bhagwati, Jagdish Biddle, Mike Bihar (India) Bill and Melinda Gates Foundation bin Laden, Osama biofuels Biofuels Digest BlackBerry blacks, see African Americans Blackstone Discovery Blankfein, Lloyd Blinder, Alan Bloomberg BusinessWeek Bloomberg News Bloom Energy Boehlert, Sherwood Boeing Company Bonaparte, Napoleon Bosnia; immigrants from Boston Boston Red Sox baseball team Bowles, Erskine Boxer, Barbara Boyd, John Boys and Girls High School (Brooklyn, New York) Bradsher, Keith Brazil Bretton Woods Agreement Bridges, Beau Bridges, Jeff Britain Brookings Institution Brooks, Preston Brownstein, Ronald Bryan, William Jennings budget deficits; lobbyists and; partisan polarization and; reduction of; state; tax cuts and; wars and Budget Reconciliation Act (1993) Buffalo (New York) Buffett, Warren Bull Moose party Bull Run, battle of Bumpers, Dale Burger King Burkhardt, Dan Bush, George H.


pages: 454 words: 139,350

Jihad vs. McWorld: Terrorism's Challenge to Democracy by Benjamin Barber

airport security, Alvin Toffler, anti-communist, Apple's 1984 Super Bowl advert, Ayatollah Khomeini, Berlin Wall, borderless world, Bretton Woods, British Empire, classic study, computer age, Corn Laws, Corrections Corporation of America, David Brooks, deindustrialization, Deng Xiaoping, digital map, export processing zone, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, George Gilder, global village, invisible hand, It's morning again in America, Joan Didion, Kevin Kelly, laissez-faire capitalism, late capitalism, Live Aid, market fundamentalism, Marshall McLuhan, minimum wage unemployment, new economy, Norbert Wiener, North Sea oil, off-the-grid, pirate software, Plato's cave, postnationalism / post nation state, profit motive, race to the bottom, Right to Buy, road to serfdom, Ronald Reagan, The Wealth of Nations by Adam Smith, Thomas L Friedman, undersea cable, vertical integration, young professional, zero-sum game

Only the competing need to gather a coalition to underwrite its antiterrorist military strike compelled the American government finally to pay its UN dues and to commit to modest amounts of simple humanitarian aid that should have been a function of normalcy (the United States still devotes a smaller percentage of its GNP to foreign aid than any other developed nation in the world). The Bretton Woods institutions such as the International Monetary Fund and the World Trade Organization (heir to the General Agreement on Tariffs and Trade) might have been of some succor in the effort to construct a more democratic globalism if they had been used for the kinds of developmental and democratic purposes for which they were designed in postwar Europe.

The moralist here is the hardheaded James Wolfensohn, president of the World Bank, who has begun to replace the bank’s traditional energy and industrialization projects, thought to favor the interests of foreign investors, with environmental and health projects aimed at the interests of the populations being directly served.2 There are, of course, extant international institutions that might serve as building blocks for a global democratic box into which the economy could safely be put. The international financial institutions conceived at Bretton Woods after World War II to oversee the reconstruction of shattered European and Asian economies were intended originally to function as regulatory agencies to ensure peaceful, stable, and democratic redevelopment under the watchful eye of the victorious Allied powers. Though the World Bank and the International Monetary Fund (and later the General Agreement on Tariffs and Trade and the World Trade Organization, which grew out of GATT in 1995) were ostensibly forged as instruments of democratic sovereign nations designed to guide and regulate private-sector interests in the name of public sector reconstruction, over a period of time they became instruments of the very private-sector interests they were meant to channel and keep in check.

When in the summer of 1994, seventeen of the world’s largest central banks (including America’s Federal Reserve) tried to prop up the dollar, they could come up with only $5 billion. Their effort had (in Thomas Friedman’s charming image) all the impact of “a zoo keeper trying to calm a starved gorilla by offering it a raisin for lunch.”21 Free-market advocates like Wriston boast about the failure of the Bretton Woods Treaty (by which sovereign nations tried to govern the international currency exchange after World War II)—proof that “Big Brother” (his caricature of all states, democratic as well as autocratic) has been forced out of business. Unfortunately, Big Brother’s role as a guardian of social justice has also been superseded and the many junior siblings who have displaced him turn out to be both more intimidating and far less accountable.


Adam Smith: Father of Economics by Jesse Norman

active measures, Alan Greenspan, Andrei Shleifer, balance sheet recession, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, Black Swan, Branko Milanovic, Bretton Woods, British Empire, Broken windows theory, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, cognitive dissonance, collateralized debt obligation, colonial exploitation, Corn Laws, Cornelius Vanderbilt, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, David Ricardo: comparative advantage, deindustrialization, electricity market, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Fellow of the Royal Society, financial engineering, financial intermediation, frictionless, frictionless market, future of work, George Akerlof, Glass-Steagall Act, Hyman Minsky, income inequality, incomplete markets, information asymmetry, intangible asset, invention of the telescope, invisible hand, Isaac Newton, Jean Tirole, John Nash: game theory, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, lateral thinking, loss aversion, low interest rates, market bubble, market fundamentalism, Martin Wolf, means of production, mirror neurons, money market fund, Mont Pelerin Society, moral hazard, moral panic, Naomi Klein, negative equity, Network effects, new economy, non-tariff barriers, Northern Rock, Pareto efficiency, Paul Samuelson, Peter Thiel, Philip Mirowski, price mechanism, principal–agent problem, profit maximization, public intellectual, purchasing power parity, random walk, rent-seeking, Richard Thaler, Robert Shiller, Robert Solow, Ronald Coase, scientific worldview, seigniorage, Socratic dialogue, South Sea Bubble, special economic zone, speech recognition, Steven Pinker, The Chicago School, The Myth of the Rational Market, The Nature of the Firm, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, time value of money, transaction costs, transfer pricing, Veblen good, Vilfredo Pareto, Washington Consensus, working poor, zero-sum game

Jean-Jacques Rousseau by Allan Ramsay, 1766. (National Galleries Scotland) 10. Statue of Adam Smith by Alexander Stoddart, 2008. (Realy Easy Star/Giuseppe Masci/Alamy) 11. Statue of David Hume by Alexander Stoddart, 1995. (Chris Dorney/ Alamy) 12. John Maynard Keynes and Henry Morgenthau at Bretton Woods, New Hampshire, July 1944. (Alfred Eisenstaedt/Time/Getty) 13. Kenneth Arrow carrying his Nobel prize, Stockholm 1972. (AP/REX/Shutterstock) 14. Adam Smith medallion by James Tassie, 1787. (National Galleries of Scotland) 15. Back of a £20 banknote. (Copyright © The Governor and the Company of the Bank of England, 2006) INTRODUCTION Adam, Adam, Adam Smith Listen what I charged you with!

On the contrary, they are the results of positive feedback loops working through specific market channels, whose effect is to magnify and compound instability. That is why they—and their cousins, rapid market over- and undershoots—occur with such alleged statistically improbable regularity. It is why ‘boom and bust’ has been such a regular feature of the world’s economy ever since monetary flows were liberalized after the collapse of the Bretton Woods Agreement in 1971; and why a tendency to ‘boom and bust’ is likely to remain for the foreseeable future. And it is the central insight which lies behind Benjamin Graham’s memorable metaphor of the friendly but deranged Mr Market. And finally, there is reason to think that, had those in positions of public authority before 2008 genuinely read and absorbed the ideas of Adam Smith on political economy, they could have mitigated such problems.

Adam Smith by Alexander Stoddart, in heroic pose in front of St Giles’ Cathedral on the Royal Mile in Edinburgh… 11. … and David Hume as a Roman senator, also by Stoddart, on the other side of the Cathedral. 12. John Maynard Keynes with Henry Morgenthau, the US Treasury Secretary, at the Bretton Woods conference, 1944. Keynes said ‘Economists must leave to Adam Smith alone the glory of the Quarto… and achieve immortality by accident, if at all.’ 13. Kenneth Arrow receiving the Nobel Prize for economics, 1972. No less than Keynes and Hayek, his work stands in dialogue with Smith. 14.


pages: 485 words: 133,655

Water: A Biography by Giulio Boccaletti

active transport: walking or cycling, Anthropocene, Asian financial crisis, Bretton Woods, British Empire, business cycle, clean water, conceptual framework, Corn Laws, deindustrialization, demographic transition, Deng Xiaoping, energy transition, financial engineering, Great Leap Forward, invisible hand, John Snow's cholera map, joint-stock company, land reform, land tenure, linear programming, loose coupling, market fundamentalism, mass immigration, means of production, Medieval Warm Period, megaproject, Mohammed Bouazizi, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, opioid epidemic / opioid crisis, Peace of Westphalia, phenotype, scientific management, South China Sea, Suez crisis 1956, text mining, the long tail, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, trade route, Washington Consensus, Works Progress Administration, Yom Kippur War, zero-sum game

He proposed that a quarter of the money previously spent on the war effort by Britain and America should be invested in the industrialization of China. He imagined the creation of a single international institution that would represent the donor countries, and expected the productivity improvements to pay for the interest and principal. In many ways these were ideas that anticipated the Bretton Woods establishment of the International Bank for Reconstruction and Development, the World Bank. The only comparable program of postwar recovery was that outlined by Keynes in his 1919 Economic Consequences of Peace. Neither was taken up. Dr. Sun was a progressive utopian in the nineteenth-century tradition.

The TVA—Roosevelt’s central New Deal legacy—had become an American theory of modernization. It would dominate much of the second half of the twentieth century. 17 Cold War Competing over Growth After the Second World War, the United States had become the world’s dominant economic and military power. The Bretton Woods agreement of 1944 had fixed exchange rates, turning the United States into the world’s banker. Its capital could be deployed across the world as an instrument of development, often ending up in water infrastructure. With programs like the Marshall Plan, the United States hoped to provide financial support during reconstruction, not only to secure allegiance, but also to stimulate an expansion of markets for its goods and improve the productivity of its suppliers.

In wealthy countries, at least, “peak water” for energy had passed, and so had their appetite for expensive infrastructure. This transition occurred during a deep economic crisis. It is a well-known chapter of twentieth-century history. After the Second World War, America became the pre-eminent global consumer. This transition had been assisted by the Bretton Woods system in which the dollar was pegged to gold. The United States became a net importer of manufactured goods, in turn leading to its de-industrialization and to a consequent rise in unemployment. According to economic orthodoxy, still informed by Keynes’s policy prescriptions, unemployment called for monetary stimulus to sustain demand.


pages: 273 words: 93,419

Let them eat junk: how capitalism creates hunger and obesity by Robert Albritton

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Bretton Woods, California gold rush, carbon tax, clean water, collective bargaining, computer age, corporate personhood, creative destruction, deindustrialization, Food sovereignty, Haber-Bosch Process, illegal immigration, immigration reform, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, land reform, late capitalism, means of production, military-industrial complex, offshore financial centre, oil shale / tar sands, peak oil, planned obsolescence, price stability, profit maximization, profit motive, South Sea Bubble, the built environment, union organizing, Unsafe at Any Speed, upwardly mobile

One of the main markers for the ending of the golden age was the quadrupling of the price of oil by the C O N S U M E R I S M A N D U S RO OT S 57 Organization of Petroleum Exporting Countries (OPEC) in the early 1970s.16 Other significant markers were the Viet Nam war, America’s abandoning of its Bretton Woods commitment to exchange dollars for gold at $35 an ounce, and the abandonment of the visions of social justice arising out of President Johnson’s “Great Society” programme.17 Petroleum and natural gas generated a chemical revolution, the outcome of which was tens of thousands of new products including pharmaceuticals, plastics, paints, preservatives, solvents, cleaners, synthetic rubber, synthetic fabrics, pesticides, fertilizers, explosives, lubricants and fuels.

For instance, private debt in the 1950s increased from $73 billion to $196 billion.67 Debt of every kind, from bank loans to mortgages to instalment buying at a personal level, to balance of payments deficits and debt expansion at a federal level, fuelled the rapidly expanding consumption. Debt expanded at every level from the national to the local, and from the corporate to the individual. But in due course easy money ultimately leads to hard choices, and it was the balance of payments deficits that seemed particularly threatening. The Bretton Woods international monetary system agreed to by the great powers after World War II made the US dollar the international currency, to be stabilized by being exchangeable for gold at $35 per ounce. As previously mentioned, one consequence of this was that the United States could be less concerned about balance of payments deficits than other countries.

Index A abstract theory 10–12, 18–50 see also deep structure, inner logic, pure capitalism accountability 205–10 see also democracy addiction 43, 45, 95–6, 177, 179, 222 advertising 70, 167–8, 172–4, 177 Africa 153, 156, 158 agriculture 7, 11, 18, 32, 40, 125, 127, 128, 132, 134, 141, 158, 185, 202, 205 American 8, 135, 148–9 non-food crops 7, 142, 157 (see also cotton, tobacco) see also aid to agriculture, exportoriented agriculture, family farms, industrial farms aid 134 see also aid to agriculture, food aid, foreign aid AIDS 153, 178 Alberta tar sands 148, 206 see also peak oil algae blooms 156, 159 see also chemical fertilizer allergies 118, 161–2 American hegemony 52, 76, 91, 125 see also US hegemony American Council on Science and Health 195 American Sugar Association 188 anaemia 107 anti-depressants 178 antibiotics 103 anxiety 173 Archer Daniels Midland 186, 189 asthma 149 atomism 72–3 see also individualism, islandization, possessive individualism Attention Deficit Disorder (ADD) 63, 114, 173 austerity policies 135 see also structural adjustment policies automobile 57, 59–60, 72–3 see also car-dependent development B Baby Milk Action Group 96 balance of payments 58, 68, 220 balance of trade 136, 220 banana workers 136–8, 143 Bangladesh 142 Bernay, Edward 168 biodiesel 142 see also biofuel, ethanol biofuel 151–2 blacklisting 127 Borneo 155 bottom trawling 160 bovine growth hormone 116, 236 boycotts 206 brand loyalty 166, 169, 173, 176 see also advertising, marketing Brandt, Allan 8, 168, 170 Brazil 139, 140, 151, 155 [ 251 ] 252 INDEX Bretton Woods monetary system 68 Buffet, Warren 84 bulimia 176 Bush, President George W. 149, 152 Butz, Earl (US Secretary of Agriculture) 59, 68–9, 75 C Califano, Joseph 170 California 127, 159 cancer 63 see also carcinogen capitalism x, 8–11, 50–1, 61, 82–3, 93, 122, 124, 126, 178, 183, 184, 190, 197, 201–2, 204, 210, 213 capitalist farms 130–1, 214 capitalist ideology 73–4, 165, 168, 183, 196–7 car-dependent development 60, 64 see also automobile carbon dioxide (CO2) 149, 151, 154 carbon tax 209 carcinogens 111–12, 114, 137, 178, 191, 194 Carson, Rachel 61, 77, 111 causality 169–70 causes ix, 90, 180 Center for Consumer Freedom 188, 196 Center for Science in the Public Interest (CSPI) 93, 174 Channel One 176 chemical fertilizers 58, 129, 149, 151, 159–60, 217 chemicalization 83, 158–9, 202 see also chemical fertilizers, nemagon, pesticides Chicago Board of Trade 153 child labour 138–9 see also slavery China 122, 142, 155, 175 choice 165–81, 187 see also consumer sovereignty, freedom chronic illnesses 94 class 99, 168, 213 class struggle 12 Clinton, President Bill 100 coal 151 cocoa 135, 138, 202 codex alimentarius 97, 188 coffee 135, 140–3, 202 cold war 58–9, 61–2, 74–6 collective bargaining 127 colonialism 18, 25, 44–5, 71, 124, 153 see also developing countries command economy 202 commodification 12, 21, 37–8, 39, 214–15 commodities 12, 20 commodity futures 89, 108, 142, 145, 153 see also Chicago Board of Trade concentration/centralization 25, 45, 114, 120, 131–2, 137, 187, 216 competition 11, 26, 43, 127–8, 135 confined animal feeding operation (CAFO) 101–2, 150, 153, 155, 159, 163 consumer sovereignty 165, 178–80 see also choice, freedom, rights consumerism xii, 42, 68–9, 72, 125, 173, 176, 180 consumers 28, 144, 166, 178 consumption 9, 165 contradiction x, 25 see also irrationality, rationality cooking skills 121–2 cooperation 144, 200–11 see also movements coral 159 corn 108, 111, 136, 151–3 see also ethanol, subsidies corporate lobbies 186 corporations xi, 8, 14–15, 45, 60–1, 70, 87, 123, 130, 132, 136, 138, 141–2, 145, 147–8, 162, 165, 168–9, 172, 183,–4, 186, 193–5, 197, 203, 206–7, 218–19 Costa Rica 138 INDEX cotton 111, 129, 143 see also non-food crops, pesticides, subsidies crises 12, 25, 38, 39, 42, 216 ecological crisis 146–7 see also food crisis D Dalley, George 187 death rate 127, 130 debt 42–3 64, 66, 68, 70, 122, 129, 134, 141, 205, 208 ecological debt 43, 147 health debt 43 decline of civilization 7 deep cause/deep structure ix, 12, 16, 18–50, 52, 106 see also abstract theory, inner logic, levels of analysis, pure capitalism deforestation 35, 86, 102, 140 142–3, 151, 155, 157 democracy x, 9, 19, 52, 85, 162, 166, 181, 197, 206 see also accountability, equality, freedom, inequality, liberaldemocracy, rights democratization of corporations xii, 14, 15, 205–8 of markets xii, 15, 208–10 Department of Agriculture (US) 171 deportation 126–7 depression 94, 222 desertification 157 see also deforestation developing countries 45, 58–9, 69, 76, 78, 85–6, 104, 106, 111, 129, 134–37, 140–3, 162, 193, 203, 205 diabetes 94, 96, 99, 100 diet 174, 191 distributive justice 8, 10, 16, 91, 142, 194, 209–10 division of labour 6 Doll, Sir Richard 194–5 Dominican Republic 128 253 drought 158 see also water dumping 59, 129, 135, 205 see also developing countries, food prices, subsidies E E.


pages: 284 words: 92,387

The Democracy Project: A History, a Crisis, a Movement by David Graeber

Bretton Woods, British Empire, company town, corporate personhood, David Graeber, deindustrialization, dumpster diving, East Village, feminist movement, financial innovation, George Gilder, John Markoff, Kim Stanley Robinson, land bank, Lao Tzu, late fees, Money creation, Murray Bookchin, Occupy movement, Paul Volcker talking about ATMs, payday loans, planetary scale, plutocrats, radical decentralization, Ralph Nader, reserve currency, Ronald Reagan, Savings and loan crisis, seigniorage, too big to fail, trickle-down economics, unpaid internship, We are the 99%, working poor

This is partly because people outside the United States have some knowledge of the relevant history: they tend to be aware, for instance, that the current world financial architecture, in which U.S. Treasury bonds serve as the principal reserve currency, did not somehow emerge spontaneously from the workings of the market but was designed during negotiations between the Allied powers at the Bretton Woods conference of 1944. In the end, the U.S. plan prevailed, despite the strenuous objections of the British delegation, led by John Maynard Keynes.k Like the “Bretton Woods institutions” (the IMF, World Bank) that were created at that same conference to back up the system, these were political decisions, established by military powers, which created the institutional framework in which what we call the “global market” has taken shape.

My conclusion that U.S. deficits are almost exclusively due to military spending is derived from a calculation of real military spending as roughly half of federal spending (one has to include not only Pentagon spending but the cost of wars, the nuclear arsenal, military benefits, intelligence, and that portion of debt servicing that is derived from military borrowing), which is, of course, contestable.l The Bretton Woods decision was, essentially, to internationalize this system: to make U.S. Treasury bonds (again, basically U.S. war debt) the basis of the international financial system. During the Cold War, U.S. military protectorates like West Germany would buy up enormous numbers of such T-bonds and hold them at a loss so as to effectively fund the U.S. bases that sat on German soil (the economist Michael Hudson notes that, for instance, in the late 1960s, the United States actually threatened to pull its forces out of West Germany if its central bank tried to cash in its Treasury bonds for gold14); similar arrangements seem to exist with Japan, South Korea, and the Gulf States today.


pages: 584 words: 187,436

More Money Than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby

Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, automated trading system, bank run, barriers to entry, Bear Stearns, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, currency peg, deal flow, do well by doing good, Elliott wave, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, financial intermediation, fixed income, full employment, German hyperinflation, High speed trading, index fund, Jim Simons, John Bogle, John Meriwether, junk bonds, Kenneth Rogoff, Kickstarter, Long Term Capital Management, low interest rates, machine translation, margin call, market bubble, market clearing, market fundamentalism, Market Wizards by Jack D. Schwager, Mary Meeker, merger arbitrage, Michael Milken, money market fund, moral hazard, Myron Scholes, natural language processing, Network effects, new economy, Nikolai Kondratiev, operational security, pattern recognition, Paul Samuelson, pre–internet, proprietary trading, public intellectual, quantitative hedge fund, quantitative trading / quantitative finance, random walk, Renaissance Technologies, Richard Thaler, risk-adjusted returns, risk/return, Robert Mercer, rolodex, Savings and loan crisis, Sharpe ratio, short selling, short squeeze, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical arbitrage, statistical model, survivorship bias, tail risk, technology bubble, The Great Moderation, The Myth of the Rational Market, the new new thing, too big to fail, transaction costs, two and twenty, uptick rule

He speculated in currencies, bonds, and equities, and he did it on a global scale; he went both long and short, and he magnified returns with leverage. After World War II, stable inflation, regulated interest rates, and immobile currencies caused Keynes’s tradition of macro investing to die out—ironically Keynes himself had helped to negotiate the fixing of exchange rates at the Bretton Woods conference. After the Bretton Woods system unraveled in the 1970s, macro investing began to stir again. But at first it did so tentatively. Two streams of investors helped to revive it. Equity types such as Michael Steinhardt realized that shifts in interest rates could drive the stock market, as we have seen; starting in the 1980s, they took the logical next step and bet directly on interest-rate movements by speculating in bonds, first in the United States and later internationally.59 Meanwhile, commodity investors such as Michael Marcus and Bruce Kovner started out trading cotton, gold, and so on; but as commodity markets created new contracts on currencies and interest rates, they began to surf these instruments.

Like Michael Marcus of Commodities Corporation, who abandoned his seat on the floor of the cotton exchange to become a generalist trader, Soros saw no point in knowing everything about a few stocks in the hope of anticipating small moves; the game was to know a little about a lot of things, so that you could spot the places where the big wave might be coming. By the 1980s, the post–Bretton Woods system of floating currencies had emerged as a natural playground. The value of the dollar was based on traders’ perceptions, which Soros naturally believed were flawed. And since these perceptions could reverse at any time, the dollar could move dramatically. This was not the conventional view of the way currency markets functioned.

When French politicians complained that hedge funds were amassing dangerous and excessive power, their concerns were not totally baseless. Whatever this danger, little was done to reduce it. Clamping down on speculators—guillotining them, as the French finance minister had urged—would have involved taming the waves of cross-border money on which the speculators surfed: It would have involved a return to Bretton Woods and the reimposition of capital controls. Most policy makers viewed this option with horror. If free trade in goods and services was beneficial, surely free flows of capital were good for the same reason; just as trade allowed car manufacturing to be concentrated in the countries that did it best, so cross-border capital flows funneled scarce savings to places that would invest them most productively.


pages: 1,242 words: 317,903

The Man Who Knew: The Life and Times of Alan Greenspan by Sebastian Mallaby

airline deregulation, airport security, Alan Greenspan, Alvin Toffler, Andrei Shleifer, anti-communist, Asian financial crisis, balance sheet recession, bank run, barriers to entry, Bear Stearns, behavioural economics, Benoit Mandelbrot, Black Monday: stock market crash in 1987, bond market vigilante , book value, Bretton Woods, business cycle, central bank independence, centralized clearinghouse, classic study, collateralized debt obligation, conceptual framework, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, Dr. Strangelove, energy security, equity premium, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, forward guidance, full employment, Future Shock, Glass-Steagall Act, Greenspan put, Hyman Minsky, inflation targeting, information asymmetry, interest rate swap, inventory management, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", junk bonds, Kenneth Rogoff, Kickstarter, Kitchen Debate, laissez-faire capitalism, Lewis Mumford, Long Term Capital Management, low interest rates, low skilled workers, market bubble, market clearing, Martin Wolf, Money creation, money market fund, moral hazard, mortgage debt, Myron Scholes, Neil Armstrong, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, paper trading, paradox of thrift, Paul Samuelson, Phillips curve, plutocrats, popular capitalism, price stability, RAND corporation, Reminiscences of a Stock Operator, rent-seeking, Robert Shiller, Robert Solow, rolodex, Ronald Reagan, Saturday Night Live, Savings and loan crisis, savings glut, secular stagnation, short selling, stock buybacks, subprime mortgage crisis, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Tipper Gore, too big to fail, trade liberalization, unorthodox policies, upwardly mobile, We are all Keynesians now, WikiLeaks, women in the workforce, Y2K, yield curve, zero-sum game

The way he saw things, the miraculous growth of the postwar era was not the achievement of the invisible hand; rather, it was the result of the international architecture established at the end of World War II, with the United States at its center. “For thirty years, the modern economic system created at the Bretton Woods conference of 1944 has served us well,” Kissinger declared; by creating a framework of stability, it had allowed commerce to flourish. It was hardly surprising that the collapse of the Bretton Woods system, marked by Nixon’s abandonment of the gold peg, was now leading to trouble; it was the job of statesmen to come up with a fresh architecture to replace the old one. Kissinger duly proposed a series of price-stabilizing commodity agreements between producer and consumer nations.

American business had leveraged itself to the point where it could not cope with the slower growth needed to fight inflation. Meanwhile, confidence in the dollar was falling because of Americans’ debts to foreigners. Besides the problem of its debts, the United States had to reckon with the fact that its two central economic objectives had proved incompatible. At the Bretton Woods conference in 1944, America had committed itself to a system of fixed exchange rates: the dollar was pegged to gold, and other major currencies were pegged to the dollar. The system had worked well for fifteen years, but then the New Frontier economists had embraced the goal of “full employment.”

But to attain full employment, the United States had to do the opposite—it had to accept inflation in accordance with the implication of the Phillips curve, which indicated that rising prices could sustainably boost the number of jobs in the economy. As the goal of full employment trumped the fealty to Bretton Woods, rising inflation eroded confidence in the dollar.41 Indeed, by the time Nixon’s advisers gathered at Camp David, the dollar-gold link was close to breaking. The floor was opened to debate. Nixon and his counselors confronted a choice between two options: They could take radical steps to rein in inflation and shore up confidence in the dollar.


Who Rules the World? by Noam Chomsky

Able Archer 83, Alan Greenspan, Albert Einstein, anti-communist, Ayatollah Khomeini, Berlin Wall, Bretton Woods, British Empire, capital controls, classic study, corporate governance, corporate personhood, cuban missile crisis, deindustrialization, Donald Trump, Doomsday Clock, Edward Snowden, en.wikipedia.org, facts on the ground, failed state, Fall of the Berlin Wall, Garrett Hardin, high-speed rail, Howard Zinn, illegal immigration, Intergovernmental Panel on Climate Change (IPCC), invisible hand, liberation theology, Malacca Straits, Martin Wolf, Mikhail Gorbachev, Monroe Doctrine, Nelson Mandela, nuclear winter, Occupy movement, oil shale / tar sands, one-state solution, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, public intellectual, Ralph Waldo Emerson, Robert Solow, Ronald Reagan, South China Sea, Stanislav Petrov, Strategic Defense Initiative, structural adjustment programs, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trade route, Tragedy of the Commons, union organizing, uranium enrichment, wage slave, WikiLeaks, working-age population

They trace back to the 1970s, when the national political economy underwent major transformations, bringing to an end what is commonly called “the golden age of [state] capitalism.” Two major elements of this shift were financialization and the offshoring of production, both related to the decline in the rate of profit in manufacturing and the dismantling of the postwar Bretton Woods system of capital controls and regulated currencies. The ideological triumph of “free market doctrines,” highly selective as always, administered further blows as these doctrines were translated into deregulation, rules of corporate governance linking huge CEO rewards to short-term profits, and other such policy decisions.

In 2015, China also established the Asian Infrastructure Investment Bank (AIIB), with itself as the main shareholder. Fifty-six nations participated in the opening in Beijing in June, including U.S. allies Australia, Britain, and others which joined in defiance of Washington’s wishes. The United States and Japan were absent. Some analysts believe that the new bank might turn out to be a competitor to the Bretton Woods institutions (the IMF and the World Bank), in which the United States holds veto power. There are also some expectations that the SCO might eventually become a counterpart to NATO.11 THE CHALLENGES TODAY: EASTERN EUROPE Turning to the second region, eastern Europe, there is a crisis brewing at the NATO-Russian border.

Berlin Wall, fall of Bernays, Edward Blackmon, Douglas Blackstone, William Blair, Bruce Blair, Tony Blankfein, Lloyd Bolender, Keith Bolivia Bordne, John Boumedienne v. Bush Bourne, Randolph Boustany, Nora Bowles, Chester Brandt, Willy Branfman, Fred Brazil coup of 1964 Breivik, Anders Bretton Woods system Britain empire British Department of Information British Ministry of Information British National Party British Parliament British Petition of Right Brugioni, Dino Brunetière, Ferdinand Brzezinski, Zbigniew Bulletin of the Atomic Scientists Bundy, McGeorge Burchinal, David Burnham, Walter Dean Bush, George H.


pages: 337 words: 89,075

Understanding Asset Allocation: An Intuitive Approach to Maximizing Your Portfolio by Victor A. Canto

accounting loophole / creative accounting, airline deregulation, Alan Greenspan, Andrei Shleifer, asset allocation, Bretton Woods, business cycle, buy and hold, buy low sell high, California energy crisis, capital asset pricing model, commodity trading advisor, corporate governance, discounted cash flows, diversification, diversified portfolio, equity risk premium, financial engineering, fixed income, frictionless, global macro, high net worth, index fund, inflation targeting, invisible hand, John Meriwether, junk bonds, law of one price, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low cost airline, low interest rates, market bubble, merger arbitrage, money market fund, new economy, passive investing, Paul Samuelson, Performance of Mutual Funds in the Period, Phillips curve, price mechanism, purchasing power parity, risk free rate, risk tolerance, risk-adjusted returns, risk/return, rolling blackouts, Ronald Reagan, Savings and loan crisis, selection bias, seminal paper, shareholder value, Sharpe ratio, short selling, statistical arbitrage, stocks for the long run, survivorship bias, systematic bias, Tax Reform Act of 1986, the market place, transaction costs, Y2K, yield curve, zero-sum game

Data across Ike’s years illustrate monetary policy’s power to reduce effective marginal tax rates, lower investor uncertainty, and lengthen investor horizons to produce a strong and vibrant stock market. Eisenhower’s successor, John F. Kennedy, is credited with lowering tax rates, although the rate reduction was posthumously enacted. During the late 1960s, Kennedy tax cut’s effect was evident. Unfortunately, during that time, the Bretton Woods standard (the dollar–gold currency-exchange standard established in 1944, which in effect made for an international price rule) was falling apart. Meanwhile, the inflation rate began creeping up, as did effective marginal tax rates. Richard Nixon’s administration subsequently took the U.S. off the gold standard and the U.S. inflation rate continued to increase.

From these numbers, we can conclude the higher the tax rate, the lower the real GDP’s growth rate, while the lower the inflation rate, the higher the real S&P’s performance. Chapter 5 Linking Up 95 In both the Clinton and Eisenhower years, the U.S. adhered to a price-rule monetary system. During the 1950s, the U.S. was the centerpiece of the Bretton Woods global price rule, while in the Clinton years, U.S. monetary policy had been guided by the Greenspan domestic price rule (which started during the Reagan years). Remember: These two periods exhibited slower economic growth than the Reagan years, from which we can conclude low real GDP growth is not necessarily bad for the market and low inflation is good for the market.

See also passive management cyclical asset allocation (CAA) compared to, 141-142 strategic asset allocation (SAA) as, 104 historical allocations, 104-108, 113-115 lifecycle allocations, 115-116 market allocations, 108-115, 266-269 ERISA, 284n beta, 19, 21, 113 active versus passive management, 252-255 elasticity and, 211-212 swing assets, 290n in value-timing strategy, 243-250 Bretton Woods standard, 89 broad market. See market breadth Bush, George H.W., 55, 73, 76, 83, 238 Bush, George W., 55, 83-84, 101 buy-and-hold. See passive management C CAA. See cyclical asset allocation California energy crisis example (location effect), 194-198, 273 cap-weighted indexes versus equal-weighted indexes, 175-180, 242-245 capital asset pricing model (CAPM), 2-3, 19, 113, 253 capital gains, 72-73, 76-79, 83-84.


pages: 414 words: 101,285

The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It by Ian Goldin, Mike Mariathasan

air freight, air traffic controllers' union, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Bretton Woods, BRICs, business cycle, butterfly effect, carbon tax, clean water, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, connected car, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, digital divide, discovery of penicillin, diversification, diversified portfolio, Douglas Engelbart, Douglas Engelbart, Edward Lorenz: Chaos theory, energy security, eurozone crisis, Eyjafjallajökull, failed state, Fairchild Semiconductor, Fellow of the Royal Society, financial deregulation, financial innovation, financial intermediation, fixed income, Gini coefficient, Glass-Steagall Act, global pandemic, global supply chain, global value chain, global village, high-speed rail, income inequality, information asymmetry, Jean Tirole, John Snow's cholera map, Kenneth Rogoff, light touch regulation, Long Term Capital Management, market bubble, mass immigration, megacity, moral hazard, Occupy movement, offshore financial centre, open economy, precautionary principle, profit maximization, purchasing power parity, race to the bottom, RAND corporation, regulatory arbitrage, reshoring, risk free rate, Robert Solow, scientific management, Silicon Valley, six sigma, social contagion, social distancing, Stuxnet, supply-chain management, systems thinking, tail risk, TED Talk, The Great Moderation, too big to fail, Toyota Production System, trade liberalization, Tragedy of the Commons, transaction costs, uranium enrichment, vertical integration

The realization that global connectivity requires global policy coordination is not new; the Great Depression of the 1930s led to the coordination of monetary policy (the gold standard), and in the aftermath of World War II policy makers were pressed “to find a common measure, a common standard, a common rule applicable to each and not irksome to any.”6 At the Bretton Woods conference of 1944, the leaders of the time responded to this challenge by agreeing to revive monetary policy coordination and establish the International Monetary Fund and the International Bank for Reconstruction and Development (World Bank). These institutions have continued to play an important role. However, they were designed for a different time and, as noted above, need to be radically reformed if they are to meet current challenges. The financial crisis, and the connected world that we have outlined in the previous chapters, demand a “Bretton Woods moment” for the twenty-first century.

See also ecosystem BioScience, 132–33 bioterrorism, risk of, 149, 194 bird flu (H5N1) virus, 24, 146, 149, 154–57, 165. See also influenza birds, West Nile virus in, 158 BIS. See Bank for International Settlements blackouts: in Brazil, 108–9; causes of, 108, 108f, 109; in United States, 106–8, 107f, 109 Bourguignon, François, 183 Brazil: airports in, 104; blackouts in, 108–9; income inequality in, 175f Bretton Woods conference, 202–3 BRIC countries. See Brazil; China; India; Russia Brilliant, Larry, 144, 161–62, 165 British Telecom, 118 Brockmann, Dirk, 24 bubonic plague, 150 buffer stocks, 84, 85, 95, 98, 207, 208, 213, 214 Bush (George W.) administration, 49 Bush, George W., 47 business: e-commerce, 75–77, 112, 114, 118, 193; geographic concentration of, 205; global integration and, 15; marketing and advertising, 159; production networks of, 78; risk management in, 204, 213–14; short-term thinking in, 44, 46, 213–14, 216–17; systemic risks in, 205; taxes, 181, 196, 205.


pages: 328 words: 96,678

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

Advanced nations do not melt down or “clip” coins these days to make more money, because they don’t need to. Printing money at a stunning pace is easier and causes more harm. Debasement of fiat currencies is always a temptation. At some point it starts eroding confidence vital to economic growth and prosperity. The mighty US dollar is not aging well. It has dominated all other currencies since the Bretton Woods Conference installed it as the world’s global reserve currency following World War II. After a run of seventy-five years, when most nations measured the health of their money by comparing it to the dollar, could modern forms of debasement eventually demote the dollar? In the next five years, probably not.

Since the first currency changed hands, value has hinged on providing what economists call a single numeraire—shorthand for a benchmark that compares the relative value of all goods and services in a consistent and unified manner. In the Flintstones’ world, shells supplied the single numeraire. The relative value of shoes, hats, and foot-powered cars had meaning. In the real world during the twentieth century, the Bretton Woods Conference made the dollar a global benchmark, its price set at one thirty-fifth the price of an ounce of gold. Other currencies measured their value as either a multiple or a fraction of the dollar. So long as the dollar furnishes a single numeraire, the cost of a pound of sugar in Peoria, Pretoria, or Kuala Lumpur is transparent to consumers using any currency.

Manu Kumar and Brad Setser are longtime friends and intellectual colleagues: I learned a lot from both of them and very much appreciate their friendship. I benefited a lot from feedback received at many conferences and other venues where I presented my views over the years, including the World Economic Forum at Davos, the Ambrosetti Forum, the International Monetary Fund, the World Bank, the Bank for International Settlements, the Reinventing Bretton Woods Committee, the Milken Institute Global Conference, the NBER, and the CEPR. Many academic colleagues—some with invaluable policy and/or markets experience—have been a source of great food for thought and important ideas: Ken Rogoff, Barry Eichengreen, Dani Rodrik, Maury Obstfeld, Jeff Frankel, Bill Nordhaus, Larry Kotlikoff, Jeff Sachs, Michael Pettis, Alberto Alesina, Richard Portes, Helen Rey, Paul Krugman, Carmen Reinhart, Nassim Taleb, Raghu Rajan, Joe Stiglitz, Niall Ferguson, Robert Shiller, Kishore Mahbubani, Willem Buiter, Giancarlo Corsetti, Brad DeLong, and Steven Mihm (my co-author of Crisis Economics).


pages: 25 words: 7,179

Why Government Is the Problem by Milton Friedman

affirmative action, Bretton Woods, floating exchange rates, invisible hand, rent control, Savings and loan crisis, urban renewal

In 1971, after President Nixon closed the gold window, the fixed exchange rate system collapsed and was replaced by a system of floating exchange rates. The IMF's function disappeared, yet, instead of being disbanded, it changed its function and expanded. It became a relief agency for backward countries and proceeded to dig deeper into the pockets of its sponsors to finance its new activities. At Bretton Woods, two agencies were established: one to administer a fixed exchange rate system and the other, the World Bank, to perform the function of promoting development. Now you have two agencies to promote development, both of them, in my opinion, doing far more harm than good. Let me take a very different example in the United States.


pages: 309 words: 54,839

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts by David Gerard

altcoin, Amazon Web Services, augmented reality, Bernie Madoff, bitcoin, Bitcoin Ponzi scheme, blockchain, Blythe Masters, Bretton Woods, Californian Ideology, clean water, cloud computing, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, distributed ledger, Dogecoin, Dr. Strangelove, drug harm reduction, Dunning–Kruger effect, Ethereum, ethereum blockchain, Extropian, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, functional programming, index fund, information security, initial coin offering, Internet Archive, Internet of things, Kickstarter, litecoin, M-Pesa, margin call, Neal Stephenson, Network effects, operational security, peer-to-peer, Peter Thiel, pets.com, Ponzi scheme, Potemkin village, prediction markets, quantitative easing, RAND corporation, ransomware, Ray Kurzweil, Ross Ulbricht, Ruby on Rails, Satoshi Nakamoto, short selling, Silicon Valley, Silicon Valley ideology, Singularitarianism, slashdot, smart contracts, South Sea Bubble, tulip mania, Turing complete, Turing machine, Vitalik Buterin, WikiLeaks

It took until the Great Depression for governments to accept that managing the money supply – injecting money every now and then, managing interest rates, requiring banks to be backed – was not optional, and that they just couldn’t do that on gold. Countries recovered from the Great Depression pretty much as they left the rigid gold standard behind, because managing your money supply works much better and is much more stable. A version of the gold standard lingered in the form of the Bretton Woods system until 1971, but rigid backing of currency with gold had been delivered the fatal blow by World War I and then the Great Depression. But a standard mode of pseudoscience is to adopt and fervently defend a discarded idea, and “gold bugs” were no exception, ardently pushing the version of the gold standard that had just been demonstrated utterly inadequate to a functioning economy.

Index 8chan 53 A company for carrying on an undertaking of great advantage, but nobody to know what it is 100 Accenture 122 address 12 AIDS Trojan 72 AllCrypt 43 Alloway, Tracy 111 AlphaBay 72 AlphaPoint 84 altcoins 91 Altoid 51 Amazon Web Services 43, 98 anarcho-capitalism 18, 49 Andresen, Gavin 65 anonymity 26, 52 AntMiner 57 Apple 127, 137 arbitrage 83, 88 artificial intelligence 103, 117, 137 ASCAP 126 Ash, Jordan 96 ASIC 56 Astrobotic 94 Atlantis 54 Augur 104 Australian Securities Exchange 121 Australian Tax Office 63 Austrian economics 23, 49, 98, 137 Automattic 75 Ayre, Calvin 63 Azure Blockchain 122 b-money 19 Back, Adam 19 Bancor 95, 97 Bandcamp 130 banking the unbanked 29 baphomet (8chan) 53 BBC 32, 66 Beanie Baby 35 Berklee Rethink 128 BFX 85 Bitcoin creation of new bitcoins 14 economic aims 22 economic equality 30 exchanges 42 invention 20 irreversibility 26 limited supply 31 Satoshi Nakamoto (creator) 59 security 25 transactions per second 28 Bitcoin Bowl 77 Bitcoin Jesus 37 Bitcoin Mining Accidents 55 Bitcoin Relay Network 58 Bitcoin Savings & Trust 40 Bitcoinica 43, 83 bitcoinmarket.com 35 Bitcointalk 40, 41 Bitfinex 40, 83 BitGo 84 Bitgold 19 Bitmain 57 Bitomat 43 BitPay 43, 74 BitShares 99 BitTorrent 130, 134 Blem Information Management 116 blockchain 13 blockchain (business) 111 Blockchain for Creative Industries 132 Blockchain or the Chaingang? 133 Bloomberg 117 Branwen, Gwern 60, 64, 72 Bretton Woods 20 Bridges, Shaun 53 brockchainbrockshize 108 BTC38 99 bubble 35, 81, 88, 94, 139 Budovsky, Arthur 18 Buffett, Jimmy 40 Burning Chrome 19 Buterin, Vitalik 86, 94, 96, 103, 119 Buttcoin Foundation 27, 56 Butterfly Labs 39, 56 Byrne, Patrick 76 C01N 65 Californian ideology 18 Cards Against Humanity 75 Cellan-Jones, Rory 67 Chain Core 123 Charles Sturt University 61 Chaum, David 19 Citrix 73 cloud mining 39 Cloudcroft 65 Cloudflare 44 Cobban, Cédric 135 CODE 136 coin doubler 38 Coin.mx 74 Coinbase 74, 81, 82 CoinDesk 122 coingen.io 91 CoinLab 47 cold wallet 12 consensus model 91, 119 ConsenSys 129, 136 Conversation, The 62 Cooper, Charley 111 Corda 123 Crypto Anarchist Manifesto 19 cryptocurrency 11 Cryptography and Cryptography Policy (mailing list) 20, 23 CryptoLocker 73 Cryptonomicon 19 Cryptowat.ch 83 Cryptsy 44 Cunk, Philomena 124 Curecoin 91 cyberlibertarianism 17 cyberpunk 19 Cypherpunks 19, 62 Cyprus 32 DafuqCoin 91 Dai, Wei 19, 65 DAO, The 105, 108, 122, 135 dapp 94 darknet 37, 48, 69, 70, 71 decentralisation 25, 112 DeMorgan 63 DigiCash 19 Digital Asset Holdings 121, 122 Digital Catapult 125, 134 Digital Rights Management 127, 135 Digix 98 distributed ledger technology 111, 131 Distributed Ledger Technology: beyond block chain 123 Doernberg, Ben 93 Dogecoin 92 Dogecoin Foundation 93 dot.blockchain 135 Dr.


pages: 234 words: 53,078

The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer by Dean Baker

accelerated depreciation, accounting loophole / creative accounting, affirmative action, Alan Greenspan, Asian financial crisis, Bretton Woods, business cycle, corporate governance, declining real wages, full employment, index fund, Jeff Bezos, low interest rates, McDonald's hot coffee lawsuit, medical malpractice, medical residency, money market fund, offshore financial centre, price discrimination, public intellectual, risk tolerance, spread of share-ownership

This could happen if a country had a problem with inflation or a large trade deficit, both of which could cause people to dump a currency. The IMF was supposed to lend money to a country to allow it to sustain the value of its currency while it made the adjustments necessary to correct the initial problem. The IMF filled this role until the collapse of the Bretton Woods system of fixed exchange rates in 1973. The problem with the system was that the United States, the country with the key currency, had itself begun to have problems supporting its currency. In 1971, The United States was able to arrange for a reduction in the value of the dollar against both gold and the other currencies in the world.

With the end of the fixed exchange rate system, the IMF lost the purpose for which it had originally been designed. As free market conservatives know, government bureaucracies rarely go out of business, even if the reason for their existence has disappeared. Following the tradition of bureaucracies everywhere, the IMF found itself a new purpose following the collapse of the Bretton Woods system. It became an international debt collector. Whenever countries fell into crises and found themselves unable to repay loans to western creditors, the IMF stepped in to assure the largest possible debt repayment. The way in which the IMF performed this function was to effectively make itself the agent of an international creditors’ cartel.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, Alan Greenspan, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Bear Stearns, Berlin Wall, Blitzscaling, Bonfire of the Vanities, book value, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, cotton gin, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, driverless car, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fairchild Semiconductor, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, full employment, general purpose technology, George Gilder, germ theory of disease, Glass-Steagall Act, global supply chain, Great Leap Forward, guns versus butter model, hiring and firing, Ida Tarbell, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, land bank, Lewis Mumford, Louis Pasteur, low interest rates, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, McDonald's hot coffee lawsuit, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Michael Milken, military-industrial complex, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, Phillips curve, plutocrats, pneumatic tube, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, public intellectual, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Robert Solow, Ronald Reagan, Sand Hill Road, savings glut, scientific management, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, vertical integration, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

America laid the foundations of a liberal trading regime by slashing tariffs on dutiable imports from an average of 33 percent in 1944 to 13 percent just six years later. It also laid the foundations of global economic management with the creation of the International Monetary Fund and the World Bank at a conference at a hotel in Bretton Woods, New Hampshire, in July 1944. The General Agreement on Tariffs and Trade (later the World Trade Organization) followed in 1947. It laid the foundations of global political management with the creation of the United Nations in 1944–46. The Marshall Plan provided Europe with some $13 billion for rebuilding in the years 1948 through 1952, more than all previous foreign aid combined.

“The Plan presupposes that we desire to restore a Europe which can and will compete with us in the world markets,” Allen Dulles, the CIA director, wrote, referring to the Marshall Plan, “and for that very reason will be able to buy substantial amounts of our products.”8 The U.S. share of world trade in manufactured goods increased from 10 percent in 1933 to 29 percent in 1953, providing millions of jobs for American workers. There was no doubt as to who was in charge of the new world. John Maynard Keynes was the moving spirit behind the Bretton Woods meeting, and by far the most intellectually distinguished figure there, but America’s treasury secretary, Henry Morgenthau, and his deputy, Harry Dexter White, made the key decisions: the conference attendees bowed to Keynes but listened to Morgenthau and White. Keynes was so appalled by America’s ruthless determination to replace, rather than supplement, Britain as the world’s superpower that he complained that it wanted to “pick out the eyes of the British Empire.”9 America quickly moved from the hot war against the Axis powers to the cold war against the Warsaw Pact.

The New York Times, reflecting conventional wisdom at the time, applauded its archenemy for his “bold” move. Inflation slowed for a while only to resume with renewed fury. Nixon coupled his decision to fix prices and wages with a momentous decision to take America off the gold standard and allow the dollar to float (downward) on the global market. Since the Bretton Woods Agreement of 1944, all major nations that tied their currency to the U.S. dollar and central banks had been able to convert the dollar to gold at $35 an ounce. This system provided the basis for stable growth by imprisoning politicians in a straitjacket: if a particular national leader wanted to give his economy a temporary boost ahead of an election, the head of the central bank could restrain him by saying that this would destabilize the global system and anger other countries.


pages: 214 words: 57,614

America at the Crossroads: Democracy, Power, and the Neoconservative Legacy by Francis Fukuyama

affirmative action, Ayatollah Khomeini, Berlin Wall, Bretton Woods, cuban missile crisis, David Brooks, European colonialism, failed state, Francis Fukuyama: the end of history, information security, Internet Archive, John Perry Barlow, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, New Journalism, no-fly zone, oil-for-food scandal, race to the bottom, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, transaction costs, uranium enrichment, War on Poverty, Washington Consensus

They would much rather harp on the United Nation's failings in the Oil for Food scandal than think about how to create an organization of democracies that would build incentives to improve governance and democracy around the world. In the period immediately after World War II, American power was used not just to deter Soviet aggression but also to create a welter of new international organizations and agreements, from the Bretton Woods institutions (the World Bank and the International Monetary Fund) to the United Nations, NATO, the U.S.-Japan Security Treaty, ANZUS (Australia, New Zealand, and United States Treaty), GATT, and the like. The Bush administration and its neoconservative supporters have been very critical of existing international initiatives like the Kyoto Protocol and the International Criminal Court, but have offered up no alternatives in their place that would legitimate and enhance the effectiveness of American action in the world.

It is not sufficient that Americans believe in their own good intentions; non-Americans must be convinced of them as well. The idea that the United States has in the past acted in a broad-minded way and that it has provided global public goods has considerable plausibility. The post-World War II transformations of Germany and Japan into democracies and allies, America's support for the Bretton Woods institutions and the United Nations in the 1940s, and the support given to Western Europe through the Marshall Plan and to the "captive nations" of Eastern Europe during the Cold War provided broad public benefits to the global community even as they suited American strategic interests. The United States could easily have opted for isolationism instead, as many Americans argued up through the late 1940s, and might well have been less generous in its sustenance of allies throughout this period.


pages: 398 words: 111,333

The Einstein of Money: The Life and Timeless Financial Wisdom of Benjamin Graham by Joe Carlen

Abraham Maslow, Albert Einstein, asset allocation, Bernie Madoff, book value, Bretton Woods, business cycle, business intelligence, discounted cash flows, Eugene Fama: efficient market hypothesis, full employment, index card, index fund, intangible asset, invisible hand, Isaac Newton, John Bogle, laissez-faire capitalism, margin call, means of production, Norman Mailer, oil shock, post-industrial society, price anchoring, price stability, reserve currency, Robert Shiller, the scientific method, Vanguard fund, young professional

As Keynes wrote in a personal letter to Graham, “On the use of buffer stocks as a means of stabilizing short-term commodity prices, you and I are ardent crusaders on the same side.”72 According to Kahn and Milne, “Ben exchanged a number of letters with John Maynard Keynes on this and other economic topics.”73 Whatever one's opinion of his plan may be, it is a testament to his extraordinary intellect and writing skills that Graham, with no formal economic training, could conceive, develop, and present his plan in such a way as to elicit considered (and, on balance, positive) responses from two of the greatest economists of the era (and, indeed, of modern history). Moreover, as mentioned above, the Roosevelt White House recognized the merits (and seriously considered the implementation) of various aspects of the commodity-reserve currency plan. As well, a summarized proposal of Graham's international conception of the plan was submitted to the fabled Bretton Woods conference of 1944,74 the effective birthplace of the IMF and the precursor to the World Bank.75 Nonetheless, to his great disappointment, Graham would never witness the implementation of his currency plan on either the national or the global scale. However, as late as 1965 (eleven years prior to his death), Graham remained convinced that his plan was still preferable to the status quo or any of the other currency schemes that had been proposed since: “If ever expert world opinion should become ready for a new and improved formulation of sound money, my idea might be accepted as the best of its kind.”76 While “expert world opinion” has yet to accept Graham's plan as “the best of its kind,” it has resurfaced in some interesting places since his passing in 1976.

Hayek, “A Commodity Reserve Currency,” Economic Journal 53, no. 210/211 (June–September 1943): 176–84. 72. Janet Lowe, ed., The Rediscovered Benjamin Graham (New York: John Wiley & Sons, 1999), p. 232. 73. Kahn and Milne, Benjamin Graham, p. 25. 74. Lowe, Rediscovered Benjamin Graham, p. 233. 75. “Bretton Woods Conference Collection,” IMF Online Archives, http://www.imf.org/external/np/arc/eng/fa/bwc/overview.htm (accessed December 22, 2011). 76. Graham, Memoirs of the Dean of Wall Street, p. 307. 77. David Ranson, “The Volatile Dollar: The Floating Dollar Needs an Anchor,” New York Times, November 19, 1989. 78.

., 184 beta coefficient, 262 Bill Nygren/Oakmark Funds, 257 Bogle, John, 165, 256 “bond house,” 113 bonds, convertible, 112 bond selection, 47–48 “book value,” 96 book value vs. net book value, 98 Boyle, David, 218 brand, uniqueness of, 54 Brandes, Charles, 47, 83, 127, 175, 208, 244, 255, 305 Brandes Investment Partners, 47, 306 Bretton Woods conference, 217 Brinson, Gary, 166 British parliament, 21 Brown, Chester, 60–61 Buerger's disease, 186 Buffett, Howard (father of Warren), 225 Buffett, Warren Howard Graham Buffett (first son), 233 and the Internet bubble, 37, 49 and margin of safety, 35 marriage to Susan “Susie,” 233 as most successful investor in human history, 200 as opportunistic investor, 172 “Oracle of Omaha” (nickname), 37 personal wealth estimate, 167 photographic memory of, 227 Buffett Partnership, Ltd., 247 bull markets, 175 business cycle, normal, 127 business valuations, 130 Calandro, Joseph, 315 call options, 112 charge-offs, special, 97 Charles Royce/Royce Funds, 257 Chartered Financial Analyst (CFA), 196, 291 Chatman, Seymour, 58, 106, 270 Chernow, Ron, 145 chief rabbi of Warsaw, 18–19 Chris Davis/Davis Funds, 257 Churchill, Winston, 150 “circulars” (research reports), 111 Clinton, W.


pages: 357 words: 110,017

Money: The Unauthorized Biography by Felix Martin

Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, call centre, capital asset pricing model, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, creative destruction, credit crunch, David Graeber, en.wikipedia.org, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, Fractional reserve banking, full employment, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Hyman Minsky, inflation targeting, invention of writing, invisible hand, Irish bank strikes, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, land bank, Michael Milken, mobile money, moral hazard, mortgage debt, new economy, Northern Rock, Occupy movement, Paul Volcker talking about ATMs, plutocrats, private military company, proprietary trading, public intellectual, Republic of Letters, Richard Feynman, Robert Shiller, Savings and loan crisis, Scientific racism, scientific worldview, seigniorage, Silicon Valley, smart transportation, South Sea Bubble, supply-chain management, The Wealth of Nations by Adam Smith, too big to fail

How could the most influential social science of the last two centuries have fallen into such catastrophic error? A third verdict was delivered in April 2011, by Lawrence Summers—recently retired as the Director of President Obama’s National Economic Council, a former Chief Economist of the World Bank, and one of the leading academic economists in the United States. Asked at a conference in Bretton Woods whether he believed that the crisis had exposed the failure of orthodox macroeconomics and financial theory to understand the economic reality, Summers made an astonishing admission. In the breach, Summers explained, the “vast edifice” of orthodox economic theory constructed since the Second World War had been virtually useless.7 It had proved to have almost nothing to say about why the economy was nose-diving and what could be done to stop it.

And by the same token, the question that many were keen to put to the bankers and their regulators—Why didn’t they realise that what they were doing was so risky?—also turned out to be simple. Their framework for understanding finance did not include the macroeconomy. It would all have been comical—or just irrelevant—had it not ended in such a cataclysmic economic disaster. At the end of his speech at Bretton Woods, Lawrence Summers noted how economics had lost track of finance over the previous two decades—and acknowledged that the crash showed how it, and thereby the world, had suffered as a result. But as Keynes, Bagehot, and indeed William Lowndes before them, would have been eager to explain, the divergence was much older than that.

Ibid. 6. 110th Congress House of Representatives Committee on Oversight and Government Reform (2008), The Financial Crisis and the Role of Federal Regulators, hearing of 23 October 2008. Available at https://​house.​resource.​org/​110/​gov.​house.​ogr.​20081023_​hrs15​REF2154.​raw.​txt. 7. The discussion in which Wolf and Summers made these comments is available at: http://​ineteconomics.​org/​net/​video/​playlist/​conference/​bretton-​woods/​V. Summers’ response referred to here is his answer to the first question in the interview, starting at 6:04. 8. Ibid. Summers also mentioned the 1981 Nobel Laureate James Tobin as an important influence, as well as alluding to the microeconomic literature on bank runs. 9. Ibid., second question starting at 10:58. 10.


pages: 356 words: 106,161

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

Economist Paul Romer once said that “a crisis is a terrible thing to waste” but it seems that only lip-service has been paid to the lessons we have painfully learned since. In stark contrast, the 1929 Great Depression saw a radical redesign of the US economy known as the New Deal and a growing consensus on how to govern the global economy, which eventually led to the so-called Bretton Woods system that lasted between 1944 and 1971. This period was characterized by economic policies that would seem heretical in our current policy environment: exchange rates were pegged to the dollar, capital flows across countries were tightly regulated, and institutions like the International Monetary Fund (IMF) served as a lender of last resort rather than as a global economic policeman.

And yet global GDP per capita doubled in the quarter century after 1950 (the last post-war year with reliable global data), a pace that has not been exceeded in any comparable period since.10 The success of these policies is testament to the brilliance and far-sightedness of their main architect, the British economist John Maynard Keynes. Not only did the global economy grow at its fastest pace ever, but it was also at its most stable. Virtually no banking crises took place while the Bretton Woods system was in place and there was also a decline in the number of external debt crises (Figure 5.1). But aside from a few marginal attempts at re-regulating the financial system like the Frank-Dodd Act (now partly rolled back by the Trump administration), it has been business as usual for the global economy since 2008–2009.

But I also believe in a higher principle that we’re all in this together. That’s the spirit that made the American economy work.13 Figure 5.1 The post-war period was also more stable Notes: This chart shows the number of countries experiencing banking or external debt crises. Contrary to what the advocates of market liberalization would predict, the Bretton Woods system provided the most stable period in the history of capitalism and also its fastest growing. Source: Carmen M. Reinhart and Kenneth S. Rogoff (2009). What has changed since the crisis is the opposition to capitalism. Whether it comes in the form of grassroots movements like Occupy Wall Street, the rise of the populist left through figures like Bernie Sanders in the US or Jeremy Corbyn in Britain, or the anti-globalization backlash from the supporters of Brexit and Trump, there is a growing sense that the last four decades of Western history under liberal capitalism have been a disappointment.


Global Financial Crisis by Noah Berlatsky

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, asset-backed security, banking crisis, Bear Stearns, Bretton Woods, capital controls, Celtic Tiger, centre right, circulation of elites, collapse of Lehman Brothers, collateralized debt obligation, corporate raider, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, Doha Development Round, energy security, eurozone crisis, financial innovation, Food sovereignty, George Akerlof, Glass-Steagall Act, God and Mammon, Gordon Gekko, housing crisis, illegal immigration, income inequality, low interest rates, market bubble, market fundamentalism, mass immigration, Money creation, moral hazard, new economy, Northern Rock, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Robert Shiller, Ronald Reagan, Savings and loan crisis, shareholder value, social contagion, South China Sea, structural adjustment programs, subprime mortgage crisis, too big to fail, trade liberalization, transfer pricing, working poor

It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and 238 Organizations to Contact financial system. It produces publications for specialists such as International Journal of Central Banking and consumeroriented publications such as Consumer’s Guide to Mortgage Refinancing. Bretton Woods Committee (BWC) 1990 M Street NW, Suite 450, Washington, DC 20036 (202) 331-1616 • fax: (202) 785-9423 e-mail: info@brettonwoods.org Web site: www.brettonwoods.org Bretton Woods Committee (BWC) is a bipartisan group dedicated to increasing public understanding of international financial and development issues and the role of the World Bank, International Monetary Fund, and the World Trade Organization.


pages: 239 words: 62,311

The Next Factory of the World: How Chinese Investment Is Reshaping Africa by Irene Yuan Sun

"World Economic Forum" Davos, asset light, barriers to entry, Bretton Woods, business logic, capital controls, clean water, Computer Numeric Control, deindustrialization, demographic dividend, Deng Xiaoping, Donald Trump, European colonialism, floating exchange rates, full employment, global supply chain, Great Leap Forward, invisible hand, job automation, low skilled workers, M-Pesa, manufacturing employment, means of production, mobile money, Multi Fibre Arrangement, post-industrial society, profit motive, purchasing power parity, race to the bottom, RAND corporation, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Skype, special economic zone, structural adjustment programs, tacit knowledge, Triangle Shirtwaist Factory, union organizing, Washington Consensus, working-age population

The will is clearly there, as are the funds: China took the lead in launching the $100 billion Asian Infrastructure Investment Bank and the $40 billion Silk Road Fund and joined the other BRICS countries (Brazil, Russia, India, and South Africa) to launch the $100 billion New Development Bank. These moves together represent the biggest rebalancing in global development finance since the creation of the International Monetary Fund and the World Bank at Bretton Woods in 1944. In their ambition and scale, these new banks have the potential to match their forebears not only in financing capacity but in global agenda-setting clout. How should China use this power? As China steps out onto the global stage with grand strategies and lofty new institutions, the lesson from this book is that true development happens elsewhere.

INDEX accountability, 82 Acemoglu, Daron, 22 Achebe, Chinua, 10 Adams, Luqy, 117–119 adaptation, 146–148 Africa attitudes in toward Chinese businesses, 77–78 attractions of for manufacturing investments, 44–45 Chinese government aid to, 179n7 Chinese immigration to, 32, 123–127, 167–169, 181n1 deindustrialization of, 32, 35 demographics, 92–94 development theories and, 9–10 economic slowing in China and, 171–172 education in, 95 GDP from manufacturing in, 41 governance in, 129–150 health care/disease in, 151–169 industrialization in, 4–6, 8, 32 labor costs in, 23 living standards in, 6 match between China and, 167–168 special economic zones, 137–142 unemployment rates in, 94 uneven industrialization in, 51 African Development Bank, 95 African Governance Initiative, 135–136 African Growth and Opportunity Act (AGOA), 54, 57, 64, 72, 184n3 agency, 102–105 AIDS/HIV, 11, 152–156, 159 Asian Infrastructure Investment Bank, 174 Austria, 147–148, 190n30 automation, 9, 55, 58–61, 172–173 AVIC International, 111, 131, 132–134, 136, 148–150 Baoyao Steel, 61, 64 barriers to entry, 55–56 Belgium, 147–148 Belt and Road Initiative, 173–174 birthrates, 93–94 Blair, Tony, 135–136 Bloom, Ron, 94–95 Bobu Feizhou, 124, 125 bootstrapping development, 132–136, 147–148, 165–166 BP, 35–36 Brazil, 43 Bretton Woods, 174 bribes, 7–8 Britain, 19–20, 98–99, 102 Brookings Institute, 38–39, 95 Bush, George W., 154 business models, 46–47, 50–51, 65–66 global competition and, 74–75 governance and, 133–134 labor- vs. capital-intensive, 51, 52, 54, 57, 64, 65 Campaign for Democratic and Workers’ Rights, 79 capital-intensive production, 51, 52, 54, 58–61, 64.


pages: 218 words: 62,889

Sabotage: The Financial System's Nasty Business by Anastasia Nesvetailova, Ronen Palan

Alan Greenspan, algorithmic trading, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Bernie Sanders, big-box store, bitcoin, Black-Scholes formula, blockchain, Blythe Masters, bonus culture, Bretton Woods, business process, collateralized debt obligation, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, critique of consumerism, cryptocurrency, currency risk, democratizing finance, digital capitalism, distributed ledger, diversification, Double Irish / Dutch Sandwich, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, gig economy, Glass-Steagall Act, global macro, Gordon Gekko, high net worth, Hyman Minsky, independent contractor, information asymmetry, initial coin offering, interest rate derivative, interest rate swap, Joseph Schumpeter, junk bonds, Kenneth Arrow, litecoin, London Interbank Offered Rate, London Whale, Long Term Capital Management, margin call, market fundamentalism, Michael Milken, mortgage debt, new economy, Northern Rock, offshore financial centre, Paul Samuelson, peer-to-peer lending, plutocrats, Ponzi scheme, Post-Keynesian economics, price mechanism, regulatory arbitrage, rent-seeking, reserve currency, Ross Ulbricht, shareholder value, short selling, smart contracts, sovereign wealth fund, Thorstein Veblen, too big to fail

The regulatory environment that was established across the advanced industrialized world is commonly remembered (and romanticized) as a system that prioritized what many consider the ‘real economy’ over finance, and welfare over markets. This view has become so well entrenched that the two postwar decades are sometimes referred to as the era of ‘financial repression’,1 an era dominated by manufacturing and productive capital that kept speculative finance at bay. Nostalgically, the short-lived Bretton Woods era is sometimes referred to as ‘the golden age of capitalism’. Whether or not that was a golden age, what seems to have been forgotten is that the financial regulations which kept the financial system stable were designed in the 1930s to tackle, first and foremost, the problem of sabotage head-on.

European Commission, ‘What is Fintech?’, https://ec.europa.eu/info/business-economy-euro/banking-and-finance/fintech_en. 5. Back in the late 1950s the Eurodollar market, a market that emerged in London almost by accident, has swiftly plugged a hole in the entire postwar regulatory regime known as the Bretton Woods system. 6. So dubbed by the University of California–Irvine law professor Omri Marian. 7. O. Bateman, ‘Bitcoin might make tax havens obsolete’, Motherboard, Vice, 22 June 2016, https://motherboard.vice.com/en_us/article/wnxzpy/bitcoin-might-make-tax-havens-obsolete. 8. D. Ketchum, ‘15 biggest crowdfunding scams and failures of all time’, Go Banking Rates, 14 March 2018, www.gobankingrates.com/making-money/business/biggest-crowdfunding-scams-failures/. 9.


Trade Your Way to Financial Freedom by van K. Tharp

asset allocation, backtesting, book value, Bretton Woods, buy and hold, buy the rumour, sell the news, capital asset pricing model, commodity trading advisor, compound rate of return, computer age, distributed generation, diversification, dogs of the Dow, Elliott wave, high net worth, index fund, locking in a profit, margin call, market fundamentalism, Market Wizards by Jack D. Schwager, passive income, prediction markets, price stability, proprietary trading, random walk, Reminiscences of a Stock Operator, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, Sharpe ratio, short selling, Tax Reform Act of 1986, transaction costs

Second, these emerging economies need raw materials and are thus starting to produce a huge boom in commodity prices. And last, the countries of the world are currently supporting the U.S. dollar because most of the world growth of the 1990s was due to the U.S. consumer. This phenomenon has been called “Bretton Woods II” by some economic commentators.9 The first major issue is the growth of emerging countries. China and India, for example, are emerging as major players globally. Many U.S. companies are investing huge amounts of money in China, which is causing its economy to grow. The U.S. companies want access to the market of the billion people that populate China.

It’s estimated that most of the growth of the world economy during the 1990s was due to the insatiable demand for products by the U.S. consumer. Other countries want to continue to sell to the U.S. consumer, and they can do that reasonably only if their currencies remain low in cost compared with the U.S. dollar. As a result, an unofficial agreement, known as Bretton Woods II, has sprung up in which foreign countries tend to support the U.S. dollar to keep it from falling (despite the huge deficit in the balance of payments) by purchasing U.S. debt. Foreign countries now own about $3 trillion in U.S. debt, which they maintain by purchasing Treasury bills, notes, and bonds.

• How is the global economy moving during this time period, and what is the impact that it will have on my investment strategy? • For example, what if commodities continue to escalate at 30 percent per year? • What happens if the economy of the country in which I largely invest (for example, the United States) shrinks relative to the economy of other nations in the world? • What happens if Bretton Woods II disappears and other countries stop supporting the U.S. debt and the U.S. dollar? FACTOR 4. THE IMPACT OF MUTUAL FUNDS During most bull markets, people have participated by buying stocks directly. The last bull market was different. Instead, most people were participating through mutual funds.


pages: 442 words: 39,064

Why Stock Markets Crash: Critical Events in Complex Financial Systems by Didier Sornette

Alan Greenspan, Asian financial crisis, asset allocation, behavioural economics, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, Brownian motion, business cycle, buy and hold, buy the rumour, sell the news, capital asset pricing model, capital controls, continuous double auction, currency peg, Deng Xiaoping, discrete time, diversified portfolio, Elliott wave, Erdős number, experimental economics, financial engineering, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, global village, implied volatility, index fund, information asymmetry, intangible asset, invisible hand, John von Neumann, joint-stock company, law of one price, Louis Bachelier, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, market design, market fundamentalism, mental accounting, moral hazard, Network effects, new economy, oil shock, open economy, pattern recognition, Paul Erdős, Paul Samuelson, power law, quantitative trading / quantitative finance, random walk, risk/return, Ronald Reagan, Schrödinger's Cat, selection bias, short selling, Silicon Valley, South Sea Bubble, statistical model, stochastic process, stocks for the long run, Tacoma Narrows Bridge, technological singularity, The Coming Technological Singularity, The Wealth of Nations by Adam Smith, Tobin tax, total factor productivity, transaction costs, tulip mania, VA Linux, Y2K, yield curve

Friedman’s case for flexible exchange rates was transformed from heresy to majority academic recommendation and from there (via two U.S. treasury secretaries) to become the cornerstone of the post-1973 international “monetary order” [261]. As flexible exchange rates were legitimized, several leading countries began to experiment with monetary targeting, with the idea that a flexible exchange rate is a precondition for independent 256 chapter 7 national monetary policy. This was the death of the previous 1944 Bretton Woods agreement, designed to provide postwar international stability to facilitate the approach towards both free trade and full employment. It turned out that fixed-exchange rates led to numerous crises and problems: indeed, the whole point of going from a world fixed-exchange rate to floating exchanges between local currencies was to give governments the ability to have independent monetary policies so they could fight their local recessions when necessary.

A country can also improve its competitive position by devaluing. But hints that a devaluation might be looming can cause massive speculation against the vulnerable currency, as we shall discuss in chapter 8. See also [248] for an eye-opening description of the conundrums of monetary policies. With the end of Bretton Woods in the early 1970s, the market for foreign currency grew rapidly in both size and instability. The liberalization of capital flows that followed the adoption of floating-exchange rates brought vastly larger flows of capital between nations. The first naive presumption is that the exchange rate between two currencies, say the U.S. dollar and the European euro (since January 1999), would be determined by the needs of trade: by North Americans trading with Europeans for euros in order to buy European goods, and conversely.

Le Bras, H. (1996). Rumeur, troublante vérité du faux (Rumors, troubling truth of the false) (Editions Odile Jacob, Paris). 260. Lee, C. M., Myers, J., and Swaminathan, B. (1999). What is the intrinsic value of the Dow? Journal of Finance 54, 1693–1741. 261. Leeson, R. (1999). The Decline and Fall of Bretton Woods, Working Paper No. 178, Economics Department, Murdoch University, Perth, Western Australia, E-print at http://cleo.murdoch.edu.au/teach/econs/wps/178.html. 262. Levy, M., Levy, H., and Solomon, S. (1995). Microscopic simulation of the stock market—the effect of microscopic diversity, Journal de Physique I 5, 1087–1107. 263.


The Economic Weapon by Nicholas Mulder

anti-communist, Boycotts of Israel, Bretton Woods, British Empire, capital controls, classic study, deglobalization, European colonialism, falling living standards, false flag, foreign exchange controls, global pandemic, guns versus butter model, Monroe Doctrine, power law, reserve currency, rising living standards, Suez crisis 1956, transatlantic slave trade, éminence grise

The danger of this interregnum became apparent during the Great Depression, when the international economic order entered a deep crisis marked by nationalism and disintegration. Hegemony theorists emphasize that it was only in the wake of World War II that the United States came to provide a stable international monetary and financial system—the Bretton Woods system—enabling an “embedded liberalism” of national welfare states.17 But in the 1930s, they argue, there was not yet a great power available to provide the global public goods needed to save liberalism. That the interwar world was riven by profound tensions has also been the point of departure for historians who emphasize competitive dynamics as a cause of breakdown.

Lobell, pp. 120–146 (Cambridge: Cambridge University Press, 2012), and Economic Interdependence and War (Princeton, NJ: Princeton University Press, 2014); an examination of the effect of blockade and economic pressure on German strategic thinking is Erik Sand, “Desperate Measures: The Effects of Economic Isolation on Warring Powers,” Texas National Security Review 3, no. 2 (Spring 2020): 12–37. 24. Jamie Martin, Governing Capitalism in the Age of Total War (Cambridge, MA: Harvard University Press, forthcoming). 25. Eric Helleiner, Forgotten Foundations of Bretton Woods: International Development and the Making of the Postwar Order (Ithaca, NY: Cornell University Press, 2014); Ted Fertik, “Steel and Sovereignty: The United States, Nationalism, and the Transformation of World Order, 1898–1941” (PhD diss., Yale University, 2018), pp. 423–506. 26. David A. Baldwin, Economic Statecraft (Princeton, NJ: Princeton University Press, 1985), pp. 150–152; Gary C.

Charles Maier, “The Politics of Productivity: Foundations of American International Economic Policy after World War II,” in Charles Maier, In Search of Stability: Explorations in Historical Political Economy (Cambridge: Cambridge University Press, 1987), pp. 121–152; Eric Helleiner, Forgotten Foundations of Bretton Woods: International Development and the Making of the Postwar Order (Ithaca, NY: Cornell University Press, 2014); David Engerman, The Price of Aid: The Economic Cold War in India (Cambridge, MA: Harvard University Press, 2018). 12. Igor Lukes, Czechoslovakia between Stalin and Hitler: The Diplomacy of Edvard Beneš in the 1930s (New York: Oxford University Press, 1996), pp. 190–224; Igor Lukes and Erik Goldstein, eds., The Munich Crisis, 1938: Prelude to World War II (London: Frank Cass, 1999); Louise Grace Shaw, The British Political Elite and the Soviet Union, 1937–1939 (London: Frank Cass, 2003), pp. 5–30; Hugh Ragsdale, The Soviets, the Munich Crisis, and the Coming of World War II (Cambridge: Cambridge University Press, 2004), pp. 28–52. 13.


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The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Given the debate over low investment, low borrowing costs and concerns over growth, Keynes’s relatively lesser-known views on public investment could have a greater impact on the structure of an economy than his better-known arguments about government deficit spending. Keynes’s legacy Keynes passed away in 1946 after helping to construct the post-Second World War Bretton Woods System, which included the formation of the sister institutions of the IMF and the World Bank. His memorial service was held at Westminster Abbey, close to Parliament, where he had latterly become a member of the House of Lords. He was survived by his widow, Lydia Lopokova, who continued his work with the Arts Council of Britain and lived another thirty-six years.

Great Crash The collapse of the US stock market in October 1929. Also known as the Wall Street Crash. Great Depression The worldwide economic downturn that followed the Great Crash and lasted for most of the 1930s. Great Recession The recession that followed the global financial crisis in 2009. IMF (International Monetary Fund) A Bretton Woods institution focused on global economic stability. inclusive growth Economic growth that benefits everyone in a society. laissez-faire Literally ‘let (people) do’. Used to describe a policy of non-intervention by the state or government. Long Depression The global recession that occurred during the last quarter of the nineteenth century.

second-generation currency crisis The collapse of the European exchange rate mechanism (ERM) in 1992. STEM Science, technology, engineering and mathematics. third-generation financial and currency crisis The Asian financial crisis of 1997–98. Wall Street Crash See Great Crash. World Bank A Bretton Woods institution focused on alleviating poverty. WTO (World Trade Organization) An intergovernmental organization formed in 1995 that regulates international trade, which was preceded by the General Agreement on Tariffs and Trade (GATT), in force since 1947. Acknowledgements I am hugely indebted to Graeme Chamberlin for his steadfast support of this project.


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Seventeen Contradictions and the End of Capitalism by David Harvey

accounting loophole / creative accounting, Alvin Toffler, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, Charles Babbage, classic study, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, company town, cotton gin, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, death from overwork, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, gentrification, global reserve currency, Great Leap Forward, Guggenheim Bilbao, Gunnar Myrdal, Herbert Marcuse, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, military-industrial complex, Money creation, Murray Bookchin, new economy, New Urbanism, Occupy movement, peak oil, phenotype, planned obsolescence, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, Savings and loan crisis, scientific management, short selling, Silicon Valley, special economic zone, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

Likewise, the crisis whose existence was signalled by turbulence in international currency markets in the late 1960s and the events of 1968 on the streets of many cities (from Paris and Chicago to Mexico City and Bangkok) was not resolved until the mid-1980s, having passed through the early 1970s collapse of the Bretton Woods international monetary system set up in 1944, a turbulent decade of labour struggles in the 1970s and the rise and consolidation of the politics of neoliberalisation under Reagan, Thatcher, Kohl, Pinochet and, ultimately, Deng in China. With the benefit of hindsight it is not hard to spot abundant signs of problems to come well before a crisis explodes into full view.

There are other currencies which might be used for global trade – pounds sterling (which used to be the global reserve currency), the euro and the yen and maybe in the future the Chinese yuan. But these have so far not threatened the position of the US dollar and occasional proposals to replace the dollar with a market-basket of currencies (of the sort that Keynes originally proposed at Bretton Woods in 1944) have so far been rebuffed by the USA. Considerable benefits accrue to the USA, after all, from its control over the global reserve currency. US imperial power has been exercised either directly or indirectly by dollar diplomacy. The hegemony of the US state in the world system is largely sustained by its control over the world currency and its ability to print money to pay, for example, for its excessive military expenditures.

., Disposable Women and Other Myths of Global Capitalism, New York, Routledge, 2006 Index Numbers in italics indicate Figures. 2001: A Space Odyssey (film) 271 A Abu Ghraib, Iraq 202 acid deposition 255, 256 advertising 50, 121, 140, 141, 187, 197, 236, 237, 275, 276 Aeschylus 291 Afghanistan 202, 290 Africa and global financial crisis 170 growth 232 indigenous population and property rights 39 labour 107, 108, 174 ‘land grabs’ 39, 58, 77, 252 population growth 230 Agamben, Giorgio 283–4 agglomeration 149, 150 economies 149 aggregate demand 20, 80, 81, 104, 173 aggregate effective demand 235 agribusiness 95, 133, 136, 206, 247, 258 agriculture ix, 39, 61, 104, 113, 117, 148, 229, 239, 257–8, 261 Alabama 148 Algerian War (1954–62) 288, 290 alienation 57, 69, 125, 126, 128, 129, 130, 198, 213, 214, 215, 263, 266–70, 272, 275–6, 279–80, 281, 286, 287 Allende, Salvador 201 Althusser, Louis 286 Amazon 131, 132 Americas colonisation of 229 indigenous populations 283 Amnesty International 202 anti-capitalist movements 11, 14, 65, 110, 111, 162 anti-capitalist struggle 14, 110, 145, 193, 269, 294 anti-globalisation 125 anti-terrorism xiii apartheid 169, 202, 203 Apple 84, 123, 131 apprenticeships 117 Arab Spring movement 280 Arbenz, Jacobo 201 Argentina 59, 107, 152, 160, 232 Aristotelianism 283, 289 Aristotle 1, 4, 200, 215 arms races 93 arms traffickers 54 Arrighi, Giovanni 136 Adam Smith in Beijing 142 Arthur, Brian: The Nature of Technology 89, 95–9, 101–4, 110 artificial intelligence xii, 104, 108, 120, 139, 188, 208, 295 Asia ‘land grabs’ 58 urbanisation 254 assembly lines 119 asset values and the credit system 83 defined 240 devalued 257 housing market 19, 20, 21, 58, 133 and predatory lending 133 property 76 recovery of 234 speculation 83, 101, 179 associationism 281 AT&T 131 austerity xi, 84, 177, 191, 223 Australia 152 autodidacts 183 automation xii, 103, 105, 106, 108, 138, 208, 215, 295 B Babbage, Charles 119 Bangkok riots, Thailand (1968) x Bangladesh dismantlement of old ships 250 factories 129, 174, 292 industrialisation 123 labour 108, 123, 129 protests against unsafe labour conditions 280 textile mill tragedies 249 Bank of England 45, 46 banking bonuses 164 electronic 92, 100, 277 excessive charges 84 interbank lending 233 and monopoly power 143 national banks supplant local banking in Britain and France 158 net transfers between banks 28 power of bankers 75 private banks 233 profits 54 regional banks 158 shell games 54–5 systematic banking malfeasance 54, 61 Baran, Paul and Sweezy, Paul: Monopoly Capitalism 136 Barcelona 141, 160 barrios pobres ix barter 24, 25, 29 Battersea Power Station, London 255 Battle of Algiers, The (film) 288 Bavaria, Germany 143, 150 Becker, Gary 186 Bernanke, Ben 47 Bhutan 171 billionaires xi, 165, 169, 170 biodiversity 246, 254, 255, 260 biofuels 3 biomedical engineering xii Birmingham 149 Bitcoin 36, 109 Black Panthers 291 Blade Runner (film) 271 Blankfein, Lloyd 239–40 Bohr, Niels 70 Bolivia 257, 260, 284 bondholders xii, 32, 51, 152, 158, 223, 240, 244, 245 bonuses 54, 77, 164, 178 Bourdieu, Pierre 186, 187 bourgeois morality 195 bourgeois reformism 167, 211 ‘Brady Bonds’ 240 Braudel, Fernand 193 Braverman, Harry: Labor and Monopoly Capital 119 Brazil a BRIC country 170, 228 coffee growers 257 poverty grants 107 unrest in (2013) 171, 243, 293 Brecht, Bertolt 265, 293 Bretton Woods (1944) 46 brewing trade 138 BRIC countries 10, 170, 174, 228 Britain alliance between state and London merchant capitalists 44–5 banking 158 enclosure movement 58 lends to United States (nineteenth century) 153 suppression of Mau Mau 291 surpluses of capital and labour sent to colonies 152–3 welfare state 165 see also United Kingdom British Empire 115, 174 British Museum Library, London 4 British Petroleum (BP) 61, 128 Buffett, Peter 211–12, 245, 283, 285 Buffett, Warren 211 bureaucracy 121–2, 165, 203, 251 Bush, George, Jr 201, 202 C Cabet, Étienne 183 Cabral, Amilcar 291 cadastral mapping 41 Cadbury 18 Cairo uprising (2011) 99 Calhoun, Craig 178 California 29, 196, 254 Canada 152 Cape Canaveral, Florida 196 capital abolition of monopolisable skills 119–20 aim of 92, 96–7, 232 alternatives to 36, 69, 89, 162 annihilation of space through time 138, 147, 178 capital-labour contradiction 65, 66, 68–9 and capitalism 7, 57, 68, 115, 166, 218 centralisation of 135, 142 circulation of 5, 7, 8, 53, 63, 67, 73, 74, 75, 79, 88, 99, 147, 168, 172, 177, 234, 247, 251, 276 commodity 74, 81 control over labour 102–3, 116–17, 166, 171–2, 274, 291–2 creation of 57 cultural 186 destruction of 154, 196, 233–4 and division of labour 112 economic engine of 8, 10, 97, 168, 172, 200, 253, 265, 268 evolution of 54, 151, 171, 270 exploitation by 156, 195 fictitious 32–3, 34, 76, 101, 110–11, 239–42 fixed 75–8, 155, 234 importance of uneven geographical development to 161 inequality foundational for 171–2 investment in fixed capital 75 innovations 4 legal-illegal duality 72 limitless growth of 37 new form of 4, 14 parasitic forms of 245 power of xii, 36, 47 private capital accumulation 23 privatisation of 61 process-thing duality 70–78 profitability of 184, 191–2 purpose of 92 realisation of 88, 173, 192, 212, 231, 235, 242, 268, 273 relation to nature 246–63 reproduction of 4, 47, 55, 63, 64, 88, 97, 108, 130, 146, 161, 168, 171, 172, 180, 181, 182, 189, 194, 219, 233, 252 spatiality of 99 and surplus value 63 surpluses of 151, 152, 153 temporality of 99 tension between fixed and circulating capital 75–8, 88, 89 turnover time of 73, 99, 147 and wage rates 173 capital accumulation, exponential growth of 229 capital gains 85, 179 capital accumulation 7, 8, 75, 76, 78, 102, 149, 151–5, 159, 172, 173, 179, 192, 209, 223, 228–32, 238, 241, 243, 244, 247, 273, 274, 276 basic architecture for 88 and capital’s aim 92, 96 collapse of 106 compound rate of 228–9 and the credit system 83 and democratisation 43 and demographic growth 231 and household consumerism 192 and lack of aggregate effective demand in the market 81 and the land market 59 and Marx 5 maximising 98 models of 53 in a new territories 152–3 perpetual 92, 110, 146, 162, 233, 265 private 23 promotion of 34 and the property market 50 recent problems of 10 and the state 48 capitalism ailing 58 an alternative to 36 and capital 7, 57, 68, 115, 166, 218 city landscape of 160 consumerist 197 contagious predatory lawlessness within 109 crises essential to its reproduction ix; defined 7 and demand-side management 85 and democracy 43 disaster 254–5, 255 economic engine of xiii, 7–8, 11, 110, 220, 221, 252, 279 evolution of 218 geographical landscape of 146, 159 global xi–xii, 108, 124 history of 7 ‘knowledge-based’ xii, 238 and money power 33 and a moneyless economy 36 neoliberal 266 political economy of xiv; and private property rights 41 and racialisation 8 reproduction of ix; revivified xi; vulture 162 capitalist markets 33, 53 capitalo-centric studies 10 car industry 121, 138, 148, 158, 188 carbon trading 235, 250 Caribbean migrants 115 Cartesian thinking 247 Cato Institute 143 Central America 136 central banks/bankers xi–xii, 37, 45, 46, 48, 51, 109, 142, 156, 161, 173, 233, 245 centralisation 135, 142, 144, 145, 146, 149, 150, 219 Césaire, Aimé 291 CFCs (chloro-fluorocarbons) 248, 254, 256, 259 chambers of commerce 168 Chandler, Alfred 141 Chaplin, Charlie 103 Charles I, King 199 Chartism 184 Chávez, Hugo 123, 201 cheating 57, 61, 63 Cheney, Dick 289 Chicago riots (1968) x chicanery 60, 72 children 174 exploitation of 195 raising 188, 190 trading of 26 violence and abuse of 193 Chile 136, 194, 280 coup of 1973 165, 201 China air quality 250, 258 becomes dynamic centre of a global capitalism 124 a BRIC country 170, 228 capital in (after 2000) 154 class struggles 233 and competition 150, 161 consumerism 194–5, 236 decentralisation 49 dirigiste governmentality 48 dismantlement of old ships 250 dispossessions in 58 education 184, 187 factories 123, 129, 174, 182 famine in 124–5 ‘great leap forward’ 125 growth of 170, 227, 232 income inequalities 169 industrialisation 232 Keynesian demand-side and debt-financed expansion xi; labour 80, 82, 107, 108, 123, 174, 230 life expectancy 259 personal debt 194 remittances 175 special economic zones 41, 144 speculative booms and bubbles in housing markets 21 suburbanisation 253 and technology 101 toxic batteries 249–50 unstable lurches forward 10 urban and infrastructural projects 151 urbanisation 232 Chinese Communist Party 108, 142 Church, the 185, 189, 199 circular cumulative causation 150 CitiBank 61 citizenship rights 168 civil rights 202, 205 class affluent classes 205 alliances 143, 149 class analysis xiii; conflict 85, 159 domination 91, 110 plutocratic capitalist xiii; power 55, 61, 88, 89, 92, 97, 99, 110, 134, 135, 221, 279 and race 166, 291 rule 91 structure 91 class struggle 34, 54, 67, 68, 85, 99, 103, 110, 116, 120, 135, 159, 172, 175, 183, 214, 233 climate change 4, 253–6, 259 Clinton, President Bill 176 Cloud Atlas (film) 271 CNN 285 coal 3, 255 coercion x, 41–4, 53, 60–63, 79, 95, 201, 286 Cold War 153, 165 collateralised debt obligations (CDOs) 78 Collins, Suzanne: The Hunger Games 264 Colombia 280 colonialism 257 the colonised 289–90 indigenous populations 39, 40 liberation from colonial rule 202 philanthropic 208, 285 colonisation 229, 262 ‘combinatorial evolution’ 96, 102, 104, 146, 147, 248 commercialisation 262, 263, 266 commodification 24, 55, 57, 59–63, 88, 115, 140, 141, 192, 193, 235, 243, 251, 253, 260, 262, 263, 273 commodities advertising 275 asking price 31 and barter 24 commodity exchange 39, 64 compared with products 25–6 defective or dangerous 72 definition 39 devaluation of 234 exchange value 15, 25 falling costs of 117 importance of workers as buyers 80–81 international trade in 256 labour power as a commodity 62 low-value 29 mobility of 147–8 obsolescence 236 single metric of value 24 unique 140–41 use value 15, 26, 35 commodity markets 49 ‘common capital of the class’ 142, 143 common wealth created by social labour 53 private appropriation of 53, 54, 55, 61, 88, 89 reproduction of 61 use values 53 commons collective management of 50 crucial 295 enclosure of 41, 235 natural 250 privatised 250 communications 99, 147, 148, 177 communism 196 collapse of (1989) xii, 165 communist parties 136 during Cold War 165 scientific 269 socialism/communism 91, 269 comparative advantage 122 competition and alienated workers 125 avoiding 31 between capitals 172 between energy and food production 3 decentralised 145 and deflationary crisis (1930s) 136 foreign 148, 155 geopolitical 219 inter-capitalist 110 international 154, 175 interstate 110 interterritorial 219 in labour market 116 and monopoly 131–45, 146, 218 and technology 92–3 and turnover time of capital 73, 99 and wages 135 competitive advantage 73, 93, 96, 112, 161 competitive market 131, 132 competitiveness 184 complementarity principle of 70 compounding growth 37, 49, 222, 227, 228, 233, 234, 235, 243, 244 perpetual 222–45, 296 computerisation 100, 120, 222 computers 92, 100, 105, 119 hardware 92, 101 organisational forms 92, 93, 99, 101 programming 120 software 92, 99, 101, 115, 116 conscience laundering 211, 245, 284, 286 Conscious Capitalism 284 constitutional rights 58 constitutionality 60, 61 constitutions progressive 284 and social bond between human rights and private property 40 US Constitution 284 and usurpation of power 45 consumerism 89, 106, 160, 192–5, 197, 198, 236, 274–7 containerisation 138, 148, 158 contracts 71, 72, 93, 207 contradictions Aristotelian conception of 4 between money and the social labour money represents 83 between reality and appearance 4–6 between use and exchange value 83 of capital and capitalism 68 contagious intensification of 14 creative use of 3 dialectical conception of 4 differing reactions to 2–3 and general crises 14 and innovation 3 moved around rather than resolved 3–4 multiple 33, 42 resolution of 3, 4 two modes of usage 1–2 unstable 89 Controller of the Currency 120 corporations and common wealth 54 corporate management 98–9 power of 57–8, 136 and private property 39–40 ‘visible hand’ 141–2 corruption 53, 197, 266 cosmopolitanism 285 cost of living 164, 175 credit cards 67, 133, 277 credit card companies 54, 84, 278 credit financing 152 credit system 83, 92, 101, 111, 239 crises changes in mental conceptions of the world ix-x; crisis of capital 4 defined 4 essential to the reproduction of capitalism ix; general crisis ensuing from contagions 14 housing markets crisis (2007–9) 18, 20, 22 reconfiguration of physical landscapes ix; slow resolution of x; sovereign debt crisis (after 2012) 37 currency markets, turbulence of (late 1960s) x customary rights 41, 59, 198 D Davos conferences 169 DDT 259 Debord, Guy: The Society of the Spectacle 236 debt creation 236 debt encumbrancy 212 debt peonage 62, 212 decentralisation 49, 142, 143, 144, 146, 148, 219, 281, 295 Declaration of Independence (US) 284 decolonisation 282, 288, 290 decommodification 85 deindustrialisation xii, 77–8, 98, 110, 148, 153, 159, 234 DeLong, Bradford 228 demand management 81, 82, 106, 176 demand-side management 85 democracy 47, 215 bourgeois 43, 49 governance within capitalism 43 social 190 totalitarian 220, 292 democratic governance 220, 266 democratisation 43 Deng Xiaoping x depressions 49, 227 1930s x, 108, 136, 169, 227, 232, 234 Descartes, René 247 Detroit 77, 136, 138, 148, 150, 152, 155, 159, 160 devaluation 153, 155, 162 of capital 233 of commodities 234 crises 150–51, 152, 154 localised 154 regional 154 developing countries 16, 240 Dhaka, Bangladesh 77 dialectics 70 Dickens, Charles 126, 169 Bleak House 226 Dombey and Son 184 digital revolution 144 disabled, the 202 see also handicapped discrimination 7, 8, 68, 116, 297 diseases 10, 211, 246, 254, 260 disempowerment 81, 103, 116, 119, 198, 270 disinvestment 78 Disneyfication 276 dispossession accumulation by 60, 67, 68, 84, 101, 111, 133, 141, 212 and capital 54, 55, 57 economies of 162 of indigenous populations 40, 59, 207 ‘land grabs’ 58 of land rights of the Irish 40 of the marginalised 198 political economy of 58 distributional equality 172 distributional shares 164–5, 166 division of labour 24, 71, 112–30, 154, 184, 268, 270 and Adam Smith 98, 118 defined 112 ‘the detail division of labour’ 118, 121 distinctions and oppositions 113–14 evolution of 112, 120, 121, 126 and gender 114–15 increasing complexity of 124, 125, 126 industrial proletariat 114 and innovation 96 ‘new international division of labour’ 122–3 organisation of 98 proliferating 121 relation between the parts and the whole 112 social 113, 118, 121, 125 technical 113, 295 uneven geographical developments in 130 dot-com bubble (1990s) 222–3, 241 ‘double coincidence of wants and needs’ 24 drugs 32, 193, 248 cartels 54 Durkheim, Emile 122, 125 Dust Bowl (United States, 1930s) 257 dynamism 92, 104, 146, 219 dystopia 229, 232, 264 E Eagleton , Terry: Why Marx Was Right 1, 21, 200, 214–15 East Asia crisis of 1997–98 154 dirigiste governmentality 48 education 184 rise of 170 Eastern Europe 115, 230 ecological offsets 250 economic rationality 211, 250, 252, 273, 274, 275, 277, 278, 279 economies 48 advanced capitalist 228, 236 agglomeration 149 of dispossession 162 domination of industrial cartels and finance capital 135 household 192 informal 175 knowledge-based 188 mature 227–8 regional 149 reoriented to demand-side management 85 of scale 75 solidarity 66, 180 stagnant xii ecosystems 207, 247, 248, 251–6, 258, 261, 263, 296 Ecuador 46, 152, 284 education 23, 58, 60, 67–8, 84, 110, 127–8, 129, 134, 150, 156, 168, 183, 184, 185, 187, 188, 189, 223, 235, 296 efficiency 71, 92, 93, 98, 103, 117, 118, 119, 122, 126, 272, 273, 284 efficient market hypothesis 118 Egypt 107, 280, 293 Ehrlich, Paul 246 electronics 120, 121, 129, 236, 292 emerging markets 170–71, 242 employment 37 capital in command of job creation 172, 174 conditions of 128 full-time 274 opportunities for xii, 108, 168 regional crises of 151 of women 108, 114, 115, 127 see also labour enclosure movement 58 Engels, Friedrich 70 The Condition of the English Working Class in England 292 English Civil War (1642–9) 199 Enlightenment 247 Enron 133, 241 environmental damage 49, 61, 110, 111, 113, 232, 249–50, 255, 257, 258, 259, 265, 286, 293 environmental movement 249, 252 environmentalism 249, 252–3 Epicurus 283 equal rights 64 Erasmus, Desiderius 283 ethnic hatreds and discriminations 8, 165 ethnic minorities 168 ethnicisation 62 ethnicity 7, 68, 116 euro, the 15, 37, 46 Europe deindustrialisation in 234 economic development in 10 fascist parties 280 low population growth rate 230 social democratic era 18 unemployment 108 women in labour force 230 European Central Bank 37, 46, 51 European Commission 51 European Union (EU) 95, 159 exchange values commodities 15, 25, 64 dominance of 266 and housing 14–23, 43 and money 28, 35, 38 uniform and qualitatively identical 15 and use values 15, 35, 42, 44, 50, 60, 65, 88 exclusionary permanent ownership rights 39 experts 122 exploitation 49, 54, 57, 62, 68, 75, 83, 107, 108, 124, 126, 128, 129, 150, 156, 159, 166, 175, 176, 182, 185, 193, 195, 208, 246, 257 exponential growth 224, 240, 254 capacity for 230 of capital 246 of capital accumulation 223, 229 of capitalist activity 253 and capital’s ecosystem 255 in computer power 105 and environmental resources 260 in human affairs 229 and innovations in finance and banking 100 potential dangers of 222, 223 of sophisticated technologies 100 expropriation 207 externality effects 43–4 Exxon 128 F Facebook 236, 278, 279 factories ix, 123, 129, 160, 174, 182, 247, 292 Factory Act (1864) 127, 183 famine 124–5, 229, 246 Fannie Mae 50 Fanon, Frantz 287 The Wretched of the Earth 288–90, 293 fascist parties 280 favelas ix, 16, 84, 175 feminisation 115 feminists 189, 192, 283 fertilisers 255 fetishes, fetishism 4–7, 31, 36–7, 61, 103, 111, 179, 198, 243, 245, 269, 278 feudalism 41 financial markets 60, 133 financialisation 238 FIRE (finance, insurance and real estate) sections 113 fishing 59, 113, 148, 249, 250 fixity and motion 75–8, 88, 89, 146, 155 Food and Drug Administration 120 food production/supply 3, 229, 246, 248, 252 security 253, 294, 296 stamp aid 206, 292 Ford, Martin 104–8, 111, 273 foreclosure 21, 22, 24, 54, 58, 241, 268 forestry 113, 148, 257 fossil fuels 3–4 Foucault, Michel xiii, 204, 209, 280–81 Fourier, François Marie Charles 183 Fourierists 18 Fourteen Points 201 France banking 158 dirigiste governmentality under de Gaulle 48 and European Central Bank 46 fascist parties 280 Francis, Pope 293 Apostolic Exhortation 275–6 Frankfurt School 261 Freddie Mac 50 free trade 138, 157 freedom 47, 48, 142, 143, 218, 219, 220, 265, 267–270, 276, 279–82, 285, 288, 296 and centralised power 142 cultural 168 freedom and domination 199–215, 219, 268, 285 and the good life 215 and money creation 51 popular desire for 43 religious 168 and state finances 48 under the rule of capital 64 see also liberty and freedom freedom of movement 47, 296 freedom of thought 200 freedom of the press 213 French Revolution 203, 213, 284 G G7 159 G20 159 Gallup survey of work 271–2 Gandhi, Mahatma 284, 291 Gaulle, Charles de 48 gay rights 166 GDP 194, 195, 223 Gehry, Frank 141 gender discriminations 7, 8, 68, 165 gene sequences 60 General Motors xii genetic engineering xii, 101, 247 genetic materials 235, 241, 251, 261 genetically modified foods 101 genocide 8 gentrification 19, 84, 141, 276 geocentric model 5 geographical landscape building a new 151, 155 of capitalism 159 evolution of 146–7 instability of 146 soulless, rationalised 157 geopolitical struggles 8, 154 Germany and austerity 223 autobahns built 151 and European Central Bank 46 inflation during 1920s 30 wage repression 158–9 Gesell, Silvio 35 Ghana 291 global economic crisis (2007–9) 22, 23, 47, 118, 124, 132, 151, 170, 228, 232, 234, 235, 241 global financialisation x, 177–8 global warming 260 globalisation 136, 174, 176, 179, 223, 293 gold 27–31, 33, 37, 57, 227, 233, 238, 240 Golden Dawn 280 Goldman Sachs 75, 239 Google 131, 136, 195, 279 Gordon, Robert 222, 223, 230, 239, 304n2 Gore, Al 249 Gorz, André 104–5, 107, 242, 270–77, 279 government 60 democratic 48 planning 48 and social bond between human rights and private property 40 spending power 48 governmentality 43, 48, 157, 209, 280–81, 285 Gramsci, Antonio 286, 293 Greco, Thomas 48–9 Greece 160, 161, 162, 171, 235 austerity 223 degradation of the well-being of the masses xi; fascist parties 280 the power of the bondholders 51, 152 greenwashing 249 Guantanamo Bay, Cuba 202, 284 Guatemala 201 Guevara, Che 291 Guggenheim Museum, Bilbao 141 guild system 117 Guinea-Bissau 291 Gulf Oil Spill (2010) 61 H Habermas, Jürgen 192 habitat 246, 249, 252, 253, 255 handicapped, the 218 see also disabled Harvey, David The Enigma of Capital 265 Rebel Cities 282 Hayek, Friedrich 42 Road to Serfdom 206 health care 23, 58, 60, 67–8, 84, 110, 134, 156, 167, 189, 190, 235, 296 hedge funds 101, 162, 239, 241, 249 managers 164, 178 Heidegger, Martin 59, 250 Heritage Foundation 143 heterotopic spaces 219 Hill, Christopher 199 Ho Chi Minh 291 holocausts 8 homelessness 58 Hong Kong 150, 160 housing 156, 296 asset values 19, 20, 21, 58 ‘built to order’ 17 construction 67 controlling externalities 19–20 exchange values 14–23, 43 gated communities ix, 160, 208, 264 high costs 84 home ownership 49–50 investing in improvements 20, 43 mortgages 19, 21, 28, 50, 67, 82 predatory practices 67, 133 production costs 17 rental markets 22 renting or leasing 18–19, 67 self-built 84 self-help 16, 160 slum ix, 16, 175 social 18, 235 speculating in exchange value 20–22 speculative builds 17, 28, 78, 82 tenement 17, 160 terraced 17 tract ix, 17, 82 use values 14–19, 21–2, 23, 67 housing markets 18, 19, 21, 22, 28, 32, 49, 58, 60, 67, 68, 77, 83, 133, 192 crisis (2007–9) 18, 20, 22, 82–3 HSBC 61 Hudson, Michael 222 human capital theory 185, 186 human evolution 229–30 human nature 97, 198, 213, 261, 262, 263 revolt of 263, 264–81 human rights 40, 200, 202 humanism 269 capitalist 212 defined 283 education 128 excesses and dark side 283 and freedom 200, 208, 210 liberal 210, 287, 289 Marxist 284, 286 religious 283 Renaissance 283 revolutionary 212, 221, 282–93 secular 283, 285–6 types of 284 Hungary: fascist parties 280 Husserl, Edmund 192 Huygens, Christiaan 70 I IBM 128 Iceland: banking 55 identity politics xiii illegal aliens (‘sans-papiers’) 156 illegality 61, 72 immigrants, housing 160 imperialism 135, 136, 143, 201, 257, 258 income bourgeois disposable 235 disparities of 164–81 levelling up of 171 redistribution to the lower classes xi; see also wages indebtedness 152, 194, 222 India billionaires in 170 a BRIC country 170, 228 call centres 139 consumerism 236 dismantlement of old ships 250 labour 107, 230 ‘land grabs’ 77 moneylenders 210 social reproduction in 194 software engineers 196 special economic zones 144 unstable lurches forward 10 indigenous populations 193, 202, 257, 283 dispossession of 40, 59, 207 and exclusionary ownership rights 39 individualism 42, 197, 214, 281 Indonesia 129, 160 industrial cartels 135 Industrial Revolution 127 industrialisation 123, 189, 229, 232 inflation 30, 36, 37, 40, 49, 136, 228, 233 inheritance 40 Inner Asia, labour in 108 innovation 132 centres of 96 and the class struggle 103 competitive 219 as a double-edged sword xii; improving the qualities of daily life 4 labour-saving 104, 106, 107, 108 logistical 147 organisational 147 political 219 product 93 technological 94–5, 105, 147, 219 as a way out of a contradiction 3 insurance companies 278 intellectual property rights xii, 41, 123, 133, 139, 187, 207, 235, 241–2, 251 interest compound 5, 222, 224, 225, 226–7 interest-rate manipulations 54 interest rates 54, 186 living off 179, 186 on loans 17 money capital 28, 32 and mortgages 19, 67 on repayment of loans to the state 32 simple 225, 227 usury 49 Internal Revenue Service income tax returns 164 International Monetary Fund (IMF) 49, 51, 100, 143, 161, 169, 186, 234, 240 internet 158, 220, 278 investment: in fixed capital 75 investment pension funds 35–6 IOUs 30 Iran 232, 289 Iranian Revolution 289 Iraq war 201, 290 Ireland dispossession of land rights 40 housing market crash (2007–9) 82–3 Istanbul 141 uprising (2013) 99, 129, 171, 243 Italy 51,161, 223, 235 ITT 136 J Jacobs, Jane 96 James, C.L.R. 291 Japan 1980s economic boom 18 capital in (1980s) 154 economic development in 10 factories 123 growth rate 227 land market crash (1990) 18 low population growth rate 230 and Marshall Plan 153 post-war recovery 161 Jewish Question 213 JPMorgan 61 Judaeo-Christian tradition 283 K Kant, Immanuel 285 Katz, Cindi 189, 195, 197 Kenya 291 Kerala, India 171 Keynes, John Maynard xi, 46, 76, 244, 266 ‘Economic Possibilities for our Grandchildren’ 33–4 General Theory of Employment, Interest, and Money 35 Keynesianism demand management 82, 105, 176 demand-side and debt-financed expansion xi King, Martin Luther 284, 291 knowledge xii, 26, 41, 95, 96, 100, 105, 113, 122, 123, 127, 144, 184, 188, 196, 238, 242, 295 Koch brothers 292 Kohl, Helmut x L labour agitating and fighting for more 64 alienated workers 125, 126, 128, 129, 130 artisan 117, 182–3 and automation 105 capital/labour contradiction 65, 66, 68–9, 146 collective 117 commodification of 57 contracts 71, 72 control over 74, 102–11, 119, 166, 171–2, 274, 291–2 deskilling 111, 119 discipline 65, 79 disempowering workers 81, 103, 116, 119, 270 division of see division of labour; domestic 196 education 127–8, 129, 183, 187 exploitation of 54, 57, 62, 68, 75, 83, 107, 108, 126, 128, 129, 150, 156, 166, 175, 176, 182, 185, 195 factory 122, 123, 237 fair market value 63, 64 Gallup survey 271–2 house building 17 housework 114–15, 192 huge increase in the global wage labour force 107–8 importance of workers as buyers of commodities 80–81 ‘industrial reserve army’ 79–80, 173–4 migrations of 118 non-unionised xii; power of 61–4, 71, 73, 74, 79, 81, 88, 99, 108, 118–19, 127, 173, 175, 183, 189, 207, 233, 267 privatisation of 61 in service 117 skills 116, 118–19, 123, 149, 182–3, 185, 231 social see social labour; surplus 151, 152, 173–4, 175, 195, 233 symbolic 123 and trade unions 116 trading in labour services 62–3 unalienated 66, 89 unionised xii; unpaid 189 unskilled 114, 185 women in workforce see under women; worked to exhaustion or death 61, 182 see also employment labour markets 47, 62, 64, 66–9, 71, 102, 114, 116, 118, 166 labour-saving devices 104, 106, 107, 173, 174, 277 labour power commodification of 61, 88 exploitation of 62, 175 generation of surplus value 63 mobility of 99 monetisation of 61 private property character of 64 privatisation of 61 reserves of 108 Lagos, Nigeria, social reproduction in 195 laissez-faire 118, 205, 207, 281 land commodification 260–61 concept of 76–7 division of 59 and enclosure movement 58 establishing as private property 41 exhausting its fertility 61 privatisation 59, 61 scarcity 77 urban 251 ‘land grabs’ 39, 58, 77, 252 land market 18, 59 land price 17 land registry 41 land rents 78, 85 land rights 40, 93 land-use zoning 43 landlords 54, 67, 83, 140, 179, 251, 261 Latin America ’1and grabs’ 58, 77 labour 107 reductions in social inequality 171 two ‘lost decades’ of development 234 lawyers 22, 26, 67, 82, 245 leasing 16, 17, 18 Lebed, Jonathan 195 Lee Kuan-Yew 48 Leeds 149 Lefebvre, Henri 157, 192 Critique of Everyday Life 197–8 left, the defence of jobs and skills under threat 110 and the factory worker 68 incapable of mounting opposition to the power of capital xii; remains of the radical left xii–xiii Lehman Brothers investment bank, fall of (2008) x–xi, 47, 241 ‘leisure’ industries 115 Lenin, Vladimir 135 Leninism 91 Lewis, Michael: The Big Short 20–21 LGBT groups 168, 202, 218 liberation struggle 288, 290 liberty, liberties 44, 48–51, 142, 143, 212, 276, 284, 289 and bourgeois democracy 49 and centralised power 142 and money creation 51 non-coercive individual liberty 42 popular desire for 43 and state finances 48 liberty and freedom 199–215 coercion and violence in pursuit of 201 government surveillance and cracking of encrypted codes 201–2 human rights abuses 202 popular desire for 203 rhetoric on 200–201, 202 life expectancy 250, 258, 259 light, corpuscular theory of 70 living standards xii, 63, 64, 84, 89, 134, 175, 230 loans fictitious capital 32 housing 19 interest on 17 Locke, John 40, 201, 204 logos 31 London smog of 1952 255 unrest in (2011) 243 Los Angeles 150, 292 Louis XIV, King of France 245 Lovelace, Richard 199, 200, 203 Luddites 101 M McCarthyite scourge 56 MacKinnon, Catherine: Are Women Human?


Worldmaking After Empire: The Rise and Fall of Self-Determination by Adom Getachew

agricultural Revolution, Bretton Woods, British Empire, collective bargaining, colonial exploitation, colonial rule, failed state, financial independence, Gunnar Myrdal, land reform, land tenure, liberal world order, market fundamentalism, means of production, Monroe Doctrine, Mont Pelerin Society, Peace of Westphalia, Ronald Reagan, Scramble for Africa, structural adjustment programs, trade liberalization, transatlantic slave trade, W. E. B. Du Bois

However, as the problem of declining terms of trade illustrated, international trade did not follow a pattern of equal exchange.98 Here, the problem was that even if all states did play by the same rules, the distribution of the benefits of trade would be uneven and follow the hierarchical ordering of states. According to Manley, like the Bretton Woods system more generally, GATT was the product of a Eurocentric international order. While it sought to “create an international system of political management for the world economy,” an effort the NIEO hoped to emulate, it did so before most of the world could participate in international decision-­making.

He critiqued the punitive attitude that informed structural adjustment, highlighted the deterioration of living conditions as social welfare programs were cut, and called for a new approach to international finance commensurate with the aims of the NIEO.136 The IMF’s early interventions in Jamaica and Tanzania were thus at the center of the South-­North Conference on the International Monetary System and the New International Order. In response to both the breakdown of the Bretton Woods the w elfa r e wor ld of the new economic or der [ 173 ] system and the exclusion of developing nations from the IMF and World Bank, the Arusha initiative called for a new democratic and universal monetary system that would be attentive to economic development in the global south and that established an international currency unit independent of the US dollar.137 For Nyerere and Manley, the economic crisis at home and internationally was an opportunity to advance the “struggle for the New International Order.”138 But far from initiating a new phase of debates about the NIEO and revealing the limits of the NIEO’s initial preoccupation with trade, the Arusha initiative would be one of the last attempts to revive the postcolonial demand for a welfare world.

See also African Americans; Africans black sovereignty, 55, 61; in Ethiopia, 81; and humanitarian crisis, 60, 67; in Liberia, 81; and slavery, 59, 62 Bockman, Johanna, 165 Boer Wars, 43 Bolshevik Decree on Peace, 37 Bolshevik Revolution, 4, 37 Bolsheviks, 10, 43, 52 borders, postcolonial, 102, 103, 104 Botsio, Kojo, 132 Brazil, 20, 172 Brest-­Litovsk, Treaty of (1918), 38 Bretton Woods system, 164, 172–­73 Brexit, 139 British Anti-­slavery and Aborigines Protection Society, 53, 55, 56 British Cape Colony, 46, 47, 194n62 British Colonial Office, 120 British dominions, 41 British Empire, 78; and Atlantic Charter, 71; and Churchill, 198–­99n1; colonial fascism of, 7; decline of, 17; dominance of, 85; and forced labor for public works, 82; and James, 68; League of Nations as extension of, 56; as model for League of Nations, 49; and Smuts, 48, 49, 50, 56, 166.


pages: 391 words: 71,600

Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone by Satya Nadella, Greg Shaw, Jill Tracie Nichols

3D printing, AlphaGo, Amazon Web Services, anti-globalists, artificial general intelligence, augmented reality, autonomous vehicles, basic income, Bretton Woods, business process, cashless society, charter city, cloud computing, complexity theory, computer age, computer vision, corporate social responsibility, crowdsourcing, data science, DeepMind, Deng Xiaoping, Donald Trump, Douglas Engelbart, driverless car, Edward Snowden, Elon Musk, en.wikipedia.org, equal pay for equal work, everywhere but in the productivity statistics, fault tolerance, fulfillment center, Gini coefficient, global supply chain, Google Glasses, Grace Hopper, growth hacking, hype cycle, industrial robot, Internet of things, Jeff Bezos, job automation, John Markoff, John von Neumann, knowledge worker, late capitalism, Mars Rover, Minecraft, Mother of all demos, Neal Stephenson, NP-complete, Oculus Rift, pattern recognition, place-making, Richard Feynman, Robert Gordon, Robert Solow, Ronald Reagan, Salesforce, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, Snow Crash, special economic zone, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, subscription business, TED Talk, telepresence, telerobotics, The Rise and Fall of American Growth, The Soul of a New Machine, Tim Cook: Apple, trade liberalization, two-sided market, universal basic income, Wall-E, Watson beat the top human players on Jeopardy!, young professional, zero-sum game

To complaints that trade agreements are bad for the environment, supporters have pointed out that TPP is the first multilateral trade deal to include enforceable provisions for environmental protection. To be sure, the basic rules-based framework for economic relations between nations that were established at the end of World War II through the Bretton-Woods system provides a good, but imperfect, foundation on which to build. The framework continues to form the foundational principles for closer cooperation with like-minded countries through networks of free-trade agreements. But, trade agreements will only continue to be successful if they are seen in the broader context of economic policies for growth.

., 20 Alien and Sedition Acts, 188 Allen, Colin, 209 Allen, Paul, 4, 21, 28, 64, 69, 87, 127 Alphago, 199 ALS, 10–11 Altair, 87 Althoff, Judson, 82 Amar, Akhil Reed, 186 Amazon, 47, 51, 54, 59, 85, 122, 125, 200, 228 Amazon Fire, 125 Amazon Web Service (AWS), 45–46, 52, 54, 58 ambient intelligence, 228–39 ambition, 76–78, 80, 90 American Dream, 238 American Revolution, 185–86 Amiss, Dennis, 37 Anderson, Brad, 58, 82 Android. 59, 66, 70–72, 123, 125, 132–33, 222 antitrust case, 130 AOL, 174 Apple Computer, 15, 45, 51, 66, 69–70, 72, 128, 132, 174, 177–78, 189 partnership with, 121–25 apprenticeship, 227 artificial general intelligence (AGI), 150, 153–54 artificial intelligence (AI), 11, 13, 50, 52, 59, 76, 88, 110, 139–42, 149–59, 161, 164, 166–67, 186, 212, 223, 239 ethics and, 195–210 Artificial Intelligence and Life in 2030 (Stanford report), 208 Asia, 86, 219 Asimov, Isaac, 202–3 astronauts, 146, 148 asynchronous transfer model (ATM), 30 AT&T, 174 Atari 2600, 146 at-scale services, 53, 61 auction-based pricing, 47, 50 Australia, 38–39, 149, 228, 230 autism, 149 Autodesk, 127–28 automation, 208, 214, 226, 231–32, 236 automobile, 127, 153, 230 driverless, 209, 226, 228 aviation, 210 Azure, 58–61, 85, 125, 137 backdoors, 177–78 Bahl, Kunal, 33 Baig, Abbas Ali, 36 Bain Capital, 220 Baldwin, Richard, 236 Ballmer, Steve, 3–4, 12, 14, 29, 46–48, 51–55, 64, 67, 72, 91, 94, 122 Banga, Ajay Singh, 20 Baraboo project, 145 Baraka, Chris, 97 BASIC, 87, 143 Batelle, John, 234 Bates, Tony, 64 Bayesian estimators, 54 Baymax (robot), 150 Beauchamp, Tom, 179 Belgium, 215 Best Buy, 87, 127 Bezos, Jeff, 54 bias, 113–15 Bicycle Corporation of America, 232 Big Data, 13, 58, 70, 150–51, 183–84 Big Hero 6 (film), 150 Bill & Melinda Gates Foundation, 46, 74 Bill of Rights, 190 Bing, 47–54, 57, 59, 61, 125, 134 Birla Institute of Technology, 21 Bishop, Christopher, 199 black-hat groups, 170 Blacks @ Microsoft (BAM), 116–17. See also employee resource groups (ERGs) Blockbuster, 126 Bloomberg, 80 Bloomberg, Michael, 179 Bloomberg News, 129 Bohr, Niels, 160 bootstrapping, 50 Bosch, Carl, 165 Breazeal, Cynthia, 204 Brenner, Yul, 149–50 Bretton-Woods system, 231 Brexit, 235 Britain, 37, 215, 229. See also United Kingdom British Raj, 16, 186–87 broadband infrastructure, 225 Buddha, Gautama, 9 Burgum, Doug, 47–48 cable TV, 30 Cairo, 214, 218 cameras, 150 Canada, 230 cancer, 142, 159, 214 Candidate, The (film), 75 capabilities, 122–23, 141 capitalism, 237–38 late-stage, 221 Capossela, Chris, 3, 71, 81–82 Carnegie Mellon, 3 Carney, Susan L., 177 Carroll, Pete, 4 Case, Anne, 236 Cavium Networks, 20 CD-ROM, 28 CEO as curator of culture, 100, 241 “disease,” 92 panoramic view of, 118 cerebral palsy, 8–10 Chang, Emily, 129 charter city, 229 Cheng, Lili, 197 chess, 198–99 Chik, Joy, 58 child exploitation, 190 Chile, 223, 230 China, 86, 195, 220, 222, 229, 232, 236 chip design, 25 CIA, 169 Cisco, 174 civil liberties, 172–73 civil rights, 24 civil society, 179 Civil War, 188 clarity, 119 Clayton, Steve, 155 client/server era, 45 climate change, 142, 214 Clinton, Hillary, 230 cloud, 13, 41–47, 49, 51–62, 68, 70, 73, 81, 88, 110, 125, 129, 131, 137, 140, 150, 164, 166, 172, 180–81, 186, 189–92, 216, 219, 223–25, 228 cloud-first mission and, 57–58, 70, 76, 79, 83 public, 42–43, 57 Cloud for Global Good, 240–41 Codapalooza, 104 cognition, 89, 150, 152–53 Cohen, Leonard, 10 collaboration, 88, 102–3, 106–8, 126, 135, 163–64, 166, 200 collaborative robots (co-bots), 204 collective IQ, 142, 143 Colombia, 78 Columbia University, 165 Comin, Diego, 216–17, 226 commitment, shared, 77, 119 Common (hip hop artist), 71 Common Objects in Context challenge, 151 communication, 76–77 Compaq, 29 comparative advantage, 222, 228 competition, internal, 52 competitive zeal, 38–39, 70–71, 102 competitors, 39 partnerships and, 78, 125–38 complexity, 25, 224 computers early, 21–22, 24–26 future platforms, 110–11 programs by, 153–54 computing power, massive, 150–51 Conard, Edward, 220 concepts, 122–23, 141 consistency, 77–78, 182 Constitution Today, The (Amar), 186–87 constraints, 119 construction companies, 153 consumers, 49–50, 222 context, shared, 56–57 Continental Congress, 185 Continuum, 73 Convent of Jesus and Mary (India), 19 Cook, Tim, 177 cook stoves, 43 coolness, 75–76 core business, 142 Cortana, 125, 152, 156–58, 195, 201 Couchbase company, 58 counterintuitive strategy, 56–57 Coupland, Douglas, 74 Courtois, Jean-Philippe, 82 courts, 184–85 Covington and Burling lawyers, 3 Cranium games, 7 creativity, 58, 101, 119, 201, 207, 242 credit rating, 43, 204–5 Creed (film), 44–45 cricket, 18–22, 31, 35–40, 115 Cross-country Historical Adoption of Technology (CHAT), 217 culture bias and, 205 “live site first,” 61 three Cs and, 122–23, 141 transforming, 2, 11, 16, 40, 76–78, 81–82, 84, 90–92, 98–103, 105, 108–10, 113–18, 120, 122–23, 241–42 Culture (Eagleton), 91 Curiosity (Mars rover), 144 customer needs, 42, 59, 73, 80, 83, 88, 99, 101–2, 108, 126, 138 customization, 151 cybersecurity, 171, 190 cyberworld, rules for, 184 data, 60, 151 data analytics, 50 databases, 26 Data General company, 68 data management, 54 data platform, 59 data security, 175–76, 188–89 Deaton, Angus, 236 Deep Blue, 198–99 deep neural networks, 153 Delbene, Kurt, 3, 81–82 Delhi, India, 19, 31, 37 Dell, 63, 87, 127, 129–30 Dell, Michael, 129 democracy, 180 democratization, 4, 13, 69, 127, 148, 151–52 Deng Xiaoping, 229 Depardieu, Gerard, 33 design, 50, 69, 141, 239 desktop software, 27 Detroit, 15, 225, 233 developed economies, 99–100 share of world income, 236 developing economies, 99–100, 217, 225 device management solutions, 58 digital assistants, 142, 156–58, 195–98, 201 digital cable, 28 digital evidence, 191–92 Digital Geneva Convention, 171–72 digital ink, 142 digital literacy, 226–27 digital publishing laws, 185 digital transformation, 70, 126–27, 132, 235 dignity, 205 disabilities, 103, 200 disaster relief, 44 Disney, 150 disruption, 13 distributed systems, 49 diversity, 101–2, 108, 111–17, 205–6, 238, 241 Donne, John, 57 drones, 209, 226 Drucker, Peter, 90 dual users, 79 Dubai, 214, 228 Duke University, 3 Dupzyk, Kevin, 147 D-Wave, 160 Dweck, Carol, 92 dynamic learning, 100 Dynamics, 121 Dynamics 365, 152 dyslexia, 44, 103–4 Eagleton, Terry, 91 earthquakes, 44 EA Sports, 127 economic growth, 211–34 economic inequality, 12, 207–8, 214, 219–21, 225, 227, 236–41 Edge browser, 104 education, 42–44, 78, 97, 104, 106–7, 142, 145, 206–7, 224, 226–28, 234, 236–38 Egypt, 218–19, 223, 225 E-health companies, 222–23 8080 microprocessor, 21 elasticity, 49 electrical engineering (EE), 21–22 elevator and escalator business, 60 Elop, Stephen, 64, 72 email, 27, 169–73, 176 EMC, 129 emotion, 89, 197, 201 emotional intelligence (EQ), 158, 198 empathy, 6–12, 16, 40, 42–43, 93, 101, 133–34, 149, 157, 182, 197, 201, 204, 206, 226, 239, 241 employee resource groups (ERGs), 116–17 employees, 66–68, 75, 138 diversity and, 101, 111–17 empowerment and, 79–80, 126 global summit of, 86–87 hackathon, 10–11 talent development and, 117–18 empowerment, 87–88, 98–99, 106, 108–10, 126 encryption, 161–62, 175, 192–93 energy, generating across company, 119 energy costs, 237 Engelbart, Doug, 142 Engelbart’s Law, 142–43 engineers, 108–9 Enlightiks, 222–23 Enterprise Business, 81 entertainment industry, 126 ethics, 195-210, 239 Europe, 193 Excel, 121 experimental physicists, 162–64 eye-gaze tracking, 10 Facebook, 15, 44, 51, 125, 144, 174, 200, 222 failures, overcoming, 92, 111 Fairfax Financial Holdings, 20 fairness, 236 Federal Bureau of Investigation (FBI), 170, 177–78, 189 Federal Communications Commission (FCC), 28 fear of unknown, 110–11 feedback loop, 53 fertilizer, 164 Feynman, Richard, 160 fiefdoms, 52 field-programmable gate arrays (FPGAs), 161 Fields Medal, 162 firefighters, 43, 56 First Amendment, 185, 190 Flash, 136 focus, 135–36, 138 Foley, Mary Jo, 52 Ford Motor Company, 64 foreign direct investment, 219, 225, 229 Foreign Intelligence Surveillance Act (FISA), 173 Fourth Amendment, 185–88, 190, 193 France, 223, 236 Franco, James, 169 Franklin, Benjamin, 186 Freedman, Michael, 162, 166 free speech, 170–72, 175, 179, 185, 190, 238 Fukushima nuclear plant, 44 G20 nations, 219 Galaxy Explorer, 148 game theory, 123–24 Gandhi, Mohandas Mahatma, 16 Gartner Inc., 145 Gates, Bill, 4, 12, 21, 28, 64, 46, 67–69, 73–75, 87, 91, 127, 146, 183, 203 Gavasker, Sunil, 36 GE, 3, 126–27, 237 Gelernter, David, 143, 183 Geneva Convention, Fourth (1949), 171 Georgia Pacific, 29 Germany, 220, 223, 227–36 Gervais, Michael, 4–5 Gini, Corrado, 219 Gini coefficient, 219–21 GLEAM, 117 Gleason, Steve, 10–11 global competitiveness, 78–79, 100–102, 215 global information, policy and, 191 globalization, 222, 227, 235–37 global maxima, 221–22 goals, 90, 136 Goethe, J.W. von, 155 Go (game), 199 Goldman Sachs, 3 Google, 26, 45, 70–72, 76, 127, 160, 173–74, 200 partnership with, 125, 130–32 Google DeepMind, 199 Google Glass, 145 Gordon, Robert, 234 Gosling, James, 26 government, 138, 160 cybersecurity and, 171–79 economic growth and, 12, 223–24, 226–28 policy and, 189–92, 223–28 surveillance and, 173–76, 181 Grace Hopper, 111–14 graph coloring, 25 graphical user interfaces (GUI), 26–27 graphics-processing unit (GPU), 161 Great Convergence, the (Baldwin), 236 Great Recession (2008), 46, 212 Greece, 43 Green Card (film), 33 Guardians of Peace, 169 Gutenberg Bible, 152 Guthrie, Scott, 3, 58, 60, 82, 171 H1B visa, 32–33 habeas corpus, 188 Haber, Fritz, 165 Haber process, 165 hackathon, 103–5 hackers, 169–70, 177, 189, 193 Hacknado, 104 Halo, 156 Hamaker, Jon, 157 haptics, 148 Harvard Business Review, 118 Harvard College, 3 Harvey Mudd College, 112 Hawking, Stephen, 13 Hazelwood, Charles, 180 head-mounted computers, 144–45 healthcare, 41–42, 44, 142, 155–56, 159, 164, 198, 218, 223, 225, 237 Healthcare.gov website, 3, 81, 238 Heckerman, David, 158 Hewlett Packard, 63, 87, 127, 129 hierarchy, 101 Himalayas, 19 Hindus, 19 HIV/AIDS, 159, 164 Hobijn, Bart, 217 Hoffman, Reid, 232, 233 Hogan, Kathleen, 3, 80–82, 84 Holder, Eric, 173–74 Hollywood, 159 HoloLens, 69, 89, 125, 144–49, 236 home improvement, 149 Hong Kong, 229 Hood, Amy (CFO), 3, 5, 82, 90 Horvitz, Eric, 154, 208 hospitals, 42, 78, 145, 153, 223 Hosseini, Professor, 23 Huang, Xuedong, 151 human capital, 223, 226 humanistic approach, 204 human language recognition, 150–51, 154–55 human performance, augmented by technology, 142–43, 201 human rights, 186 Hussain, Mumtaz, 36, 37 hybrid computing, 89 Hyderabad, 19, 36–37, 92 Hyderabad Public School (HPS), 19–20, 22, 37–38, 136 hyper-scale, cloud-first services, 50 hypertext, 142 IBM, 1, 160, 174, 198 IBM Watson, 199–200 ideas, 16, 42 Illustrator, 136 image processing, 24 images, moving, 109 Imagine Cup competition, 149 Immelt, Jeff, 237 Immigration and Naturalization Act (1965), 24, 32–33 import taxes, 216 inclusiveness, 101–2, 108, 111, 113–17, 202, 206, 238 independent software vendor (ISV), 26 India, 6, 12, 17–22, 35–37, 170, 186–87, 222–23, 236 immigration from, 22–26, 32–33, 114–15 independence and, 16–17, 24 Indian Administrative Service (IAS), 16–17, 31 Indian Constitution, 187 Indian Institutes of Technology (IIT), 21, 24 Indian Premier League, 36 IndiaStack, 222–23 indigenous peoples, 78 Indonesia, 223, 225 industrial policy, 222 Industrial Revolution, 215 Fourth or future, 12, 239 information platforms, 206 information technology, 191 Infosys, 222 infrastructure, 88–89, 152–53, 213 innovation, 1–2, 40, 56, 58, 68, 76, 102, 111, 120, 123, 142, 212, 214, 220, 224, 234 innovator’s dilemma, 141–42 insurance industry, 60 Intel, 21, 45, 160, 161 intellectual property, 230 intelligence, 13, 88–89, 126, 150, 154–55, 160, 169, 173, 239 intelligence communities, 173 intensity of use, 217, 219, 221, 224–26 International Congress of the International Mathematical Union, 162 Internet, 28, 30, 48, 79, 97–98, 222 access and, 225–26, 240 security and privacy and, 172–73 Internet Explorer, 127 Internet of Things (IoT), 79, 134, 142, 228 Internet Tidal Wave, 203 Intersé, 3 Interview, The (film), 169–71 intimidation, 38 investment strategy, 90, 142 iOS devices, 59, 72, 123, 132 iPad, 70, 141 iPad Pro, 123–25 iPhone, 70, 72, 85, 121–22, 125, 177–79 Irish data center, 176, 184 Islamic State (ISIS), 177 Istanbul, 214 Jaisimha, M.L., 18, 36–37 Japan, 44, 223, 230 Japanese-American internment, 188 JAVA, 26 Jeopardy (TV show), 199 Jha, Rajesh, 82 jobs, 214, 231, 239–40.


pages: 238 words: 46

When Things Start to Think by Neil A. Gershenfeld

3D printing, Ada Lovelace, Bretton Woods, cellular automata, Charles Babbage, Claude Shannon: information theory, Computing Machinery and Intelligence, disinformation, Dynabook, Hedy Lamarr / George Antheil, I think there is a world market for maybe five computers, information security, invention of movable type, Iridium satellite, Isaac Newton, Jacquard loom, Johannes Kepler, John von Neumann, low earth orbit, means of production, new economy, Nick Leeson, packet switching, RFID, speech recognition, Stephen Hawking, Steve Jobs, telemarketer, the medium is the message, Turing machine, Turing test, Vannevar Bush, world market for maybe five computers

Freeing money from its legacy as a tangible asset carries with it great promise to make the economy more accessible to more people, but we'll be in trouble if we continue to act as if money is worth something. The bits of electronic cash still retain a vestigial reflection of their origin in the atoms of scarce resources. Just after World War II, the Bretton Woods Agreement fixed a conversion rate between dollars and gold at $35 an ounce, and in turn set exchange rates between the dollar and other currencies. The U.S. government was obligated to convert dollars into gold upon request, using the cache held at Fort Knox. In 1971, saddled with a dwindling gold supply, a persistent recession, and an expensive war in Vietnam, President Nixon took the dollar off the gold standard.

Index adding machine, Pascal's, 131-32 Adelson, Ted, 180-81 affective states, computer's perception of, 53-54 agents, 107, 109, 116-17 airbag, smart, 170-71, 180 analog circuits, 165, 166 Analytical Engine, 125 Any Thing project, 70, 71, 73 Apple Macintosh, 139 Argonne National Laboratory, 158 ARPANET, 79 artificial intelligence, 108, 128, 129-30, 135, 201 sensory perception and, 135, 201 assembly line, 180 AT&T, 158, 203 autonomy and wearable computers, 57-58 Babbage, Charles, 124-27, 132 Barings Bank, 77, 86 bassoon, 29-32 Begin Again Again, 34 Bell Labs, 36, 162, 174 Bender, Walter, 202-3 Benioff, Paul, 158 Bennett, Charles, 159, 176, 177 Benton, Steve, 14 2 Bill of Rights, 98-99 Bill of Things' Rights, 104 Bill of Things Users' Rights, 102 Birnbaum, Joel, 52 Bitnet, 89 "bit" of information, 176 "blessing of dimensionality," 164-65 Boltzmann, Ludwig, 175 books, printed, 13-25 competing technologies, 10, 13-25 dimensions of, 20 future of computing, lesson to be derived for, 14 Gutenberg and movable metal type, 18-19 as historical artifacts, 23-24 libraries and electronic book, 20-23 lighting for reading, 15 papal bull to require certification of, 96 paper for, 15 specifications of, 13-14 state of book business, 13 universal book, 18-20 Borden, David, 30-31 218 +INDEX Boyden, Edward, 196, 197 brain, 212 brain, human, 135, 163-64 Brain Opera, 206-7 Bretton Woods Agreement, 79 Bunka Fashion College, 55 Bush, Vannevar, 139,171-74,180 Buxton, Bill, 140 buzz words, technology, 107-21 CAD software, 73 calculus, 131, 132 Caltech, 158 carbonless copy paper, 15-16 card catalogs, 20-22 Carnegie Mellon, 129 CD-ROM, 10 as competitor of printed book, 13 cello: comparison of computer mouse to violin bow, 142-43 critical reaction to digital cello, 37-38 designing a smart, 27-44, 143-44, 187 limits of classic, 33, 37 Cellular Automata (CAs), 132-33 Census Bureau, 78 central planning, 88-89 chaos theory, 109, 112-16 chess-playing computer programs, 128-30, 134-35 children: learning methods of, 137-38 LOGO programming language, 138, 147 China, Internet access in, 99 Chuang, Isaac, 160-61 Chung, joe, 34 Citron, Robert, 78 Clarke, Arthur C., 51 Clausius, Rudolf, 175 clocks, 104 clothing and wearable computers, 50, 52,55-56,61,102-3,179 coffeemaker, intelligent, 201 communications: imposing on our lives, 95, 100-2 performance limit of a channel of, 176 privacy issues and, 100-1 regulation of, 99-100 see also specific forms of communication, e.g. e-mail; telephones Communications Act of 1934, 99 Communications Assistance for Law Enforcement Act (CALEA), 208 compact disc players, 4 Compumachine, 67 computer chips: entropy and, 177 future uses of, 152 lowering the cost of, 152-56 computers: affective states and, 53-54 Babbage's contribution in developing, 124-25, 132 battle of operating systems, 146 chips, see computer chips cost of, 4, 103 desktop, 5 difficulty using, 4, 7, 103 division of industry into software and hardware, 7 ease of use, 4, 7, 103 educational use of, 201 expectations from, 4 inability to anticipate your needs, 7-8 interfaces, see interfaces, computer irritation with, 199-200 laptop, see laptop computers mainframes, see mainframes minicomputers, 52, 138 Moore's law, 155-57, 163 music and, see musiC and computers parallel, 68, 157 PCs, see personal computers (PCs) peripherals, 52-53 INDEX+ pnvacy issue and, 56-57, 100-1 productivity and, 7 pyramid of information technology, 151 quantum, 157-63, 177 software, see software speed of, 7 standards, 88-90, 126 supercomputers, 151, 177, 199 unobtrusive computing, 44, 200, 211 upgrades, 98 wearable, see wearable computers "Computing Machinery and Intelligence," 128, 135 consciousness, quantum mechanics to describe human, 130-31 Constitution, U.S., 98-99 Copernicus, 113-14 copyrights, 181 Creapole, 55 credit cards: electronic commerce and, 80-81 privacy and use of, 100-1 reflective holograms on, 142 cryptography, 80-81, 156, 207-8 "curse of dimensionality," 164 Daiwa Bank, 77, 86 Darwin, Charles, 125 Data Glove, 49 "Deep Blue," 129-30 "Deep Thought," 129 Defense Advanced Research Projects Agency (DARPA), 79, 129 derivative~ 78, 85-86 Deutsch, David, 158 Deutsche Telekom, 203 developing countries, 210-11 Dickinson, Becton, 204 Difference Engine, 124-25, 132 digital evolution, 10 digital money, see smart money digital representation, effect of time and use on, 5-6 219 Digital Revolution: disturbance resulting from, 10 promise and reality of, 3, 5 disabled, wearable computers and, 58 discovery, the business of, 169-84 Disney, 203 distance learning, 19 3 distribution of wealth, 78 division of labor between people and machines, 8 DNA molecules, 157 Domus, 55 Doom (computer game), 89 Dynabook, 138 e-broidery, 55 Economist, 115 economy, electronic, 79 education: classroom, 188, 197 departmental organization of, 190-91 distance learning, 193 just-in-time, 192 local learning, 193 at Massachusetts Institute of Technology (MIT) Media Lab, 187-97 use of computers for, 201 Einstein's theory of relativity, 178 electronic books, 15-25, 38, 72 electronic commerce, 80-81, 152, 156 cryptography and, 80-81 paying-as-you-go, 82 electronic funds transfers, 80 electronic ink, 16, 17, 200 universal book and, 18-20 e-mail, 101-2, 104-6 encryption, 80-81 Engelhart, Doug, 139 English Bill of Rights, 98 entanglement, 159 entropy, 175, 176, 177, 188-90 "Entschedidungsproblem," 127 Equifax, 101 220 + Ernst, Richard R.


pages: 267 words: 71,123

End This Depression Now! by Paul Krugman

airline deregulation, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, bond market vigilante , Bretton Woods, business cycle, capital asset pricing model, Carmen Reinhart, centre right, correlation does not imply causation, credit crunch, Credit Default Swap, currency manipulation / currency intervention, debt deflation, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, full employment, German hyperinflation, Glass-Steagall Act, Gordon Gekko, high-speed rail, Hyman Minsky, income inequality, inflation targeting, invisible hand, it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Joseph Schumpeter, junk bonds, Kenneth Rogoff, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Mark Zuckerberg, Minsky moment, Money creation, money market fund, moral hazard, mortgage debt, negative equity, paradox of thrift, Paul Samuelson, price stability, quantitative easing, rent-seeking, Robert Gordon, Ronald Reagan, Savings and loan crisis, Upton Sinclair, We are all Keynesians now, We are the 99%, working poor, Works Progress Administration

—Janet Yellen, vice chair of the Federal Reserve, from a speech titled “A Minksy Meltdown: Lessons for Central Bankers,” April 16, 2009 IN APRIL 2011 the Institute for New Economic Thinking—an organization founded in the wake of the 2008 financial crisis to promote, well, new economic thinking—held a conference in Bretton Woods, New Hampshire, site of a famous 1944 meeting that laid the foundations of the postwar world monetary system. One of the participants, Mark Thoma of the University of Oregon, who maintains the influential blog Economist’s View, cracked, after listening to some of the panels, that “new economic thinking means reading old books.”

academic sociology, 92, 96, 103 AIG, 55 airlines, deregulation of, 61 Alesina, Alberto, 196–99 American Airlines, 127 American Recovery and Reinvestment Act (ARRA): cost of, 121 inadequacy of, 108, 109–10, 116–19, 122–26, 130–31, 212, 213 Angle, Sharron, 6 anti-Keynesians, 26, 93–96, 102–3, 106–8, 110–11, 192 Ardagna, Silvia, 197–99 Argentina, 171 Arizona, housing bubble in, 111 Asian financial crisis of 1997–98, 91 asset-backed securities, 54, 55 auction rate securities, 63 Austerians, 188–207 creditors’ interests favored by, 206–7 supposed empirical evidence of, 196–99 austerity programs: alarmists and, 191–95, 224 arguments for, 191–99 economic contraction and, 237–38 in European debt crisis, 46, 144, 185, 186, 188 as ineffective in depressions, xi, 213 state and local governments and, 213–14, 220 unemployment and, xi, 189, 203–4, 207, 237–38 Austrian economics, 150 automobile sales, 47 babysitting co-op, 26–28, 29–30, 32–33, 34 Bakija, Jon, 78 balance of trade, 28 Ball, Laurence, 218 Bank for International Settlements (BIS), 190, 191 Bank of England, 59 Bank of Japan, 216, 218 bankruptcies, personal, 84 bankruptcy, 126–27 Chapter 11, 127 banks, banking industry: capital ratios in, 58–59 complacency in, 55 definition of, 62 deregulation of, see deregulation, financial European, bailouts of, 176 government debt and, 45 “haircuts” in, 114–15 incomes in, 79–80 lending by, 30 money supply and, 32 moral hazard in, 60, 68 1930s failures in, 56 origins of, 56–57 panics in, 4, 59 political influence of, 63 receivership in, 116 regulation of, 55–56, 59–60, 100 repo in, 62 reserves in, 151, 155, 156 revolving door in, 86, 87–88 risk taking in, see risk taking runs on, 57–58, 59, 60, 114–15, 155 separation of commercial and investment banks in, 60, 62, 63 shadow, 63, 111, 114–15 unregulated innovations in, 54–55, 62–63, 83 Barro, Robert, 106–7 Bebchuck, Lucian, 81 Being There (film), 3 Bernanke, Ben, 5, 10–11, 32, 76, 104, 106, 151, 157, 159–60, 210 recovery and, 216–19 on 2008–09 crisis, 3–4 “Bernanke Must End Era of Ultra-low Rates” (Rajan), 203–4 Black, Duncan, 190 Blanchard, Olivier, 161–63 Bloomberg, Michael, 64 BNP Paribas, 113 Boehner, John, 28 bond markets: interest rates in, 132–41, 133 investor confidence and, 132, 213 bonds, high-yield (junk bonds), 115, 115 bond vigilantes, 125, 132–34, 138, 139, 140 Bowles, Erskine, 192–93 Brazil, 171 breach of trust, 80 Bretton Woods, N.H., 41 Broder, David, 201 Brüning, Heinrich, 19 Buckley, William F., 93 Bureau of Labor Statistics, U.S. (BLS): CPI of, 156–57, 159, 160 U6 measure of, 7–8 Bush, George W.: Social Security and, 224 tax cuts of, 124, 227 Bush, Kate, 20 Bush administration, 116 business investment: confidence and, 201, 206 government spending cuts and, 143–44 business investment, slump in, 41, 52, 117 lack of demand and, 24–25, 26, 33, 136, 145 long-term effects of, 16 California: defense industry in, 236 housing bubble in, 111 Calvin and Hobbes, 191 Cameron, David, 200–201 Canada, 198–99 Capital Asset Pricing Model (CAPM), 98–99 capital ratios, 58–59 Carney, Jay, 124–25 Carter, Jimmy, deregulation under, 61 Carville, James, 132 “Case for Flexible Exchange Rates, The” (Friedman), 170 Case-Shiller index, 112 causation: common, 83 correlation vs., 83, 198, 232–33, 237 Cheney, Dick, 124 Chicago Board of Trade, 6 China, 146, 159 U.S. trade with, 221 Citibank, 63, 68 Citicorp, 63, 85 Citigroup, 63, 85, 116 Clague, Ewan, 35 Clinton, Bill, 36 Cochrane, John, 106, 107 Cold War, 236 Cole, Adam, 78 collateralized loan obligations, 54, 55 college graduates, unemployment and underemployment among, 11–12, 16, 37, 144–45 commodities, prices of, 159–60 Community Reinvestment Act, 65 confidence: business, 201, 206 consumer, 201 investor, 132, 188, 192, 194–97, 200, 213 unemployment and, 94–96 “confidence fairy,” 195, 200, 201 Congress, U.S., 192–93 deregulation and, 67 polarization of, 89 TARP enacted by, 116 2008 financial crisis blamed on, 64, 65 2012 election and, 226, 227–28 see also House of Representatives, U.S.; Senate, U.S.


pages: 218 words: 63,471

How We Got Here: A Slightly Irreverent History of Technology and Markets by Andy Kessler

Albert Einstein, Andy Kessler, animal electricity, automated trading system, bank run, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Bretton Woods, British Empire, buttonwood tree, Charles Babbage, Claude Shannon: information theory, Corn Laws, cotton gin, Dennis Ritchie, Douglas Engelbart, Edward Lloyd's coffeehouse, Fairchild Semiconductor, fiat currency, fixed income, floating exchange rates, flying shuttle, Fractional reserve banking, full employment, GPS: selective availability, Grace Hopper, invention of the steam engine, invention of the telephone, invisible hand, Isaac Newton, Jacquard loom, James Hargreaves, James Watt: steam engine, John von Neumann, joint-stock company, joint-stock limited liability company, Joseph-Marie Jacquard, Ken Thompson, Kickstarter, Leonard Kleinrock, Marc Andreessen, Mary Meeker, Maui Hawaii, Menlo Park, Metcalfe's law, Metcalfe’s law, military-industrial complex, Mitch Kapor, Multics, packet switching, pneumatic tube, price mechanism, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, proprietary trading, railway mania, RAND corporation, Robert Metcalfe, Silicon Valley, Small Order Execution System, South Sea Bubble, spice trade, spinning jenny, Steve Jobs, Suez canal 1869, supply-chain management, supply-chain management software, systems thinking, three-martini lunch, trade route, transatlantic slave trade, tulip mania, Turing machine, Turing test, undersea cable, UUNET, Wayback Machine, William Shockley: the traitorous eight

While the resulting hyperinflation left Germany without debts (and debtors learned a lesson to carry debt in dollars!), it wiped out the country’s savings and put the German economy into a severe depression, leaving the country susceptible to new political regimes. On July 1, 1944, just 24 days after D-Day and well before World War II ended, a dollar standard was put in place, called the Bretton Woods agreement. It was considered a gold standard, but even economist John Maynard Keynes called it “the exact opposite of the gold standard.” The U.S. dollar was pegged to gold at $35 per ounce, and became the only currency allowed to convert into gold. The rest of the world’s currencies were pegged to the dollar at a “sort of” fixed rate.

The run started as dollars were dumped, and despite efforts to kill inflation and shore up the dollar, Nixon halted convertibility on August 15, 1971. Finally, elasticity could run free of the restraints of gold. Mark this, then, as the birthday of the modern world. With flexible exchange rates and relatively free trade in postWWII (and to be fair, post the Bretton Woods gold standard), low margin tasks and low paying jobs moved out of the U.S. Displaced workers and union rhetoric screamed for something to be done about 168 HOW WE GOT HERE “lost jobs” but it probably was the best thing to happen to the U.S. since it allowed for high wages in the U.S. for high margin tasks.


pages: 415 words: 125,089

Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein

Alan Greenspan, Albert Einstein, Alvin Roth, Andrew Wiles, Antoine Gombaud: Chevalier de Méré, Bayesian statistics, behavioural economics, Big bang: deregulation of the City of London, Bretton Woods, business cycle, buttonwood tree, buy and hold, capital asset pricing model, cognitive dissonance, computerized trading, Daniel Kahneman / Amos Tversky, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Lloyd's coffeehouse, endowment effect, experimental economics, fear of failure, Fellow of the Royal Society, Fermat's Last Theorem, financial deregulation, financial engineering, financial innovation, full employment, Great Leap Forward, index fund, invention of movable type, Isaac Newton, John Nash: game theory, John von Neumann, Kenneth Arrow, linear programming, loss aversion, Louis Bachelier, mental accounting, moral hazard, Myron Scholes, Nash equilibrium, Norman Macrae, Paul Samuelson, Philip Mirowski, Post-Keynesian economics, probability theory / Blaise Pascal / Pierre de Fermat, prudent man rule, random walk, Richard Thaler, Robert Shiller, Robert Solow, spectrum auction, statistical model, stocks for the long run, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas Bayes, trade route, transaction costs, tulip mania, Vanguard fund, zero-sum game

By 1936, Keynes had built a personal fortune from a modest inheritance into the equivalent of £10,000,000 in today's money.18 He designed Britain's war financing during the Second World War, negotiated a large loan by the United States to Britain immediately after the war, and wrote much of the Bretton Woods agreements that established the postwar international monetary system. Ideas came to Keynes in such a rush and in such volume that he often found himself at odds with something he had said or written earlier. That did not disturb him. "When somebody persuades me that I am wrong," he wrote, "I change my mind.

The return of peacetime was heralded as an opportunity to apply the lessons learned so painfully during the long years of depression and war. Perhaps the dreams of the Enlightenment and the Victorian age might at last come true for all members of the human race. Keynesian economics was enlisted as a means of controlling the business cycle and promoting full employment. The aim of the Bretton Woods Agreements was to recapture the stability of the nineteenth-century gold standard. The International Monetary Fund and the World Bank were set up to nourish economic progress among disadvantaged people around the world. Meanwhile, the United Nations would keep peace among nations. In this environment, the Victorian concept of rational behavior regained its former popularity.

While the Standard & Poor's 500 fell by 43% from December 1972 to September 1974, the Manhattan Fund lost 60% and the Hartwell & Cambell Fund fell by 55%. This was a dark time, one marked by a series of ominous events: Watergate, skyrocketing oil prices, the emergence of persistent inflationary forces, the breakdown of the Bretton Woods Agreements, and an assault on the dollar so fierce that its foreign exchange value fell by 50%. The destruction of wealth in the bear markets of 1973-1974 was awesome, even for investors who had thought they had been investing conservatively. After adjustment for inflation, the loss in equity values from peak to trough amounted to 50%, the worst performance in history other than the decline from 1929 to 1931.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, An Inconvenient Truth, Andrew Keen, basic income, battle of ideas, Black Lives Matter, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, classic study, clean water, cognitive bias, conceptual framework, critical race theory, David Brooks, deindustrialization, demographic transition, desegregation, disinformation, Donald Trump, en.wikipedia.org, Evgeny Morozov, fake news, Francis Fukuyama: the end of history, gentrification, German hyperinflation, gig economy, Gini coefficient, Herbert Marcuse, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, Jeremy Corbyn, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, microaggression, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, Rutger Bregman, secular stagnation, sharing economy, Steve Bannon, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

For much of the nineteenth and early twentieth centuries, the value of most currencies was tied to its gold reserves. In the Bretton Woods system, which came to dominate in the wake of World War II, exchange rates were largely fixed; on the relatively rare occasions when they had to be adjusted, the decision was usually taken by elected politicians rather than unelected bureaucrats. During this period, Polillo and Guillén write, “finance ministers became the key decision-makers, while central banks … played a relatively limited and quiet role in economic and financial policymaking.”45 Only since the demise of Bretton Woods in the early 1970s did central banks gain the leeway to set interest rates in keeping with their policy objectives.

See Dictatorships Automation, 37–38, 157–158, 219 Baghdad, Iraq, 204 Bahamas, 223 Bailouts, 12 Bangladesh, 219 Bankruptcy: corporate, 159; national, 12, 198 Banks: central, 59–60, 67–70, 77, 92–94; regulation of, 64, 66, 95 Bannon, Stephen, 94 Barro, Robert, 69 BBC, 44, 62 Beck, Glenn, 43 Belgium: ethnic minorities in, 212; EU headquarters in, 8, 11–12, 76, 86, 197, 243 Berlin, Germany, 170, 243 Berlusconi, Silvio, 32, 90, 115, 191 Bern, Switzerland, 32 Bethel School District No. 403 v. Fraser, 246 Bible, 57 Big Brother, 58 Bilingual education, 178 Black Lives Matter, 142 Blagojevich, Rod, 80 Blame, casting of, 7–8, 181 Border controls, 37–38, 176, 213–214, 217 Bots (robots), 239 Breitbart, 144–145 Bretton Woods system, 69–70 Brexit, 25, 46, 120–121, 166, 198, 216–217 Britain, 24, 36, 55, 66, 159, 193, 196–197, 224; attitude toward democracy, 106–107; bureaucrats in, 63; central bank in, 69; Constitution, 71–72; democracy in, 54–55, 110; ethnic minorities in, 212; and European Union, 25, 46, 120–121, 166, 198, 216–217; housing in, 225–226; immigration in, 165; income inequality in, 152; income distribution in, 152–153; judiciary in, 46, 71–73; media in, 44, 46, 90; Parliament in, 46, 54, 61–62, 64–65, 72, 78–79, 87, 90, 241; political radicalism of youth, 121; populism in, 7–8, 50; support for authoritarian leader, 112; support for military rule, 110–111; and tax havens, 223; youth vote, 122–123 British Americans, 200 Brooke, Heather, 138–139 Brooks, David, 250 Brown v.


pages: 232

Planet of Slums by Mike Davis

barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, company town, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, disinformation, Dr. Strangelove, edge city, European colonialism, failed state, gentrification, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, jitney, jobless men, Kibera, labor-force participation, land reform, land tenure, Lewis Mumford, liberation theology, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, Nelson Mandela, New Urbanism, Pearl River Delta, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

Sivaramakrishnan, "Urban Governance: Changing Realities," pp. 232-33 60 Soliman, in Ananya Roy and Nezar A1 Sayyad (eds), 'urban Informality Iransnational Per.rpectives from the Middle Bast, Latin America, and South Asia Lanham (Md.) 2004, pp. 171, 202. 61 Gooptu, The Politics of the Urban Poor in Early Twentieth-Century India, p. 84. Illusions of Self-Help It would be foolish to pass from one distortion - that the slums are places of crime, disease and despair - to the opposite: that they can be safely left to look after themselves. As Third World governments abdicated the battle against the slum in the 1970s, the Bretton Woods institutions - with the IMF as "bad cop" and the World Bank as "good cop" — assumed increasingly commanding roles in setting the parameters of urban housing policy. Lending for urban development by the World Bank increased from a mere 10 million dollars in 1972 to more than 2 billion dollars in 1988.2 And between 1972 and 1990 the Bank helped finance a total of 116 sites-and-services and/or slum-upgrading schemes in 55 nations.3 In terms of need, of course, this was a mere drop in the bucket, but it gave the Bank tremendous leverage over national urban policies, as well as direct patronage relationships to local slum communities and NGOs; it also allowed the Bank to impose its own theories as worldwide urban policy orthodoxy. 1 Seabrook, In the Cities of the South, p. 197. 2 S.

Debt - as William Tabb reminds us in his recent history of global economic governance — has been the forcing-house of an epochal 6 Mallaby, The World's Banker, p. 110. 7 Quoted in Tony Killick, "Twenty-five Years in Development: The Rise and Impending Decline of Market Solutions," Development Policy Review 4 (1986), p. 101. transfer of power from Third World nations to the Bretton Woods institutions controlled by the United States and other core capitalist countries. According to Tabb, the Bank's professional staff are the postmodern equivalent of a colonial civil service, and "like the colonial administrators they never seem to go away except to be replaced by a fresh adviser team with the same outlook and powers over the local economy and society."8 Although the debt-collectors claim to be in the business of economic development, they seldom allow poor nations to play by the same rules that richer countries used to promote growth in the late nineteenth or early twentieth centuries.


pages: 280 words: 79,029

Smart Money: How High-Stakes Financial Innovation Is Reshaping Our WorldÑFor the Better by Andrew Palmer

Affordable Care Act / Obamacare, Alan Greenspan, algorithmic trading, Andrei Shleifer, asset-backed security, availability heuristic, bank run, banking crisis, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, bonus culture, break the buck, Bretton Woods, call centre, Carmen Reinhart, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Graeber, diversification, diversified portfolio, Edmond Halley, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, family office, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, Google Glasses, Gordon Gekko, high net worth, housing crisis, Hyman Minsky, impact investing, implied volatility, income inequality, index fund, information asymmetry, Innovator's Dilemma, interest rate swap, Kenneth Rogoff, Kickstarter, late fees, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, low interest rates, margin call, Mark Zuckerberg, McMansion, Minsky moment, money market fund, mortgage debt, mortgage tax deduction, Myron Scholes, negative equity, Network effects, Northern Rock, obamacare, payday loans, peer-to-peer lending, Peter Thiel, principal–agent problem, profit maximization, quantitative trading / quantitative finance, railway mania, randomized controlled trial, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Savings and loan crisis, short selling, Silicon Valley, Silicon Valley startup, Skype, South Sea Bubble, sovereign wealth fund, statistical model, subprime mortgage crisis, tail risk, Thales of Miletus, the long tail, transaction costs, Tunguska event, unbanked and underbanked, underbanked, Vanguard fund, web application

The size of the derivatives markets grew relentlessly in the years leading up to the 2007–2008 crisis, expanding by an annual average rate of 24 percent between 1995 and 2007, much quicker than the equity (11 percent growth) and bond (9 percent) markets.24 All of the strands of financial development that were at work in prior centuries were at work during the age of derivatives. First, and inconveniently for finance bashers, genuine needs were being met. The changes to the world’s financial system over the past few decades created new risks for banks, companies, and investors to deal with. The end of the Bretton Woods system of fixed exchange rates in the 1970s meant that currencies could rise and fall: foreign-­exchange derivatives offered a way to hedge that risk. Big jumps in US interest rates in the early 1980s, as then Federal Reserve chairman Paul Volcker battled inflation, gave people more reason to hedge against interest-rate volatility.

Index AAA credit ratings, 49–51, 233–236 AARP Public Policy Institute, report on home ownership by, 139 Abacus, 235 Accenture, 54, 56 Adaptive-market hypothesis, 115–116 Adelino, Manuel, 49 Adoption, SIB program for, 97 Adverse selection, 21, 174, 175, 182 AIG (American International Group), 65 AIR Worldwide, 222, 225 Alabama, land boom in, 74–75 Algorithms, 53–54, 56–57, 62–63, 113, 202, 216–217 Alibaba.com, 219 Allia, 108 Alzheimer’s disease, megafund for, 122 Amazon, 162, 216–217, 219 American Diabetes Association, 102 American Dream Downpayment Act of 2003, 78 American International Group (AIG), 65 American Railroad Journal, 24 American Research and Development Corporation, 150 Amsterdam Stock Exchange, 14–15, 24, 38 Anchoring effect, 137–138 Annuities, 20–22, 139 Apax Partners, 91 Aristotle, 10 Asian debt crisis (1990s), x, 30 Asian Development Bank, 27 Auto-enrollment in pension schemes, 135 Auto-escalation, 135–136 Availability heuristic, 73 Baby boomers, retirement rate of, 125 Bailouts, xi, 35, 65 Bank, derivation of word, 12 Bank deregulation, effect of on college enrollments, 171 Bank for International Settlements (BIS), 224, 226 Bank of America, 98 Banks advantages of, 192–193 bailouts of, xi commercial paper, use of, 185 competition, response to, 193–194 crisis, episodes of, 35–36 in Dark Ages, 11 deposits, xiv, 12–13 equity, 186–187 innovator’s dilemma, 189 leverage, 50, 70–71, 80, 186, 188 liquidity and, 12–14, 185–186, 193 operating expenses, 188 profits of, ix property and, xiv, 69, 75–80 public attitudes toward, ix, xi purpose of, 11–14 raising returns in, 51 repurchase “repo” markets, 15, 185 runs on, x, 13, 185 secured lending, xiv unbanked households, 200 Barbon, Nicholas, 16–17 Basel accords, 77 Basildon, England, 52–53, 58 Bass, Oren, 166, 168 Behavioral finance, 132–138, 208–214 Belinsky, Michael, 103 Benartzi, Shlomo, 136 Benitez-Silva, Hugo, 73 Bernoulli, Jacob, 18 Betting on Lives (Clark), 144 Bid-ask spreads, 55 Big data, xviii, 22, 47, 199, 201, 218, 236 Big Society Capital, 95 Biotechnology, decline in investment in, xii-xiii, 114–115 Black, Fischer, 31, 123–124 Black Monday, October, 1987, 62 BlackRock, 132 Black-Scholes equation, 31, 32, 124 Blackstone, 85 Blood donation, experiment with, 110 Bloomberg, Michael, 98 Bonds attractiveness to investors, 120 catastrophe, 224–227 income, 25 inflation protected, 26 samurai, 27 Book of Calculation (Fibonacci), 19 Bottomry, 8 Brain, reaction of to monetary rewards, 116 Brazil, financial liberalization of, 34 Breslow, Noah, 216, 219 Bretton Woods system, 30 Bridges Ventures, 93 Britain average age of first-time home buyer, 84 average house price, 74 banking crisis, 69 equity-crowdfunding, 154 government spending, 99 life expectancy, 125 peer-to-peer lending, 181 social-impact bonds (SIB), 95–97 student indebtedness, 171 total residential property value, 69–70 Brown, Gordon, 93 Bucket price (okenedan), 40 Bullae (early financial contracts), 5 Bush, George W., 78 Byng, John, 143 Call options, 9–10, 131 Calment, Jeanne, 144 Cameron, David, 95 Cancer megafund.


pages: 305 words: 75,697

Cogs and Monsters: What Economics Is, and What It Should Be by Diane Coyle

3D printing, additive manufacturing, Airbnb, Al Roth, Alan Greenspan, algorithmic management, Amazon Web Services, autonomous vehicles, banking crisis, barriers to entry, behavioural economics, Big bang: deregulation of the City of London, biodiversity loss, bitcoin, Black Lives Matter, Boston Dynamics, Bretton Woods, Brexit referendum, business cycle, call centre, Carmen Reinhart, central bank independence, choice architecture, Chuck Templeton: OpenTable:, cloud computing, complexity theory, computer age, conceptual framework, congestion charging, constrained optimization, coronavirus, COVID-19, creative destruction, credit crunch, data science, DeepMind, deglobalization, deindustrialization, Diane Coyle, discounted cash flows, disintermediation, Donald Trump, Edward Glaeser, en.wikipedia.org, endogenous growth, endowment effect, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, Evgeny Morozov, experimental subject, financial deregulation, financial innovation, financial intermediation, Flash crash, framing effect, general purpose technology, George Akerlof, global supply chain, Goodhart's law, Google bus, haute cuisine, High speed trading, hockey-stick growth, Ida Tarbell, information asymmetry, intangible asset, Internet of things, invisible hand, Jaron Lanier, Jean Tirole, job automation, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, knowledge worker, Les Trente Glorieuses, libertarian paternalism, linear programming, lockdown, Long Term Capital Management, loss aversion, low earth orbit, lump of labour, machine readable, market bubble, market design, Menlo Park, millennium bug, Modern Monetary Theory, Mont Pelerin Society, multi-sided market, Myron Scholes, Nash equilibrium, Nate Silver, Network effects, Occupy movement, Pareto efficiency, payday loans, payment for order flow, Phillips curve, post-industrial society, price mechanism, Productivity paradox, quantitative easing, randomized controlled trial, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Robinhood: mobile stock trading app, Ronald Coase, Ronald Reagan, San Francisco homelessness, savings glut, school vouchers, sharing economy, Silicon Valley, software is eating the world, spectrum auction, statistical model, Steven Pinker, tacit knowledge, The Chicago School, The Future of Employment, The Great Moderation, the map is not the territory, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, the strength of weak ties, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Uber for X, urban planning, winner-take-all economy, Winter of Discontent, women in the workforce, Y2K

These technologies, invented in the late nineteenth century, delivered the growth and productivity of the mid-twentieth century. However, the thirty golden years contained the seeds of the next political economy cycle. History is over-determined so there are many possible contributors to the economic crisis of the 1970s. The OPEC shocks, the resulting international capital flows testing the Bretton Woods exchange rate arrangements to destruction, the excesses of public sector unions, all played a part. But so too did demand management policies based on the assumption that the machine metaphor of the flow of incomes around the economy—represented literally in the famous Phillips machine of Chapter Four—was the reality.

., 122, 124 BBC Reith Lectures, 77–78 BBC Trust, 83 Becker, Gary, 2, 92, 119 behavioural economics: aggregation and, 3, 40, 42, 71–72, 100–102, 106, 113, 122–23, 141, 176–77, 201–2; beliefs of tomorrow and, 22; bias and, 109, 136; Coase on, 58; cognitive science and, 35–36, 48, 51, 91–92, 118–19, 186; competition and, 45–51 (see also competition); consumers and, 22, 59–60, 92, 109; context and, 88; failures and, 55; Goodhart’s Law and, 72, 103; happiness and, 70–71, 153; incentives and, 29, 33, 35, 55, 63–64, 80, 106, 110, 160, 200; interventions and, 48, 63, 104, 106, 160, 208, 211; markets as process and, 37–45; models and, 22, 35, 47, 63, 88, 92–93, 119, 136, 154; outsider context and, 88, 92–93, 100, 103–9; performativity and, 11, 23, 30, 211; progress and, 136–37, 145, 154, 157–60; psychology and, 38, 63, 70, 92, 94; public choice theory and, 64, 106, 119, 124; public services and, 33; rationality and, 22, 35, 46–47, 59, 109, 117–19; self-referential policy advice and, 63–64; separation protocol and, 119–20, 124; special interest groups and, 64–66; technocratic dilemma and, 67–79; twenty-first-century policy and, 186, 202, 207–8; Wu study and, 8 Bell, Daniel, 67 Bernanke, Ben, 17 Berners-Lee, Tim, 195 bias: academics and, 6; artificial intelligence (AI) and, 13, 161, 165, 187; behavioural, 109, 136; causality and, 13, 105; control groups and, 105; data, 13, 101, 105, 161, 187, 209; decision making and, 13, 109, 187, 209; framing effects and, 47; gender, 6, 8; institutional, 180; market, 180, 187, 209; non-rational, 47, 109; skill-biased technical change and, 132; special interest groups and, 64–66; survey, 101; twenty-first-century policy and, 187, 209 Biden, Joe, 205 Big Bang, 16 big data, 3, 13, 40, 51, 86, 100, 203, 209 biodiversity, 39, 63, 165 Black, Fisher, 23–25, 28 blackboard economies, 99 black box solutions, 161 BlackLivesMatter, 9, 214 black markets, 43 Black-Scholes-Merton model, 24–25 Blair, Tony, 208 Blake, William, 150 Blue Books, 150 BMW, 196 Booking, 173 Borges, J., 90 Boskin Commission, 146–47 Boston Dynamics, 137 Bowles, Sam, 85, 117, 119 Bretton Woods, 192 Brexit, 1, 37, 53, 56, 70, 110, 131, 155, 213 Brown, Dan, 108 Brynjolfsson, Eric, 176 bubbles, 20, 22, 29 Buchanan, James, 33 budget constraints, 177 Bundeskartellamt, 205 Bureau of Economic Policy Analysis, 66 business cycles, 71, 81, 102, 124 calculus, 16, 33, 90, 145 Calculus of Consent, The: Logical Foundations of Constitutional Democracy (Buchanan and Tullock), 33 Camus, Albert, 87, 108, 111 capitalism: criticism of, 19–20; free market and, 19, 41, 186; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; inequality from, 19; progress and, 143, 149; Schumpeter on, 143; twenty-first-century policy and, 186, 190, 195 Capital (Piketty), 131 carbon emissions, 38–40, 180, 187 Carlin, Wendy, 85 Cartlidge, John, 27 Case, Anne, 131 cash for clunkers, 55, 63 causality: bias and, 13, 105; correlation and, 94; deductive approach and, 103; economically establishing, 100; empirical work and, 2, 61, 94–96, 99; feedback and, 11, 94, 96; Leamer on, 102; methodological debate over, 2; models and, 2, 94–95, 102; moral issues and, 96; outsider context and, 94–96, 99–105; progress and, 137; public responsibilities and, 61, 74; randomised control trials (RCTs) and, 93–95, 105, 109–10; reflexivity and, 11, 81; societal statistics and, 61; statistics and, 61, 95, 99, 102; two-way, 94, 96 central banks: independence of, 16; progress and, 149; public responsibilities and, 16, 32, 62, 64, 66–67, 76, 81 central planning: artificial intelligence (AI) and, 184, 186–87; competition and, 38, 41, 124, 182; failure of communist, 40, 182–88, 190; socialist calculation debate and, 182–88, 190, 209 Central Planning Bureau, 66 Chetty, Raj, 86 Chicago School, 24–25, 73, 75, 190, 193–94 Chile, 184 China, 173, 195, 206 Citadel, 27 City of London, 16, 19 climate change, 85, 148, 154 Close the Door campaign, 155–56 cloud computing, 150, 170–72, 184, 197 Coase, Ronald, 57–58, 62, 98–99 codes of conduct, 9, 206 cognitive science, 35–36, 48, 51, 91–92, 118–19, 186 Colander, David, 100 Cold War, 190 Coming of Post-Industrial Society, The (Bell), 67 common sense, 78, 127 communication, 53, 127, 168; bandwidth and, 171; compression and, 171; cost of, 196; 4G platforms and, 195; instant messaging, 171; latency and, 171; price of, 150, 171, 177; servers and, 25–26, 141, 170; smartphones and, 46, 138–39, 164, 171, 173, 177, 195, 198; SMS, 171; social media and, 52, 73, 82, 140–41, 149, 157, 163, 173, 176–77, 195; telephony and, 4, 31, 46, 98, 123, 138–39, 144, 156, 164, 171, 173–74, 177, 184, 195, 198; 3G platforms, 60, 139, 173, 195; transmission speeds and, 171 comparative advantage, 78, 97 competition: behavioural fix and, 45–51; central planning and, 38, 41, 124, 182; Chinese, 173, 195, 206; creative destruction and, 41; digital economy and, 42, 85, 165, 181, 201–6; directory numbers and, 60; empirical work and, 181, 209; envelopment and, 203–4; incumbents and, 41–42; innovation and, 28, 41, 46, 68, 85, 209; monopolies and, 20, 42; network effects and, 202, 205; opportunity cost and, 56, 58, 80, 156; outsider context and, 98, 105; Pareto criterion and, 122–23, 126–27, 129; production and, 12, 41; profit and, 33, 41–42, 105, 204; progress and, 135, 158, 165; public responsibilities and, 28, 33, 38, 41–42, 45–48, 57–69, 74, 77, 79, 85; rationality and, 117; resource, 41, 45, 117, 123, 125; separation protocol and, 120, 123–25; socialist calculation debate and, 182–83; special interest groups and, 64–66; specific studies in, 12; spectrum auctions and, 60–61; SSNIP test and, 204; twenty-first-century policy and, 182, 201–9 Competition and Markets Authority (CMA), 205 computers: AI and, 116 (see also artificial intelligence [AI]); Black-Scholes-Merton model and, 24–25; changing technology and, 169; cloud computing and, 150, 170–72, 184, 197; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; David on, 169; declining price of, 170; empirical work and, 2, 17, 52; exchange locations and, 25; feedback and, 179; Millennium Bug and, 155; Moore’s Law and, 170, 184; power of, 2, 17, 40, 58, 170, 183–84, 188; progress and, 138, 144, 155; rationality and, 116–17; servers and, 25–26, 141, 170; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; Solow on, 169; speed and, 25, 184; statistics and, 17, 52, 58, 144, 169; supercomputers, 170; twenty-first-century policy and, 183–84, 186, 188, 214; ultra-high frequency trading (HFT) and, 25–27 conservatism, 30 Consumer Price Index (CPI), 146–47, 172 consumers: bad choices and, 3; behavioural economics and, 22, 59–60, 92, 109; conspicuous consumption and, 42; digital economy and, 42, 137, 172–76, 181, 198, 200–206, 213; empirical work and, 3, 181; income and, 93 (see also income); innovation and, 28, 102, 200; Keynes and, 22; online shopping and, 173, 198; outsider context and, 92, 96, 98, 100–102, 105, 108–9; progress and, 137, 141, 144, 146–47, 151; public responsibilities and, 22, 28, 42, 59–60, 65; rationality and, 116; technology and, 28, 102, 171–76, 181, 200, 213; time spent online, 176–78; twenty-first-century policy and, 184, 198–206; welfare and, 105, 206 Cook, Eli, 150 copyright, 140 CORE’s The Economy, 85–86, 212–13 cost-benefit analysis (CBA), 56–57, 58n12, 125–26, 207 cost of living, 143–47, 172 counterfactuals, 97–98, 158, 161, 198, 208 Covid19 pandemic: body politics and, 163; financial recovery from, 88, 114; GDP growth and, 88, 165; impact of, 3, 10–11, 14, 20, 38, 43, 45, 68, 75, 88, 110, 114, 132–33, 149, 153, 155, 163–66, 181, 194, 213–15; lockdowns and, 3, 43, 45, 88, 114, 163, 198; public opinion and, 165–66 “Creating Humble Economists” (Colander), 100 creative destruction, 41 curriculum issues, 2, 4–5, 83, 85, 88 Daily Telegraph, 159 Darwin, Charles, 48 data centres, 26 data sets, 2, 13, 51–52, 60, 101, 161, 177, 201, 209 David, Paul, 169 Deaths of Despair (Case and Deaton), 131 Deaton, Angus, 128–29, 131 debt, 76, 101, 153 decision making: artificial intelligence (AI) and, 116, 186–87; bias and, 13, 109, 187, 209; Green Book and, 56, 126; normative economics and, 110, 114, 120; opportunity cost and, 56; outsider context and, 93; production and, 12, 123, 140, 196; progress and, 160, 162; rationality and, 116 (see also rationality); rules of thumb and, 47–48, 90, 117, 212; self knowledge and, 81; separation protocol and, 120 DeepMind, 115–16 Deliveroo, 173 demand management, 31, 191–92 democracy, 33, 67, 69, 79, 193 deregulation, 16, 31, 60, 68, 71, 193–94 derivative markets, 16, 18, 23–25, 28 Desrosières, Alain, 146 Dickens, Charles, 150 digital economy: AI and, 115 (see also artificial intelligence (AI)); changing nature of, 168–81; cloud computing and, 150, 170–72, 184, 197; cogs and, 6, 129, 154, 165, 179; competition and, 42, 85, 165, 181, 201–6; consumers and, 42, 137, 172–76, 181, 198, 200–206, 213; difference of, 168–76; dominance of by giant companies, 133; envelopment and, 203–4; 4G platforms, 195; GAFAM and, 173; globalisation and, 110, 132, 139, 154, 164, 193–96, 213; GPTs and, 169; Great Financial Crisis (GFC) and, 113–14; growth and, 129, 132, 140, 143, 194, 202; implications of, 176–78, 211–14; individual and, 6, 13–14, 128–29, 141, 175, 179, 181, 201; innovation and, 169–70; market changes and, 173–76; measuring online value and, 176; monsters and, 6, 154; network effects and, 127, 141, 174, 177, 185, 199–202, 205, 209; new agenda for, 179–81; online shopping and, 173, 198; Phillips machine and, 135–37, 151, 192; populism and, 211; production and, 132, 140, 142, 176, 195–97, 202, 213; progress and, 14, 137–43, 150, 153–54, 164–67; Project CyberSyn and, 184; services and, 176; software and, 25, 140, 155, 171, 177–78, 186, 197, 200–201, 203; statistics and, 113, 150, 164, 170, 172, 212; superstar features and, 173–74; 3G platforms, 60, 139, 173, 195; twenty-first-century policy and, 13, 185–88, 194–210; wealth creation and, 132–33; welfare and, 128, 134, 143, 206, 208, 212 Director, Aaron, 190 directory numbers, 60 discount rates, 147–48 diversity, 6–9, 213–14 Dow Jones, 26 Duflo, Esther, 20–21, 52, 109, 137 eBay, 175 ECO, 11 Economics Job Market Rumors, 8 Economics Observatory (ECO), 214 economies of scale: changing technology and, 174; network effects and, 127, 174, 177, 185, 199–201, 209; progress and, 142 education: derivatives and, 16; growth and, 16–17, 132; interventions and, 12; online, 177; policy on, 60; provision of basic, 30; real-world context and, 88; skills and, 88, 128, 132, 169–70; spread of higher, 151, 153 Efficient Markets Hypothesis, 17, 29 Eichengreen, Barry, 16 electricity: changing economies and, 127, 169, 191–92; progress and, 139, 142, 156, 165, 169, 191–92; regulation and, 65; supply of, 32; twenty-first-century policy and, 191–92, 200–201; warranties on goods and, 105 empirical work: behavioural economics and, 117, 159; causality and, 2, 61, 94–96, 99; competition and, 181, 209; computers and, 2, 17, 52; consumers and, 3, 181; context and, 17, 35, 61, 78, 92; correlation and, 70, 94; counterfactuals and, 97–98, 158, 161, 198, 208; data sets and, 2, 13, 51–52, 60, 101, 161, 177, 201, 209; feedback and, 11, 94–95, 155, 179, 188–89, 203, 205; growth and, 17, 61, 78, 209; macroeconomics and, 74, 100; market structures and, 35; physics envy and, 50; politics and, 3, 76, 78–79, 124, 213; populism and, 77; public responsibilities and, 17, 35, 40, 52, 61, 70, 74–81, 90, 92, 94–102, 110–11; randomised control trials (RCTs) and, 93–95, 105, 109–10; rationality and, 17; separation protocol and, 119, 124, 128; social constructs and, 13; statistics and, 17, 52, 61, 90, 95, 99; taxes and, 3; theory and, 2, 17, 52, 74, 90, 96, 99, 124, 181 endogenous growth theory, 17, 202 Enlightenment, 20 envelopment, 203–4 environmentalists, 126 equilibrium, 31, 38–39, 90–91, 123, 182 ethics, 4, 34, 39, 100, 105, 115, 119–24 Ethics and Society group, 115 ethnicity, 6–7, 9 European Commission, 67, 130, 205 European Steel and Coal Community, 190 European Union (EU), 37, 67, 195, 204 Eurozone, 67, 74 exchange rates, 118, 192 Facebook, 133, 173, 204–5 facial recognition, 165 fairness, 43, 45–46, 166 fake items, 98 Fear Index, The (Harris), 27 feedback: causality and, 11, 94–96; changing technology and, 179; political economy and, 188–89; progress and, 155; twenty-first-century policy and, 203, 205 financial intermediation services indirectly measured (FISIM), 28 Financial Times, 68–69, 97–98 Fisher Ideal index, 144n3 fixed costs, 174, 177, 179, 185–86, 200 forecasting: agent-based modeling and, 102; conditional projections and, 76; financial crises and, 17, 30, 100–101, 112–13; growth and, 37, 61; inflation and, 36; macroeconomics and, 3, 12, 36–37, 76, 101–2, 112; models and, 17, 74, 101–2, 113; self-fulfilling prophecies and, 5, 22–23, 154–55, 157; twenty-first-century policy and, 205; weather, 76 Fourastié, J., 191 4G platforms, 195 framing, 47, 130, 208 Frankenfinance, 18, 21, 25, 51–52, 165 Freakonomics, 108 free market: Brexit and, 213; capitalism and, 19, 41, 186; criticism of, 19; globalisation and, 110, 132, 139, 154, 164, 193–94, 196, 213; politics and, 30, 36, 130, 206; public responsibilities and, 19, 30–32, 35–36, 45, 54; separation protocol and, 123–24; twenty-first-century policy and, 182, 186, 191, 193, 195, 207 frictions, 22, 113, 136, 154, 182 Friedman, Ben, 16 Friedman, Milton, 16, 31, 93, 104, 121, 190 Furman, Jason, 86 GAFAM, 173 GameStop, 27 game theory, 48, 90–91, 129, 159–60, 179–80 Gelman, Andrew, 108 gender, 6–9, 93 GenZ, 166 Giavazzi, Francesco, 68 Gigerenzer, Gerd, 48 Gilded Age, 133 Giudici, Claudio, 69 Glaeser, Ed, 92 globalisation, 110, 132, 139, 154, 164, 193–96, 213 Goldman Sachs, 19 Good Economics for Hard Times (Banerjee and Duflo), 109 Goodhart’s Law, 72, 103 Google, 133, 141, 173, 201, 204–5 Gordon, Robert, 142 Gould, Stephen Jay, 49–50 Gove, Michael, 110, 149 Government Economic Service (GES), 53, 83–85 GPT, 169 Great Depression, 3, 10, 17, 20, 74, 191, 213 Great Financial Crisis (GFC): behavioural economics and, 51; consequences of, 1, 3, 11, 213; digital economy and, 113–14; dynamic stochastic general equilibrium models and, 31; forecasting, 30, 101, 112–13; Greece and, 56–58, 67; Italy and, 56–58, 67–69; models and, 31, 101, 113; outsider context and, 87–88, 101, 110, 112–14; progress and, 149, 153, 159; public responsibilities and, 16–19, 21, 29–31, 37–38, 50–51, 56, 67–68, 73–74, 79, 84; technology and, 56, 181; twenty-first-century policy and, 194 Great Moderation, 17, 73 Greece, 56, 67–68 greed, 11, 16, 29, 164 Green, Duncan, 95–96 Green Book, 56, 126 Greenspan, Alan, 101 Griliches, Zvi, 198 Gross Domestic Product (GDP), 60; Covid19 pandemic and, 88, 165; Fisher Ideal index and, 144n3; FISIM and, 28; flatlining of, 142; free market and, 130; Gross Domestic Product (GDP) and, 172–73; Gross National Product (GNP) and, 151; growth and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; inflation and, 13, 113, 148; internet and, 97; Laspeyres index and, 144n3; macroeconomics and, 13, 101, 113, 151; progress and, 138, 142–44, 148, 151, 158–59, 165, 172–73; real, 101, 142–44, 169, 173; Sen-Stiglitz-Fitoussi Commission on the Measurement of Economic Performance and, 151; social welfare and, 134; twenty-first-century policy and, 187; Winter of Discontent and, 158, 192 Gross National Product (GNP), 151 Grove, Andy, 41 growth: changing economies and, 171–72, 212; Covid19 pandemic and, 88, 165; derivatives market and, 16, 23, 28; digital technology and, 129, 132, 140, 143, 194–210; education and, 16–17, 132; empirical work and, 17, 61, 78, 209; endogenous growth theory and, 17, 202; faster, 66, 71, 144, 159; forecasting, 37, 61; Goodhart’s Law and, 72; Gross Domestic Product (GDP) and, 28, 46, 88, 97, 138, 143–44, 159, 165, 169, 171–72; income, 70, 131, 138, 143, 164–65, 194, 207; inflation and, 12, 66, 73, 178; innovation and, 37, 41, 46, 68, 71, 194, 209; internet and, 97; living standards and, 143–47, 172, 194; outsider context and, 12, 97, 101n1, 111; political economy and, 167, 181, 188–95; progress and, 138, 140, 143–45, 152, 159, 165; public responsibilities and, 16–17, 23, 28, 37, 41, 46, 61, 66, 68–73, 76, 78; recession and, 17, 51, 73, 111, 154, 158–59; slow, 11, 72; spillovers and, 129–30; sustainability and, 11, 20, 111, 148, 152, 166; technology and, 71, 132, 140, 202; twenty-first-century policy and, 187, 191–92, 194, 202, 207, 209; velocity of money and, 71 Guardian, 159 happiness, 70–71, 153 Harberger, A.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

"there is no alternative" (TINA), "World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, barriers to entry, battle of ideas, behavioural economics, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low interest rates, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

The eurozone will be hit by other shocks, and the weakest countries again may be thrown into crisis—there simply isn’t enough flexibility within the eurozone, as currently constituted, for the eurozone to work for the weakest. And the eurozone itself is likely to have very slow growth at best. The euro was always a means to an end, not an end in itself. Monetary arrangements come and go. The great achievement of the post–World War II era, the Bretton Woods monetary system, lasted less than three decades. First and foremost in our minds should be the ultimate objectives: shared prosperity within Europe and closer economic and political integration. The monetary union increasingly appears as a well-intentioned detour in the attempt to achieve those loftier goals.

A symptom of how bad things have become in many of the crisis countries, as we have noted, has been the dramatic rise in suicides.18 In the most important objective of economic policy, enhancing individual and societal well-being, the eurozone has been a disappointment, to say the least. Monetary systems come and go. Monetary arrangements, like the Bretton Woods system that governed the world after 1944, was heralded at its onset as the replacement of the gold standard. It seemed to work in the years after World War II, but in the end, it did not last even three decades. The euro’s moment of glory was even shorter; and as I have argued, even in the brief time that it seemed to be working, the imbalances that would eventually bring on the euro crisis were building up, and the euro (and the associated economic arrangements) were largely to blame.

Africa, 10, 95, 381 globalization and, 51 aggregate demand, 98, 107, 111, 118–19, 189, 367 deflation and, 290 lowered by inequality, 212 surpluses and, 187, 253 tech bubble slump in, 250 as weakened by imports, 111 aggregate supply, 99, 104, 189 agricultural subsidies, 45, 197 agriculture, 89, 224, 346 airlines, 259 Akerlof, George, 132 American Express, 287 Apple, 81, 376 Argentina, 18, 100, 110, 117, 371 bailout of, 113 debt restructuring by, 205–6, 266, 267 Arrow-Debreu competitive equilibrium theory, 303 Asia, globalization and, 51 asset price bubbles, 172 Athens airport, 191, 367–68 austerity, xvi–xvii, 9, 18–19, 20, 21, 28–29, 54, 69–70, 95, 96, 98, 97, 103, 106, 140, 150, 178, 185–88, 206, 211, 235, 316–17 academics for, 208–13 debt restructuring and, 203–6 design of programs of, 188–90 Germany’s push for, 186, 232 government investment curtailed by, 217 opposition to, 59–62, 69–70, 207–8, 315, 332, 392 private, 126–27, 241–42 reform of, 263–65 Austria, 331, 343 automatic destabilizers, see built-in destabilizers automatic stabilizers, 142, 244, 247–48, 357 flexible exchange rate as, 248 bail-ins, 113 bailouts, 91–92, 111, 112–13, 201–3, 354, 362–63, 370 of banks, 127–28, 196, 279, 362–63 of East Asia, 202 of Latin America, 202 of Mexico, 202 of Portugal, 178–79 of Spanish banks, 179, 199–200, 206 see also programs balanced-budget multiplier, 188–90, 265 Balkans, 320 bank capital, 284–85 banking system, in US, 91 banking union, 129–30, 241–42, 248, 263 and common regulations, 241 and deposit insurance, 241, 242, 246 Bank of England, 359 inflation target of, 157 Bank of Italy, 158 bankruptcies, 77, 94, 102, 104, 346, 390 super–chapter 11 for, 259–60 banks, 198–201 bailouts of, 127–28, 196, 279, 362–63 capital requirements of, 152, 249 closing of, 378 credit creation by, 280–82 development, 137–38 evolution of, 386–87 forbearance of regulations on, 130–31 Greek, 200–201, 228–29, 231, 270, 276, 367, 368 lending contracted by, 126–27, 246, 282–84 money supply increased by, 277 restructuring of, 113 small, 171 in Spain, 23, 186, 199, 200, 242, 270, 354 too-big-to-fail, 360 bank transfers, 49 Barclays, 131 behavioral economics, 335 Belgium, 6, 331, 343 belief systems, 53 Berlin Wall, 6 Bernanke, Ben, 251, 351, 363, 381 bilateral investment agreement, 369 Bill of Rights, 319 bimetallic standard, 275, 277 Blanchard, Olivier, 211 bonds, 4, 114, 150, 363 confidence in, 127, 145 Draghi’s promise to support, 127, 200, 201 GDP-indexed, 267 inflation and, 161 long-term, 94 restructuring of, 159 bonds, corporate, ECB’s purchase of, 141 borrowing, excessive, 243 Brazil, 138, 370 bailout of, 113 bread, 218, 230 Bretton Woods monetary system, 32, 325 Brunnermeier, Markus K., 361 Bryan, William Jennings, xii bubbles, 249, 381 credit, 122–123 real estate, see real estate bubble stability threatened by, 264 stock market, 200–201 tech, 250 tools for controlling, 250 budget, capital, 245 Buffett, Warren, 287, 290 built-in destabilizers, 96, 142, 188, 244, 248, 357–58 common regulatory framework as, 241 Bulgaria, 46, 331 Bundesbank, 42 Bush, George W., 266 Camdessus, Michel, 314 campaign contributions, 195, 355 Canada, 96 early 1990s expansion of, 209 in NAFTA, xiv railroad privatization in, 55 tax system in, 191 US’s free trade with, 45–46, 47 capital, 76–77 bank, 284–85 human, 78, 137 return to, 388 societal vs. physical, 77–78 tax on, 356 unemployment increased by, 264 capital adequacy standards, 152 capital budget, 245 capital controls, 389–90 capital flight, 126–34, 217, 354, 359 austerity and, 140 and labor flows, 135 capital flows, 14, 15, 25, 26, 27–28, 40, 116, 125, 128, 131, 351 economic volatility exacerbated by, 28, 274 and foreign ownership, 195 and technology, 139 capital inflows, 110–11 capitalism: crises in, xviii, 148–49 inclusive, 317 capital requirements, 152, 249, 378 Caprio, Gerry, 387 capture, 158–60 carbon price, 230, 260, 265, 368 cash, 39 cash flow, 194 Catalonia, xi CDU party, 314 central banks, 59, 354, 387–88 balance sheets of, 386 capture of, 158–59 credit auctions by, 282–84 credit creation by, 277–78 expertise of, 363 independence of, 157–63 inequality created by, 154 inflation and, 153, 166–67 as lender of last resort, 85, 362 as political institutions, 160–62 regulations and, 153 stability and, 8 unemployment and, 8, 94, 97, 106, 147, 153 CEO compensation, 383 Chapter 11, 259–60, 291 childhood poverty, 72 Chile, 55, 152–53 China, 81, 98, 164, 319, 352 exchange-rate policy of, 251, 254, 350–51 global integration of, 49–50 low prices of, 251 rise of, 75 savings in, 257 trade surplus of, 118, 121, 350–52 wages controlled in, 254 as world’s largest economy, 318, 327 chits, 287–88, 290, 299–300, 387, 388–389 Citigroup, 355 climate change, 229–30, 251, 282, 319 Clinton, Bill, xiv, xv, 187 closing hours, 220 cloves, 230 cognitive capture, 159 Cohesion Fund, 243 Cold War, 6 collateral, 364 collective action, 41–44, 51–52 and inequality, 338 and stabilization, 246 collective bargaining, 221 collective goods, 40 Common Agricultural Policy, 338 common regulatory framework, 241 communism, 10 Community Reinvestment Act (CRA), 360, 382 comparative advantage, 12, 171 competition, 12 competitive devaluation, 104–6, 254 compromise, 22–23 confidence, 95, 200–201, 384 in banks, 127 in bonds, 145 and structural reforms, 232 and 2008 crisis, 280 confirmation bias, 309, 335 Congress, US, 319, 355 connected lending, 280 connectedness, 68–69 Connecticut, GDP of, 92 Constitutional Court, Greek, 198 consumption, 94, 278 consumption tax, 193–94 contract enforcement, 24 convergence, 13, 92–93, 124, 125, 139, 254, 300–301 convergence criteria, 15, 87, 89, 96–97, 99, 123, 244 copper mines, 55 corporate income tax, 189–90, 227 corporate taxes, 189–90, 227, 251 corporations, 323 regulations opposed by, xvi and shutdown of Greek banks, 229 corruption, 74, 112 privatization and, 194–95 Costa, António, 332 Council of Economic Advisers, 358 Council of State, Greek, 198 countercyclical fiscal policy, 244 counterfactuals, 80 Countrywide Financial, 91 credit, 276–85 “divorce”’s effect on, 278–79 excessive, 250, 274 credit auctions, 282–84 credit bubbles, 122–123 credit cards, 39, 49, 153 credit creation, 248–50, 277–78, 386 by banks, 280–82 domestic control over, 279–82 regulation of, 277–78 credit default swaps (CDSs), 159–60 crisis policy reforms, 262–67 austerity to growth, 263–65 debt restructuring and, 265–67 Croatia, 46, 331, 338 currency crises, 349 currency pegs, xii current account, 333–34 current account deficits, 19, 88, 108, 110, 120–121, 221, 294 and exit from euro, 273, 285–89 see also trade deficit Cyprus, 16, 30, 140, 177, 331, 386 capital controls in, 390 debt-to-GDP ratio of, 231 “haircut” of, 350, 367 Czech Republic, 46, 331 debit cards, 39, 49 debtors’ prison, 204 debt restructuring, 201, 203–6, 265–67, 290–92, 372, 390 of private debt, 291 debts, xx, 15, 93, 96, 183 corporate, 93–94 crisis in, 110–18 in deflation, xii and exit from eurozone, 273 with foreign currency, 115–18 household, 93–94 increase in, 18 inherited, 134 limits of, 42, 87, 122, 141, 346, 367 monetization of, 42 mutualization of, 242–43, 263 place-based, 134, 242 reprofiling of, 32 restructuring of, 259 debt-to-GDP ratio, 202, 210–11, 231, 266, 324 Declaration of Independence, 319 defaults, 102, 241, 338, 348 and debt mutualization, 243 deficit fetishism, 96 deficits, fiscal, xx, 15, 20, 93, 96, 106, 107–8, 122, 182, 384 and balanced-budget multiplier, 188–90, 265 constitutional amendment on, 339 and exit from euro, 273, 289–90 in Greece, 16, 186, 215, 233, 285–86, 289 limit of, 42, 87, 94–95, 122, 138, 141, 186, 243, 244, 265, 346, 367 primary, 188 problems financing, 110–12 structural, 245 deficits, trade, see trade deficits deflation, xii, 147, 148, 151, 166, 169, 277, 290 Delors, Jacques, 7, 332 democracy, lack of faith in, 312–14 Democracy in America (Tocqueville), xiii democratic deficit, 26–27, 35, 57–62, 145 democratic participation, xix Denmark, 45, 307, 313, 331 euro referendum of, 58 deposit insurance, 31, 44, 129, 199, 301, 354–55, 386–87 common in eurozone, 241, 242, 246, 248 derivatives, 131, 355 Deutsche Bank, 283, 355 devaluation, 98, 104–6, 254, 344 see also internal devaluation developing countries, and Washington Consensus, xvi discretion, 262–63 discriminatory lending practices, 283 disintermediation, 258 divergence, 15, 123, 124–44, 255–56, 300, 321 in absence of crisis, 128–31 capital flight and, 126–34 crisis policies’ exacerbation of, 140–43 free mobility of labor and, 134–36, 142–44, 242 in public investment, 136–38 reforms to prevent, 243 single-market principle and, 125–26 in technology, 138–39 in wealth, 139–40 see also capital flows; labor movement diversification, of production, 47 Dodd-Frank Wall Street Reform and Consumer Protection Act, 355 dollar peg, 50 downsizing, 133 Draghi, Mario, 127, 145, 156, 158, 165, 269, 363 bond market supported by, 127, 200, 201 Drago, Luis María, 371 drug prices, 219 Duisenberg, Willem Frederik “Wim,” 251 Dynamic Stochastic Equilibrium model, 331 East Asia, 18, 25, 95, 102–3, 112, 123, 202, 364, 381 convergence in, 138 Eastern Europe, 10 Economic Adjustment Programme, 178 economic distortions, 191 economic growth, xii, 34 confidence and, 232 in Europe, 63–64, 69, 73–74, 74, 75, 163 lowered by inequality, 212–13 reform of, 263–65 and structural reforms, 232–35 economic integration, xiv–xx, 23, 39–50 euro and, 46–47 political integration vs., 51–57 single currency and, 45–46 economic rents, 226, 280 economics, politics and, 308–18 economic security, 68 economies of scale, 12, 39, 55, 138 economists, poor forecasting by, 307 education, 20, 76, 344 investment in, 40, 69, 137, 186, 211, 217, 251, 255, 300 electricity, 217 electronic currency, 298–99, 389 electronics payment mechanism, 274–76, 283–84 emigration, 4, 68–69 see also migration employment: central banks and, 8, 94, 97 structural reforms and, 257–60 see also unemployment Employment Act (1946), 148 energy subsidies, 197 Enlightenment, 3, 318–19 environment, 41, 257, 260, 323 equality, 225–26 equilibrium, xviii–xix Erasmus program, 45 Estonia, 90, 331, 346 euro, xiv, 325 adjustments impeded by, 13–14 case for, 35–39 creation of, xii, 5–6, 7, 10, 333 creation of institutions required by, 10–11 divergence and, see divergence divorce of, 272–95, 307 economic integration and, 46–47, 268 as entailing fixed exchange rate, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 143, 193, 215–16, 240, 244, 249, 252, 254, 286, 297 as entailing single interest rate, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 and European identification, 38–39 financial instability caused by, 131–32 growth promised by, 235 growth slowed by, 73 hopes for, 34 inequality increased by, xviii interest rates lowered by, 235 internal devaluation of, see internal devaluation literature on, 327–28 as means to end, xix peace and, 38 proponents of, 13 referenda on, 58, 339–40 reforms needed for, xii–xiii, 28–31 risk of, 49–50 weakness of, 224 see also flexible euro Eurobond, 356 euro crisis, xiii, 3, 4, 9 catastrophic consequences of, 11–12 euro-euphoria, 116–17 Europe, 151 free trade area in, 44–45 growth rates in, 63–64, 69, 73–74, 74, 75, 163 military conflicts in, 196 social models of, 21 European Central Bank (ECB), 7, 17, 80, 112–13, 117, 144, 145–73, 274, 313, 362, 368, 380 capture of, 158–59 confidence in, 200–201 corporate bonds bought by, 141 creation of, 8, 85 democratic deficit and, 26, 27 excessive expansion controlled by, 250 flexibility of, 269 funds to Greece cut off by, 59 German challenges to, 117, 164 governance and, 157–63 inequality created by, 154–55 inflation controlled by, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 250, 256, 266 interest rates set by, 85–86, 152, 249, 302, 348 Ireland forced to socialize losses by, 134, 156, 165 new mandate needed by, 256 as political institution, 160–62 political nature of, 153–56 quantitative easing opposed by, 151 quantitative easing undertaken by, 164, 165–66, 170, 171 regulations by, 249, 250 unemployment and, 163 as unrepresentative, 163 European Commission, 17, 58, 161, 313, 332 European Court of Human Rights, 45 European Economic Community (EEC), 6 European Exchange Rate Mechanism (ERM), 30, 335 European Exchange Rate Mechanism II (ERM II), 336 European Free Trade Association, 44 European Free Trade Association Court, 44 European Investment Bank (EIB), 137, 247, 255, 301 European Regional Development Fund, 243 European Stability Mechanism, 23, 246, 357 European Union: budget of, 8, 45, 91 creation of, 4 debt and deficit limits in, 87–88 democratic deficit in, 26–27 economic growth in, 215 GDP of, xiii and lower rates of war, 196 migration in, 90 proposed exit of UK from, 4 stereotypes in, 12 subsidiarity in, 8, 41–42, 263 taxes in, 8, 261 Euro Summit Statement, 373 eurozone: austerity in, see austerity banking union in, see banking union counterfactual in, 235–36 double-dip recessions in, 234–35 Draghi’s speech and, 145 economic integration and, xiv–xx, 23, 39–50, 51–57 as flawed at birth, 7–9 framework for stability of, 244–52 German departure from, 32, 292–93 Greece’s possible exit from, 124 hours worked in, 71–72 lack of fiscal policy in, 152 and move to political integration, xvi, 34, 35, 51–57 Mundell’s work on dangers of, 87 policies of, 15–17 possible breakup of, 29–30 privatization avoided in, 194 saving, 323–26 stagnant GDP in, 12, 65–68, 66, 67 structure of, 8–9 surpluses in, 120–22 theory of, 95–97 unemployment in, 71, 135, 163, 177–78, 181, 331 working-age population of, 70 eurozone, proposed structural reforms for, 239–71 common financial system, see banking union excessive fiscal responsibility, 163 exchange-rate risks, 13, 47, 48, 49–50, 125, 235 exchange rates, 80, 85, 288, 300, 338, 382, 389 of China, 251, 254, 350–51 and competitive devaluation, 105–6 after departure of northern countries, 292–93 of euro, 8, 42–43, 46–47, 86–87, 92, 93, 94, 102, 105, 215–16, 240, 244, 249, 252, 254, 286, 297 flexible, 50, 248, 349 and full employment, 94 of Germany, 254–55, 351 gold and, 344–45 imports and, 86 interest rates and, 86 quantitative easing’s lowering of, 151 real, 105–6 and single currencies, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 stabilizing, 299–301 and trade deficits, 107, 118 expansionary contractions, 95–96, 208–9 exports, 86, 88, 97–99, 98 disappointing performance of, 103–5 external imbalances, 97–98, 101, 109 externalities, 42–43, 121, 153, 301–2 surpluses as, 253 extremism, xx, 4 Fannie Mae, 91 farmers, US, in deflation, xii Federal Deposit Insurance Corporation (FDIC), 91 Federal Reserve, US, 349 alleged independence of, 157 interest rates lowered by, 150 mandate of, 8, 147, 172 money pumped into economy by, 278 quantitative easing used by, 151, 170 reform of, 146 fiat currency, 148, 275 and taxes, 284 financial markets: lobbyists from, 132 reform of, 214, 228–29 short-sighted, 112–13 financial systems: necessity of, xix real economy of, 149 reform of, 257–58 regulations needed by, xix financial transaction system, 275–76 Finland, 16, 81, 122, 126, 292, 296, 331, 343 growth in, 296–97 growth rate of, 75, 76, 234–35 fire departments, 41 firms, 138, 186–87, 245, 248 fiscal balance: and cutting spending, 196–98 tax revenue and, 190–96 Fiscal Compact, 141, 357 fiscal consolidation, 310 fiscal deficits, see deficits, fiscal fiscal policy, 148, 245, 264 in center of macro-stabilization, 251 countercyclical, 244 in EU, 8 expansionary, 254–55 stabilization of, 250–52 fiscal prudence, 15 fiscal responsibility, 163 flexibility, 262–63, 269 flexible euro, 30–31, 272, 296–305, 307 cooperation needed for, 304–5 food prices, 169 forbearance, 130–31 forecasts, 307 foreclosure proposal, 180 foreign ownership, privatization and, 195 forestry, 81 France, 6, 14, 16, 114, 120, 141, 181–82, 331, 339–40, 343 banks of, 202, 203, 231, 373 corporate income tax in, 189–90 euro creation regretted in, 340 European Constitution referendum of, 58 extreme right in, xi growth in, 247 Freddie Mac, 91 Freefall (Stiglitz), 264, 335 free mobility of labor, xiv, 26, 40, 125, 134–36, 142–44, 242 Friedman, Milton, 151, 152–53, 167, 339 full employment, 94–97, 379 G-20, 121 gas: import of, 230 from Russia, 37, 81, 93 Gates Foundation, 276 GDP-indexed bonds, 267 German bonds, 114, 323 German Council of Economic Experts, 179, 365 Germany, xxi, 14, 30, 65, 108, 114, 141, 181–82, 207, 220, 286, 307, 331, 343, 346, 374 austerity pushed by, 186, 232 banks of, 202, 203, 231–32, 373 costs to taxpayers of, 184 as creditor, 140, 187, 267 debt collection by, 117 debt in, 105 and debt restructuring, 205, 311 in departure from eurozone, 32, 292–93 as dependent on Russian gas, 37 desire to leave eurozone, 314 ECB criticized by, 164 EU economic practices controlled by, 17 euro creation regretted in, 340 exchange rate of, 254–55, 351 failure of, 13, 78–79 flexible exchange of, 304 GDP of, xviii, 92 in Great Depression, 187 growing poverty in, 79 growth of, 78, 106, 247 hours worked per worker in, 72 inequality in, 79, 333 inflation in, 42, 338, 358 internal solidarity of, 334 lack of alternative to euro seen by, 11 migrants to, 320–21, 334–35, 393 minimum wage in, 42, 120, 254 neoliberalism in, 10 and place-based debt, 136 productivity in, 71 programs designed by, 53, 60, 61, 202, 336, 338 reparations paid by, 187 reunification of, 6 rules as important to, 57, 241–42, 262 share of global employment in, 224 shrinking working-age population of, 70, 78–79 and Stability and Growth Pact, 245 and structural reforms, 19–20 “there is no alternative” and, 306, 311–12 trade surplus of, 117, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 “transfer union” rejected by, 22 US loans to, 187 victims blamed by, 9, 15–17, 177–78, 309 wages constrained by, 41, 42–43 wages lowered in, 105, 333 global financial crisis, xi, xiii–xiv, 3, 12, 17, 24, 67, 73, 75, 114, 124, 146, 148, 274, 364, 387 and central bank independence, 157–58 and confidence, 280 and cost of failure of financial institutions, 131 lessons of, 249 monetary policy in, 151 and need for structural reform, 214 originating in US, 65, 68, 79–80, 112, 128, 296, 302 globalization, 51, 321–23 and diminishing share of employment in advanced countries, 224 economic vs. political, xvii failures of, xvii Globalization and Its Discontents (Stig-litz), 234, 335, 369 global savings glut, 257 global secular stagnation, 120 global warming, 229–30, 251, 282, 319 gold, 257, 275, 277, 345 Goldman Sachs, 158, 366 gold standard, 148, 291, 347, 358 in Great Depression, xii, 100 goods: free movement of, 40, 143, 260–61 nontraded, 102, 103, 169, 213, 217, 359 traded, 102, 103, 216 Gordon, Robert, 251 governance, 157–63, 258–59 government spending, trade deficits and, 107–8 gravity principle, 124, 127–28 Great Depression, 42, 67, 105, 148, 149, 168, 313 Friedman on causes of, 151 gold standard in, xii, 100 Great Malaise, 264 Greece, 14, 30, 41, 64, 81, 100, 117, 123, 142, 160, 177, 265–66, 278, 307, 331, 343, 366, 367–68, 374–75, 386 austerity opposed by, 59, 60–62, 69–70, 207–8, 392 balance of payments, 219 banks in, 200–201, 228–29, 231, 270, 276, 367, 368 blaming of, 16, 17 bread in, 218, 230 capital controls in, 390 consumption tax and, 193–94 counterfactual scenario of, 80 current account surplus of, 287–88 and debt restructuring, 205–7 debt-to-GDP ratio of, 231 debt write-offs in, 291 decline in labor costs in, 56, 103 ECB’s cutting of funds to, 59 economic growth in, 215, 247 emigration from, 68–69 fiscal deficits in, 16, 186, 215, 233, 285–86, 289 GDP of, xviii, 183, 309 hours worked per worker in, 72 inequality in, 72 inherited debt in, 134 lack of faith in democracy in, 312–13 living standards in, 216 loans in, 127 loans to, 310 migrants and, 320–21 milk in, 218, 223, 230 new currency in, 291, 300 oligarchs in, 16, 227 output per working-age person in, 70–71 past downturns in, 235–36 pensions in, 16, 78, 188, 197–98, 226 pharmacies in, 218–20 population decline in, 69, 89 possible exit from eurozone of, 124, 197, 273, 274, 275 poverty in, 226, 261, 376 primary surplus of, 187–88, 312 privatization in, 55, 195–96 productivity in, 71, 342 programs imposed on, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 renewable energy in, 193, 229 social capital destroyed in, 78 sovereign spread of, 200 spread in, 332 and structural reforms, 20, 70, 188, 191 tax revenue in, 16, 142, 192, 227, 367–368 tools lacking for recovery of, 246 tourism in, 192, 286 trade deficits in, 81, 194, 216–17, 222, 285–86 unemployment in, xi, 71, 236, 267, 332, 338, 342 urgency in, 214–15 victim-blaming of, 309–11 wages in, 216–17 youth unemployment in, xi, 332 Greek bonds, 116, 126 interest rates on, 4, 114, 181–82, 201–2, 323 restructuring of, 206–7 green investments, 260 Greenspan, Alan, 251, 359, 363 Grexit, see Greece, possible exit from eurozone of grocery stores, 219 gross domestic product (GDP), xvii decline in, 3 measurement of, 341 Growth and Stability Pact, 87 hedge funds, 282, 363 highways, 41 Hitler, Adolf, 338, 358 Hochtief, 367–68 Hoover, Herbert, 18, 95 human capital, 78, 137 human rights, 44–45, 319 Hungary, 46, 331, 338 hysteresis, 270 Iceland, 44, 111, 307, 354–55 banks in, 91 capital controls in, 390 ideology, 308–9, 315–18 imports, 86, 88, 97–99, 98, 107 incentives, 158–59 inclusive capitalism, 317 income, unemployment and, 77 income tax, 45 Independent Commission for the Reform of International Corporate Taxation, 376–377 Indonesia, 113, 230–31, 314, 350, 364, 378 industrial policies, 138–39, 301 and restructuring, 217, 221, 223–25 Industrial Revolution, 3, 224 industry, 89 inequality, 45, 72–73, 333 aggregate demand lowered by, 212 created by central banks, 154 ECB’s creation of, 154–55 economic performance affected by, xvii euro’s increasing of, xviii growth’s lowering of, 212 hurt by collective action, 338 increased by neoliberalism, xviii increase in, 64, 154–55 inequality in, 72, 212 as moral issue, xviii in Spain, 72, 212, 225–26 and tax harmonization, 260–61 and tax system, 191 inflation, 277, 290, 314, 388 in aftermath of tech bubble, 251 bonds and, 161 central banks and, 153, 166–67 consequences of fixation on, 149–50, 151 costs of, 270 and debt monetization, 42 ECB and, 8, 25, 97, 106, 115, 145, 146–50, 151, 163, 165, 169–70, 172, 255, 256, 266 and food prices, 169 in Germany, 42, 338, 358 interest rates and, 43–44 in late 1970s, 168 and natural rate hypothesis, 172–73 political decisions and, 146 inflation targeting, 157, 168–70, 364 information, 335 informational capital, 77 infrastructure, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 inheritance tax, 368 inherited debt, 134 innovation, 138 innovation economy, 317–18 inputs, 217 instability, xix institutions, 93, 247 poorly designed, 163–64 insurance, 355–356 deposit, see deposit insurance mutual, 247 unemployment, 91, 186, 246, 247–48 integration, 322 interest rates, 43–44, 86, 282, 345, 354 in aftermath of tech bubble, 251 ECB’s determination of, 85–86, 152, 249, 302, 348 and employment, 94 euro’s lowering of, 235 Fed’s lowering of, 150 on German bonds, 114 on Greek bonds, 4, 114, 181–82 on Italian bonds, 114 in late 1970s, 168 long-term, 151, 200 negative, 316, 348–49 quantitative easing and, 151, 170 short-term, 249 single, eurozone’s entailing of, 8, 85–88, 92, 93, 94, 105, 129, 152, 240, 244, 249 on Spanish bonds, 114, 199 spread in, 332 stock prices increased by, 264 at zero lower bound, 106 intermediation, 258 internal devaluation, 98–109, 122, 126, 220, 255, 388 supply-side effects of, 99, 103–4 International Commission on the Measurement of Economic Performance and Social Progress, 79, 341 International Labor Organization, 56 International Monetary Fund (IMF), xv, xvii, 10, 17, 18, 55, 61, 65–66, 96, 111, 112–13, 115–16, 119, 154, 234, 289, 309, 316, 337, 349, 350, 370, 371, 381 and Argentine debt, 206 conditions of, 201 creation of, 105 danger of high taxation warnings of, 190 debt reduction pushed by, 95 and debt restructuring, 205, 311 and failure to restore credit, 201 global imbalances discussed by, 252 and Greek debts, 205, 206, 310–11 on Greek surplus, 188 and Indonesian crisis, 230–31, 364 on inequality’s lowering of growth, 212–13 Ireland’s socialization of losses opposed by, 156–57 mistakes admitted by, 262, 312 on New Mediocre, 264 Portuguese bailout of, 178–79 tax measures of, 185 investment, 76–77, 111, 189, 217, 251, 264, 278, 367 confidence and, 94 divergence in, 136–38 in education, 137, 186, 211, 217, 251, 255, 300 infrastructure in, xvi–xvii, 47, 137, 186, 211, 255, 258, 265, 268, 300 lowered by disintermediation, 258 public, 99 real estate, 199 in renewable energy, 229–30 return on, 186, 245 stimulation of, 94 in technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 investor state dispute settlement (ISDS), 393–94 invisible hand, xviii Iraq, refugees from, 320 Iraq War, 36, 37 Ireland, 14, 16, 44, 113, 114–15, 122, 178, 234, 296, 312, 331, 339–40, 343, 362 austerity opposed in, 207 debt of, 196 emigrants from, 68–69 GDP of, 18, 231 growth in, 64, 231, 247, 340 inherited debt in, 134 losses socialized in, 134, 156–57, 165 low debt in, 88 real estate bubble in, 108, 114–15, 126 surplus in, 17, 88 taxes in, 142–43, 376 trade deficits in, 119 unemployment in, 178 irrational exuberance, 14, 114, 116–17, 149, 334, 359 ISIS, 319 Italian bonds, 114, 165, 323 Italy, 6, 14, 16, 120, 125, 331, 343 austerity opposed in, 59 GDP per capita in, 352 growth in, 247 sovereign spread of, 200 Japan, 151, 333, 342 bubble in, 359 debt of, 202 growth in, 78 quantitative easing used by, 151, 359 shrinking working-age population of, 70 Java, unemployment on, 230 jobs gap, 120 Juncker, Jean-Claude, 228 Keynes, John Maynard, 118, 120, 172, 187, 351 convergence policy suggested by, 254 Keynesian economics, 64, 95, 108, 153, 253 King, Mervyn, 390 knowledge, 137, 138–39, 337–38 Kohl, Helmut, 6–7, 337 krona, 287 labor, marginal product of, 356 labor laws, 75 labor markets, 9, 74 friction in, 336 reforms of, 214, 221 labor movement, 26, 40, 125, 134–36, 320 austerity and, 140 capital flows and, 135 see also migration labor rights, 56 Lamers, Karl, 314 Lancaster, Kelvin, 27 land tax, 191 Latin America, 10, 55, 95, 112, 202 lost decade in, 168 Latvia, 331, 346 GDP of, 92 law of diminishing returns, 40 learning by doing, 77 Lehman Brothers, 182 lender of last resort, 85, 362, 368 lending, 280, 380 discriminatory, 283 predatory, 274, 310 lending rates, 278 leverage, 102 Lichtenstein, 44 Lipsey, Richard, 27 liquidity, 201, 264, 278, 354 ECB’s expansion of, 256 lira, 14 Lithuania, 331 living standards, 68–70 loans: contraction of, 126–27, 246 nonperforming, 241 for small and medium-size businesses, 246–47 lobbyists, from financial sector, 132 location, 76 London interbank lending rate (LIBOR), 131, 355 Long-Term Refinancing Operation, 360–361 Lucas, Robert, xi Luxembourg, 6, 94, 142–43, 331, 343 as tax avoidance center, 228, 261 luxury cars, 265 Maastricht Treaty, xiii, 6, 87, 115, 146, 244, 298, 339, 340 macro-prudential regulations, 249 Malta, 331, 340 manufacturing, 89, 223–24 market failures, 48–49, 86, 148, 149, 335 rigidities, 101 tax policy’s correction of, 193 market fundamentalism, see neoliberalism market irrationality, 110, 125–26, 149 markets, limitations of, 10 Meade, James, 27 Medicaid, 91 medical care, 196 Medicare, 90, 91 Mellon, Andrew, 95 Memorandum of Agreement, 233–34 Merkel, Angela, 186 Mexico, 202, 369 bailout of, 113 in NAFTA, xiv Middle East, 321 migrant crisis, 44 migration, 26, 40, 68–69, 90, 125, 320–21, 334–35, 342, 356, 393 unemployment and, 69, 90, 135, 140 see also labor movement military power, 36–37 milk, 218, 223, 230 minimum wage, 42, 120, 254, 255, 351 mining, 257 Mississippi, GDP of, 92 Mitsotakis, Constantine, 377–78 Mitsotakis, Kyriakos, 377–78 Mitterrand, François, 6–7 monetarism, 167–68, 169, 364 monetary policy, 24, 85–86, 148, 264, 325, 345, 364 as allegedly technocratic, 146, 161–62 conservative theory of, 151, 153 in early 1980s US, 168, 210 flexibility of, 244 in global financial crisis, 151 political nature of, 146, 153–54 recent developments in theory of, 166–73 see also interest rates monetary union, see single currencies money laundering, 354 monopolists, privatization and, 194 moral hazard, 202, 203 mortgage rates, 170 mortgages, 302 multinational chains, 219 multinational development banks, 137 multinationals, 127, 223, 376 multipliers, 211–12, 248 balanced-budget, 188–90, 265 Mundell, Robert, 87 mutual insurance, 247 mutualization of debt, 242–43, 263 national development banks, 137–38 natural monopolies, 55 natural rate hypothesis, 172 negative shocks, 248 neoliberalism, xvi, 24–26, 33, 34, 98–99, 109, 257, 265, 332–33, 335, 354 on bubbles, 381 and capital flows, 28 and central bank independence, 162–63 in Germany, 10 inequality increased by, xviii low inflation desired by, 147 recent scholarship against, 24 Netherlands, 6, 44, 292, 331, 339–40, 343 European Constitution referendum of, 58 New Democracy Party, Greek, 61, 185, 377–78 New Mediocre, 264 New World, 148 New Zealand, 364 Nokia, 81, 234, 297 nonaccelerating inflation rate of unemployment (NAIRU), 379–80 nonaccelerating wage rate of unemployment (NAWRU), 379–80 nongovernmental organizations (NGOs), 276 nonperforming loans, 241 nontraded goods sector, 102, 103, 169, 213, 217, 359 North American Free Trade Agreement (NAFTA), xiv North Atlantic Treaty Organization (NATO), 196 Norway, 12, 44, 307 referendum on joining EU, 58 nuclear deterrence, 38 Obama, Barack, 319 oil, import of, 230 oil firms, 36 oil prices, 89, 168, 259, 359 oligarchs: in Greece, 16, 227 in Russia, 280 optimal currency area, 345 output, 70–71, 111 after recessions, 76 Outright Monetary Transactions program, 361 overregulate, 132 Oxfam, 72 panic of 1907, 147 Papandreou, Andreas, 366 Papandreou, George, xiv, 60–61, 184, 185, 220, 221, 226–27, 309, 312, 366, 373 reform of banks suggested by, 229 paradox of thrift, 120 peace, 34 pensions, 9, 16, 78, 177, 188, 197–98, 226, 276, 370 People’s Party, Portugal, 392 periphery, 14, 32, 171, 200, 296, 301, 318 see also specific countries peseta, 14 pharmacies, 218–20 Phishing for Phools (Akerlof and Shiller), 132 physical capital, 77–78 Pinochet, Augusto, 152–53 place-based debt, 134, 242 Pleios, George, 377 Poland, 46, 333, 339 assistance to, 243 in Iraq War, 37 police, 41 political integration, xvi, 34, 35 economic integration vs., 51–57 politics, economics and, 308–18 pollution, 260 populism, xx Portugal, 14, 16, 64, 177, 178, 331, 343, 346 austerity opposed by, 59, 207–8, 315, 332, 392 GDP of, 92 IMF bailout of, 178–79 loans in, 127 poverty in, 261 sovereign spread of, 200 Portuguese bonds, 179 POSCO, 55 pound, 287, 335, 346 poverty, 72 in Greece, 226, 261 in Portugal, 261 in Spain, 261 predatory lending, 274, 310 present discount value, 343 Price of Inequality, The (Stiglitz), 154 prices, 19, 24 adjustment of, 48, 338, 361 price stability, 161 primary deficit, 188, 389 primary surpluses, 187–88 private austerity, 126–27, 241–42 private sector involvement, 113 privatization, 55, 194–96, 369 production costs, 39, 43, 50 production function, 343 productivity, 71, 332, 348 in manufacturing, 223–24 after recessions, 76–77 programs, 17–18 Germany’s design of, 53, 60, 61, 187–88, 205, 336, 338 imposed on Greece, xv, 21, 27, 60–62, 140, 155–56, 179–80, 181, 182–83, 184–85, 187–88, 190–93, 195–96, 197–98, 202–3, 205, 206, 214–16, 218–23, 225–28, 229, 230, 231, 233–34, 273, 278, 308, 309–11, 312, 315–16, 336, 338 of Troika, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 202, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 346, 366, 379, 392 progressive automatic stabilizers, 244 progressive taxes, 248 property rights, 24 property taxes, 192–93, 227 public entities, 195 public goods, 40, 337–38 quantitative easing (QE), 151, 164, 165–66, 170–72, 264, 359, 361, 386 railroads, 55 Reagan, Ronald, 168, 209 real estate bubble, 25, 108, 109, 111, 114–15, 126, 148, 172, 250, 301, 302 cause of, 198 real estate investment, 199 real exchange rate, 105–6, 215–16 recessions, recovery from, 94–95 recovery, 76 reform, 75 theories of, 27–28 regulations, 24, 149, 152, 162, 250, 354, 355–356, 378 and Bush administration, 250–51 common, 241 corporate opposition to, xvi difficulties in, 132–33 of finance, xix forbearance on, 130–31 importance of, 152–53 macro-prudential, 249 in race to bottom, 131–34 Reinhardt, Carmen, 210 renewable energy, 193, 229–30 Republican Party, US, 319 research and development (R&D), 77, 138, 217, 251, 317–18 Ricardo, David, 40, 41 risk, 104, 153, 285 excessive, 250 risk markets, 27 Rogoff, Kenneth, 210 Romania, 46, 331, 338 Royal Bank of Scotland, 355 rules, 57, 241–42, 262, 296 Russia, 36, 264, 296 containment of, 318 economic rents in, 280 gas from, 37, 81, 93, 378 safety nets, 99, 141, 223 Samaras, Antonis, 61, 309, 377 savings, 120 global, 257 savings and loan crisis, 360 Schäuble, Wolfgang, 57, 220, 314, 317 Schengen area, 44 schools, 41, 196 Schröeder, Gerhard, 254 self-regulation, 131, 159 service sector, 224 shadow banking system, 133 shareholder capitalism, 21 Shiller, Rob, 132, 359 shipping taxes, 227, 228 short-termism, 77, 258–59 Silicon Valley, 224 silver, 275, 277 single currencies: conflicts and, 38 as entailing fixed exchange rates, 8, 42–43, 46–47, 86–87, 92, 93, 94, 97–98 external imbalances and, 97–98 and financial crises, 110–18 integration and, 45–46, 50 interest rates and, 8, 86, 87–88, 92, 93, 94 Mundell’s work on, 87 requirements for, 5, 52–53, 88–89, 92–94, 97–98 and similarities among countries, 15 trade integration vs., 393 in US, 35, 36, 88, 89–92 see also euro single-market principle, 125–26, 231 skilled workers, 134–35 skills, 77 Slovakia, 331 Slovenia, 331 small and medium-sized enterprises (SMEs), 127, 138, 171, 229 small and medium-size lending facility, 246–47, 300, 301, 382 Small Business Administration, 246 small businesses, 153 Smith, Adam, xviii, 24, 39–40, 41 social cohesion, 22 Social Democratic Party, Portugal, 392 social program, 196 Social Security, 90, 91 social solidarity, xix societal capital, 77–78 solar energy, 193, 229 solidarity fund, 373 solidarity fund for stabilization, 244, 254, 264, 301 Soros, George, 390 South Dakota, 90, 346 South Korea, 55 bailout of, 113 sovereign risk, 14, 353 sovereign spreads, 200 sovereign wealth funds, 258 Soviet Union, 10 Spain, 14, 16, 114, 177, 178, 278, 331, 335, 343 austerity opposed by, 59, 207–8, 315 bank bailout of, 179, 199–200, 206 banks in, 23, 186, 199, 200, 242, 270, 354 debt of, 196 debt-to-GDP ratio of, 231 deficits of, 109 economic growth in, 215, 231, 247 gold supply in, 277 independence movement in, xi inequality in, 72, 212, 225–26 inherited debt in, 134 labor reforms proposed for, 155 loans in, 127 low debt in, 87 poverty in, 261 real estate bubble in, 25, 108, 109, 114–15, 126, 198, 301, 302 regional independence demanded in, 307 renewable energy in, 229 sovereign spread of, 200 spread in, 332 structural reform in, 70 surplus in, 17, 88 threat of breakup of, 270 trade deficits in, 81, 119 unemployment in, 63, 161, 231, 235, 332, 338 Spanish bonds, 114, 199, 200 spending, cutting, 196–98 spread, 332 stability, 147, 172, 261, 301, 364 automatic, 244 bubble and, 264 central banks and, 8 as collective action problem, 246 solidarity fund for, 54, 244, 264 Stability and Growth Pact, 245 standard models, 211–13 state development banks, 138 steel companies, 55 stock market, 151 stock market bubble, 200–201 stock market crash (1929), 18, 95 stock options, 259, 359 structural deficit, 245 Structural Funds, 243 structural impediments, 215 structural realignment, 252–56 structural reforms, 9, 18, 19–20, 26–27, 214–36, 239–71, 307 from austerity to growth, 263–65 banking union, 241–44 and climate change, 229–30 common framework for stability, 244–52 counterproductive, 222–23 debt restructuring and, 265–67 of finance, 228–29 full employment and growth, 256–57 in Greece, 20, 70, 188, 191, 214–36 growth and, 232–35 shared prosperity and, 260–61 and structural realignment, 252–56 of trade deficits, 216–17 trauma of, 224 as trivial, 214–15, 217–20, 233 subsidiarity, 8, 41–42, 263 subsidies: agricultural, 45, 197 energy, 197 sudden stops, 111 Suharto, 314 suicide, 82, 344 Supplemental Nutrition Assistance Program (SNAP), 91 supply-side effects: in Greece, 191, 215–16 of investments, 367 surpluses, fiscal, 17, 96, 312, 379 primary, 187–88 surpluses, trade, see trade surpluses “Swabian housewife,” 186, 245 Sweden, 12, 46, 307, 313, 331, 335, 339 euro referendum of, 58 refugees into, 320 Switzerland, 44, 307 Syria, 321, 342 Syriza party, 309, 311, 312–13, 315, 377 Taiwan, 55 tariffs, 40 tax avoiders, 74, 142–43, 227–28, 261 taxes, 142, 290, 315 in Canada, 191 on capital, 356 on carbon, 230, 260, 265, 368 consumption, 193–94 corporate, 189–90, 227, 251 cross-border, 319, 384 and distortions, 191 in EU, 8, 261 and fiat currency, 284 and free mobility of goods and capital, 260–61 in Greece, 16, 142, 192, 193–94, 227, 367–68 ideal system for, 191 IMF’s warning about high, 190 income, 45 increase in, 190–94 inequality and, 191 inheritance, 368 land, 191 on luxury cars, 265 progressive, 248 property, 192–93, 227 Reagan cuts to, 168, 210 shipping, 227, 228 as stimulative, 368 on trade surpluses, 254 value-added, 190, 192 tax evasion, in Greece, 190–91 tax laws, 75 tax revenue, 190–96 Taylor, John, 169 Taylor rule, 169 tech bubble, 250 technology, 137, 138–39, 186, 211, 217, 251, 258, 265, 300 and new financial system, 274–76, 283–84 telecoms, 55 Telmex, 369 terrorism, 319 Thailand, 113 theory of the second best, 27–28, 48 “there is no alternative” (TINA), 306, 311–12 Tocqueville, Alexis de, xiii too-big-to-fail banks, 360 tourism, 192, 286 trade: and contractionary expansion, 209 US push for, 323 trade agreements, xiv–xvi, 357 trade balance, 81, 93, 100, 109 as allegedly self-correcting, 98–99, 101–3 and wage flexibility, 104–5 trade barriers, 40 trade deficits, 89, 139 aggregate demand weakened by, 111 chit solution to, 287–88, 290, 299–300, 387, 388–89 control of, 109–10, 122 with currency pegs, 110 and fixed exchange rates, 107–8, 118 and government spending, 107–8, 108 of Greece, 81, 194, 215–16, 222, 285–86 structural reform of, 216–17 traded goods, 102, 103, 216 trade integration, 393 trade surpluses, 88, 118–21, 139–40, 350–52 discouragement of, 282–84, 299–300 of Germany, 118–19, 120, 139, 253, 293, 299, 350–52, 381–82, 391 tax on, 254, 351, 381–82 Transatlantic Trade and Investment Partnership, xv, 323 transfer price system, 376 Trans-Pacific Partnership, xv, 323 Treasury bills, US, 204 Trichet, Jean-Claude, 100–101, 155, 156, 164–65, 251 trickle-down economics, 362 Troika, 19, 20, 26, 55, 56, 58, 60, 69, 99, 101–3, 117, 119, 135, 140–42, 178, 179, 184, 195, 274, 294, 317, 362, 370–71, 373, 376, 377, 386 banks weakened by, 229 conditions of, 201 discretion of, 262 failure to learn, 312 Greek incomes lowered by, 80 Greek loan set up by, 202 inequality created by, 225–26 poor forecasting of, 307 predictions by, 249 primary surpluses and, 187–88 privatization avoided by, 194 programs of, 17–18, 21, 155–57, 179–80, 181, 182–83, 184–85, 187–93, 196, 197–98, 202, 204, 205, 207, 208, 214–16, 217, 218–23, 225–28, 229, 231, 233–34, 273, 278, 308, 309–11, 312, 313, 314, 315–16, 323–24, 348, 366, 379, 392 social contract torn up by, 78 structural reforms imposed by, 214–16, 217, 218–23, 225–38 tax demand of, 192 and tax evasion, 367 see also European Central Bank (ECB); European Commission; International Monetary Fund (IMF) trust, xix, 280 Tsipras, Alexis, 61–62, 221, 273, 314 Turkey, 321 UBS, 355 Ukraine, 36 unemployment, 3, 64, 68, 71–72, 110, 111, 122, 323, 336, 342 as allegedly self-correcting, 98–101 in Argentina, 267 austerity and, 209 central banks and, 8, 94, 97, 106, 147 ECB and, 163 in eurozone, 71, 135, 163, 177–78, 181, 331 and financing investments, 186 in Finland, 296 and future income, 77 in Greece, xi, 71, 236, 267, 331, 338, 342 increased by capital, 264 interest rates and, 43–44 and internal devaluation, 98–101, 104–6 migration and, 69, 90, 135, 140 natural rate of, 172–73 present-day, in Europe, 210 and rise of Hitler, 338, 358 and single currency, 88 in Spain, 63, 161, 231, 235, 332, 338 and structural reforms, 19 and trade deficits, 108 in US, 3 youth, 3, 64, 71 unemployment insurance, 91, 186, 246, 247–48 UNICEF, 72–73 unions, 101, 254, 335 United Kingdom, 14, 44, 46, 131, 307, 331, 332, 340 colonies of, 36 debt of, 202 inflation target set in, 157 in Iraq War, 37 light regulations in, 131 proposed exit from EU by, 4, 270 United Nations, 337, 350, 384–85 creation of, 38 and lower rates of war, 196 United States: banking system in, 91 budget of, 8, 45 and Canada’s 1990 expansion, 209 Canada’s free trade with, 45–46, 47 central bank governance in, 161 debt-to-GDP of, 202, 210–11 financial crisis originating in, 65, 68, 79–80, 128, 296, 302 financial system in, 228 founding of, 319 GDP of, xiii Germany’s borrowing from, 187 growing working-age population of, 70 growth in, 68 housing bubble in, 108 immigration into, 320 migration in, 90, 136, 346 monetary policy in financial crisis of, 151 in NAFTA, xiv 1980–1981 recessions in, 76 predatory lending in, 310 productivity in, 71 recovery of, xiii, 12 rising inequality in, xvii, 333 shareholder capitalism of, 21 Small Business Administration in, 246 structural reforms needed in, 20 surpluses in, 96, 187 trade agenda of, 323 unemployment in, 3, 178 united currency in, 35, 36, 88, 89–92 United States bonds, 350 unskilled workers, 134–35 value-added tax, 190, 192 values, 57–58 Varoufakis, Yanis, 61, 221, 309 velocity of circulation, 167 Venezuela, 371 Versaille, Treaty of, 187 victim blaming, 9, 15–17, 177–78, 309–11 volatility: and capital market integration, 28 in exchange rates, 48–49 Volcker, Paul, 157, 168 wage adjustments, 100–101, 103, 104–5, 155, 216–17, 220–22, 338, 361 wages, 19, 348 expansionary policies on, 284–85 Germany’s constraining of, 41, 42–43 lowered in Germany, 105, 333 wage stagnation, in Germany, 13 war, change in attitude to, 38, 196 Washington Consensus, xvi Washington Mutual, 91 wealth, divergence in, 139–40 Weil, Jonathan, 360 welfare, 196 West Germany, 6 Whitney, Meredith, 360 wind energy, 193, 229 Wolf, Martin, 385 worker protection, 56 workers’ bargaining rights, 19, 221, 255 World Bank, xv, xvii, 10, 61, 337, 357, 371 World Trade Organization, xiv youth: future of, xx–xxi unemployment of, 3, 64, 71 Zapatero, José Luis Rodríguez, xiv, 155, 362 zero lower bound, 106 ALSO BY JOSEPH E.


pages: 537 words: 144,318

The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money by Steven Drobny

Albert Einstein, AOL-Time Warner, Asian financial crisis, asset allocation, asset-backed security, backtesting, banking crisis, Bear Stearns, Bernie Madoff, Black Swan, bond market vigilante , book value, Bretton Woods, BRICs, British Empire, business cycle, business process, buy and hold, capital asset pricing model, capital controls, central bank independence, collateralized debt obligation, commoditize, commodity super cycle, commodity trading advisor, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, diversification, diversified portfolio, equity premium, equity risk premium, family office, fiat currency, fixed income, follow your passion, full employment, George Santayana, global macro, Greenspan put, Hyman Minsky, implied volatility, index fund, inflation targeting, interest rate swap, inventory management, inverted yield curve, invisible hand, junk bonds, Kickstarter, London Interbank Offered Rate, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, market microstructure, Minsky moment, moral hazard, Myron Scholes, North Sea oil, open economy, peak oil, pension reform, Ponzi scheme, prediction markets, price discovery process, price stability, private sector deleveraging, profit motive, proprietary trading, purchasing power parity, quantitative easing, random walk, Reminiscences of a Stock Operator, reserve currency, risk free rate, risk tolerance, risk-adjusted returns, risk/return, savings glut, selection bias, Sharpe ratio, short selling, SoftBank, sovereign wealth fund, special drawing rights, statistical arbitrage, stochastic volatility, stocks for the long run, stocks for the long term, survivorship bias, tail risk, The Great Moderation, Thomas Bayes, time value of money, too big to fail, Tragedy of the Commons, transaction costs, two and twenty, unbiased observer, value at risk, Vanguard fund, yield curve, zero-sum game

Many of the countries I mentioned will actually start producing a higher inflation coupon from the pass-through of currency to CPI. A dollar rally would be a bigger risk if you were holding nominal bonds. What are your thoughts on the hedge fund space? The business is returning to what it was generation ago, and it will be better off. For most of my career, hedge funds meant global macro. From the collapse of the Bretton Woods system, to the appointment of Fed chairman Paul Volcker, until the dot-com bust, governments, policy makers, and central banks dominated financial markets. Many different things affect prices, but the weight ascribed to policy maker conduct and analysis—estimating their intentions, analyzing their speeches, reviewing their published research, etc.

Nevertheless, regardless of the rhetoric, it would be impossible to move to an SDR model (see box) within the immediate investment horizon. Special Drawing Rights (SDR) The SDR is an international reserve asset created by the International Monetary Fund (IMF) in 1969 to supplement member country reserves and to support the Bretton Woods fixed exchange rate system. The SDR is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, through the IMF, which designates members with strong external positions to purchase SDRs from members with weak external positions.

Holders of SDRs can obtain currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, through the IMF, which designates members with strong external positions to purchase SDRs from members with weak external positions. The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold, which at the time was equivalent to one U.S. dollar. After the collapse of the Bretton Woods system, the SDR was redefined as a basket of currencies. Today the basket consists of specific amounts of the euro, Japanese yen, British pound, and U.S. dollar. The U.S. dollar-value of the SDR is posted daily on the IMF’s Web site. SOURCE: International Monetary Fund (www.imf.org). With a long-term investment horizon, if you had to put all your liquid net worth in one trade for 10 years, what would it be?


pages: 422 words: 131,666

Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff

Abraham Maslow, Adam Curtis, addicted to oil, affirmative action, Alan Greenspan, Amazon Mechanical Turk, An Inconvenient Truth, anti-globalists, AOL-Time Warner, banks create money, Bear Stearns, benefit corporation, big-box store, Bretton Woods, car-free, Charles Lindbergh, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, congestion pricing, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, digital divide, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, General Motors Futurama, gentrification, Glass-Steagall Act, global village, Google Earth, greed is good, Herbert Marcuse, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, Kickstarter, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, military-industrial complex, moral hazard, multilevel marketing, mutually assured destruction, Naomi Klein, negative equity, new economy, New Urbanism, Norbert Wiener, peak oil, peer-to-peer, place-making, placebo effect, planned obsolescence, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, public intellectual, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, scientific management, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, vertical integration, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional, zero-sum game

To be fair, most European nations were having their own problems in the late 1940s. The only one of the allies that had made it through the war without significant damage was the United States. Foreseeing the need for a postcolonial world order, the Allied nations sent delegates to a meeting at a hotel in Bretton Woods, New Hampshire, in 1944 to figure out a new global monetary system. The U.S. was in a position to leverage its authority as Europe’s military savior and the only surviving industrial economy to promote its own fiscal agenda: free markets and monetary leadership. Everyone else’s currencies would be pegged to the dollar, and the world would enjoy open markets, which benefited the U.S., as the economy poised to grow the most.

Through the World Bank and the International Monetary Fund, lender nations would be in a position to assist developing nations with huge injections of cash. By accepting the loans, however, borrower nations would be obligated to open themselves to rules of free trade as established by the international lending community at Bretton Woods. This made them vulnerable to a new style of the same old colonialism. Taking a loan meant opening one’s ports to foreign ships, and one’s markets to foreign goods. It meant allowing foreign corporations to purchase land within a country, and to compete freely with any domestic company. Nations would not be allowed to impose restrictions on what sorts of goods could be imported, or which resources could be extracted.

And while protectionism has been cast, in free-market terms, as a fear-based reaction to the healthy and necessary functioning of the market, there are instances when nations might simply be attempting to protect their real territories and people from the tyranny of the balance sheet. For, even if every currency in the world was in some way pegged to U.S. money, not every gain and loss proved to be measurable in dollars and cents. For one, the economic globalization negotiated in Bretton Woods has given wealthy industrial nations the ability to pass environmental liabilities on to poorer nations. As documented in several of David Korten’s books on corporate power, wealthy nations actually take credit for this exploitation of poorer ones on the grounds that they’re bringing them prosperity.


Eastern USA by Lonely Planet

1960s counterculture, active transport: walking or cycling, Affordable Care Act / Obamacare, Albert Einstein, Apollo 11, Bear Stearns, Berlin Wall, bike sharing, Bretton Woods, British Empire, car-free, carbon footprint, centre right, Charles Lindbergh, collective bargaining, congestion pricing, Cornelius Vanderbilt, cotton gin, cuban missile crisis, Day of the Dead, desegregation, Donald Trump, East Village, fake news, Fall of the Berlin Wall, Ford Model T, Frank Gehry, gentleman farmer, gentrification, glass ceiling, Guggenheim Bilbao, haute cuisine, Hernando de Soto, illegal immigration, immigration reform, information trail, interchangeable parts, jitney, Ken Thompson, Kickstarter, license plate recognition, machine readable, Mason jar, mass immigration, McMansion, megacity, Menlo Park, Neil Armstrong, new economy, New Urbanism, obamacare, Quicken Loans, Ralph Waldo Emerson, Ronald Reagan, Rosa Parks, Saturday Night Live, Silicon Valley, Skype, the built environment, the High Line, the payments system, three-martini lunch, transcontinental railway, union organizing, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, walkable city, white flight, Works Progress Administration, young professional

The 97 wooded campsites fill up early in summer, so it’s best to reserve in advance. BRETTON WOODS & CRAWFORD NOTCH Before 1944, Bretton Woods was known primarily as a low-key retreat for wealthy visitors who patronized the majestic Mt Washington Hotel. After President Roosevelt chose the hotel for the historic conference that established a new post-WWII economic order, the town’s name took on worldwide recognition. The countryside, with Mt Washington looming above it, is as magnificent today as it was back then. The Twin Mountain-Bretton Woods Chamber of Commerce ( 800-245-8946; www.twinmountain.org; cnr US 302 & US 3, Twin Mountain) has details on the area.

During the 19th-century industrialization boom, the state’s leading city, Manchester, became such a powerhouse that its textile mills were the world’s largest. New Hampshire played a high-profile role in 1944 when president Franklin D Roosevelt gathered leaders from 44 Allied nations to remote Bretton Woods for a conference to rebuild global capitalism. It was at the Bretton Woods Conference that the World Bank and the International Monetary Fund emerged. In 1963 New Hampshire, long famed for its antitax sentiments, found another way to raise revenue – by becoming the first state in the USA to have a legal lottery. NEW HAMPSHIRE FACTS »Nicknames Granite State, White Mountain State »Population 1.3 million »Area 8968 sq miles »Capital city Concord (population 42,700) »Other cities Manchester (population 109,600) »Sales tax none »Birthplace of America’s first astronaut Alan Shepard (1923–98), The Da Vinci Code author Dan Brown (b 1964) »Home of the highest mountains in northeastern USA »Politics New England’s most Republican state »Famous for being the first to vote in US presidential primaries, which gives the state enormous political influence for its size »Most extreme state motto ‘Live Free or Die’ »Driving distances Boston to Portsmouth 60 miles, Concord to Hanover 66 miles Information Welcome centers are situated at major state border crossings, including one at the south end of I-93 that’s open 24/7.

The Twin Mountain-Bretton Woods Chamber of Commerce ( 800-245-8946; www.twinmountain.org; cnr US 302 & US 3, Twin Mountain) has details on the area. The region’s largest ski area, Bretton Woods ski station ( 603-278-3320; www.brettonwoods.com; US 302) offers downhill and cross-country skiing as well as a zipline. US 302 heads south from Bretton Woods to Crawford Notch (1773ft) through stunning mountain scenery ripe with towering cascades. Crawford Notch State Park ( 603-374-2272; www.nhstateparks.org; adult/child $4/2) maintains an extensive system of hiking trails, including short hikes around a pond and to a waterfall, and a longer trek up Mt Washington. Sleeping Mt Washington Hotel HOTEL $$$ ( 603-278-1000; www.mountwashingtonresort.com; US 302; r $149-600; ) If walls could talk, the ones here could spin quite a tale.


pages: 287 words: 86,919

Protocol: how control exists after decentralization by Alexander R. Galloway

Ada Lovelace, airport security, Alvin Toffler, Berlin Wall, bioinformatics, Bretton Woods, Charles Babbage, computer age, Computer Lib, Craig Reynolds: boids flock, Dennis Ritchie, digital nomad, discovery of DNA, disinformation, Donald Davies, double helix, Douglas Engelbart, Douglas Engelbart, easy for humans, difficult for computers, Fall of the Berlin Wall, Free Software Foundation, Grace Hopper, Hacker Ethic, Hans Moravec, informal economy, John Conway, John Markoff, John Perry Barlow, Ken Thompson, Kevin Kelly, Kickstarter, late capitalism, Lewis Mumford, linear programming, macro virus, Marshall McLuhan, means of production, Menlo Park, moral panic, mutually assured destruction, Norbert Wiener, old-boy network, OSI model, packet switching, Panopticon Jeremy Bentham, phenotype, post-industrial society, profit motive, QWERTY keyboard, RAND corporation, Ray Kurzweil, Reflections on Trusting Trust, RFC: Request For Comment, Richard Stallman, semantic web, SETI@home, stem cell, Steve Crocker, Steven Levy, Stewart Brand, Ted Nelson, telerobotics, The future is already here, the market place, theory of mind, urban planning, Vannevar Bush, Whole Earth Review, working poor, Yochai Benkler

Further to these many theoretical interventions—Foucault, Deleuze, Kittler, Mandel, Castells, Jameson, Hardt and Negri—are many dates that roughly confirm my periodization: the discovery of DNA in 1953; the economic crisis in the West during the 1970s epitomized by President Richard Nixon’s decoupling of the U.S. dollar from the gold standard on August 17, 1971 (and thus the symbolic evaporation of the Bretton Woods agreement); Charles Jencks’s claim that modern architecture ended on July 15, 1972, at 3:32 P.M.; the ARPAnet’s mandatory rollover to TCP/IP on January 1, 1983; the fall of the Berlin Wall in 1989; the crashing of AT&T’s long-distance 46. Hardt and Negri, Empire, p. 330. 47. Hardt and Negri, Empire, p. 199. 48.

., 165 Autonomous agents, 47, 160, 164, 201 Avalos, David, 227n32 Avant-garde, 194, 232 Biometrics, 113 Biopolitics, 12–13, 81, 85–87, 161 Biopower, 12, 17, 69, 84–87 “Bitch Mutant Manifesto” (VNS Matrix), 195 Blanchot, Maurice, 91n28 Bodies INCorporated (Vesna), 229 Body, 188, 190–191, 193–195, 229 security of, 179 Boggs, J. S. G., 227n32 Braden, Bob, 142–143 Brain, relationship to computers, 103 Brand, Stewart, 152n10, 160, 169 Britain, 181 British Standards Institution (BSI), 129 Brecht, Bertolt, 55 Bretton Woods agreement, 26 Broeckmann, Andreas, 197n61 Browser, 75–76, 218 Bug, computer, 185–186, 224 Bukoff, Alan, 235 Bunting, Heath, 219, 225–226 Burden, Chris, 227n32 Bureaucracy, 121, 205 Bureau of Inverse Technology, 195, 228–229 Burger, Ralf, 179 Bush, Vannevar, 18, 58–60 Byfield, Ted, 47, 50 Babbage, Charles, 188 BackOrifice, 152n11 Baker, Fred, 123 Baker, Rachel, 195 Bandwidth, 219–220, 225 Baran, Paul, 4–5, 30n2, 35, 120, 127, 140n43, 200, 204n71 Barbie Liberation Organization, 228 Barlow, John Perry, 168, 229 Barratt, Virginia, 192 Barthes, Roland, 18, 92, 143 Baudrillard, Jean, 58, 69 Baumgärtel, Tilman, 216, 219 Bazin, André, 18, 69, 78 Being Digital (Negroponte), 18 Bell, Daniel, 17 Bell Telephone Laboratories, 123, 182 Benkler, Yochai, 40 Bentham, Jeremy, 31 Berkeley, University of California at, 124.


pages: 297 words: 84,009

Big Business: A Love Letter to an American Anti-Hero by Tyler Cowen

"Friedman doctrine" OR "shareholder theory", 23andMe, Affordable Care Act / Obamacare, augmented reality, barriers to entry, Bernie Sanders, Big Tech, bitcoin, blockchain, Bretton Woods, cloud computing, cognitive dissonance, company town, compensation consultant, corporate governance, corporate social responsibility, correlation coefficient, creative destruction, crony capitalism, cryptocurrency, dark matter, David Brooks, David Graeber, don't be evil, Donald Trump, driverless car, Elon Musk, employer provided health coverage, experimental economics, Fairchild Semiconductor, fake news, Filter Bubble, financial innovation, financial intermediation, gentrification, Glass-Steagall Act, global reserve currency, global supply chain, Google Glasses, income inequality, Internet of things, invisible hand, Jeff Bezos, junk bonds, late fees, Mark Zuckerberg, mobile money, money market fund, mortgage debt, Network effects, new economy, Nicholas Carr, obamacare, offshore financial centre, passive investing, payday loans, peer-to-peer lending, Peter Thiel, pre–internet, price discrimination, profit maximization, profit motive, RAND corporation, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, Ronald Coase, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Nature of the Firm, Tim Cook: Apple, too big to fail, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, ultimatum game, WikiLeaks, women in the workforce, World Values Survey, Y Combinator

It was understood that America now had a more permanent role in protecting at least some parts of the world from oppression, and that this needed to be complemented by an international economic order that put America and American finance at the center of the global economy. And so the Bretton Woods talks and the surrounding decisions created an international economic architecture with the U.S. dollar as the central reserve currency and the International Monetary Fund and World Bank as multilateral institutions to back up an overall liberal trade and currency order. Later came the General Agreement on Tariffs and Trade, which morphed into the World Trade Organization. And even after the fixed exchange rates of Bretton Woods broke down in the early 1970s, the world was still a place where the dollar was the central reserve currency and New York City the number-one banking center, today rivaled only by London, which evolved into part of the same broad Anglo-American axis for a liberal world trading order.


pages: 252 words: 80,636

Bureaucracy by David Graeber

a long time ago in a galaxy far, far away, Affordable Care Act / Obamacare, airport security, Albert Einstein, Alvin Toffler, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, collateralized debt obligation, Columbine, conceptual framework, Corn Laws, David Graeber, Future Shock, George Gilder, High speed trading, hiring and firing, junk bonds, Kitchen Debate, late capitalism, Lewis Mumford, means of production, music of the spheres, Neal Stephenson, new economy, obamacare, Occupy movement, Oklahoma City bombing, Parkinson's law, Peter Thiel, planetary scale, pneumatic tube, post-work, price mechanism, Ronald Reagan, self-driving car, Silicon Valley, South Sea Bubble, stock buybacks, technological determinism, transcontinental railway, union organizing, urban planning, zero-sum game

The Americans in particular were much more concerned with creating structures of international administration. The very first thing the United States did, on officially taking over the reins from Great Britain after World War II, was to set up the world’s first genuinely planetary bureaucratic institutions in the United Nations and the Bretton Woods institutions—the International Monetary Fund, World Bank, and GATT, later to become the WTO. The British Empire had never attempted anything like this. They either conquered other nations, or traded with them. The Americans attempted to administer everything and everyone. British people, I’ve observed, are quite proud that they are not especially skilled at bureaucracy; Americans, in contrast, seem embarrassed by the fact that on the whole, they’re really quite good at it.14 It doesn’t fit the American self-image.

As the profits from banks and credit card companies derive more and more from “fees and penalties” levied on their customers—so much so that those living check to check can regularly expect to be charged eighty dollars for a five-dollar overdraft—financial firms have come to play by an entirely different set of rules. I once attended a conference on the crisis in the banking system where I was able to have a brief, informal chat with an economist for one of the Bretton Woods institutions (probably best I not say which). I asked him why everyone was still waiting for even one bank official to be brought to trial for any act of fraud leading up to the crash of 2008. OFFICIAL: Well, you have to understand the approach taken by U.S. prosecutors to financial fraud is always to negotiate a settlement.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"World Economic Forum" Davos, Adam Curtis, air traffic controllers' union, Alan Greenspan, AOL-Time Warner, banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, job polarisation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Larry Ellison, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, low skilled workers, manufacturing employment, market bubble, Martin Wolf, Mary Meeker, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, proprietary trading, Right to Buy, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

The plot failed when the General selected to lead the coup revealed the approaches to the House Un-American Activities Committee in a secret session in New York.140 After the Second World War, a new, comprehensive system of international finance was born. It had been brokered at the Mount Washington Hotel in Bretton Woods, New Hampshire in 1944. The main architect of the new system, and Britain’s representative at the conference, was John Maynard Keynes. Although Lord Keynes— he had been awarded a peerage in 1942—died two years later at the age of 63, the global system of finance was part of his remarkable intellectual legacy.

Most effective in reining in the banks would be a global transactions tax levied on every financial deal. The idea was first mooted by John Maynard Keynes in the 1930s as a way of discouraging speculation. It was then resuscitated by the American Nobel laureate, James Tobin, in 1972, as a way of curbing the kind of currency fluctuations which followed the break-up of the Bretton Woods system of monetary management in 1971. If the ‘Tobin’ or ‘Robin Hood tax’ had been in place in recent times, it would have limited the build up of surpluses while clawing back some of the excess profits from speculation. Even a moderate rate of tax would raise between one and 2.5 per cent of global GDP, a substantial sum that could be used to rebuild national economies.


pages: 501 words: 145,943

If Mayors Ruled the World: Dysfunctional Nations, Rising Cities by Benjamin R. Barber

"World Economic Forum" Davos, Aaron Swartz, Affordable Care Act / Obamacare, American Legislative Exchange Council, Berlin Wall, bike sharing, borderless world, Boris Johnson, Bretton Woods, British Empire, car-free, carbon footprint, Cass Sunstein, Celebration, Florida, classic study, clean water, congestion pricing, corporate governance, Crossrail, crowdsourcing, David Brooks, desegregation, Detroit bankruptcy, digital divide, digital Maoism, digital rights, disinformation, disintermediation, edge city, Edward Glaeser, Edward Snowden, Etonian, Evgeny Morozov, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, gentrification, George Gilder, ghettoisation, global pandemic, global village, Hernando de Soto, Howard Zinn, illegal immigration, In Cold Blood by Truman Capote, income inequality, informal economy, information retrieval, Jane Jacobs, Jaron Lanier, Jeff Bezos, Lewis Mumford, London Interbank Offered Rate, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, megacity, microcredit, Mikhail Gorbachev, mortgage debt, mutually assured destruction, new economy, New Urbanism, Nicholas Carr, Norman Mailer, nuclear winter, obamacare, Occupy movement, off-the-grid, Panopticon Jeremy Bentham, Peace of Westphalia, Pearl River Delta, peer-to-peer, planetary scale, plutocrats, Prenzlauer Berg, profit motive, Ralph Waldo Emerson, RFID, Richard Florida, Ronald Reagan, self-driving car, Silicon Valley, SimCity, Skype, smart cities, smart meter, Steve Jobs, Stewart Brand, technological determinism, technological solutionism, TED Talk, Telecommunications Act of 1996, The Death and Life of Great American Cities, The Fortune at the Bottom of the Pyramid, The future is already here, The Wealth of Nations by Adam Smith, Tobin tax, Tony Hsieh, trade route, UNCLOS, UNCLOS, unpaid internship, urban sprawl, Virgin Galactic, War on Poverty, zero-sum game

Yet it represents half the world’s population. With 300 delegates from cities in more than 100 countries having participated in its 2010 World Congress, it may be in a better position to nurture global cooperation, and with a far greater claim to represent ordinary citizens, than state-based and money-dominated Bretton Woods institutions such as the World Trade Organization and the International Monetary Fund ever will be. Recently, led by the city of Barcelona and the tech company Cisco, thirty cities along with allied organizations and universities established City Protocol. City Protocol “aims to define a global, cooperative framework among cities, industries and institutions with the goal to address urban challenges in a systemic way in areas such as sustainability, self-sufficiency, quality of life, competitiveness and citizen participation.”3 It will certify smart cities, create and test urban innovation models “based on standards definition, platform integration and technology and solutions development.”

There are, however, other organizations and institutions that play a role in global civic relations and deserve brief scrutiny. Chief among them are nongovernmental organizations (NGOs) and multinational corporations (MNCs) along with traditional international organizations such as the international financial institutions born of the Bretton Woods conference or those associated with the United Nations. There are also cross-border religious associations such as the Quaker American Friends Service Committee and the interfaith Catholic association Focolare, both of which are global civic associations with bighearted civic purposes including tolerance and world peace.21 Such nonstate actors are patently significant despite the fact that academic political science and the media have focused almost obsessively on states and state-based international relations.

But this hardly makes them democratic. NGO boards and leaders are pretty much self-appointed, while nonprofit identity and sometimes even nonprofit purposes tend to be opaque to the larger public in whose name NGOs operate. State-based international organizations like the United Nations and the former Bretton Woods international financial institutions (IFIs) exhibit formal democratic structures (at least to the extent member states are democratic), but as we have seen throughout this study, they are not now and are unlikely any time soon to become effective global governing bodies. It seems as if bodies such as states and state-based international institutions, though invested with democratic legitimacy, are inefficient and ineffective as agents of interdependence, while those like multinational corporations that are more globally efficient and effective are undemocratic.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

Abraham Maslow, Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, bread and circuses, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, disinformation, diversification, double helix, Edward Glaeser, financial deregulation, financial engineering, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, general purpose technology, George Akerlof, Gini coefficient, Glass-Steagall Act, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, language acquisition, Large Hadron Collider, liberal capitalism, light touch regulation, Long Term Capital Management, long term incentive plan, Louis Pasteur, low cost airline, low interest rates, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, meritocracy, Mikhail Gorbachev, millennium bug, Money creation, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, power law, price discrimination, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, Savings and loan crisis, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, systems thinking, tail risk, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, three-masted sailing ship, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, work culture , working poor, world market for maybe five computers, zero-sum game, éminence grise

A generation-long sequence of mistakes, omissions and delusion was about to receive its come-uppance. The journey begins As early as the 1970s, bankers began to challenge the rules and regulations inherited from the Great Depression, the New Deal, the Second World War and those accompanying the Bretton Woods system of fixed exchange rates. The collapse of Bretton Woods itself between 1971 and 1973 was an important trigger. Policy-makers and bankers themselves had always been more attached to competition than regulation – it was intellectually and philosophically more acceptable, and it afforded huge opportunities to make serious money.

., 29–30, 65–6, 71, 253 apprenticeships, 10, 295 Arculus, Sir David, 180 Argentina, 368 Aristotle, 39, 274 ‘arms race’ effects, 105 Arup Group, 66, 67, 93 Asda, 93 Ashcroft, Lord, 344 Ashdown, Paddy, 141 Asian Tiger exports, 149, 208, 355 AT & T, 133–4 Atari, 30 BAA, 8, 257–8 baby boomer generation, 34, 372–3 ‘Baby P’ case, 10, 325–6 Bagehot, Walter, 156–7 Bailey, Bob, 16, 25 Baker, Kenneth, 276 Baldacci, Emanuele, 367 Baldwin, Stanley, 315 Balls, Ed, 138, 147, 338 Bank of America, 152, 158, 175, 192 Bank of England, 4, 7–8, 129, 148, 180, 208, 250, 339, 359; lender-of-last-resort function, 157, 158, 160; Monetary Policy Committee, 185, 186, 264; reserve requirements scrapped (1979), 161, 208 Bank of International Settlements (BIS), 169, 182 Bank of Scotland, 186, 251 bankers, 4–5, 25–6, 62, 63–4, 180, 188; errors that caused the crash, 188–96, 197–204; gambling culture, 7, 8; pay see pay of executives and bankers Bankers Trust (New York), 140, 167 banking and banks: see also under entries for individual organisations; bail-out of, 3, 7–8, 19, 24, 138, 152–3, 172, 175, 176, 181, 204–5, 210, 389, 392; balance sheets, 7, 160, 164, 165, 191, 208, 210; bank runs, 9, 156–7, 158, 175–6, 202; borrow short and lend long principle, 154, 155–6, 157, 158–9; capital ratios, 151, 158, 162–3, 169, 170, 207, 208; credit-rating agencies and, 151, 196, 207; deposit insurance and, 158, 160; diversification, 154–5, 157, 165, 199, 354; fairness/desert and, 64, 206–7; interbank money markets, 164, 170, 176, 187–8, 202, 204; investment banks, 6, 28, 42, 101, 103, 150–1, 158, 165, 166, 170, 172–6, 195–6, 207; maturity transformation, 155–6, 157, 158–9; need for network of specialist banks, 251–2, 265, 371; nineteenth-century collapses, 156–7; post-crunch deleverage pressures, 359; principles and strategies, 154–6, 157; regulation of see regulation; relationship finance, 244, 251–2, 256–7; remoteness of management, 173–4; required reforms of, 205–10, 251–2, 371; short-term structure of lending, 33; banking and banks – continued socially vital role of, 155, 157; subsidiaries and special purpose vehicles, 181; unproductive entrepreneurship and, 28, 101, 103; vast assets/loans/profits, 32, 138, 147, 170, 172, 201; zero loyalty of front-line staff, 174 Barclay brothers, 327 Barclays, 24, 176, 177–8, 181, 215, 296, 363 Barker, Kate, 185 Basel system, 158, 160, 163, 169, 170–1, 196, 385 Baumol, William, 101, 111, 116, 253, 256 Bayerische Landesbank, 196 Bear Stearns, 150, 152, 158–9, 166, 173–4, 187 Bebchuk, Lucian, 198 Becht, Bart, 82–3 Beckwith, John Lionel, 179 behavioural psychology, 44, 47–50, 59–61 Bekar, Clifford, 108, 263 Bell, Alexander Graham, 221 Ben & Jerry’s, 266 Benz, Matthias, 86 Berlusconi, Silvio, 317, 328 Bettelheim, Bruno, 86 Better Government Initiative, 313, 336–7 Better Regulation Task Force, 180 Bhagwati, Jagwad, 163 Big Bang (1986), 90, 162 bin Mahfouz, Khalid Salim, 333 biotechnology, 109, 229, 240, 263, 268 Birt, John, 324 Bischoff Inquiry, 178 BISTRO (broad index secured trust offering), 169, 170, 196 Black, Fisher, 191 Blair, Tony, 5, 17, 138, 141–3, 144, 148–9, 276–7, 313, 328, 342; centralisation of power, 14–15, 313, 334, 337, 341; Iraq War and, 14, 36, 144; Rupert Murdoch and, 318; neo-conservative economics and, 388; ‘third-way’ as enthronement of resignation, 389–90; welfare reforms, 81 Blanchflower, Danny, 264–5 Blanden, Jo, 283–4 Blankfein, Lloyd, 42, 63, 168 BMW, 91 Boeing, 136, 256 Bologna University, 261 Born, Brooksley, 182–3 Bowen, Jeremy, 323 Boyle, Susan, 314 BP, 216–17, 392 Branson, Richard, 30 Brazil, 354–5, 385 Bretton Woods system, 159 Brinkley, Ian, 233 Briscoe, Simon, 294 Bristol University, 263 British Airways (BA), 30, 91 British Broadcasting Company (BBC), 321, 322, 323, 329, 330–1, 350, 389 British National Party (BNP), 16, 24–5, 82 Britishness, 15–16, 124, 392–3, 395 Brompton folding bicycle, 103, 105 Brooks, Clem, 281, 282 Brown, Gordon, 5, 12, 141, 178, 302, 314, 328; centralisation of power, 14, 334, 337, 341; as Chancellor, 138, 143, 145–8, 215, 245; deal with Blair (1994), 148; Gillian Duffy blunder by, 394; general election (2010) and, 20, 378, 394; neo-conservative economics and, 144–8, 388; as visionless, 391; Where There is Greed: Margaret Thatcher and the Betrayal of Britain’s Future (1989), 144 Browne, John, 216 Brunel, Isambard Kingdom, 126 Buffett, Warren, 116, 173, 222 Building Schools for the Future programme, 371 building societies, demutualisation of, 156, 186 Buiter, Wilhelm, 172 Burrows, Paul, 59 Buscombe, Baroness, 332 Bush, George W., 17, 36, 135, 177 Cabinet Office, 218–19, 336, 337 Cable, Vincent, 220 Cambridge University, 9, 363 Cameron, David, 20, 179, 233–4, 235, 318, 338, 342; ‘Big Society’ policy, 19–20, 234, 271, 280 Campbell, Alastair, 141, 142, 224, 312 Canada, 121, 354, 358–9, 383 capital controls, abolition of, 32, 161 capitalism: see also entrepreneurs; innovation; amorality of, 16–19; ‘arms race’ effects, 105; boom and bust cycle, 181–7, 392; deregulation (from 1970s), 159–63, 388; fairness and, ix, x, 23–7, 41, 106, 122–3, 206–7, 210, 249, 385, 386, 394; as immutable force of nature, ix, 23, 40–2; incumbent firms, 29–30, 31, 105, 106, 110, 111–12, 253–5, 257, 297; interconnectedness of markets, 200–2, 204; knowledge-entrepreneurship dynamic, 27–8, 31, 103, 110–11, 112–13; liquidity as totemic, 199, 200, 202, 240, 243; need for ‘circuit breakers’, 197, 199, 202, 203; network theory and, 199–204, 206; required reforms of, 205–9, 215–16; stakeholder, x, 148–9; undue influence of, 32–3 Carlaw, Kenneth, 108, 263 Carnegie, Andrew, 195, 303 cars, motor, 91, 108, 109, 134, 269 Castells, Manuel, 317 Cayne, Jimmy, 173–4 CCTV cameras, 10 celebrity culture, 282, 314 central banks, 154, 157, 158, 160, 182, 185, 187, 208; see also Bank of England; Federal Reserve, 169–70, 176, 177, 183 Cerberus Capital Management, 177 Cervantes, Miguel de, 274 Channel 4, 330, 350 Charles I, King of England, 124–5 Charter One Financial, 150 chavs, mockery of, 25, 83, 272, 286–8 child poverty, 12, 21, 74–5, 83, 278, 279, 288–90, 291 China, x, 101, 112, 140, 144, 160, 226, 230, 354–5, 385; consumption levels, 375–6, 379, 380, 381; economic conflict with USA, 376–7, 378–80, 381, 382, 383; export led growth, 36, 169, 208, 226, 355–6, 375–7, 379–81, 382–3; rigged exchange rates, 36, 169, 355, 377, 378–9; surpluses of capital and, 149, 154, 169, 171, 208, 226, 375; unfairness of world system and, 383, 385 Christianity, 53, 54, 352, 353 Church of England, 128 Churchill, Winston, 138, 273, 313 Churchill Insurance, 150 Cisco, 253 Citigroup, 152, 158, 172, 177, 184, 202, 203, 242, 247 city academies, 278, 307 City of London, 34, 137, 138, 178–9, 252, 359; as incumbent elite, 14, 26, 31, 32–3, 210, 249, 355; in late nineteenth-century, 128–30; light-touch regulation of, 5, 32, 138, 145, 146–7, 151, 162, 187, 198–9; New Labour and, x–xi, 5, 19, 22, 142, 144–5, 355; remuneration levels see pay of executives and bankers civic engagement, 86, 313 civil service, 13, 221, 273, 312, 343 Clasper, Mike, 178 Clayton Act (USA, 1914), 133 Clegg, Nick, 22, 218, 318, 327–8, 342, 391 Clifton, Pete, 321 Clinton, Bill, 140, 177, 183 coalition government (from May 2010), 14, 20, 22, 37, 307, 311, 343, 346, 390–2; abolition of child trust fund, 302; capital spending cuts, 370–1; deficit reduction programme, xi, 19, 34, 214, 227, 357, 360–1, 364, 369–71, 373, 390–2; emergency budget (June 2010), 369–70; market fundamentalism and, 370; political reform commitment, 35, 341, 343–4, 346, 350, 390, 391; proposed financial reforms, 208, 209, 245, 252, 371; repudiation of Keynesian economics, xi, 390–1 Cohan, William, 158–9 Cohen, Ronald, 12, 245 collapse/crash of financial system, x, xi, 4, 9, 41, 144, 146, 152–4, 158–9, 168; costs of, 7, 19, 138, 152–3, 172, 214–15; errors responsible for, 136, 187–96, 197–204; global interconnectedness, 375, 382–3; lessening of internationalism following, 376–83; need to learn from/understand, 36–7; predictions/warnings of, 148, 153, 180, 182–5; recommended policy responses, 215–16; results of previous credit crunches, 358, 359–60, 361–2 collateralised debt obligations (CDOs), 155, 167–8, 174 colonialism, 109, 124 Commodity Future Trading Commission, 182–3 communism, collapse of in Eastern Europe, 16, 19, 135, 140, 163 competition, 29, 30, 33, 51, 156, 185, 186, 207–8, 251; see also ‘open-access societies’; City of London and, 160, 178, 179, 198–9; deregulated banking and, 160, 161, 163, 164, 178, 179, 181; European Union and, 251, 258, 259; fairness and, 89–90, 99, 272; incumbent elites/oligarchs and, 104, 114, 129–30, 131–4, 257; innovation and, 40, 114, 257–60; national authorities/regimes, 201–2, 257–60, 316, 318; state facilitation of, 31 Competition Commission, 257–8 computer games, 233 Confederation of British Industry (CBI), 4, 6–7 Conservative Party, xi, 5, 11, 14, 97–8, 220, 343, 378; broken Britain claims, 16, 227, 271; budget deficit and, 19, 224, 357, 360–1, 368, 379; City/private sector funding of, 179, 257, 344; decline of class-based politics, 341; deregulation and, 32, 160, 161; fairness and, 83, 302, 374, 390; general election (1992) and, 140–1; general election (2010) and, 20, 97, 227, 234, 271, 357, 374, 379, 390; Conservative Party – continued government policies (1979-97), 32, 81, 275–6, 290; inheritance/wealth taxes and, 74, 302–3; market fundamentalism and, 5, 17, 138, 147, 160, 161; poverty and, 21, 279; reduced/small state policy, 20, 22, 233–4, 235 construction industry, 5, 33, 268 consumer goods, types of, 266–7 Continental Illinois collapse, 152, 162 Convention on Modern Liberty, 340 Cook, Robin, 142 Cootner, Paul, 194–5 Copenhagen climate change talks (2009), 226, 231, 385 Corporate Leadership Council, US, 93 Corzine, Jon, 177 county markets, pre-twentieth-century, 90 Coutts, Ken, 363 Cowell, Simon, 314, 315 ‘creative destruction’ process, 111, 112, 134 creative industries, 11, 71, 355 credit cards, 64, 354 credit crunch: see collapse/crash of financial system credit default swaps, 151, 152, 166–8, 170, 171, 175, 176, 191, 203, 207 Crédit Lyonnais collapse, 152 credit-rating agencies, 151, 165, 175, 196, 197, 248, 269, 362, 388; funding of, 151, 196, 207 criminal activity/allegations, 7, 101, 103, 104–5, 138, 167–8 Crosby, James, 178 Cuba, 61 culture, British, 12, 187, 282, 314 Dacre, Paul, 324, 326, 329 Daily Mail, 218, 286, 288, 315, 324, 325–7, 339, 342 Daily Telegraph, 288, 317, 319, 327 Darling, Alistair, 149, 204, 252 Darwin, Charles, 31 Data Monitor, 186 Davies, Howard, 198 Davies, Nick, Flat Earth News, 319, 321, 323–4, 326, 331–2 de Gaulle, Charles, 65 debt, 33, 155, 209, 351–63; corporate/commercial, 8, 29, 181, 245, 248, 352, 354, 359, 363, 374; moral attitudes towards, 351–4, 357, 360–1; necessity of, 155, 351, 353, 354; private, 5, 186, 187, 210, 226, 279–80, 354–7, 359, 363, 373; public, 9, 34, 164, 166, 167, 182, 203, 214, 224–6, 356–7, 362–3, 375, 388, 393; sustainable level of, 356–7, 368–9 Defence Advanced Research Projects Agency (DARPA), 265 defence and armed forces, 34, 372 deficit, public, 4, 34, 213, 224–6, 335, 364–74; coalition’s reduction programme, xi, 19, 34, 214, 227, 357, 360–1, 364, 369–71, 373, 390–2, 393; need for fiscal policy, 224–5, 226, 357–8, 364, 365–9, 370, 374; speed of reduction of, 213, 224–5, 360–1, 368, 371 Delingpole, James, 287 Delong, Brad, 27, 106 democracy, 13–15, 235, 310–16, 333–48; centralisation of power and, 14–15, 35, 217, 313, 334, 337, 342; fair process and, 86, 89, 96–9; incumbent elites and, 35, 99; industrial revolution and, 128; media undermining of, 315–16, 317–18, 321–9, 333, 350; ‘open-access societies’ and, 136, 314 Democratic Party, US, 18, 140, 183, 379 Demos, 289 Deng Xiao Ping, 140 Denham, John, 21 deprivation and disadvantage, 10, 34, 288–93, 307–8, 393; low-earning households, 11–12, 13, 291, 361; weight of babies and, 13; young children and, 74–5, 83, 288–90 derivatives, 140, 145, 150–1, 164–8, 171, 175, 188, 207, 209; City of London and, 32, 137, 150–1, 157, 199; mathematical models (‘quants’) and, 188, 191; regulation and, 183, 197–8, 199 desert, due, concept of, 4, 24, 38–43, 45–7, 50–63, 64–8, 73–7, 80–2, 223, 395; see also effort, discretionary; proportionality; big finance and, 40–2, 82, 167, 174, 176, 210; debt and, 351–2; diplomacy/international relations and, 385–6; Enlightenment notions of, 53–6, 58–9, 112; luck and, 70, 73–7, 273; poverty relief systems and, 80–2, 277–8; productive entrepreneurship and, 102–3, 105–6, 112, 222, 392–3; taxation and, 40, 220, 266 Deutsche Bank, 170 developing countries, 71–2, 160, 354–5, 375, 376, 385 Diamond, Bob, 24 Dickens, Charles, 353 digitalisation, 34, 231, 320, 349, 350 Doepke, Matthias, 115–16 dot.com bubble, 9, 193 Drugs Advisory Panel, 11 Duffy, Gillian, 394 Durham University, 263 Dworkin, Ronald, 70 Dyson, James, 28, 33 East India Company, 130 Easyjet, 28, 233 eBay, 136 economic theory, 43–4, 188–9, 366; see also Keynesian economics; market fundamentalism economies of scale, 130–1, 254–5, 258 The Economist, 326, 330, 349 economy, British: see also capitalism; financial system, British; annual consumption levels, 375; balance of payments, 363–4; as ‘big firm’ economy, 254; change in landscape of trading partners, 230–1; coalition capital spending cuts, 370–1; collapse of tax base, 224, 368; cumulative loss of output caused by crash, 138, 153, 172, 214–15; desired level of state involvement, 234–5; domination of market fundamentalism, 16–17; economic boom, 3–4, 5–6, 12, 143, 173, 181–7, 244–5; fall in volatility, 365; fiscal deficit, 368; fiscal policy, 208, 224–5, 226, 357–8, 364–9, 370, 374; growth and, 9–10, 214–15, 218–19, 224, 359, 363; inefficient public spending, 335; investment in ‘intangibles’, 232–3; in late nineteenth-century, 128–30; ‘leading-edge’ sectors, 218–19; need for engaged long term ownership, 240–4, 249–51; as non-saver, 36, 354; potential new markets/opportunities, 231–3; public-private sector interdependence and, 219–22, 229–30, 261, 265–6, 391, 392; required reforms of, 20, 239–44, 249–52, 264–6, 371–4 see also national ecosystem of innovation; ‘specialising sectors’, 219; urgent need for reform, 36–7; volatility of, 297–8; vulnerability of after credit crunch, 358–64 economy, world: acute shortfall of demand, 375–6; Asian and/or OPEC capital surpluses and, 149, 153–4, 169, 171, 208, 226, 354, 375; conflicts of interest and, 137, 138; deregulation (from 1970s), 159–63; emerging powers’ attitudes to, 226; entrenched elites and, 137–8, 210; fall in volatility, 365; international institutions as unfair, 383, 385; London/New York axis, 149, 150–1, 157–8, 160, 187, 202; need for international cooperation, 357–8, 379–80, 381–3, 384, 385–6; post-crunch deleverage pressures, 359–60, 374–5; protectionism dangers, 36, 358, 376–7, 378, 379, 382, 386; savers/non-savers imbalance, 36, 169, 208, 222, 355, 356, 375–6, 378–83; shift of wealth from West to East, 36, 383–4; sovereign debt crises, 167, 203, 214; unheeded warnings, 182–5; wrecking of European ERM, 140, 144 Edinburgh University, 145 education, 10, 20–1, 128, 131, 272–4, 276, 278, 292–5, 304–8, 343; Building Schools for the Future programme, 371; cognitive and mental skills, 288–90, 304–6; private, 13, 114, 264–5, 272–3, 276, 283–4, 293–5, 304, 306 effort, discretionary, 50, 53, 54–5, 58–60, 80, 90–1, 114, 134; see also desert, due, concept of; fair process and, 91–4; indispensability and, 65–7; innovation and invention, 62, 65, 102–3, 105–6, 112, 117, 131, 223, 262–3, 392–3; luck and, 26–7, 65, 67, 70, 71, 73–4, 75–7; productive/unproductive, 43, 46–7, 51–2, 62, 64–5, 102–3, 392–3; proportionate reward for, 26, 39–40, 44, 47, 61, 74, 76–7, 84, 122, 272, 273, 2 84 egalitarianism, 27, 53–4, 55–6, 61, 75, 78–80, 144, 341, 343; Enlightenment equal worth concept, 53, 55, 59–60 Ehrenfeld, Rachel, 333 Eisman, Steve, 207 electoral politics: see also general election (6 May 2010); general elections, 97, 138, 277, 315; fair process and, 96–9; franchise, 128; general election (1992), x, 138, 140–1, 144, 148, 277; general election (1997), x, 138, 141 electricity, 134, 228, 256 electronic trading, 105 elites, incumbent, 23, 31–3, 99, 131; City of London, 14, 26, 31, 32–3, 210, 249, 355; competition and, 104, 113, 114, 129–30, 131–4, 257; democracy and, 35, 99; Enlightenment and, 122; history of (from 1880s), 131–4; history of in Britain (to 1900), 124–30; innovation and, 29–30, 110, 111–12, 113, 114, 115, 116; modern big finance and, 135, 137–8, 180, 210, 387–9; in ‘natural states’, 111, 113, 114–15, 116, 123–4, 127; New Labour’s failure to challenge, x–xi, 14, 22, 388, 389–90; world economy and, 137–8, 210 EMI, 28, 247, 248 employment and unemployment, 6, 75, 291–3, 295, 300, 373, 393; employment insurance concept, 298–9, 301, 374; lifelong learning schemes, 300, 301; lifelong savings plans, 300; unemployment benefit, 81, 281 Engels, Friedrich, 121–2 English language as lingua franca, 124 Enlightenment, European, 22, 30–1, 146, 261, 314–15; economics and, 104, 108–9, 116–17, 121–3; notions of fairness/desert, 53–6, 58–9, 112, 122–3, 394; science and technology and, 31, 108–9, 112–13, 116–17, 121, 126–7 Enron affair, 147 entrepreneurs: see also innovation; productive entrepreneurship; capitalist knowledge dynamic, 27–8, 31, 110–11, 112–13; challenges of the status quo, 29–30; Conservative reforms (1979-97) and, 275; private capital and, 241; public-private sector interdependence and, 219–22, 229–30, 261, 265–6, 391, 392; rent-seeking and, 61–2, 63, 78, 84, 101, 105, 112, 113–14, 116, 129, 135, 180; unproductive, 28–9, 33, 61–2, 63, 78, 84, 101–2, 103–5, 180 environmental issues, 35–6, 71–2, 102, 226, 228, 231, 236, 385, 390, 394; due desert and, 68; German Greens and, 269 Erie Railroad Company, 133 Essex County Council, 325, 332 European Commission, 298 European Exchange Rate Mechanism (ERM), 140, 144, 166 European Union (EU), 11, 82, 179, 379–80, 383–4, 385; British media and, 15, 328, 378; Competition Commissioner, 251, 258, 259; scepticism towards, 15, 36, 328, 377, 378, 386 eurozone, 377 Fabian Society, 302–3 factory system, 126 fairness: see also desert, due, concept of; proportionality; abuse/playing of system and, 24–5, 27; asset fairness proposals, 301–3, 304; behavioural psychology and, 44, 47–50, 59–61; Blair’s conservative view of, 143; Britishness and, 15–16, 392–3, 395; capitalism and, ix, x, 23–7, 41, 106, 122–3, 206–7, 210, 249, 385, 386, 394; challenges to political left, 78–83; coalition government (from May 2010) and, 22, 37; commonly held attitudes, 44, 45–7; deficit reduction and, 226, 227, 374; economic and social determinism and, 56–8; Enlightenment notions of, 53–6, 58–9, 112, 122–3, 394; fair process, 84–94, 96, 98–9, 272; as foundation of morality, 24, 26, 45, 50; individual responsibility and, 39, 78–9; inequality in Britain, 78, 80, 275–6, 277–8, 342; international relations and, 226, 385–6; ‘Just World Delusion’, 83; luck and, 72–7; management-employee relationships, 90–2; models/frameworks of, 43–58; need for shared understanding of, 25, 37, 43; partisanship about, 42–3; politicians/political parties and, 22, 83, 271–2, 302–3, 374, 391–2; popular support for NHS and, 75, 77, 283; pre-Enlightenment notions, 52–3; shared capitalism and, 66, 92–3; state facilitation of, ix–x, 391–2, 394–5; welfare benefits to migrants and, 81–2, 282, 283, 284 Farnborough Sixth Form College, 294 Federal Reserve, 169–70, 176, 177, 183 Fees Act (1891), 128 Fertile Crescent, 106 feudalism, European, 53–4, 74, 104, 105 financial instruments, 103, 148, 157, 167–8 Financial Services and Markets Act (2001), 198 Financial Services Authority (FSA), 24, 147, 162, 178, 198–9, 208 financial system, British: see also capitalism; economy, British; Asian and/or OPEC capital surpluses and, 149, 154, 354; big finance as entrenched elite, 136, 137–8, 176, 178–80, 210, 387–9; declining support for entrepreneurship, 241; deregulation (1971), 161; fees and commissions, 33; importance of liquidity, 240, 243; lack of data on, 241; London/New York axis, 149, 150–1, 157–8, 160, 187, 202; massive growth of, 137, 138, 209, 219; need for tax reform, 209–10; regulation and see regulation; required reforms to companies, 249–50; savings institutions’ share holdings, 240–1; short termism of markets, 241, 242–3; unfairness of, 138, 210 Financial Times, 12, 149, 294, 330, 349, 361 Fink, Stanley, 179 fiscal policy, 208, 224–5, 226, 357–8, 364–9, 374; coalition rejection of, 370 fish stocks, conservation of, 394 Fitch (credit-rating agencies), 248 flexicurity social system, 299–301, 304, 374 Forbes’ annual list, 30 Ford, Henry, 195, 302 foreign exchange markets, 32, 161, 164, 165, 168, 363, 367; China’s rigged exchange rate, 36, 169, 355, 377, 378–9; currency options, 166, 191; eurozone, 377 foreign takeovers of British firms, 8, 388 Fortune magazine, 94 Foster, Sir Christopher, 313 foundation schools, 307 France, 51–2, 123–4, 163, 372, 375, 377 free trade, 163, 334, 379 Frey, Bruno, 60, 86 Friedman, Benjamin, 282–3 Fukuyama, Francis, 140 Fuld, Dick, 192 Future Jobs Fund, 373 G20 countries, 209, 358, 368, 374 Galliano, John, 143 Gardner, Howard, 274, 305–6 gated communities, 13 Gates, Bill, 71 Gates, Bill (Senior), 222 Gaussian distribution, 190–1, 194 ‘gearing’, 6 general election (6 May 2010), 97, 142, 179, 214, 217, 227, 234, 271, 314, 318, 327–8, 334, 378; Gillian Duffy incident, 394; result of, xi, 20, 345–6, 390 ‘generalised autoregressive conditional heteroskedasicity’ (GARCH), 194 genetically modified crops, 232 Germany, 36, 63, 244, 262, 269, 375–6, 379, 380; export led growth, 355–6, 375, 381–2; Fraunhofer Institutes, 252, 264; Greek bail-out and, 377; pre-1945 period, 128, 129, 134, 382, 383 Gieve, Sir John, 339–40 Gilligan, Andrew, 329 Gladwell, Malcolm, 76–7 Glasgow University, 323 Glass-Steagall Act, 162, 170, 202–3 Glastonbury festival, 143 globalisation, 32, 98, 140, 143, 144, 153–4, 163, 182, 297, 363, 366, 380 Goldman Sachs, 42, 63, 103, 150, 167–8, 174, 176, 177, 205 Goodwin, Sir Fred, 7, 150, 176, 340 Google, 131, 136, 253, 255, 258, 262 Goolsbee, Austin, 52 Gorbachev, Mikhail, 140 Gough, Ian, 79 Gould, Jay, 133 Gould, Philip, 142 government: see also democracy; political system, British; cabinet government, 312, 334, 337; centralisation of power, 14–15, 35, 217, 313, 334, 337, 341, 342; control of news agenda, 14, 224, 313; disregard of House of Commons, 14–15, 223, 339, 345; Number 10 Downing Street as new royal court, 14, 337, 338, 346, 347; press officers/secretaries, 14, 180, 224, 312; Prime Ministerial power, 337, 344, 345, 346 GPS navigation systems, 233, 265 Gray, Elisha, 221 Great Depression, 159, 162, 205, 362 Greece: classical, 25, 26, 38, 39, 44–5, 52–3, 59, 96, 107, 108; crisis and bail-out (2010), 167, 371, 377, 378 Green, Sir Philip, 12, 29, 33 Green Investment Bank, proposed, 252, 371 Greenhead College, Huddersfield, 294 Greenspan, Alan, 145–6, 165, 177, 183, 184, 197–8 Gregory, James, 277 growth, economic: Britain and, 9–10, 214–15, 219, 221, 359, 364; education and, 305–6; export led growth, 36, 169, 208, 226, 355–6, 375–7, 378–83; social investment and, 280–1 GSK, 219, 254 the Guardian, 319, 330, 349 Gupta, Sanjeev, 367 Gutenberg, Johannes, 110–11 Habsburg Empire, 127 Haines, Joe, 312 Haji-Ioannous, Stelios, 28 Haldane, Andrew, 8, 151, 153, 193, 214, 215 the Halifax, 186, 251 Hamilton, Lewis, 64, 65 Hammersmith and Fulham, Borough of, 167 Hampton, Sir Philip, 173 Hands, Guy, 28, 178, 246–8 Hanley, Lynsey, 291, 293, 302 Hanushek, Eric, 305–6 Hart, Betty, 289 Harvard University, 47, 62, 198 Hashimoto administration in Japan, 362 Hastings, Max, 217–18 Hauser, Marc, 47–50 Hawley, Michael, 65–6 Hayward, Tony, 216–17 HBOS, 157, 158, 178, 251 health and well-being, 9, 75, 77, 106, 232, 233, 290–1; see also National Health Service (NHS) Heckman, James, 290 hedge funds, 6, 21, 103, 157–8, 167–8, 172, 203, 205, 206, 240; collapses of, 152, 173–4, 187, 202; as destabilisers, 166–7, 168; destruction of ERM, 140, 144, 166; near collapse of LTCM, 169–70, 183, 193, 200–1 hedging, 164, 165–6 Heinz, Henry John, 302 Hermes fund management company, 242 Herrman, Edwina, 179 Herstatt Bank collapse, 152 Hetherington, Mark, 84 Hewitt, Patricia, 180 Hewlett-Packard, 30 Hills Report on social housing, 290 Hilton, Paris, 304 Himmelfarb, Gertrude, 146 Hirst, Damien, 12 history, economic, 121–36, 166, 285–6, 353–4 Hobhouse, Leonard, 220, 222, 234, 235, 261, 266 Hobsbawm, Eric, 100 Hoffman, Elizabeth, 60 Holland, 113, 124, 230 Honda, 91, 269 Hong Kong, 168 Hopkins, Harry, 300 Horton, Tim, 277 House of Commons, 14–15, 223, 312–13, 337–9, 345 House of Lords, 15, 128, 129, 312, 334, 344, 346–7 housing, social, 10, 289, 290–1, 292, 308–9 housing cost credits, 308–9 HSBC, 181, 251 Huhne, Chris, 346 Hunt family, sale of cattle herds, 201 Hurka, Thomas, 45–6 Hutton, Will, works of, x; The State We’re In, x, 148–9 IBM, 29, 164, 254 Iceland, 7, 138 ICT industry, 9, 29–30, 109, 134, 135–6, 182, 229 immigration, 11, 143, 326, 328, 342, 343, 386, 394; from Eastern Europe, 82, 281–2, 283; welfare state and, 81–2, 281–2, 283, 284 incapacity benefit, 27 the Independent, 93, 330 Independent Safeguarding Authority, 339 India, 144, 226, 230, 254, 354–5 individual responsibility, 17, 38, 39, 78–9 individualism, 54, 57, 66, 111, 221, 281, 341, 366; capitalism/free market theories and, ix, 17, 19, 27, 40, 145, 221, 234–5 Indonesia, 168 Industrial and Commercial Finance Corporation (now 3i), 250 industrial revolution, 28, 112, 115, 121–3, 124, 126–8, 130, 315 inflation, 6, 32, 355, 364, 365; targets, 163, 165, 208, 359 Ingham, Bernard, 312 innovation: see also entrepreneurs; national ecosystem of innovation; as collective and social, 40, 131, 219–22, 261, 265–6, 388; comparisons between countries, 67; competition and, 40, 114, 257–60; development times, 240, 243; discretionary effort and, 62, 65, 102–3, 105–6, 131, 222, 392–3; dissemination of knowledge and, 110–11, 112–13, 219–22, 265–6; due desert and, 40, 62, 67, 112, 117; ‘financial innovation’, 63–4, 138, 147, 149, 153–4, 182; general-purpose technologies (GPTs), 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384; high taxation as deterrent, 104, 105; history of, 107–17, 121–7, 131–4, 221; increased pace of advance, 228–9, 230, 266–7; incremental, 108, 254, 256; incumbent elites and, 29–30, 104, 106, 109, 111–12, 113, 114, 115, 116, 257; large firms and, 251–2, 254–5; as natural to humans, 106–7, 274; need for network of specialist banks, 251–2, 265, 371; in ‘open-access societies’, 109–13, 114, 116–17, 122–3, 126–7, 131, 136, 315; patents and copyright, 102, 103, 105, 110, 260–1, 263; private enterprise and, 100–1; regulation and, 268–70; risk-taking and, 6, 103, 111, 189; short term investment culture and, 33, 242–3, 244; small firms and, 252, 253–4, 255–6; universities and, 261–5 Innovation Fund, 21, 251, 252 Institute of Fiscal Studies, 275–6, 363, 368–9, 372 Institute of Government, 334, 335, 337, 343 insurance, 165–6, 187, 240, 242 Intel, 255, 256 intellectual property, 260–1 interest rates, 164, 191, 352–3, 354, 357, 359, 360, 361, 362, 367, 380 internal combustion engine, 28, 109, 134 International Monetary Fund (IMF), 9, 152–3, 177–8, 187, 207, 226, 383, 384; Asian currency crisis (1997) and, 168–9; proposed bank levy and financial activities tax, 209; support for fiscal policy, 367 internet, 11, 28, 52, 109, 134, 227, 256, 265; news and politics on, 316–17, 321, 349; pay-walls, 316, 349; as threat to print media, 324, 331, 349 iPods, 105, 143 Iraq War, 14–15, 18, 36, 144, 329 Ireland, 138 iron steamships, 126 Islam, 352, 353 Islamic fundamentalism, 283, 384 Israel, 251, 322–3 Italy, 101, 103, 317, 328 ITN, 330, 331 James, Howell, 180 Japan, 36, 67, 140, 163, 168, 244, 369, 375, 376, 385, 386; credit crunch (1989-92), 359–60, 361–2, 382; debt levels, 356, 362, 363; incumbent elites in early twentieth-century, 134; Tokyo Bay, 254; Top Runner programme, 269 Jenkins, Roger, 296 Jobcentre Plus, 300 Jobs, Steve, 29–30, 65–6, 71 John Lewis Group, 66, 67, 93, 246 Johnson, Boris, 179 Johnson, Simon, 177 Jones, Tom, 242 Joseph Rowntree Foundation, 21, 278–9 journalism, 318–21, 323–4, 326–7 Jovanovic, Boyan, 256 JP Morgan, 169, 191–2, 195–6 judges, 15 justice systems, 30–1, 44–5, 49; symbolised by pair of scales, 4, 40 Kahneman, Daniel, 94–5 Kant, Immanuel, 73, 112, 274 Kay, John, 175 Kennedy, Helena, 340 Keynesian economics, x, xi, 184, 190, 196–7, 354, 362, 390–1 Kindleberger, Charles, 184 King, Mervyn, 213 Kinnock, Neil, 142 kitemarking, need for, 267 Klenow, Peter, 52 Knetsch, Jack, 94–5 Knight, Frank, Risk, Uncertainty and Profit (1921), 189, 191, 196–7 knowledge: capitalist advance of, 27–8, 31, 110–11, 112–13; public investment in learning, 28, 31, 40, 131, 220, 235, 261, 265 knowledge economy, 8, 11–12, 34, 135–6, 229–33, 258, 273–4, 341, 366; credit growth and, 355; graduate entry to, 295; large firms and, 251–2, 254–5; small firms and, 252, 253–4, 255–6, 261; state facilitation of, 219–22, 229–30 Koizumi administration in Japan, 362 Koo, Richard, 360, 361–2 Kuper, Simon, 352 Kwak, James, 64, 177 labour market, 52, 62, 83, 95; flexibility, 5, 275, 276, 299, 364–5, 387 laissez-faire ideology, 153, 198–9, 259 Laker, Freddie, 30 Lambert, Richard, 6–7 language acquisition and cognitive development, 288, 289 Large Hadron Collider, 263 Latin American debt crisis, 164 Lavoisier, Antoine, 31 Lazarus, Edmund, 179 Leahy, Sir Terry, 295 Learning and Skills Council, 282, 300 left wing politics, modern, 17, 38, 78–83 Lehman Brothers, 150, 152, 165, 170, 181, 192, 204 lender-of-last-resort function, 155, 158, 160, 187 Lerner, Melvin, 83 leverage, 6, 29, 154–6, 157, 158, 172, 179, 180, 198, 204, 209–10, 254, 363; disguised on balance sheet, 181, 195; effect on of credit crunches, 358, 359, 360, 361, 374–5; excess/massive levels, 7, 147–8, 149, 150–1, 158, 168, 170, 187, 192, 197, 203; need for reform of, 206, 207, 208; private equity and, 245–6, 247 Lewis, Jemima, 282, 287 Lewis, Joe, 12 libel laws, 332–3, 348–9 Liberal Democrats, xi, 11, 98, 141, 343, 360–1, 368; general election (2010) and, 97, 142, 179, 271, 390 libertarianism, 234 Likierman, Sir Andrew, 180 limited liability (introduced 1855), 353–4, 363 Lind, Allan, 85 Lindert, Peter, 280–1 Lipsey, Richard, 108, 263 Lisbon earthquake (1755), 54 Lisbon Treaty Constitution, 328 literacy and numeracy, 20–1 livestock fairs, pre-twentieth-century, 90 Lloyds Bank, 176, 178, 186, 202, 204, 251, 259 Lo, Andrew, 195 loan sharks, illegal, 291 local government, 307, 347–8 Locke, John, 54–5, 59 London School of Economics (LSE), 246 London Stock Exchange, 90, 162 London Underground, financing of, 336, 389 lone parent families, 292 Long Term Capital Management (LTCM), 169–70, 183, 193, 194, 200–1 long-term incentive plans (LTIPs), 6 Loomes, Graham, 59 luck, 23, 26–7, 38, 39, 40, 41, 67, 68, 69–77, 222, 273, 393–4; diplomacy/international relations and, 385–6; disadvantaged children and, 74–5, 83, 288–90; executive pay and, 138; taxation and, 73–4, 75, 78, 303 Luxembourg, 138 MacDonald, Ramsey, 315 Machiavelli, Niccolo, 62 Machin, Steve, 283–4 Macmillan Committee into City (1931), 179 Madoff, Bernie, 7 mafia, Italian, 101, 104–5 Major, John, 138, 180, 279, 334 Malaysia, 168 malls, out-of-town, 143 Mandelbrot, Benoit, 194, 195 Mandelson, Peter, 21, 24, 142, 148, 220 manufacturing sector, decline of, 5, 8, 219, 272, 292, 341, 363 Manza, Jeff, 281, 282 Marconi, 142–3 market fundamentalism, 9–19, 32–3, 40–2, 366; belief in efficiency of markets, 188–9, 190, 193, 194, 235–9, 366; coalition government (from May 2010) and, 370; collapse of, 3–4, 7–9, 19, 20, 219–20, 235, 392; Conservative Party and, 5, 17, 138, 147, 160, 161; domination of, 5–6, 14, 16–17, 163, 364–5, 387–90; likely resurgence of, 5, 8; New Labour and, x–xi, 5, 19, 144–9, 388, 389–90; post-communist fiasco in Russia, 135; rejection of fiscal policy, 224–5, 364–5, 367 mark-to-market accounting convention, 175 Marland, Lord Jonathan, 179 Marquand, David, 328 Marsh, Jodie, 64, 65 Marx, Karl, 56–8, 121–2 Maslow’s hierarchy of needs, 232, 274–5 mass production, 109, 134, 182 Masters, Blythe, 196 mathematical models (‘quants’), 105, 149, 151, 152, 165, 169, 188, 190–6, 203; extensions and elaborations, 194; Gaussian distribution, 190–1, 194; JP Morgan and, 195–6 Matthewson, Sir George (former chair of RBS), 25 Maude, Francis, 180 Mayhew, Henry, 285–6 McCartney, Paul, 247 McGoldrick, Mark, 174 McKinsey Global Institute, 253, 358–9, 360, 363 McQueen, Alexander, 143 media, mainstream, 6, 35, 312, 315–20, 321–32, 348–50; commoditisation of information, 318–20, 321; communications technology and, 316, 320, 349; domination of state by, 14, 16, 223–4, 338, 339, 343; fanatical anti-Europeanism, 15, 328, 378; foreign/tax exile ownership of, 218; hysterical tabloid campaigns, 10–11, 298, 319–20; ‘info-capitalism’, 317–18, 327, 328, 342; lauding of celebrity, 281, 314; modern 24/7 news agenda, 13, 224, 321, 343; regional newspapers, 331; as setter of agenda/narrative, 327–31, 342; television news, 330–1; undermining of democracy, 315–16, 317–18, 321–9, 333, 350; urgent need for reform, 35, 218, 344, 348–50, 391; view of poverty as deserved, 25, 53, 83, 281, 286; weakness of foreign coverage, 322, 323, 330 Mencken, H.L., 311 mergers and takeovers, 8, 21, 33, 92, 245, 251, 258, 259, 388 Merkel, Angela, 381–2 Merrill Lynch, 150, 170, 175, 192 Merton, Robert, 169, 191 Meucci, Antonnio, 221 Mexico, 30, 385 Meyer, Christopher, 332 Michalek, Richard, 175 Microsoft, 71, 114, 136, 253, 254, 258–9 Milburn, Alan, 273 Miles, David, 186–7 Milgram, Stanley, 200 millennium bug, 319 Miller, David, 70, 76, 77 minimum wage, 142, 278 Minsky, Hyman, 183, 185 Mirror newspapers, 319, 329 Mlodinow, Leonard, 72–3 MMR vaccine, 327 mobile phones, 30, 134, 143, 229, 349 modernity, 54–5, 104 Mokyr, Joel, 112 monarchy, 15, 312, 336 Mondragon, 94 monetary policy, 154, 182, 184, 185, 208, 362, 367 monopolies, 74, 102, 103, 160, 314; history of, 104, 113, 124, 125–6, 130–4; in the media, 30, 317, 318, 331, 350; modern new wave of, 35, 135–6, 137–8, 201–2, 258–9; ‘oligarchs’, 30, 65, 104 Monopolies and Mergers Commission, 258, 318 Moody’s (credit-ratings agency), 151, 175 morality, 16–27, 37, 44–54, 70, 73; see also desert, due, concept of; fairness; proportionality; debt and, 351–4, 357, 360–1 Morgan, JP, 67 Morgan, Piers, 329 Morgan Stanley, 150 Mulas-Granados, Carlos, 367 Murdoch, James, 389 Murdoch, Rupert, 317–18, 320, 327 Murphy, Kevin, 62, 63 Murray, Jim ‘Mad Dog’, 321 Myners, Paul, 340 Nash bargaining solution, 60 National Audit Office, 340 National Child Development Study, 289–90 national ecosystem of innovation, 33–4, 65, 103, 206, 218, 221, 239–44, 255–9, 374; state facilitation of, 102, 219–22, 229–30, 233, 251–2, 258–66, 269–70, 392 National Health Service (NHS), 21, 27, 34, 92, 265, 277, 336, 371–2; popular support for, 75, 77, 283 national insurance system, 81, 277, 302 national strategy for neighbourhood renewal, 278 Navigation Acts, abolition of, 126 Neiman, Susan, 18–19 neo-conservatism, 17–18, 144–9, 387–90 network theory, 199–201, 202–4, 206; Pareto curve and, 201–2 New Economics Foundation, 62 New Industry New Jobs strategy, 21 New Labour: budget deficit and, 224, 335, 360, 368, 369; business friendly/promarket policies, x–xi, 139–40, 142, 145, 146–7, 162, 198–9, 382; City of London and, x–xi, 5, 19, 22, 142–3, 144–5, 355; decline of class-based politics, 341; failure to challenge elites, x–xi, 14, 22, 388, 389–90; general election (1992) and, 138, 140–1, 144, 148, 277; general election (2005) and, 97; general election (2010) and, 20, 271, 334, 374, 378; light-touch regulation and, 138, 145, 146–7, 162, 198–9; New Industry New Jobs strategy, 21; one-off tax on bank bonuses, 26, 179, 249; record in government, 10–11, 19, 20–2, 220, 276–80, 302, 306, 334–6, 366–7, 389–90; reforms to by ‘modernisers’, 141; responses to newspaper campaigns, 11 New York markets, 140, 152, 162; Asian and/or OPEC capital surpluses and, 169, 171, 354; London/New York axis, 149, 150–1, 157–8, 160, 188, 202 Newsweek, 174 Newton, Isaac, 31, 127, 190 NHS Direct, 372 Nicoli, Eric, 13 non-executive directors (NEDs), 249–50 Nordhaus, William, 260 Nordic countries, 262; Iceland, 7, 138; Norway, 281; Sweden, 264, 281 North, Douglas, 113, 116, 129–30 Northern Rock, 9, 156, 157, 158, 186, 187–8, 202, 204, 251, 340–1 Norton Publishing, 93 Nozick, Robert, 234, 235 nuclear non-proliferation, 226, 384, 394 Nussbaum, Martha, 79 Obama, Barack, 18, 183, 380, 382–3, 394–5 the Observer, 141, 294, 327 Office for Budget Responsibility, 360 Office of Fair Trading (OFT), 257, 258 OFSTED, 276 oil production, 322; BP Gulf of Mexico disaster (2010), 216–17, 392; finite stocks and, 230, 384; OPEC, 149, 161, 171; price increase (early 1970s), 161; in USA, 130, 131, 132 Olsen, Ken, 29 Olympics (2012), 114 open markets, 29, 30, 31, 40, 89, 92, 100–1, 366, 377, 379, 382, 384; see also ‘open-access societies’; as determinants of value, 51–2, 62; fairness and, 60–1, 89–91, 94–6; ‘reference prices’ and, 94–6 ‘open-access societies’, 134, 135, 258, 272, 273, 275, 276, 280–1, 394; Britain as ‘open-access society’ (to 1850), 124, 126–7; democracy and, 136, 314; Enlightenment and, 30–1, 314–15, 394; innovation and invention in, 109–13, 114, 116–17, 122–3, 126–7, 131, 136, 315; partial political opening in, 129–30; US New Freedom programme, 132–3 opium production, 102 options, 166, 188, 191 Orange County derivatives losses, 167 Organisation for Economic Co-operation and Development (OECD), 180, 337, 373 Orwell, George, 37 Osborne, George, 147, 208, 224, 245, 302, 338 Overend, Gurney and Co., 156–7 Oxbridge/top university entry, 293–4, 306 Oxford University, 261 Page, Scott, 204 Paine, Tom, 347 Pareto, Vilfredo, 201–2 Paribas, 152, 187 Parkinson, Lance-Bombardier Ben, 13 participation, political, 35, 86, 96, 99 Paulson, Henry, 177 Paulson, John, 103, 167–8 pay of executives and bankers, 3–4, 5, 6–7, 22, 66–7, 138, 387; bonuses, 6, 25–6, 41, 174–5, 176, 179, 208, 242, 249, 388; high levels/rises of, 6–7, 13, 25, 82–3, 94, 172–6, 216, 296, 387, 393; Peter Mandelson on, 24; post-crash/bail-outs, 176, 216; in private equity houses, 248; remuneration committees, 6, 82, 83, 176; shared capitalism and, 66, 93; spurious justifications for, 42, 78, 82–3, 94, 176, 216 pension, state, 81, 372, 373 pension funds, 240, 242 Pettis, Michael, 379–80 pharmaceutical industry, 219, 255, 263, 265, 267–8 Phelps, Edmund, 275 philanthropy and charitable giving, 13, 25, 280 Philippines, 168 Philippon, Thomas, 172–3 Philips Electronics, Royal, 256 Pimco, 177 piracy, 101–2 Plato, 39, 44 Player, Gary, 76 pluralist state/society, x, 35, 99, 113, 233, 331, 350, 394 Poland, 67, 254 political parties, 13–14, 340, 341, 345, 390; see also under entries for individual parties political system, British: see also democracy; centralised constitution, 14–15, 35, 217, 334; coalitions as a good thing, 345–6; decline of class-based politics, 341; devolving of power to Cardiff and Edinburgh, 15, 334; expenses scandal, 3, 14, 217, 313, 341; history of (to late nineteenth-century), 124–30; lack of departmental coordination, 335, 336, 337; long-term policy making and, 217; monarchy and, 15, 312, 336; politicians’ lack of experience outside politics, 338; required reforms of, 344–8; select committee system, 339–40; settlement (of 1689), 125; sovereignty and, 223, 346, 347, 378; urgent need for reform, 35, 36–7, 218, 344; voter-politician disengagement, 217–18, 310, 311, 313–14, 340 Pommerehne, Werner, 60 population levels, world, 36 Portsmouth Football Club, 352 Portugal, 108, 109, 121, 377 poverty, 278–9; child development and, 288–90; circumstantial causes of, 26, 283–4; Conservative Party and, 279; ‘deserving’/’undeserving’ poor, 276, 277–8, 280, 284, 297, 301; Enlightenment views on, 53, 55–6; need for asset ownership, 301–3, 304; political left and, 78–83; the poor viewed as a race apart, 285–7; as relative not absolute, 55, 84; Adam Smith on, 55, 84; structure of market economy and, 78–9, 83; view that the poor deserve to be poor, 25, 52–3, 80, 83, 281, 285–8, 297, 301, 387; worldwide, 383, 384 Power2010 website, 340–1 PR companies and media, 322, 323 Press Complaints Commission (PCC), 325, 327, 331–2, 348 preventative medicine, 371 Price, Lance, 328, 340 Price, Mark, 93 Prince, Chuck, 184 printing press, 109, 110–11 prisoners, early release of, 11 private-equity firms, 6, 28–9, 158, 172, 177, 179, 205, 244–9, 374 Procter & Gamble, 167, 255 productive entrepreneurship, 6, 22–3, 28, 29–30, 33, 61–2, 63, 78, 84, 136, 298; in British history (to 1850), 28, 124, 126–7, 129; due desert/fairness and, 102–3, 105–6, 112, 223, 272, 393; general-purpose technologies (GPTs) and, 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384 property market: baby boomer generation and, 372–3; Barker Review, 185; boom in, 5, 143, 161, 183–4, 185–7, 221; bust (1989-91), 161, 163; buy-to-let market, 186; commercial property, 7, 356, 359, 363; demutualisation of building societies, 156, 186; deregulation (1971) and, 161; Japanese crunch (1989-92) and, 361–2; need for tax on profits from home ownership, 308–9, 373–4; property as national obsession, 187; residential mortgages, 7, 183–4, 186, 356, 359, 363; securitised loans based mortgages, 171, 186, 188; shadow banking system and, 171, 172; ‘subprime’ mortgages, 64, 152, 161, 186, 203 proportionality, 4, 24, 26, 35, 38, 39–40, 44–6, 51, 84, 218; see also desert, due, concept of; contributory/discretionary benefits and, 63; diplomacy/ international relations and, 385–6; job seeker’s allowance as transgression of, 81; left wing politics and, 80; luck and, 73–7, 273; policy responses to crash and, 215–16; poverty relief systems and, 80–1; profit and, 40, 388; types of entrepreneurship and, 61–2, 63 protectionism, 36, 358, 376–7, 378, 379, 382, 386 Prussia, 128 Public Accounts Committee, 340 Purnell, James, 338 quantitative easing, 176 Quayle, Dan, 177 race, disadvantage and, 290 railways, 9, 28, 105, 109–10, 126 Rand, Ayn, 145, 234 Rawls, John, 57, 58, 63, 73, 78 Reagan, Ronald, 135, 163 recession, xi, 3, 8, 9, 138, 153, 210, 223, 335; of 1979-81 period, 161; efficacy of fiscal policy, 367–8; VAT decrease (2009) and, 366–7 reciprocity, 43, 45, 82, 86, 90, 143, 271, 304, 382; see also desert, due, concept of; proportionality Reckitt Benckiser, 82–3 Regional Development Agencies, 21 regulation: see also Bank of England; Financial Services Authority (FSA); Bank of International Settlements (BIS), 169, 182; Basel system, 158, 160, 163, 169, 170–1, 196, 385; big as beautiful in global banking, 201–2; Big Bang (1986), 90, 162; by-passing of, 137, 187; capital requirements/ratios, 162–3, 170–1, 208; dismantling of post-war system, 149, 158, 159–63; economists’ doubts over deregulation, 163; example of China, 160; failure to prevent crash, 154, 197, 198–9; Glass-Steagall abolition (1999), 170, 202–3; light-touch, 5, 32, 138, 151, 162, 198–9; New Deal rules (1930s), 159, 162; in pharmaceutical industry, 267–8; as pro-business tool, 268–70; proposed Financial Policy Committee, 208; required reforms of, 267, 269–70, 376, 377, 384, 392; reserve requirements scrapped (1979), 208; task of banking authorities, 157; Top Runner programme in Japan, 269 Reinhart, Carmen, 214, 356 Repo 105 technique, 181 Reshef, Ariell, 172–3 Reuters, 322, 331 riches and wealth, 11–13, 272–3, 283–4, 387–8; see also pay of executives and bankers; the rich as deserving of their wealth, 25–6, 52, 278, 296–7 Rickards, James, 194 risk, 149, 158, 165, 298–302, 352–3; credit default swaps and, 151, 152, 166–8, 170, 171, 175, 176, 191, 203, 207; derivatives and see derivatives; distinction between uncertainty and, 189–90, 191, 192–3, 196–7; employment insurance concept, 298–9, 301, 374; management, 165, 170, 171, 189, 191–2, 193–4, 195–6, 202, 203, 210, 354; securitisation and, 32, 147, 165, 169, 171, 186, 188, 196; structured investment vehicles and, 151, 165, 169, 171, 188; value at risk (VaR), 171, 192, 195, 196 Risley, Todd, 289 Ritchie, Andrew, 103 Ritter, Scott, 329 Robinson, Sir Gerry, 295 Rogoff, Ken, 214, 356 rogue states, 36 Rolling Stones, 247 Rolls-Royce, 219, 231 Rome, classical, 45, 74, 108, 116 Roosevelt, Franklin D., 133, 300 Rothermere, Viscount, 327 Rousseau, Jean-Jacques, 56, 58, 112 Rousseau, Peter, 256 Rowling, J.K., 64, 65 Rowthorn, Robert, 292, 363 Royal Bank of Scotland (RBS), 25, 150, 152, 157, 173, 181, 199, 251, 259; collapse of, 7, 137, 150, 158, 175–6, 202, 203, 204; Sir Fred Goodwin and, 7, 150, 176, 340 Rubin, Robert, 174, 177, 183 rule of law, x, 4, 220, 235 Russell, Bertrand, 189 Russia, 127, 134–5, 169, 201, 354–5, 385; fall of communism, 135, 140; oligarchs, 30, 65, 135 Rwandan genocide, 71 Ryanair, 233 sailing ships, three-masted, 108 Sandbrook, Dominic, 22 Sands, Peter (CEO of Standard Chartered Bank), 26 Sarkozy, Nicolas, 51, 377 Sassoon, Sir James, 178 Scholes, Myron, 169, 191, 193 Schumpeter, Joseph, 62, 67, 111 science and technology: capitalist dynamism and, 27–8, 31, 112–13; digitalisation, 34, 231, 320, 349, 350; the Enlightenment and, 31, 108–9, 112–13, 116–17, 121, 126–7; general-purpose technologies (GPTs), 107–11, 112, 117, 126–7, 134, 228–9, 256, 261, 384; increased pace of advance, 228–9, 253, 297; nanotechnology, 232; New Labour improvements, 21; new opportunities and, 33–4, 228–9, 231–3; new technologies, 232, 233, 240; universities and, 261–5 Scotland, devolving of power to, 15, 334 Scott, James, 114–15 Scott Bader, 93 Scott Trust, 327 Second World War, 134, 313 Securities and Exchanges Commission, 151, 167–8 securitisation, 32, 147, 165, 169, 171, 186, 187, 196 self-determination, 85–6 self-employment, 86 self-interest, 59, 60, 78 Sen, Amartya, 51, 232, 275 service sector, 8, 291, 341, 355 shadow banking system, 148, 153, 157–8, 170, 171, 172, 187 Shakespeare, William, 39, 274, 351 shareholders, 156, 197, 216–17, 240–4, 250 Sher, George, 46, 50, 51 Sherman Act (USA, 1890), 133 Sherraden, Michael, 301 Shiller, Robert, 43, 298, 299 Shimer, Robert, 299 Shleifer, Andrei, 62, 63, 92 short selling, 103 Sicilian mafia, 101, 105 Simon, Herbert, 222 Simpson, George, 142–3 single mothers, 17, 53, 287 sixth form education, 306 Sky (broadcasting company), 30, 318, 330, 389 Skype, 253 Slim, Carlos, 30 Sloan School of Management, 195 Slumdog Millionaire, 283 Smith, Adam, 55, 84, 104, 112, 121, 122, 126, 145–6 Smith, John, 148 Snoddy, Ray, 322 Snow, John, 177 social capital, 88–9, 92 social class, 78, 130, 230, 304, 343, 388; childcare and, 278, 288–90; continued importance of, 271, 283–96; decline of class-based politics, 341; education and, 13, 17, 223, 264–5, 272–3, 274, 276, 292–5, 304, 308; historical development of, 56–8, 109, 115–16, 122, 123–5, 127–8, 199; New Labour and, 271, 277–9; working-class opinion, 16, 143 social investment, 10, 19, 20–1, 279, 280–1 social polarisation, 9–16, 34–5, 223, 271–4, 282–5, 286–97, 342; Conservative reforms (1979-97) and, 275–6; New Labour and, 277–9; private education and, 13, 223, 264–5, 272–3, 276, 283–4, 293–5, 304; required reforms for reduction of, 297–309 social security benefits, 277, 278, 299–301, 328; contributory, 63, 81, 283; flexicurity social system, 299–301, 304, 374; to immigrants, 81–2, 282, 283, 284; job seeker’s allowance, 81, 281, 298, 301; New Labour and ‘undeserving’ claimants, 143, 277–8; non-contributory, 63, 79, 81, 82; targeting of/two-tier system, 277, 281 socialism, 22, 32, 38, 75, 138, 144, 145, 394 Soham murder case, 10, 339 Solomon Brothers, 173 Sony, 254–5 Soros, George, 166 Sorrell, Martin, 349 Soskice, David, 342–3 South Korea, 168, 358–9 South Sea Bubble, 125–6 Spain, 123–4, 207, 358–9, 371, 377 Spamann, Holger, 198 special purpose vehicles, 181 Spitzer, Matthew, 60 sport, cheating in, 23 stakeholder capitalism, x, 148–9 Standard Oil, 130–1, 132 state, British: anti-statism, 20, 22, 233–4, 235, 311; big finance’s penetration of, 176, 178–80; ‘choice architecture’ and, 238, 252; desired level of involvement, 234–5; domination of by media, 14, 16, 221, 338, 339, 343; facilitation of fairness, ix–x, 391–2, 394–5; investment in knowledge, 28, 31, 40, 220, 235, 261, 265; need for government as employer of last resort, 300; need for hybrid financial system, 244, 249–52; need for intervention in markets, 219–22, 229–30, 235–9, 252, 392; need for reshaping of, 34; pluralism, x, 35, 99, 113, 233, 331, 350, 394; public ownership, 32, 240; target-setting in, 91–2; threats to civil liberty and, 340 steam engine, 110, 126 Steinmueller, W.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Alan Greenspan, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Economies as a whole could borrow more readily from foreigners, enabling all countries to smooth over temporary difficulties more easily and poorer ones that invested wisely to catch up with richer ones more quickly. Countries also decided to merge their money in order to insulate themselves against currency crises. These had periodically struck Europe since the breakdown of the Bretton Woods system of exchange rates pegged to the US dollar in the early 1970s. Its replacement in Europe, the exchange-rate mechanism (ERM) of the European Monetary System (EMS), involved trying to limit currencies’ fluctuations around pegs to Germany’s Deutsche Mark. But after European governments lifted capital controls in the 1980s, allowing money to flow freely in and out of the economy, the ERM became increasingly vulnerable to destabilising speculation.

This deceptively stable environment tricked policymakers into thinking they could plan economic development while fine-tuning demand to maintain full employment. But the system broke down in the early 1970s as the post-war economic boom ran out of steam, efforts to boost employment resulted in ever higher inflation, the Bretton Woods system of currencies pegged to the US dollar collapsed and the oil shocks of 1973–74 resulted in the previously unthinkable combination of stagnation and inflation: stagflation. In this new stop-go world, controlling inflation became the top priority of economic policy and monetary policy the preferred tool for economic management, with central banks causing short, sharp recessions by raising interest rates whenever inflation looked like getting out of hand.

Even if they lent these funds on at an interest rate of say 50 per cent – ie, 1 per cent a week – for two weeks the overall impact on the cost of borrowing for Greek banks would be small and hence affordable. Clearly, then, a restructuring was possible even against the wishes of the ECB. 256 See, for example, Lorenzo Bini Smaghi, “Private sector involvement: From (good) theory to (bad) practice”, speech at the Reinventing Bretton Woods Committee, Berlin, 6 June 2011. http://www.ecb.int/press/key/date/2011/html/sp110606.en.html Bini Smaghi argues that restructurings have typically been “disorderly, harmful and fraught with difficulties”. But a comprehensive IMF study (Udaibir Das, Michael Papaioannou, and Christoph Trebesch, “Sovereign Debt Restructurings 1950 - 2010: Literature Survey, Data, and Stylized Facts”, IMF Working Paper 12/203, 1 August 2012) argues that this isn’t necessarily so.


pages: 298 words: 95,668

Milton Friedman: A Biography by Lanny Ebenstein

Abraham Wald, affirmative action, Alan Greenspan, banking crisis, Berlin Wall, Bretton Woods, business cycle, classic study, Deng Xiaoping, Fall of the Berlin Wall, fiat currency, floating exchange rates, Francis Fukuyama: the end of history, full employment, Hernando de Soto, hiring and firing, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Arrow, Lao Tzu, liquidity trap, means of production, Modern Monetary Theory, Mont Pelerin Society, Myron Scholes, Pareto efficiency, Paul Samuelson, Phillips curve, Ponzi scheme, price stability, public intellectual, rent control, road to serfdom, Robert Bork, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, school choice, school vouchers, secular stagnation, Simon Kuznets, stem cell, The Chicago School, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thorstein Veblen, zero-sum game

Three days later, Milton took a new position, with the Statistical Research Group, a wartime government research entity headquartered in New York at Columbia University. Looking back, the only thing that he regrets about leaving the Treasury is that if he had stayed, he might have participated in the Bretton Woods conference in 1945, which shaped postwar international financial institutions. The Statistical Research Group (SRG) was high in the nation’s scientific brain trust. It was made up of eighteen principals and about forty supporting staff, although typically no more than about ten principals worked at a time.

It doesn’t worry me a bit that China and Japan hold so much U.S. debt. In a way, it seems foolish for them to do it because they get lower returns than they might elsewhere. But that is their business. Interviewer: By pegging their currencies to the dollar, haven’t China and Japan de facto established what is in essence “Bretton Woods II”—that is, a stable new currency regime among most of the world’s largest trading partners? Friedman: Yes, for the moment, this is sort of true. But they are not really committed to it. The Chinese currency is starting to appreciate. The Japanese currency has moved quite a lot. China’s productive system draws upon the other East Asian countries to a great extent.


pages: 323 words: 95,188

The Year That Changed the World: The Untold Story Behind the Fall of the Berlin Wall by Michael Meyer

"World Economic Forum" Davos, Ayatollah Khomeini, bank run, Berlin Wall, Bonfire of the Vanities, Bretton Woods, BRICs, call centre, disinformation, Dr. Strangelove, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, guns versus butter model, haute couture, mass immigration, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Prenzlauer Berg, public intellectual, Ronald Reagan, Ronald Reagan: Tear down this wall, union organizing

The federal loans that generations of young Americans have relied upon for college began with the National Defense Education Act of 1958, a crash program launched after Sputnik to win the “brain race” against the Soviets. The California dream rode the tides of defense spending pouring into the state, swelling its population from 5 million before the Cold War began to more than 30 million by the time it ended. A whole new economic order evolved within the Cold War’s shadow: Bretton Woods. The World Bank and International Monetary Fund. The United Nations. The U.S. Agency for International Development. The Marshall Plan, which helped rebuild postwar Europe. Postwar investment in Japan and the network of international trade and security organizations that spanned the globe, from SEATO to NATO to the Warsaw Pact, Cominterm and the Common Market cum European Union.

See Velvet Revolution (Prague; 1989) Bloc That Failed, The (Gati), 39, 224 BMW, 72, 161, 228–229 Bogomolov, Oleg, 63 Bölling, Klaus, 121 Bolshevik Revolution (1917), 65–66, 85 Bond, James, 21 Bonfire of the Vanities (Wolfe), 53 border guards at the Berlin Wall, 3, 5–10, 15–17, 27, 97–105 fall of Berlin Wall and, 5–10, 97–104, 168–170 Boyd, Gerald M., 222 Brain race, 21 Brandenburg Gate, Berlin Wall, 3, 15, 170, 204 Brazil, 217 Breslau, Karen, 167 Bretton Woods Agreement, 21 Brezhnev, Leonid, 39, 45, 71, 91, 225–226 Brezhnev Doctrine, 39, 45, 63, 91, 227 Brian Lapping Associates, 228 Brokaw, Tom, 9, 183 Brookings Institution, Nuclear Audit, 22–23, 223–224 Bucharest, 105–111 Ceaucescu’s home, 198–200 Ceaucescu’s palace, 107, 198–199 fall of communism and, 193–201 Warsaw Pact summit (1989), 91–95 See also Romania Buckley, William F., Jr., 223 Budapest fall of communism in Hungary, 28, 29–39, 41–42, 46, 61, 66–74, 125, 128, 137, 139–140, 143–145 People’s Picnic (1989), 66–67 reburial of Imre Nagy, 84–88 See also Hungary Bulgaria, fall of communism in, 190–191 Bulletin of Atomic Scientists, 227 Bush, George H.


pages: 400 words: 88,647

Frugal Innovation: How to Do Better With Less by Jaideep Prabhu Navi Radjou

3D printing, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, barriers to entry, Baxter: Rethink Robotics, behavioural economics, benefit corporation, Bretton Woods, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, circular economy, cloud computing, collaborative consumption, collaborative economy, Computer Numeric Control, connected car, corporate social responsibility, creative destruction, crowdsourcing, disruptive innovation, driverless car, Elon Musk, fail fast, financial exclusion, financial innovation, gamification, global supply chain, IKEA effect, income inequality, industrial robot, intangible asset, Internet of things, job satisfaction, Khan Academy, Kickstarter, late fees, Lean Startup, low cost airline, M-Pesa, Mahatma Gandhi, Marc Benioff, megacity, minimum viable product, more computing power than Apollo, new economy, payday loans, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, planned obsolescence, precision agriculture, race to the bottom, reshoring, risk tolerance, Ronald Coase, Salesforce, scientific management, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, software as a service, standardized shipping container, Steve Jobs, supply-chain management, tacit knowledge, TaskRabbit, TED Talk, The Fortune at the Bottom of the Pyramid, the long tail, The Nature of the Firm, Tony Fadell, transaction costs, Travis Kalanick, unbanked and underbanked, underbanked, value engineering, vertical integration, women in the workforce, work culture , X Prize, yield management, Zipcar

A 2014 American Council for an Energy-Efficient Economy (ACEEE) study estimates that reducing electricity consumption by 1 kilowatt-hour costs utilities just 2.8 cents; up to one-third of the cost to generate 1 kilowatt-hour of electricity at a power plant. Consumption is important for well-being but can erode it For most of the 20th century, the West’s dominant economic model placed consumption at the heart of growth. Since the Bretton Woods Conference in 1944, a nation’s gross domestic product (GDP) has become the benchmark for measuring economic health and progress. Consumption is normally the largest component of GDP, consisting of household expenditure on durable and non-durable goods and services. From this viewpoint, the more people consume, the greater the incentive for firms to produce.

Index 3D printers 18, 47–9, 50, 128, 132, 134, 152, 166 3D printing 9, 47–9, 50, 51, 52, 132, 151–2, 206 4D revolution 53–4 A Accor 172–6 Accountable Care Solutions 211 Active Health Management 211 adaptability 90, 154 additive manufacturing 47–9 ADEO Group 127, 128 advertising 24, 61–3, 71–2 aerosols 95, 96 Aetna 32, 208–13, 213, 215 Affinnova 31, 141 affordability 3, 82, 136, 153, 161, 172, 194, 216 in emerging markets 4, 56, 120, 198, 206 health-care innovations 202–3 and quality 1, 3, 9, 12, 75, 120–1, 198, 206 affordances 120–1 Africa 40, 56, 146, 161, 164, 197 financial services 198, 201 IBM in 200–2 innovation potential 200–2 as market 12, 169, 197–8, 199 ageing populations 109, 194 ageing workforce 13, 29, 49, 153 agility 26, 41, 69, 75, 143, 169–70 in innovation 21, 27, 33–4, 42–3, 72, 154, 167, 173, 176, 206 in manufacturing 44–5, 49, 52 Akerman, Dave 136 Air Liquide 205–7 air pollution 74, 78, 187, 200 Airbnb 10, 17, 85, 136, 140, 163, 173, 175 aircraft 68, 149 parts 48–9, 49, 121, 151–2 airlines 60, 121 Alteryx 32 Amazon 46, 60–1, 150 Amelio, Gil 68–9 AmEx (American Express) 161–2, 167, 215 Amgen 45 Anderson, Chris 18 Android operating system 130, 172 AOL 42 Apple 17, 24, 68–9, 71, 99, 150, 155, 172 Apple TV 62 apps 99, 106, 107, 108, 111–12, 124–5, 148 Arduino 135 Ariely, Dan 132 Arla Foods 37 artists 88, 93 ASDA 158–9, 159 Asia 161, 164, 200 aspirations 88–9, 119–20, 198 assets digitising 65–6 flexing see flexing assets reusing 92–3 sharing 159–61, 167 AT&T 21 ATMI 88 Auchan 13, 126, 128, 215 austerity 5, 6–7, 23 Australia 5, 62, 146, 200 Autodesk 48, 92, 132, 196–7 Automatic 131 automation 49–50 Avon 146 AXA 116 Ayed, Anne-Christine 75, 76 B B Corps (Benefit Corporations) 82 B2B (business-to-business) sectors 25–6, 34, 57, 142, 161, 175, 212 B2C (business-to-consumer) companies 25, 34, 212 Badrinath, Vivek 174 BAE Systems 48–9 Ban, Shigeru 93 Bangladesh 66 Bank of America 155 banking services 13, 17, 57, 161–2, 198 see also financial services Banner Health Network 210 Banzi, Massimo 135 Barber, Michael 181 Barclays 100, 115, 117, 215 Barry, Mike 183–4, 187 Bayer 66–7 Bazin, Sébastien 173 BBVA 125 Béhar, Yves 110 Belgium 103 Benefit Corporations (B Corps) 82 Benelux countries 7, 103 Benetton 67 Benoît, Paul 89 Berg 89 Bergh, Chip 122–3 Bertolini, Mark 208–9, 212, 213, 217 BHAGs (“big, hairy audacious” goals) 90–1, 158–9, 179, 191–2 Biasiotta, Bruno 123 big data 32–3, 117, 150 big-box retailers 9, 18, 137 “bigger is better” 2, 8, 14–15, 104 biomimetics (or biomimicry) 84 Birol, Jacques 163–4 BlaBlaCar 10, 85, 163 Blanchard, David 94, 96 Bloomberg, Michael 18, 79, 133 BMI (business model innovation) 192 BMW 47, 62–3, 86 BNP Paribas 168–9 Boeing 92, 144 Bolland, Marc 180–1, 186 Bontha, Ven 59 Booz & Company (now Strategy&) 6, 22, 23, 28, 171 Bosch 156 Boston Consulting Group 55, 64, 116, 145, 217 Botsman, Rachel 10 bottom-of-pyramid (BOP) customers 161, 203, 207 Bouygues Immobilier 90 BP 169 BPS (by-product synergy) 159 Brabeck-Letmathe, Peter 44, 78 brand ambassadors 143, 145 brand loyalty 46, 100, 204, 215 branding 15, 108, 119–20, 156 brands 1, 71, 139, 141, 143, 154, 165–6, 215 “conversations” with 129, 131–2 working together 154, 156–7 Braungart, Michael 82 Brazil 40, 74, 102, 146, 188, 199 emerging market 4, 12, 38, 146, 197, 199 Bretton Woods Conference (1944) 104 Brin, Sergey 63 BringBee 85 Bross, Matt 37–8, 171 Brown, Tim 121 Brusson, Nicolas 163 BT 37–8, 171 BTG (British Technology Group) 171 budgeting, personal 124–5 budgets 6–7, 36, 42 Buffett, Warren 138 buildings 196–7 bureaucracy 36, 63–4, 65, 70, 165, 169, 173, 182 business, primary purpose of 14 business model innovation (BMI) 192 business models 2, 34, 38, 80, 118, 205, 216, 217 changing 190–3, 213 business opportunities 36, 188–9, 190 business process re-engineering 192 business strategy 34 business-to-business see B2B business-to-consumer see B2C by-product synergy (BPS) 159 C C2C (cradle-to-cradle) design 75, 77, 82, 84, 97 Cacciotti, Jerry 22, 23 CAD (computer-aided design) 47, 65, 132, 165 California 79, 99 Calmes, Stéphane 127, 128 Camp, Garrett 163 Canada 5, 102 cannibalisation conundrum 15, 117–18 capital costs 45 car insurance 116 car sharing 10, 17, 85, 86, 108, 123, 163 car-related services 62–3, 116 Caravan Shop 89 carbon emissions 102, 103, 196 reducing 78–9, 106–7, 159, 160, 174 stabilising 184, 186 carbon footprint 94, 100, 102, 156, 184, 186 Carrefour 121–2, 157, 174 cars 89, 92, 116, 119–20, 144, 155, 156 electric 47, 86, 172 emissions 47, 106–7 fuel consumption 47, 106–7 fuel efficiency 8, 12, 24, 47, 78, 131, 197 low-cost 2–4 personalisation 129–30 related services 62–3 standards for 78–9 see also BMW; Ford; Nissan; Renault; Tesla; Toyota Caterpillar 31, 55 CellScope 110 Cemex 59 centralisation 9, 44, 51 CEOs 34, 40, 168, 203–5, 204 certification, sustainability 84 Chaparral Steel 159 chemical industry 33, 58, 66–7 chemical usage, reducing 79 Cheshire, Ian 185–6 Chesky, Brian 163 Chevron 170 China 44, 83, 102, 144, 213, 216 air pollution 187, 200 emerging market 4, 38, 169, 197, 205 innovation in 169, 200 mobile phones 198 R&D 40, 188, 206 selling into 187–8 shifting production from 55, 56 Christchurch (New Zealand) 93 Chrysler 166 circular economy 9, 76–7, 80–4, 159–60, 195–6 “Circular Economy 100” 76–7, 86 circular supply chains 193 Cisco 17, 29, 65, 110 CISL (University of Cambridge Institute for Sustainability Leadership) 158–9 cities 107, 153 Citigroup 161 climate change 8, 100 closed-loop products 86, 91, 185, 192–3 cloud computing 60, 61, 157, 169 CMF-A car platform 4–5, 198–9 CNC (computer numerical control) cutters 128, 134, 152 co-branding 143 co-creation 126–9, 202–3, 206–7 see also collaboration; horizontal economy; prosumers co-distribution 143 co-marketing 143 co-operation 64–5, 69, 70–1 co-opetition 158–9 Coase, Ronald 133 Coca-Cola 57, 62, 142, 154 “cold chains” 57 CoLearnr 114 Collaborating Centre on Sustainable Consumption and Production (CSCP) 193–4 collaboration 76, 114, 138–9, 176, 211, 217–18 cross-functional 36–8, 39, 71–2 see also hyper-collaboration; TechShop collaborative consumption see sharing economy collaborative manufacturing 50–1 collective buying platforms 137 Commonwealth Fund 110 communities of customers 129, 131, 132–3 local 52, 57, 146, 206–7 commuting 131 competition 22, 27, 102, 189 competitive advantage 15–16, 80, 195 competitors 19, 26, 148, 149–50, 172, 215 emerging markets 16, 205–6, 216 engaging 158–9, 167 frugal 16–18, 26, 216 complexity 24, 64 components 3, 67 computer numerical control see CNC computer-aided design (CAD) 47, 65, 132, 165 Comstock, Beth 40–1, 149, 150, 151, 170 concentration 96 Concept Lab 211 concept testing 25, 31, 72, 191 Cone, Carol 7 congestion 108, 201 constraints 4–5, 22, 34, 36, 42, 207, 217 consumer behaviour 3, 6, 97, 98–101 shaping xix, 99–101, 105–9, 125 Consumer Empowerment Index 103 consumer spending 103 consumers 8, 27, 37, 97, 105 developed-world 2, 7, 9, 102 dissatisfaction 130–1 empowerment 22, 105, 106 environmental awareness 101–2, 105 frugal 197–200 of the future 193–4 innovative ideas from 50–1 with particular needs 194–5 power 102–4, 139 social experience 139 and sustainability 95, 97, 101–4 trust of 143 young 16, 85, 86, 122, 124, 131 see also customers; prosumers consumption 85, 101–6, 115, 124, 193 continuous processing 44–5, 47, 50 Cook, Scott 19 core, focusing on 68–9 Cornillon, Paul 37 Corporate Home Exchange 175 corporate leaders 122–4, 180–1, 203–5 corporate social responsibility see CSR Cortese, Amy 138 cost effectiveness 12, 34, 149, 164, 172, 188, 190, 191 consumer energy use 53 customisation 67 health care 202 innovation 21, 173 micro-factories 52 Costco 18 costs 3D printers 48 capital costs 45 development costs 22, 36 distribution costs 54, 55, 96 electricity generation 104 energy costs 161, 190 environmental costs 11 fuel costs 121 of good-enough approach 27 health-care costs 13, 109 innovation costs 168, 171 inventory costs 54 life-cycle costs 12, 24, 196 maintenance costs 48–9, 66 manufacturing costs 47, 48, 52 operating costs 45, 215 production costs 9, 83 raw materials 153, 161, 190 reducing 11, 46, 47, 60, 84, 89, 160, 167, 200 resource costs 78, 203 shipping costs 55, 59 supply chain 58, 84 transaction costs 133 wage costs 48 Coughlin, Bill 167 Coursera 61, 112 Coye, Molly 202 cradle-to-cradle see C2C design creativity 88, 94, 128, 130, 135, 163–4, 199 in organisations 63–4, 70, 71 credit culture 115–16 CRM (customer relationship management) systems 59, 157 cross-functional collaboration 36–8, 39, 71–2 crowdfunding 17, 48, 132, 137–9, 152 crowdsourcing 28–9, 50–1, 126, 140, 143, 152, 202 platforms 142, 150–1, 151, 152 CSCP (Collaborating Centre on Sustainable Consumption and Production) 193–4 CSR (corporate social responsibility) 77, 82, 94, 161 culture, organisational see organisational culture “culture of simplification” 170 curiosity 153–4 customer behaviour see consumer behaviour customer experience, enhancing 75 customer feedback 31–2, 33, 72, 152, 170, 192 customer immersion labs 31–2 customer loyalty 28, 68, 77, 80, 124, 129, 131–2, 215 customer needs 37, 58, 90, 139–40, 170, 192, 206 changing 28, 38, 51, 127, 150, 168, 205 diversity 38, 46, 51 R&D disconnect from 26, 38 customer preferences 58, 67, 75 customer relationship management see CRM customer satisfaction 65, 128, 130–1 customer service 25–6, 127–8, 147 customer visits 18, 20, 128 customers 19, 27, 46, 76, 148, 205 alienating 24–6 behaviour see consumer behaviour bottom-of-pyramid 12–13, 161, 203, 207 communities of 129, 131, 132–3 cost-conscious 3, 6, 7, 22, 26, 156, 189, 215 dreams 140–1 eco-awareness 22, 26, 54, 75, 78, 93, 156, 195–6, 215 in emerging markets 200 engaging with 20–1, 24–6, 27–33, 34, 35, 38–9, 42–3, 115, 128, 170 as experts 146 focus on 19–21, 43, 62, 157–8, 204 goodwill of 84 motivation for change 117 multiple roles 143–6 needs see customer needs outsourcing to 143 participation 128–9 profligate 115–16 R&D and 27–8, 31–2, 38, 43 rewards for 147–8 shared 156–8 used to motivate employees 205–7 young 16, 85, 86, 122, 124, 131 see also consumers; prosumers customisation 9, 46, 47, 48, 51–2, 57–8, 67, 72 CVS Health 7 D D2D Fund 162 Dacia 2–4, 156, 179 Dannon 141 Danone 66, 141, 184, 186 Darchis, François 205–6, 207 DARPA (Defence Advanced Research Projects Agency) 49 Darukhanavala, P.P.


pages: 344 words: 93,858

The Post-American World: Release 2.0 by Fareed Zakaria

"World Economic Forum" Davos, affirmative action, agricultural Revolution, airport security, Alan Greenspan, anti-communist, Asian financial crisis, battle of ideas, Bear Stearns, Berlin Wall, Bretton Woods, BRICs, British Empire, call centre, capital controls, central bank independence, centre right, collapse of Lehman Brothers, conceptual framework, Credit Default Swap, currency manipulation / currency intervention, delayed gratification, Deng Xiaoping, double entry bookkeeping, failed state, Fall of the Berlin Wall, financial innovation, global reserve currency, global supply chain, Great Leap Forward, illegal immigration, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, low interest rates, Mahatma Gandhi, Martin Wolf, mutually assured destruction, National Debt Clock, new economy, no-fly zone, oil shock, open economy, out of africa, Parag Khanna, postindustrial economy, purchasing power parity, race to the bottom, reserve currency, Ronald Reagan, Silicon Valley, Silicon Valley startup, South China Sea, Steven Pinker, Suez crisis 1956, The future is already here, The Great Moderation, Thomas L Friedman, Thomas Malthus, three-masted sailing ship, trade route, Washington Consensus, working-age population, young professional, zero-sum game

America, for its part, wants complete freedom of action: “Now that the United States is powerful, it behaves as powerful nations do.”6 But this argument misinterprets history and misunderstands the unique place that America occupied in twentieth-century diplomacy. America was the most powerful country in the world when it proposed the creation of the League of Nations to manage international relations after World War I. It was the dominant power at the end of World War II, when it founded the United Nations, created the Bretton Woods system of international economic cooperation, and launched the world’s key international organizations. America had the world at its feet, but Franklin Delano Roosevelt and Harry Truman chose not to create an American imperium. Instead, they built an international order of alliances and multilateral institutions and helped get the rest of the world back on its feet by pumping out vast amounts of aid and private investment.

., III, 39, 244 Bakiyev, Kurmanbek, 54 balance of power, 79 Bali bombings (2002), 11, 17 Balkans, 20, 29, 117–18, 245, 246, 247 Bangalore, 50 Bangladesh, 60, 159, 281 Ban Ki-moon, 30 banking industry, 36, 43–45, 81, 106, 107, 109, 110, 127, 139, 153, 157 Barma, Naazneen, 38 Barnett, Correlli, 262 “Base Structure Report” (2006), 262 Bay of Pigs invasion (1961), 20 BBC, 96, 120 Bear Stearns, xi Beijing, 71, 103, 105, 111, 137, 150, 211 “Beijing Consensus, The” (Ramo), 142–43 Beijing Olympic Games (2008), 5, 103, 105, 137 Belgium, 41 Berlin, 103 Berlin Wall, 24 Beveridge Plan, 197 Bharatiya Janata Party (BJP), 158–59, 160, 178, 179–80 Bhutan, 166 Bialik, Carl, 205 Bible, 172 bicycles, 192 bin Laden, Osama, 12, 13, 14–15, 85, 269–70 biological weapons, 18 biotechnology, 201–2, 215 bipolar order, 4 Bismarck, Otto von, 198, 257, 266–67 Blackwill, Robert, 177 Blair, Tony, 274 Blinder, Alan, 230–31 Bloomberg, Michael, 220–21 “blue card,” 224 blue jeans, 88, 89, 91 Boer War, 188–90, 261 Bollywood, 90, 94, 147, 153–55 Bono, 272 Boorstin, Daniel, 69 Bosnia, 272 Brahmans, 74 “brain drain,” 167 brand names, 203 Brazil, xii, 2, 3–4, 19, 23, 26, 28–29, 39, 48, 49, 53, 55, 60, 79, 95, 98, 257, 258, 259, 263 Bretton Woods Conference (1944), 253 British East India Company, 60, 80, 82–83 British Empire, 36, 37, 57, 60, 65, 79, 80–83, 84, 89, 94, 97–98, 151, 154, 156, 158–59, 161, 162–63, 164, 170, 173, 179, 184–99, 237, 261–63, 266, 268 British Guiana, 194n broadband service, 28, 224–25 Brookings, Robert, 235 Brookings Institution, 235 Brzezinski, Zbigniew, 36 Buck, Pearl, 100 Buddhism, 124, 171, 172 budget deficits, 219, 241–42, 244 Buffett, Warren, 45–46 Bulgaria, 182 Burma, 79, 121, 264, 273 Burns, Ken, 37 Buruma, Ian, 187 Bush, George H.


pages: 372 words: 92,477

The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge

"World Economic Forum" Davos, Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, bike sharing, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, classic study, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Disneyland with the Death Penalty, driverless car, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", junk bonds, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, Les Trente Glorieuses, liberal capitalism, Martin Wolf, means of production, Michael Milken, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, popular capitalism, profit maximization, public intellectual, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Shenzhen special economic zone , Silicon Valley, Skype, special economic zone, TED Talk, the long tail, three-martini lunch, too big to fail, total factor productivity, vertical integration, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game

The state even funded the young iconoclasts who spent their lives thumbing their noses at the establishment on TV and radio. With so many members of the elites working together to build the New Jerusalem, it was not surprising that the consensus began to create international organizations. The closing days of the war saw the birth of the Bretton Woods twins, the International Monetary Fund and the World Bank (both partly under Keynes’s influence) and the creation of the United Nations. The latter never quite became the “parliament of man” internationalists had hoped for: The cold war, with its competing ideologies, snuffed that dream out rapidly.

Government imposed ever-bigger burdens on the economy, and the productive economy stagnated or shrank. “Goodbye, Great ­Britain, It Was Nice Knowing You” was the title of one Wall Street Journal ­article in the Mid-1970s.21 Britain was forced to take a begging bowl to the IMF in 1976: One of the leading architects of the Bretton Woods System became the first advanced country to need a bailout. Sweden, another champion of the Welfare State, was on its way from being the world’s fourth-richest country in the 1970s to the fourteenth-richest in 1990. The biggest disaster of all was unfolding to the east. It was now obvious to everyone that the new civilization that the Webbs had worshipped was in fact a new barbarism.


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Magic Internet Money: A Book About Bitcoin by Jesse Berger

Alan Greenspan, barriers to entry, bitcoin, blockchain, Bretton Woods, Cambridge Analytica, capital controls, carbon footprint, correlation does not imply causation, cryptocurrency, diversification, diversified portfolio, Ethereum, ethereum blockchain, fiat currency, Firefox, forward guidance, Fractional reserve banking, George Gilder, inflation targeting, invisible hand, Johann Wolfgang von Goethe, liquidity trap, litecoin, low interest rates, Marshall McLuhan, Metcalfe’s law, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, Nixon shock, Nixon triggered the end of the Bretton Woods system, oil shale / tar sands, planned obsolescence, price mechanism, Ralph Waldo Emerson, rent-seeking, reserve currency, ride hailing / ride sharing, risk tolerance, Robert Metcalfe, Satoshi Nakamoto, the medium is the message, Vitalik Buterin

Chapter 3: Money 4Established by Carl Menger, the father of the Austrian school of economics, and popularized by Ludwig Von Mises and his student, F.A. Hayek, among others. 5In 1971, former US President Richard Nixon undertook a series of economic measures to respond to increasing inflation. The most significant rendered inoperative the existing Bretton Woods system of international financial exchange. It came to be known as the Nixon Shock. 6Occurring between 2007 and 2008, it is considered by many economists to be the most serious financial crisis since the Great Depression of the 1930s. Chapter 4: Growth 7Robert Breedlove, “Bitcoin and the Tyranny of Time Scarcity” The Bitcoin Times online (December 19, 2019). 8Evelyn Cheng, “Bitcoin debuts on the world’s largest futures exchange, and prices fall slightly” CNBC: Markets online (December 17, 2017). 9Ryan Brown, “New York Stock Exchange owner launches futures contracts that pay out in bitcoin” CNBC: Cryptocurrency online (September 23, 2019).


Debtor Nation: The History of America in Red Ink (Politics and Society in Modern America) by Louis Hyman

Alan Greenspan, asset-backed security, bank run, barriers to entry, Bretton Woods, business cycle, business logic, card file, central bank independence, computer age, corporate governance, credit crunch, declining real wages, deindustrialization, diversified portfolio, financial independence, financial innovation, fixed income, Gini coefficient, Glass-Steagall Act, Home mortgage interest deduction, housing crisis, income inequality, invisible hand, It's morning again in America, late fees, London Interbank Offered Rate, low interest rates, market fundamentalism, means of production, mortgage debt, mortgage tax deduction, p-value, pattern recognition, post-Fordism, profit maximization, profit motive, risk/return, Ronald Reagan, Savings and loan crisis, Silicon Valley, statistical model, Tax Reform Act of 1986, technological determinism, technology bubble, the built environment, transaction costs, union organizing, white flight, women in the workforce, working poor, zero-sum game

A truly global history of debt would compare these two trajectories in the developed world until the war, and then show how they diverged after the war until the mid-1960s, when the capital imbalance between the United States and the globe began to shift back to what it had been traditionally. The breakdown of this temporary order, most visible in the collapse of the Bretton Woods system, prefigured a transition back to a more volatile world of global integration and competition, where the flows were not nearly so unilateral and once again, capital investment was more difficult to carry out profitably. While a global history of debt would, no doubt be fascinating, it was beyond the scope of this work to do so.

While inflation did not have this strategic consequence for borrowers, it did have an important strategic consequence for lenders, who, in their fixed-rate portfolios, felt the rising interest rate most keenly as they watched their profits fall. Lenders’ business responses to inflation, more than consumers, pushed household debt in new directions that previously, in the most literal sense, had been impossible. Personal debt after the 1970s was made possible through the global connections of capital that arose after the fall of Bretton Woods. The story of high-flying finance divorced from the everyday lives of Americans, a viewpoint through which financial history is too commonly told, makes as little sense as telling the story of the 1970s only from the viewpoint of consumers. Borrowing and buying, after 1970, took place in a Median Male Income (1994 Dollars) 222 CHAPTER SEVEN 36000 32000 28000 24000 20000 1960 1965 1970 1975 1980 1985 1990 1995 Year Figure 7.1.

., 48 Bloomingdale’s, 121, 122, 148, 326n175; and permanent budget accounts (PBAs), 121, 124, 125, 326n166 Bodie, Zvi, 353n76 Bollman, David, 159 bond insurance companies, 278 bond ratings, 255, 258, 278 Box, The (Levinson), 295n11 Boyer, Gene, 203 Brady, Nicholas, 260 Brandt, Lillian, 297n26 Brendsel, Leland, 239 Brennan, William, 245 Bretton Woods, collapse of, 8 Brian, William, 120, 122–23 Brinkerhoff, Philip, 231 Brobeck, Stephen, 277 Brock, William, 192 Brown, Bonnar, 113–14, 114, 118 Brown, Edward, 106 Brown, Victor, 24, 340n186 Brownstein, Philip, 224, 226 Budnowitz, Joseph, 297n41 Bullock’s department store, 130 Bulte, R. H., 122, 160 Burdine’s department store, 116 Bureau of Federal Credit Unions, 186–87 Burge, W.


pages: 596 words: 163,682

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disinformation, disruptive innovation, Donald Trump, driverless car, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, Glass-Steagall Act, global supply chain, Great Leap Forward, high net worth, household responsibility system, housing crisis, Ida Tarbell, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, Les Trente Glorieuses, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, Money creation, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, opioid epidemic / opioid crisis, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

Unfortunately, as the 1960s ended, and just as governments had promised their citizens a substantial share of the high anticipated future growth, growth suddenly proved much harder to generate. There were plenty of proximate causes: rising inflation in the United States as spending on the Vietnam quagmire added to the new social spending promised in the War on Poverty; the subsequent breakdown of the Bretton Woods system of fixed exchange rates as the United States abandoned the international convertibility of the dollar into gold; the tripling of oil prices as OPEC tested its powers after the Yom Kippur war broke out . . . But perhaps the most obvious reason was that the gains from the Second Industrial Revolution had largely played out.

As wages in domestic currency rose faster in France and Southern Europe compared to Germany, they needed a steady depreciation of their exchange rate in order to retain competitiveness. Corporations disliked having to manage the resulting exchange rate volatility—it was costly to hedge exchange risk, and unhedged contracts could become unprofitable overnight. Therefore, after the breakdown of the Bretton Woods system of fixed exchange rates, a number of countries in Europe tried to tie their currencies to the deutsche mark under the European Exchange Rate Mechanism (ERM), hoping to inherit Germany’s low inflation and low interest rates, even while reducing currency volatility with respect to their most important trading partners.

., 39 authoritarianism, xvii, xviii, 97, 106, 108–9, 112, 139, 160, 244, 253, 257, 274 legitimacy-seeking, 253 automobiles, 152, 179–80, 261 automation, xii, xviii, 3, 18, 84, 179, 180, 143–44, 175, 178, 185–87, 284, 314, 324 Autor, David, 185 Bacon, Francis, 41 Bakunin, Mikhail, 91 Banfield, Edward, 12–14, 227 Bank of England, 68, 69 banks, 15–16, 72, 104, 178–79, 209, 219, 381, 385, 386 Global Financial Crisis and, 237–39, 358 inflation and, 366 regulation of, 358–60 Baosteel Group, 253 Barry, Ellen, 19–20 Basel Accords, 358, 360 Basix, 336, 337 “beggar thy neighbor” policies, 364 “beggar thyself” policies, 364 Bell, Daniel, 257 Beveridge, William, 155–56 Beveridge Report, 155–56, 318, 319, 321 Bible, 119 usury and, 31–32, 34, 48 Billington, Elizabeth, 193 Bismarck, Otto von, 112, 132 Black Death, 40, 41–42 BoBos (bourgeois bohemians), 218 Bohannan, Laura, 7–8 Boldrin, Michele, 382–83 Boleyn, Anne, 54 Book of Rates, 63 borders, 290, 351–54, 371 Bork, Robert, 202 Bowling Alone (Putnam), 334 Bretton Woods system, 160, 169 Brexit, 242 Britain, see England; United Kingdom Brooks, David, 218, 227 Bryan, William Jennings, 100 bubonic plague (Black Death), 40, 41–42 Burnham, Daniel, xxviii Bush, George W., 158 Calvin, John, 47–49, 82 Calvinism, 47–49, 55, 82, 86, 218 Canada, 294, 298, 342, 368 cannons, 42–44, 51 capitalism, 145, 147 Calvinism and, 47–48 in China, 252–55 crony, 99, 106, 108–9, 257–58 Marxist view of, 88–90 Weber’s view of, 47 Capitalism for the People, A (Zingales), 200 caregivers, 319–20 Carlyle, Thomas, 83 cars, 152, 179–80, 261 Carter, Jimmy, 163, 165, 235 Catholic Church, 29, 42, 49–50, 57, 59, 66–67, 72 Councils of, 34 monasteries of, 54, 57, 72 Papal Revolution in, 38, 40 Reformation and, 40–41, 47, 49 reform in attitudes toward business and interest, 47–49 state and, 45–46 usury and, 34–42, 44–46, 49 wealth of, 44–45 Celler-Kefauver Act, 380 CEOs, 193–94, 198–99, 209 Chandragupta Maurya, 31 Charles I, King, 66 Chernow, Ron, 85 Chetty, Raj, xvi Chicago, Ill., xxii, xxiii, 308, 312, 340–41 Pilsen community in, xxii–xxvi, 12, 298, 344, 381 Chicago Tribune, xxiii chickens, 354–55, 357 children, 222–31 meritocracy and, 224–25, 228 China, xxviii, 42, 97, 144, 145, 147, 185, 245, 246, 291, 342, 352 aging population in, 260, 292 anti-corruption campaign in, 261, 265 capitalism in, 252–55 change in, 258–64 Communist Party in, 144, 247–67 construction sector in, 275 crony competition in, 257–58 Deng in, 249–52, 265, 278 Global Financial Crisis and, 258, 259 growth of, 258, 368–69 households in, 255–56, 259–60, 263–64 imports from, 185 income inequality in, 260 India compared with, 247–48, 267, 269, 270, 275–76 infrastructure in, 259 internet and, 266, 350 liberalization in, 248–67, 276 Maoism in, 247, 248–50 medieval, 20–21 meritocracy in, 257, 265 one-child policy in, 260 in Opium Wars, 349–50 path not taken in, 249–52 populist nationalism in, 276–79 social credit system proposed in, 266 state, markets, and democracy in, 264–67 technology and, 261–62, 278 Tiananmen Square protests in, 250–51 United States and, 278 Xiushui Market in Beijing, 255 Church, see Catholic Church citizenship, 290, 295–99, 302 global, 369 civic nationalism, 297–99, 302 Civil Rights movement, 138, 157, 229, 230, 235 Clay, Lucius, 150 climate change, xii, 245, 284, 365, 396–97 Clinton, Hillary, 235 Coleman, James, 225 colleges and universities, 190–91, 220–21, 308–9, 340 credentials and, 233–34, 317 communications technology: community and, 330–35 see also Information and Communications Technology (ICT) revolution; internet communism, xvii, 91, 97, 145–47 in China, 144, 247–67 in France, 168 community(ies), xiii, xxvii, 1–22, 25, 243, 283, 285–87, 297, 303–4, 325, 392, 393, 394 alternatives and, 15–17 assets of, 339–41 in the balance, 107–40 benefits of, 327–29 common themes in revival of, 338 communications technology and, 330–35 competition between, 306–7, 329 conflict resolution in, 9–10 crime and drug abuse in, 343–44 dealing with failure in, 347–48 definition of, xiv downsides of, 329 dysfunctional, xiii, xix, 12–15, 173, 227, 325, 378 economic segregation in, 307–9 economic value of, 11 Elberfeld system in, 129–31, 320 engagement in, 344–45 feudal, see feudalism, feudal communities financing revival in, 346–47 Galena, 337–38, 339, 344 ICT revolution and, xviii–xx, 176, 184–88 importance of, xiv–xviii and importance of location, 219–21 and incentive to change, 18–19 Indore, 335–37, 339, 344 infrastructure and, 309–11 insular, costs of, 19–21 leadership in, 339, 344–45 local government, xiv, xv, xvi, 11–12, 286, 305, 311–13 localizing powers and public services in, 306–13 and loss of faith in markets, 115–19 market adjustments and, 388–91 outside choice and, 15, 18, 19 people as assets in, 342–43 physically proximate, 1–4, 327–30, 335–45, 395 Pilsen, xxii–xxvi, 12, 298, 344, 381 as political training ground, xvii positive roles of, 4–10 regulations and, 285, 304, 306–7, 341, 357 reinvigorating, xx–xxi, 327–48, 352, 395 relief efforts from, 131–33 safety net and, 127–38, 318–25 schools and, 119–25, 225–28, 232–34, 313–18 separation of markets and state from, xiv–xv social relationships in, 7–8 sorting and, see residential sorting state and, 303–25, 345–46 tax incentives and, 345 technology and, 119, 335, 344–45 trade and, xviii–xx, 335, 352 training and socializing of young in, 5–7 transactions in, 3, 8–9, 10–11 value of, 10–12 values in, and tolerance for markets, 390–92 varieties of, 2, 329–35 village, 4 virtual, 327, 329, 330 compass, 41–42, 43 competition, xxii, 52, 64, 71, 84–87, 89, 91, 105, 106, 108–10, 139, 145, 176, 207–8, 283, 374, 392, 393 between communities, 306–7, 329 curbs on, 138 enhancing, 379–86 European Union and, 208–9 monopolies and, see monopolies non-compete agreements, 205, 206, 387 patent protection and, 383 preservation of, in U.S., 98–105 property rights and, 286 regulation and, 165, 387–88 scaring away, 203–6 computers, 117, 175, 185, 186, 314 see also Information and Communications Technology revolution; internet Confessions (Augustine), 39 conflict resolution, 9–10 consensus politics, 153 construction, 275 Constitution, U.S., 71 constitutional patriotism, 298 constitutions, 285 Consumer Price Index (CPI), 189 copyhold tenancy, 36 copyright laws, 204–6 corporations, 173, 176, 194, 195, 206, 355–56, 373–74 CEOs of, 193–94, 198–99, 209 and change in attitudes toward profit and incomes, 195–201 European, 209 lobbying by, 378, 389 monopolies by, see monopolies new business creation, 201–7, 380–81 profit maximization and value maximization in, 374–79 social responsibility of, 378–79 corruption, 98–100, 109, 114, 138 in China, 261, 265 in India, 272 Cowen, Tyler, 161 Crecy, battle of, 42 crime, 343–44 Cristo Rey Catholic School, xxiv Cromwell, Oliver, 66 cronyism, 99, 106, 108–9, 113–15, 139, 176, 244, 274, 184, 352, 392 in China, 257–58 in India, 268, 269 data, as market power, 384–86 David, Paul, 161 debt contract, 29–31 see also loans de la Croix, David, 20 democracy(ies), xxvii, 79, 91, 97, 98, 118, 143, 160, 172, 218, 244, 319, 352, 357, 371, 380, 396 crony, 113–15 illiberal, 113 in India, 268–70, 272–74 markets and, 106, 110 public hearings and, 389–90 Democrats, 235–36, 240 Deng Xiaoping, 249–52, 265, 278 Depression, Great, see Great Depression Depression of 1893, 133, 134 developing countries, 245 Dewey, John, 124–25, 227 Dickens, Charles, 129 diversity, 128, 134, 148, 177, 284, 287, 289, 302, 357 benefits of, 290–95 costs of, 293–95 see also immigration, immigrants divorce, 235 Dodd–Frank Wall Street Reform and Consumer Protection Act, 204 Doepke, Matthias, 20 Douthat, Ross, 235 Dream Hoarders (Reeves), 224 drugs, drug companies, 183, 184, 204, 354, 362–63, 384 East India Company, 68, 69 Economist, 202 Edison, Thomas, 117 education and schools, xx, 6, 72, 83, 140, 158, 162, 221, 228–29, 283, 286, 290, 305, 308–9, 343 colleges and universities, see colleges and universities community and, 119–25, 225–28, 232–34, 313–18 credentials and, 233–34, 317, 393 decentralization in, 316 decline in school quality, 232–34 in France, 125–27, 317 GI Bill and, 156, 157 new tools and methods in, 314–15 paying for, 317–18 segregation and, 229–30 teachers, 102–3 technological progress and, 122–23 in U.S., 119–25, 127, 190–91, 233–34, 317 worker capabilities and, 313–18 Einstein, Albert, 384 Einsweiler, Frank, 337, 339 Elberfeld system, 129–31, 320 Ellikson, Robert, 9–10 emerging markets, 245, 271 see also China; India Engels, Frederick, 88, 90 Engerman, Stanley, 72, 96 England, 52, 59–60, 64–65, 67, 73, 132–33 agricultural laborer revolt in, 94–95 Chartist movement in, 95 Civil War in, 66, 70 Declaration of Rights in, 67–68, 71 emergence as constitutionally limited state, 52–74, 83 Glorious Revolution in, 67–71 Industrial Revolution in, see Industrial Revolution Parliament in, 57, 60–62, 65–70, 74, 77, 84, 105 Poor Law in, 19, 84 Stuarts in, 52, 58, 65–67, 73, 108 Tudors in, 51–54, 73 voting rights in, 92, 94–95 William and Mary in, 67 environment, 365, 371–72, 396 climate change, xii, 245, 284, 365, 396–97 Erhard, Ludwig, 154 Essay on the Principles of Population, An (Malthus), 83 ethnicity and race, xxi–xxii, 298, 397 residential sorting and, 229–31 see also African Americans; diversity; immigration, immigrants; minorities ethnic nationalism, 215–16 populist, 216–17; see also populist nationalism Europe, 52, 59, 74, 160, 167–68, 236, 368, 370 feudalism in, see feudalism, feudal communities immigration in, 144, 159, 167, 210, 241–43 inequalities in, 177 populist nationalism in, 241–43 regulators in, 359 safety nets in, 156 after World War II, 148–54 European Coal and Steel Community, 150 European Economic Community (EEC), 150 European Payment Services Directive, 385 European Payments Union, 150 European Union (EU), 168–73, 208–10, 310, 369, 370 Brexit and, 242 competition and, 208–9 creation of, 168 currency integration in, 169, 237 immigration crisis and, 242 loss of sovereignty in, 171–72 poultry farms in, 355, 356 Stability and Growth Pact in, 169, 170 factories, 18, 78, 88–89, 104, 185 fairness, 115–16 Fallows, Deborah, 344 Fallows, James, 344 families, 231, 235 familism, amoral, 14 Farmers’ Alliance, 23 fascism, xvii, 97, 138, 145, 153 Fault Lines (Rajan), xxvi Federal Reserve, 104, 163, 366 feudalism, feudal communities, xxvii, 19, 25, 35–36, 42, 51–52, 55, 64, 73, 74, 83, 84, 91, 92 and Church’s attack on usury, 34–40 commercial revolution and, 36–39 technology and, 41–42 financial crises: technological change and, 118, 119 of 2007–2008, see Global Financial Crisis of 2007–2008 in U.S., 87–88, 118 Food and Drug Administration, 387 Forastie, Jean, 153 Forbes 400, 192 Ford, Gerald, 235 Ford, Henry, 179–80 France, 59, 145, 168, 246, 298 in European Union, 169, 170 income in, 191, 192 in postwar period, 150, 152–54 Revolution in, 74, 94, 125–26 schooling in, 125–27, 317 free-rider problem, 17 Friedman, Milton, 139–40, 164, 195–201, 375, 377 Friedman, Rose, 139–40 Furstenberg, Carl, 209 G7 nations, 368 Galena, Ill., 337–38, 339, 344 gaming, 334 Gandhi, Indira, 269, 271 Gandhi, Mohandas K., 281, 298 Gao, Xiaohui, 201 Gaud, Malinil, 336, 339 GDP, 163, 164 General Agreement on Tariffs and Trade (GATT), 146, 150, 353 gentry, 54–58, 64–66, 71, 72 Gentzkow, Matt, 332–33 Germany, 73, 74, 162, 236, 238, 241 Elberfeld system of assistance in, 129–31, 320 in European Union, 169–71 income in, 191, 192 migrants and foreign workers in, 159, 242 Nazi, 112, 157, 380 in postwar period, 150, 153, 154 social insurance in, 132, 156 state and industry linked in, 111–12 Giersch, Herbert, 167 Giving Pledge, 396 Glaeser, Edward, 98, 137 Glass-Steagall Act, 104 Global Financial Crisis of 2007–2008, xiii, xxvi, xxviii, 88, 144, 199, 204, 213, 236–43, 353–54, 358, 370, 393 China and, 258, 259 global governance, 245–46, 367–70 globalization, 371–72 gold, 100, 101 Goldin, Claudia, 98 Goldstein, Amy, 186 Google, 201, 203, 350, 386 Gorbachev, Mikhail, 251 Gordon, Robert, 161 government, governance, xv, 107, 139, 394 centralization of, 51 deficits, 162–64, 324 federal, xiii–xiv, xvi; see also state global, 245–46, 367–70 local, xiv, xv, xvi, 11–12, 286, 305, 311–13; see also community promises made by, 145–73, 324–25 promotion of views in, 107 Grant, Ulysses S., 98, 337 Great Britain, see England; United Kingdom Great Depression, xxvii, 88, 119, 134–38, 139, 145–47, 151, 157, 210, 237, 364 safety nets in the U.S. before, 133–34 Great Recession, xiii, 238, 334 Great Society, 158 Greece, 145, 170, 237, 238, 359 Gregory VII, Pope, 38, 54 guilds, 58–62, 64, 81 gunpowder, 41–42 Gutenberg, Johannes, 46 Habermas, Jurgen, 298 Hampton, Keith, 331 handloom weavers, 18–19, 116, 188 Hanson, Gordon, 185 Harrington, James, 58 Hart, Oliver, 11 Harvard University, 98, 137, 197, 233, 242, 293, 362, 364, 371, 389 Hayek, Friedrich, 91, 164 health care, 156, 162–63, 318–19, 324 Affordable Care Act (Obamacare), 144, 214, 239–41 drugs, 183, 184, 204, 354, 362–63 training and wages in, 388 in U.K., 156 in U.S., 158, 203 Heckman, James, 6, 223, 225, 226 Hendren, Nathaniel, xvi Henry VII, King, 53–54 Henry VIII, King, 54, 57 Hicks, John, 99 Hillbilly Elegy (Vance), 300–301 Hochschild, Arlie Russell, 239–40 Holland, 65 housing, 237, 307–9 Hsieh, Chang-Tai, 220, 253, 258 Huang, Yasheng, 251 Hume, David, 63 Hurst, Erik, 333–34 Icahn, Carl, 197 ICT, see Information and Communications Technology revolution Idea of India, The (Khilnani), 298 Ignatieff, Michael, 299 immigration, immigrants, xvi, xviii, 121, 134, 137, 147, 148, 159–60, 173, 218, 219, 245, 284, 286, 289, 297, 302, 348 benefits of, 290–95 distressed communities and, 342 in Europe, 144, 159, 167, 210, 241–43 Harvard study on, 242, 293 Japan and, 292–93 Muslim, 241, 242 population aging and, 260, 284, 286, 292–93, 396 residential sorting and, 229–31 talent and, 290–91 in U.S., 137, 159–60, 292 inclusive civic nationalism, 297–99, 302 inclusive localism, xxii, 22, 285–87, 289–302, 327, 351, 394 income and wages, 90, 127, 152, 213, 388, 395, 396 dispersion across US cities, 220 of doctors, 388 Earned Income Tax Credit and, 345–46 economic segregation and, 307–9 effects of technology and trade on, 188–94 median wage, 189–91 occupational licensing and, 207 top one percent, 102, 191–94 universal basic income, 322–23 India, xxvi, xxviii, 19–20, 31, 113–15, 139, 144, 245, 246, 267–74, 287, 298, 317, 350, 391 affirmative action in, 300–302 bribery in, 312 China compared with, 247–48, 267, 269, 270, 275–76 corruption in, 272 cronyism in, 268, 269 decentralization in, 270, 272 democracy in, 268–70, 272–74 economic growth of villages in, 275 Finance Ministry in, 274 Indore, 335–37, 339, 344 land acquisition for public projects in, 275–76 liberalization in, 269–71, 273, 276 populism in, 272, 276–78 Rashtriya Swayamsevak Sangh in, xix, 277 socialism in, 267–69, 391 state, markets, and democracy in, 272–74 individualism, 194–96, 201, 284 Indore, 335–37, 339, 344 industrialization, 75, 88, 127, 275 Industrial Revolution(s), 16, 18, 26, 70, 74, 78, 84, 87, 91, 230 First, 116–17 Fourth, 117 handloom weavers and, 18–19, 116, 188 Second, 117–19, 122, 146, 147, 152, 153, 160–61 Third, 117 in U.S., 121 see also Information and Communications Technology (ICT) revolution inflation, 56–57, 163, 164, 366 Information and Communications Technology (ICT) revolution, xii–xiii, xxi, xxviii, 117, 148, 161, 162, 175–211, 213, 313, 321–22, 338, 340, 382, 393, 394 automation in, xii, xviii, 3, 143–44, 175, 178, 185–87, 314 communities and, xviii–xx, 176, 184–88 decentralization and, 312–13 interconnected world and, 350–51 jobs and, 143–44, 173, 175, 177–88, 395 trade and, 143–44, 173, 181–88 inheritance, 37, 45, 105 Inquiry into the Nature and Causes of the Wealth of Nations, An (Smith), 80 intellectual property, 73, 183, 278, 351, 362–63, 382–84 patents, 204–6, 362, 382–84 International Monetary Fund (IMF), xxvi, 146, 151, 270, 367, 368–69 international responsibilities, 363–67, 372, 397 internet, 117, 310 China and, 266, 350 community and, 330–35 political views and, 332–33 Ireland, 237, 238, 353–54 Italy, 145, 162, 303–4, 359 in European Union, 169 Montegrano, 12–14, 113, 227 in postwar period, 149, 152 Jackson, Andrew, 93 James I, King, 66–67 Jams II, King, 70 Janesville, Wisc., 341 Janesville (Goldstein), 186 Japan, 157, 160, 302, 368, 380 aging population in, 292–93 currency in, 366 immigration and, 292–93 income in, 191 in postwar period, 148, 153 protectionism in, 354 Jeffers, Jessica, 205 Jefferson, Thomas, 58 Jensen, Michael, 196 Jiang Zemin, 251 jobs, xii, xviii, 163, 164, 224, 343, 389, 395 African Americans and, 230–31 credentials and, 233–34, 317, 393 ICT revolution and, 143–44, 173, 175, 177–88, 395 and lump of labor fallacy, 180 mercantilism and, 62–63 occupational licensing and, 206–7, 387–88, 393 Second Industrial Revolution and, 122 see also income and wages; workers Johnson, Lyndon, 157–58, 229 Juncker, Jean-Claude, 172 Jungle, The (Sinclair), 104 Justice, US Department of, 202 Kahn, Alfred, 165 Kalanick, Travis, 196 Kaplan, Steve, 192 Katz, Bruce, 303 Kautilya, 31 Keynes, John Maynard, 154, 163, 395 Khan, Khizr, xxi Khilnani, Sunil, 298 Khodorkovsky, Mikhail, 111 Kim, Han, 220 King, Martin Luther, Jr., 157, 158, 397 Kleiner, Morris, 207 knowledge, diffusion of, 204–6 Krueger, Alan, 207 Kyoto Protocol, 365 laissez-faire, 77–78, 81, 83 landowners, 37, 58, 72, 74 gentry, 54–58, 64–66, 71, 72 Lasch, Christopher, 227 Latin America, 72, 93, 96 Lee Kuan Yew, 247 LEGO, 391 lending, see loans Le Pen, Marine, 236 Lerner, Josh, 362 Levine, David, 382–83 liberal democracy, 74–75 liberalism, 83, 160 liberalization, 206 in China, 248–67, 276 in India, 269–71, 273, 276 private sector’s reaction to, 194–201, 207–8 liberal market democracies, xiii, xx, xxvii libertarianism, 115 limited-access societies, 97–98 Lindsey, Brink, 205 loans, 44–45, 48 contract in, 29–31 see also usury lobbying, 378, 389 localism, xxi, xxviii, 285, 286, 303 inclusive, xxii, 22, 285–87, 289–302, 327, 351, 394 long-term benefits of, 303 location, importance of, 219–21 Long, Huey, 136 looms, 18–19, 116, 188 Louis XIV, King, 60, 65, 66 Luce, Edward, 227 Luther, Martin, 46 Madison, James, 97, 218 magnates, decline of, 53–54 Mahajan, Vijay, 337 Malthus, Thomas Robert, 83 Mann, Horace, 121 manufacturing, 152, 184–85, 206 Mao Zedong, 247–50 markets, xiii, xv, xvii–xviii, xx, xxii, xxvii–xxviii, 25–27, 50, 56, 77–106, 145, 154, 172, 173, 243–44, 283, 184, 285–87, 304, 393, 394 community adjustment to, 388–92 community and state buffers against volatility in, 127–38 community loss of faith in, 115–19 community values and, 390–92 competition in, see competition data in, 384–86 definition of, xiv democracy and, 106, 110 emerging, 245, 271; see also China; India fairness in, 115–16 freeing, 80–81 laissez-faire and, 77–78, 81, 83 liberalization of, see liberalization liberal market democracies, xiii, xx, xxvii perceived legitimacy of players in, 110–12 philosophy for, 81–84 reforming, 373–92 separation from community, xiv–xv state and, 304 transactions in, 3, 4 unbridled, 84–87 see also trade marriage, 231, 235 Marshall Plan, 149–51, 365 marshmallow test, 222–23 Marx, Karl, 49, 78, 87–91 Marxism, 87–91, 112, 115, 249, 287 Maximum Feasible Misunderstanding (Moynihan), 158 McClure’s Magazine, 103 McKinley, William, 106 McLean, Malcolm, 181 meatpacking industry, 104, 107–8 Medicare, 241, 324 mercantilism, 62–65, 80 Merchant of Venice, The (Shakespeare), 30 meritocracy, 390, 393 children and, 224–25, 228 in China, 257, 265 Merkel, Angela, 241 military technologies, 42–44, 51, 53 Mill, Harriet, 81 Mill, John Stuart, 81–83 minorities, 218, 219, 289, 296–97 affirmative action and, 300–302 see also African Americans; immigration, immigrants Mischel, Walter, 223 misery index, 163 Mitterand, François, 168 Mokyr, Joel, 20, 21 monarchy, 51–53, 56–59, 61–63, 65, 73 monasteries, 54, 57, 72 moneylending, see loans Monnet, Jean, 154 monopolies, 58–62, 64, 80, 81, 87, 91, 97, 99, 105, 106, 108, 109, 112, 201–7, 283, 379–82 antitrust laws and, 101, 103–4, 381–82 Montegrano, 12–14, 113, 227 Moore, Barrington, 73 Moretti, Enrico, 220 Morgan, John Pierpont, 99, 104 Morse, Adair, 220 Moynihan, Daniel Patrick, 158, 340 multilateral institutions, 367–70 Murphy, Kevin, 196 Murray, Charles, 227 muskets, 42–43 Muslims, 21, 35, 36, 241, 242, 272, 277 Napoleon I, 126 nationalism, xvii, 64, 184, 330, 397 civic, 297–99, 302 ethnic, 215–17; see also populist nationalism mercantilism and, 63 populist, see populist nationalism Nation at Risk, A, 232–33 nation-states, 26, 42, 50, 51–52, 61–62 Nehru, Jawaharlal, 267, 270, 287, 298 neighborhoods, 297 isolation index and, 333 sorting and, see residential sorting see also community Netville, 331–32 Neumann, Franz, 112 New Deal, 134–35 New Localism, The (Katz and Nowak), 303 news consumption, and diversity of opinions, 332–33 New York Times, 19, 98, 218, 387 Nixon, Richard, 98, 108 North, Douglass, 70, 97 Nowak, Jeremy, 303 Obama, Barack, xvii, 158, 235, 240 India visited by, 273 Obama, Michelle, 240 Obamacare, 144, 214, 239–41 Oceana (Harrington), 58 oil industry, 84–86, 99, 103, 107, 111 Oliver, Douglas, 9 one percent, 102, 191–94 On Liberty (Mill), 81–83 open-access societies, 98 Opium Wars, 349–50 Organization for Economic Co-operation and Development (OECD), 189–90 Our Towns: A 100,000-Mile Journey into the Heart of America (Fallows and Fallows), 344 Owen, Robert, 88 Owens, Ann, 226 Papal Revolution, 38, 40 parents, 222–31, 343 Paris Agreement, 365 parliaments, 77, 78–79 English, 57, 60–62, 65–70, 74, 77, 84, 105 patents, 204–6, 362, 382–84 patriotism, 298 peasants, 37–38, 73, 74, 78 see also feudalism, feudal communities Peltzman, Sam, 202 Perez, Carlotta, 118 Petersen, Mitchell, 15, 219 pharmaceutical drugs and companies, 183, 184, 204, 354, 362–63, 384 Physiocrats, 77 Piketty, Thomas, 191 Pilsen community, xxii–xxvi, 12, 298, 344, 381 Pirenne, Henri, 45 plague (Black Death), 40, 41–42 Polanyi, Karl, 84 police officers, 312 politics: conflict over, 234–36 isolation index and, 332–33 left-wing, xiii, xix, xxvii, 214, 217, 394 right-wing, xiii, xix, 214–17, 394 Polybius, 118 population aging, 260, 284, 286, 292–93, 324, 342–43, 348, 396 population diversity, see diversity population growth, 83, 152, 162–63 populism, xiii, xix, xxviii, 63, 136, 137, 211, 213–44, 284 in China, 276–79 and conflict over values and politics, 234–36 in Europe, 241–43 Global Financial Crisis and, 236–43 growing divide and, 218–19 in India, 272, 276–78 left-wing, 214, 217 Obamacare and, 239–41 Populist movement at turn of nineteenth century, 23, 26, 79, 98–101, 102, 105–6, 112, 244, 265 reemergence in the industrial West, 213–44 right-wing, 214–17 types of, 214–18 populist nationalism, xiii, xix–xx, xxi, xxvii, 144, 216–17, 241–44, 246, 276–79, 286, 289, 295–300, 302, 352, 353 in China, 276–79 in Europe, 241–43 in India, 276–78 why it cannot work, 296–97 Populist Revolt, The (Hicks), 99 Portugal, 148, 238 Poterba, James, 140 poultry farms, 354–55, 357 poverty, 396 African Americans and, 157 Elberfeld system of assistance, 129–31, 320 War on, 158, 160, 229 Powell, Enoch, 159 presidential election of 2016, 235, 236, 333, 354 Price, Brendan, 185 Princeton University, 125 printing press, 41–42, 46 private sector, 107–8, 111, 139, 147, 283, 284, 352, 371 liberalization and, 194–201, 207–8 Progressives, 26, 79, 98–99, 102–6, 112, 124, 134, 137, 244, 265 property, 26, 52, 57, 58, 74, 79, 83, 103, 115, 352, 362, 374, 394 competition and, 286 intellectual, see intellectual property land, see landowners taxes on, 121, 123 as theft, 110–11 protectionism, 108, 258–59, 278, 306, 353–56, 364 Protestant Ethic and the Spirit of Capitalism, The (Weber), 47 Protestant Reformation, 40–41, 47, 49 Protestants, 48, 49 public hearings, 389–90 Putnam, Robert, 227, 334 Quakers, 16–17, 230 race, see ethnicity and race race to the bottom, 358–60 railroad industry, 85, 87, 99, 101 Ramanathan, Swati, 312 Ramcharan, Rodney, 72 ranchers, 9–10, 11 Rand, Ayn, 80, 391 R&D, 183–84 Rashtriya Swayamsevak Sangh (RSS), xix, 277 Rauh, Joshua, 192 Rawls, John, 115 Raymundo, Raul, xxiii, xxvi Reagan, Ronald, 165, 194, 232 Reeves, Richard, 224 Reformation, 40–41, 47, 49 regulation(s), 103–5, 107–8, 165, 172 antitrust, 202 of banks, 358–60 communities and, 285, 304, 306–7, 341, 357 competition and, 165, 387–88 deregulation, 165–67, 194, 197 harmonization of, 354–63, 365, 371 relief efforts, 131–33, 135 see also safety nets religion, 49, 51, 64 Protestant Reformation, 40–41, 47, 49 Protestants, 48, 49 see also Catholic Church Republicans, 235–36 residential sorting, 144, 177, 222, 227, 314 by income, 307–9 race and immigration and, 229–31 resources, policies on, 365 Resurrection Project, xxiii–xxvi Ritter, Jay, 201 Robinson, James, 94 Rockefeller, John D., 84–91, 98, 103, 104, 108, 200 Rodgers, Daniel, 334 Rodrik, Dani, 364–65, 371 Roman Republic, 58 Romney, Mitt, 235 Roosevelt, Franklin, 134–37, 156 Roosevelt, Theodore, 106 Rosen, Sherwin, 193 Russell, John, 95 Russia, 97, 287, 292, 354, 369 wealthy in, 111 Saez, Emmanuel, 191 safety nets, 139, 173, 290 caregivers and, 319–20 community and, 127–38, 318–25 in Europe, 156 government support in, 322–24 health care, see health care paying for, 324–25 for peasants, 37–38 in U.K., 155–56 in U.S., 133–34, 156, 157–58, 320–21, 324 welfare, 129, 137, 148, 158, 230 Salam, Reihan, 235 Sandel, Michael, 389–90 Sanders, Bernie, 214 Satyanath, Shaker, 112 schools, see education and schools Schumpeter, Joseph, 203, 379 Schwartz, Heather, 225–26 science, 21 “Second Coming, The” (Yeats), 141 Second Federal Bank, xxv SeeClickFix, 311–12 Sen, Amartya, 287 Shakespeare, William, 30 Shapiro, Jesse, 332–33 Share Our Wealth Society plan, 136 Shleifer, Andrei, 197 Sinclair, Upton, 104 Singapore, 247, 291, 318 Singh, Manish, 336 Singh, Manmohan, 270 Siuai people, 9 smartphones, 175, 178, 182–83 Smith, Adam, 17, 64, 77, 80–81, 83, 84, 87, 91, 105, 200 Smoot Hawley Act, 138 socialism, 132, 138, 145–47, 168, 250 in India, 267–69, 391 socializing the young, 5–7 social media, 330, 354, 386 social relationships, 7–8 social safety nets, see safety nets Social Security, 134–38, 187, 241, 324 Sokoloff, Kenneth, 72, 96 sorting, see residential sorting South Sea Company, 68, 69–70 sovereignty, 349–72 and controlling flows, 351–54 and harmonization of regulation, 354–63 Soviet Union, 91, 145–47, 153–54, 250, 251, 267, 287, 367 Spain, 148, 162, 169, 237, 238, 353–54 Spence, Michael, 234 stagflation, 163 Standard Oil, 86, 99, 103, 107 Stanford marshmallow test, 222–23 state, xiii, xv, xvii–xviii, xx–xxi, xxvii–xxviii, 25–27, 50, 139, 140, 172, 283–86, 304, 393 anti-state ideology and, 176 buffers against market volatility, 127–38 Church and, 45–46 community and, 303–25, 345–46 constitutionally limited, 52–74, 83 definition of, xiii–xiv growth of, 145 international responsibilities and, 363–67, 372, 397 laissez-faire and, 77–78, 81, 83 markets and, 304 relief efforts from, 131–33 separation from community, xiv–xv strong but limited, rise of, 51–75 sustainable financing for, 65–71 steel industries, 87, 99, 122, 185, 186, 253, 261, 338, 364, 366 European Coal and Steel Community, 150 student loans, 317–18 suffrage, see voting, suffrage Summers, Larry, 197 Supreme Court, U.S., 103, 384 Sweden, 138 Swift, Taylor, 193 Talleyrand, Charles Maurice de, 66 Tarbell, Ida, 103, 200 tariffs, 61, 63–64, 80–81, 100, 108, 138, 150–51, 164, 181–83, 217, 242, 258–59, 271, 277, 352–53, 356, 363, 364, 366, 371 General Agreement on Tariffs and Trade, 146, 150, 353 Tawney, Richard, 34–35, 46 taxes, 59, 61–62, 102–5, 156–57, 163–64, 206, 308–9, 364 for education, 121, 123 property, 121, 123 tax holidays, 341 tax incentives, 345 on towns, 59–60 universal basic income and, 322–23 tax preparation, 179, 180 Tea Party movement, 239–41, 242, 333 technology, xii, xxviii, 117, 160–62, 175–76, 283, 284, 286, 287 automation in, 18, 84, 179, 180, 284 China and, 261–62, 278 community and, 119, 335, 344–45 disruptive change from, xii–xiii, xix education and, 122–23 feudal community and, 41–42 financial crises and, 118 incomes and, 188–94 job losses from, xii, xviii public anxiety about, 116–18 winner-take-most effects of, 191–94 see also Industrial Revolution; Information and Communications Technology revolution Teles, Steven, 205 Thatcher, Margaret, 165–66, 194 three pillars, xiii, 25–27, 393, 394 balance between, xvii–xviii, 175, 394 see also community; markets; state Tiananmen Square protests, 250–51 Tiv people, 7–8 Tönnies, Ferdinand, 3–4 totalitarian regimes, 97 trade, 62–64, 80–81, 143, 146, 149–51, 154, 160, 164–65, 172, 181, 245, 271, 283, 307, 352–53, 363, 371 “beggar thy neighbor” policies and, 364 communications costs and, 181, 182 communities and, xviii–xx, 335, 352 European, with Muslim lands, 36 ICT revolution and, 143–44, 173, 181–88 incomes and, 188–94 protectionism and, 108, 258–59, 278, 306, 353–56, 364 tariffs and, see tariffs transportation costs and, 181–82 Trade Related Intellectual Property Rights Agreement (TRIPS), 362 training and socializing the young, 5–7 transactions: in communities, 3, 8–9, 10–11 market, 3, 4 Trotsky, Leon, 90 Trump, Donald, 235 Truly Disadvantaged, The (Wilson), 230 Turkey, xix, 97, 167, 190, 245 Uber, 196 Unified Payments Interface (UPI), 386 unions, 165, 198, 206, 360, 361 United Kingdom, 173 Companies Act in, 377 health care in, 156 income in, 191, 192 in Opium Wars, 349–50 safety net in, 155–56 United Nations, 367 United States, 143, 145, 149, 246, 298 African Americans in, see African Americans agriculture in, 184 China and, 278 Civil War in, 74, 93, 133–34 competitive market in, 98–105 Constitution of, 71 diversity in population of, 134 financial crises in, 87–88, 118 GI Bill in, 156, 157 Gilded Age in, 87 gold standard in, 100 government debt in, 324 growth of, 148, 162 health care in, 158, 203 hegemony of, 148, 367–69 immigration and, 137, 159–60, 292 Industrial Revolution in, 121 manufacturing in, 184–85 Marshall Plan of, 149–51, 365 in postwar period, 148 presidential election of 2016, 235, 236, 333, 354 safety net in, 133–34, 157–58, 320–21, 324 schools in, 119–25, 127, 190–91, 233–34, 317 South of, 72, 74 Supreme Court, 103, 384 voting rights in, 92–93, 96 Western settlers in, 72, 99–100 universal basic income (UBI), 322–23 universities, see colleges and universities University of Chicago, xxiii, xxvi, 87, 124–25, 164, 290–91 University of Rochester, 223 usury: Catholic Church and, 34–42, 44–46, 49 favorable public attitudes toward, 44 intellectual support for ban on, 39–40 prohibition on, 31–32 rationale for proscribing, 32–34 values: community, and tolerance for markets, 390–92 conflict over, 234–36 Virginia, 58 Voigtländer, Nico, 112 Volcker, Paul, 163 Voth, Hans-Joachim, 112 voting and suffrage, xxvii, 26, 79, 105 extension of franchise, 91–98 wages, see income and wages Wallis, John, 97 Washington Post, 108 wealth, 111, 395–96 Wealth of Nations, The (Smith), 80 weavers, 18–19, 116, 188 Weber, Max, 47, 38 Weingast, Barry, 70, 97–98 welfare, 129, 137, 148, 158, 230 Wellman, Andrew, 331 Whigs, 67, 95 William of Orange, 67 Wilson, William Junius, 230, 231 Wilson, Woodrow, 125 Wolf, Martin, 355 workers, 75, 78, 79, 87, 89, 97, 127–28 education and capabilities of, 313–18 insurance plans for, 132 rights of, 360–61 strikes by, 102 unions for, 165, 198, 206, 360, 361 see also income and wages; jobs working at a distance, 219, 220 World Bank, 151, 253–54 World Trade Organization (WTO), 353, 356, 362 World Values Survey, 297 World War I, 103, 112, 124 World War II, xxvii, 138, 139, 140, 143, 145, 146, 155–57, 210, 243, 367 Marshall Plan and, 149–51, 365 postwar period, 148–54 Wulf, Julie, 193 Xi Jinping, 261, 278 Xiushui Market, 255 Yeats, W.


pages: 780 words: 168,782

Strange Rebels: 1979 and the Birth of the 21st Century by Christian Caryl

Alvin Toffler, anti-communist, Ayatollah Khomeini, Berlin Wall, Boeing 747, Bretton Woods, British Empire, colonial rule, Deng Xiaoping, disinformation, export processing zone, financial deregulation, financial independence, friendly fire, full employment, Future Shock, Great Leap Forward, household responsibility system, income inequality, industrial robot, Internet Archive, Kickstarter, land reform, land tenure, Les Trente Glorieuses, liberal capitalism, liberation theology, Mahatma Gandhi, means of production, Mikhail Gorbachev, Mohammed Bouazizi, Mont Pelerin Society, Neil Kinnock, new economy, New Urbanism, oil shock, open borders, open economy, Pearl River Delta, plutocrats, price stability, rent control, road to serfdom, Ronald Reagan, Shenzhen special economic zone , single-payer health, special economic zone, The Chicago School, union organizing, upwardly mobile, Winter of Discontent, Xiaogang Anhui farmers, Yom Kippur War

The impact of the Arab oil embargo on the economies of the West was so devastating in part because the rules that had governed the postwar order were already in flux. At the end of World War II, the Americans and their allies had collaborated to create the Bretton Woods system, which laid out a framework for the global economy in the form of a system of loosely fixed exchange rates. Bretton Woods remained in place for thirty-six years. It established the US dollar as the pole around which everything revolved. By 1971, however, the United States faced a looming balance-of-payments crisis brought on by the costs of the Vietnam War and by its growing trade deficits with rising economic powerhouses like West Germany and Japan.

See also under Taraki, Nur Mohammed Amouzegar, Jamshid (Iranian prime minister), 140 Anarchy, 19, 33, 47, 53, 213 Andropov, Yuri, 69, 268–269, 274 Angola, 10 Anniversaries, 223 Anti-Semitism, 207 Arab Spring, 345–347 Arjomand, Said Amir, 109 Ash, Timothy Garton, 206, 282, 287 Assad, Hafez al-, 300 Assassinations, 188, 220, 264, 291, 308, 311, 358 Atatürk, Mustafa Kemal, 42, 358 Atheism, 69, 72, 75, 91, 99, 101, 102, 112, 213, 272, 305, 342, 345 Atlas Economic Research Foundation, 325 Attlee, Clement, 4, 55 Austerity, 6, 87, 193 Australia, 316, 325 Authoritarianism, 1, 7, 42, 140, 301 Ayandegan newspaper, 154 Ayazi, Akbar, 95–96 Azzam, Abdullah, 221, 304–307, 308 Baathism, 47, 105, 300 Bakhash, Shaul, 289, 293, 295 Bakhtiar, Shapour, 143, 144, 148, 149 Balance-of-payments, 3, 5 Balcerowicz, Leszek, 323–324 Bali nightclub bombing of 2002, 309 Banisadr, Abolhassan, 290–291, 292, 293 Banks, 2, 100, 220, 232, 233, 293, 323, 335 Banna, Hussein al-, 112, 218–219 Barfield, Thomas, 36 Bazaar merchants, 8, 91, 138, 139, 142, 289 Bazargan, Mehdi, 9, 92, 114, 138, 140, 142, 148, 149, 151, 152, 153, 231, 233, 238–239, 241, 291, 293 Beheshti, Mohammed (Ayatollah), 291, 348 Bell, Daniel, 3–4 Benn, Tony, 318 Beveridge Report, 54, 55, 56, 60 Bhutto, Zulfikar Ali, 24 Bielinski, Konrad, 280 Bin Laden, Osama, 221, 224, 307, 308, 310–311 Birth control, 287 Blachnicki, Father Franciszek, 76 Blair, Tony, 321 Bogdanov, Vladimir, 214, 263–264 Boniecki, Adam, 198 Borujerdi, Hossein Tabatabai (Ayatollah), 48, 87, 88 Bouazizi, Mohammed, 345 Brazil, 3, 325, 326 Bretton Woods system, 3 Brezhnev, Leonid, 15, 25, 80–81, 101, 133, 263, 265, 266, 268, 268 Bribes, 128 Broken Earth: The Rural Chinese (Mosher), 249 Brzezinski, Zbigniew, 169, 233–234 Bundesbank, 186 Bus Number Three (film), 248 Butler, R. A., 56, 163 Callaghan, James, 5–6, 51–54, 155, 157, 158, 159, 160, 181, 182, 186, 318 Cambodia, 100–101 Campbell, John, 63, 183, 317 Canada, 325 Canton Trade Fair, 245 Capitalism, 13, 18, 31, 53, 55, 56, 60, 75, 110, 125, 142, 220, 245, 249, 260, 279, 330, 334 Cardenal, Ernesto, 78 Carrington, Peter, 192 Carter, Jimmy, 138, 169, 170, 171, 178, 215, 231, 232, 234, 237, 238, 242, 268, 305 Casaroli, Agostino Cardinal, 72 Catholic Church, 16, 17, 18, 69, 354 sexual abuse of children by priests, 288 See also John Paul II; Vatican Censorship, 143, 154, 208, 273, 353 Center for Policy Studies (CPS), 165, 166, 322 Centralization/decentralization, 133, 135, 241, 294, 295, 322 Charter 77 human rights group, 205, 286 Chen Yun, 130, 134, 330, 334 Chernenko, Konstantin, 267 Chiang Kai-shek, 24, 27, 30, 173, 174 Chidambaram, Palaniappan, 326 Chile, 10 China Huai Hai Campaign of 1948–1949, 30 Long March in, 28, 117, 173 See also Chiang Kai-shek; People’s Republic of China China International Trust & Investment Corporation (CITIC), 245 China Youth, 124–125 Chinese Human Rights League, 178 Chinese Merchant Shipping Company, 258 Churchill, Winston, 55, 56 Civil wars, 27, 30, 31, 47, 214, 222, 287, 295, 298, 309, 342, 347, 354 Clash of civilizations, 306 Class warfare, 43, 79, 134, 278, 340 Clay, Lucius, 162 Climate change, 360 Coal, 55, 183, 316 Cockett, Richard, 163, 318, 321, 322 Coffin, William Sloan, 236 Cold War, 7, 10, 11, 13, 35, 72, 105, 203, 222, 237, 267, 286, 303, 305 Collard, David, 164–165 Collectivization, 129, 249, 250, 325 Communications, 4, 41, 55, 90, 213, 259, 359 Communism, 9, 12, 19, 39, 40, 71, 91, 102, 111, 164, 220, 226, 342 Communist parties, 11, 13, 15, 18, 22, 25, 26, 27, 29, 30, 38, 39, 75, 77, 95, 96, 97, 127, 174, 353–355 (see also Iran: Tudeh Party in; People’s Democratic Party of Afghanistan) and labor unrest, 278–279 See also Marxism Communist Manifesto, The (Marx and Engels), 343 Competition, 61, 64, 132 133, 166, 185 Computers, 4.


pages: 614 words: 168,545

Rentier Capitalism: Who Owns the Economy, and Who Pays for It? by Brett Christophers

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Amazon Web Services, barriers to entry, Big bang: deregulation of the City of London, Big Tech, book value, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business process, business process outsourcing, Buy land – they’re not making it any more, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cloud computing, collective bargaining, congestion charging, corporate governance, data is not the new oil, David Graeber, DeepMind, deindustrialization, Diane Coyle, digital capitalism, disintermediation, diversification, diversified portfolio, Donald Trump, Downton Abbey, electricity market, Etonian, European colonialism, financial deregulation, financial innovation, financial intermediation, G4S, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, greed is good, green new deal, haute couture, high net worth, housing crisis, income inequality, independent contractor, intangible asset, Internet of things, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kickstarter, land bank, land reform, land value tax, light touch regulation, low interest rates, Lyft, manufacturing employment, market clearing, Martin Wolf, means of production, moral hazard, mortgage debt, Network effects, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, patent troll, pattern recognition, peak oil, Piper Alpha, post-Fordism, post-war consensus, precariat, price discrimination, price mechanism, profit maximization, proprietary trading, quantitative easing, race to the bottom, remunicipalization, rent control, rent gap, rent-seeking, ride hailing / ride sharing, Right to Buy, risk free rate, Ronald Coase, Rutger Bregman, sharing economy, short selling, Silicon Valley, software patent, subscription business, surveillance capitalism, TaskRabbit, tech bro, The Nature of the Firm, transaction costs, Uber for X, uber lyft, vertical integration, very high income, wage slave, We are all Keynesians now, wealth creators, winner-take-all economy, working-age population, yield curve, you are the product

As Aled Davies has recently argued, the shift to neoliberalism that eventually occurred in the UK under Thatcher was facilitated by changes in the financial system in the 1960s and 1970s that weakened and undermined key components of the nation’s social democratic political economy.34 Not least among these changes were the breakdown of the post-war settlement model of voluntary cooperation between the state and an oligopoly of cartelized banks, the emergence of the London-centred Euromarkets, and the disintegration of the Bretton Woods international monetary system. As Davies also observes, in the 1970s, the UK’s social democrats ‘were not simply ignorant of the changes, or fatalistic in response to the challenges arising from them’. Rather, they ‘sought to reformulate and reconstruct their economic strategy in the 1970s in an attempt to advance the social democratic project beyond the post-war settlement’.35 But they ultimately failed.

Marx, Capital, Vol. 3 (London: Pelican, 1981 [1894]), p. 678. 7. E. H. Green, ‘Rentiers versus Producers? The Political Economy of the Bimetallic Controversy c. 1880–1898’, English Historical Review 103: 408 (1988), pp. 588–612, at p. 600. 8. E. Helleiner, ‘When Finance Was Servant: International Capital Movements in the Bretton Woods Order’, in P. Cerny, ed., Finance and World Politics: Markets, Regimes, and States in the Post-Hegemonic Era (Aldershot: Edward Elgar, 1993) pp. 20–48. 9. C. Lapavitsas, Profiting Without Producing: How Finance Exploits Us All (London: Verso, 2013); C. Durand, Fictitious Capital: How Finance Is Appropriating Our Future (London: Verso, 2017). 10.

., 239 Aviva, 336, 356, 358, 359 BAE Systems, 7, 8, 148, 250–251, 256, 281, 437n19 Bailey, Shaun, 201 balance-sheet capitalism, xviii, 40, 50, 149 Balfour Beatty, 249 Bank of England, 60, 62, 70, 75–77, 105–106, 348 Barber, Brendan, 49 Barclay, Frederick, 363 Barclay, David, 363 Barclays, 7, 49–52, 62, 82, 105–106, 428n12 Barnet (London borough), 244, 250, 258 barriers to entry, xiv, 55, 123, 203, 207–209, 254–255, 260, 287, 292–293, 309 barriers to switching, 255 BBC, 233 Beatrice oil field, 115 Before the Oil Ran Out: Britain 1977-86 (Jack), 377, 379 Bell, Brian, 92–93 Bell, Torsten, 42 Benjamin, Joel, 250, 257–258 Benn, Tony, 111, 114–115, 121, 133 Berkeley Group, 9, 336 Betfair Exchange, 185, 186 Beyazay-Odemis, Basak, 233–234 Bezos, Jeff, 278 BHP Billiton, 7, 95–97, 100, 102, 107, 116–117, 133, 432–433n15 Big Bang (finance), 55, 78, 83–84, 377–378, 385 Big Yellow Group, 356, 360 Billmonitor, 297 BioIndustry Association (BIA), 156, 164 Blair, Tony, 28, 129, 325, 355 Blankfein, Lloyd, 227, 228 Block, Hans, 215 Blyth, Mark, 54 Boldrin, Michele, 140, 170 Bolivia, 110 bonds (financial), 56, 68, 79, 322 booking of reserves, 99–101 Borsa Italiana, 179–180 Boué, Juan Carlos, 117–120, 123–124 Bowers, Simon, 224 BP, 7, 106, 108–112, 132–133, 135–136, 233–234, 269–270, 432–433n15 BP Alternative Energy, 133 BP Solar, 133 Bregman, Rutger, xxii, 379, 414, 416–417 Bretton Woods international monetary system, 23 Bre-X scandal, 101–102 Brexit, 11, 381–385, 411–412, 416, 418, 461n12, 461n18 Britannia natural gas field, 134 British Aerospace, 281 British Airports Authority (BAA), 282, 290–291, 304, 311, 313–314, 452n52 British Airways, 282, 291, 301 British American Tobacco, 7, 40–41, 148 British Coal Corporation, 282, 328–329 British Energy, 282 British Gas, 282, 284 British Generic Manufacturers Association, 176 British Infrastructure Group (BIG), 297–299, 303–304 British Land, 9, 336, 356–358 British National Oil Corporation (BNOC), 114–115 British Nuclear Fuels, 282 British Rail, 405 British Rail Engineering, 282 British Satellite Broadcasting, 305 British Shipbuilders Corporation, 282 British Steel, 281, 282 British Technology Group, 282 British Telecom.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, carbon tax, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, Glass-Steagall Act, global reserve currency, Global Witness, Golden arches theory, Great Leap Forward, greed is good, Greenspan put, Hernando de Soto, illegal immigration, income inequality, invisible hand, It's morning again in America, Jeff Bezos, laissez-faire capitalism, Live Aid, low interest rates, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, Oklahoma City bombing, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Savings and loan crisis, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, Tax Reform Act of 1986, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, Timothy McVeigh, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

Even if tensions between a wounded West and a rising Asia can be contained, the relative weakening of the United States makes it significantly less likely that the world will be able to find solutions to these festering international problems. In the aftermath of the financial crisis, there was much talk of the need for a “new Bretton Woods”—a reference to the conference in 1944 that laid the foundations for the international architecture of the postwar period. But in the aftermath of World War II, America was powerful enough to design the world’s new institutions—and then to ensure that they were accepted. In today’s world, the United States does not have the power to impose solutions to international political problems.

INDEX Abalkin, Leonid, 56–57 Adelman, Kenneth, 167 Afghanistan, 55, 174, 199, 208–12, 244, 251–56, 258 as failed state, 10, 132, 181 U.S. war in, 96, 165, 167, 169, 174, 181, 185, 209–10, 212, 230, 233, 239, 240, 249, 252–53, 254, 268, 272, 273, 314n Africa, 7, 96, 195, 228, 235, 247, 274, 283, 289 global problems and, 205–8 African National Congress, 36, 69 African Union force, 210 Aganbegyan, Abel, 56–57 Age of Anxiety, 11, 171–292 Age of Optimism, 6, 11, 85, 91–170, 173–75, 183, 188, 191, 194, 195, 208, 231, 246–49, 259–62, 271, 272, 277, 280, 281, 286 antiglobalization movement and, 96, 153, 155–62 democracy and, 99–105 the East and, 135–43 Europe and, 145–53, 290 new world order in, 87, 93, 95–96, 230 peace and, 103, 118, 126–34, 140, 304n power and, 93, 96, 118, 162–70 progress and, 118–26 prosperity and, 107–18, 133, 134, 140, 173, 194 Age of Transformation, 11, 13–90 agriculture, 56, 125, 195, 206, 290 in China, 23, 25, 294n Ahmadinejad, Mahmoud, 197, 227, 242, 244, 248 Ahmed, Kamal, 313n AIG, 201 air-traffic controllers, 39 Albright, Madeleine, 166 Aliber, Robert, 265 Allende, Salvador, 74 al-Qaeda, 10, 96, 156–57, 161–62, 210, 252, 256 American Enterprise Institute (AEI), 39, 163–64, 167–68 Angola, 43, 131, 205, 247 Annan, Kofi, 132 antiglobalization movement, 96, 153, 155–62 antitrust cases, 120 apartheid, 69, 70 Apple, 120, 261 Aquino, Corazon, 43 Arab world, 269 Argentina, 77, 78, 188 democracy in, 17, 71, 72 Falklands War and, 34, 73, 76 military regime in, 73, 75, 76 Arizona, 211, 260 Asia, 24, 66, 94, 110, 111, 114, 117, 134–43, 157, 184, 195, 200, 205, 217, 245, 256, 274, 279 democracy in, 18, 85, 94, 283 economic crisis in (1997–98), 6, 107–8, 141–43, 159, 218, 269 rise of, 4, 6, 8, 9, 46, 59–60, 73, 80, 95, 137–40, 143, 146, 173, 262 see also East Asia; specific places Asian values, 138 Aslund, Anders, 221 Audacity of Hope, The (Obama), 170 Austria, 68, 269 authoritarianism, 9, 75–76, 124, 138, 140, 174, 175–76, 233–49, 257, 283, 284 global government and, 220, 221, 223, 231 Axis of Hugo, 241–42, 249 Baghdad, 124, 125, 148, 253–54 bailouts, 113, 142, 188–89, 195 Balkan wars, 125, 130–33, 145, 146 Balls, Ed, 3 Baltic states, 58–59, 235 Bangalore, 84–85, 141 banks, 142, 159, 191–92, 200 see also investment banks BBC, 108, 279 Beijing, 15, 25, 27, 65, 137, 190, 202–3, 206, 234–38, 240, 261, 268, 305n Tiananmen Square massacre in, see China, Tiananmen Square massacre in Belarus, 59 Belgrade, U.S. bombing of Chinese embassy in, 268 Berlin, East, 65 Berlin, West, 63 Berlin Wall, fall of, 11, 43, 63, 67, 68, 69, 73, 143, 146, 147, 149, 150, 152, 165, 180, 312n-13n Bernanke, Ben, 116–17 Bezos, Jeff, 120 Bhutto, Benazir, 211, 252 Blair, Tony, 43–44, 114–15, 118, 132, 201–2, 279–80 Bloom, Allan, 99, 100, 104 Boeing, 6, 155 Bolivia, 72, 78, 242 Bonfire of the Vanities, The (Wolfe), 40 Boot, Max, 146, 167, 168 Bosnia, 131, 132, 133, 231 Branden, Nathaniel, 109 Brazil, 17, 71, 73, 75–78, 176, 244, 245, 246, 286 in BRICs, 76–77, 196 global government and, 217, 219, 226, 227 zero-sum future and, 262, 276 Bremmer, Ian, 193 Bretton Woods, 9 Brezhnev, Leonid, 54, 64 Brezhnev Doctrine, 64, 67 Brickell, Mark, 112–13 BRICs (Brazil, Russia, India, and China), 76–77, 196 Bright, John, 128 Brookings Institution, 139, 256 Brown, Gordon, 3, 114, 117 Brussels, 213, 215, 311n Buchanan, Pat, 42, 157–58, 260 Bulgaria, 145–48 Burma, 160, 227, 274, 275 Bush, George H.


pages: 351 words: 96,780

Hegemony or Survival: America's Quest for Global Dominance by Noam Chomsky

"World Economic Forum" Davos, anti-communist, Berlin Wall, Bretton Woods, British Empire, capital controls, cuban missile crisis, declining real wages, disinformation, Doomsday Clock, facts on the ground, failed state, Fall of the Berlin Wall, invisible hand, launch on warning, liberation theology, long peace, market fundamentalism, Monroe Doctrine, Nelson Mandela, public intellectual, RAND corporation, Ronald Reagan, Search for Extraterrestrial Intelligence, Strategic Defense Initiative, uranium enrichment

It has been regularly observed that the extension of formal democracy in Latin America has been accompanied by increasing disillusionment about democracy. One reason, pointed out some years ago by Argentine political scientist Atilio Boron, is that the new wave of democratization in Latin America has coincided with neoliberal economic reforms, which undermine effective democracy.59 The postwar Bretton Woods system was based on capital controls and relatively fixed currencies, not only in the expectation of economic benefit, as proved to be the case, but also to allow governments space to carry out highly popular social democratic policies. It was understood that the kind of financial liberalization that opened the neoliberal era in the 1970s reduces the options for democratic choice, transferring decisions to the hands of a “virtual Senate” of investors and lenders.60 Governments now face a “‘dual constituency conundrum,’ which pits the interests of voters against foreign currency traders and hedge fund managers ‘who conduct a moment-to-moment referendum’ on the economic and financial policies of developing and developed nations alike,” and the competition is highly unequal.

See also weapons of mass destruction Biological Weapons Convention, 121, 233, 234 Bishop, Maurice, 88 Bismarck, Otto Eduard Leopold von, 63 Blair, Tony, 17, 23, 27, 30, 33, 57, 62, 130, 158 Blanton, Thomas, 74 Bolsheviks, 69–70 Bolton, John, 234 Boot, Max, 44, 45, 134 Borge, Tomás, 97 Boron, Atilio, 138 Bosch, Orlando, 86–87 Bosnia, 35, 57, 208 Bowles, Chester, 82 Boxer Rebellion, 101 Brazil, 45, 92–93 Bremer, Paul, 142 Bretton Woods system, 138 Britain Afghanistan and, 206 Beirut and, 194 Cambodia and, 23 colonization and, 62 control of opinion in, 5–6 Cuba and, 79, 81 dossier on Saddam Hussein, 130 economy of, 146 fascism and, 67–70 imperialism and, 43–45, 149, 153 India and, 44–45, 155, 182–83 Iran and, 162 Iraq and, 34, 127, 130–31, 163 Jefferson on, 48 Kenya and, 183 Kosovo and, 56 Kuwait and, 164 Middle East and, 150, 161, 162, 197 New Labour party, 130 Russia and, 76 Smith on, 29 terrorism and, 188 UN and, 30 Venezuela and, 64 British Foreign Office, 149, 161 British House of Commons, 56 British Ministry of Information, 8 Bruce, David, 148 Brzezinski, Zbigniew, 110 B’Tselem, 172 Bulgaria, 162 Bulletin of the Atomic Scientists, 73 Bundy, McGeorge, 78–80, 124, 125, 223 Bunker, Ellsworth, 93 Burmese workers, 155 Burns, John, 195 Burns, William, 115 Bush, George H.


pages: 104 words: 30,990

The Centrist Manifesto by Charles Wheelan

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, Bernie Madoff, Bretton Woods, carbon tax, centre right, clean water, creative destruction, David Brooks, delayed gratification, demand response, high-speed rail, Home mortgage interest deduction, housing crisis, income inequality, invisible hand, obamacare, profit maximization, Ralph Nader, rent-seeking, Report Card for America’s Infrastructure, Ronald Reagan, Ronald Reagan: Tear down this wall, Solyndra, stem cell, the scientific method, transcontinental railway, Walter Mischel

We need a revamped set of international institutions to handle all of the modern issues that transcend national borders. The institutions developed after World War II laid the groundwork for decades of prosperity and global cooperation. Many of those institutions need to be reinvented or reinvigorated for twenty-first-century challenges. The international monetary system negotiated at Bretton Woods near the end of World War II has broken down. The United Nations has stood effectively mute in the face of the Iraq War, the Rwandan genocide, the rise of al-Qaeda, the creation of an Iranian nuclear program, and too many other international challenges. We have no meaningful international mechanism for dealing with climate change.


pages: 891 words: 253,901

The Devil's Chessboard: Allen Dulles, the CIA, and the Rise of America's Secret Government by David Talbot

Albert Einstein, anti-communist, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, Charles Lindbergh, colonial rule, Cornelius Vanderbilt, cuban missile crisis, disinformation, Dr. Strangelove, drone strike, independent contractor, information retrieval, Internet Archive, land reform, means of production, Naomi Klein, Norman Mailer, operation paperclip, Ralph Waldo Emerson, RAND corporation, Ted Sorensen

For the Dulles group, there were a number of disquieting developments at the Bretton Woods Conference, held in the green foothills of New Hampshire in the summer of 1944, where 730 delegates from around the world thrashed out the final plans for the new financial system. Morgenthau and White led a movement at the conference to abolish the Bank for International Settlements, an institution they saw as an instrument of financial collaboration among New York, London, and Nazi Germany. It took a major, behind-the-scenes campaign at Bretton Woods—an effort mounted by representatives of Wall Street, the State Department, and the Bank of England—to head off the Morgenthau-White assault on BIS, which the New Dealers wanted to replace with the World Bank and the International Monetary Fund.

., 261, 372–73, 383, 394, 397–401, 403, 407–8, 410, 414, 425, 427, 433 blacklist, 432 Black Muslims, 342, 346 Black Ravens, 103 black sites, 290, 293, 310, 546 Blakey, Bob, 562 Blanco, Enrique, 317 Blind Ambition (Dean), 173 Blome, Kurt, 294 Blondheim, David, 41–42 Blood and Roses (film), 430 Blough, Roger, 444–45 Blouin, Andrée, 382 BND (Bundesnachrichtendienst, West German intelligence), 280–81 Bogart, Humphrey, 228 Boggs, Hale, 576 Bohlen, Charles “Chip,” 216–17, 440 Bohrman, Stan, 600 Bolivar, 349 Bolivia, 557 Bond, James (fictional character), 22, 368 Bond of Secrecy (Hunt), 499 Bonn, Germany, U.S. embassy, 93 Bonnell, John Sutherland, 311 Bonus March, 151 Booth, John Wilkes, 577 Bormann, Martin, 269, 271 Bourne, Randolph, 247 Bouvier, “Black Jack,” 528 Bouvier family, 522 Braden, Tom, 369, 547, 553 Bradley, Omar, 409 brainwashing, 289–90, 293, 308 Braun, Eva, 101 Braun, Werner von, 470 Brazil, 388 Breakfast at Tiffany’s (film), 430–31 Bremer, L. Paul, III, 406 Bretton Woods, 178 Bridges, Harry, 218 Britain, 19, 67, 95, 229, 231–34, 293 British intelligence, 16–17, 21–23, 83, 105, 115, 153, 234, 275, 279, 334. See also MI6 British Petroleum (formerly Anglo-Iranian Oil), 229 British Royal Air Force, 58 British Security Coordination, 21 Brogan, Denis, 601 Brookings Institution, 546 Browder, Earl, 152 Brown, George, 540 Brown, Herman, 540 Brown & Root, 540 Brownell, Herbert, Jr., 185, 199, 204, 328–29 Bruce, David, 32, 250–51 Bruce-Lovett report, 250–51 Buchanan, Thomas G., 582 Buckley, William F., Jr., 173, 524 Buffalo Evening News, 222 Bulgari, Giorgio, 98 Bundy, Carol, 586 Bundy, Harvey, 218 Bundy, McGeorge, 218–19, 373, 382, 407–8 Bundy, William, 218–19, 221, 373, 399, 585–86, 593 Burchinal, David, 453 Burden, Wendy, 378 Burden, William, 377–78 Bureau of Special Services (BOSS, NYPD), 323–24, 326 Buresch, Eugen “Gino,” 138–39 Burgess, Guy, 334, 469 Burke, Arleigh, 401–2, 406, 408–9, 411, 428, 450 Bush, Dorothy, 425 Bush, George H.W., 532–33 Bush, George W., 406, 617 Bush, Prescott, 249, 425–26 Bush family, 522 Butler, Smedley, 25 Byrd, David Harold, 512, 524, 539–40 Byrd, Harry, 539 Cabell, Charles, 406, 410, 427, 449, 488, 524 Cabell, Earle, 488, 524 Cabot, John Moors, 259–60 Cabrera, Angelina, 605–6 Caesar, Julius, 447, 463 Calvi, Fabrizio, 477 Cameron, Dr.

Benjamin, 393 Spotlight, 505–506 SS, 30, 31, 34–36, 47, 55, 59, 74–80, 74–87, 92, 94, 96, 100, 103–9, 113–14, 150, 270–71 SS-Obergruppenführer, 75 Stalin, Joseph, 29–30, 62, 81, 114, 144, 150, 152–53, 155–56, 203, 228, 246, 432, 601 Stalingrad, siege of, 29 Standard Oil, 27, 160, 163, 164, 179, 230, 427, 459, 528, 550, 552, 557–59 Standard Oil of California, 239 Standard Oil of New Jersey, 239 Stans, Maurice, 364 Starnes, Richard, 569 Starrs, James, 296 State Department Allen, Jr.’s job at, 303 Bedell Smith and, 214–15 Bretton Woods and, 178 Chambers-Hiss and, 167, 172–73 Cuba and, 341 Dillon and, 170 Eleanor’s job at, 38, 427–28 ex-Nazis and, 93, 111 FDR and, 66 Field and, 151–52 Guatemala and, 253, 260 Holocaust and, 45–46, 51–52, 56 Iran and, 239 JFD heads, 193, 202–4, 367–68 JFD resigns from, 364–65 JFK and, 374, 437–38, 451, 493 Lumumba and, 377 Maheu on CIA and, 326 McCarthy and, 209, 212–18, 223, 326 Nixon and, 159 Nuremberg trials and, 62–67 oil and, 230 Oswald and, 518–19 Trujillo and, 318 West Germany and, 282 Staudte, Wolfgang, 72 Stauffenberg, Claus von, 134 stay-behind network, 29, 96, 282, 416, 475 steel industry, 444–47 Stephenson, William, 21–23 Stettinius, Edward, Jr., 66–67 Stevens, Robert Ten Broeck, 224 Stevenson, Adlai, 208, 215, 363, 387 Stinnes family, 78 St.


How an Economy Grows and Why It Crashes by Peter D. Schiff, Andrew J. Schiff

Alan Greenspan, Bear Stearns, Bretton Woods, business climate, currency peg, hiring and firing, indoor plumbing, low interest rates, offshore financial centre, price stability, Robert Shiller, technology bubble

Although his conversion was gradual (taking the full decade of the 1950’s to complete), he eventually emerged as a full-blooded believer in sound money, limited government, low taxes, and personal responsibility. By 1964, Irwin enthusiastically supported Barry Goldwater for president. At the 1944 Bretton Woods Monetary Conference, the United States persuaded the nations of the world to back their currencies with dollars instead of gold. Since the United States pledged to exchange an ounce of gold for every 35 dollars, and it owned 80 percent of the world’s gold, the arrangement was widely accepted. However, 40 years of monetary inflation brought about by Keynesian money managers at the Federal Reserve caused the pegged price of gold to be severely undervalued.


pages: 358 words: 106,729

Fault Lines: How Hidden Fractures Still Threaten the World Economy by Raghuram Rajan

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Andrei Shleifer, Asian financial crisis, asset-backed security, assortative mating, bank run, barriers to entry, Bear Stearns, behavioural economics, Bernie Madoff, Bretton Woods, business climate, business cycle, carbon tax, Clayton Christensen, clean water, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, currency risk, diversification, Edward Glaeser, financial innovation, fixed income, floating exchange rates, full employment, Glass-Steagall Act, global supply chain, Goldman Sachs: Vampire Squid, Greenspan put, illegal immigration, implied volatility, income inequality, index fund, interest rate swap, Joseph Schumpeter, Kaizen: continuous improvement, Kenneth Rogoff, knowledge worker, labor-force participation, Long Term Capital Management, longitudinal study, low interest rates, machine readable, market bubble, Martin Wolf, medical malpractice, microcredit, money market fund, moral hazard, new economy, Northern Rock, offshore financial centre, open economy, Phillips curve, price stability, profit motive, proprietary trading, Real Time Gross Settlement, Richard Florida, Richard Thaler, risk tolerance, Robert Shiller, Ronald Reagan, Savings and loan crisis, school vouchers, seminal paper, short selling, sovereign wealth fund, tail risk, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, upwardly mobile, Vanguard fund, women in the workforce, World Values Survey

And finally, the rules governing membership of these organizations should force members to accept such engagement, facilitate it, and protect it when carried out in good faith. This may indeed require important revisions to the articles of agreement signed by members of the IMF, perhaps even a new historic agreement like the one at Bretton Woods that created the IMF and the World Bank. This last point is important. No large power, especially but not exclusively countries that are undemocratic, will be happy giving multilateral organizations a platform to sound off on anything they want. Countries have to understand that there are important collective benefits from adopting sounder policies, and that if they want a platform from which to influence the policies of others, they have to allow others a platform to influence theirs.

Lardy, The Future of China’s Exchange Rate Policy (Washington, DC: Peterson Institute for International Economics, 2009). 8 See Dani Rodrik, “The Real Exchange Rate and Economic Growth,” working paper, Kennedy School of Government, Harvard University, 2008. 9 See George Monbiot, “Keynes Is Innocent: The Toxic Spawn of Bretton Woods Was No Plan of His,” Guardian, November 18, 2008. 10 See Eswar S. Prasad, “Is the Chinese Growth Miracle Built to Last?” China Economic Review 20 (2009): 103–23. 11 Economists will see that I am arguing here that the income effect swamps the substitution effect. 12 See Tarun Khanna and Yasheng Huang, “Can India Overtake China?”


pages: 297 words: 108,353

Boom and Bust: A Global History of Financial Bubbles by William Quinn, John D. Turner

accounting loophole / creative accounting, Alan Greenspan, algorithmic trading, AOL-Time Warner, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Big bang: deregulation of the City of London, bitcoin, blockchain, book value, Bretton Woods, business cycle, buy and hold, capital controls, Celtic Tiger, collapse of Lehman Brothers, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, debt deflation, deglobalization, Deng Xiaoping, different worldview, discounted cash flows, Donald Trump, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, fake news, financial deregulation, financial intermediation, Flash crash, Francis Fukuyama: the end of history, George Akerlof, government statistician, Greenspan put, high-speed rail, information asymmetry, initial coin offering, intangible asset, Irish property bubble, Isaac Newton, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, junk bonds, land bank, light touch regulation, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, negative equity, Network effects, new economy, Northern Rock, oil shock, Ponzi scheme, quantitative easing, quantitative trading / quantitative finance, railway mania, Right to Buy, Robert Shiller, Shenzhen special economic zone , short selling, short squeeze, Silicon Valley, smart contracts, South Sea Bubble, special economic zone, subprime mortgage crisis, technology bubble, the built environment, total factor productivity, transaction costs, tulip mania, urban planning

From the early 1970s onwards, however, the United States began to push back against this arrangement. President Nixon, concerned by high unemployment and inflation, suspended the convertibility of the dollar into gold in 1971, hoping to allow the dollar to devalue. This heralded the end of the Bretton Woods System, and by 1973 most major currencies had moved to a managed float. No longer fixed to a low valuation, the yen began to appreciate. At the pegged rate, which was sustained throughout the 1950s and 1960s, $1 had cost ¥360, but in 1973, $1 cost only ¥272.7 From 1980 onwards, however, the appreciation of the yen slowed, largely because of Japan’s conservative fiscal policies.

See financial crisis Banks and Currency Amendment Statute 1887, 92 Banque Générale. See General Bank Banque Royale. See General Bank Bear Stearns, 178 Berners-Lee, Tim, 153 Big Four Japanese securities companies, 140, 146 Birmingham Small Arms, 111 bitcoin, 210–11 Black Thursday, 24 October 1929, 123–4, 126 blockchain, 210–11 Bloomberg Television, 158 Bretton Woods System, 136 brewery boom of the 1890s, 111 Brodzky, Maurice, 88 broker loans in relation to the 1920s stock market bubble, 123, 128, 130 in relation to the Chinese bubbles, 205–7 in relation to the Dot-Com Bubble, 162 regulation of after the 1920s stock market bubble, 134 Brown, Gordon, 170 Bubble Act 1720, 28, 38, 40, 46 repeal of, 47, 56 bubble triangle, the as a predictive tool, 211–12 description of, 4–9 diagram of, 5 bubbles consequences of, 9–10 282 INDEX criteria for inclusion, 12 definition of, 4 etymology of, 3–4 investing in, 220–2 list of included, 13 prevention of, 216–18 rationality/irrationality of, 10–11 reasons for changes in frequency of, 214 reasons for end of, 9 riding of, 7, 221 capital controls, 198 capital flight.


pages: 428 words: 103,544

The Data Detective: Ten Easy Rules to Make Sense of Statistics by Tim Harford

Abraham Wald, access to a mobile phone, Ada Lovelace, affirmative action, algorithmic bias, Automated Insights, banking crisis, basic income, behavioural economics, Black Lives Matter, Black Swan, Bretton Woods, British Empire, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Charles Babbage, clean water, collapse of Lehman Brothers, contact tracing, coronavirus, correlation does not imply causation, COVID-19, cuban missile crisis, Daniel Kahneman / Amos Tversky, data science, David Attenborough, Diane Coyle, disinformation, Donald Trump, Estimating the Reproducibility of Psychological Science, experimental subject, fake news, financial innovation, Florence Nightingale: pie chart, Gini coefficient, Great Leap Forward, Hans Rosling, high-speed rail, income inequality, Isaac Newton, Jeremy Corbyn, job automation, Kickstarter, life extension, meta-analysis, microcredit, Milgram experiment, moral panic, Netflix Prize, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, opioid epidemic / opioid crisis, Paul Samuelson, Phillips curve, publication bias, publish or perish, random walk, randomized controlled trial, recommendation engine, replication crisis, Richard Feynman, Richard Thaler, rolodex, Ronald Reagan, selection bias, sentiment analysis, Silicon Valley, sorting algorithm, sparse data, statistical model, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, survivorship bias, systematic bias, TED Talk, universal basic income, W. E. B. Du Bois, When a measure becomes a target

Keynes was able to change his mind; Fisher, alas, could not. Fisher and Keynes died within a few months of each other, not long after the end of the Second World War. Fisher was a much-diminished figure; Keynes was the most influential economist on the planet, fresh from shaping the World Bank, the IMF, and the entire global financial system at the Bretton Woods conference in 1944. Late in his life, Keynes reflected, “My only regret is that I have not drunk more champagne in my life.” But he is remembered far more for words that he probably never said. Nevertheless, he lived by them: “When my information changes, I alter my conclusions. What do you do, sir?”

See also choice research Bell, Vanessa, 256–57 Bem, Daryl, 111, 113–14, 119–23 benefits of statistical analysis, 9 Berti, Gasparo, 172 Bevacqua, Graciela, 194–95, 212 Beyth, Ruth, 248–49, 251, 254 biases biased assimilation, 35–36 confirmation bias, 33 current offense bias, 169 and motivated reasoning, 27–29, 32–36, 38, 131, 268 negativity bias, 95–99 non-response bias, 146–47 novelty bias, 95–99, 113, 114, 122 optimism bias, 96 and power of doubt, 13 publication bias, 113–16, 118–23, 125–27 racial bias in criminal justice, 176–79 in sampling, 135–38, 142–45, 147–51 selection bias, 2, 245–46 survivorship bias, 109–10, 112–13, 122–26 systematic bias in algorithms, 166 and value of statistical knowledge, 17 big data and certification of researchers, 182 and criminal justice, 176–79 and excessive credulity in data, 164–67 and found data, 149, 151, 152, 154 and Google Flu Trends, 153–57 historical perspective on, 171–75 influence in today’s world, 183 limitations and misuse of, 159–63, 170–71 proliferation of, 157–59 and teacher evaluations, 163–64 See also algorithms Big Data (Cukier and Mayer-Schönberger), 148, 157 “Big Duck” graphics, 216–18, 217, 229–30 Big Issue, The, 226n “Billion Pound-O-Gram, The” (infographic), 223 billionaires, 78–80 binge drinking, 75 Bird, Sheila, 68 bird’s-eye view of data, 61–64, 203, 221, 265 BizzFit, 108 Black Swan, The (Taleb), 101 Blastland, Michael, 10, 68, 93 blogs, 76 Bloomberg TV, 89 body count metrics, 58 Boijmans Museum, 20 Boon, Gerard, 19, 30–31 border wall debate, 93–94 Borges, Jorge Luis, 118 Boyle, Robert, 172–75 brain physiology, 270 Bredius, Abraham, 19–23, 29–32, 35, 43–45, 78, 242, 262 Bretton Woods conference, 262 Brettschneider, Brian, 224 Brexit, 71, 277 British Army, 213–14, 220–21 British Election Study, 145–46 British Medical Journal, 6, 67 British Treasury, 256–57 Broward County Sheriff’s Office, 176 Brown, Derren, 115 Brown, Zack “Danger,” 108 Buchanan, Larry, 229, 232 budget deficits, 188, 192–93, 195 Buffett, Warren, 259 Bureau of Economic Analysis, 190, 205 Bureau of Labor Statistics, 190, 205, 212 business-cycle forecasting, 258–59 business writing, 123–24 Butoyi, Imelda, 62–63 Cairo, Alberto, 227 Cambridge Analytica, 158 Cambridge University, 162.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab, Peter Vanham

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

A few years later, he also became the intellectual father of the closely linked GDP, presenting the slightly different concept in a 1937 report to US Congress.4 (GDP takes into account only the domestically produced goods and services, while GNI or GNP include income or products produced abroad by companies owned by a country's citizens.) It was a stroke of genius. Over the remainder of the 1930s, other economists helped standardize and popularize this measure of economic output to such an extent, that by the time the Bretton Woods conference was held in 1944, GDP was confirmed as the main tool for measuring economies.5 The definition of GDP that was used then is still valid today: GDP is the sum of the value of all goods produced in a country, adjusted for the country's trade balance. There are various ways of measuring GDP, but the most common is probably the so-called expenditure approach.

Although there were crises and setbacks, the story of the overall global economy was one of growth, so the notion that growth is good reigned supreme. But there is a painful end to this story, and we could have foreseen it had we better listened to Simon Kuznets himself. In 1934, long before the Bretton Woods Agreement, Kuznets warned US Congress not to focus too narrowly on GNP/GDP: “The welfare of a nation can scarcely be inferred from a measure of national income,” he said.6 In this he was right. GDP tells us about consumption, but it does not tell us about well-being. It tells us about production but not pollution or the resource use.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

A few years later, he also became the intellectual father of the closely linked GDP, presenting the slightly different concept in a 1937 report to US Congress.4 (GDP takes into account only the domestically produced goods and services, while GNI or GNP include income or products produced abroad by companies owned by a country's citizens.) It was a stroke of genius. Over the remainder of the 1930s, other economists helped standardize and popularize this measure of economic output to such an extent, that by the time the Bretton Woods conference was held in 1944, GDP was confirmed as the main tool for measuring economies.5 The definition of GDP that was used then is still valid today: GDP is the sum of the value of all goods produced in a country, adjusted for the country's trade balance. There are various ways of measuring GDP, but the most common is probably the so-called expenditure approach.

Although there were crises and setbacks, the story of the overall global economy was one of growth, so the notion that growth is good reigned supreme. But there is a painful end to this story, and we could have foreseen it had we better listened to Simon Kuznets himself. In 1934, long before the Bretton Woods Agreement, Kuznets warned US Congress not to focus too narrowly on GNP/GDP: “The welfare of a nation can scarcely be inferred from a measure of national income,” he said.6 In this he was right. GDP tells us about consumption, but it does not tell us about well-being. It tells us about production but not pollution or the resource use.


pages: 583 words: 182,990

The Ministry for the Future: A Novel by Kim Stanley Robinson

"World Economic Forum" Davos, agricultural Revolution, airport security, Anthropocene, availability heuristic, basic income, bitcoin, blockchain, Bretton Woods, cakes and ale, carbon tax, centre right, clean tech, clean water, cryptocurrency, dark matter, decarbonisation, degrowth, distributed ledger, drone strike, European colonialism, failed state, fiat currency, Food sovereignty, full employment, Gini coefficient, global village, green new deal, happiness index / gross national happiness, High speed trading, high-speed rail, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, Jevons paradox, Kim Stanley Robinson, land reform, liberation theology, liquidity trap, Mahbub ul Haq, megacity, megastructure, Modern Monetary Theory, mutually assured destruction, nuclear winter, ocean acidification, off grid, off-the-grid, offshore financial centre, place-making, plutocrats, Ponzi scheme, post-oil, precariat, price stability, public intellectual, quantitative easing, rewilding, RFID, Robert Solow, seigniorage, Shenzhen special economic zone , Silicon Valley, special economic zone, structural adjustment programs, synthetic biology, time value of money, Tragedy of the Commons, universal basic income, wage slave, Washington Consensus

The sun goes down, the sky goes twilight blue. Then indigo. This is the 1,859th day I have spent in this camp. 49 In July of 1944, the United States government convened a group of seven hundred delegates, from all the Allied countries, to design the postwar financial order. They met at the Mount Washington Hotel in Bretton Woods, New Hampshire, and there, after three weeks of meetings, they published recommendations that when ratified by the member governments resulted in the International Bank for Reconstruction and Development, and the International Monetary Fund. The intended results of these new entities included the establishment of open markets and the stability of member nations’ currencies.

An international trade organization was also proposed, but when the US Senate failed to ratify this part of the proposal, it was not founded. Later the GATT, the General Agreement on Tariffs and Trade, was established and took on the functions that the failed ITO would have fulfilled. Later the GATT was superseded by the World Trade Organization. John Maynard Keynes, the chief British negotiator, also suggested at Bretton Woods that they found an International Clearing Union, which would make use of a new unit of currency to be called a bancor. The purpose of the bancor would be to allow nations with trade deficits to be able to climb out of their debts by calling on an overdraft account with the ICU that would allow them to spend money to employ more citizens and thus create more exports.

As the world’s biggest creditor and holder of gold by far, the US was in a position to enter the postwar period as the sole owner of the major global currency, the US dollar, which was to be backed by gold reserves. White proposed an International Stabilization Fund, which would place the burden of debt firmly on deficit nations; this later became part of the World Bank. So at Bretton Woods, White’s plan prevailed over Keynes’s, and in the absence of the International Clearing Union and its bancor, postwar reconstruction and subsequent economic development was funded by the US dollar, which became the de facto global currency. The imperial coin, so to speak. 50 Mary returned to Europe, and from her base in Zurich began visiting the various central banks there, trying to improve on the unsuccessful meeting in San Francisco.


pages: 593 words: 183,240

An Economic History of the Twentieth Century by J. Bradford Delong

affirmative action, Alan Greenspan, Andrei Shleifer, ASML, asset-backed security, Ayatollah Khomeini, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, collapse of Lehman Brothers, collective bargaining, colonial rule, coronavirus, cotton gin, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, en.wikipedia.org, ending welfare as we know it, endogenous growth, Fairchild Semiconductor, fake news, financial deregulation, financial engineering, financial repression, flying shuttle, Ford Model T, Ford paid five dollars a day, Francis Fukuyama: the end of history, full employment, general purpose technology, George Gilder, German hyperinflation, global value chain, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Rosling, hedonic treadmill, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, Hyman Minsky, income inequality, income per capita, industrial research laboratory, interchangeable parts, Internet Archive, invention of agriculture, invention of the steam engine, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, means of production, megacity, Menlo Park, Mikhail Gorbachev, mortgage debt, mutually assured destruction, Neal Stephenson, occupational segregation, oil shock, open borders, open economy, Paul Samuelson, Pearl River Delta, Phillips curve, plutocrats, price stability, Productivity paradox, profit maximization, public intellectual, quantitative easing, Ralph Waldo Emerson, restrictive zoning, rising living standards, road to serfdom, Robert Gordon, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Simon Kuznets, social intelligence, Stanislav Petrov, strikebreaker, structural adjustment programs, Suez canal 1869, surveillance capitalism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Great Moderation, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, transatlantic slave trade, transcontinental railway, TSMC, union organizing, vertical integration, W. E. B. Du Bois, Wayback Machine, Yom Kippur War

In the mid-1950s Western Europe created its own European Coal and Steel Community for free trade in those commodities, an initiative that grew into today’s European Union. The dominant United States had bet heavily on international trade as an enabler of international peace as well as of domestic prosperity. At the 1944 Bretton Woods Conference, US Treasury Department official Harry Dexter White and John Maynard Keynes from Britain had designed a system to try to make increased globalization work for good. There was to be a World Bank—an International Bank for Reconstruction and Development—to finance, via loans (on nonusurious terms), the reconstruction of those parts of the world that had been ruined by war and to develop those parts of the world that had not yet grasped the productive opportunities of modern machine and industrial technologies.

To Nixon, the political situation was painfully familiar: back in 1960, as a vice president running for president, he and then Eisenhower aide Arthur Burns had begged their boss, President Eisenhower, not to let unemployment rise during the 1960 election year. Eisenhower had turned them down, and Nixon had narrowly lost the 1960 election to Kennedy.19 This time, Nixon decided on a version of “shock therapy”: suspend the pegged-but-flexible exchange-rate system put in place back during Bretton Woods (the suspension would eventually become permanent), impose wage and price controls to reduce inflation, and make sure that Arthur Burns, his Fed chair, understood that unemployment needed to be lower and declining as the election of 1972 approached. Nixon’s political calculations, however, were not entirely to blame for the upward burst in inflation.

The newly dominant United States wagered that international trade would soon become an enabler of both international peace and domestic prosperity. Western Europe joined in on this wager, most prominently with the creation in the mid-1950s of the European Coal and Steel Community for free trade in those commodities, an initiative that grew into today’s European Union. And at the 1944 Bretton Woods Conference, Harry Dexter White from the United States and John Maynard Keynes from Britain designed a system to try to make increased globalization work for good. The three planned organizations to promote global economic cooperation were the World Bank, the International Monetary Fund (IMF), and—the one that failed to fully come into existence—the International Trade Organization (ITO).


pages: 128 words: 38,187

The New Prophets of Capital by Nicole Aschoff

"World Economic Forum" Davos, 3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, American Legislative Exchange Council, Anthropocene, antiwork, basic income, biodiversity loss, Bretton Woods, clean water, collective bargaining, commoditize, crony capitalism, do what you love, feminist movement, follow your passion, food desert, Food sovereignty, glass ceiling, global supply chain, global value chain, helicopter parent, hiring and firing, income inequality, Khan Academy, late capitalism, Lyft, Mark Zuckerberg, mass incarceration, means of production, microapartment, performance metric, post-Fordism, post-work, profit motive, rent-seeking, Ronald Reagan, Rosa Parks, school vouchers, shareholder value, sharing economy, Sheryl Sandberg, Silicon Valley, Slavoj Žižek, structural adjustment programs, Susan Wojcicki, TED Talk, Tim Cook: Apple, urban renewal, women in the workforce, working poor, zero-sum game

Their numbers have waxed and waned, but beginning in the post–World War II era, many countries, including the United States, saw a huge increase in the number of NGOs. The spread of internet technology in the 1990s gave NGOs an international presence and helped to solidify their power and influence. The growing importance of international NGOs (INGOs) is a story intimately linked to the economic and political changes resulting from the collapse of the Bretton Woods system in the 1970s and the 1980s debt crisis. As rural sociologist Phil McMichael argues, in the 1980s the “development project”—in which poor countries implemented national development strategies geared toward economic self-sufficiency and political sovereignty—was replaced by the “globalization project”—an ideological turn that encouraged states to lower their trade barriers, privatize resources and services, and embed themselves in global value chains.10 In this climate, national states lost legitimacy and, during the debt crisis, structural adjustment programs forced developing countries to dramatically curtail spending on health, education, and food subsidies.


pages: 447 words: 111,991

Exponential: How Accelerating Technology Is Leaving Us Behind and What to Do About It by Azeem Azhar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 23andMe, 3D printing, A Declaration of the Independence of Cyberspace, Ada Lovelace, additive manufacturing, air traffic controllers' union, Airbnb, algorithmic management, algorithmic trading, Amazon Mechanical Turk, autonomous vehicles, basic income, Berlin Wall, Bernie Sanders, Big Tech, Bletchley Park, Blitzscaling, Boeing 737 MAX, book value, Boris Johnson, Bretton Woods, carbon footprint, Chris Urmson, Citizen Lab, Clayton Christensen, cloud computing, collective bargaining, computer age, computer vision, contact tracing, contact tracing app, coronavirus, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, Daniel Kahneman / Amos Tversky, data science, David Graeber, David Ricardo: comparative advantage, decarbonisation, deep learning, deglobalization, deindustrialization, dematerialisation, Demis Hassabis, Diane Coyle, digital map, digital rights, disinformation, Dissolution of the Soviet Union, Donald Trump, Double Irish / Dutch Sandwich, drone strike, Elon Musk, emotional labour, energy security, Fairchild Semiconductor, fake news, Fall of the Berlin Wall, Firefox, Frederick Winslow Taylor, fulfillment center, future of work, Garrett Hardin, gender pay gap, general purpose technology, Geoffrey Hinton, gig economy, global macro, global pandemic, global supply chain, global value chain, global village, GPT-3, Hans Moravec, happiness index / gross national happiness, hiring and firing, hockey-stick growth, ImageNet competition, income inequality, independent contractor, industrial robot, intangible asset, Jane Jacobs, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Perry Barlow, Just-in-time delivery, Kickstarter, Kiva Systems, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, lockdown, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, megacity, Mitch Kapor, Mustafa Suleyman, Network effects, new economy, NSO Group, Ocado, offshore financial centre, OpenAI, PalmPilot, Panopticon Jeremy Bentham, Peter Thiel, Planet Labs, price anchoring, RAND corporation, ransomware, Ray Kurzweil, remote working, RFC: Request For Comment, Richard Florida, ride hailing / ride sharing, Robert Bork, Ronald Coase, Ronald Reagan, Salesforce, Sam Altman, scientific management, Second Machine Age, self-driving car, Shoshana Zuboff, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, software as a service, Steve Ballmer, Steve Jobs, Stuxnet, subscription business, synthetic biology, tacit knowledge, TaskRabbit, tech worker, The Death and Life of Great American Cities, The Future of Employment, The Nature of the Firm, Thomas Malthus, TikTok, Tragedy of the Commons, Turing machine, Uber and Lyft, Uber for X, uber lyft, universal basic income, uranium enrichment, vertical integration, warehouse automation, winner-take-all economy, workplace surveillance , Yom Kippur War

It was an uneasy match, and did not sit well with the expectations of web surfers. There are exceptions to this institutional slowness, of course. On occasion, institutions can lend themselves to very rapid change. Wars and revolutions help. It took less than a year to create the International Monetary Fund after it was proposed at the Bretton Woods Conference in July 1944. The visceral shock of World War Two and the need to find a solid base for international cooperation provided the impetus to establish many institutions, such as the United Nations and the General Agreement on Tariffs and Trade. These are, in the language of institutional theory, moments of ‘punctuated equilibrium’.

Abu Dhabi, UAE, 250 Acemoglu, Daron, 139 Acorn Computers, 16, 21 Ada Lovelace Institute, 8 additive manufacturing, 43–4, 46, 48, 88, 166, 169, 175–9 Adidas, 176 advertising, 94, 112–13, 116, 117, 227–8 AdWords, 227 aeroponics, 171 Afghanistan, 38, 205 Africa, 177–8, 182–3 Aftenposten, 216 Age of Spiritual Machines, The (Kurzweil), 77 agglomeration, 181 Air Jordan sneakers, 102 Airbnb, 102, 188 aircraft, 49–50 Alexandria, Egypt, 180 AlexNet, 33 Algeciras, HMM 61 Alibaba, 48, 102, 108, 111, 122 Alipay, 111 Allen, Robert, 80 Alphabet, 65, 113–14, 131, 163 aluminium, 170 Amazon, 65, 67–8, 94, 104, 108, 112, 122, 135–6 Alexa, 25, 117 automation, 135–6, 137, 139, 154 collective bargaining and, 163 Covid-19 pandemic (2020–21), 135–6 drone sales, 206 Ecobee and, 117 Go stores, 136 Kiva Systems acquisition (2012), 136 management, 154 Mechanical Turk, 142–3, 144, 145 monopoly, 115, 117, 122 Prime, 136, 154 R&D, 67–8, 113 Ami Pro, 99 Amiga, 16 Anarkali, Lahore, 102 anchoring bias, 74 Android, 85, 94, 117, 120 Angola, 186 Ant Brain, 111 Ant Financial, 111–12 antitrust laws, 114, 119–20 Apache HTTP Server, 242 Appelbaum, Binyamin, 63 Apple, 47, 62, 65, 85, 94, 104, 108, 112, 122 App Store, 105, 112, 115 chip production, 113 Covid-19 pandemic (2019–21), 222–3 data collection, 228 iOS, 85 iPhone, 47, 62, 85, 94, 105 media subscription, 112 watches, 112 APT33 hacker group, 198 Aral, Sinan, 238 Aramco, 108, 198 Armenia, 206–7 Arthur, William Brian, 110, 123 artificial intelligence, 4, 8, 31–4, 54, 88, 113, 249 academic brain drain, 118 automation, 125–42 data and, 31–2, 142 data network effect, 106–7 drone technology and, 208, 214 education and, 88 employment and, 126–7 healthcare and, 88, 103 job interviews and, 153 regulation of, 187, 188 arXiv, 59 Asana, 151 Asian Development Bank, 193 Aslam, Yaseen, 148 Assembly Bill 5 (California, 2019), 148 asymmetric conflict, 206 AT&T, 76, 100 Atari, 16 attack surfaces, 192–3, 196, 209, 210 Aurora, 141 Australia, 102, 197 automation, 125–42 autonomous weapons, 208, 214 Azerbaijan, 173, 206–7 Ballmer, Steve, 85 Bangladesh, 175 banking, 122, 237 Barcelona, Catalonia, 188 Barlow, John Perry, 184 Barrons, Richard, 195, 211 Bartlett, Albert, 73 batteries, 40, 51, 53–4, 250, 251 Battle of the Overpass (1937), 162 Bayraktar TB2 drone, 206 Bee Gees, 72 Bekar, Clifford, 45 Bell Labs, 18 Bell Telephone Company, 100 Benioff, Marc, 108–9 Bentham, Jeremy, 152 Berlin Wall, fall of (1989), 4 Bermuda, 119 Berners-Lee, Timothy, 55, 100, 160, 239 Bessen, James, 46 Bezos, Jeffrey, 135–6 BGI, 41 Biden, Joseph, 225 Bing, 107 biological weapons, 207, 213 biology, 10, 39, 40–42, 44, 46 genome sequencing, 40–41, 90, 229, 234, 245–7, 250, 252 synthetic biology, 42, 46, 69, 174, 245, 250 biopolymers, 42 bits, 18 Black Death (1346–53), 12 BlackBerry, 120 Blair, Tony, 81 Bletchley Park, Buckinghamshire, 22 blitzscaling, 110 Blockbuster, 138 BMW, 177 Boeing, 51, 236 Bol.com, 103 Bollywood, 181 Boole, George, 18 Bork, Robert, 114–15, 117, 119 Bosworth, Andrew, 233 Boyer, Pascal, 75 Boyle, James, 234 BP, 92, 158 brain, 77 Braudel, Fernand, 75 Brave, 242 Brazil, 202 Bremmer, Ian, 187 Bretton Woods Conference (1944), 87 Brexit (2016–20), 6, 168 British Broadcasting Corporation (BBC), 87, 129, 191 Brookings Institution, 130 BT, 123 Bulgaria, 145 Bundy, Willard Legrand, 149 Busan, South Korea, 56 business, 82, 92–124 diminishing returns to scale, 93, 108 economic dynamism and, 117 economies of scale, 50, 92 growth, 110–13 increasing returns to scale, 108–10 intangible economy, 104–7, 118, 156, 175, 180 linear value chains, 101 market share, 93–6, 111 monopolies, 10, 71, 94, 95, 114–24 network effect, 96–101 platform model, 101–3, 219 re-localisation, 11, 166–79, 187, 252, 255 state-sized companies, 11, 67 superstar companies, 10, 94–6 supply chains, 61–2, 166–7, 169, 175, 187, 252, 255 taxation of, 96, 118–19 Butler, Nick, 179 ByteDance, 28 C40 initiative, 189 Cambridge University, 127, 188 cancer, 57–8, 127 Capitol building storming (2021), 225 car industry, 93 carbon emissions, 35, 90, 251 Carlaw, Kenneth, 45 Carnegie, Andrew, 112 Carnegie Mellon University, 131 Catholic Church, 83, 88 censorship, 216–17, 224–6, 236 Central Intelligence Agency (CIA), 194 Cerebras, 34 cervical smears, 57–8 chemical weapons, 207, 213 Chen, Brian, 228 chewing gum, 78 Chicago Pile-1 reactor, 64 Chile, 170 China automation in, 127, 137 brainwave reading in, 152 Covid-19 pandemic (2019–21), 245 drone technology in, 207 Great Firewall, 186, 201 Greater Bay Area, 182 horizontal expansion in, 111–12 manufacturing in, 176 misinformation campaigns, 203 raw materials, demand for, 178 Singles’ Day, 48 social credit systems, 230 superstar companies in, 95 US, relations with, 166 chips, 19–22, 28–9, 48–9, 52, 113, 251 Christchurch massacre (2019), 236 Christensen, Clayton, 24 CIPD, 153 cities, 11, 75, 169, 179–84, 188, 255 Clegg, Nick, 225–6, 235 climate change, 90, 169, 187, 189, 251, 252 cloud computing, 85, 112 Cloudflare, 200 cluster bombs, 213 CNN, 185, 190 coal, 40, 65, 172 Coase, Ronald, 92 Coca-Cola, 93 code is law, 220–22, 235 cold fusion, 113–14 Cold War (1947–91), 194, 212, 213 collective bargaining, 147, 149, 154, 156, 162–5 Colombia, 145 colonialism, 167 Columbus, Christopher, 4 combination, 53–7 Comical Ali, 201 commons, 234–5, 241–3, 256 companies, see business comparative advantage, 170 complex systems, 2 compounding, 22–3, 28 CompuServe, 100 computing, 4, 10, 15–36, 44, 46, 249 artificial intelligence, 4, 8, 31–4, 54, 88 cloud computing, 85, 112 internet, 47–8, 55, 65, 84 Law of Accelerating Returns, 30–31, 33, 35 machining, 43 Moore’s Law, see Moore’s Law quantum computing, 35 transistors, 18–22, 28–9, 48–9, 52 conflict, 87, 189, 190–215 attack surfaces, 192–3, 196, 209, 210 cyberattacks, 11, 114, 140, 181, 187, 190–200, 209–14, 256 de-escalation, 212–13 drone technology, 11, 192, 204–9, 214, 256 institutional change and, 87 misinformation, 11, 191, 192, 200–204, 209, 212, 217, 225 new wars, 194 non-proliferation, 213–14 re-localisation and, 189, 193, 194, 209 consent of the networked, 223 Costco, 67 Coursera, 58 Covid-19 pandemic (2019–21), 12–13, 59, 78–9, 131, 245–9 automation and, 127, 135, 136 cities and, 183 contact-tracing apps, 222–3 gig economy and, 146 lockdowns, 12, 152, 176, 183, 246 manufacturing and, 176 misinformation and, 202–4, 247–8 preprint servers and, 60 recession (2020–21), 178 remote working and, 146, 151, 153 supply chains and, 169, 246 vaccines, 12, 202, 211, 245–7 workplace cultures and, 151, 152 cranks, 54 credit ratings, 162, 229 critical thinking skills, 212 Croatia, 145 Crocker, David, 55 crowdsourcing, 143–4 Cuba, 203 Cuban missile crisis (1962), 99, 212 cultural lag, 85 cyberattacks, 11, 114, 140, 181, 187, 190–200, 209–14, 256 CyberPeace Institute, 214 Daniel, Simon, 173–4 Dar es Salaam, Tanzania, 183 Darktrace, 197 data, 8, 11, 71, 217–19, 226–31, 235, 237–42, 256 AI and, 8, 32, 33, 58, 106 compensation for, 239 commons, 242 cyberattacks and, 196 doppelgängers, 219, 226, 228, 239 interoperability and, 237–9 network effects, 106–7, 111 protection laws, 186, 226 rights, 240 Daugherty, Paul, 141 DDT (dichlorodiphenyltrichloroe thane), 253 death benefits, 151 Dediu, Horace, 24, 30 deep learning, 32–4, 54, 58, 127 deforestation, 251 dehumanisation, 71, 154, 158 deindustrialisation, 168 Deliveroo, 154, 163 Delphi, 100 dematerialised techniques, 166, 175 Denmark, 58, 160, 199–200, 257 Deutsche Bank, 130 Diamandis, Peter, 5 Dickens, Charles, 80 digital cameras, 83–4 Digital Geneva Convention, 211 Digital Markets Act (EU, 2020), 122 digital minilateralism, 188 Digital Nations group, 188 Digital Services Act (EU, 2020), 123 diminishing returns, 93, 108 disinformation, see misinformation DoorDash, 147, 148, 248 dot-com bubble (1995–2000), 8, 108, 150 Double Irish tax loophole, 119 DoubleClick, 117 drone technology, 11, 192, 204–9, 214, 256 Dubai, UAE, 43 Duke University, 234 dystopia, 208, 230, 253 Eagan, Nicole, 197 eBay, 98, 121 Ecobee, 120 economies of scale, 50, 92 Economist, The, 8, 65, 119, 183, 239 economists, 63 Edelman, 3 education artificial intelligence and, 88 media literacy, 211–12 Egypt, 145, 186 Elance, 144 electric cars, 51, 69, 75, 173–4, 177, 250 electricity, 26, 45, 46, 54, 157, 249–50 see also energy Electronic Frontier Foundation, 184 email, 6, 55 embodied institutions, 82 employment, 10, 71, 125–65 automation, 125–42 collective bargaining, 147, 149, 154, 156, 162–5 dehumanisation and, 71, 154, 158 flexicurity, 160–61, 257 gig economy, 10, 71, 142–9, 153, 162, 164, 239, 252, 255 income inequality, 155–8, 161, 168 lump of labour fallacy, 139 management, 149–54, 158–9 protections, 85–6, 147–9 reskilling, 159–60 universal basic income (UBI), 160, 189 Enclosure, 234–5, 241 energy, 11, 37–8, 39–40, 44, 46, 172–4, 250 cold fusion, 113–14 fossil fuels, 40, 159, 172, 250 gravitational potential, 53 solar power, 37–8, 53, 65, 77, 82, 90, 171, 172, 173, 249, 250, 251 storage, 40, 53, 114, 173–4, 250, 251 wind power, 39–40, 52 Energy Vault, 53–4, 173 Engels, Friedrich, 81 Engels’ pause, 80, 81 environmental movement, 73 Epic Games, 116 estate agents, 100 Estonia, 188, 190–91, 200, 211 Etzion Airbase, Sinai Peninsula, 195 European Commission, 116, 122, 123 European Space Agency, 56 European Union, 6, 82, 147, 186, 226 Excel, 99 exogeny, 2 exponential gap, 9, 10, 67–91, 70, 89, 253 cyber security and, 193 institutions and, 9, 10, 79–88, 90 mathematical understanding and, 71–5 predictions and, 75–9 price declines and, 68–9 superstar companies and, 10, 94–124 exponential growth bias, 73 Exponential View, 8–9 externalities, 97 extremism, 232–4 ExxonMobil, 65, 92 Facebook, 27, 28, 65, 94, 104, 108, 122, 216–17, 218, 219, 221–2, 223 advertising business, 94, 228 censorship on, 216–17, 224–6, 236 collective bargaining and, 164 data collection on, 228, 239–40 extremism and, 233–4 Instagram acquisition (2012), 117, 120 integrity teams, 234 interoperability, 237–8 Kenosha unrest shooting (2020), 224 misinformation on, 201, 225 network effect and, 98, 223 Oculus acquisition (2014), 117 pay at, 156–7 Phan photo controversy (2016), 216–17, 224, 225 platform model, 101 polarisation and, 233 relationship status on, 221–2 Rohingya ethnic cleansing (2018), 224, 225 US presidential election (2016), 217 WhatsApp acquisition (2014), 117 facial recognition, 152, 208 Factory Act (UK, 1833), 81 Fairchild Semiconductor, 19, 21 fake news, 201–4 family dinners, 86 farming, 170–72, 251 Farrar, James, 148 fax machines, 97 Federal Aviation Administration (US), 236 feedback loops, 3, 13 fertilizers, 35, 90 5G, 203 Financial Conduct Authority, 122 Financial Times, 183 Finland, 160, 211–12 Fitbit, 158 Fiverr, 144 flashing of headlights, 83 flexicurity, 160, 257 flints, 42 flywheels, 54 Ford, 54, 92, 162 Ford, Gerald, 114 Ford, Henry, 54, 162 Ford, Martin, 125 Fortnite, 116 fossil fuels, 40, 159, 172 France, 100, 138, 139, 147, 163 free-market economics, 63–4 freelance work, 10, 71, 142–9 Frey, Carl, 129, 134, 141 Friedman, Milton, 63–4, 241 Friedman, Thomas, 167 FriendFeed, 238 Friendster, 26 Fudan University, 245 fund management, 132 Galilei, Galileo, 83 gaming, 86 Gates, Bill, 17, 25, 84 gender, 6 General Agreement on Tariffs and Trade, 87 General Data Protection Regulation (GDPR), 226 General Electric, 52 General Motors, 92, 125, 130 general purpose technologies, 10, 45–8 generative adversarial networks (GANs), 58 Geneva Conventions, 193, 199, 209 Genghis Khan, 44 GEnie, 100 genome sequencing, 40–41, 90, 229, 234, 245–7, 250, 252 Germany, 75, 134, 147 Giddens, Anthony, 82 gig economy, 10, 71, 142–9, 153, 162, 164, 239, 252, 255 Gilbreth, Lillian, 150 Ginsparg, Paul, 59 GitHub, 58, 60 GlaxoSmithKline, 229–30 global financial crisis (2007–9), 168 Global Hawk drones, 206 global positioning systems (GPS), 197 globalisation, 11, 62, 64, 156, 166, 167–71, 177, 179, 187, 193 internet and, 185 conflict and, 189, 193, 194 Glocer, Thomas, 56 Go (game), 132 GOAT, 102 Gojek, 103 Golden Triangle, 170 Goldman Sachs, 151 Goodfellow, Ian, 58 Google, 5, 35, 36, 94, 98, 104, 108, 115, 122 advertising business, 94, 112–13, 116, 117, 227 Android, 85, 94, 117, 120 chip production, 113 Covid-19 pandemic (2019–21), 222–3 data network effect, 106–7 death benefits, 151 Double Irish tax loophole, 119 Maps, 113 quantum computing, 35 R&D, 114, 118 vertical integration, 112–13, 116 X, 114 YouTube acquisition (2006), 112, 117 Gopher, 59, 100 GPT-3, 33 Graeber, David, 133–4 Grand Bazaar, Istanbul, 102 Graphcore, 34, 35 graphics chips, 34 Grateful Dead, The, 184 gravitational potential energy, 53 gravity bombs, 195 Greater Bay Area, China, 182 Greenberg, Andy, 199 Gross, Bill, 53 Grove, Andrew, 17 GRU (Glavnoje Razvedyvatel’noje Upravlenije), 199 Guangzhou, Guangdong, 182 Guardian, 8, 125, 154, 226, 227 Guiyang, Guizhou, 166 H1N1 virus, 75 Habermas, Jürgen, 218 Hard Times (Dickens), 80 Hardin, Garrett, 241 Harop drones, 207–8 Harpy drones, 207–8 Harvard University, 150, 218, 220, 221, 253 healthcare artificial intelligence and, 57–8, 88, 103 data and, 230, 239, 250–51 wearable devices and, 158, 251 Helsinki, Finland, 160 Herlev Hospital, Denmark, 58 Hinton, Geoffrey, 32, 126–7 HIPA Act (US, 1996), 230 Hitachi, 152 Hobbes, Thomas, 210 Hoffman, Josh, 174 Hoffman, Reid, 110, 111 Holmes, Edward, 245 homophily, 231–4 Hong Kong, 182 horizontal expansion, 111–12, 218 Houston Islam protests (2016), 203 Houthis, 206 Howe, Jeff, 143 Hsinchu, Taiwan, 181 Hughes, Chris, 217 Hull, Charles, 43 Human + Machine (Daugherty), 141 human brain, 77 human genome, 40–41, 90, 229, 234, 250 human resources, 150 Hussein, Saddam, 195 Hyaline, 174 hydroponics, 171 hyperinflation, 75 IBM, 17, 21, 47, 98 IDC, 219 Ideal-X, 61 Ikea, 144 Illumina, 41 Ilves, Toomas Hendrik, 190 ImageNet, 32 immigration, 139, 168, 183–4 Impossible Foods, 69 Improv, 99 income inequality, 155–8, 161, 168 India, 103, 145, 181, 186, 224, 253, 254 Indonesia, 103 Industrial Revolution (1760–1840), 79–81, 157, 235 informational networks, 59–60 ING, 178 innovation, 14, 117 Innovator’s Dilemma, The (Christensen), 24 Instagram, 84, 117, 120, 121, 237 institutions, 9, 10, 79–88, 90–91 path dependence, 86–7 punctuated equilibrium, 87–8 intangible economy, 104–7, 118, 156, 175, 180 integrated circuits, 19 Intel, 16–17, 19, 163 intellectual property law, 82 Intermediate-Range Nuclear Forces Treaty (1987), 237 International Alliance of App-Based Transport Workers, 164 International Court of Justice, 224 International Criminal Court, 208 International Energy Agency, 77, 82 International Labour Organization, 131 International Monetary Fund (IMF), 87, 167, 187 international organisations, 82 International Organization for Standardization, 55, 61 International Rescue Committee, 184 International Telecommunication Union, 55 internet, 7, 47–8, 55, 65, 72, 75, 84–5, 88, 115, 184–6 code is law, 220–22, 235 data and, 11, 32, 71 informational networks, 59–60 localisation, 185–6 lockdowns and, 12 network effect, 100–101 online shopping, 48, 61, 62, 75, 94, 102, 135 platform model and, 102 public sphere and, 223 standardisation, 55 Wi-Fi, 151 interoperability, 55, 120–22, 237–9, 241, 243, 256–7 iPhone, 47, 62, 85, 94, 115, 175 Iran, 186, 196, 198, 203, 206 Iraq, 195–6, 201, 209 Ireland, 57–8, 119 Islamic State, 194, 233 Israel, 37, 188, 195–6, 198, 206, 207–8 Istanbul, Turkey, 102 Jacobs, Jane, 182 Japan, 37, 152, 171, 174 Jasanoff, Sheila, 253 JD.com, 137 Jena, Rajesh, 127 Jio, 103 job interviews, 153, 156 John Paul II, Pope, 83 Johnson, Boris, 79 Jumia, 103 just in time supply chains, 61–2 Kahneman, Daniel, 74 KakaoTalk, 27 Kaldor, Mary, 194 Kapor, Mitchell, 99 Karunaratne, Sid, 140–41, 151 Kenosha unrest shooting (2020), 224 Keynes, John Maynard, 126, 158 Khan, Lina, 119 Khartoum, Sudan, 183 Kim Jong-un, 198 King’s College London, 179 Kiva Systems, 136 Kobo360, 145 Kodak, 83–4, 88 Kranzberg, Melvin, 254 Krizhevsky, Alex, 32–3, 34 Kubursi, Atif, 178 Kurdistan Workers’ Party, 206 Kurzweil, Ray, 29–31, 33, 35, 77 Lagos, Nigeria, 182 Lahore, Pakistan, 102 landmines, 213 Law of Accelerating Returns, 30–31, 33, 35 Laws of Motion, 20 learning by doing, 48, 53 Leggatt, George, 148 Lemonade, 56 Lessig, Larry, 220–21 Leviathan (Hobbes), 210 Li Fei-Fei, 32 life expectancy, 25, 26 light bulbs, 44, 157 Lime, 27 Limits to Growth, The (Meadows et al.), 73 linear value chains, 101 LinkedIn, 26, 110, 121, 237, 238 Linkos Group, 197 Linux OS, 242 Lipsey, Richard, 45 lithium-ion batteries, 40, 51 lithium, 170 localism, 11, 166–90, 252, 255 log files, 227 logarithmic scales, 20 logic gates, 18 logistic curve, 25, 30, 51, 52, 69–70 London, England, 180, 181, 183 London Underground, 133–4 looms, 157 Lordstown Strike (1972), 125 Lotus Development Corporation, 99 Luddites, 125, 253 Lufa Farms, 171–2 Luminate, 240 lump of labour fallacy, 139 Lusaka, Zambia, 15 Lyft, 146, 148 machine learning, 31–4, 54, 58, 88, 127, 129, 143 MacKinnon, Rebecca, 223 Maersk, 197, 199, 211 malaria, 253 Malaysia Airlines Flight 17 shootdown (2014), 199 Malta, 114 Malthus, Thomas, 72–3 malware, 197 Man with the Golden Gun, The (1974 film), 37 manufacturing, 10, 39, 42–4, 46, 166–7, 175–9 additive, 43–4, 46, 48, 88, 166, 169, 175–9 automation and, 130 re-localisation, 175–9 subtractive, 42–3 market saturation, 25–8, 51, 52 market share, 93–6, 111 Marshall, Alfred, 97 Massachusetts Institute of Technology, 18, 147, 202, 238 Mastercard, 98 May, Theresa, 183 Mayors for a Guaranteed Income, 189 McCarthy, John, 31 McKinsey, 76, 94 McMaster University, 178 measles, 246 Mechanical Turk, 142–3, 144, 145 media literacy, 211–12 meningitis, 246 Mexico, 202 microorganisms, 42, 46, 69 Microsoft, 16–17, 65, 84–5, 88, 98–9, 100, 105, 108, 122, 221 Bing, 107 cloud computing, 85 data collection, 228 Excel, 99 internet and, 84–5, 100 network effect and, 99 Office software, 98–9, 110, 152 Windows, 85, 98–9 Workplace Productivity scores, 152 Mill, John Stuart, 193 miniaturisation, 34–5 minimum wage, 147, 161 misinformation, 11, 191, 192, 200–204, 209, 212, 217, 225, 247–8 mobile phones, 76, 121 see also smartphones; telecom companies Moderna, 245, 247 Moixa, 174 Mondelez, 197, 211 Mongol Empire (1206–1368), 44 monopolies, 10, 71, 94, 95, 114–24, 218, 255 Monopoly (board game), 82 Montreal, Quebec, 171 mood detection systems, 152 Moore, Gordon, 19, 48 Moore’s Law, 19–22, 26, 28–9, 31, 34, 63, 64, 74 artificial intelligence and, 32, 33–4 Kodak and, 83 price and, 41–2, 51, 68–9 as social fact, 29, 49 superstar companies and, 95 time, relationship with, 48–9 Moravec, Hans, 131 Moravec’s paradox, 131–2 Motorola, 76 Mount Mercy College, Cork, 57 Mozilla Firefox, 242 Mumbai, India, 181 mumps, 246 muskets, 54–5 MySpace, 26–7 Nadella, Satya, 85 Nagorno-Karabakh War (2020), 206–7 napalm, 216 NASA (National Aeronautics and Space Administration), 56 Natanz nuclear site, Iran, 196 National Health Service (NHS), 87 nationalism, 168, 186 NATO (North Atlantic Treaty Organization), 191, 213 Netflix, 104, 107, 109, 136, 137, 138, 139, 151, 248 Netherlands, 103 Netscape Communicator, 6 networks, 58–62 network effects, 96–101, 106, 110, 121, 223 neural networks, 32–4 neutral, technology as, 5, 220–21, 254 new wars, 194 New York City, New York, 180, 183 New York Times, 3, 125, 190, 228 New Zealand, 188, 236 Newton, Isaac, 20 Nigeria, 103, 145, 182, 254 Niinistö, Sauli, 212 Nike, 102 nitrogen fertilizers, 35 Nixon, Richard, 25, 114 Nobel Prize, 64, 74, 241 Nokia, 120 non-state actors, 194, 213 North Korea, 198 North Macedonia, 200–201 Norway, 173, 216 NotPetya malware, 197, 199–200, 211, 213 Novell, 98 Noyce, Robert, 19 NSO Group, 214 nuclear weapons, 193, 195–6, 212, 237 Nuremberg Trials (1945–6), 208 O’Reilly, Tim, 107 O’Sullivan, Laura, 57–8, 60 Obama, Barack, 205, 214, 225 Ocado, 137 Ocasio-Cortez, Alexandria, 239 Oculus, 117 oDesk, 144 Ofcom, 8 Ofoto, 84 Ogburn, William, 85 oil industry, 172, 250 Houthi drone attacks (2019), 206 OAPEC crisis (1973–4), 37, 258 Shamoon attack (2012), 198 Standard Oil breakup (1911), 93–4 Olduvai, Tanzania, 42 online shopping, 48, 61, 62, 75, 94, 102, 135 open-source software, 242 Openreach, 123 Operation Opera (1981), 195–6, 209 opium, 38 Orange, 121 Organisation for Economic Co-operation and Development (OECD), 119, 167 Osborne Computer Corporation, 16 Osborne, Michael, 129 Osirak nuclear reactor, Iraq, 195–6, 209 Ostrom, Elinor, 241 Oxford University, 129, 134, 203, 226 pace of change, 3 pagers, 87 Pakistan, 145, 205 palladium, 170 PalmPilot, 173 panopticon, 152 Paris, France, 181, 183 path dependence, 86 PayPal, 98, 110 PC clones, 17 PeerIndex, 8, 201, 237 Pegasus, 214 PeoplePerHour, 144 PepsiCo, 93 Perez, Carlota, 46–7 pernicious polarization, 232 perpetual motion, 95, 106, 107, 182 Petersen, Michael Bang, 75 Phan Thi Kim Phuc, 216–17, 224, 225 pharmaceutical industry, 6, 93, 250 phase transitions, 4 Philippines, 186, 203 Phillips Exeter Academy, 150 phishing scams, 211 Phoenix, Arizona, 134 photolithography, 19 Pigou, Arthur Cecil, 97 Piketty, Thomas, 160 Ping An Good Doctor, 103, 250 Pix Moving, 166, 169, 175 PKK (Partîya Karkerên Kurdistanê), 206 Planet Labs, 69 platforms, 101–3, 219 PlayStation, 86 plough, 157 Polanyi, Michael, 133 polarisation, 231–4 polio, 246 population, 72–3 Portify, 162 Postel, Jon, 55 Postings, Robert, 233 Predator drones, 205, 206 preprints, 59–60 price gouging, 93 price of technology, 22, 68–9 computing, 68–9, 191, 249 cyber-weapons, 191–2 drones, 192 genome sequencing, 41–2, 252 renewable energy, 39–40, 250 printing press, 45 public sphere, 218, 221, 223 Pulitzer Prize, 216 punctuated equilibrium, 87–8 al-Qaeda, 205, 210–11 Qatar, 198 quantum computing, 35 quantum physics, 29 quarantines, 12, 152, 176, 183, 246 R&D (research and development), 67–8, 113, 118 racial bias, 231 racism, 225, 231, 234 radicalisation pathways, 233 radiologists, 126 Raford, Noah, 43 Raz, Ze’ev, 195, 209 RB, 197 re-localisation, 11, 166–90, 253, 255 conflict and, 189, 193, 194, 209 Reagan, Ronald, 64, 163 religion, 6, 82, 83 resilience, 257 reskilling, 159–60 responsibility gap, 209 Restrepo, Pascual, 139 Reuters, 8, 56, 132 revolutions, 87 Ricardo, David, 169–70, 177 rights, 240–41 Rise of the Robots, The (Ford), 125 Rittenhouse, Kyle, 224 Roche, 67 Rockefeller, John, 93 Rohingyas, 224 Rome, ancient, 180 Rose, Carol, 243 Rotterdam, Netherlands, 56 Rule of Law, 82 running shoes, 102, 175–6 Russell, Stuart, 31, 118 Russian Federation, 122 disinformation campaigns, 203 Estonia cyberattacks (2007), 190–91, 200 Finland, relations with, 212 Nagorno-Karabakh War (2020), 206 nuclear weapons, 237 Ukraine cyberattacks (2017), 197, 199–200 US election interference (2016), 217 Yandex, 122 S-curve, 25, 30, 51, 52, 69–70 al-Sahhaf, Muhammad Saeed, 201 Salesforce, 108–9 Saliba, Samer, 184 salt, 114 Samsung, 93, 228 San Francisco, California, 181 Sandel, Michael, 218 Sanders, Bernard, 163 Sandworm, 197, 199–200, 211 Santander, 95 Sasson, Steve, 83 satellites, 56–7, 69 Saturday Night Fever (1977 soundtrack), 72 Saudi Arabia, 108, 178, 198, 203, 206 Schmidt, Eric, 5 Schwarz Gruppe, 67 Second Machine Age, The (Brynjolfsson and McAfee), 129 self-driving vehicles, 78, 134–5, 141 semiconductors, 18–22, 28–9, 48–9, 52, 113, 251 September 11 attacks (2001), 205, 210–11 Shamoon virus, 198 Shanghai, China, 56 Shannon, Claude, 18 Sharp, 16 Shenzhen, Guangdong, 182 shipping containers, 61–2, 63 shopping, 48, 61, 62, 75, 94, 102, 135 Siemens, 196 silicon chips, see chips Silicon Valley, 5, 7, 15, 24, 65, 110, 129, 223 Sinai Peninsula, 195 Sinclair ZX81, 15, 17, 21, 36 Singapore, 56 Singles’ Day, 48 Singularity University, 5 SixDegrees, 26 Skydio R1 drone, 208 smartphones, 22, 26, 46, 47–8, 65, 86, 88, 105, 111, 222 Smith, Adam, 169–70 sneakers, 102, 175–6 Snow, Charles Percy, 7 social credit systems, 230 social media, 26–8 censorship on, 216–17, 224–6, 236 collective bargaining and, 164 data collection on, 228 interoperability, 121, 237–8 market saturation, 25–8 misinformation on, 192, 201–4, 217, 247–8 network effect, 98, 223 polarisation and, 231–4 software as a service, 109 solar power, 37–8, 53, 65, 77, 82, 90, 171, 172, 173, 249, 250, 251 SolarWinds, 200 Solberg, Erna, 216 South Africa, 170 South Korea, 188, 198, 202 Southey, Robert, 80 sovereignty, 185, 199, 214 Soviet Union (1922–91), 185, 190, 194, 212 Spain, 170, 188 Spanish flu pandemic (1918–20), 75 Speedfactory, Ansbach, 176 Spire, 69 Spotify, 69 Sputnik 1 orbit (1957), 64, 83 stagflation, 63 Standard and Poor, 104 Standard Oil, 93–4 standardisation, 54–7, 61, 62 Stanford University, 32, 58 Star Wars franchise, 99 state-sized companies, 11, 67 see also superstar companies states, 82 stirrups, 44 Stockholm International Peace Research Institute, 208 Stockton, California, 160 strategic snowflakes, 211 stress tests, 237 Stuxnet, 196, 214 Sudan, 183 superstar companies, 10, 11, 67, 94–124, 218–26, 252, 255 blitzscaling, 110 collective bargaining and, 163 horizontal expansion, 111–12, 218 increasing returns to scale, 108–10 innovation and, 117–18 intangible economy, 104–7, 118, 156 interoperability and, 120–22, 237–9 monopolies, 114–24, 218 network effect, 96–101, 121 platform model, 101–3, 219 taxation of, 118–19 vertical expansion, 112–13 workplace cultures, 151 supply chains, 61–2, 166–7, 169, 175, 187, 252 surveillance, 152–3, 158 Surviving AI (Chace), 129 Sutskever, Ilya, 32 synthetic biology, 42, 46, 69, 174, 245, 250 Syria, 186 Taiwan, 181, 212 Talkspace, 144 Tallinn, Estonia, 190 Tang, Audrey, 212 Tanzania, 42, 183 TaskRabbit, 144 Tasmania, Australia, 197 taxation, 10, 63, 96, 118–19 gig economy and, 146 superstar companies and, 118–19 Taylor, Frederick Winslow, 150, 152, 153, 154 Tel Aviv, Israel, 181 telecom companies, 122–3 Tencent, 65, 104, 108, 122 territorial sovereignty, 185, 199, 214 Tesco, 67, 93 Tesla, 69, 78, 113 Thailand, 176, 203 Thatcher, Margaret, 64, 163 Thelen, Kathleen, 87 Thiel, Peter, 110–11 3D printing, see additive manufacturing TikTok, 28, 69, 159–60, 219 Tisné, Martin, 240 Tomahawk missiles, 207 Toyota, 95 trade networks, 61–2, 166–7, 169, 175 trade unions, see collective bargaining Trading Places (1983 film), 132 Tragedy of the Commons, The (Hardin), 241 transistors, 18–22, 28–9, 48–9, 52, 113, 251 transparency, 236 Treaty of Westphalia (1648), 199 TRS-80, 16 Trump, Donald, 79, 119, 166, 201, 225, 237 Tufekci, Zeynep, 233 Turing, Alan, 18, 22 Turkey, 102, 176, 186, 198, 202, 206, 231 Tversky, Amos, 74 23andMe, 229–30 Twilio, 151 Twitch, 225 Twitter, 65, 201, 202, 219, 223, 225, 237 two cultures, 7, 8 Uber, 69, 94, 102, 103, 106, 142, 144, 145 Assembly Bill 5 (California, 2019), 148 engineering jobs, 156 London ban (2019), 183, 188 London protest (2016), 153 pay at, 147, 156 satisfaction levels at, 146 Uber BV v Aslam (2021), 148 UiPath, 130 Ukraine, 197, 199 Unilever, 153 Union of Concerned Scientists, 56 unions, see collective bargaining United Arab Emirates, 43, 198, 250 United Autoworkers Union, 162 United Kingdom BBC, 87 Biobank, 242 Brexit (2016–20), 6, 168 collective bargaining in, 163 Covid-19 epidemic (2020–21), 79, 203 DDT in, 253 digital minilateralism, 188 drone technology in, 207 flashing of headlights in, 83 Golden Triangle, 170 Google and, 116 Industrial Revolution (1760–1840), 79–81 Luddite rebellion (1811–16), 125, 253 misinformation in, 203, 204 National Cyber Force, 200 NHS, 87 self-employment in, 148 telecom companies in, 123 Thatcher government (1979–90), 64, 163 United Nations, 87, 88, 188 United States antitrust law in, 114 automation in, 127 Battle of the Overpass (1937), 162 Capitol building storming (2021), 225 China, relations with, 166 Cold War (1947–91), 194, 212, 213 collective bargaining in, 163 Covid-19 epidemic (2020–21), 79, 202–4 Cyber Command, 200, 210 DDT in, 253 drone technology in, 205, 214 economists in, 63 HIPA Act (1996), 230 Kenosha unrest shooting (2020), 224 Lordstown Strike (1972), 125 manufacturing in, 130 misinformation in, 202–4 mobile phones in, 76 nuclear weapons, 237 Obama administration (2009–17), 205, 214 polarisation in, 232 presidential election (2016), 199, 201, 217 presidential election (2020), 202–3 Reagan administration (1981–9), 64, 163 self-employment in, 148 September 11 attacks (2001), 205, 210–11 shipping containers in, 61 shopping in, 48 solar energy research, 37 Standard Oil breakup (1911), 93–4 taxation in, 63, 119 Trump administration (2017–21), 79, 119, 166, 168, 201, 225, 237 Vietnam War (1955–75), 216 War on Terror (2001–), 205 universal basic income (UBI), 160, 189 universal service obligation, 122 University of Cambridge, 127, 188 University of Chicago, 63 University of Colorado, 73 University of Delaware, 55 University of Oxford, 129, 134, 203, 226 University of Southern California, 55 unwritten rules, 82 Uppsala Conflict Data Program, 194 UpWork, 145–6 USB (Universal Serial Bus), 51 Ut, Nick, 216 utility providers, 122–3 vaccines, 12, 202, 211, 245–7 Vail, Theodore, 100 value-free, technology as, 5, 220–21, 254 Veles, North Macedonia, 200–201 Véliz, Carissa, 226 Venezuela, 75 venture capitalists, 117 vertical expansion, 112–13, 116 vertical farms, 171–2, 251 video games, 86 Vietnam, 61, 175, 216 Virological, 245 Visa, 98 VisiCalc, 99 Vodafone, 121 Vogels, Werner, 68 Wag!


State-Building: Governance and World Order in the 21st Century by Francis Fukuyama

Asian financial crisis, behavioural economics, Berlin Wall, Bretton Woods, centre right, corporate governance, demand response, Doha Development Round, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, George Akerlof, Hernando de Soto, information asymmetry, liberal world order, Live Aid, Nick Leeson, Pareto efficiency, Potemkin village, precautionary principle, price stability, principal–agent problem, rent-seeking, road to serfdom, Ronald Coase, structural adjustment programs, Suez crisis 1956, tacit knowledge, technology bubble, The Market for Lemons, The Nature of the Firm, transaction costs, vertical integration, Washington Consensus, Westphalian system

The view that Americans are unilateralist and Europeans are committed to a broad, multilateral world order is of course a great oversimplification. Liberal internationalism, after all, has a long and honored place in American foreign policy. The United States was the country that promoted the League of Nations, the United Nations, the Bretton Woods institutions, the General Agreement on Tariffs and Trade, the World Trade Organization (WTO), and a host of other international organizations. There are many international governance organizations in the world today in which the United States participates as an active, if not the most active, member, addressing issues from standards setting, nuclear power safety, and scientific cooperation to aviation safety, bank settlements, drug regulation, uses of outer space, and telecommunications.


pages: 145 words: 43,599

Hawai'I Becalmed: Economic Lessons of the 1990s by Christopher Grandy

Alan Greenspan, Bretton Woods, business climate, business cycle, dark matter, endogenous growth, inventory management, Jones Act, Long Term Capital Management, market bubble, Maui Hawaii, minimum wage unemployment, open economy, purchasing power parity, Silicon Valley, Telecommunications Act of 1996

In 1988, the average Japanese visitor spent $350 per day while the U.S. mainland visitor spent only $121 per day.8 An appreciating yen further supported Japanese spending. The productivity of Japan’s economy, and the large and growing trade surpluses run with the United States, meant that the yen had appreciated against the dollar (and most other currencies) since the global abandonment of the Bretton Woods fixed exchange rate system in the early 1970s (Figure 5). Between early 1985 and 1989 the yen rose from 260 per dollar to 144 per dollar—an 81% appreciation. The rising yen made Hawai‘i products and services less expensive for the Japanese consumer, and this stimulated Japanese-based visitor spending in Hawai‘i.


pages: 363 words: 28,546

Portfolio Design: A Modern Approach to Asset Allocation by R. Marston

asset allocation, Bob Litterman, book value, Bretton Woods, business cycle, capital asset pricing model, capital controls, carried interest, commodity trading advisor, correlation coefficient, currency risk, diversification, diversified portfolio, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, family office, financial engineering, financial innovation, fixed income, German hyperinflation, global macro, high net worth, hiring and firing, housing crisis, income per capita, index fund, inventory management, junk bonds, Long Term Capital Management, low interest rates, managed futures, mortgage debt, Nixon triggered the end of the Bretton Woods system, passive investing, purchasing power parity, risk free rate, risk-adjusted returns, Robert Shiller, Ronald Reagan, Sharpe ratio, Silicon Valley, stocks for the long run, superstar cities, survivorship bias, transaction costs, Vanguard fund

During this period, financing was available primarily through loans from national governments and (in the postwar period) international agencies such as the World Bank. Even banks were wary of foreign lending. The third phase began in the early 1970s when capital controls began to be lifted. It was in this period that the so-called Bretton Woods system of fixed exchange rates came to an end. In 1971, the Nixon Administration ended the dollar’s tie to gold. Over the next few years, many industrial countries allowed their currencies to float vis-à-vis the dollar. With less need to defend their currencies, governments began to relax their capital controls.

., 128 European, 135 international, 134 parallel, 134 bond returns, inflation impact, 7 bonds, 10–13, 22–25, 121–122 capital gains, 12–13 default rates, 113, 103 emerging markets, 113–114 estimating returns, 288 in portfolios, 290–291, 309–310 interest rates, 135 key features, 140–141 markets outside U.S., 133–140 returns, 27–30, 131–133 stocks versus, 24–25 treasury, 122–127 Brady Bonds, 114 Brady, Nicholas, 114 Brazil, 99–100 Bretton Woods, 74 BRIC countries, 99 bull market, 30 buyout funds, 192–195, 205–207 returns, 207–211 B backfill bias, 178, 180 backwardation, normal, 240 Baker, James, 81 Bank for International Settlements, 133–134 Banz, Rolf W., 49 bequests, effects of, 311–313 beta, 17 biases, hedge funds, 178–181 Black, Fischer, 154–155 C Cambridge Associates, 199 Campbell, John Y., 64 capital asset pricing model (CAPM), 41 capital gains, 36 bonds, 12–13 currency, 79–85 CAPM.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

affirmative action, Alan Greenspan, Albert Einstein, Andrei Shleifer, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Boeing 747, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Cass Sunstein, central bank independence, classic study, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency risk, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, Great Leap Forward, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, libertarian paternalism, low interest rates, low skilled workers, Malacca Straits, managed futures, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, school vouchers, seminal paper, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, tech worker, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.”14 Given the stakes involved, are any adults supervising all of this? Yes, but they are getting long in the tooth. In the waning days of World War II, representatives of the Allied nations gathered at the Mt. Washington Hotel in Bretton Woods, New Hampshire. (It’s a delightful place in both summer and winter, if you are looking for a New England getaway.) Their mission was to create a stable financial infrastructure for the postwar world. They created two international institutions, or “the two sisters.” The institution at the center of the global fight against poverty is the Washington-based World Bank.

If the World Bank is the world’s welfare agency, then its sister organization, the International Monetary Fund (IMF), is the fire department responsible for dousing international financial crises. Iceland called the IMF. So did Argentina, Mexico, and all the others. The IMF was also conceived at Bretton Woods as a cooperative global institution. Members pay funds into the IMF; in exchange they can borrow in times of difficulty “on condition that they undertake economic reforms to eliminate these difficulties for their own good and that of the entire membership.” No country is ever required to accept loans or advice from either the IMF or the World Bank.


pages: 516 words: 116,875

Greater: Britain After the Storm by Penny Mordaunt, Chris Lewis

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, accelerated depreciation, Ada Lovelace, Airbnb, banking crisis, battle of ideas, behavioural economics, Bernie Madoff, bitcoin, Black Lives Matter, blockchain, Bob Geldof, Boeing 747, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, carbon footprint, Charles Babbage, collective bargaining, Corn Laws, corporate social responsibility, COVID-19, credit crunch, crowdsourcing, data is not the new oil, data is the new oil, David Attenborough, death from overwork, Deng Xiaoping, Diane Coyle, Donald Trump, Downton Abbey, driverless car, Elon Musk, en.wikipedia.org, experimental economics, failed state, fake news, Firefox, fixed income, full employment, gender pay gap, global pandemic, global supply chain, green new deal, happiness index / gross national happiness, high-speed rail, impact investing, Jeremy Corbyn, Khartoum Gordon, lateral thinking, Live Aid, lockdown, loss aversion, low skilled workers, microaggression, mittelstand, moral hazard, Neil Kinnock, Nelson Mandela, Ocado, off-the-grid, offshore financial centre, Panamax, Ponzi scheme, post-truth, quantitative easing, remote working, road to serfdom, Salesforce, Sheryl Sandberg, Skype, smart cities, social distancing, South China Sea, sovereign wealth fund, Steve Jobs, Steven Pinker, surveillance capitalism, transaction costs, transcontinental railway

CONCLUSION The question now is whether the leadership can be found to change capitalism against a backdrop of nationalism and protectionism. This needs to be led by nations like the US and the UK, in the same spirit that was shown during the 1930s and in the post-war years.74 This will require confident Bretton Woods-style thinking,75 bringing together today’s pre-eminent minds to collaborate with vision and coordination to plan ahead. This should be an appealing area both for Britain and for America because of the inherent trust that accompanies their democratic systems. Democratic political and capitalist economic systems share the important and attractive feature of vicarious power.

ie=UTF&tag=capbookedit-20 67 The Meeting That Showed Me the Truth About VCs by Tomer Dean, TechCrunch, 1 June 2017. 68 https://www.fsb.org.uk/uk-small-business-statistics.html 69 https://www.visualcapitalist.com/2000-years-economic-history-one-chart/ 70 https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/jobsecurityandbenefits.aspx 71 https://www.statista.com/statistics/289137/central-heating-in-households-in-the-uk/ 72 https://www.independent.co.uk/travel/news-and-advice/british-travellers-iata-world-air-transport-statistics-a9029366.html 73 http://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf 74 https://www.theguardian.com/commentisfree/2019/aug/21/contemporary-capitalism-liberal-democracy-policies 75 https://www.federalreservehistory.org/essays/bretton-woods-created 10 WHAT IS BRITAIN? What it means to be British is being tested again. Can Britain reinvent itself as it has so many times before? Will Britain turn inward just to solve its own problems? Is the government structured in a way that makes this possible? Capitalism has flourished and become more powerful, but democracy and political institutions have lagged, either baulking at the boundaries of the nation state or finding themselves bypassed by direct action.


The Empire Project: The Rise and Fall of the British World-System, 1830–1970 by John Darwin

anti-communist, banking crisis, Bretton Woods, British Empire, capital controls, classic study, cognitive bias, colonial rule, Corn Laws, disinformation, European colonialism, floating exchange rates, full employment, imperial preference, Joseph Schumpeter, Khartoum Gordon, Kickstarter, labour mobility, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Mahatma Gandhi, Monroe Doctrine, new economy, New Urbanism, open economy, railway mania, reserve currency, Right to Buy, rising living standards, scientific management, Scientific racism, South China Sea, Suez canal 1869, Suez crisis 1956, tacit knowledge, the market place, The Wealth of Nations by Adam Smith, trade route, transaction costs, transcontinental railway, undersea cable

But it was also acknowledged in the Bank of England, by Treasury officials and even by ministers, that preserving the sterling area as a closed currency zone was not a long-term solution to the problem of sterling. Sooner or later, the ‘one world’ economy envisaged in the Bretton Woods agreements at the close of the war would have to come into force. The alternative was return to the protectionist blocs of the inter-war years with all the consequences that might follow from that. Open disavowal of the Bretton Woods system would be hugely controversial. It might easily lead to an open breach with the United States, and perhaps the break-up of the Western Alliance. Washington had been patient with London's delays, but on the understanding that it intended to honour the promise of a convertible pound as soon as it could.

Instead, Labour was committed to a ‘cheap money’ policy (interest rates were kept at 2 per cent) partly to keep employment levels high, partly because the cost of nationalising Britain's mines and transport drove up government borrowing. Cheap money was as vital to Labour's public finances as to its social policy and electoral hopes. These considerations ruled out defending Britain's solvency in the open international economy that the Bretton Woods agreements had envisaged. Cheap money at home required a closed sterling economy abroad, to guard sterling's value and protect the overseas (sterling area) markets to which much of her exports were sent. Nor was it just a matter of weathering the immediate threat of a sterling collapse. The convertibility disaster brought home to ministers and their advisers that the fundamental imbalance of the British economy required both immediate action and a longer-term remedy.

It was, he said, ‘a reckless leap in the dark involving appalling political and economic risks at home and abroad’.42 The objection to ROBOT was not just that Butler's medicine was unnecessarily strong. Four arguments sank it. First, although there had been ambiguous signals from across the Atlantic, floating the pound would breach the first commandment of the Bretton Woods doctrine. It was hard to believe that the American response would not be severe. Secondly, it was far from certain that all the other countries in the sterling area would adopt a floating exchange rate. Far from forming a bloc of like-minded states, the sterling countries might break up in anger and acrimony.


pages: 891 words: 220,950

Winds of Change by Peter Hennessy

anti-communist, Beeching cuts, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, centre right, Corn Laws, creative destruction, cuban missile crisis, Dr. Strangelove, Etonian, Fall of the Berlin Wall, floating exchange rates, full employment, government statistician, Great Leap Forward, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, land tenure, liberal capitalism, meritocracy, Mikhail Gorbachev, Nelson Mandela, Norman Macrae, North Sea oil, oil shock, reserve currency, rising living standards, Robert Gordon, Scramble for Africa, Suez canal 1869, Suez crisis 1956, Ted Sorensen, The Rise and Fall of American Growth, total factor productivity, upwardly mobile, uranium enrichment

He knew its risks. The first was inflation. Though he saw ‘spare capacity in the economy’,65 there was a danger that wages would rip. The second was the balance of payments. Maudling thought of floating the pound but it was too difficult for the UK to go it alone in the era of fixed exchange rates under the Bretton Woods system. He thought, too, of a two-tier interest rate system: one for home, one for abroad. The Treasury and the Bank of England told him this was not a runner because the UK was responsible for sterling as the world’s second reserve currency.66 Thus, wrote Maudling, in a very characteristic paragraph, we went for expansion, quite deliberately, with our eyes open, recognizing the dangers.

It was very early days for both ‘Neddy’ and ‘Nicky’. And there was no evidence that a new and more benign ecology in terms of industrial relations was about to envelop the UK in a warm front of co-operation. Sterling couldn’t float to help take the strain (presumably because breaking out unilaterally from the Bretton Woods fixed-exchange regime would be too difficult). Nor, Maudling was advised, could the sterling balances be funded (effectively the reserves in the UK of the mainly Commonwealth sterling area countries could be drawn on by them at any time). So all the restraints that had cramped his predecessors’ room for manoeuvre during their chancellorships applied to Maudling too.

(BBC TV) 4 Anstey, Caroline 152 Anstey, Edgar 294 Appleton, Edward 453 Archipov, Vasili 266 Argyll, Duchess of 390 Armstrong, William 142, 443 Arnold, Matthew 467 Aron, Raymond 10, 248 Arrowsmith, Pat 302 Art of the Possible, The (Butler) 156, 399, 402 Association Football 179 Astor, Lord 367–9 At the End of the Day (Macmillan) 139 Atomic Energy Act (US 1954) 53 Atomic Energy Authority (AEA) 357–8 atomic power 10–11, 353 Atomic Weapons Establishment, Aldermaston 296 Attenborough, Richard 26 Attlee, Clement appointment as PM 341 and Britain’s influence in the world 484 chairing a committee of privy counsellors 165 comparison with de Gaulle 106 creator of Civil Defence Corps 296 and Harold Wilson 475, 494 and NATO 76 one of the great British Prime Ministers 169 and Quintin Hogg 488–9 saw Britain as Macmillan did 139 and the special Cabinet committee on immigration (GEN 325) 216 Aucuparius: Recollections of a Recruiting Officer (Furse) 192 Australia 105, 107, 118, 190 Automobile Association 222–3, 274 B-52 bombers 263, 289 B-59 (submarine) 264–6 Badenoch, David 396 Bagehot, Walter 166–7, 449 Bagrit, Leon 451, 455–7 balance of payments 42, 127, 141, 334, 340–41, 443–4, 478–9 Balfour, Arthur 218 Ball, George 68–71, 100 Ballistic Missile Early Warning System (BMEWS) 226, 273, 417 Barlow Report (1946) 453–4 ‘Barrow, The’ 3 Beale, USS (warship) 265–6 Beatles, The 3, 318–19, 459 Beaverbrook, Lord 94, 102, 189, 397, 403–4 ‘Bedsitter, The’ (BBC TV) 28 Beeching Report (March 1963) 175, 319–20, 343–51, 353 Beeching, Richard 174–5, 343–4, 350–51 Beloff, Nora 112 Benn, Tony 363 Benzedrine (amphetamine) 462 Berkeley, Humphrey 434–5 Berlin Blockade (1949) 233 Berlin crisis (1958–62) and Blake 246 and the Cold War bunker 5 coterminous with Cuban missile crisis 253, 257–9, 271–2, 281–2, 287, 289 ‘hub’ of the Cold War universe 228–33 preparations to deal with 224, 226 and US commitment to 235 and the Wall 238–42 Berlin Wall 218, 232, 238–42 Berthoud, Roger 367 Betjeman, John 169 Bevan, Aneurin 99, 422, 475–6 Beveridge Report 20, 123, 349, 452, 465, 499 Beveridge, William 344, 496 Bevin, Ernest 52, 76, 310 Beyond the Fringe (revue) 29–32, 35 Biggs, Ronnie 351 Billington, Michael 30 Birch, Nigel 162, 383 Bishop, Hedley 2 ‘Black Saturday’ 265–70, 283, 285–6, 302 Blair, Tony 141 Blake, George 242, 244–6, 299, 364 Bligh, Tim 154, 157–60, 222–5, 279, 333, 395, 408, 413–15, 449, 472 Blom-Cooper, Louis 385–6 ‘Blood Donor, The’ (BBC TV) 27–8 Bobbitt, Philip 497, 499 Bomber Command 267–8, 271–2 Bonaparte, Napoleon 495–6 Booker, Christopher 29, 37, 297, 317 Boothby, Lord Robert 166–7, 368, 380 Bottomley, Arthur 475 Boulting, John 25–7 Boulting, Roy 25–7 Bow Group 14, 132, 498 Bowles, Frank 93 Boyd-Carpenter, John 161 Boyle, Edward 147–9, 161, 406, 466 Braithwaite, Rodric 223–4, 295 Brandenburg Gate 237 Braudel, Fernand 24, 318 Bray, Roger 459 Bretton Woods system 340 Brexit 101, 210, 220, 500 Brezhnev, Leonid 492 Bridego Bridge, Linslade 351–2 Britannia (Royal Yacht) 8 British Army of the Rhine (BAOR) 3, 43, 61–2, 131 British Commonwealth agreement for UK at Conference 116–19 ‘become a gigantic farce’ 438–9 changes wrought by UK membership of EEC 114, 320 and decolonization 180, 185–7, 187 and EEC application 56, 60–61, 78, 106 and future access to EEC markets 112 and immigration to UK 211, 214–17 Labour’s position on 482–3 not a political organization 104–5 ‘three overlapping circles’ notion 84 and UK plans to join EEC 71–3, 79, 81–3, 87–93 British Empire achievement of independence 185–7 ‘darkest stain on withdrawal’ 191–2 ‘dash for the exit’ 178–85 decision to get out of 72 greater effects of empire ‘coming home’ 211–12 and immigration to UK 217–18 last decade of 189–91 Macmillan’s reluctance 188 nostalgia for 114 origins of imperial collapse 182 reviled as a renegade because of Suez 203 and ‘three overlapping circles’ 84 ‘British Establishment’ 385–6, 388 British Nationality Act (1948) 212, 216 British New Deal 20, 24–6, 123, 126, 139, 497 British Oxygen 486 British Railways Board 175 British Transport Commission 175, 345 British War Cabinet bunker see Central Government War HQ (alternative), Cotswolds Brittan, Samuel 145, 341 Brocklebank, Roy 267 Brook, Norman 55–7, 68–9, 116, 161, 183, 228–9, 276, 331–2, 372, 377 Brooke, Henry 161, 168 Brown, George 255, 335–8, 473 Browning, Robert 383 Bruce, David 253, 301–2, 376, 380 Bruce, Evangeline 380 Buchan, John 497–8 Budget (April 1963) 339–43 Bulganin, Nikolai 246 Bull, Peter 289 Bundy, McGeorge (‘Mac’) 284, 312 Burgess, Guy 377 Burke, Edmund 202 BURLINGTON see Central Government War HQ (alternative), Cotswolds Burton, Montague see Roberts, Adam Burton, Richard 240 Bush, George H.


pages: 538 words: 138,544

The Story of Stuff: The Impact of Overconsumption on the Planet, Our Communities, and Our Health-And How We Can Make It Better by Annie Leonard

air freight, banking crisis, big-box store, blood diamond, Bretton Woods, business logic, California gold rush, carbon footprint, carbon tax, clean water, Community Supported Agriculture, cotton gin, dematerialisation, employer provided health coverage, energy security, European colonialism, export processing zone, Firefox, Food sovereignty, Ford paid five dollars a day, full employment, global supply chain, Global Witness, income inequality, independent contractor, Indoor air pollution, intermodal, Jeff Bezos, job satisfaction, Kickstarter, liberation theology, McMansion, megaproject, Nelson Mandela, new economy, oil shale / tar sands, peak oil, planned obsolescence, Ralph Nader, renewable energy credits, Silicon Valley, special economic zone, supply-chain management, systems thinking, TED Talk, the built environment, trade liberalization, trickle-down economics, union organizing, Wall-E, Whole Earth Review, Zipcar

As the war drew to a close in 1944, the Allied powers, led by the United States, decided they needed a way to rearrange global economic relations around the new de facto world currency, the U.S. dollar, while also facilitating investment in the economies freshly destroyed by the war.103 And so two superinfluential international agencies were born at a hotel in Bretton Woods, New Hampshire. The “Bretton Woods Institutions”—the International Monetary Fund (IMF) and World Bank (the nickname of the International Bank for Reconstruction and Development)—were later joined by the World Trade Organization, or WTO (which evolved from the 1948 General Agreement on Tariffs and Trade, or GATT).


pages: 458 words: 136,405

Protest and Power: The Battle for the Labour Party by David Kogan

Bear Stearns, Berlin Wall, Bernie Sanders, Boris Johnson, Bretton Woods, Brexit referendum, Brixton riot, centre right, crowdsourcing, Donald Trump, Etonian, F. W. de Klerk, falling living standards, financial independence, full employment, imperial preference, Jeremy Corbyn, means of production, Mikhail Gorbachev, Neil Kinnock, Nelson Mandela, Northern Rock, open borders, race to the bottom, Ronald Reagan, wealth creators, Winter of Discontent, Yom Kippur War

Throughout that week, Brown and his chancellor, Alistair Darling, became central to the global efforts to save the banking system. They worked through the G7 with European and US leaders to get a global agreement to reinforce collapsing banks. The G20 met in November for the first time since Lehman Brothers had gone under. This meeting was compared in significance to the Bretton Woods summit in 1944. Paul Krugman writing in the New York Times in October 12, 2008: Has Gordon Brown, the British prime minister, saved the world financial system? OK, the question is premature — we still don’t know the exact shape of the planned financial rescues in Europe or for that matter the United States, let alone whether they’ll really work.

Index Abbott, Diane here, here, here, here, here, here, here, here Abrahams, Debbie here Adams, Gerry here Adonis, Andrew here, here Afghanistan war here, here, here, here Al Qaeda here Alexander the Great here Alexander, Sir Danny here Alexander, Douglas here, here Alexander, Heidi here Ali, Rushanara here Ali, Tariq here Alliance for Workers’ Liberty here, here, here Allied Union of Engineering Workers (AUEW) here, here all-women shortlists here, here, here Another Europe is Possible (AEIP) here, here, here, here, here, here antisemitism row here, here, here, here, here, here Arab Spring here Armstrong, Hilary here, here Article 50 here, here, here, here, here, here, here see also Brexit; EU referendum Ashdown, Paddy here Ashworth, Jonathan here, here, here, here, here, here, here al-Assad, Bashar here Association of London Government here, here Atkinson, Norman here, here Attlee, Clement here, here, here, here austerity here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here Austin, Ian here, here, here Baldwin, Tom here Balls, Ed here, here, here, here, here, here, here, here, here, here, here, here Bank of England here, here Banks, Tony here, here, here, here Barclay, Stephen here Barenboim, Daniel here Barnet council here Basnett, David here, here, here BBC here, here, here, here, here, here, here and Iraq war here Beckett, Margaret here, here, here, here, here, here Benn, Emily here Benn, Hilary here, here, here, here, here, here, here, here, here Benn, Tony here, here, here, here, here, here, here, here, here, here, here, here compared with Corbyn here death here, here deputy leadership election (1981) here, here, here, here, here, here, here economic programme and NEC here, here general election defeat (1983) here, here and Iraq war here, here and Kinnock leadership here, here, here, here and Kosovo intervention here and Northern Ireland here Berger, Luciana here, here, here, here, here, here Berlin Wall, fall of here Bermondsey by-election here, here, here Best for Britain here, here, here, here Beveridge, William here bin Laden, Osama here Bishops Stortford meeting here Black September group here Black, Ann here, here, here, here, here Black Wednesday here Blair, Tony here, here, here, here, here, here, here, here, here, here and antisemitism row here and Brown here, here, here, here, here and Brown premiership here, here enters parliament here and EU referendum/Brexit here, here, here general election victory (1997) here, here, here and international events here and Iraq war here, here, here, here, here leadership election (1994) here, here, here leadership style here, here and London mayoral election here and Miliband leadership here, here, here, here, here, here, here, here and New Labour here, here, here, here, here, here, here and public services here, here stands down as leader here and trade unions here vetoes Corbyn deselection here Blears, Hazel here Blunkett, David here Board of Deputies of British Jews here, here Bond, Jack here, here, here, here Bond, Pete here Bono here Brabin, Tracy here Bradshaw, Ben here Brady, Sir graham here Bretton Woods here Brexit here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here Irish border issue here, here, here, here, here, here, here see also Article here; EU referendum Brixton riots here Brooks, Rebekah here Brown, Gordon here, here, here, here, here, here, here, here, here, here, here and antisemitism row here, here and Blair here, here, here, here, here and Blair leadership here, here economic policies here, here, here, here, here, here, here, here and EU referendum here, here and financial crisis here, here general election defeat (2010) here, here Gillian Duffy incident here, here leadership election (1994) here, here leadership election (2007) here, here and Miliband leadership here, here, here, here, here, here, here and New Labour here, here, here, here, here, here, here parallels with Callaghan here, here parallels with Osborne here premiership here refuses to join Euro here, here, here, here and Scottish referendum here and trade unions here Brown, Ron here Burden, Richard here Burgon, Richard here, here, here Burnham, Andy here, here, here, here, here, here, here, here, here, here, here, here leadership election (2015) here, here, here, here, here, here, here, here, here Bush, George H.


pages: 545 words: 137,789

How Markets Fail: The Logic of Economic Calamities by John Cassidy

Abraham Wald, Alan Greenspan, Albert Einstein, An Inconvenient Truth, Andrei Shleifer, anti-communist, AOL-Time Warner, asset allocation, asset-backed security, availability heuristic, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Black Monday: stock market crash in 1987, Black-Scholes formula, Blythe Masters, book value, Bretton Woods, British Empire, business cycle, capital asset pricing model, carbon tax, Carl Icahn, centralized clearinghouse, collateralized debt obligation, Columbine, conceptual framework, Corn Laws, corporate raider, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Daniel Kahneman / Amos Tversky, debt deflation, different worldview, diversification, Elliott wave, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, Garrett Hardin, George Akerlof, Glass-Steagall Act, global supply chain, Gunnar Myrdal, Haight Ashbury, hiring and firing, Hyman Minsky, income per capita, incomplete markets, index fund, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kickstarter, laissez-faire capitalism, Landlord’s Game, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, mandelbrot fractal, margin call, market bubble, market clearing, mental accounting, Mikhail Gorbachev, military-industrial complex, Minsky moment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, Naomi Klein, negative equity, Network effects, Nick Leeson, Nixon triggered the end of the Bretton Woods system, Northern Rock, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, Ponzi scheme, precautionary principle, price discrimination, price stability, principal–agent problem, profit maximization, proprietary trading, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, RAND corporation, random walk, Renaissance Technologies, rent control, Richard Thaler, risk tolerance, risk-adjusted returns, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical model, subprime mortgage crisis, tail risk, Tax Reform Act of 1986, technology bubble, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, too big to fail, Tragedy of the Commons, transaction costs, Two Sigma, unorthodox policies, value at risk, Vanguard fund, Vilfredo Pareto, wealth creators, zero-sum game

By the early 1970s, under the onslaught of rising government spending, globalization, and growing demand for natural resources, the social contract between workers and corporations that underpinned the postwar boom was fraying badly, and so were other features of the Keynesian settlement, such as modest inflation and the Bretton Woods monetary system. Free market economics offered an intellectual alternative to the Kennedy-Johnson-Nixon consensus, which was known in the United Kingdom as “Butskellism.” Securitization and the rise of the stock market provided an alternative means of mobilizing and disciplining the economy. If corporate managers and government officials couldn’t restructure declining industries, control the budget deficit, and boost languishing profit rates, perhaps financial markets could do the job.

Berlin Wall, fall of Bernanke, Ben Friedman lauded by response to market meltdown of subprime crisis underestimated by Beveridge, William Biggs, Barton Bikhchandani, Sushil Bill and Melinda Gates Foundation Binmore, Ken Black, Fischer Black Monday crash of 1987 Black Panther Party Black-Scholes option pricing formula Blackstone Group Blair, Tony Blankfein, Lloyd C. Blaug, Mark Blinder, Alan bliss point Bloomberg News BNP Paribas Bank Boeing Bohr, Niels Bolsheviks Book-of-the-Month Club Born, Brooksley E. Boudoukh, Jacob Bourbaki, Nicolas Brazil Bretton Woods monetary system Bright, John Britain, see United Kingdom Broadcom Corporation Brookings Institution Brown University Brunnermeier, Markus bubbles credit dot.com efficient market hypothesis violated by Greenspan and real estate, see housing bubble South Sea technology Buccleuch, Duke of Buffett, Warren Buiter, Willem Bulgaria Bunning, Jim Burns, Arthur Bush, George H.


How I Became a Quant: Insights From 25 of Wall Street's Elite by Richard R. Lindsey, Barry Schachter

Albert Einstein, algorithmic trading, Andrew Wiles, Antoine Gombaud: Chevalier de Méré, asset allocation, asset-backed security, backtesting, bank run, banking crisis, Bear Stearns, Black-Scholes formula, Bob Litterman, Bonfire of the Vanities, book value, Bretton Woods, Brownian motion, business cycle, business process, butter production in bangladesh, buy and hold, buy low sell high, capital asset pricing model, centre right, collateralized debt obligation, commoditize, computerized markets, corporate governance, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency risk, discounted cash flows, disintermediation, diversification, Donald Knuth, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, fixed income, full employment, George Akerlof, global macro, Gordon Gekko, hiring and firing, implied volatility, index fund, interest rate derivative, interest rate swap, Ivan Sutherland, John Bogle, John von Neumann, junk bonds, linear programming, Loma Prieta earthquake, Long Term Capital Management, machine readable, margin call, market friction, market microstructure, martingale, merger arbitrage, Michael Milken, Myron Scholes, Nick Leeson, P = NP, pattern recognition, Paul Samuelson, pensions crisis, performance metric, prediction markets, profit maximization, proprietary trading, purchasing power parity, quantitative trading / quantitative finance, QWERTY keyboard, RAND corporation, random walk, Ray Kurzweil, Reminiscences of a Stock Operator, Richard Feynman, Richard Stallman, risk free rate, risk-adjusted returns, risk/return, seminal paper, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, sorting algorithm, statistical arbitrage, statistical model, stem cell, Steven Levy, stochastic process, subscription business, systematic trading, technology bubble, The Great Moderation, the scientific method, too big to fail, trade route, transaction costs, transfer pricing, value at risk, volatility smile, Wiener process, yield curve, young professional

Today the Eurodollar market would hardly evoke a yawn from most observers, but at the time the central bankers meeting in Basel took an interest, it was considered a great mystery and even a threat. The Eurodollar market had arisen as a side effect of the U.S. current account deficits that had brought down the original Bretton Woods system, it JWPR007-Lindsey 298 May 7, 2007 17:27 h ow i b e cam e a quant appeared to threaten a loss of the Federal Reserve’s ability to limit the U.S. money supply, and to top things off, the Soviet Union and later the oil exporters were among the largest depositors. In my new role, I searched for reasons to worry about financial innovations that, like the Eurodollar market in its time, were poorly understood, and that with some imagination could be seen as potentially harmful.

See Salomon Brothers Bloomberg L.P., 151 Bohren, Øyvind, 155 Bonds mathematics, analogy, 23–26 valuation, option theory (application), 40 Booth, Laurence, 139 Bop Play, 191 Borel subgroup, 109–110 Bossaerts, Peter, 77 Boyle, Phelim, 161, 162 Brain-imaging technologies, improvement, 27–28 Brennan, Michael, 140 Bretton Woods system, 297–298 Bridge brokerage, 220 Brinson, Hood, and Beebower (BHB) methodology, 260 British Telecommunications Pension Scheme, 143 Broadie, Mark, 171 Broker-sponsored WRAP accounts, growth, 79 Brown, Jerry, 213 Brown, Stephen, 253 Bubble Logic, 204 Buglierello, George, 335 Call markets, conditional orders (allowance), 77 Campbell, Myron, 117 Cantor, Bernie, 21 Cantor Fitzgerald, 21 Cantwell, Gary, 320 Capital allocation, standalone risk (basis), 103–104 Capital Asset Pricing Model (CAPM), 34 development, 147 result, appearance, 43 validation, 77 P1: OTE/PGN JWPR007-Lindsey P2: OTE January 1, 1904 6:33 382 Capital Ideas and Market Realities: Option Replication, Investor Behavior, and Stock Market Crashes (Jacobs), 278, 280, 281 Capital Market Risk Advisors, 83 control/maintenance, continuation, 90–91 Capital Markets Risk Advisors, 90–91 Capital structure, 212 irrelevance, Modigliani-Miller explanation (usage), 139 Capped stock index options, analysis, 160–161 Carnegie-Mellon, Graduate School of Industrial Administration, 264 Carr, Peter, 137–141, 242 Carret, Philip, 321 Carry play, 193 CFA Institute, 213, 280, 283 Chalone Group, 217 Chaos control, 165 Charlotte Group, 217 Chase Manhattan Bank, 245–248 Chicago Board of Trade (CBOT), 331 options, exchange trading, 89 Chriss, Neil, 107–135 Churchill, Winston, 37 risk management, problems, 232 Clark, Kent, 200 Clayman, Michelle, 253–254 Clifford, Scott, 45 Clinton Group, 302 Clowes, Michael, 279 Cohen, Kalman, 71–72 Coleman, Lew, 221 Collateralized debt obligations (CDOs), 234 equity tranche, 234 Collateralized mortgage obligations (CMOs), instrument creation, 184 Columbus, Christopher, 112 Commercial International Brokerage Company (CIBC), 231–232 Commercial loan-pooling venture, 215 Commerzbank Securities, 173–175 Communication, quality, 105 Complete Guide to Financial Innovation, The (Marshall/Bansal), 329 Composite models, usage, 80 Compound returns, 72 Compustat, 219, 313 Computers, usage, 113–117 Conditional orders, 76–77 Conditional value-at-risk (CVAR), 195 Contingent claims, publicly traded markets (growth), 249 Continuous markets, 76 Continuous value at risk, 256 Conventional value trading, combined value trading (contrast), 78t Convexity, examination, 38–39 INDEX Cooper, Richard, 321, 322 Cooper, Tom, 314 Copulas.


pages: 525 words: 131,496

Near and Distant Neighbors: A New History of Soviet Intelligence by Jonathan Haslam

active measures, Albert Einstein, Benoit Mandelbrot, Berlin Wall, Bletchley Park, Bolshevik threat, Bretton Woods, British Empire, cuban missile crisis, disinformation, falling living standards, false flag, John von Neumann, lateral thinking, military-industrial complex, Robert Hanssen: Double agent, Ronald Reagan, Strategic Defense Initiative, Valery Gerasimov, Vladimir Vetrov: Farewell Dossier, éminence grise

Vassiliev, The Haunted Wood: Soviet Espionage in America—the Stalin Era (New York: Modern Library, 2000), p. 91.   50. Ocherki istorii Rossiiskoi vneshnei razvedki, vol. 4, pp. 224–25.   51. Gladkov, Nash chelovek, pp. 93, 97–99.   52. Weinstein and Vassiliev, Haunted Wood, p. 90; and B. Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, NJ: Princeton University Press, 2013).   53. Feklisov, Za okeanom, p. 31.   54. A letter of entreaty written to Duggan by his handler, Norman Borodin (“Granite”), on November 25, 1942, for example, is almost embarrassing in its abject arguments: from the archives, Vassiliev Yellow Notebook 2, Russian transcript, p. 30, Wilson Center Digital Archive, Library of Congress, Washington, D.C., digitalarchive.wilsoncenter.org/collection/86/Vassiliev-Notebooks.

Moscow: Tsentrpoligraf, 2008. Singh, Simon. The Code Book. New York: Anchor, 2000. Smith, Michael. Six. London: Biteback, 2011. Sobolev, Vasilii, ed. Lubyanka 2. Moscow: Glavarkhiv, 1999. Soboleva, Tatyana. Istoriya shifroval’nogo dela v Rossii. Moscow: Olma Press, 2002. Steil, Benn. The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order. Princeton, NJ: Princeton University Press, 2013. Syrkov, Boris. Proslushka predtechi Snoudena. Moscow: Algoritm, 2013. Taylor, Sally. Stalin’s Apologist: Walter Duranty, the New York Times’s Man in Moscow. New York: Oxford University Press, 1990.


pages: 461 words: 128,421

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street by Justin Fox

"Friedman doctrine" OR "shareholder theory", Abraham Wald, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, Andrei Shleifer, AOL-Time Warner, asset allocation, asset-backed security, bank run, beat the dealer, behavioural economics, Benoit Mandelbrot, Big Tech, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, Bretton Woods, Brownian motion, business cycle, buy and hold, capital asset pricing model, card file, Carl Icahn, Cass Sunstein, collateralized debt obligation, compensation consultant, complexity theory, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, democratizing finance, Dennis Tito, discovery of the americas, diversification, diversified portfolio, Dr. Strangelove, Edward Glaeser, Edward Thorp, endowment effect, equity risk premium, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, George Akerlof, Glass-Steagall Act, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, information asymmetry, invisible hand, Isaac Newton, John Bogle, John Meriwether, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Arrow, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, low interest rates, mandelbrot fractal, market bubble, market design, Michael Milken, Myron Scholes, New Journalism, Nikolai Kondratiev, Paul Lévy, Paul Samuelson, pension reform, performance metric, Ponzi scheme, power law, prediction markets, proprietary trading, prudent man rule, pushing on a string, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Richard Thaler, risk/return, road to serfdom, Robert Bork, Robert Shiller, rolodex, Ronald Reagan, seminal paper, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, Skinner box, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, stocks for the long run, tech worker, The Chicago School, The Myth of the Rational Market, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Thorstein Veblen, Tobin tax, transaction costs, tulip mania, Two Sigma, Tyler Cowen, value at risk, Vanguard fund, Vilfredo Pareto, volatility smile, Yogi Berra

He built his reputation among his peers with theoretical work, as well as his famous methodology essay. But as the 1950s progressed he increasingly focused on issues of public policy. While working in Paris for a few months in 1950 consulting for the U.S. agency that administered the Marshall Plan, Friedman wrote a memo that recommended ditching the Bretton Woods system of fixed currency exchange rates (devised in part by John Maynard Keynes, who had been almost ruined trading currencies in 1920). Friedman argued that free currency markets would not be the dens of speculative excess they were so often feared to be. “People who argue that speculation is generally destabilizing seldom realize that this is largely equivalent to saying that speculators lose money,” he wrote, “since speculation can be destabilizing in general only if speculators on the average sell when the currency is low in price and buy when it is high.”7 As Friedman put it later, “It just seemed to me sensible that the only way you could make money was by buying low and selling high, and not the other way around.

, 112–13, 115, 122, 128–30, 306, 322 Bok, Derek, 169 bonds and bond markets, xi–xii, 13–14, 16, 21–22, 29, 38–39, 140–41, 167–68 book-to-price ratio, 208–9 Booth, David, 225 Bork, Robert, 158 Born, Brooksley, 244 Bossaerts, Peter, 297 Brealey, Richard, 355n. 38 Brennan, Michael, 284 Bretton Woods system, 92 Brinegar, Claude, 43–44 Brooks, John, 68, 118 Brown, Kathleen, 278 Brownian motion, 7, 13, 41, 65–69, 73 Bryan, William Jennings, 11 “Bubble Logic: Or, How I Learn to Stop Worrying and Love the Bull” (Asness), 261 Buchanan, James M., 159 Buffet, Warren, 118, 211–14, 214–16, 221–23, 229, 260, 271, 278–79, 323, 366n. 29 bull markets, 18, 61–62, 255, 279, 291 Burns, Arthur, 76, 217, 258 Bush, George W., 295 business cycle, 19–20, 28, 81, 309–10 Business Cycle Institute, 41 Business Week, 97–98 California Institute of Technology, 147 California Public Employees Retirement System (Calpers), 272, 273–74 Cambridge, University, 64 Camerer, Colin, 188 Cameron, David, 295 Campaign GM, 159 Campbell, John, 257 capital asset pricing model (CAPM).


pages: 349 words: 134,041

Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives by Satyajit Das

accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Asian financial crisis, asset-backed security, Bear Stearns, beat the dealer, Black Swan, Black-Scholes formula, Bretton Woods, BRICs, Brownian motion, business logic, business process, buy and hold, buy low sell high, call centre, capital asset pricing model, collateralized debt obligation, commoditize, complexity theory, computerized trading, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, currency peg, currency risk, disinformation, disintermediation, diversification, diversified portfolio, Edward Thorp, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, financial engineering, financial innovation, fixed income, Glass-Steagall Act, Haight Ashbury, high net worth, implied volatility, index arbitrage, index card, index fund, interest rate derivative, interest rate swap, Isaac Newton, job satisfaction, John Bogle, John Meriwether, junk bonds, locking in a profit, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Marshall McLuhan, mass affluent, mega-rich, merger arbitrage, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mutually assured destruction, Myron Scholes, new economy, New Journalism, Nick Leeson, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, Parkinson's law, placebo effect, Ponzi scheme, proprietary trading, purchasing power parity, quantitative trading / quantitative finance, random walk, regulatory arbitrage, Right to Buy, risk free rate, risk-adjusted returns, risk/return, Salesforce, Satyajit Das, shareholder value, short selling, short squeeze, South Sea Bubble, statistical model, technology bubble, the medium is the message, the new new thing, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, volatility smile, yield curve, Yogi Berra, zero-coupon bond

Derivatives have always been about knowledge – people who knew, people who didn’t. If you didn’t know then somewhere along the line you would pay school fees to learn about the other side of derivatives. Whole lotta swapping going on When I started in 1977, banking was changing. In 1973, Richard Nixon abolished the gold standard. The Bretton Woods Agreement on fixed exchange rates collapsed. Two oil shocks (1973 and 1978) contributed to high inflation. Under Paul Volcker, US interest rates surged. The prime rate peaked at an incomprehensible 21.50% pa. Interest rates, currencies and share prices began to fluctuate in a way that no one had ever experienced.

However, the text is different. 6 ‘What Worries Warren’ (3 March 2003) Fortune. 13_INDEX.QXD 17/2/06 4:44 pm Page 325 Index accounting rules 139, 221, 228, 257 Accounting Standards Board 33 accrual accounting 139 active fund management 111 actuaries 107–10, 205, 289 Advance Corporation Tax 242 agency business 123–4, 129 agency theory 117 airline profits 140–1 Alaska 319 Allen, Woody 20 Allied Irish Bank 143 Allied Lyons 98 alternative investment strategies 112, 308 American Express 291 analysts, role of 62–4 anchor effect 136 Anderson, Rolf 92–4 annuities 204–5 ANZ Bank 277 Aquinas, Thomas 137 arbitrage 33, 38–40, 99, 114, 137–8, 171–2, 245–8, 253–5, 290, 293–6 arbitration 307 Argentina 45 arithmophobia 177 ‘armpit theory’ 303 Armstrong World Industries 274 arrears assets 225 Ashanti Goldfields 97–8, 114 Asian financial crisis (1997) 4, 9, 44–5, 115, 144, 166, 172, 207, 235, 245, 252, 310, 319 asset consultants 115–17, 281 ‘asset growth’ strategy 255 asset swaps 230–2 assets under management (AUM) 113–4, 117 assignment of loans 267–8 AT&T 275 attribution of earnings 148 auditors 144 Australia 222–4, 254–5, 261–2 back office functions 65–6 back-to-back loans 35, 40 backwardation 96 Banca Popolare di Intra 298 Bank of America 298, 303 Bank of International Settlements 50–1, 281 Bank of Japan 220 Bankers’ Trust (BT) 59, 72, 101–2, 149, 217–18, 232, 268–71, 298, 301, 319 banking regulations 155, 159, 162, 164, 281, 286, 288 banking services 34; see also commercial banks; investment banks bankruptcy 276–7 Banque Paribas 37–8, 232 Barclays Bank 121–2, 297–8 13_INDEX.QXD 17/2/06 326 4:44 pm Page 326 Index Baring, Peter 151 Baring Brothers 51, 143, 151–2, 155 ‘Basel 2’ proposal 159 basis risk 28, 42, 274 Bear Stearns 173 bearer eurodollar collateralized securities (BECS) 231–3 ‘behavioural finance’ 136 Berkshire Hathaway 19 Bermudan options 205, 227 Bernstein, Peter 167 binomial option pricing model 196 Bismarck, Otto von 108 Black, Fischer 22, 42, 160, 185, 189–90, 193, 195, 197, 209, 215 Black–Scholes formula for option pricing 22, 185, 194–5 Black–Scholes–Merton model 160, 189–93, 196–7 ‘black swan’ hypothesis 130 Blair, Tony 223 Bogle, John 116 Bohr, Niels 122 Bond, Sir John 148 ‘bond floor’ concept 251–4 bonding 75–6, 168, 181 bonuses 146–51, 244, 262, 284–5 Brady Commission 203 brand awareness and brand equity 124, 236 Brazil 302 Bretton Woods system 33 bribery 80, 303 British Sky Broadcasting (BSB) 247–8 Brittain, Alfred 72 broad index secured trust offerings (BISTROs) 284–5 brokers 69, 309 Brown, Robert 161 bubbles 210, 310, 319 Buconero 299 Buffet, Warren 12, 19–20, 50, 110–11, 136, 173, 246, 316 business process reorganization 72 business risk 159 Business Week 130 buy-backs 249 ‘call’ options 25, 90, 99, 101, 131, 190, 196 callable bonds 227–9, 256 capital asset pricing model (CAPM) 111 capital flow 30 capital guarantees 257–8 capital structure arbitrage 296 Capote, Truman 87 carbon trading 320 ‘carry cost’ model 188 ‘carry’ trades 131–3, 171 cash accounting 139 catastrophe bonds 212, 320 caveat emptor principle 27, 272 Cayman Islands 233–4 Cazenove (company) 152 CDO2 292 Cemex 249–50 chaos theory 209, 312 Chase Manhattan Bank 143, 299 Chicago Board Options Exchange 195 Chicago Board of Trade (CBOT) 25–6, 34 chief risk officers 177 China 23–5, 276, 302–4 China Club, Hong Kong 318 Chinese walls 249, 261, 280 chrematophobia 177 Citibank and Citigroup 37–8, 43, 71, 79, 94, 134–5, 149, 174, 238–9 Citron, Robert 124–5, 212–17 client relationships 58–9 Clinton, Bill 223 Coats, Craig 168–9 collateral requirements 215–16 collateralized bond obligations (CBOs) 282 collateralized debt obligations (CDOs) 45, 282–99 13_INDEX.QXD 17/2/06 4:44 pm Page 327 Index collateralized fund obligations (CFOs) 292 collateralized loan obligations (CLOs) 283–5, 288 commercial banks 265–7 commoditization 236 commodity collateralized obligations (CCOs) 292 commodity prices 304 Commonwealth Bank of Australia 255 compliance officers 65 computer systems 54, 155, 197–8 concentration risk 271, 287 conferences with clients 59 confidence levels 164 confidentiality 226 Conseco 279–80 contagion crises 291 contango 96 contingent conversion convertibles (co-cos) 257 contingent payment convertibles (co-pays) 257 Continental Illinois 34 ‘convergence’ trading 170 convertible bonds 250–60 correlations 163–6, 294–5; see also default correlations corruption 303 CORVUS 297 Cox, John 196–7 credit cycle 291 credit default swaps (CDSs) 271–84, 293, 299 credit derivatives 129, 150, 265–72, 282, 295, 299–300 Credit Derivatives Market Practices Committee 273, 275, 280–1 credit models 294, 296 credit ratings 256–7, 270, 287–8, 297–8, 304 credit reserves 140 credit risk 158, 265–74, 281–95, 299 327 credit spreads 114, 172–5, 296 Credit Suisse 70, 106, 167 credit trading 293–5 CRH Capital 309 critical events 164–6 Croesus 137 cross-ruffing 142 cubic splines 189 currency options 98, 218, 319 custom repackaged asset vehicles (CRAVEs) 233 daily earning at risk (DEAR) concept 160 Daiwa Bank 142 Daiwa Europe 277 Danish Oil and Natural Gas 296 data scrubbing 142 dealers, work of 87–8, 124–8, 133, 167, 206, 229–37, 262, 295–6; see also traders ‘death swap’ strategy 110 decentralization 72 decision-making, scientific 182 default correlations 270–1 defaults 277–9, 287, 291, 293, 296, 299 DEFCON scale 156–7 ‘Delta 1’ options 243 delta hedging 42, 200 Deming, W.E. 98, 101 Denmark 38 deregulation, financial 34 derivatives trading 5–6, 12–14, 18–72, 79, 88–9, 99–115, 123–31, 139–41, 150, 153, 155, 175, 184–9, 206–8, 211–14, 217–19, 230, 233, 257, 262–3, 307, 316, 319–20; see also equity derivatives Derman, Emmanuel 185, 198–9 Deutsche Bank 70, 104, 150, 247–8, 274, 277 devaluations 80–1, 89, 203–4, 319 13_INDEX.QXD 17/2/06 4:44 pm Page 328 328 Index dilution of share capital 241 DINKs 313 Disney Corporation 91–8 diversification 72, 110–11, 166, 299 dividend yield 243 ‘Dr Evil’ trade 135 dollar premium 35 downsizing 73 Drexel Burnham Lambert (DBL) 282 dual currency bonds 220–3; see also reverse dual currency bonds earthquakes, bonds linked to 212 efficient markets hypothesis 22, 31, 111, 203 electronic trading 126–30, 134 ‘embeddos’ 218 emerging markets 3–4, 44, 115, 132–3, 142, 212, 226, 297 Enron 54, 142, 250, 298 enterprise risk management (ERM) 176 equity capital management 249 equity collateralized obligations (ECOs) 292 equity derivatives 241–2, 246–9, 257–62 equity index 137–8 equity investment, retail market in 258–9 equity investors’ risk 286–8 equity options 253–4 equity swaps 247–8 euro currency 171, 206, 237 European Bank for Reconstruction and Development 297 European currency units 93 European Union 247–8 Exchange Rate Mechanism, European 204 exchangeable bonds 260 expatriate postings 81–2 expert witnesses 310–12 extrapolation 189, 205 extreme value theory 166 fads of management science 72–4 ‘fairway bonds’ 225 Fama, Eugene 22, 111, 194 ‘fat tail’ events 163–4 Federal Accounting Standards Board 266 Federal Home Loans Bank 213 Federal National Mortgage Association 213 Federal Reserve Bank 20, 173 Federal Reserve Board 132 ‘Ferraris’ 232 financial engineering 228, 230, 233, 249–50, 262, 269 Financial Services Authority (FSA), Japan 106, 238 Financial Services Authority (FSA), UK 15, 135 firewalls 235–6 firing of staff 84–5 First Interstate Ltd 34–5 ‘flat’ organizations 72 ‘flat’ positions 159 floaters 231–2; see also inverse floaters ‘flow’ trading 60–1, 129 Ford Motors 282, 296 forecasting 135–6, 190 forward contracts 24–33, 90, 97, 124, 131, 188 fugu fish 239 fund management 109–17, 286, 300 futures see forward contracts Galbraith, John Kenneth 121 gamma risk 200–2, 294 Gauss, Carl Friedrich 160–2 General Motors 279, 296 General Reinsurance 20 geometric Brownian motion (GBM) 161 Ghana 98 Gibson Greeting Cards 44 Glass-Steagall Act 34 gold borrowings 132 13_INDEX.QXD 17/2/06 4:44 pm Page 329 Index gold sales 97, 137 Goldman Sachs 34, 71, 93, 150, 173, 185 ‘golfing holiday bonds’ 224 Greenspan, Alan 6, 9, 19–21, 29, 43, 47, 50, 53, 62, 132, 159, 170, 215, 223, 308 Greenwich NatWest 298 Gross, Bill 19 Guangdong International Trust and Investment Corporation (GITIC) 276–7 guaranteed annuity option (GAO) contracts 204–5 Gutenfreund, John 168–9 gyosei shido 106 Haghani, Victor 168 Hamanaka, Yasuo 142 Hamburgische Landesbank 297 Hammersmith and Fulham, London Borough of 66–7 ‘hara-kiri’ swaps 39 Hartley, L.P. 163 Hawkins, Greg 168 ‘heaven and hell’ bonds 218 hedge funds 44, 88–9, 113–14, 167, 170–5, 200–2, 206, 253–4, 262–3, 282, 292, 296, 300, 308–9 hedge ratio 264 hedging 24–8, 31, 38–42, 60, 87–100, 184, 195–200, 205–7, 214, 221, 229, 252, 269, 281, 293–4, 310 Heisenberg, Werner 122 ‘hell bonds’ 218 Herman, Clement (‘Crem’) 45–9, 77, 84, 309 Herodotus 137, 178 high net worth individuals (HNWIs) 237–8, 286 Hilibrand, Lawrence 168 Hill Samuel 231–2 329 The Hitchhiker’s Guide to the Galaxy 189 Homer, Sidney 184 Hong Kong 9, 303–4 ‘hot tubbing’ 311–12 HSBC Bank 148 HSH Nordbank 297–8 Hudson, Kevin 102 Hufschmid, Hans 77–8 IBM 36, 218, 260 ICI 34 Iguchi, Toshihude 142 incubators 309 independent valuation 142 indexed currency option notes (ICONs) 218 India 302 Indonesia 5, 9, 19, 26, 55, 80–2, 105, 146, 219–20, 252, 305 initial public offerings 33, 64, 261 inside information and insider trading 133, 241, 248–9 insurance companies 107–10, 117, 119, 150, 192–3, 204–5, 221, 223, 282, 286, 300; see also reinsurance companies insurance law 272 Intel 260 intellectual property in financial products 226 Intercontinental Hotels Group (IHG) 285–6 International Accounting Standards 33 International Securities Market Association 106 International Swap Dealers Association (ISDA) 273, 275, 279, 281 Internet stock and the Internet boom 64, 112, 259, 261, 310, 319 interpolation of interest rates 141–2, 189 inverse floaters 46–51, 213–16, 225, 232–3 13_INDEX.QXD 17/2/06 4:44 pm Page 330 330 Index investment banks 34–8, 62, 64, 67, 71, 127–8, 172, 198, 206, 216–17, 234, 265–7, 298, 309 investment managers 43–4 investment styles 111–14 irrational decisions 136 Italy 106–7 Ito’s Lemma 194 Japan 39, 43, 82–3, 92, 94, 98–9, 101, 106, 132, 142, 145–6, 157, 212, 217–25, 228, 269–70 Jensen, Michael 117 Jett, Joseph 143 JP Morgan (company) 72, 150, 152, 160, 162, 249–50, 268–9, 284–5, 299; see also Morgan Guaranty junk bonds 231, 279, 282, 291, 296–7 JWM Associates 175 Kahneman, Daniel 136 Kaplanis, Costas 174 Kassouf, Sheen 253 Kaufman, Henry 62 Kerkorian, Kirk 296 Keynes, J.M. 167, 175, 198 Keynesianism 5 Kidder Peabody 143 Kleinwort Benson 40 Korea 9, 226, 278 Kozeny, Viktor 121 Krasker, William 168 Kreiger, Andy 319 Kyoto Protocol 320 Lavin, Jack 102 law of large numbers 192 Leeson, Nick 51, 131, 143, 151 legal opinions 47, 219–20, 235, 273–4 Leibowitz, Martin 184 Leland, Hayne 42, 202 Lend Lease Corporation 261–2 leptokurtic conditions 163 leverage 31–2, 48–50, 54, 99, 102–3, 114, 131–2, 171–5, 213–14, 247, 270–3, 291, 295, 305, 308 Lewis, Kenneth 303 Lewis, Michael 77–8 life insurance 204–5 Lintner, John 111 liquidity options 175 liquidity risk 158, 173 litigation 297–8 Ljunggren, Bernt 38–40 London Inter-Bank Offered Rate (LIBOR) 6, 37 ‘long first coupon’ strategy 39 Long Term Capital Management (LTCM) 44, 51, 62, 77–8, 84, 114, 166–75, 187, 206, 210, 215–18, 263–4, 309–10 Long Term Credit Bank of Japan 94 LOR (company) 202 Louisiana Purchase 319 low exercise price options (LEPOs) 261 Maastricht Treaty and criteria 106–7 McLuhan, Marshall 134 McNamara, Robert 182 macro-economic indicators, derivatives linked to 319 Mahathir Mohammed 31 Malaysia 9 management consultants 72–3 Manchester United 152 mandatory convertibles 255 Marakanond, Rerngchai 302 margin calls 97–8, 175 ‘market neutral’ investment strategy 114 market risk 158, 173, 265 marketable eurodollar collateralized securities (MECS) 232 Markowitz, Harry 110 mark-to-market accounting 10, 100, 139–41, 145, 150, 174, 215–16, 228, 244, 266, 292, 295, 298 Marx, Groucho 24, 57, 67, 117, 308 13_INDEX.QXD 17/2/06 4:44 pm Page 331 Index mathematics applied to financial instruments 209–10; see also ‘quants’ matrix structures 72 Meckling, Herbert 117 Melamed, Leo 34, 211 merchant banks 38 Meriwether, John 167–9, 172–5 Merrill Lynch 124, 150, 217, 232 Merton, Robert 22, 42, 168–70, 175, 185, 189–90, 193–7, 210 Messier, Marie 247 Metallgesellschaft 95–7 Mexico 44 mezzanine finance 285–8, 291–7 MG Refining and Marketing 95–8, 114 Microsoft 53 Mill, Stuart 130 Miller, Merton 22, 101, 194 Milliken, Michael 282 Ministry of Finance, Japan 222 misogyny 75–7 mis-selling 238, 297–8 Mitchell, Edison 70 Mitchell & Butler 275–6 models financial 42–3, 141–2, 163–4, 173–5, 181–4, 189, 198–9, 205–10 of business processes 73–5 see also credit models Modest, David 168 momentum investment 111 monetization 260–1 monopolies in financial trading 124 moral hazard 151, 280, 291 Morgan Guaranty 37–8, 221, 232 Morgan Stanley 76, 150 mortgage-backed securities (MBSs) 282–3 Moscow, City of 277 moves of staff between firms 150, 244 Mozer, Paul 169 Mullins, David 168–70 multi-skilling 73 331 Mumbai 3 Murdoch, Rupert 247 Nabisco 220 Napoleon 113 NASDAQ index 64, 112 Nash, Ogden 306 National Australia Bank 144, 178 National Rifle Association 29 NatWest Bank 144–5, 198 Niederhoffer, Victor 130 ‘Nero’ 7, 31, 45–9, 60, 77, 82–3, 88–9, 110, 118–19, 125, 128, 292 NERVA 297 New Zealand 319 Newman, Frank 104 news, financial 133–4 News Corporation 247 Newton, Isaac 162, 210 Nippon Credit Bank 106, 271 Nixon, Richard 33 Nomura Securities 218 normal distribution 160–3, 193, 199 Northern Electric 248 O’Brien, John 202 Occam, William 188 off-balance sheet transactions 32–3, 99, 234, 273, 282 ‘offsites’ 74–5 oil prices 30, 33, 89–90, 95–7 ‘omitted variable’ bias 209–10 operational risk 158, 176 opinion shopping 47 options 9, 21–2, 25–6, 32, 42, 90, 98, 124, 197, 229 pricing 185, 189–98, 202 Orange County 16, 44, 50, 124–57, 212–17, 232–3 orphan subsidiaries 234 over-the-counter (OTC) market 26, 34, 53, 95, 124, 126 overvaluation 64 13_INDEX.QXD 17/2/06 4:44 pm Page 332 332 Index ‘overwhelming force’ strategy 134–5 Owen, Martin 145 ownership, ‘legal’ and ‘economic’ 247 parallel loans 35 pari-mutuel auction system 319 Parkinson’s Law 136 Parmalat 250, 298–9 Partnoy, Frank 87 pension funds 43, 108–10, 115, 204–5, 255 People’s Bank of China (PBOC) 276–7 Peters’ Principle 71 petrodollars 71 Pétrus (restaurant) 121 Philippines, the 9 phobophobia 177 Piga, Gustavo 106 PIMCO 19 Plaza Accord 38, 94, 99, 220 plutophobia 177 pollution quotas 320 ‘portable alpha’ strategy 115 portfolio insurance 112, 202–3, 294 power reverse dual currency (PRDC) bonds 226–30 PowerPoint 75 preferred exchangeable resettable listed shares (PERLS) 255 presentations of business models 75 to clients 57, 185 prime brokerage 309 Prince, Charles 238 privatization 205 privity of contract 273 Proctor & Gamble (P&G) 44, 101–4, 155, 298, 301 product disclosure statements (PDSs) 48–9 profit smoothing 140 ‘programme’ issuers 234–5 proprietary (‘prop’) trading 60, 62, 64, 130, 174, 254 publicly available information (PAI) 277 ‘puff’ effect 148 purchasing power parity theory 92 ‘put’ options 90, 131, 256 ‘quants’ 183–9, 198, 208, 294 Raabe, Matthew 217 Ramsay, Gordon 121 range notes 225 real estate 91, 219 regulatory arbitrage 33 reinsurance companies 288–9 ‘relative value’ trading 131, 170–1, 310 Reliance Insurance 91–2 repackaging (‘repack’) business 230–6, 282, 290 replication in option pricing 195–9, 202 dynamic 200 research provided to clients 58, 62–4, 184 reserves, use of 140 reset preference shares 254–7 restructuring of loans 279–81 retail equity products 258–9 reverse convertibles 258–9 reverse dual currency bonds 223–30 ‘revolver’ loans 284–5 risk, financial, types of 158 risk adjusted return on capital (RAROC) 268, 290 risk conservation principle 229–30 risk management 65, 153–79, 184, 187, 201, 267 risk models 163–4, 173–5 riskless portfolios 196–7 RJ Reynolds (company) 220–1 rogue traders 176, 313–16 Rosenfield, Eric 168 Ross, Stephen 196–7, 202 Roth, Don 38 Rothschild, Mayer Amshel 267 Royal Bank of Scotland 298 Rubinstein, Mark 42, 196–7 13_INDEX.QXD 17/2/06 4:44 pm Page 333 Index Rumsfeld, Donald 12, 134, 306 Rusnak, John 143 Russia 45, 80, 166, 172–3, 274, 302 sales staff 55–60, 64–5, 125, 129, 217 Salomon Brothers 20, 36, 54, 62, 167–9, 174, 184 Sandor, Richard 34 Sanford, Charles 72, 269 Sanford, Eugene 269 Schieffelin, Allison 76 Scholes, Myron 22, 42, 168–71, 175, 185, 189–90, 193–7, 263–4 Seagram Group 247 Securities and Exchange Commission, US 64, 304 Securities and Futures Authority, UK 249 securitization 282–90 ‘security design’ 254–7 self-regulation 155 sex discrimination 76 share options 250–1 Sharpe, William 111 short selling 30–1, 114 Singapore 9 single-tranche CDOs 293–4, 299 ‘Sisters of Perpetual Ecstasy’ 234 SITCOMs 313 Six Continents (6C) 275–6 ‘smile’ effect 145 ‘snake’ currency system 203 ‘softing’ arrangements 117 Solon 137 Soros, George 44, 130, 253, 318–19 South Sea Bubble 210 special purpose asset repackaging companies (SPARCs) 233 special purpose vehicles (SPVs) 231–4, 282–6, 290, 293 speculation 29–31, 42, 67, 87, 108, 130 ‘spinning’ 64 333 Spitzer, Eliot 64 spread 41, 103; see also credit spreads stack hedges 96 Stamenson, Michael 124–5 standard deviation 161, 193, 195, 199 Steinberg, Sol 91 stock market booms 258, 260 stock market crashes 42–3, 168, 203, 257, 259, 319 straddles or strangles 131 strategy in banking 70 stress testing 164–6 stripping of convertible bonds 253–4 structured investment products 44, 112, 115, 118, 128, 211–39, 298 structured note asset packages (SNAPs) 233 Stuart SC 18, 307, 316–18 Styblo Bleder, Tanya 153 Suharto, Thojib 81–2 Sumitomo Corporation 100, 142 Sun Tzu 61 Svensk Exportkredit (SEK) 38–9 swaps 5–10, 26, 35–40, 107, 188, 211; see also equity swaps ‘swaptions’ 205–6 Swiss Bank Corporation (SBC) 248–9 Swiss banks 108, 305 ‘Swiss cheese theory’ 176 synthetic securitization 284–5, 288–90 systemic risk 151 Takeover Panel 248–9 Taleb, Nassim 130, 136, 167 target redemption notes 225–6 tax and tax credits 171, 242–7, 260–3 Taylor, Frederick 98, 101 team-building exercises 76 team moves 149 technical analysis 60–1, 135 television programmes about money 53, 62–3 Thailand 9, 80, 302–5 13_INDEX.QXD 17/2/06 4:44 pm Page 334 334 Index Thatcher, Margaret 205 Thorp, Edward 253 tobashi trades 105–7 Tokyo Disneyland 92, 212 top managers 72–3 total return swaps 246–8, 269 tracking error 138 traders in financial products 59–65, 129–31, 135–6, 140, 148, 151, 168, 185–6, 198; see also dealers trading limits 42, 157, 201 trading rooms 53–4, 64, 68, 75–7, 184–7, 208 Trafalgar House 248 tranching 286–9, 292, 296 transparency 26, 117, 126, 129–30, 310 Treynor, Jack 111 trust investment enhanced return securities (TIERS) 216, 233 trust obligation participating securities (TOPS) 232 TXU Europe 279 UBS Global Asset Management 110, 150, 263–4, 274 uncertainty principle 122–3 unique selling propositions 118 unit trusts 109 university education 187 unspecified fund obligations (UFOs) 292 ‘upfronting’ of income 139, 151 Valéry, Paul 163 valuation 64, 142–6 value at risk (VAR) concept 160–7, 173 value investing 111 Vanguard 116 vanity bonds 230 variance 161 Vietnam War 182, 195 Virgin Islands 233–4 Vivendi 247–8 volatility of bond prices 197 of interest rates 144–5 of share prices 161–8, 172–5, 192–3, 199 Volcker, Paul 20, 33 ‘warehouses’ 40–2, 139 warrants arbitrage 99–101 weather, bonds linked to 212, 320 Weatherstone, Dennis 72, 268 Weil, Gotscal & Manges 298 Weill, Sandy 174 Westdeutsche Genosenschafts Zentralbank 143 Westminster Group 34–5 Westpac 261–2 Wheat, Allen 70, 72, 106, 167 Wojniflower, Albert 62 World Bank 4, 36, 38 World Food Programme 320 Worldcom 250, 298 Wriston, Walter 71 WTI (West Texas Intermediate) contracts 28–30 yield curves 103, 188–9, 213, 215 yield enhancement 112, 213, 269 ‘yield hogs’ 43 zaiteku 98–101, 104–5 zero coupon bonds 221–2, 257–8


pages: 517 words: 139,477

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies by Jeremy Siegel

Alan Greenspan, AOL-Time Warner, Asian financial crisis, asset allocation, backtesting, banking crisis, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, Black-Scholes formula, book value, break the buck, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, carried interest, central bank independence, cognitive dissonance, compound rate of return, computer age, computerized trading, corporate governance, correlation coefficient, Credit Default Swap, currency risk, Daniel Kahneman / Amos Tversky, Deng Xiaoping, discounted cash flows, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Financial Instability Hypothesis, fixed income, Flash crash, forward guidance, fundamental attribution error, Glass-Steagall Act, housing crisis, Hyman Minsky, implied volatility, income inequality, index arbitrage, index fund, indoor plumbing, inflation targeting, invention of the printing press, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, London Interbank Offered Rate, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Minsky moment, Money creation, money market fund, mortgage debt, Myron Scholes, new economy, Northern Rock, oil shock, passive investing, Paul Samuelson, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, quantitative easing, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Gordon, Robert Shiller, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, stocks for the long run, survivorship bias, technology bubble, The Great Moderation, the payments system, The Wisdom of Crowds, transaction costs, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, uptick rule, Vanguard fund

The job now is to manage our money effectively, wisely, with self-restraint. It can be done.7 POSTDEVALUATION MONETARY POLICY Ironically, while the right to redeem dollars for gold was denied U.S. citizens, it was soon reinstated for foreign central banks at the devalued price of $35 per ounce. As part of the Bretton Woods agreement, which set up the rules of international exchange rates after the close of World War II, the U.S. government promised to exchange all dollars for gold held by foreign central banks at the fixed rate of $35 per ounce as long as these countries fixed their currency to the dollar. In the postwar period, as inflation increased and the dollar’s worth declined, gold seemed more and more attractive to foreigners.

See Bonds vs.stocks yields in, 164–166 Bonds since 1802 the dollar and, 79–81 equity premiums in, 87–88 fixed-income assets in, 84–87 gold and, 79–81 inflation and, 79–81 international real returns on, 89 introduction to, 75–76 long-term performance of, 78–79 real returns in, 81–87 total asset returns, 76–78 worldwide equity and, 88–90 Bonds vs. stocks correlation of returns, 99–101 efficient frontiers in, 101–102 holding periods in, 94–97, 101–102 performance of, 221–222 portfolio mix and, 101–102 risk, standard measures of, 97–99 risk vs. return, generally, 93–94 yield reversals and, 157–159 Book-to-market ratios, 185–186 Book values, 166–168 Bosland, Chelcie, 171 BP (British Petroleum), 123–124, 205 Brands, 68 Brazil, 197 Bretton Woods agreement, 215 British Petroleum (BP), 123–124, 205 British pound, 201–202 Brookings Papers, 29 Bubbles fundamentally weighted portfolios vs., 370 Japanese market, 199–200 real estate, 28–30 stock market, 343–344, 371 technology, 16–17, 340–342 Buffett, Warren on holding periods, 373 on index products, 271, 288 on mutual funds, 362–363 Bull markets in 1920s, 4–5, 8–11, 171 of 1982–2000, 12–17, 84–85, 163, 367 CAPE ratios in, 163 before financial crisis of 2008, 220 in Japan, 200–201 in Treasury bonds, 52, 55–56 Bureau of Economic Analysis (BEA), 153 Bureau of Labor Statistics (BLS), 261–262, 266 Burns, Arthur, 231 Bush, President George W., 55, 135 Business Cycle Dating Committee, 232–233 Business cycles conclusions about, 237–238 gains through timing of, 235–236 introduction to, 229–230 market volatility and, 307–308 NBER calling, 230–233 prediction of, 236–237 stock returns in, 233–235 theory of, 8 turning points in, 233–235 Business Week , 13, 157–158, 215 Buy and write strategy, 287 Buy programs, 279 Buybacks, 144–145 Buying index options, 286 Calendar anomalies day-of-the-week effects, 336–337 introduction to, 325 investor choices and, 337 January effect, 326–330 large monthly returns and, 330 seasonal, 326 September effect, 330–334 times of month and, 335–336 winter holidays and, 334–335 Calls, 284–287 Campbell, John, 14, 162, 190–191 CAPE (cyclically adjusted price/earnings) ratios, 160–165 Capital asset pricing model (CAPM), 175–177 Capital gains taxes deferring, generally, 135–137 deferring on stocks vs. bonds, 140 history of, 133–135, 141–142 inflation and, 137–139 in monetary policy, 226 Capital theory, 9 Capitalization-weighted indexes.


pages: 561 words: 138,158

Shutdown: How COVID Shook the World's Economy by Adam Tooze

2021 United States Capitol attack, air freight, algorithmic trading, Anthropocene, Asian financial crisis, asset-backed security, Ayatollah Khomeini, bank run, banking crisis, Basel III, basic income, Ben Bernanke: helicopter money, Benchmark Capital, Berlin Wall, Bernie Sanders, Big Tech, bitcoin, Black Lives Matter, Black Monday: stock market crash in 1987, blue-collar work, Bob Geldof, bond market vigilante , Boris Johnson, Bretton Woods, Brexit referendum, business cycle, business process, business process outsourcing, buy and hold, call centre, capital controls, central bank independence, centre right, clean water, cognitive dissonance, contact tracing, contact tracing app, coronavirus, COVID-19, credit crunch, Credit Default Swap, cryptocurrency, currency manipulation / currency intervention, currency peg, currency risk, decarbonisation, deindustrialization, Donald Trump, Elon Musk, energy transition, eurozone crisis, facts on the ground, failed state, fake news, Fall of the Berlin Wall, fear index, financial engineering, fixed income, floating exchange rates, friendly fire, George Floyd, gig economy, global pandemic, global supply chain, green new deal, high-speed rail, housing crisis, income inequality, inflation targeting, invisible hand, It's morning again in America, Jeremy Corbyn, junk bonds, light touch regulation, lockdown, low interest rates, margin call, Martin Wolf, mass immigration, mass incarceration, megacity, megaproject, middle-income trap, Mikhail Gorbachev, Modern Monetary Theory, moral hazard, oil shale / tar sands, Overton Window, Paris climate accords, Pearl River Delta, planetary scale, Potemkin village, price stability, Productivity paradox, purchasing power parity, QR code, quantitative easing, remote working, reserve currency, reshoring, Robinhood: mobile stock trading app, Ronald Reagan, secular stagnation, shareholder value, Silicon Valley, six sigma, social distancing, South China Sea, special drawing rights, stock buybacks, tail risk, TikTok, too big to fail, TSMC, universal basic income, Washington Consensus, women in the workforce, yield curve

The war on inflation waged by Thatcher and Reagan was a comprehensive campaign against a threat of social upheaval, which they saw as coming from without and from within. It had the ferocity that it did because in the 1970s and early 1980s, class conflict in Europe, Asia, and the United States was still framed by the global struggles of decolonization and the Cold War.57 The conservative campaign was all the more urgent because the collapse of the Bretton Woods system between 1971 and 1973 unfastened money from gold and opened the door to expansive economic policy. What threatened was not the decorous Keynesianism of the postwar era, but something far more radical. Containing that risk required redrawing the boundaries of state and society. In that battle, the most decisive institutional move was to insulate control of money from democratic politics, placing it under the authority of independent central banks.

., 224–27, 254, 271, 275 Bill & Melinda Gates Foundation, 32, 33, 236, 237, 245 biological warfare and terrorism, 17, 46, 68 BioNTech, 234, 238–40, 244, 246, 248–49 biotechnology revolution, 235–36 Birx, Deborah, 90–91 Bismarckian Germany, 139, 293 Black Lives Matter, 7, 36, 216–17, 219, 240–41 BlackRock, 117, 120, 124, 146, 202, 228 Blair, Tony, 3, 17–18 Blanchard, Oliver, 143, 290 Blue Dot Network, 264 Bollywood, 100 Bolsanaro, Jair, 11, 77, 80, 89–90, 171, 173, 197, 248–49, 265–66 Bourla, Albert, 67, 240–41 Brainard, Lael, 121 Brazil: and Chinese pandemic aid, 197; and debt relief programs, 265–66, 268; and emerging market debt crises, 159, 164, 165, 171–73; and financial market turmoil, 125; and fiscal responses to pandemic, 133; and global market stabilization efforts, 122; and global vaccine rollout, 248–49; and pandemic denialism, 77; and second wave of pandemic, 292; size of economy, 155–56; and virus variants, 266; and WHO funding, 33 Bretton Woods system, 15 Brexit, 2, 3, 6, 69, 276–79, 288, 296 Bridgewater Associates, 201–2, 218 Britain, 39, 101, 233. See also United Kingdom (UK) Brussels, Belgium. See European Union (EU) Build Back Better program, 12, 16 Bulgaria, 75, 104, 285–86 Bullard, James, 106 Bush, George W., 46, 225 Cabana, Mark, 119 Calderón, Felipe, 77 California, 82 Cambodia, 103 Cameron, David, 277 Cameroon, 257 Canada, 33, 133, 138, 139–40, 142–43, 206, 246, 263 CanSino Biologics, 67, 247 carbon emissions, 19, 22, 34, 190, 194, 280 Caribbean, 28, 189 Carney, Mark, 76, 123–24 Carter, Jimmy, 20, 23 Center for Disease Control and Prevention (China), 49–50, 52 Centers for Disease Control and Prevention (CDC), 47, 74–75, 77, 222, 270 central banks.


pages: 177 words: 50,167

The Populist Explosion: How the Great Recession Transformed American and European Politics by John B. Judis

affirmative action, Affordable Care Act / Obamacare, Albert Einstein, anti-communist, back-to-the-land, Bernie Sanders, Boris Johnson, Bretton Woods, capital controls, carbon tax, centre right, Charlie Hebdo massacre, collapse of Lehman Brothers, deindustrialization, desegregation, Donald Trump, eurozone crisis, financial deregulation, first-past-the-post, fixed income, full employment, ghettoisation, glass ceiling, Glass-Steagall Act, hiring and firing, illegal immigration, immigration reform, income inequality, invisible hand, Jeremy Corbyn, laissez-faire capitalism, Les Trente Glorieuses, mass immigration, means of production, neoliberal agenda, obamacare, Occupy movement, open borders, plutocrats, Post-Keynesian economics, post-materialism, rolodex, Ronald Reagan, Silicon Valley, War on Poverty, We are the 99%, white flight, Winter of Discontent

The countries, except for Denmark and the UK, also committed themselves to a common currency, the Euro, which would begin circulating in 1999. France and Germany were always the main movers behind the EU; their principal motive was to integrate Germany into a European community. But economics also figured in the design of the EU. Once, after the United States abandoned Bretton Woods, Europe’s currencies began floating in value, and smaller countries like the Netherlands that were dependent on exports wanted to provide some stability to their currencies. Former French Finance Minister Dominique Strauss-Kahn described the Euro as “a tool to help us . . . resist irrational shifts in the market.”


pages: 1,335 words: 336,772

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance by Ron Chernow

Alan Greenspan, always be closing, bank run, banking crisis, Bear Stearns, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Bolshevik threat, book value, Boycotts of Israel, Bretton Woods, British Empire, buy and hold, California gold rush, capital controls, Carl Icahn, Charles Lindbergh, collective bargaining, Cornelius Vanderbilt, corporate raider, death from overwork, Dutch auction, Etonian, financial deregulation, financial engineering, fixed income, German hyperinflation, Glass-Steagall Act, index arbitrage, interest rate swap, junk bonds, low interest rates, margin call, Michael Milken, military-industrial complex, money market fund, Monroe Doctrine, North Sea oil, oil shale / tar sands, old-boy network, paper trading, plutocrats, Robert Gordon, Ronald Reagan, short selling, stock buybacks, strikebreaker, Suez canal 1869, Suez crisis 1956, the market place, the payments system, too big to fail, transcontinental railway, undersea cable, Yom Kippur War, young professional

Leffingwell thought that Glass-Steagall, by segmenting banking, had destroyed the most interesting jobs on the Street. After World War II, the Morgan bank was upstaged by a new set of multilateral institutions. Between the wars, the mysterious troika of the Bank of England, the New York Fed, and Morgans had largely governed the international monetary order. At Bretton Woods, New Hampshire, in 1944, they were superseded by a proposed World Bank and International Monetary Fund. These twin bodies would try to lift currency stabilization and European reconstruction to a supranational plane. In the postwar era, there would also be greater collaboration among central banks and finance ministries of the major industrial countries.

Gradually Wall Street bankers would lose their unique place in world finance. Never again would a private bank such as J. P. Morgan be the most powerful financial agency on earth. Far from standing guard over scarce resources, bankers would evolve into glad-handing salesmen, almost pushing the bountiful stuff on customers. The new Bretton Woods bodies were shaped by the interwar lending disaster. The memories of the 1920s were fresh, with over a third of foreign government securities still in default. The World Bank’s decision to finance only meticulously conceived projects was a reaction to this loose sovereign lending. Even so scrupulous a lender as Morgans smarted from a flood of outstanding defaulted bonds—$197 million in Japanese debt, $20 million from Austria, $151 million from Germany.

Carlyle Gifford of the British Treasury, “However bungling we may think the governments of the West, it is plain that there can be no hope for democracy and a world of free men except that England be restored and aided to take her place again in the world.”12 To his friend Lady Layton he said, “Nothing matters as much as the British empire and the United States of America and their collaboration.”13 Britain’s diminished place in world affairs would lessen the value of Morgan ties to the British Treasury and the Bank of England. Unlike the 1920s, after World War II the United States no longer deferred to Britain’s financial leadership. When John Maynard Keynes proposed that the World Bank and the International Monetary Fund be based in London or New York, the United States, in a symbolic act, placed its Bretton Woods wards a short walk from the White House. For Leffingwell, the touchstone of any policy was how it would affect both America and Britain. Like others at Morgans, he was violently anti-Zionist, imagining that agitation for a Jewish homeland would stir up the Moslem world against the British Empire.


pages: 225 words: 54,010

A Short History of Progress by Ronald Wright

Albert Einstein, Atahualpa, Bretton Woods, British Empire, clean water, Columbian Exchange, cuban missile crisis, Easter island, Francis Fukuyama: the end of history, Haber-Bosch Process, Hernando de Soto, invention of agriculture, It's morning again in America, James Watt: steam engine, Jane Jacobs, land reform, Mahatma Gandhi, mass immigration, nuclear winter, out of africa, Parkinson's law, post-war consensus, precautionary principle, Ronald Reagan, technological determinism, Thomas Malthus, urban sprawl

(These figures come from the Micronutrient Initiative, Ottawa, and were reported in “‘Hidden Hunger’ Weakens Physical, Economic Health,” André Picard, Globe and Mail, March 25, 2004.) The statistics on water deaths come from Ponting, Green History, p. 351. 59. Reckoning those killed in the two world wars and the Russian Revolution. 60. Many of these policies were developed by the Bretton Woods Agreements of 1944, under the influence of John Maynard Keynes. Earlier forms of social safety net were already in place, notably Franklin Roosevelt’s New Deal. The postwar era, from the 1950s to the 1970s, has been dubbed the “Golden Age” by the historian Eric Hobsbawm in his magisterial survey of the twentieth century, The Age of Extremes: A History of the World 1914–1991 (London: Michael Joseph, 1994).


pages: 198 words: 53,264

Big Mistakes: The Best Investors and Their Worst Investments by Michael Batnick

activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, AOL-Time Warner, asset allocation, Bear Stearns, behavioural economics, bitcoin, Bretton Woods, buy and hold, buy low sell high, Carl Icahn, cognitive bias, cognitive dissonance, Credit Default Swap, cryptocurrency, Daniel Kahneman / Amos Tversky, endowment effect, financial engineering, financial innovation, fixed income, global macro, hindsight bias, index fund, initial coin offering, invention of the wheel, Isaac Newton, Jim Simons, John Bogle, John Meriwether, Kickstarter, Long Term Capital Management, loss aversion, low interest rates, Market Wizards by Jack D. Schwager, mega-rich, merger arbitrage, multilevel marketing, Myron Scholes, Paul Samuelson, Pershing Square Capital Management, quantitative easing, Reminiscences of a Stock Operator, Renaissance Technologies, Richard Thaler, Robert Shiller, short squeeze, Snapchat, Stephen Hawking, Steve Jobs, Steve Wozniak, stocks for the long run, subprime mortgage crisis, transcontinental railway, two and twenty, value at risk, Vanguard fund, Y Combinator

Jack Bogle wrote, “That chapter, laced with investment wisdom, made a major impact on my 1951 senior thesis…Keynes the investor, not the economist, has been the inspiration for my central investment philosophy.”7 Warren Buffett said, “If you understand chapters 8 and 20 of The Intelligent Investor and chapter 12 of The General Theory, you don't need to read anything else and you can turn off your TV.”8 George Soros wrote, “I fancied myself as some kind of god or an economic reformer like Keynes.”9 Finally, the intellectual giant Peter Bernstein credits Keynes with defining risk “as it has come to be understood today.”10 What was it about Keynes that made these financial giants speak with such reverence? Keynes wrote several international best‐selling books, revolutionized institutional asset management, and practically built the global monetary system as we know it. He designed England's financing of World War II, and he was hugely influential in designing the Bretton Woods agreement, which established the postwar global monetary system. When Keynes died, the obituary in The Times read, “To find an economist of comparable influence, one would have to go back to Adam Smith.”11 Keynes was so far ahead of his time that when John Kenneth Galbraith reviewed his seminal work, The General Theory of Employment, Interest and Money, he wrote, “The economists of established reputation had not taken to Keynes.


The New Class War: Saving Democracy From the Metropolitan Elite by Michael Lind

"World Economic Forum" Davos, affirmative action, anti-communist, basic income, Bernie Sanders, Boris Johnson, Bretton Woods, Brexit referendum, business cycle, Cambridge Analytica, capital controls, Cass Sunstein, central bank independence, centre right, collective bargaining, commoditize, corporate governance, cotton gin, crony capitalism, deindustrialization, disinformation, Doha Development Round, Donald Trump, Edward Snowden, export processing zone, fake news, future of work, gentrification, global supply chain, guest worker program, Haight Ashbury, illegal immigration, immigration reform, independent contractor, invisible hand, Jeremy Corbyn, knowledge economy, Les Trente Glorieuses, liberal world order, low skilled workers, low-wage service sector, manufacturing employment, Mark Zuckerberg, mass immigration, means of production, Michael Milken, moral panic, Nate Silver, new economy, offshore financial centre, oil shock, open borders, plutocrats, Ponzi scheme, purchasing power parity, Ralph Nader, regulatory arbitrage, rent-seeking, Richard Florida, Ronald Reagan, scientific management, Silicon Valley, SoftBank, The Wealth of Nations by Adam Smith, Thorstein Veblen, Timothy McVeigh, trade liberalization, union organizing, universal basic income, upwardly mobile, WikiLeaks, Wolfgang Streeck, working poor

Even the most business-friendly postwar democracies like the US and Britain and West Germany had mixed economies characterized by forms of labor-business bargaining and economic regulation and public spending that would have been politically impossible before the Great Depression and World War II. Under the postwar Bretton Woods system, exchange rates were controlled and capital controls in Western Europe were not relaxed until the late 1950s. The first class war in the industrial West between the managerial overclass and the working class ended after 1945 with national class compromises like the New Deal in the US, designed to buy social peace first during wartime mobilization and then in postwar economic recovery by incorporating formerly marginalized workers and family farmers into the national power structure.


pages: 161 words: 52,058

The Art of Corporate Success: The Story of Schlumberger by Ken Auletta

Albert Einstein, Bretton Woods, data science, George Gilder, job satisfaction, offshore financial centre, oil shale / tar sands, oil shock, Ronald Reagan, the scientific method, union organizing

He said that Schlumberger and the world were entering “a new cycle”—a cycle that would no longer feature annual earnings-per-share increases of 25 to 35 percent. He divided the years after the Second World War into three cycles. The first, from 1945 to 1970, had three elements: cheap and abundant energy; the world dominance of American business; and the Bretton Woods agreement creating an international monetary system. The second cycle, from 1970 to 1980, saw the end of cheap oil; the challenge to American business dominance, particularly from Japan and other countries of the Far East; and the collapse of gold as a single international monetary standard. These changes helped ignite the worldwide rise in inflation and interest rates.


pages: 868 words: 147,152

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, foreign exchange controls, Gini coefficient, glass ceiling, Great Leap Forward, high-speed rail, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, low interest rates, market fragmentation, megaproject, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, TSMC, urban sprawl, Washington Consensus, working-age population

Finance bulks up After the Second World War, developing countries were able to put unprecedented financial power behind their development policies. Almost all governments were becoming bigger and more powerful, and had greater bureaucratic reach than ever. From the 1960s the digital age made possible information management systems that vastly increased the power of financial sectors. And in the early 1970s the Bretton Woods system of fixed exchange rates (which had been the successor to the gold standard) broke down, allowing for vastly increased flows of international capital which could be harnessed – for better or worse – by poor countries. In the late nineteenth century, Germany and the United States had been the first countries to raise their savings and investment ratios to 20 per cent of GDP.5 In 1960, the American government adviser W.

Little 103–4 ASEAN (Association of South-east Asian Nations) 150, 270 Asia Motors 126 Asmat Kamaludin 129–30, 133 Astra 153, 314n227 Australia 81, 113 Austria 171 autarky 74, 224, 225 authoritarianism xxv automotive industry see car industry Bacolod 34 Baildon, John 291n25 Bairoch, Paul 71, 79 Baker, Chris 58 Bali 50 Bangkok 56 Bank Central Asia (BCA) 205–6, 217, 325n85, 86 Bank of China 256 banks xviii–xix, 169, 170, 173, 217, 218–9 China 241, 255–7, 258–61, 280–81n55 India 320n34 Indonesia 204, 205–6, 207, 209–10, 212, 217, 328n113 Japan 175–6, 179, 315n240 Korea 104, 112, 157, 181, 184, 185, 192, 193 Malaysia 189, 195, 196, 197 Philippines 191, 192, 312n45 Taiwan 157, 185, 186, 187–8 Thailand 200, 201–3 Baogang 119 Baosteel 234 Bauer, P.T. 54, 285n97 Belgium 164 Benedicto, Roberto 42, 192 Benedicto family 42–3, 44, 47 Bengkel Night Park Entertainment Centre 213 Benson, Ezra Taft 67 Benteng 207 Bentong 140 Berkeley Mafia 103, 209, 210, 211, 213, 297n86 Berkshire Hathaway 119, 252 BHP 117, 142 Billig, Michael 48 Bismarck, Otto von 85 black jails 269, 338n3 Bogosari 205 Borderless World, The (Ohmae) 131, 134 Brazil xv, 10, 116, 154 Bretton Woods system 172 Bricklin, Malcolm 312n204 Britain see United Kingdom Broad Air Conditioning 232 Brunei xx, 288–9n3 Buffet, Warren 119, 252 bumiputera 132, 141, 195, 305n150 bureaucracy 78, 86, 289n9 China 96, 234–5, 240–1 Japan 91, 101, 293n41, 296n76 Korea 95, 113 Malaysia 132–3, 150–1, 302–3n131 Taiwan 98–9, 101 Thailand 154 Burma 97 BYD 251–2 cab fares 108, 298n90 Cambodia xx capital controls 173–4 China 224, 257 Indonesia 212 Japan 177 Korea 182–3, 185 Malaysia 323n68 Philippines 193 Taiwan 185, 186, 188 car industry 107 China 245–6, 250–2, 254 Indonesia 153, 210 Japan 160 Korea 76–7, 113–4, 119–26, 151 Malaysia 145–50 cash crops 6, 67–8 casinos 137 cement 113, 307n161 chaebol 77, 94–5 car industry 125 finance 162, 170, 181–4 Chandler, Alfred 250, 316n248 Chang Do Yung 298n96 Chang, Ha-Joon 81, 162–3 Chang Ki-Yong 94, 101 Charoean Pokphand (CP Group) 58, 286n111 Chen Shui-bian 66 Chen Yuan 241 Chen Yun 241, 333n33 Cheng, William 309n187 Chia, Eric 143–4, 145, 309n189 Chiang Kai-shek xxv, 18, 23, 30, 31, 36, 96–7 Chichibu 15 China xiii, xv, xviii, xix–xx, xxiv, 74, 166, 223–5, 263–6, 269 agriculture 3, 4–5, 6, 17–19, 20–1, 47, 48, 62, 225–31 authoritarianism xxvi civil war 18–19, 20 education xxiii, xxiv finance xxiii–xiv, 256–62 land reform xvii, xxvi, 3, 4, 5–6, 9, 15–17, 18, 61 manufacturing xvii–xviii, 33, 78, 82–3, 96–7, 120, 153, 158, 232–54 population xxii, 264–5 rule of law xxvi social mobility 61 trade surplus 158 and US 297n83 war with Japan 12, 18 China Construction Bank 256 China Development Bank (CDB) 241, 242, 244, 250, 256–7 China Export-Import Bank 242 China Mobile 234, 237 China Telecom 234 Chinalco 234 Cho Pong-am 69, 288n131 Chun Doo Hwan 136, 184 Chung In Yung 109, 298n93, 299n101 Chung Ju Yung 66, 109–10, 113–4, 121, 137, 298n92, 300n115 joint ventures 123, 301n119 and Mitsubishi 124, 146 politics 126, 302n126 Chung Se Yung 121, 123, 300n112 Churchill, Winston 53 climate xxvii CNOOC 234, 235 Coase, Ronald 267 Cockerill, John 291n25 Cojuangco, Eduardo ‘Danding’ 40–1, 192, 283n74 Cojuangco, Jose, Jr 37 Cojuangco family 37, 38, 45 collectivisation 4 China 21, 24, 223, 226 Russia 24 Communist Party of China (CPC) 233, 236, 248, 256 agriculture xxi, 223, 226 democracy 265 land reform xix, 15–16, 17 manufacturing 96, 223–4, 232, 236 rule of law xxvi Comprehensive Agrarian Reform Law (CARL) 38, 39, 40–2, 47 Congo 246 construction industry 243–4, 255 crony capitalism 108, 111, 132, 155, 293n40 Cuba xxiii, xxiv Cuenca family 47 currency China 262–3 Japan 178–9 Malaysia 198 Taiwan 187 Thailand 202 Daewoo 94, 126, 183, 301n119, 302n125–6 Daihatsu 146, 313n216 Daim Zainuddin 197 debt 173–4 China 261 Korea 181, 183, 218n28 Malaysia 198 Philippines 193, 321n43 Dee, Dewey 322–3n55 Deininger, Klaus 10, 276–7n12 democracy xxv–xxvi demographics see population Deng Wenming 17 Deng Xiaoping xxii, 17, 21, 221, 224, 226, 228, 241, 331n21 Denmark 61, 81 deregulation 162, 165–6, 173–4, 184, 196–8 Indonesia 212, 216, 217 Japan 178, 317n9 Korea 182, 183 Malaysia 196, 198 Taiwan 187 Dodge, Joseph 101–2, 297n80 Doiron, Roger 5 Dore, Ronald 25, 156 Du Shuanghua 237 Economic Planning Board (EPB) 78, 95, 114, 300n114 education xxii–xxiii Egypt 93 Eisenhower, Dwight D. 67 electricity generating 242 electronics 98 Emmott, Bill 160 Estrada, Joseph ‘Erap’ 42, 283n74 Eurobonds 178 exchange rates see currency export discipline xiv, xvii–xviii, 76, 90, 98, 151, 162, 267 China 235, 239, 241, 242, 249 Japan 90, 91 Korea 94–5, 104, 121, 122, 182 Malaysia 130, 131, 151 Philippines 191 Taiwan 97, 98–9, 153, 185 Thailand 154 Fanshen 18 farming see agriculture finance xiv, xvi, xviii–xix, 169–75, 217–18, 267, 269 China 223, 224, 241, 253–4, 255–61 Indonesia 189, 203–17 Japan 175–9 Korea 102, 103, 112, 179–84 Malaysia 188–9, 195–8 Philippines 190–5 Taiwan 185–8 Thailand 190, 195, 199–203 financial crisis xvi, 174, 217 Indonesia 154, 203, 206, 216–7 Korea 126, 162, 185, 318n23 Malaysia 149, 198 Philippines 193 Thailand 200, 202–3 Ford 114, 123, 160, 301n120 foreign debt see debt foreign trade see trade France agriculture 290n18 and Korea 123 manufacturing 92 protectionism 79 free market economics xv, 4, 6, 74, 83, 102, 165–6, 172, 257–8 free trade 74, 84 Friedman, Thomas 134 gardening see household farming Geely 246 General Agreement on Tariffs and Trade (GATT) 173 General Motors (GM) 126, 302n125–6, 129 geography xxvi–xxvii Germany and China 96 education xxii–xxiii finance 172, 316n3 and Japan 85 manufacturing 82–5, 87–8, 89–90, 92, 98, 106, 153, 292n30 protectionism 79, 80, 315n234 trade surplus 158 Gerschenkron, Alexander 171 Great Leap Forward 225 Great Wall Motor 232, 246 green energy 240–1, 253–4 Guam 113 Gurney, Sir Henry 140, 308n180 Gwangyang 118 Habibie, B.J. 153, 210, 314n228, 326n94 Halim Saad 308n178 Hamilton, Alexander 79, 80, 84, 290–1n19 Harrison, Francis Burton 190 Hartono, Budi 217 Hassan Din 204 heavy and chemical industries (HCI) Korea 95, 100, 121 Malaysia 130 Taiwan 99 see also car industry; shipbuilding; steel Herring, Ronald 56 Hinton, William 18, 19–20 Hirata Tosuke 85 Hirschman, Albert 315n232 Historical School 83–4 Holland 290n10 Hon Hai 296n71 Honda, Soichiro 288n125 Honda 8, 78 Hong Kong xiv, xx, 79, 289n3 household farming xiii, 4–6, 61, 65–7, 68, 73, 169, 267, 270, 284n92 China 20–1, 24, 224, 225–6 Korea 28, 114 Malaysia 53 Russia 23 Taiwan 31–2, 33 HTC 78 Hu Jintao 228 Huawei 244–5, 206–7, 276n8 Huk rebellion 35 Hume, David 298n89 Hussain, Rashid 140 Hussein Onn 128, 129–30 Hutchcroft, Paul 192, 322n50 Hyundai 94, 100, 105–6, 112–3, 162, 183 Hyundai Construction 110, 112, 113, 137, 298n93, 299n100, 300–1n115 Hyundai Heavy Industries (HHI) 120, 301n118, 301n121 Hyundai Merchant Marine 301n118 Hyundai Motor Company (HMC) 77, 100, 107, 114, 115, 119–26, 301–2n121–4, 302n129, 306n159 Elantra 135, 149 and Kia 185 and Malaysia 150, 313n222 and Mitsubishi 124, 146, 153 uniform 300n110 IBM 78 IMF xiv, 104, 158, 172, 173, 198, 218, 271 China 224 Indonesia 163, 203, 214, 215–6 Korea 96, 162, 163, 181, 183, 219 macro-economic stability 156 Philippines 163, 191, 193, 322n52 Thailand 163, 198, 199, 200–3 import substitution industrialisation (ISI) 147–8, 153 Philippines 155 Thailand 155 income inequality 62 Taiwan 31–2 India xix banks 320n34 and China 242 economic development 74 IT sector 164, 288–9n3 land reform 69 manufacturing 119, 158, 164, 224 public sector 97 Indocement 205 IndoMobil 205 Indonesia xv, xvi, 270 agriculture xvii, 6, 49–51, 56, 67, 68 democracy xix finance 104, 169, 188, 203–17, 317n7 manufacturing 153–4, 157, 163, 313n225 rule of law xxv and US 68 Industrial and Commercial Bank of China 256 Industrial Bank of Japan 176 Industrial Development Bureau (IDB) 78 industrial policy see manufacturing inflation Korea 180 Philippines 193 Infosys 163 interest rates Japan 179 Korea 93, 102, 170, 180, 181, 182 Malaysia 195 Philippines 188 Taiwan 157 US 189, 193 International Monetary Fund see IMF IPTN (Indonesian Aviation Industry) 153–4, 314n228 Tun Ismail Mohamed Ali 195 IT 163, 289n3 ItalDesign 124 Italy xxii–xxiii, xxv, 92, 268, 338n2 Ito Hirobumi 85 Ito family 16 Iwasaki Yataro 87 Jagger, Mick 212 Jakarta xix, 204, 205, 210–1 Japan xiv, 104, 268 agriculture 3–4, 7–8, 11–16, 29, 48, 63–5, 100, 159–60 aircraft industry 153–4, 314n229 bureaucracy 77, 78, 101 capital controls 173 car industry 124, 127 democracy xxiv demographic challenges xxi education xxii, xxiii export discipline 76, 90 finance xviii–xix, 170, 174, 175–8, 218, 317n7, 317n9 and Korea 27, 92, 110, 294n52 land reform xvii, xxiv, 3, 7–8, 11–14, 23, 24–6, 28, 31, 61, 68, 69, 279n38 and Malaysia 106, 130, 131, 137, 140–1, 142, 146, 305n154 manufacturing xvii–xviii, 11, 33, 81, 82–90, 100, 152–4, 156, 158, 159–61, 165 and POSCO 115–6 protectionism 79, 80, 315n234 social mobility 288n125 steel 106, 118, 119 and Taiwan 30 trade surplus 158 and US 101–2 war with China 12, 18–19 Jardine Matheson 314n227 Java 49, 51, 283n83 Jefferson, Thomas 291n19 J.G.


pages: 468 words: 145,998

On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry M. Paulson

Alan Greenspan, asset-backed security, bank run, banking crisis, Bear Stearns, break the buck, Bretton Woods, buy and hold, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Doha Development Round, fear of failure, financial engineering, financial innovation, fixed income, housing crisis, income inequality, junk bonds, London Interbank Offered Rate, Long Term Capital Management, low interest rates, margin call, money market fund, moral hazard, Northern Rock, price discovery process, price mechanism, regulatory arbitrage, Ronald Reagan, Saturday Night Live, Savings and loan crisis, short selling, sovereign wealth fund, technology bubble, too big to fail, trade liberalization, young professional

Depression-era legislation allows the president and the Treasury secretary to invoke emergency regulatory powers, but these are limited to banks in the Federal Reserve System and do not extend to institutions like the investment banks or hedge funds that play a major role in today’s financial system. The power of the Treasury secretary stems from the responsibilities the president delegates to him, his convening power, and his ability to persuade and influence other Cabinet members, independent regulators, foreign finance ministers, and heads of the Bretton Woods institutions like the World Bank or the International Monetary Fund. I came to Washington determined to make the most of my position. The first order of business was to restore credibility to Treasury by building a strong relationship with President Bush and making clear that I was his top economic adviser.

Then French president Nicolas Sarkozy made an impromptu call to President Bush requesting a meeting, along with European Commission president José Manuel Barroso, after the October 17 European Union–Canada Summit in Quebec City. Sarkozy and U.K. prime minister Gordon Brown had been sparring over which of them would lead reform efforts in Europe. Brown envisioned a new Bretton Woods–style gathering to overhaul the world economic order set in place during World War II. Sarkozy, who held the presidency of the European Union, had called for replacing the failed “Anglo-Saxon” model of free markets and advocated a major summit in New York, which he considered the epicenter of the problem.


pages: 863 words: 159,091

A Manual for Writers of Research Papers, Theses, and Dissertations, Eighth Edition: Chicago Style for Students and Researchers by Kate L. Turabian

Bretton Woods, conceptual framework, correlation does not imply causation, illegal immigration, information security, Menlo Park, meta-analysis, Steven Pinker, Telecommunications Act of 1996, two and twenty, W. E. B. Du Bois, yellow journalism, Zeno's paradox

Records of testimony given before congressional committees are usually published with titles, which should be included in citations. List the relevant committee as author. Notice the form for a shortened note, which differs from the usual pattern (see 16.4.1). N: 13. House Committee on Banking and Currency, Bretton Woods Agreements Act: Hearings on H.R. 3314, 79th Cong., 1st sess., 1945, 12–14. 14. House Committee, Bretton Woods, 13. B: U.S. Congress. Senate. Committee on Foreign Relations. Famine in Africa: Hearing before the Committee on Foreign Relations. 99th Cong., 1st sess., January 17, 1985. BILLS AND RESOLUTIONS. Congressional bills (proposed laws) and resolutions are published in pamphlet form.


pages: 475 words: 149,310

Multitude: War and Democracy in the Age of Empire by Michael Hardt, Antonio Negri

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Berlin Wall, Bretton Woods, British Empire, business cycle, classic study, conceptual framework, continuation of politics by other means, David Graeber, Defenestration of Prague, deskilling, disinformation, emotional labour, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, friendly fire, global village, Great Leap Forward, Howard Rheingold, Howard Zinn, illegal immigration, Joseph Schumpeter, land reform, land tenure, late capitalism, liberation theology, means of production, military-industrial complex, Naomi Klein, new economy, Paul Samuelson, Pier Paolo Pasolini, post-Fordism, post-work, private military company, race to the bottom, RAND corporation, reserve currency, Richard Stallman, Slavoj Žižek, the Cathedral and the Bazaar, The Chicago School, The Structural Transformation of the Public Sphere, Thomas Malthus, Thorstein Veblen, Tobin tax, transaction costs, union organizing, War on Poverty, Washington Consensus

In general terms, one could say that the IMF is dominated by economic technicians whereas many working at the World Bank and the UN aid agencies have an ethics of social welfare close to that of the NGO community.88 Despite such differences, however, we will argue, these supranational institutions exercise common and coherent economic and political controls. The IMF is perhaps the most ideologically coherent of the supranational economic institutions. It was founded at Bretton Woods in 1944 to regulate international monetary cooperation and to preserve the stability of international financial markets between the victors and the vanquished of the Second World War, and thus its mandate was explicitly to avoid the monetary disaster that resulted from the peace of Versailles.

This hypothesis leads us to view the changing paradigms of geopolitics as responses to the challenges posed by the struggles of the multitude. Elsewhere we have argued, for instance, that the transformation of the geopolitical framework in the late twentieth century, after the oil crises and monetary crises in the 1970s and the collapse of the Bretton Woods system, was a response to the anticolonial and antiimperialist struggles in Asia, Africa, and Latin America as well as the massive social struggles in Europe and North America.111 Today, it seems to us, the crisis of geopolitics is best understood in terms of the struggles against the present global order that we sketched in the previous chapter, from movements against neoliberalism in India, Brazil, Seattle, and Genoa to the movement against the Iraq War.


pages: 391 words: 22,799

To Serve God and Wal-Mart: The Making of Christian Free Enterprise by Bethany Moreton

affirmative action, American Legislative Exchange Council, anti-communist, Berlin Wall, big-box store, Bretton Woods, Buckminster Fuller, collective bargaining, company town, corporate personhood, creative destruction, deindustrialization, desegregation, Donald Trump, emotional labour, estate planning, eternal september, Fall of the Berlin Wall, Frederick Winslow Taylor, George Gilder, global village, Great Leap Forward, informal economy, invisible hand, liberation theology, longitudinal study, market fundamentalism, Mont Pelerin Society, mortgage tax deduction, Naomi Klein, new economy, post-industrial society, postindustrial economy, prediction markets, price anchoring, prosperity theology / prosperity gospel / gospel of success, Ralph Nader, RFID, road to serfdom, Ronald Reagan, scientific management, Silicon Valley, Stewart Brand, strikebreaker, The Wealth of Nations by Adam Smith, union organizing, walkable city, Washington Consensus, white flight, Whole Earth Catalog, work culture , Works Progress Administration

Congress signaled its approval by appropriating a whopping $20 million for SBDCs in 1981, with the Â�requirement that colleges and universities find one-Â�to-Â�one matching funds from other sources.24 The political support behind this largess had little to do with the centers’ effectiveness. Reports and hearings found a spotty record and a dramatic over-Â�reliance on undergraduates. But many constituents understood that the utility of the centers could not necessarily be meaÂ� sured by their economic impact alone. The end of the Bretton Woods era stranded these bewildered small businessmen as window-Â�dressing for the “vast casino” of international fiÂ�nanÂ�cial speculation.25 Like a failed Missouri manufacturer, many could not understand “why, in a country as great as ours, a small business should have so much trouble surviv150 EVANGELIZING FOR FREE E N T ERPRI S E ing.”26 Like the personalized outreach programs, the college-Â�based small business centers offered the businessman to impressionable campus audiences as a victim, not a bully.

See also Clerks Association of College Entrepreneurs, 158 AT&T, 46, 107, 174 Austrian school of economics, 167, 195, 219, 241 Automation, 81, 85, 130, 136, 138, 141, 160, 163–164, 321n69 Bible Baptist Fellowship, 95 Bible schools, 153, 163–164, 237 Blanchard, Kenneth, 110, 132; Lead Like Jesus, 111; The One-Minute Manager, 111 Bompreco stores, 262 Boone, Wellington, 118; Your Wife Is Not Your Momma, 113 Boosterism, corporate, 30–31, 38 Branson, MO, 9–10, 36, 39–40, 94 Bretton Woods agreement, 150 Broadcasting. See Radio; Television Brown, John E., 32, 161 Brown, John E., Jr., 162 Brown, John E. III, 233, 240, 242 Bryan, William Jennings, 32 Bryant, Anita, 3, 9, 119 Budget: defiÂ�cit, 165, 174, 181, 202–205; balanced, 203, 205 Bureaucratic corporations, 11, 153, 157, 160 Burkett, Larry, 331n58; The Coming Financial Earthquake, 205 Bush, George H.


pages: 539 words: 151,425

Lords of the Desert: The Battle Between the US and Great Britain for Supremacy in the Modern Middle East by James Barr

Albert Einstein, anti-communist, Bretton Woods, British Empire, capital controls, cuban missile crisis, disinformation, false flag, illegal immigration, imperial preference, Khartoum Gordon, land reform, Mahatma Gandhi, Suez crisis 1956, trade route

It was an early sign of how the Americans would outgun the British financially in the years to come.14 * * * Landis left Washington to return to Cairo that autumn determined to finish off the Middle East Supply Centre. The Americans insisted that the Atlantic Charter and, more definitely, the original Lend-Lease agreement had committed Britain to ending trade discrimination. Then, at the Bretton Woods conference that summer, the British had accepted a system that envisaged multilateral free trade. All this was at odds with the restrictions that the Middle East Supply Centre continued to police. When, en route for Egypt, Landis paused in London, he told British officials that his prime objective was ‘to cut out the red tape’ that impeded American exporters selling in the Middle East.

Rafiq, 265–6 armistice: 1918, 5 1949, 90, 211 Ashraf, Princess, 166 Aswan Dam, 212, 227 Nasser announces payment for, 222 Nasser sees UK–US loan loss as disaster for, 221 and other countries’ finance, 219–21 possible Russian contract for, 219 US and UK decide not to help finance, 220 Atlantic Charter, 5, 9, 13, 14–15, 48–9, 58, 66 Attlee, Clement (see also United Kingdom): and Anglo-American Committee of Enquiry, see main entry election called by, 136 and HST, 65–7, 68, 135 illness of, 133 Iran plan shelved by, 135 and Operation Agatha, 75 and Palestine, 65–6 robust action demanded of, 82 US loan requested by, 69 Azm, Khalid al, 252, 253 Baath Party, 249, 258, 259, 288, 289, 294–5 increasingly popular, 217 Badr, Imam, 298, 302, 306 Baghdad Pact, 191, 202, 204, 209, 249 and Lloyd’s offer to Nasser, 212 Bahrain, 208 Egypt encourages domestic opposition in, 274 Bakdash, Khalid, 252, 256 Balfour Declaration, 18, 23–4 anniversary of, 25 Barrie, Harry, 327 Baruch, Bernard, 89–90 Bedell Smith, Walter, 170 Beeston, Dick, 314 Begin, Menachem, 75 Beihan, 304, 311, 316–17 machine-gunned outpost in, 319 Beihan, Sharif of, 316–17 Beirut: civil war in, 262 HM in, 202 Hussein of Jordan visits, 217 US forces land in, 267 WW meets de Gaulle in, 17 Belgium, and partition, 89 Ben Gurion, David, 27–9 passim, 73, 74, 236 (see also Israel) agrees to attack Egypt, 236 and Nasser, 210 and Russia–Egypt arms sale, 193 Ben Hecht, 81, 85 Bergson, Peter, see Kook, Hillel Bernstein, Leonard, 81 Bevin, Ernest, 66 and Anglo-American Committee of Enquiry, see main entry on Anglo-Iranian, 120 critical of US, 69, 82, 90 death of, 133 disintegrating strategy of, 94 and HST, 71 illness of, 131 on Mosaddeq, 129 and Palestine, 66–7, 68–9, 82, 83–4 sabotage approved by, 85 on US support for partition, 90 Bikini Atoll, 182 Biltmore Declaration, 24, 27–8 bin Ataishan, Turki, 197 Bird, Richard, 109–11, 112–13 Bizri, Afif, 254, 256 Nasser’s view of, 258 sacked, 259 Black Saturday (1952), 146, 214 Blue Line Agreement, 104–5 Bowles, Chester, 299 Boyle, Tony, 310, 315, 324 Brando, Marlon, 81 Bretton Woods, 58 Brewster, Ralph, 45–6 Brook, Sir Norman, 293 Brown, George, 325, 329, 331, 337–8 Bulganin, Nikolai, 245 Bullard, Sir Reader, 198, 199 Bulwark, HMS, 293 Bundy, McGeorge, 294 Bunker, Ellsworth, 308, 313, 316 Buraimi, 107, 109–10, 111, 112, 197–201, 206, 276, 279, 280 and arbitration, 198–200 and Ibn Saud’s claim, 113, 116, 197 Burrows, Bernard, 278–9 Butler, Rab, 267, 318, 320 Byrnes, James, 66–7, 68–9, 95 Byroade, Hank, 192, 193 Cadogan, Alec, 156 Caffery, Jefferson, 150 Cairo: as ‘crossroads of the free world’, 16 Free Officers take over, 148 lions in zoo at, 147 secret world in, 34 US university in, 43, 57 WW in, 16 California Arabian Standard Oil Company (CASOC, later Aramco), 30, 35, 38 (see also Aramco) plan to buy into, 43–4 and private investment, 48 and UK veto, 48 Callaghan, Jim, 329, 337 Carroll, George, 164, 168 Casey, Richard, 33–5, 39–40, 45 Challe, Maurice, 232, 233 Chamoun, Camille, 261–2, 267, 269 Charles, Sir Arthur, 327–8 Chehab, Farid, 102 Chehab, Fuad, 262, 269 chemical weapons, 314–15 China, pressure on Saud to recognise, 219 Christie, John, 314 Churchill, Winston (see also United Kingdom): and Abdullah, 94 on Anglo-Iranian, 120 and Atlantic Charter, see main entry calls on, to resign as defence minister, 4 at Casablanca conference, xi and Casey proposals, 39–40 and civilian Suez contractors, 182 concessions rejected by, 139 and DDE, 157–8, 183 Eden confides in, 231 and Eden withdrawal suggestion, 146 and Egypt insurgency, 143 (see also Suez: and UK forces) on El Alamein, 5–6 Empire supported by, 5–6, 26 ‘end of the beginning’ remark of, 3 FDR called in error by, 14 FDR letter of, 9–10 FDR’s May 1943 meeting with, 36–7 FDR’s relationship with, 10–11 FDR’s spat with, 49 Five Senators blamed by, 49 and Hurley, 36 and JFD, 156, 158–9, 179 KR meets, 173 lack of scruples regarding law, 143 Mansion House addressed by, 3, 4, 5–6, 26, 140 and mischievous Parliamentary question, 22 and Mosaddeq plot, approval for, 164 (see also Operation Ajax) New Deal articles by, 10 and oil boycott, 140 partition idea hated by, 51 resignation, 190 secret Stalin visit of, 22 on Suez base, 144, 146, 182 on Suez crisis, 139 and Suez uniform policy, 180–1 tension between FDR and, 14–15 on Tobruk, 4 and US request for joint statement, 39 at US strategy conference, 36 vote of confidence in, 4, 7 and Washington talks, 143–4 WW meeting of, 13–14 WW’s relationship with, 9, 11–12, 13–14, 21–2, 25, 26 WW’s scepticism concerning, 9 and WW’s UK visit, 11–12 at Yalta, 62 CIA, 206 and arms for Nasser, 184 in Egypt, 148, 191, 210, 213 firmans distributed by, 170 and Iran, 132, 134, 155, 161–2, 163 and Iraqi Health Alteration Committee, 294 in Jordan, 217–18 in Lebanon, 164, 165, 215, 216, 217, 294 and MI6, 213–15, 243 and Mosaddeq plot, see Operation Ajax in Saudi Arabia, 218–19 support for dismemberment of Saudi Arabia, 206 and support-for-royalists question, 316 in Syria, 102–3, 217 and Voice of the Arabs, 184–5 Cold War, and US–UK differences, xii Cooper, Johnny, 310–11, 312–13, 315, 317, 318, 321 Copeland, Miles, 102–3, 184, 191, 194, 250, 294 Crater, 322, 327, 333, 334 Crossman, Richard, 69, 71 on American ‘danger’, xi on Palestine visit, xi Crum, Bartley, 70–1, 75 Cuban Missile Crisis, 299, 302, 305, 309 Cyprus: Eden sends troops to, 205 and illegal immigrants, 80 internment camp on, 87 MI6 station on, 163 Czechoslovakia, and Syria arms deal, 216 Daily Express, 88, 207 Daily Mail, 242 Daily Telegraph, 215–16, 305, 313 Dalton, Hugh, 65–6, 88, 137 Damascus (see also Syria), mob storms US embassy in, 102 Danaba Basin, 324 Darbyshire, Norman, 163–4, 165–6, 170 Dayan, Gen.


pages: 223 words: 58,732

The Retreat of Western Liberalism by Edward Luce

"World Economic Forum" Davos, 3D printing, affirmative action, Airbnb, Alan Greenspan, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, bread and circuses, Bretton Woods, Brexit referendum, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, disinformation, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, driverless car, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Evgeny Morozov, fake news, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, gentrification, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, illegal immigration, imperial preference, income inequality, independent contractor, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, Les Trente Glorieuses, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meritocracy, microaggression, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, opioid epidemic / opioid crisis, Peace of Westphalia, Peter Thiel, plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

‘By demonstrating that advanced modernization can be combined with authoritarian rule, the Chinese regime has given hope to authoritarian rulers everywhere,’ says Andrew Nathan, a leading Sinologist.7 China put its newfound prestige to work on multiple fronts. The most widely felt has been economic. China’s development banks pumped billions of dollars into Africa, Central Asia and Latin America – often displacing Western-dominated global institutions, such as the World Bank, and the Asian Development Bank. In contrast to its Bretton Woods competitors, China’s lenders offered loans without attaching pro-democracy strings. In 2015 it launched the Beijing-based Asian Infrastructure Investment Bank. The Obama White House publicly urged its allies to boycott this new body. This was ignored.8 Britain, France, Germany, Australia and others joined the AIIB as founding shareholders.


USA Travel Guide by Lonely, Planet

1960s counterculture, active transport: walking or cycling, Affordable Care Act / Obamacare, Albert Einstein, Apollo 11, Apollo 13, Asilomar, Bay Area Rapid Transit, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, big-box store, bike sharing, Biosphere 2, Bretton Woods, British Empire, Burning Man, California gold rush, call centre, car-free, carbon footprint, centre right, Charles Lindbergh, Chuck Templeton: OpenTable:, congestion pricing, Cornelius Vanderbilt, cotton gin, cuban missile crisis, Day of the Dead, desegregation, Donald Trump, Donner party, Dr. Strangelove, East Village, edge city, El Camino Real, fake news, Fall of the Berlin Wall, feminist movement, Ford Model T, Frank Gehry, gentleman farmer, gentrification, glass ceiling, global village, Golden Gate Park, Guggenheim Bilbao, Haight Ashbury, haute couture, haute cuisine, Hernando de Soto, Howard Zinn, illegal immigration, immigration reform, information trail, interchangeable parts, intermodal, jitney, Ken Thompson, Kickstarter, license plate recognition, machine readable, Mars Rover, Mason jar, mass immigration, Maui Hawaii, McMansion, Menlo Park, military-industrial complex, Monroe Doctrine, Neil Armstrong, new economy, New Urbanism, obamacare, off grid, off-the-grid, Quicken Loans, Ralph Nader, Ralph Waldo Emerson, retail therapy, RFID, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Saturday Night Live, Silicon Valley, South of Market, San Francisco, starchitect, stealth mode startup, stem cell, supervolcano, the built environment, The Chicago School, the High Line, the payments system, three-martini lunch, trade route, transcontinental railway, union organizing, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, Virgin Galactic, walkable city, white flight, working poor, Works Progress Administration, young professional, Zipcar

The 97 wooded campsites fill up early in summer, so it’s best to reserve in advance. BRETTON WOODS & CRAWFORD NOTCH Before 1944, Bretton Woods was known primarily as a low-key retreat for wealthy visitors who patronized the majestic Mt Washington Hotel. After President Roosevelt chose the hotel for the historic conference that established a new post-WWII economic order, the town’s name took on worldwide recognition. The countryside, with Mt Washington looming above it, is as magnificent today as it was back then. The Twin Mountain-Bretton Woods Chamber of Commerce ( 800-245-8946; www.twinmountain.org; cnr US 302 & US 3, Twin Mountain) has details on the area.

During the 19th-century industrialization boom, the state’s leading city, Manchester, became such a powerhouse that its textile mills were the world’s largest. New Hampshire played a high-profile role in 1944 when president Franklin D Roosevelt gathered leaders from 44 Allied nations to remote Bretton Woods for a conference to rebuild global capitalism. It was at the Bretton Woods Conference that the World Bank and the International Monetary Fund emerged. In 1963 New Hampshire, long famed for its antitax sentiments, found another way to raise revenue – by becoming the first state in the USA to have a legal lottery. NEW HAMPSHIRE FACTS » Nicknames Granite State, White Mountain State » Population 1.3 million » Area 8968 sq miles » Capital city Concord (population 42,700) » Other cities Manchester (population 109,600) » Sales tax none » Birthplace of America’s first astronaut Alan Shepard (1923–98), The Da Vinci Code author Dan Brown (b 1964) » Home of the highest mountains in northeastern USA » Politics New England’s most Republican state » Famous for being the first to vote in US presidential primaries, which gives the state enormous political influence for its size » Most extreme state motto ‘Live Free or Die’ » Driving distances Boston to Portsmouth 60 miles, Concord to Hanover 66 miles Information Welcome centers are situated at major state border crossings, including one at the south end of I-93 that’s open 24/7.

The Twin Mountain-Bretton Woods Chamber of Commerce ( 800-245-8946; www.twinmountain.org; cnr US 302 & US 3, Twin Mountain) has details on the area. The region’s largest ski area, Bretton Woods ski station ( 603-278-3320; www.brettonwoods.com; US 302) offers downhill and cross-country skiing as well as a zipline. US 302 heads south from Bretton Woods to Crawford Notch (1773ft) through stunning mountain scenery ripe with towering cascades. Crawford Notch State Park ( 603-374-2272; www.nhstateparks.org; adult/child $4/2) maintains an extensive system of hiking trails, including short hikes around a pond and to a waterfall, and a longer trek up Mt Washington. Sleeping Mt Washington Hotel HOTEL $$$ ( 603-278-1000; www.mountwashingtonresort.com; US 302; r $149-600; ) If walls could talk, the ones here could spin quite a tale.


pages: 552 words: 168,518

MacroWikinomics: Rebooting Business and the World by Don Tapscott, Anthony D. Williams

"World Economic Forum" Davos, accounting loophole / creative accounting, airport security, Andrew Keen, augmented reality, Ayatollah Khomeini, barriers to entry, Ben Horowitz, bioinformatics, blood diamond, Bretton Woods, business climate, business process, buy and hold, car-free, carbon footprint, carbon tax, Charles Lindbergh, citizen journalism, Clayton Christensen, clean water, Climategate, Climatic Research Unit, cloud computing, collaborative editing, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, commoditize, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, death of newspapers, demographic transition, digital capitalism, digital divide, disruptive innovation, distributed generation, do well by doing good, don't be evil, en.wikipedia.org, energy security, energy transition, Evgeny Morozov, Exxon Valdez, failed state, fault tolerance, financial innovation, Galaxy Zoo, game design, global village, Google Earth, Hans Rosling, hive mind, Home mortgage interest deduction, information asymmetry, interchangeable parts, Internet of things, invention of movable type, Isaac Newton, James Watt: steam engine, Jaron Lanier, jimmy wales, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, machine readable, Marc Andreessen, Marshall McLuhan, mass immigration, medical bankruptcy, megacity, military-industrial complex, mortgage tax deduction, Netflix Prize, new economy, Nicholas Carr, ocean acidification, off-the-grid, oil shock, old-boy network, online collectivism, open borders, open economy, pattern recognition, peer-to-peer lending, personalized medicine, radical decentralization, Ray Kurzweil, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, scientific mainstream, shareholder value, Silicon Valley, Skype, smart grid, smart meter, social graph, social web, software patent, Steve Jobs, synthetic biology, systems thinking, text mining, the long tail, the scientific method, The Wisdom of Crowds, transaction costs, transfer pricing, University of East Anglia, urban sprawl, value at risk, WikiLeaks, X Prize, Yochai Benkler, young professional, Zipcar

“I can predict with absolute certainty,” Wilson proclaimed, “that within another generation there will be another world war if the nations of the world do not concert the method by which to prevent it.”10 That concert never happened—another world war did. International leaders eventually came to their senses, when in July 1944 a group of world leaders gathered in the small community of Bretton Woods, New Hampshire, where they spent twenty-two days hashing out a new international architecture that would preside over the next sixty-five years of global growth and development. In the years and decades that followed, the world saw the birth of the United Nations, the General Agreement on Tariffs and Trade (GATT), the Geneva Conventions, the International Monetary Fund, the World Bank, and the Universal Declaration of Human Rights, among other institutions.

And if decisions made in distant international institutions seem illegitimate or disconnected from the realities and concerns of ordinary people, could civic organizations of all sizes and persuasions become conduits for greater citizen input—the kind of inclusivity that Samans spoke of? You probably didn’t realize this, but the NGO sector is now the eighth largest economy in the world—worth over $1 trillion a year globally!14 When Bretton Woods and other postwar arrangements were made, the concept of an NGO didn’t even exist and there were only a handful of these entities in the world. Governments were the only players at the table as our systems of global cooperation were being established. Today the NGO sector employs nearly 19 million paid workers, not to mention countless volunteers.


pages: 579 words: 164,339

Countdown: Our Last, Best Hope for a Future on Earth? by Alan Weisman

air freight, Albert Einstein, Anthropocene, anti-communist, Ayatollah Khomeini, Berlin Wall, biodiversity loss, Bretton Woods, British Empire, call centre, carbon footprint, clean water, colonial rule, David Attenborough, degrowth, demographic transition, Deng Xiaoping, Edward Jenner, El Camino Real, epigenetics, Filipino sailors, Garrett Hardin, Great Leap Forward, Haber-Bosch Process, happiness index / gross national happiness, haute couture, housing crisis, ice-free Arctic, Ignaz Semmelweis: hand washing, illegal immigration, immigration reform, Intergovernmental Panel on Climate Change (IPCC), land reform, liberation theology, load shedding, Louis Pasteur, Mahatma Gandhi, Mahbub ul Haq, megacity, Menlo Park, Michael Shellenberger, microdosing, Money creation, new economy, ocean acidification, oil shale / tar sands, out of africa, Pearl River Delta, planetary scale, Ponzi scheme, race to the bottom, rolling blackouts, Ronald Reagan, Satyajit Das, Seymour Hersh, Silicon Valley, South China Sea, stem cell, Stephen Hawking, Stewart Brand, unemployed young men, upwardly mobile, urban sprawl, Whole Earth Catalog, WikiLeaks

Instead of earning the equivalent of US$10 in West African francs—or a goat, or some chickens—for removing a girl’s clitoris and, depending on the skill of the mutilator, slicing off vaginal labia, they’re being given a hundred dollars to set up businesses selling peanuts or livestock. Others are being retrained as midwives. But as for family planning, Mme. Camacho is not very optimistic. “In all the places I’ve worked—here, Ivory Coast, Rwanda, Burundi, Comoros—I’ve never seen a country ask for this. It’s always initiated by the UN or some Bretton Woods lending institution. They’re not conscious of the threat—only the West is. In Niger, they’ve designed a family-planning program, but deep in their hearts, they feel it’s not their problem. They’ve adopted it without owning it.” When she arrived, the population director in Niger was a man with three wives and twenty children.

“AIDS Explodes in Russia—HIV Rate ‘Fastest’ in the World.” Russiatoday.com. http://www.russiatoday.com/rusjournal. Piper, David. “Lack of Babies Could Mean the Extinction of the Japanese People.” FoxNews.com, May 11, 2012. Rees, William E. “Toward a Sustainable World Economy.” Presented at the Institute for New Economic Thinking Annual Conference, Bretton Woods, NH, April 8–11, 2011. Retherford, Robert D., and Naohiro Ogawa. “Japan’s Baby Bust: Causes, Implications, and Policy Responses.” East-West Center Working Papers, Population and Health Series. No. 118, April 2005. “Reversing the Population Decline.” Japan Times, June 19, 2012. Rodriguez, Andrea.


pages: 206 words: 70,924

The Rise of the Quants: Marschak, Sharpe, Black, Scholes and Merton by Colin Read

Abraham Wald, Albert Einstein, Bayesian statistics, Bear Stearns, Black-Scholes formula, Bretton Woods, Brownian motion, business cycle, capital asset pricing model, collateralized debt obligation, correlation coefficient, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, discovery of penicillin, discrete time, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, financial engineering, financial innovation, fixed income, floating exchange rates, full employment, Henri Poincaré, implied volatility, index fund, Isaac Newton, John Meriwether, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Long Term Capital Management, Louis Bachelier, margin call, market clearing, martingale, means of production, moral hazard, Myron Scholes, Paul Samuelson, price stability, principal–agent problem, quantitative trading / quantitative finance, RAND corporation, random walk, risk free rate, risk tolerance, risk/return, Robert Solow, Ronald Reagan, shareholder value, Sharpe ratio, short selling, stochastic process, Thales and the olive presses, Thales of Miletus, The Chicago School, the scientific method, too big to fail, transaction costs, tulip mania, Works Progress Administration, yield curve

In addition, the CAPM occurred in an era of low volatility and steady growth, with fundamentals analysis and arbitrage offered enough time to respond, and with still enough rudimentary computing power to keep ahead of the analysis. However, by the 1970s, society was changing, markets were globalizing, the Bretton Woods fixed-exchange rate regime was abandoned, and macroeconomic shocks, from oil prices on the supply side to monetary policy and inflation on the demand side, were buffeting financial markets by the end of the decade. Stock markets shifted into a new regime of volatility. While the CAPM and fundamentals analysis could provide unbiased estimates of stock prices, there was a sudden and pressing need to manage risk and volatility.


On Nature and Language by Noam Chomsky

Alfred Russel Wallace, anti-communist, Berlin Wall, Bretton Woods, complexity theory, dark matter, disinformation, Fall of the Berlin Wall, language acquisition, launch on warning, Murray Gell-Mann, Steven Pinker, tacit knowledge, theory of mind, Turing test

The “neoliberal” regime undermines popular sovereignty by shifting decisionmaking power from national governments to a “virtual parliament” of investors and lenders, primarily organized in corporate institutions. This virtual parliament can wield “veto power” over government planning by capital flight and attacks on currency, thanks to the liberalization of financial flows that was part of the dismantling of the Bretton Woods system that had been instituted in 1944. That brings us to the current period, raising major issues that I will have to put aside, reluctantly, given time constraints. The results, and the methods used to bring them about, should be ranked as among the most significant achievements of power and its servants in the twentieth century.


Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, behavioural economics, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial engineering, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, low interest rates, market fundamentalism, means of production, military-industrial complex, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, synthetic biology, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

Having been introduced in an important and politically influential country, as was the United Kingdom, these programs – which created “a taxpayer-funded welfare state and full employment as a national goal” – would be imitated by several other countries (see Wapshott, 2011, p. 227). Keynes, who at the time of the preparation of the Beveridge Report had been spending much of his time on the other side of the Atlantic, thinking about and helping to create the Bretton Woods institutions, had not been directly involved with the recommendations contained in the Beveridge Report (see Marcuzzo, 2010). Those recommendations were not directly connected with the Keynesian Revolution, which dealt with the objective of stabilization and full employment and not directly with social reform.

Be that as it may, and in spite of their questionable theoretical underpinning, performance-based compensation contracts spread and, through benchmarking effects, became common. They led to overcompensation of managers, and changed dramatically the ratios of executive pay to worker pay. The American conservative administrations in the 1980s pushed this thinking also in the Bretton Woods organizations (IMF and World Bank), creating some difficulties for them. If only managers responded to financial incentives and not workers, it became rational to squeeze the incomes of the workers, while increasing those of the managers and the returns to shareholders, an objective that also became important and that was achieved.


pages: 612 words: 179,328

Buffett by Roger Lowenstein

Alan Greenspan, asset allocation, Bear Stearns, book value, Bretton Woods, buy and hold, Carl Icahn, cashless society, collective bargaining, computerized trading, corporate raider, credit crunch, cuban missile crisis, Eugene Fama: efficient market hypothesis, index card, index fund, interest rate derivative, invisible hand, Jeffrey Epstein, John Meriwether, junk bonds, Long Term Capital Management, Michael Milken, moral hazard, Paul Samuelson, random walk, risk tolerance, Robert Shiller, Ronald Reagan, Savings and loan crisis, selection bias, Teledyne, The Predators' Ball, traveling salesman, Works Progress Administration, Yogi Berra, young professional, zero-coupon bond

During the war, he coauthored a letter demanding that the United States “elaborate” on its policy of seeking an unconditional German surrender and posing the curious question “What are we fighting for?”15 Did uprooting Nazism not constitute “an addition to human liberty?” After the war, he voted against aiding bombed-out Britain, against school lunches, against European grain exports, and against the Bretton Woods monetary scheme.16 At his worst, his Americanism lapsed into xenophobia and Red-baiting. As the Buffetts drove past the still-lit British embassy in the evenings, Howard would growl, “They even stay up late to think of ways to get our money.”17 He opposed the Marshall Plan to rebuild Western Europe as “Operation Rathole,” and as possibly having Stalin’s secret backing.18 On several issues, Howard was remarkably prescient.

Policy,” Omaha World-Herald, March 26, 1944. 16. On aid to Britain, Journal of the House of Representatives, 79th Congress, 1st Session (Washington: U.S. Government Printing Office, 1946), 197–98; on school lunches, Journal of the House, 79th Congress, 2nd Session, 101–3; on grain exports, Omaha World-Herald, September 11, 1947; and on Bretton Woods, Omaha World-Herald, March 10, 1945. 17. Leila Buffett’s memoirs. 18. “Buffett Lashes Marshall Plan,” Omaha World-Herald, January 28, 1948. See also “Buffett Sees Stalin Trick,” Omaha World-Herald, March 18, 1947. 19. Don Danly. 20. Warren Buffett, letter to Jerry Orans, August 4, 1950. 21.


pages: 1,477 words: 311,310

The Rise and Fall of the Great Powers: Economic Change and Military Conflict From 1500 to 2000 by Paul Kennedy

agricultural Revolution, airline deregulation, anti-communist, banking crisis, Berlin Wall, book value, Bretton Woods, British Empire, cuban missile crisis, deindustrialization, Deng Xiaoping, disinformation, European colonialism, floating exchange rates, full employment, German hyperinflation, Great Leap Forward, guns versus butter model, Herman Kahn, imperial preference, industrial robot, joint-stock company, laissez-faire capitalism, long peace, means of production, military-industrial complex, Monroe Doctrine, mutually assured destruction, night-watchman state, North Sea oil, nuclear winter, oil shock, open economy, Peace of Westphalia, Potemkin village, price mechanism, price stability, RAND corporation, reserve currency, Ronald Reagan, Silicon Valley, South China Sea, South Sea Bubble, spice trade, spinning jenny, stakhanovite, Strategic Defense Initiative, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, trade route, University of East Anglia, upwardly mobile, zero-sum game

With the entire international payments and money-flow system buckling under these interacting problems, and being further weakened by de Gaulle’s angry counterattacks against what he regarded as America’s “export of inflation,” the Nixon administration found it had little choice but to end the dollar’s link to gold in private markets, and then to float the dollar against other currencies. The Bretton Woods system, very much a creation of the days when the United States was financially supreme, collapsed when its leading pillar could bear the strains no more.253 The detailed story of the ups and downs of the dollar in the 1970s, when it was floating freely, are not for telling here; nor is the zigzag course of successive administrations’ efforts to check inflation and to stimulate growth, always without causing too much pain politically.

Rolfe, The International Corporation (Paris, 1969); as well as Woodruff, America’s Impact on the World, ch. 4. 253. Becker and Wells (ed.), Economics and World Power, chs. 7–8; D. Calleo, The Imperious Economy (Cambridge, Mass., 1982), passim; J. Gowa, Closing the Gold Window: Domestic Politics and the End of Bretton Woods (Ithaca, N.Y., 1983); G. Epstein, “The Triple Debt Crisis,” World Policy Journal, vol. 2, no. 4 (Fall 1985), pp. 628ff; Economist, October 5, 1985, “Monetary Reform” Survey, p. 11. 254. Thurow, “America Among Equals,” in Ungar (ed.), Estrangement, p. 163. 255. Idem, Zero-Sum Society, pp. 3–4.

, ed. Center and Periphery. Beverly Hills, Calif., 1980. Goubert, P. Louis XIV and Twenty Million Frenchmen. London, 1970. Gough, B. The Royal Navy and the North West Coast of America 1810-1914. Vancouver, 1971. Gowa, J. Closing the Gold Window: Domestic Politics and the End of Bretton Woods. Ithaca, N.Y., 1983. Grabaud, S.R. British Labour and the Russian Revolution 1917-1924. Cambridge, Mass., 1956. Graebner, N.A. America as a World Power. Wilmington, Del., 1984. Graham, G.S. Great Britain in the Indian Ocean: A Study of Maritime Enterprise 1810-1850. Oxford, 1967.


Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics by Francis Fukuyama

Asian financial crisis, banking crisis, Berlin Wall, Bletchley Park, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, cognitive bias, contact tracing, cuban missile crisis, currency risk, energy security, Fairchild Semiconductor, flex fuel, global pandemic, Herman Kahn, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John von Neumann, low interest rates, mass immigration, Menlo Park, Mikhail Gorbachev, moral hazard, Norbert Wiener, oil rush, oil shale / tar sands, oil shock, packet switching, RAND corporation, Ray Kurzweil, reserve currency, Ronald Reagan, The Wisdom of Crowds, trade route, Vannevar Bush, Vernor Vinge, Yom Kippur War

China can fund a capital spending boom with domestic resources, but it is still enjoying the benefit of $55 billion a year of foreign direct investment. It is foreign firms that have turned China into an export powerhouse by producing almost 60 percent of the country’s foreign trade. Some economists contend that the world has returned de facto to a Bretton Woods fixed exchange rate system in the Asia-Pacific region because of the 2990-7 ch05 hale 50 7/23/07 12:09 PM Page 50 david hale complementary nature of East Asia’s surplus savings and America’s savings deficit. These economists believe the new equilibrium can be sustained indefinitely because East Asian central banks will intervene in the market to support the U.S. dollar when private capital flows slow down.


pages: 238 words: 73,121

Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, Craig Calhoun, Stephen Hoye, Audible Studios

affirmative action, blood diamond, Bretton Woods, BRICs, British Empire, business cycle, butterfly effect, company town, creative destruction, deindustrialization, demographic transition, Deng Xiaoping, discovery of the americas, distributed generation, Dr. Strangelove, eurozone crisis, fiat currency, financial engineering, full employment, gentrification, Gini coefficient, global village, hydraulic fracturing, income inequality, Isaac Newton, job automation, joint-stock company, Joseph Schumpeter, junk bonds, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, loose coupling, low skilled workers, market bubble, market fundamentalism, mass immigration, means of production, mega-rich, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, offshore financial centre, oil shale / tar sands, Ponzi scheme, postindustrial economy, reserve currency, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, Suez crisis 1956, too big to fail, transaction costs, vertical integration, Washington Consensus, WikiLeaks

This was a global phenomenon, shaped by a range of factors largely dating from the 1970s and accelerating toward the end of the 20th century. Because of its unpopularity, the United States financed the last years of the Vietnam War largely on credit. Seeking to manage economic difficulties in the 1970s, the United States and other core capitalist countries brought the Bretton Woods monetary system to an end, replacing the stabilization of backing by precious metals with floating, infinitely tradable fiat currencies. After the 1973 Arab-Israeli war OPEC oil producers restricted supply, vastly multiplying their returns from a world deeply dependent on petroleum, and then channeled much of the money into sovereign wealth funds.


pages: 280 words: 73,420

Crapshoot Investing: How Tech-Savvy Traders and Clueless Regulators Turned the Stock Market Into a Casino by Jim McTague

Alan Greenspan, algorithmic trading, automated trading system, Bear Stearns, Bernie Madoff, Bernie Sanders, Black Monday: stock market crash in 1987, Bretton Woods, buttonwood tree, buy and hold, computerized trading, corporate raider, creative destruction, credit crunch, Credit Default Swap, financial innovation, fixed income, Flash crash, High speed trading, housing crisis, index arbitrage, junk bonds, locking in a profit, Long Term Capital Management, machine readable, margin call, market bubble, market fragmentation, market fundamentalism, Myron Scholes, naked short selling, Nixon triggered the end of the Bretton Woods system, pattern recognition, Ponzi scheme, proprietary trading, quantitative trading / quantitative finance, Renaissance Technologies, Ronald Reagan, Sergey Aleynikov, short selling, Small Order Execution System, statistical arbitrage, technology bubble, transaction costs, uptick rule, Vanguard fund, Y2K

The twentieth century was an era of innovation for the CME as well. The exchange introduced pork belly futures in 1961, live cattle futures in 1964, the first futures on foreign currencies in 1972 (which was the year after Nixon suspended the dollar’s convertibility into gold and destroyed the Bretton Woods system), and stock index futures in 1982. The New York Mercantile Exchange, or “The Merc,” and its subsidiary the “Comex” began in the 1870s as a butter and egg exchange and branched out into other agricultural products. By the late 1990s, the exchange also was trading precious metals, copper, oil, gas, uranium, and a host of other commodities.


pages: 275 words: 77,017

The End of Money: Counterfeiters, Preachers, Techies, Dreamers--And the Coming Cashless Society by David Wolman

addicted to oil, Bay Area Rapid Transit, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, bitcoin, Bretton Woods, carbon footprint, cashless society, central bank independence, collateralized debt obligation, corporate social responsibility, credit crunch, cross-subsidies, Diane Coyle, fiat currency, financial innovation, floating exchange rates, German hyperinflation, greed is good, Isaac Newton, Kickstarter, M-Pesa, Mahatma Gandhi, mental accounting, mobile money, Money creation, money: store of value / unit of account / medium of exchange, offshore financial centre, P = NP, Peter Thiel, place-making, placebo effect, Ponzi scheme, Ronald Reagan, seigniorage, Silicon Valley, special drawing rights, Steven Levy, the payments system, transaction costs, WikiLeaks

Bloomberg BusinessWeek, January 10, 2010, p. 14. 16 “Love in a Cold Climate,” The Economist, November 4, 2010. 17 “Global Currency Could Save World Economy,” Telegraph, March 26, 2009. 18 Craig Karmin, Biography of the Dollar: How the Mighty Buck Conquered the World and Why It’s Under Siege (New York: Crown, 2008), p. 104. 19 “Beyond Bretton Woods 2,” The Economist, November 6, 2010. 20 From Exorbitant Privilege, as quoted in ibid. 6: The Traitor 1 “A Mug’s Game,” Newsweek, October 8,1973 ; David Ganz personal interview, December 2010. 2 http://www.libraryofmu.org/display-resource.php?id=389. 3 http://online.wsj.com/public/article/SB117519670114653518-FR_svDHxRtxkvNmGwwpouq_hl2g_20080329.html. 4 http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html. 5 “Bitcoin, Ven, and the End of Currency,” TechCrunch.com, May 20, 2011. 6 http://online.wsj.com/video/the-coming-currency-revolution/25225F5A-B979-4609-A55D-1BAE9A1BA158.html. 7 http://www.economist.com/node/18836780. 8 “In Gold We Trust,” Wired, January 2002. 9 “Workers Spurn Cash for Virtual Coin to Fund Online-Game Habits,” Bloomberg News, June 17, 2010. 10 From Liberty Dollar advertising leaflet. 11 http://www.kidscreen.com/articles/magazine/20100923/virtual.html. 12 http://www.bloomberg.com/apps/news?


pages: 280 words: 74,559

Fully Automated Luxury Communism by Aaron Bastani

"Peter Beck" AND "Rocket Lab", Alan Greenspan, Anthropocene, autonomous vehicles, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boston Dynamics, Bretton Woods, Brexit referendum, capital controls, capitalist realism, cashless society, central bank independence, collapse of Lehman Brothers, computer age, computer vision, CRISPR, David Ricardo: comparative advantage, decarbonisation, deep learning, dematerialisation, DIY culture, Donald Trump, double helix, driverless car, electricity market, Elon Musk, energy transition, Erik Brynjolfsson, fake news, financial independence, Francis Fukuyama: the end of history, future of work, Future Shock, G4S, general purpose technology, Geoffrey Hinton, Gregor Mendel, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kuiper Belt, land reform, Leo Hollis, liberal capitalism, low earth orbit, low interest rates, low skilled workers, M-Pesa, market fundamentalism, means of production, mobile money, more computing power than Apollo, new economy, off grid, pattern recognition, Peter H. Diamandis: Planetary Resources, post scarcity, post-work, price mechanism, price stability, private spaceflight, Productivity paradox, profit motive, race to the bottom, rewilding, RFID, rising living standards, Robert Solow, scientific management, Second Machine Age, self-driving car, sensor fusion, shareholder value, Silicon Valley, Simon Kuznets, Slavoj Žižek, SoftBank, stem cell, Stewart Brand, synthetic biology, technological determinism, technoutopianism, the built environment, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, transatlantic slave trade, Travis Kalanick, universal basic income, V2 rocket, Watson beat the top human players on Jeopardy!, We are as Gods, Whole Earth Catalog, working-age population

Having faced crises almost every decade for two centuries, amid the ferocious pace of constantly accelerating change, it has always found ways of extracting profit and, eventually, improving living standards. Capitalism has survived, evolved and prospered through the Industrial Revolution, the Great Depression, protectionism, two World Wars, the end of the gold standard and the demise of the Bretton Woods Agreement. Little more than a generation ago, much of the world was under the political influence of the former Soviet Union, with it and the United States seemingly destined to face off in nuclear confrontation. And yet that never came to pass and, as Fukuyama would later write, a divided world was replaced by one where markets prevailed and liberal democracy would reign supreme.


pages: 318 words: 77,223

The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse by Mohamed A. El-Erian

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, balance sheet recession, bank run, barriers to entry, Bear Stearns, behavioural economics, Black Monday: stock market crash in 1987, break the buck, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, collapse of Lehman Brothers, corporate governance, currency peg, disruptive innovation, driverless car, Erik Brynjolfsson, eurozone crisis, fear index, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, friendly fire, full employment, future of work, geopolitical risk, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, inflation targeting, Jeff Bezos, Kenneth Rogoff, Khan Academy, liquidity trap, low interest rates, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, Norman Mailer, oil shale / tar sands, price stability, principal–agent problem, quantitative easing, risk tolerance, risk-adjusted returns, risk/return, Second Machine Age, secular stagnation, sharing economy, Sheryl Sandberg, sovereign wealth fund, The Great Moderation, The Wisdom of Crowds, too big to fail, University of East Anglia, yield curve, zero-sum game

Then there is the global mismatch, which is even harder to solve. It is illustrated in a pattern of national surpluses and deficits that are frustratingly stubborn to change, and in an insufficiently productive recycling of surpluses. In sum, we remain very far from what the founding fathers of the Bretton Woods Agreement envisaged in terms of symmetrical adjustments of imbalances among surplus and deficit economies in a manner that promotes global prosperity and reduces bilateral tensions and forgone opportunities. As it is wired and operates today, the global economy consistently solves at a level of aggregate demand that is lower than what is both feasible and desirable.


pages: 206 words: 9,776

Rebel Cities: From the Right to the City to the Urban Revolution by David Harvey

Alan Greenspan, Bretton Woods, business cycle, collateralized debt obligation, commoditize, creative destruction, David Graeber, deindustrialization, financial innovation, Garrett Hardin, gentrification, Guggenheim Bilbao, Hernando de Soto, high-speed rail, housing crisis, illegal immigration, indoor plumbing, invisible hand, Jane Jacobs, late capitalism, Lewis Mumford, Long Term Capital Management, low interest rates, market bubble, market fundamentalism, means of production, military-industrial complex, moral hazard, mortgage debt, mortgage tax deduction, Murray Bookchin, New Urbanism, Ponzi scheme, precariat, profit maximization, race to the bottom, radical decentralization, Robert Shiller, Savings and loan crisis, special economic zone, the built environment, the High Line, The Wealth of Nations by Adam Smith, Tragedy of the Commons, transcontinental railway, urban planning, We are the 99%, William Langewiesche, Works Progress Administration

And if the H aussmannization of Paris had a role in explaining the dynamics of the Paris Comm une, so the soulless qualities of subur­ ban living played a critical role in the dramatic movements of 1 9 68 in the United States, as d iscontented white m iddle- class students went into a phase of revolt, seeking alliances with o ther marginalized groups and rallying against US imperialism to create a movement to build another kind of world, including a d ifferent kind of urban experience ( though, again, anarchistic and libertarian currents were pitted against demands for h ierarchical and centralized alternatives) .7 Along with the '68 revolt came a financial crisis. It was partly global (with the collapse of the Bretton Woods agreem ents) , but it also origi­ nated within the credit institutions that had powered the property boom in the preceding decades. Th is crisis gathered momentum at the end of the 1 960s, until the whole capital ist system crashed into a m ajor global crisis, led by the bursting of the global property market bubble in 19 73, followed by the fiscal bankruptcy of New York City in 1 975.


pages: 235 words: 73,873

Half In, Half Out: Prime Ministers on Europe by Andrew Adonis

banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, centre right, colonial rule, congestion charging, Corn Laws, cuban missile crisis, Dominic Cummings, eurozone crisis, imperial preference, mass immigration, Neil Kinnock, oil shock, Suez crisis 1956

It is a small story, but behind the vanities was the permanent struggle of the Jean Monnet wish for a federal Europe which Callaghan at this stage was more aware of than I. On Europe itself, the most important long-term issue was Callaghan’s handling of the Exchange Rate Mechanism (ERM). The European Council meeting at Copenhagen on 8 April 1978 provided Callaghan and Giscard d’Estaing with an opportunity to hear about Schmidt’s idea of a European-type Bretton Woods, with a European exchange rate fixed against the dollar, which would effectively mean Europe becoming a Deutsche Mark zone. D’Estaing, despite some cosmetic criticisms, had clearly worked closely on it with Schmidt. Callaghan explained why the proposals disadvantaged Britain, for the strong Deutsche Mark would have the effect of tugging sterling upwards with deflationary consequences for the British economy, unless long-term credit was absolutely unlimited.


pages: 250 words: 75,151

The New Nomads: How the Migration Revolution Is Making the World a Better Place by Felix Marquardt

"World Economic Forum" Davos, agricultural Revolution, Anthropocene, Black Lives Matter, Black Swan, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, carbon footprint, carbon tax, coronavirus, COVID-19, dark matter, digital nomad, Donald Trump, George Floyd, ghettoisation, glass ceiling, green new deal, Greta Thunberg, Intergovernmental Panel on Climate Change (IPCC), Joi Ito, Kickstarter, knowledge economy, labour market flexibility, Les Trente Glorieuses, out of africa, phenotype, place-making, Ponzi scheme, pre–internet, QAnon, Ray Kurzweil, remote working, Richard Feynman, road to serfdom, Silicon Valley, Skype, Snapchat, social distancing, sustainable-tourism, technological solutionism, technoutopianism, Yogi Berra, young professional

I can’t say for sure how they can prove they get it. But what is sure is that there is a very simple way for them to show that they don’t get it. And that is by going back to Davos. In the twentieth century, geopolitical summits like Versailles and Yalta laid the foundations of the world order. Bretton Woods and Davos were geo-economic, too. The new era opened by Covid-19 will require a new kind of decentralised gathering, perhaps best described as geosocial and nomadic. Instead of being exclusive and excluding, it might include not just politicians, CEOs and NGOs but also randomly selected representatives of local and translocal, professional, indigenous, etc., communities.


pages: 272 words: 76,154

How Boards Work: And How They Can Work Better in a Chaotic World by Dambisa Moyo

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Airbnb, algorithmic trading, Amazon Web Services, AOL-Time Warner, asset allocation, barriers to entry, Ben Horowitz, Big Tech, bitcoin, Black Lives Matter, blockchain, Boeing 737 MAX, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon footprint, collapse of Lehman Brothers, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, cryptocurrency, deglobalization, don't be evil, Donald Trump, fake news, financial engineering, gender pay gap, geopolitical risk, George Floyd, gig economy, glass ceiling, global pandemic, global supply chain, hiring and firing, income inequality, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jeff Bezos, knowledge economy, labor-force participation, long term incentive plan, low interest rates, Lyft, money: store of value / unit of account / medium of exchange, multilevel marketing, Network effects, new economy, old-boy network, Pareto efficiency, passive investing, Pershing Square Capital Management, proprietary trading, remote working, Ronald Coase, Savings and loan crisis, search costs, shareholder value, Shoshana Zuboff, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, sovereign wealth fund, surveillance capitalism, The Nature of the Firm, Tim Cook: Apple, too big to fail, trade route, Travis Kalanick, uber lyft, Vanguard fund, Washington Consensus, WeWork, women in the workforce, work culture

Additionally, Poland and Hungary have presented a challenge to the EU’s core principle of free movement, and concerns are rising about the health of German industry—which has underpinned the EU’s economic might for decades. Altogether, these developments signal the reemergence of assertive national power in Europe. Meanwhile, China is working to establish a multilateral world order of its own to rival the dominance of Bretton Woods institutions such as the IMF and World Bank. This effort has included the creation of development institutions such as the New Development Bank and the Asian Infrastructure Investment Bank. China is also seeking to gain a greater global foothold in trade, capital flows, and investments through the multi-continent Belt and Road Initiative, which includes infrastructure investment across sixty-eight countries in Asia, Africa, Europe, and the Middle East to develop improved trade routes by land and sea.


pages: 303 words: 74,206

GDP: The World’s Most Powerful Formula and Why It Must Now Change by Ehsan Masood

Alan Greenspan, anti-communist, bank run, banking crisis, biodiversity loss, Bob Geldof, Bretton Woods, centre right, clean water, colonial rule, coronavirus, COVID-19, Credit Default Swap, decarbonisation, deindustrialization, Diane Coyle, energy security, European colonialism, financial engineering, government statistician, happiness index / gross national happiness, income inequality, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, Kickstarter, Mahbub ul Haq, mass immigration, means of production, Meghnad Desai, Mohammed Bouazizi, Robert Solow, Ronald Reagan, Sheryl Sandberg, Silicon Valley, Simon Kuznets, Skype, statistical model, the scientific method, The Spirit Level, Washington Consensus, wealth creators, zoonotic diseases

He would say that GDP, as currently constructed, was “destined to become one of the most used and misunderstood sources of economic information.”19 Keynes’s relationship to America would always remain complex. He had his critics, including those with whom he was negotiating. Whether during the negotiations over the lend-lease agreements, or later at Bretton Woods, which led to the creation of the World Bank and the International Monetary Fund, anyone on the other side of a conference table experienced the full force of Keynesian pomposity. The British art historian Lord Kenneth Clark, an equally precocious high achiever, recalls a man who did not know how to “dim his headlights.”


China's Superbank by Henry Sanderson, Michael Forsythe

"World Economic Forum" Davos, addicted to oil, Asian financial crisis, Bretton Woods, BRICs, Carmen Reinhart, Credit Default Swap, deindustrialization, Deng Xiaoping, Dutch auction, failed state, financial innovation, financial repression, fixed income, Great Leap Forward, high-speed rail, if you build it, they will come, income inequality, invisible hand, joint-stock company, junk bonds, Kenneth Rogoff, land bank, London Interbank Offered Rate, low interest rates, megacity, new economy, New Urbanism, price mechanism, race to the bottom, reserve currency, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Solyndra, South Sea Bubble, sovereign wealth fund, special drawing rights, special economic zone, too big to fail, urban renewal, urban sprawl, work culture

NewsID=1174 36. “Africa’s Infrastructure: A Time for Transformation,” World Bank, November 2009, http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/0,,contentMDK:22386904∼pagePK:146736∼piPK:146830∼theSitePK:258644,00.html 37. Edward Sagendorph Mason and Robert E. Asher, The World Bank Since Bretton Woods (Washington, DC: Brookings Institution Press, 1973). 38. Zhu Xinqiang, speaking at the Latin America China Investors Forum conference, Beijing, September 2011. 39. Sebastian Mallaby, The World’s Banker: A Story of Failed States, Financial Crises, and the Wealth and Poverty of Nations (New Haven, CT: Yale University Press, 2005). 40.


pages: 637 words: 199,158

The Tragedy of Great Power Politics by John J. Mearsheimer

active measures, Berlin Wall, Bretton Woods, British Empire, colonial rule, continuation of politics by other means, deindustrialization, discrete time, disinformation, Dissolution of the Soviet Union, Francis Fukuyama: the end of history, guns versus butter model, Herman Kahn, illegal immigration, long peace, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, oil shock, Pareto efficiency, RAND corporation, Ronald Reagan, Simon Kuznets, South China Sea, Suez canal 1869, The Wealth of Nations by Adam Smith, Thomas L Friedman, Yom Kippur War

Morgenthau, Vietnam and the United States (Washington, DC: Public Affairs, 1965); and “Bernard Johnson’s Interview with Hans J. Morgenthau,” in Kenneth Thompson and Robert J. Myers, eds., Truth and Tragedy: A Tribute to Hans J. Morgenthau (New Brunswick, NJ: Transaction Books, 1984), pp. 382–84.] Furthermore, the collapse of the Bretton Woods system in 1971, the oil shock of 1973, and the growing power of multinational corporations (MNCs) led many to think that economic issues had become more important than security issues, and that realism, especially Morgenthau’s brand, had little to say about questions of international political economy.

., The Myth of the Global Corporation (Princeton, NJ: Princeton University Press, 1998); Geoffrey Garrett, “Global Markets and National Politics: Collision Course or Virtuous Circle?” International Organization 52, No. 4 (Autumn 1998), pp. 787–824; Eric Helleiner, States and the Reemergence of Global Finance: From Bretton Woods to the 1990s (Ithaca, NY: Cornell University Press, 1994); Ethan B. Kapstein, Governing the Global Economy: International Finance and the State (Cambridge, MA: Harvard University Press, 1994); Stephen D. Krasner, Sovereignty: Organized Hypocrisy (Princeton, NJ: Princeton University Press, 1999); Steven K.


pages: 789 words: 207,744

The Patterning Instinct: A Cultural History of Humanity's Search for Meaning by Jeremy Lent

Admiral Zheng, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Anthropocene, Atahualpa, Benoit Mandelbrot, Bretton Woods, British Empire, Buckminster Fuller, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, commoditize, complexity theory, conceptual framework, dematerialisation, demographic transition, different worldview, Doomsday Book, Easter island, en.wikipedia.org, European colonialism, failed state, Firefox, Ford Model T, Francisco Pizarro, Garrett Hardin, Georg Cantor, Great Leap Forward, Hans Moravec, happiness index / gross national happiness, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of gunpowder, invention of writing, Isaac Newton, Jevons paradox, Johann Wolfgang von Goethe, Johannes Kepler, language acquisition, Lao Tzu, Law of Accelerating Returns, mandelbrot fractal, mass immigration, megacity, Metcalfe's law, Mikhail Gorbachev, move 37, Neil Armstrong, Nicholas Carr, Nick Bostrom, Norbert Wiener, oil shale / tar sands, out of africa, peak oil, Pierre-Simon Laplace, Plato's cave, QWERTY keyboard, Ray Kurzweil, Robert Solow, Sapir-Whorf hypothesis, scientific management, Scientific racism, scientific worldview, seminal paper, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, social intelligence, South China Sea, Stephen Hawking, Steven Pinker, Stuart Kauffman, synthetic biology, systems thinking, technological singularity, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, Turing test, ultimatum game, urban sprawl, Vernor Vinge, wikimedia commons

These assumptions about human nature are not self-evident truths; however, the money-based system constructed by capitalism encourages and rewards these traits over other traditional, community-oriented values, creating a self-fulfilling prophecy about the nature of human behavior.27 Through the first half of the twentieth century, capitalism competed globally against other powerful ideologies such as communism and fascism. That would change drastically after World War II. In 1944, the soon-to-be victorious powers held a conference at Bretton Woods to lay the foundation for a global structure upon which capitalism could thrive. At that time of war-torn devastation, a vision of unrestrained worldwide economic growth was understandably intoxicating, and institutions such as the World Bank and the International Money Fund were established to facilitate this prospect.

See also Islamic civilization and thought Aral Sea, 391 Aranyakas, 166 Arawak people, 306 Aristotle Chinese thought, contrast with, 209 empiricism of, 152 in “moonlight tradition,” 359–61 Plato, contrast with, 152–53, 159, 359–60 reason, veneration of, 159, 170 soul, view of, 359–60, 368, 525 systematic logic and, 152, 360 systems theory, relation to, 367–68 in Western tradition, 340–41, 347, 360–61, 525 Arthasastra, 305 artificial intelligence, 28, 36, 376, 401, 408 Singularity and, 421–26 Aryans, 133–36, 169 cosmology of, 162–65 invasion of Indian subcontinent, 133–36, 138, 162–65, 173, 483 racial supremacy perceived, 314–15 Ascent of Man, The (Bronowski), 13, 16, 17 ase, 113 Ash'arites, 320–23 Ashoka, King, 247–48, 304–305 Assyrian empire, 217–19, 297–98 astronomy in Chinese civilization, 324 in European thought, 344–49 in Greek civilization, 319–20, 336 in Islamic civilization, 319–20, 321 in Mesopotamian civilization, 128 Atahualpa, 307 Aten, 122–24, 239 Athens, Greece, 143, 337 Atiyah, Sir Michael, 353 atman, 203 Brahman, identity with, 165–66, 168–69, 171, 172–75 in chariot metaphor, 168–70, 190–91 as eternal self, 165–66, 167–69 existing in everything, 172, 176 intellect, distinct from, 170–72, 520 renunciation and, 167–68, 177 Augustine, Saint, 231–33, 236 human being, conception of, 232–33, 236 legacy of, 231–33, 237, 339–40 and Original Sin, 232 Platonism, relation to, 231–32 reason, view of, 245, 339–40 rejection of senses, 232–33 slavery, view of, 300 Avesta, 139 Axial Age, 144 Aztec civilization, 113, 115, 288, 307–308, 472 ba, 113–14 Babylon, 129, 140, 145 cosmology of, 336 in Old Testament, 140, 219–20, 222 Bacon, Francis, 280, 313, 315, 324 and CONQUERING NATURE metaphor, 277–78, 279, 281, 313 Bacon, Roger, 344 Baghdad, Iraq, 318–19 Bantu agricultural expansion, 109 Bateson, Gregory, 260 Baxter, Richard, 312 Bayt al-Hikma (House of Wisdom), 319 Bellarmine, Cardinal, 348–49 Bernays, Edward, 380, 400 Berry, Thomas, 377, 540 Bertalanffy, Ludwig von, 364 Betanzos, Father Domingo de, 311 Bhagavad Gita, 167, 174, 489 Biard, Pierre, 91–92 Bible, 187, 231, 243, 287 interpretations of, 215–16, 341, 347 See also New Testament; Old Testament bidaa, 323 bin Laden, Osama, 247 Blake, William, 361 Blombos Cave, 69–70, 73 Boethius, 340, 342 Bohr, Niels, 258, 270 Book of Changes. See I Ching Book of Odes, 298 Book of the Dead, 121 Bostrom, Nick, 421 Boulding, Kenneth, 397–98 Boykin, William, 247 Boyle, Robert, 278, 284, 350 Brahman, 165–69, 174–75, 177, 261 atman, identity with, 165–66, 171, 172–75 brain plasticity, 81, 470 Bretton Woods conference, 385 British Empire, 130, 313–14 Broca's area, 56 Broom, Robert, 280 Bruno, Giordano, 245 Buddha (Siddhartha Gautama), 144, 249, 252–53 Buddhism, 164 in China, 249–50, 253–54 compared with Confucianism and Taoism, 247, 249–50 in India, 247–48, 252–53, 304–305 Neo-Confucianism, relation with, 252–54, 261, 269 tolerance, religious, 247–48 Bush, George H.


pages: 274 words: 85,557

DarkMarket: Cyberthieves, Cybercops and You by Misha Glenny

Berlin Wall, Bretton Woods, Brian Krebs, BRICs, call centre, Chelsea Manning, Fall of the Berlin Wall, illegal immigration, James Watt: steam engine, Julian Assange, military-industrial complex, MITM: man-in-the-middle, pirate software, Potemkin village, power law, reserve currency, Seymour Hersh, Silicon Valley, Skype, SQL injection, Stuxnet, urban sprawl, white flight, WikiLeaks, zero day

The original and abiding purpose of the agency was to detect, investigate and then seek the prosecution of anybody found manufacturing or dealing in counterfeit currency. Soon after it was established, Congress also charged the agency with investigating financial fraud. In the wake of the Second World War, the Bretton Woods agreements established the United States as the undisputed leader of Western economies and the dollar as the chosen reserve currency in the capitalist world. Although the Soviet Union and China rejected the dollar’s supremacy, both communist superpowers were nonetheless eager to accumulate as many greenbacks as possible.


pages: 251 words: 80,243

Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia by Peter Pomerantsev

Bretton Woods, corporate governance, corporate raider, Julian Assange, mega-rich, megaproject, new economy, Occupy movement, Silicon Valley, WikiLeaks

Because they’ve been perfecting this for just a few years longer, because the learning curve was so much harder and faster when their Soviet world disappeared and they were all shot into cold space. They became post-Soviet a breath before the whole world went post-everything. Post-national and post-West and post-Bretton-Woods and post-whatever-else. The Yuri Gagarins of the culture of zero gravity. Just south of Piccadilly, on St. James, England looks like the same old-boy country it always was: the Reform Club, Brooks, the members-only halls with their worn carpets, secret passwords, and centuries-old walls. But one simply doesn’t need “in” here anymore.


pages: 302 words: 86,614

The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds by Maneet Ahuja, Myron Scholes, Mohamed El-Erian

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Asian financial crisis, asset allocation, asset-backed security, backtesting, Bear Stearns, Bernie Madoff, book value, Bretton Woods, business process, call centre, Carl Icahn, collapse of Lehman Brothers, collateralized debt obligation, computerized trading, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, en.wikipedia.org, family office, financial engineering, fixed income, global macro, high net worth, high-speed rail, impact investing, interest rate derivative, Isaac Newton, Jim Simons, junk bonds, Long Term Capital Management, managed futures, Marc Andreessen, Mark Zuckerberg, merger arbitrage, Michael Milken, Myron Scholes, NetJets, oil shock, pattern recognition, Pershing Square Capital Management, Ponzi scheme, proprietary trading, quantitative easing, quantitative trading / quantitative finance, Renaissance Technologies, risk-adjusted returns, risk/return, rolodex, Savings and loan crisis, short selling, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, stock buybacks, systematic bias, systematic trading, tail risk, two and twenty, zero-sum game

“With a more centered, more open state of mind, everything got better. My grades went up. Everything became easier,” he says with a smile. Coming of Age through a Crisis The summer before starting Harvard Business School in 1971, Dalio clerked on the floor of the New York Stock Exchange. During that summer, the Bretton Woods system broke down, and it left an indelible impression on him. “It was one of the most dramatic economic events ever,” says Dalio, “a very, very big deal and I was at the epicenter of it on the floor of the New York Stock Exchange. It thrilled me.” Dalio remembers President Nixon making a nationally televised address on a Sunday night.


pages: 301 words: 88,082

The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business by Richard Brooks

accounting loophole / creative accounting, bank run, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, carried interest, Celtic Tiger, collateralized debt obligation, commoditize, Corn Laws, corporate social responsibility, crony capitalism, cross-border payments, Double Irish / Dutch Sandwich, financial deregulation, financial engineering, haute couture, information security, intangible asset, interest rate swap, Jarndyce and Jarndyce, mega-rich, Northern Rock, offshore financial centre, race to the bottom, shareholder value, short selling, supply-chain management, The Chicago School, The Wealth of Nations by Adam Smith, transfer pricing, two and twenty

As British prime minister Gordon Brown rhetorically asked a special gathering of the US Congress on Capitol Hill in March 2009: ‘How much safer would everybody’s savings be if the whole world finally came together to outlaw shadow banking systems and offshore tax havens?’‌17 The following month in London, at what was billed as the most economically important gathering of governments since the post-war Bretton Woods conference sixty-five years before, the G20 came together to forge a way out of the crisis. This was where the world would answer Brown’s Washington demand and unite to defeat tax havens. So went the hype, anyway. In the event, the best opportunity ever to assail the tax havens’ post-war ascendency was comprehensively fluffed.


pages: 286 words: 87,168

Less Is More: How Degrowth Will Save the World by Jason Hickel

air freight, Airbnb, Anthropocene, basic income, Bernie Sanders, Big bang: deregulation of the City of London, biodiversity loss, Boris Johnson, Bretton Woods, British Empire, capital controls, circular economy, cognitive dissonance, coronavirus, corporate governance, corporate personhood, cotton gin, COVID-19, David Graeber, decarbonisation, declining real wages, degrowth, deindustrialization, dematerialisation, disinformation, Elon Musk, energy transition, Extinction Rebellion, extractivism, Fairphone, Fellow of the Royal Society, flying shuttle, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, gender pay gap, green new deal, Greta Thunberg, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, Jeff Bezos, Jevons paradox, John Maynard Keynes: Economic Possibilities for our Grandchildren, land reform, liberal capitalism, lockdown, longitudinal study, low interest rates, Mahatma Gandhi, Mark Zuckerberg, McMansion, means of production, meta-analysis, microbiome, Money creation, moral hazard, mortgage debt, Murray Bookchin, Naomi Klein, negative emissions, new economy, ocean acidification, offshore financial centre, oil shale / tar sands, opioid epidemic / opioid crisis, out of africa, passive income, planetary scale, planned obsolescence, plutocrats, Post-Keynesian economics, quantitative easing, rent control, rent-seeking, retail therapy, Ronald Reagan, Rupert Read, Scramble for Africa, secular stagnation, shareholder value, sharing economy, Simon Kuznets, structural adjustment programs, the scientific method, The Spirit Level, transatlantic slave trade, trickle-down economics, universal basic income

As the Nazi threat mounted, Kuznets’ concerns about well-being faded into the background. Governments needed to count all economic activities – even negative ones – so they could identify every shred of money and productive capacity available for the war effort. This more aggressive vision of GDP ended up becoming dominant. And at the Bretton Woods Conference in 1944, when world leaders sat down to decide the rules that would govern the world economy in the wake of the war, it was enshrined as the key indicator of economic progress – exactly what Kuznets had warned against. Of course, there’s nothing inherently wrong with measuring some things and not others.


pages: 1,150 words: 338,839

The Wise Men: Six Friends and the World They Made by Walter Isaacson, Evan Thomas

Albert Einstein, anti-communist, Anton Chekhov, Ayatollah Khomeini, Berlin Wall, Bretton Woods, Charles Lindbergh, Cornelius Vanderbilt, cuban missile crisis, George Santayana, guns versus butter model, kremlinology, land reform, liberal world order, Mikhail Gorbachev, Monroe Doctrine, old-boy network, Ronald Reagan, Steve Jobs, Suez crisis 1956, Ted Sorensen, uranium enrichment, éminence grise

But those who favored providing American credits for Russian reconstruction came up with a clever temporary scheme in early 1944: Under a section of the Lend-Lease Act known as 3(c), equipment could be shipped on credit after the end of the war until mid-1947. Designated to negotiate with the Russians for extended credits under the plan was Dean Acheson, who had just finished representing the State Department at the Bretton Woods Conference that established the International Monetary Fund. Fearful of having no hand in such a critical matter, Harriman convinced a reluctant State Department to allow him to fly to Washington in May to consult with his old school chum. They met in Acheson’s office and quickly hammered out a memo for the President.

., Forrestal Diaries, 296, 305; Yergin, Shattered Peace, 327–329; Bohlen, Witness to History, 270–271; Acheson, Present at the Creation, 235, 239; Lovett to Truman, Dec. 22, 1947, Truman papers, Truman Library; Price papers, include Francis Wilcox, Marshall oral histories, 1952–1953, Truman Library; Forrestal to Harriman, July 31, 1947, Forrestal papers, Princeton University; authors’ interviews with Charles Burton Marshall, Kathleen Harriman Mortimer; Forrestal to Lovett, June 29, 1947, Forrestal papers, Princeton University; Forrestal telcon with Lovett, Nov. 19, 1947, Attorney General Clark telcon with Lovett, Oct. 28, 1947, Lovett daily logs, New York Historical Society; Mee, The Marshall Plan, 231–235. McCLOY AS WORLD BANK PRESIDENT: Mason and Asher, The World Bank Since Bretton Wood, 48–61; Lockett, “High Commissioner for Germany”; McCloy, “The Lesson of the World Bank”; McCloy telcon with Lovett, Dec. 17, 1947, Lovett daily logs, New York Historical Society; authors’ interviews with Robert Lovett and John McCloy; Ball, The Past Has Another Pattern, 77–79. BOHLEN’S ROLE SELLING ERP: Bohlen to Thomas Stine, May 2, 1947, Bohlen personal papers, Library of Congress; authors’ interviews with Robert Lovett, Cecil Lyon, Robert Reams, Patricia Alsop, Joseph Alsop, Jane Thompson, Charles Bohlen, Jr.; Wilmerding, “Charles Eustis Bohlen: Portrait of a Diplomat,” unpublished term paper for Groton School.

Dean Acheson: The State Department Years. New York: Dodd, Mead, 1976. McLellan, David S., and David Acheson, eds. Among Friends: Personal Letters of Dean Acheson. New York: Dodd, Mead, 1980. McPherson, Harry. A Political Education. Boston: Atlantic-Little, Brown, 1971. Mason, Edward S., and Robert Asher. The World Bank Since Bretton Woods. Washington: The Brookings Institution, 1973. May, Ernest. Lessons of the Past. New York: Oxford University Press, 1973. Medvedev, Roy. Let History Judge: The Origins and Consequences of Stalinism. New York: Knopf, 1972. Mee, Charles. The Marshall Plan: The Launching of Pax Americana. New York: Simon and Schuster, 1984. ————.


pages: 725 words: 221,514

Debt: The First 5,000 Years by David Graeber

Admiral Zheng, Alan Greenspan, anti-communist, back-to-the-land, banks create money, behavioural economics, bread and circuses, Bretton Woods, British Empire, carried interest, cashless society, central bank independence, classic study, colonial rule, commoditize, corporate governance, David Graeber, delayed gratification, dematerialisation, double entry bookkeeping, financial innovation, fixed income, full employment, George Gilder, informal economy, invention of writing, invisible hand, Isaac Newton, joint-stock company, means of production, microcredit, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, oil shock, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, place-making, Ponzi scheme, Post-Keynesian economics, price stability, profit motive, reserve currency, Right to Buy, Ronald Reagan, scientific management, seigniorage, sexual politics, short selling, Silicon Valley, South Sea Bubble, subprime mortgage crisis, Thales of Miletus, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transatlantic slave trade, tulip mania, upwardly mobile, urban decay, working poor, zero-sum game

Le Guin, The Dispossessed ON AUGUST 15, 1971, United States President Richard Nixon announced that foreign-held U.S. dollars would no longer be convertible into gold—thus stripping away the last vestige of the international gold standard.1 This was the end of a policy that had been effective since 1931, and confirmed by the Bretton Woods accords at the end of World War II: that while United States citizens might no longer be allowed to cash in their dollars for gold, all U.S. currency held outside the country was to be redeemable at the rate of $35 an ounce. By doing so, Nixon initiated the regime of free-floating currencies that continues to this day.

This usage has become almost universal, but it’s not the original sense of the term, which is to turn the debt itself into money. The Bank of England did not print money to pay the national debt; it turned the national debt itself into money. Here too there is a profound argument going on about the nature of money itself. 19. The arrangement is sometimes referred to as Bretton Woods II (Dooley, Folkerts-Landau & Garber 2004, 2009): effectively, an agreement since the 1990s at least to use various unofficial means to keep the dollar’s value artificially high, and East Asian currencies—particularly the Chinese—artificially low, in order to expedite cheap Asian exports to the United States.


pages: 291 words: 91,783

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

addicted to oil, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Bear Stearns, Bernie Sanders, Bretton Woods, buy and hold, carried interest, classic study, clean water, collateralized debt obligation, collective bargaining, computerized trading, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, David Brooks, desegregation, diversification, diversified portfolio, Donald Trump, financial innovation, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, illegal immigration, interest rate swap, laissez-faire capitalism, London Interbank Offered Rate, Long Term Capital Management, margin call, market bubble, medical malpractice, military-industrial complex, money market fund, moral hazard, mortgage debt, Nixon triggered the end of the Bretton Woods system, obamacare, passive investing, Ponzi scheme, prediction markets, proprietary trading, prudent man rule, quantitative easing, reserve currency, Ronald Reagan, Savings and loan crisis, Sergey Aleynikov, short selling, sovereign wealth fund, too big to fail, trickle-down economics, Y2K, Yom Kippur War

OPEC effectively quadrupled prices in a very short period of time, from around three dollars a barrel in October 1973 (the beginning of the boycott) to more than twelve dollars by early 1974. The United States was in the middle of its own stock market disaster at the time, caused in part by the dissolution of the Bretton Woods agreement (the core of which was Nixon’s decision to abandon the gold standard, an interesting story in its own right). In retrospect we ought to have known we were in trouble earlier that year because on January 7, 1973, then–private economist Alan Greenspan told the New York Times, “It is very rare that you can be as unqualifiedly bullish as you can be now.”


pages: 309 words: 95,495

Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe by Greg Ip

Affordable Care Act / Obamacare, Air France Flight 447, air freight, airport security, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Bear Stearns, behavioural economics, Boeing 747, book value, break the buck, Bretton Woods, business cycle, capital controls, central bank independence, cloud computing, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, Daniel Kahneman / Amos Tversky, diversified portfolio, double helix, endowment effect, Exxon Valdez, Eyjafjallajökull, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, foreign exchange controls, full employment, global supply chain, hindsight bias, Hyman Minsky, Joseph Schumpeter, junk bonds, Kenneth Rogoff, lateral thinking, Lewis Mumford, London Whale, Long Term Capital Management, market bubble, Michael Milken, money market fund, moral hazard, Myron Scholes, Network effects, new economy, offshore financial centre, paradox of thrift, pets.com, Ponzi scheme, proprietary trading, quantitative easing, Ralph Nader, Richard Thaler, risk tolerance, Ronald Reagan, Sam Peltzman, savings glut, scientific management, subprime mortgage crisis, tail risk, technology bubble, TED Talk, The Great Moderation, too big to fail, transaction costs, union organizing, Unsafe at Any Speed, value at risk, William Langewiesche, zero-sum game

Countries that abandoned gold escaped that vise and recovered much more quickly. But at the time the world drew a different lesson: it associated the Depression with “beggar thy neighbor” devaluations, and the gold standard with stability, order, and prosperity. That’s why the world’s nations agreed to return to fixed exchange rates at the Bretton Woods Conference in 1944. The United States would fix the dollar in gold; every other country would fix its currency in dollars. The new model wasn’t quite as rigid as the gold standard—countries could devalue against the dollar if necessary, usually with the permission of the International Monetary Fund—but it came close.


pages: 327 words: 88,121

The Vanishing Neighbor: The Transformation of American Community by Marc J. Dunkelman

Abraham Maslow, adjacent possible, Affordable Care Act / Obamacare, Albert Einstein, assortative mating, Berlin Wall, big-box store, blue-collar work, Bretton Woods, Broken windows theory, business cycle, call centre, clean water, company town, cuban missile crisis, dark matter, David Brooks, delayed gratification, different worldview, double helix, Downton Abbey, Dunbar number, Edward Jenner, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, gentrification, George Santayana, Gini coefficient, glass ceiling, global supply chain, global village, helicopter parent, if you build it, they will come, impulse control, income inequality, invention of movable type, Jane Jacobs, Khyber Pass, Lewis Mumford, Louis Pasteur, Marshall McLuhan, McMansion, Nate Silver, obamacare, Occupy movement, off-the-grid, Peter Thiel, post-industrial society, Richard Florida, rolodex, Saturday Night Live, Silicon Valley, Skype, social intelligence, Stanford marshmallow experiment, Steve Jobs, TED Talk, telemarketer, The Chicago School, The Death and Life of Great American Cities, the medium is the message, the strength of weak ties, Tyler Cowen, Tyler Cowen: Great Stagnation, urban decay, urban planning, Walter Mischel, War on Poverty, women in the workforce, World Values Survey, zero-sum game

Part 1 Rumblings 1 THE WARNING In 1945, following a decade and a half of economic tumult and horrific warfare, the United States entered an era of unprecedented peace and prosperity. The GIs lucky enough to return home found a landscape full of opportunity. The economy grew amid an explosion of global demand. Bretton Woods and the Marshall Plan established Washington as a beacon of stability and hope. Even as the Cold War loomed, many sensed that America was finally ready to make good on Woodrow Wilson’s decades-old vow to ensure a world “safe for democracy.”1 Over the years, our impressions of that auspicious age have been refracted through the same lens that inspired the sitcom Happy Days and the musical Grease.


pages: 294 words: 89,406

Lying for Money: How Fraud Makes the World Go Round by Daniel Davies

Alan Greenspan, bank run, banking crisis, Bernie Madoff, bitcoin, Black Swan, Bretton Woods, business cycle, business process, collapse of Lehman Brothers, compound rate of return, cryptocurrency, fake it until you make it, financial deregulation, fixed income, Frederick Winslow Taylor, Gordon Gekko, high net worth, illegal immigration, index arbitrage, junk bonds, Michael Milken, multilevel marketing, Nick Leeson, offshore financial centre, Peter Thiel, Ponzi scheme, price mechanism, principal–agent problem, railway mania, Ronald Coase, Ronald Reagan, Savings and loan crisis, scientific management, short selling, social web, South Sea Bubble, tacit knowledge, tail risk, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, time value of money, vertical integration, web of trust

It is not so big a step from the rogue trader to consider what might happen if an entire bank came under the control of fraudsters and if the rogue was at the very top. The Savings and Loan scandals The Savings and Loan (S&L) crisis of the 1980s set the tone for many of the financial scandals to come. It was the first really major banking crisis of the post-Bretton Woods era and marked the transition from the inflationary 1970s to the hard-money era in the USA and into the Great Moderation. It also gave the first foreshadowings of the fact that financial deregulation tends to lead to crises; the interaction between the economic conditions of the time and the two major deregulation bills was particularly destructive.


pages: 382 words: 92,138

The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

Apple II, banking crisis, barriers to entry, Bretton Woods, business cycle, California gold rush, call centre, carbon footprint, carbon tax, Carmen Reinhart, circular economy, clean tech, computer age, creative destruction, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, dual-use technology, endogenous growth, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Fairchild Semiconductor, Financial Instability Hypothesis, full employment, G4S, general purpose technology, green transition, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, intangible asset, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, knowledge worker, linear model of innovation, natural language processing, new economy, offshore financial centre, Philip Mirowski, popular electronics, Post-Keynesian economics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, Robert Solow, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Solyndra, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tony Fadell, too big to fail, total factor productivity, trickle-down economics, vertical integration, Washington Consensus, William Shockley: the traitorous eight

Hence, this book appears with perfect timing. The stubborn economic crisis is not likely to be overcome with austerity measures or the expectation that ‘business as usual’ can return by saving the banks. This is a crisis like that of the 1930s, which requires measures as bold and as imaginative as those of the welfare state and Bretton Woods, but geared to the need for sustainable global development lead by today’s knowledge society. It is to be hoped that the politicians in the advanced world will come around to understanding this, and that when they look for guidance they will discover the value of Mazzucato’s ideas and arguments.


The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

addicted to oil, air freight, airline deregulation, Alan Greenspan, Albert Einstein, asset-backed security, bank run, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon tax, central bank independence, collateralized debt obligation, collective bargaining, compensation consultant, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, currency risk, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Glass-Steagall Act, Hernando de Soto, income inequality, income per capita, information security, invisible hand, Joseph Schumpeter, junk bonds, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, open immigration, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, Reminiscences of a Stock Operator, reserve currency, Right to Buy, risk tolerance, Robert Solow, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, special economic zone, stock buybacks, stocks for the long run, Suez crisis 1956, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tipper Gore, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, We are all Keynesians now, working-age population, Y2K, zero-sum game

There were a couple of reasons for this: Everyone appreciated that the U.S. economy, under the direction of our government planners, had been the industrial engine behind the Allied victory. What's more, new economic institutions were being created and a new economic order was taking shape right before our eyes. The leaders of the Western world had gathered in July 1944 at Bretton Woods, New Hampshire, to set up the International Monetary Fund (IMF) and the 29 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. THE AGE OF T U R B U L E N C E World Bank. This marked what Henry Morgenthau called "the end of economic nationalism"—the leaders agreed that if world prosperity was to be sustained, it had to be shared, and it was the responsibility of the industrial nations to ensure that barriers were lowered in trade and finance.

., assets of, 359, 360 see also central banks; Federal Reserve banks Banks, J. Eugene, 31 Barrett, Craig, 4 3 4 - 3 5 baseball, 2 1 - 2 2 , 9 7 Beatles, 56, 396 beer, beer cans, 50, 78 Belda, Alain, 428n Bentsen, B.A., 146 Bentsen, Lloyd, 144-48, 157, 210 Berlin Wall, fall of, 12, 113, 123, 139, 259, 367, 384,481-82 Piano Real in, 334, 340, 341 populism in, 337, 340 Bretton Woods Conference (1944), 29 Breyer, Stephen, 82, 497 Brezhnev, Leonid, 88-89, 126 briefcase indicator, 197-98 Brimmer, Andrew, 68 Brokaw, Tom, 4 Brookings Institution, 405 Brown, Gordon, 266, 283-84, 499, 500 Brown Brothers Harriman, 3 1 , 32 Bryan, William Jennings, 176, 343, 480 Buchanan, Pat, 57 Buckley, Dennis, 100 budget bill (1990), 120 budget deficits, 54, 55n, 70, 7 1 , 73, 213, 215, 218, 255,481 Clinton and, 143-50 current account imbalance and, 349, 350, 357 G .


pages: 869 words: 239,167

The Story of Work: A New History of Humankind by Jan Lucassen

3D printing, 8-hour work day, affirmative action, agricultural Revolution, Albert Einstein, anti-work, antiwork, Asian financial crisis, banking crisis, basic income, Berlin Wall, Black Lives Matter, blue-collar work, bread and circuses, Bretton Woods, Capital in the Twenty-First Century by Thomas Piketty, Charles Babbage, collective bargaining, Columbian Exchange, commoditize, computer age, coronavirus, COVID-19, demographic transition, deskilling, discovery of the americas, domestication of the camel, Easter island, European colonialism, factory automation, Fall of the Berlin Wall, fixed income, Ford Model T, founder crops, Frederick Winslow Taylor, full employment, future of work, Great Leap Forward, hiring and firing, income inequality, income per capita, informal economy, invisible hand, James Watt: steam engine, joint-stock company, knowledge economy, labour mobility, land tenure, long peace, mass immigration, means of production, megastructure, minimum wage unemployment, money: store of value / unit of account / medium of exchange, new economy, New Urbanism, out of africa, pension reform, phenotype, post-work, precariat, price stability, public intellectual, reshoring, scientific management, Scramble for Africa, Second Machine Age, stakhanovite, tacit knowledge, Thales of Miletus, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transatlantic slave trade, two and twenty, universal basic income, W. E. B. Du Bois, women in the workforce, working poor

Britain was particularly active in pursuing such agreements in the late 1940s and early 1950s, especially through the Economic and Social Council of the UN (ECOSOC), but largely in vain because of American opposition. In the end, the GATT (General Agreement on Tariffs and Trade) was the only device left after the still-birth of the ITO (International Trade Organization) and the short-lived Bretton Woods Agreement. This was a far cry from the Keynesian ideals of the 1940s. Before continuing the saga of the welfare state, after it was challenged deeply during the economic world crisis of the 1970s and after, let us briefly turn to the communist variant, and its competition with the democratic variant, as briefly described, both within Europe and in the rest of the world.147 The Soviet Union was the first country to take radical measures to ensure a just income for its working population.148 By cutting out profit for employers and embracing the ideal of equality of the French Revolution, a workers’ paradise would be created on Earth.

(i), (ii) Stalin, Jozef (i), (ii), (iii), (iv), (v), (vi) Standing, Guy (i) state/polity (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii), (xxxviii), (xxxix), (xl), (xli), (xlii), (xliii), (xliv), (xlv), (xlvi), (xlvii), (xlviii), (xlix), (l), (li), (lii), (liii), (liv), (lv), (lvi), (lvii), (lviii), (lix), (lx), (lxi), (lxii)n20, (lxiii)nn56&60&65, (lxiv)n105, (lxv)n168, (lxvi)n185, (lxvii)nn241&250, (lxviii)n251, (lxix)n111, (lxx)n130, (lxxi)n22 citizen (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv)n58, (xxvi)n111 city state (i), (ii), (iii), (iv), (v), (vi), (vii), (viii)n67 democracy (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv) welfare state (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) see also society Stein, Burton (i)n220 Stewart, Michael (i) Stork, Charles Theodoor (i) subcontracting (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv)n19 cooperative/groupwise (i), (ii), (iii), (iv), (v), (vi), (vii)n32 individual, sweating (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix)n92, (x)n27 Kaufsystem (i), (ii) putting out (i), (ii), (iii), (iv) Sudan (i) Darfur (i)n20 Sugihara, Kaoru (i), (ii)n74 Sulpicius Gallus (i) Suriname (i) Swaziland (i) Switzerland (i), (ii), (iii), (iv), (v), (vi), (vii) Geneva (i) Törbel (i) Valais (i) Syria (i), (ii), (iii), (iv), (v) Damascus (i) Raqqa (i) Taiwan (i), (ii), (iii) Tamerlane (i) Tanzania (i) Zanj people (i), (ii), (iii) taxation (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii)n17, (xxxiv)nn15&17 corvée (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii) mita (i), (ii) Taylor, Frederick Winslow (i), (ii), (iii), (iv)n23 Taylor, Tim, (i)n71, (ii)n116 technology (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi)n107 automatization/digitization/robotization (i), (ii), (iii), (iv), (v), (vi), (vii)n12 mechanization (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii) tools (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii)nn35&59, (xxviii)n195 Thailand (i), (ii)n55 Hmong people (i) Mlabri people (i) Thales (i) Thatcher, Margaret (i), (ii), (iii) Tibet (i) Tille, Alexander (i) Tilly, Charles and Chris (i), (ii), (iii), (iv), (v), (vi)nn2&4&6 Tinbergen, Jan (i)n39 Tipu Sultan (i) Toledo, Francisco de (i) transport (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii)n116, (xxviii)n185, (xxix)n29 air (i) water (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx)n37 see also animal, working animal tributary redistribution/tributary labour (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) Trivers, Robert Ludlow (i)n22 Trotsky, Leon (i) Tucker, Dean (i) Tunisia (i) Kairouan (i) see also Carthage Turkey (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) Anatolia/Asia Minor (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) Arslantepe (i), (ii) Bosphorus (i) Çatal Hüyük (i), (ii) Constantinople/Istanbul (i), (ii) Ephesus (i) Göbleki Tepe (i) Lydia (i) Ottoman state (i), (ii), (iii), (iv), (v), (vi) Phrygia (i) Seljuk state (i) Turkmenistan (i) Merv (i) Tuwim, Julian (i)n27 Tyler, Wat (i), (ii), (iii) unfree labour (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv)n23, (xxxv)n25, (xxxvi)n57, (xxxvii)n141, (xxxviii)n212, (xxxix)n116, (xl)n51, (xli)n56 concentration camp (i), (ii), (iii), (iv) convict work (i), (ii), (iii), (iv), (v), (vi), (vii) encomienda-repartimiento (i), (ii) prison work (i), (ii), (iii), (iv), (v) serfdom (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii)n249 see also migration, forced migration/indentured labour migration; slavery United Nations (i), (ii), (iii) Universal Declaration of Human Rights (i), (ii) United States/USA (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii), (xxxviii), (xxxix)nn67&86, (xl)n80, (xli)nn96&98&101, (xlii)n126, (xliii)nn15&161, (xliv)n22 United States, geographic Alabama (i) Arizona (i) Bretton Woods (i) California (i) Detroit (i)n86 Doylestown (i) Florida (i), (ii), (iii)n170 Georgia (i), (ii)n170 Homestead (i) Maryland (i), (ii) Mississippi River (i) New Netherland (i) New York (i), (ii), (iii) Pennsylvania (i), (ii) Puerto Rico (i) Tennessee (i) Texas (i) Virginia (i), (ii), (iii) Washington (i) Ure, Andrew (i) Uzbekistan (i) Bukhara (i) Khiva (i) Samarqand (i) Varahamihira (i) Veblen, Thorsten (i) Venezuela (i), (ii) Vicente do Salvador, Frei (i) Vietnam (i), (ii), (iii) Annam (i) Haiphong (i) Vogel, Hans Ulrich (i) Waal, Frans de (i), (ii), (iii), (iv), (v), (vi)n22 wage/salary (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii)n105, (xxxviii)n196, (xxxix)n51, (xl)n144, (xli)n220 arbitration (i), (ii)n70 in kind (i), (ii), (iii), (iv), (v), (vi), (vii) level (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi)n9, (xxii)nn20&33, (xxiii)n140, (xxiv)n130, (xxv)n39 for piecework (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) task (i), (ii), (iii), (iv) for timework (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii) see also work, remuneration; wage labour; wage payment wage labour (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi), (xxxvii), (xxxviii), (xxxix), (xl), (xli), (xlii), (xliii), (xliv), (xlv), (xlvi), (xlvii), (xlviii), (xlix), (l), (li), (lii), (liii), (liv), (lv), (lvi), (lvii), (lviii), (lix), (lx), (lxi), (lxii), (lxiii), (lxiv), (lxv), (lxvi), (lxvii)n6 unemployment (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii) see also occupations; work wage payment (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix)n6 advance (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi)n61 benefit (i), (ii), (iii), (iv) bonus (i), (ii), (iii), (iv) payroll (i), (ii) truck system (i), (ii)n179 see also money, deep monetization; working time Wallerstein, Immanuel (i)n8 war (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxx), (xxxi), (xxxii), (xxxiii), (xxxiv), (xxxv), (xxxvi)n10, (xxxvii)n22, (xxxviii)n80, (xxxix)n168, (xl)n102, (xli)n5 aggression (i), (ii), (iii), (iv), (v), (vi) Cold War (i), (ii), (iii), (iv) conscription (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii)n31, (xiii)n249 prisoner of war (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix)n117, (xx)n146 World War I (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx)n96 World War II (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx), (xxi)n51, (xxii)nn96&109, (xxiii)n45 see also collective action, rebellion/revolt, occupations, military Watt, James (i) Weber, Max (i), (ii), (iii), (iv)n49 Weil, David (i) Wendt, Ian C.


pages: 308 words: 99,298

Brexit, No Exit: Why in the End Britain Won't Leave Europe by Denis MacShane

"World Economic Forum" Davos, 3D printing, Alan Greenspan, Alvin Toffler, banking crisis, battle of ideas, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, centre right, Corn Laws, deindustrialization, Doha Development Round, Donald Trump, Etonian, European colonialism, fake news, financial engineering, first-past-the-post, fixed income, Gini coefficient, greed is good, illegal immigration, information security, James Dyson, Jeremy Corbyn, labour mobility, liberal capitalism, low cost airline, low interest rates, Martin Wolf, mass immigration, military-industrial complex, Mont Pelerin Society, negative equity, Neil Kinnock, new economy, non-tariff barriers, offshore financial centre, open borders, open economy, post-truth, price stability, purchasing power parity, quantitative easing, reshoring, road to serfdom, secular stagnation, Silicon Valley, Thales and the olive presses, trade liberalization, transaction costs, women in the workforce

Yet the plain fact is that London, which overwhelms the rest of the UK, is in turn itself overwhelmed by its success as one of the world’s financial hubs, perhaps even more important than Wall Street in terms of international financing. After joining the EEC in 1973, shortly after the end of Bretton Woods system and the emergence of such new global economic powers as Japan or the Gulf States, with money-making cities like Hong Kong and Singapore giving the first signs of what Chinese capitalism could become, London took much of the new international financial market in raising capital and in currency trading.


pages: 382 words: 100,127

The Road to Somewhere: The Populist Revolt and the Future of Politics by David Goodhart

Affordable Care Act / Obamacare, agricultural Revolution, assortative mating, Big bang: deregulation of the City of London, borderless world, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, call centre, capital controls, carbon footprint, central bank independence, centre right, coherent worldview, corporate governance, credit crunch, Crossrail, deglobalization, deindustrialization, Donald Trump, Downton Abbey, Edward Glaeser, en.wikipedia.org, Etonian, European colonialism, eurozone crisis, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, global supply chain, global village, Great Leap Forward, illegal immigration, income inequality, informal economy, Jeremy Corbyn, job satisfaction, knowledge economy, labour market flexibility, low skilled workers, market friction, mass immigration, meritocracy, mittelstand, Neil Kinnock, New Urbanism, non-tariff barriers, North Sea oil, obamacare, old-boy network, open borders, open immigration, Peter Singer: altruism, post-industrial society, post-materialism, postnationalism / post nation state, race to the bottom, Richard Florida, Ronald Reagan, selection bias, shareholder value, Skype, Sloane Ranger, stem cell, the long tail, Thomas L Friedman, transaction costs, trickle-down economics, ultimatum game, upwardly mobile, wages for housework, white flight, women in the workforce, working poor, working-age population, World Values Survey

There is some evidence that in rich economies trade increases the proportion of high paid to low paid jobs,12 but an LSE paper by Joao Paulo Pessoa also finds that British and American workers in sectors most impacted by Chinese imports had worse job and income outcomes after China joined the WTO in 2001. (By 2013 China had captured 20 per cent of all global manufacturing exports, compared with just 2 per cent in 1991.)13 This second phase of post-war globalisation starting in the 1980s, and put on pause by the financial crisis, has been very different to the first Bretton Woods/GATT regime which governed the world economy from the 1950s to the 1970s. In the first phase trade liberalisation remained limited to manufactured goods, mainly between industrialised nations. Tariffs fell sharply and trade and investment flows grew rapidly. But capital controls remained in place and it was assumed that national preferences and national social contracts would remain undisturbed.


Powers and Prospects by Noam Chomsky

anti-communist, Berlin Wall, Bretton Woods, colonial rule, declining real wages, deindustrialization, deskilling, Fall of the Berlin Wall, invisible hand, Jacques de Vaucanson, John von Neumann, language acquisition, liberation theology, Monroe Doctrine, Nixon triggered the end of the Bretton Woods system, old-boy network, RAND corporation, Ronald Reagan, South China Sea, theory of mind, Tobin tax, Turing test

The vast majority of the world’s population, who are subjected to market discipline and regaled with odes to its wonders, are not supposed to hear such words; and rarely do. The globalisation of production puts tremendous weapons into the hands of private tyrannies. Another critical factor is the huge explosion of unregulated financial capital since Richard Nixon dismantled the Bretton Woods system in the early 1970s. The consequences of the deregulation of financial markets were quickly understood. In 1978, Nobel Prize laureate in economics James Tobin proposed that foreign exchange transactions be taxed to slow the haemorrhage of capital from the real economy (investment and trade) to financial manipulations that now constitute 95 per cent of foreign exchange transactions (as compared with 10 per cent of a far smaller total in 1970).


Culture of Terrorism by Noam Chomsky

anti-communist, Bolshevik threat, Bretton Woods, Caribbean Basin Initiative, centre right, clean water, David Brooks, disinformation, failed state, Farzad Bazoft, guns versus butter model, land reform, Monroe Doctrine, risk tolerance, Robert Bork, Ronald Reagan, Seymour Hersh, union organizing

But when governments began to become “politicized by universal male suffrage and the rise of trade unionism and parliamentary labor parties,” that was no longer so easy, and it became a really serious problem with the radicalization of the general public during the Great Depression and the antifascist war. Accordingly, in the postwar Bretton Woods system devised by the United States and United Kingdom, “limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures.” A core principle of neoliberalism is to eliminate those limits, and other limits on investor rights, which transcend all others.


pages: 340 words: 97,723

The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity by Amy Webb

"Friedman doctrine" OR "shareholder theory", Ada Lovelace, AI winter, air gap, Airbnb, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic bias, AlphaGo, Andy Rubin, artificial general intelligence, Asilomar, autonomous vehicles, backpropagation, Bayesian statistics, behavioural economics, Bernie Sanders, Big Tech, bioinformatics, Black Lives Matter, blockchain, Bretton Woods, business intelligence, Cambridge Analytica, Cass Sunstein, Charles Babbage, Claude Shannon: information theory, cloud computing, cognitive bias, complexity theory, computer vision, Computing Machinery and Intelligence, CRISPR, cross-border payments, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, data science, deep learning, DeepMind, Demis Hassabis, Deng Xiaoping, disinformation, distributed ledger, don't be evil, Donald Trump, Elon Musk, fail fast, fake news, Filter Bubble, Flynn Effect, Geoffrey Hinton, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Herman Kahn, high-speed rail, Inbox Zero, Internet of things, Jacques de Vaucanson, Jeff Bezos, Joan Didion, job automation, John von Neumann, knowledge worker, Lyft, machine translation, Mark Zuckerberg, Menlo Park, move fast and break things, Mustafa Suleyman, natural language processing, New Urbanism, Nick Bostrom, one-China policy, optical character recognition, packet switching, paperclip maximiser, pattern recognition, personalized medicine, RAND corporation, Ray Kurzweil, Recombinant DNA, ride hailing / ride sharing, Rodney Brooks, Rubik’s Cube, Salesforce, Sand Hill Road, Second Machine Age, self-driving car, seminal paper, SETI@home, side project, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart cities, South China Sea, sovereign wealth fund, speech recognition, Stephen Hawking, strong AI, superintelligent machines, surveillance capitalism, technological singularity, The Coming Technological Singularity, the long tail, theory of mind, Tim Cook: Apple, trade route, Turing machine, Turing test, uber lyft, Von Neumann architecture, Watson beat the top human players on Jeopardy!, zero day

It may seem impossible to unite the governments of the world around a central cause given the political rancor and geopolitical uneasiness we’ve experienced in the past few years. But there is precedent. In the aftermath of World War II, when tensions were still high, hundreds of delegates from all Allied nations gathered together in Bretton Woods, New Hampshire, to build the financial structures that enabled the global economy to move forward. That collaboration was human-centered—it resulted in a future where people and nations could rebuild and seek out prosperity. GAIA nations should collaborate on frameworks, standards, and best practices for AI.


pages: 311 words: 99,699

Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe by Gillian Tett

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, asset-backed security, bank run, banking crisis, Bear Stearns, Black-Scholes formula, Blythe Masters, book value, break the buck, Bretton Woods, business climate, business cycle, buy and hold, collateralized debt obligation, commoditize, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, easy for humans, difficult for computers, financial engineering, financial innovation, fixed income, Glass-Steagall Act, housing crisis, interest rate derivative, interest rate swap, inverted yield curve, junk bonds, Kickstarter, locking in a profit, Long Term Capital Management, low interest rates, McMansion, Michael Milken, money market fund, mortgage debt, North Sea oil, Northern Rock, Plato's cave, proprietary trading, Renaissance Technologies, risk free rate, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, short selling, sovereign wealth fund, statistical model, tail risk, The Great Moderation, too big to fail, value at risk, yield curve

Speculators would take on the risk of the losses farmers feared in the hopes of big payoffs that all too often turned horribly bad. In the late 1970s, a bold new era of derivatives innovation was inspired by a set of technological breakthroughs and increasing volatility in the financial markets. It brought derivatives from the world of commodities into the domain of finance. The post-WWII Bretton Woods system of credit and exchange controls, which had maintained relative stability in world markets, broke down, and the values of foreign currencies, which had been pegged to the dollar, became free-floating. That led to unpredictable swings in exchange rates. Oil price shocks then sparked a pernicious blend of recession and inflation in the US, with inflation eventually peaking at 13.2 percent in 1981.


Data and the City by Rob Kitchin,Tracey P. Lauriault,Gavin McArdle

A Declaration of the Independence of Cyberspace, algorithmic management, bike sharing, bitcoin, blockchain, Bretton Woods, Chelsea Manning, citizen journalism, Claude Shannon: information theory, clean water, cloud computing, complexity theory, conceptual framework, corporate governance, correlation does not imply causation, create, read, update, delete, crowdsourcing, cryptocurrency, data science, dematerialisation, digital divide, digital map, digital rights, distributed ledger, Evgeny Morozov, fault tolerance, fiat currency, Filter Bubble, floating exchange rates, folksonomy, functional programming, global value chain, Google Earth, Hacker News, hive mind, information security, Internet of things, Kickstarter, knowledge economy, Lewis Mumford, lifelogging, linked data, loose coupling, machine readable, new economy, New Urbanism, Nicholas Carr, nowcasting, open economy, openstreetmap, OSI model, packet switching, pattern recognition, performance metric, place-making, power law, quantum entanglement, RAND corporation, RFID, Richard Florida, ride hailing / ride sharing, semantic web, sentiment analysis, sharing economy, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart contracts, smart grid, smart meter, social graph, software studies, statistical model, tacit knowledge, TaskRabbit, technological determinism, technological solutionism, text mining, The Chicago School, The Death and Life of Great American Cities, the long tail, the market place, the medium is the message, the scientific method, Toyota Production System, urban planning, urban sprawl, web application

In 1816, the Bank of England changed the basis of English money from silver to gold through the Great Recoinage and at this point the Blockchain city 143 value of silver in a silver coin was less than its representational value, and so coin transformed into a token. As global trade required ‘modern’ organization through the early part of the twentieth century, the Bretton Woods agreement was signed in 1944 by committed countries in order to maintain exchange rates to a fixed value in terms of gold. On its failure in 1971 – due to the dollar’s inability to retain value in the light of a global recession – the detachment of monetary value from a mineral ore to a new system of floating exchange rates ‘de-materialized’ money (Harvey 1990).


pages: 372 words: 107,587

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

3D printing, agricultural Revolution, Alan Greenspan, Anthropocene, Apollo 11, back-to-the-land, banking crisis, banks create money, Bear Stearns, biodiversity loss, Bretton Woods, business cycle, carbon footprint, Carmen Reinhart, clean water, cloud computing, collateralized debt obligation, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, degrowth, dematerialisation, demographic dividend, Deng Xiaoping, Elliott wave, en.wikipedia.org, energy transition, falling living standards, financial deregulation, financial innovation, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, global village, green transition, happiness index / gross national happiness, I think there is a world market for maybe five computers, income inequality, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jevons paradox, Kenneth Rogoff, late fees, liberal capitalism, low interest rates, mega-rich, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, naked short selling, Naomi Klein, Negawatt, new economy, Nixon shock, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, price stability, private military company, quantitative easing, reserve currency, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, short selling, special drawing rights, systems thinking, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, tulip mania, WikiLeaks, working poor, world market for maybe five computers, zero-sum game

This was an inherently inflationary development from a monetarist point of view (in that it meant that money could be issued substantially beyond the amounts of gold on deposit); however, the world’s growing energy supplies and manufacturing capacity required an increase in the money supply, so for most countries and in most years measurable rates of price inflation remained relatively low.19 As World War II neared its end, Japan and the European powers lay in ruins; the United States was relatively unscathed. At the Bretton Woods monetary conference of 1944 the Allied nations laid the groundwork for a postwar international economic system that included new institutions such as the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank.


pages: 872 words: 259,208

A History of Modern Britain by Andrew Marr

air freight, Albert Einstein, anti-communist, battle of ideas, Beeching cuts, Big bang: deregulation of the City of London, Bletchley Park, Bob Geldof, Bretton Woods, British Empire, Brixton riot, clean water, collective bargaining, computer age, congestion charging, cuban missile crisis, deindustrialization, Etonian, falling living standards, fear of failure, Fellow of the Royal Society, financial independence, floating exchange rates, full employment, gentleman farmer, Herbert Marcuse, housing crisis, illegal immigration, Kickstarter, liberal capitalism, Live Aid, loadsamoney, market design, mass immigration, means of production, Mikhail Gorbachev, millennium bug, Neil Kinnock, Nelson Mandela, new economy, North Sea oil, Northern Rock, offshore financial centre, open borders, out of africa, Parkinson's law, Piper Alpha, post-war consensus, Red Clydeside, reserve currency, Right to Buy, road to serfdom, Ronald Reagan, Silicon Valley, strikebreaker, upwardly mobile, Winter of Discontent, working poor, Yom Kippur War

Yet there was one moment when Britain might have experienced a Thatcher-sized jolt, a British revolution thirty years early. It came on Churchill’s watch in 1952 when his young Chancellor, Rab Butler, proposed cutting the pound free from the system of fixed exchange rates agreed after the war at Bretton Woods. The scheme was called ROBOT. In detail it was fiendishly complicated, because of Britain’s network of obligations to so many other countries using sterling as their reserve. In essence, though, it was very simple. The pound would float partly free, or rather fall dramatically against the dollar, thus giving Britain’s struggling exporters a huge one-off boost.

Defend the pound and Britain’s global self-image or let it fall and help Britain’s exporters? ‘Stop-go’ saw sudden tightenings of fiscal policy, then a stab on the accelerator, as government tried to break into a new era of growth, before slamming on the brakes to deal with the resulting surge in inflation. Until the post-war Bretton Woods system broke down in 1971 there would be regular arguments about devaluation. For politicians at the time, it was like trying to solve a puzzle with one too many parts. The Purge It is 24 March 1954, late in the afternoon outside Winchester Castle. The great hall of the medieval building, with its famous fake of Arthur’s Round Table – created in the 1300s and painted for Henry VIII – is now empty.


The Global Money Markets by Frank J. Fabozzi, Steven V. Mann, Moorad Choudhry

asset allocation, asset-backed security, bank run, Bear Stearns, Bretton Woods, buy and hold, collateralized debt obligation, credit crunch, currency risk, discounted cash flows, discrete time, disintermediation, Dutch auction, financial engineering, fixed income, Glass-Steagall Act, high net worth, intangible asset, interest rate derivative, interest rate swap, land bank, large denomination, locking in a profit, London Interbank Offered Rate, Long Term Capital Management, margin call, market fundamentalism, money market fund, moral hazard, mortgage debt, paper trading, Right to Buy, short selling, stocks for the long run, time value of money, value at risk, Y2K, yield curve, zero-coupon bond, zero-sum game

In the changing interest rate environment, it became imperative for banks to manage both assets and liabilities simultaneously, in order to minimize interest rate and liquidity risk and maximize interest income. ALM is a key component of any financial institution’s overall operating strategy. In the era of stable interest rates that preceded the breakdown of the Bretton-Woods agreement, ALM was a more straightforward process, constricted by regulatory restrictions and the saving and borrowing pattern of bank customers.1 The introduction of the negotiable Certificate of Deposit by Citibank in the 1960s enabled banks to diversify both their investment and funding sources.


pages: 403 words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

"Friedman doctrine" OR "shareholder theory", 3D printing, Alan Greenspan, Alvin Toffler, Anthropocene, Asian financial crisis, bank run, basic income, battle of ideas, behavioural economics, benefit corporation, Berlin Wall, biodiversity loss, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Cass Sunstein, choice architecture, circular economy, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, degrowth, dematerialisation, disruptive innovation, Douglas Engelbart, Douglas Engelbart, Easter island, en.wikipedia.org, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, Future Shock, Garrett Hardin, Glass-Steagall Act, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, it is difficult to get a man to understand something, when his salary depends on his not understanding it, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, land reform, land value tax, Landlord’s Game, loss aversion, low interest rates, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, Minsky moment, mobile money, Money creation, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, ocean acidification, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, retail therapy, Richard Thaler, Robert Solow, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, Steve Ballmer, systems thinking, TED Talk, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, Tragedy of the Commons, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

Haldane, A. (2009) ‘Rethinking the Financial Network’. Speech given at the Financial Student Association, Amsterdam, 28 April 2009. http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2009/speech386.pdf 30. Brown, G. (2011) Speech made at the Institute for New Economic Thinking, Bretton Woods, New Hampshire, 11 April 2011. http://www.bbc.co.uk/news/business-13032013 31. Personal communication with Steve Keen, 3 October 2015. 32. Sraffa, P. (1926) ‘The laws of returns under competitive conditions’, Economic Journal 36, p. 144. 33. Murphy, S., Burch, D. and Clapp, J. (2012) Cereal Secrets: the world’s largest grain traders and global agriculture.


pages: 379 words: 113,656

Six Degrees: The Science of a Connected Age by Duncan J. Watts

AOL-Time Warner, Berlin Wall, Bretton Woods, business process, corporate governance, Drosophila, Erdős number, experimental subject, fixed income, Frank Gehry, Geoffrey West, Santa Fe Institute, independent contractor, industrial cluster, invisible hand, it's over 9,000, Long Term Capital Management, market bubble, Milgram experiment, MITM: man-in-the-middle, Murray Gell-Mann, Network effects, new economy, Norbert Wiener, PalmPilot, Paul Erdős, peer-to-peer, power law, public intellectual, rolodex, Ronald Coase, Savings and loan crisis, scientific worldview, Silicon Valley, social contagion, social distancing, Stuart Kauffman, supply-chain management, The Nature of the Firm, the strength of weak ties, The Wealth of Nations by Adam Smith, Toyota Production System, Tragedy of the Commons, transaction costs, transcontinental railway, vertical integration, Vilfredo Pareto, Y2K

The rapid growth of the world’s postwar industrialized economies had begun to reach the limits of what their domestic consumer markets could demand, and further growth required a dramatic globalization of both production and trade. Around the same time, and partly for the same reason, the fixed currency exchange rate system of the 1944 Bretton Woods agreement began to break down, and the first cracks appeared in the walls of trade protection behind which many nations’ postwar reconstruction strategies had sheltered. Exacerbating these tectonic changes in the global economy were a series of economic and political shocks—two oil crises in quick succession, the Iranian revolution of 1979, and a combination of growing unemployment and inflation in the United States and Europe—all of which eroded the industrialized world’s vision of an endlessly prosperous future.


pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

"World Economic Forum" Davos, accounting loophole / creative accounting, Ada Lovelace, Adam Curtis, Airbnb, Alan Greenspan, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, behavioural economics, Ben Bernanke: helicopter money, bitcoin, Bletchley Park, blockchain, Bretton Woods, Brexit referendum, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Charles Babbage, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, crowdsourcing, cryptocurrency, data science, David Graeber, deep learning, deskilling, Diane Coyle, discrete time, disruptive innovation, distributed ledger, diversification, double entry bookkeeping, Ethereum, ethereum blockchain, fiat currency, financial engineering, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, Glass-Steagall Act, Higgs boson, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, large denomination, Large Hadron Collider, Lewis Mumford, liquidity trap, London Whale, low interest rates, low skilled workers, M-Pesa, machine readable, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, Michael Milken, MITM: man-in-the-middle, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, power law, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, robo advisor, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, seigniorage, seminal paper, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, Stuart Kauffman, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Vitalik Buterin, Von Neumann architecture, Washington Consensus

In fact, Tally sticks made of polished hazel or willow wood, were used in England from 1100 AD and only abolished in 1834.3 Hence the origin of the phrase “tally up.” Gold and silver were the generally accepted forms of exchange and measurement of wealth for a long period in the history of money .4 The bimetallic system of money gave rise to the gold standard in early 1900s and during the Bretton Woods conference in 1946, it led to the creation of a fixed exchange rate. By this method, a country’s sovereign currency was pegged to gold, giving each denomination of the currency a value that could technically be redeemed in gold. As gold and silver were cumbersome to store, carry, and use, towards the eighteenth century, a new much more portable and convenient form of currency in the form of “commodity-backed” money started to be used.


pages: 436 words: 114,278

Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally

"World Economic Forum" Davos, Alan Greenspan, American energy revolution, Asian financial crisis, banking crisis, barriers to entry, Bear Stearns, Bretton Woods, collective bargaining, credit crunch, energy security, energy transition, geopolitical risk, housing crisis, hydraulic fracturing, Ida Tarbell, index fund, Induced demand, interchangeable parts, invisible hand, joint-stock company, market clearing, market fundamentalism, megaproject, moral hazard, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, price discrimination, price elasticity of demand, price stability, sovereign wealth fund, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, transfer pricing, vertical integration

“Understanding Crude Oil Prices.” National Bureau of Economic Research, Working paper 14492, Cambridge, Mass., 2008. Hamilton, James D. Causes and Consequences of the Oil Shock of 2007–2008. San Diego, Calif.: UC San Diego, Department of Economics, 2009. Hammes, David, and Douglas Wills. Black Gold: The End of Bretton Woods and the Oil Price Shocks of the 1970s. Available at SSRN: http://ssrn.com/abstract=388283. Harrington, Mark. “Oil Credit Crunch Could Be Worse than the Housing Crisis.” CNBC Commentary. January 14, 2016. http://www.cnbc.com/2016/01/14/oil-credit-crunch-could-be-worse-than-the-housing-crisis-commentary.html.


pages: 407 words: 114,478

The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein

Alan Greenspan, asset allocation, behavioural economics, book value, Bretton Woods, British Empire, business cycle, butter production in bangladesh, buy and hold, buy low sell high, carried interest, corporate governance, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, diversification, diversified portfolio, Edmond Halley, equity premium, estate planning, Eugene Fama: efficient market hypothesis, financial engineering, financial independence, financial innovation, fixed income, George Santayana, German hyperinflation, Glass-Steagall Act, high net worth, hindsight bias, Hyman Minsky, index fund, invention of the telegraph, Isaac Newton, John Bogle, John Harrison: Longitude, junk bonds, Long Term Capital Management, loss aversion, low interest rates, market bubble, mental accounting, money market fund, mortgage debt, new economy, pattern recognition, Paul Samuelson, Performance of Mutual Funds in the Period, quantitative easing, railway mania, random walk, Richard Thaler, risk tolerance, risk/return, Robert Shiller, Savings and loan crisis, South Sea Bubble, stock buybacks, stocks for the long run, stocks for the long term, survivorship bias, Teledyne, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the rule of 72, transaction costs, Vanguard fund, yield curve, zero-sum game

In Table 2-2, I’ve summarized reasonable expected real returns, derived from the DDM. Understand that “expected” returns are just that. In finance, as in life, there is often a huge chasm between what is expected and what actually transpires. The estimation of foreign stock returns is particularly perilous. Between the breakdown of the 1944 Bretton Woods agreement, which fixed currency exchange rates among the major developed nations, and the advent of increasingly active foreign-currency-denominated futures and options markets, the currencies have grown increasingly volatile. This means that the gap between expected versus realized returns for foreign stocks is liable to be especially large.


pages: 479 words: 113,510

Fed Up: An Insider's Take on Why the Federal Reserve Is Bad for America by Danielle Dimartino Booth

Affordable Care Act / Obamacare, Alan Greenspan, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, Bernie Sanders, Black Monday: stock market crash in 1987, break the buck, Bretton Woods, business cycle, central bank independence, collateralized debt obligation, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, diversification, Donald Trump, financial deregulation, financial engineering, financial innovation, fixed income, Flash crash, forward guidance, full employment, George Akerlof, Glass-Steagall Act, greed is good, Greenspan put, high net worth, housing crisis, income inequality, index fund, inflation targeting, interest rate swap, invisible hand, John Meriwether, Joseph Schumpeter, junk bonds, liquidity trap, London Whale, Long Term Capital Management, low interest rates, margin call, market bubble, Mexican peso crisis / tequila crisis, money market fund, moral hazard, Myron Scholes, natural language processing, Navinder Sarao, negative equity, new economy, Northern Rock, obamacare, Phillips curve, price stability, proprietary trading, pushing on a string, quantitative easing, regulatory arbitrage, Robert Shiller, Ronald Reagan, selection bias, short selling, side project, Silicon Valley, stock buybacks, tail risk, The Great Moderation, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, yield curve

“Yellen’s abrasive, intimidating style”: Jon Hilsenrath, “Yellen Would Bring Tougher Tone to Fed,” Wall Street Journal, September 22, 2013, www.wsj.com/articles/SB10001424052702303983904579091521754109480. Hilsenrath wrote that: Ibid. CHAPTER 21: THE NEW SHERIFF IN TOWN The truly unique power: Ralph Benko, “The Global Importance of Paul Volcker’s Call For a ‘New Bretton Woods,’” Forbes, June 16, 2014. I forwarded “Beer Goggles”: Peter Boockvar, “I’m Not a Soothsayer, but I’ll Do as Wall Street Does,” Lindsey Group, January 2, 2014. “QE puts beer goggles”: FRBD: Richard Fisher, “Beer Goggles, Monetary Camels, the Eye of the Needle, and the First Law of Holes” (speech, National Association of Corporate Directors, Dallas, Texas, January 14, 2014), www.dallasfed.org/news/speeches/fisher/2014/fs140114.cfm.


pages: 380 words: 116,919

Britain's Europe: A Thousand Years of Conflict and Cooperation by Brendan Simms

anti-communist, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Corn Laws, credit crunch, eurozone crisis, Fall of the Berlin Wall, first-past-the-post, guns versus butter model, imperial preference, Jeremy Corbyn, land reform, Monroe Doctrine, moral panic, oil shock, open economy, plutocrats, race to the bottom, Ronald Reagan, sceptred isle, South Sea Bubble, Suez canal 1869, Suez crisis 1956, trade route, éminence grise

During the nineteenth century, she was widely described as enjoying a ‘hegemonic’ role. In the twentieth century, as is well known, Britain played a major role in both world wars, and – for good or for ill – was central to the two post-conflict orders. She was at the top table at Versailles in 1919 and centrally involved in the establishment of the United Nations and the Bretton Woods economic system. Subsequently, Britain was a key player in the Cold War. In the early 1950s, British troops were in action against the troops of a major power, Mao’s China, along the Imjin River in Korea. Britain was the most important European power in NATO and played a major role in deterring the Soviet Union.


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, classic study, clean water, collapse of Lehman Brothers, collective bargaining, company town, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, gentrification, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, Glass-Steagall Act, global macro, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Savings and loan crisis, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

A few European governments have been far more thoughtful than the U.S. in figuring out what needs to be done. Even before the crisis turned global, French President Nicolas Sarkozy, in his address to the UN last month, called for a world summit to lay the foundations for more state regulation to replace the current laissez-faire approach. We may be at a new “Bretton Woods moment.” As the world emerged from the Great Depression and World War II, it realized there was need for a new global economic order. It lasted more than 60 years. That it was not well adapted for the new world of globalization has been clear for a long time. Now, as the world emerges from the Cold War and the Great Financial Crisis, it will need to construct a new global economic order for the 21st century, and that will include a new global regulatory agency.


pages: 403 words: 125,659

It's Our Turn to Eat by Michela Wrong

"World Economic Forum" Davos, Berlin Wall, Bob Geldof, Bretton Woods, British Empire, clean water, colonial rule, disinformation, Doha Development Round, Easter island, failed state, Fall of the Berlin Wall, financial independence, foreign exchange controls, Kibera, Mahatma Gandhi, Mikhail Gorbachev, Nelson Mandela, oil shock, oil-for-food scandal, out of africa, profit motive, Ronald Reagan, structural adjustment programs, upwardly mobile, young professional, zero-sum game, éminence grise

Having piled into the country with promises of aid when Moi quit the scene, they needed reassurance that it was not sliding back into the bad old ways. Kenya is one of a raft of African nations locked in a symbiotic – perhaps ‘mutually parasitic’ is a more accurate term – relationship with the developed world and the lending institutions set up at the Bretton Woods conference in the wake of the Second World War to combat global poverty. Post-independence, its agricultural sector received British support, but it was with the oil shocks of the 1970s and the collapse of commodity prices that Kenya's economy really began to depend heavily on loans, grants and investment from an industrialised world ready, as the Cold War locked Africa in its icy grip, to provide ‘no questions asked’ funding to any government rebuffing the Soviet Union and the Communist bloc.


pages: 385 words: 123,168

Bullshit Jobs: A Theory by David Graeber

1960s counterculture, active measures, antiwork, basic income, Berlin Wall, Bernie Sanders, Bertrand Russell: In Praise of Idleness, Black Lives Matter, Bretton Woods, Buckminster Fuller, business logic, call centre, classic study, cognitive dissonance, collateralized debt obligation, data science, David Graeber, do what you love, Donald Trump, emotional labour, equal pay for equal work, full employment, functional programming, global supply chain, High speed trading, hiring and firing, imposter syndrome, independent contractor, informal economy, Jarndyce and Jarndyce, Jarndyce and Jarndyce, job automation, John Maynard Keynes: technological unemployment, knowledge worker, moral panic, Post-Keynesian economics, post-work, precariat, Rutger Bregman, scientific management, Silicon Valley, Silicon Valley startup, single-payer health, software as a service, telemarketer, The Future of Employment, Thorstein Veblen, too big to fail, Travis Kalanick, universal basic income, unpaid internship, wage slave, wages for housework, women in the workforce, working poor, Works Progress Administration, young professional, éminence grise

Of course they do: for them, it is crucial that the work we’re doing is not seen as total nonsense. If that would be the case, the positions would be canceled, and the result would be having no job. In this case, it’s not the capitalist economic system but the modern international state system that between the various consular services, United Nations, and Bretton Woods instututions, creates untold thousands of (usually high-paid, respectable, comfortable) jobs across the planet. One can argue, as in all things, about which of these positions are truly useful and for what. Presumably some do important work—preventing wars, for instance. Others arrange and rearrange furniture.


Hedgehogging by Barton Biggs

activist fund / activist shareholder / activist investor, Alan Greenspan, asset allocation, backtesting, barriers to entry, Bear Stearns, Big Tech, book value, Bretton Woods, British Empire, business cycle, buy and hold, diversification, diversified portfolio, eat what you kill, Elliott wave, family office, financial engineering, financial independence, fixed income, full employment, global macro, hiring and firing, index fund, Isaac Newton, job satisfaction, junk bonds, low interest rates, margin call, market bubble, Mary Meeker, Mikhail Gorbachev, new economy, oil shale / tar sands, PalmPilot, paradox of thrift, Paul Samuelson, Ponzi scheme, proprietary trading, random walk, Reminiscences of a Stock Operator, risk free rate, Ronald Reagan, secular stagnation, Sharpe ratio, short selling, Silicon Valley, transaction costs, upwardly mobile, value at risk, Vanguard fund, We are all Keynesians now, zero-sum game, éminence grise

Keynes forcefully argued that England had stood alone and saved the world, and had bankrupted itself in the process. The U.K. economy was in a state of collapse and on the verge of class warfare. In the end he prevailed. In July 1944, Harry Dexter White, who represented the U.S. Treasury, Keynes, and a host of functionaries met at Bretton Woods, New Hampshire, to create a new economic order for the postwar world. Keynes argued that before 1914, the Bank of England for 50 years had skillfully run the international monetary system. World commerce had prospered. After World War I, Britain was so weak that it had been unable to fulfill this role, leaving a vacuum that destabilized trade and exchange rates.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

The showdown took place on a Friday afternoon in September in Washington, D.C. It was the weekend of the biannual meeting of the IMF and World Bank, a gathering of the world’s central bankers and finance ministers that takes place in the U.S. capital every fall and spring. The meetings have been on the calendar since these Bretton Woods institutions were first formed, and gradually a number of private sector conclaves have come to be held on their fringes. In 2011, one of those fringe meetings was organized by the Financial Services Forum, a bankers’ association. Its chairman, Goldman Sachs chief Lloyd Blankfein, invited Carney to address the group of about thirty bankers.


pages: 316 words: 117,228

The Code of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor

Andrei Shleifer, Asian financial crisis, asset-backed security, barriers to entry, Bear Stearns, Bernie Madoff, Big Tech, bilateral investment treaty, bitcoin, blockchain, Bretton Woods, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, digital rights, Donald Trump, double helix, driverless car, Edward Glaeser, Ethereum, ethereum blockchain, facts on the ground, financial innovation, financial intermediation, fixed income, Francis Fukuyama: the end of history, full employment, global reserve currency, Gregor Mendel, Hernando de Soto, income inequality, initial coin offering, intangible asset, investor state dispute settlement, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, land reform, land tenure, London Interbank Offered Rate, Long Term Capital Management, means of production, money market fund, moral hazard, offshore financial centre, phenotype, Ponzi scheme, power law, price mechanism, price stability, profit maximization, railway mania, regulatory arbitrage, reserve currency, Robert Solow, Ronald Coase, Satoshi Nakamoto, secular stagnation, self-driving car, seminal paper, shareholder value, Silicon Valley, smart contracts, software patent, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, trade route, Tragedy of the Commons, transaction costs, Wolfgang Streeck

Yet, Lehman’s years as a corporate entity were numbered; the firm had survived in the much more vulnerable legal form of a partnership for more than 130 years (from 1850 to 1983), a period that witnessed the transformation of America from an agricultural into the leading industrial nation, as well as the Civil War, two world wars, several major financial crises, and more than one overhaul of the monetary system in the United States and globally. Indeed, over the course of Lehman’s lifetime, the global monetary system changed from the gold standard to Bretton Woods and from there to fiat money, and from a financial sector that was tightly regulated to the rise of shadow banking on a global scale. Lehman’s transformation into a corporate entity, a legal form that promises immortality, gave it only another 14 years. Ironically, the promiscuous use of the corporate form contributed to Lehman’s downfall.


pages: 400 words: 121,988

Trading at the Speed of Light: How Ultrafast Algorithms Are Transforming Financial Markets by Donald MacKenzie

algorithmic trading, automated trading system, banking crisis, barriers to entry, bitcoin, blockchain, Bonfire of the Vanities, Bretton Woods, Cambridge Analytica, centralized clearinghouse, Claude Shannon: information theory, coronavirus, COVID-19, cryptocurrency, disintermediation, diversification, en.wikipedia.org, Ethereum, ethereum blockchain, family office, financial intermediation, fixed income, Flash crash, Google Earth, Hacker Ethic, Hibernia Atlantic: Project Express, interest rate derivative, interest rate swap, inventory management, Jim Simons, level 1 cache, light touch regulation, linked data, lockdown, low earth orbit, machine readable, market design, market microstructure, Martin Wolf, proprietary trading, Renaissance Technologies, Satoshi Nakamoto, Small Order Execution System, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, The Great Moderation, transaction costs, UUNET, zero-sum game

During the decades immediately following the Second World War, that expansion would, however, not have been an enticing prospect, since much of the financial system globally was under at least a degree of formal or informal government control, and the US government would most likely have opposed a market that, by trading in financial products, might undermine that control. But by the early 1970s, government control was eroding. Its centerpiece was the system of fixed exchange rates among currencies established by the 1944 Bretton Woods agreement. That system had involved the US’s undertaking to sell gold to other governments at a fixed dollar price. However, at a time when the US economy was seen as performing badly, in particular relative to Germany and Japan, it was becoming clear that the exchange rates for the dollar, especially against the Deutschmark and the Japanese yen, would be hard to sustain.


pages: 932 words: 307,785

State of Emergency: The Way We Were by Dominic Sandbrook

anti-communist, Apollo 13, Arthur Marwick, back-to-the-land, banking crisis, Bretton Woods, British Empire, centre right, collective bargaining, Corn Laws, David Attenborough, Doomsday Book, edge city, estate planning, Etonian, falling living standards, fear of failure, Fellow of the Royal Society, feminist movement, financial thriller, first-past-the-post, fixed income, full employment, gentrification, German hyperinflation, global pandemic, Herbert Marcuse, mass immigration, meritocracy, moral panic, Neil Kinnock, new economy, New Urbanism, Norman Mailer, North Sea oil, oil shock, Own Your Own Home, post-war consensus, sexual politics, traveling salesman, union organizing, upwardly mobile, urban planning, Winter of Discontent, young professional

It was the product not only of good and noble intentions, but of panic and arrogance, and it was a classic example of a disease to which British politics was peculiarly prone in the 1970s: the economics of wishful thinking, based on rosily optimistic predictions that were never, ever vindicated.10 The dash for growth unleashed by Barber’s Budget took place against the background of two seismic economic events. First, there was the collapse of the Bretton Woods system, which had kept monetary order through fixed exchange rates since the end of the Second World War, laying the foundations for the great post-war boom. Thanks largely to the decline of the dollar, Bretton Woods had finally disintegrated in August 1971, and was replaced by a temporary realignment under the Smithsonian Agreement at the end of that year. Meanwhile, the six countries of the EEC, together with Britain as an aspiring member, formed what was nicknamed the ‘Snake’, a primitive version of the Exchange Rate Mechanism in which members agreed to keep their exchange rates from fluctuating more than 2.25 per cent against one another.


pages: 1,037 words: 294,916

Before the Storm: Barry Goldwater and the Unmaking of the American Consensus by Rick Perlstein

"there is no alternative" (TINA), affirmative action, Alan Greenspan, Alvin Toffler, anti-communist, anti-work, antiwork, Berlin Wall, bread and circuses, Bretton Woods, business climate, card file, collective bargaining, company town, cuban missile crisis, desegregation, distributed generation, Dr. Strangelove, Electric Kool-Aid Acid Test, ending welfare as we know it, George Gilder, haute couture, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Herman Kahn, index card, indoor plumbing, invisible hand, Joan Didion, liberal capitalism, Marshall McLuhan, means of production, military-industrial complex, mortgage debt, New Journalism, Norman Mailer, plutocrats, Project Plowshare, road to serfdom, Robert Bork, rolodex, Ronald Reagan, Rosa Parks, school vouchers, the medium is the message, The Wealth of Nations by Adam Smith, transcontinental railway, union organizing, Upton Sinclair, upwardly mobile, urban renewal, War on Poverty, Watson beat the top human players on Jeopardy!, white picket fence, Works Progress Administration

Well, now we had it—and we were forking over our riches to every last Hottentot in addition to the billions General Marshall had committed to Europe. August 1949: China fell, Russia got the bomb. There would soon be an explanation. Russian spies had been at Los Alamos. Alger Hiss, architect of the United Nations; Harry Dexter White, wizard of Bretton Woods; Owen Lattimore, whispering in an enfeebled Roosevelt’s ear as he handed over Poland to the Soviets—all were Communists. America was falling apart. You began spending more of your time serving on political committees, reading books, attending lectures, studying the newspapers, writing letters.

Barr, Charlie Barron’s Barry Goldwater: Extremist of the Right (Cook) Bauman, Bob Bauman, Carol Dawson Baylor University Bay of Pigs invasion Bean, Louis Beatles Beck, Dave Bell, Daniel Bell & Howell Benson, Ezra Taft Berlin crisis Bernbach, Bill Bible, Revised Standard Edition of Birch, John; see also John Birch Society Birmingham News Birth of a Nation, The (film) Bishop, Joey Black Muslims, see Nation of Islam Blackwell, Mort Bliss, Raymond Blue Book, The Boeing Aircraft Company Boggs, Hale Bolshoi Ballet Bookbinder, Hyman Borg-Warner Corporation Bork, Robert Boston public schools Boston Strangler Boulware, Lemuel Boutwell, Albert Bowles, Chester Boy Scouts of America Boysen, Rudolph Bozell, L. Brent Bozell, Patricia Buckley Braden, Spruille Bradlee, Ben Bradley, Harry Lynd Bradley Foundation Brandt, Willy Braque, Georges Brave New World (Huxley) Brennan, Walter Bretton Woods Conference Brewster, Daniel B. Brewster, Owen Bricker, John Bricker Amendment Bridge at Andau (Michener) Bridges, Delores Bridges, Harry Bridges, Styles Brinkley, David Broder, David Bronx High School of Science Brooke, Ed Brookings Institution Brophy, Frank Cullen Brown, Archie Brown, Edmund “Pat” Brown, George Brown, Phyllis Brownell, Herbert Brown University Brown v.


pages: 518 words: 128,324

Destined for War: America, China, and Thucydides's Trap by Graham Allison

9 dash line, anti-communist, Berlin Wall, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, conceptual framework, cuban missile crisis, currency manipulation / currency intervention, Deng Xiaoping, disruptive innovation, Donald Trump, Dr. Strangelove, escalation ladder, facts on the ground, false flag, Flash crash, Francis Fukuyama: the end of history, game design, George Santayana, Great Leap Forward, guns versus butter model, Haber-Bosch Process, Herman Kahn, high-speed rail, industrial robot, Internet of things, Kenneth Rogoff, liberal world order, long peace, Mark Zuckerberg, megacity, megaproject, middle-income trap, Mikhail Gorbachev, Monroe Doctrine, mutually assured destruction, Nelson Mandela, one-China policy, Paul Samuelson, Peace of Westphalia, public intellectual, purchasing power parity, RAND corporation, Ronald Reagan, Scramble for Africa, selection bias, Silicon Valley, Silicon Valley startup, South China Sea, special economic zone, spice trade, Suez canal 1869, synthetic biology, TED Talk, the rule of 72, The Wealth of Nations by Adam Smith, too big to fail, trade route, UNCLOS, Washington Consensus, zero-sum game

In this standoff and others involving the South China Sea, China has demonstrated an ability to combine charm, largesse, bribes, and blackmail to find “compromises” that give it most of what it wants. Better than bilateral bargaining, of course, are international institutions that give the designer the advantage. The United States led the way down this road in the aftermath of World War II when creating the Bretton Woods institutions: the IMF (to coordinate international finance), the World Bank (to provide below-market-rate loans to developing countries), and the GATT and its successor, the World Trade Organization (to promote trade). In both the IMF and the World Bank, one—and only one—country has a veto over any changes in governance of the institutions: the United States.


pages: 403 words: 132,736

In Spite of the Gods: The Rise of Modern India by Edward Luce

affirmative action, Albert Einstein, Alvin Toffler, Bretton Woods, call centre, centre right, clean water, colonial rule, company town, crony capitalism, cuban missile crisis, demographic dividend, digital divide, dual-use technology, energy security, financial independence, friendly fire, Future Shock, Gini coefficient, Great Leap Forward, Haight Ashbury, informal economy, job-hopping, Kickstarter, land reform, Mahatma Gandhi, Martin Wolf, megacity, new economy, plutocrats, profit motive, purchasing power parity, Silicon Valley, trade liberalization, upwardly mobile, uranium enrichment, urban planning, women in the workforce, working-age population, Y2K

The World Bank was also accused of interfering with what it characterized as a flawed bidding process in order to ensure that PricewaterhouseCoopers, the U.S. consulting firm, won the advisory contract over a number of local firms. Clearly the World Bank had breached its own guidelines, which was both inept and politically naïve, considering the strength of feeling against the Bretton Woods institution. But it seemed overblown to accuse Dikshit of “caving in to the forces of neo-liberalism.”25 When Dikshit increased water bills quite independently of the World Bank controversy, there were similar accusations. In a pattern that is familiar to India, the protests were carried out in the name of the poor, in spite of the fact that the poor would appear to be the victims of the status quo.


pages: 589 words: 128,484

America's Bank: The Epic Struggle to Create the Federal Reserve by Roger Lowenstein

bank run, Bear Stearns, Berlin Wall, Bretton Woods, business cycle, capital controls, central bank independence, Charles Lindbergh, corporate governance, fiat currency, financial independence, full employment, Glass-Steagall Act, Ida Tarbell, Long Term Capital Management, low interest rates, Michael Milken, Money creation, moral hazard, off-the-grid, old-boy network, quantitative easing, The Wealth of Nations by Adam Smith, Upton Sinclair, walking around money

when Jackson was elected president: Richard Hofstadter, The American Political Tradition and the Men Who Made It (New York: Knopf, 1991), 69. They relied less on labor: Robert Kuttner, Debtors Prison: The Politics of Austerity vs. Possibility (New York: Knopf, 2013), 183–85. Jefferson in particular was: Hofstadter, American Political Tradition, 36. The U.S. dollar was a second-rate currency: Ed Conway, The Summit: Bretton Woods, 1944, J. M. Keynes and the Reshaping of the Global Economy (New York: Pegasus, 2015), 39, citing Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (New York: Oxford University Press, 2011), 32. CHAPTER ONE: THE FORBIDDEN WORDS “I am in favor of a national bank”: Illinois Ancestors, speech available at www.illinoisancestors.org/lincoln/firstspeech.html.


pages: 476 words: 144,288

1946: The Making of the Modern World by Victor Sebestyen

anti-communist, Ayatollah Khomeini, Berlin Wall, Bretton Woods, British Empire, centre right, classic study, clean water, colonial rule, disinformation, Etonian, European colonialism, Fall of the Berlin Wall, full employment, Herbert Marcuse, illegal immigration, imperial preference, Kickstarter, land reform, long peace, Mahatma Gandhi, mass immigration, Mikhail Gorbachev, Monroe Doctrine, moral hazard, operation paperclip

In Canada nine people, including a member of parliament, were jailed in the aftermath of the spy scandal.2 There were no immediate arrests in America, though amidst the spy hysteria some senior government figures were investigated as suspected Soviet agents. They included the Treasury official Harry Dexter White, who had represented the US at the Bretton Woods conference in 1944 that set up the World Bank and the IMF; and the State Department’s Alger Hiss, the first chief of America’s office at the new UN. Both were disgraced; White died of a heart attack shortly after testifying; Hiss, who had been a Soviet agent, was jailed for three years for perjury.


Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies by Jeremy J. Siegel

addicted to oil, Alan Greenspan, asset allocation, backtesting, behavioural economics, Black-Scholes formula, book value, Bretton Woods, business cycle, buy and hold, buy low sell high, California gold rush, capital asset pricing model, cognitive dissonance, compound rate of return, correlation coefficient, currency risk, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dividend-yielding stocks, dogs of the Dow, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, Everybody Ought to Be Rich, fixed income, German hyperinflation, implied volatility, index arbitrage, index fund, Isaac Newton, it's over 9,000, John Bogle, joint-stock company, Long Term Capital Management, loss aversion, machine readable, market bubble, mental accounting, Money creation, Myron Scholes, new economy, oil shock, passive investing, Paul Samuelson, popular capitalism, prediction markets, price anchoring, price stability, proprietary trading, purchasing power parity, random walk, Richard Thaler, risk free rate, risk tolerance, risk/return, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, stock buybacks, stocks for the long run, subprime mortgage crisis, survivorship bias, technology bubble, The Great Moderation, The Wisdom of Crowds, transaction costs, tulip mania, uptick rule, Vanguard fund, vertical integration

The job now is to manage our money effectively, wisely, with self-restraint. It can be done.6 POSTDEVALUATION MONETARY POLICY Ironically, while the right to redeem dollars for gold was denied U.S. citizens, it was soon reinstated for foreign central banks at the devalued rate of $35 per ounce. As part of the Bretton Woods agreement, which set up the rules of international exchange rates after the close of World War II, the U.S. government promised to exchange all dollars for gold held by foreign central banks at the fixed rate of $35 per ounce as long as these countries fixed their currency to the dollar. In the postwar period, as inflation increased and the dollar bought less and less, gold seemed more and more attractive to foreigners.


pages: 448 words: 142,946

Sacred Economics: Money, Gift, and Society in the Age of Transition by Charles Eisenstein

Albert Einstein, back-to-the-land, bank run, Bernie Madoff, big-box store, bread and circuses, Bretton Woods, capital controls, carbon credits, carbon tax, clean water, collateralized debt obligation, commoditize, corporate raider, credit crunch, David Ricardo: comparative advantage, debt deflation, degrowth, deindustrialization, delayed gratification, disintermediation, diversification, do well by doing good, fiat currency, financial independence, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, full employment, global supply chain, God and Mammon, happiness index / gross national happiness, hydraulic fracturing, informal economy, intentional community, invisible hand, Jane Jacobs, land tenure, land value tax, Lao Tzu, Lewis Mumford, liquidity trap, low interest rates, McMansion, means of production, megaproject, Money creation, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, multilevel marketing, new economy, off grid, oil shale / tar sands, Own Your Own Home, Paul Samuelson, peak oil, phenotype, planned obsolescence, Ponzi scheme, profit motive, quantitative easing, race to the bottom, Scramble for Africa, special drawing rights, spinning jenny, technoutopianism, the built environment, Thomas Malthus, too big to fail, Tragedy of the Commons

If too many people tried, the central bank could (and often did) simply declare that it would no longer redeem it.5 The supposed hard fact of the paper’s convertibility to X amount of gold is a construct, a convenient fiction, that depends on a web of social agreements and shared perceptions. Similarly, before the United States abrogated the Bretton-Woods agreement in the early 1970s, world currencies were pegged to the U.S. dollar, which was in turn pegged to gold. If a country accumulated reserves of U.S. dollars, it could redeem them by having the Federal Reserve ship it a few tons of gold. This was not such a big problem right after World War II, but by the late 1960s nearly all the U.S. gold reserve had been shipped overseas, threatening the Fed with bankruptcy.


The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly

"World Economic Forum" Davos, airport security, anti-communist, Asian financial crisis, bank run, banking crisis, Bob Geldof, Bretton Woods, British Empire, call centre, clean water, colonial exploitation, colonial rule, Edward Glaeser, end world poverty, European colonialism, failed state, farmers can use mobile phones to check market prices, George Akerlof, Gunnar Myrdal, guns versus butter model, Hernando de Soto, income inequality, income per capita, Indoor air pollution, intentional community, invisible hand, Kenneth Rogoff, laissez-faire capitalism, land bank, land reform, land tenure, Live Aid, microcredit, moral hazard, Naomi Klein, Nelson Mandela, publication bias, purchasing power parity, randomized controlled trial, Ronald Reagan, Scramble for Africa, structural adjustment programs, The Fortune at the Bottom of the Pyramid, the scientific method, The Wealth of Nations by Adam Smith, Tragedy of the Commons, transaction costs, TSMC, War on Poverty, Xiaogang Anhui farmers

Going to the other extreme, I have just read some UN documents on what they label “The Open-Ended Ad-Hoc Working Group on Integrated and Coordinated Implementation of and Follow-up to the Outcomes of the Major United Nations Conferences and Summits in the Economic and Social Fields.” This open-ended ad hoc working group faces some challenges, as it coordinates the follow-up to nine reports on country-level coordination, four reports on the PRSPs, eleven reports on the Bretton Woods Institutions (aka the World Bank and IMF), eleven reports on the MDGs, the annual reports of the Administrative Council on Coordination, reports from the five regional commissions of the UN, reports from five other specialized UN agencies, and the follow-up to eighteen UN world conferences.27 The working group labels the background papers for its efforts “non-papers.”


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, Bear Stearns, behavioural economics, Big Tech, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, data science, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, electricity market, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial intermediation, Ford Model T, Frederick Winslow Taylor, George Akerlof, gig economy, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, guns versus butter model, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Bogle, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, low interest rates, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, proprietary trading, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, TED Talk, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, Tragedy of the Commons, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, vertical integration, zero-sum game

Author interview with Brown for this book. 18. Noam Scheiber, The Escape Artists: How Obama’s Team Fumbled the Recovery (New York: Simon & Schuster, 2012), 3. 19. Author interview with Brown for this book. 20. Thomas Ferguson, “Legislators Never Bowl Alone: Big Money, Mass Media and the Polarization of Congress,” INET Conference, Bretton Woods, New Hampshire, April 2011, 20. 21. Philippon, “Has the U.S. Finance Industry Become Less Efficient?”; Greenwood and Scharfstein, “The Growth of Finance.” 22. Jake Bernstein, “Inside the New York Fed: Secret Recordings and a Culture Clash,” ProPublica, September 26, 2014, published in conjunction with This American Life. 23.


pages: 491 words: 141,690

The Controlled Demolition of the American Empire by Jeff Berwick, Charlie Robinson

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, airport security, Alan Greenspan, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, bank run, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, bitcoin, Black Lives Matter, bread and circuses, Bretton Woods, British Empire, call centre, carbon credits, carbon footprint, carbon tax, Cass Sunstein, Chelsea Manning, clean water, cloud computing, cognitive dissonance, Comet Ping Pong, coronavirus, Corrections Corporation of America, COVID-19, crack epidemic, crisis actor, crony capitalism, cryptocurrency, dark matter, deplatforming, disinformation, Donald Trump, drone strike, Edward Snowden, Elon Musk, energy transition, epigenetics, failed state, fake news, false flag, Ferguson, Missouri, fiat currency, financial independence, George Floyd, global pandemic, global supply chain, Goldman Sachs: Vampire Squid, illegal immigration, Indoor air pollution, information security, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jeff Bezos, Jeffrey Epstein, Julian Assange, Kickstarter, lockdown, Mahatma Gandhi, mandatory minimum, margin call, Mark Zuckerberg, mass immigration, megacity, microapartment, Mikhail Gorbachev, military-industrial complex, new economy, no-fly zone, offshore financial centre, Oklahoma City bombing, open borders, opioid epidemic / opioid crisis, pill mill, planetary scale, plutocrats, Ponzi scheme, power law, pre–internet, private military company, Project for a New American Century, quantitative easing, RAND corporation, reserve currency, RFID, ride hailing / ride sharing, Saturday Night Live, security theater, self-driving car, Seymour Hersh, Silicon Valley, smart cities, smart grid, smart meter, Snapchat, social distancing, Social Justice Warrior, South China Sea, stock buybacks, surveillance capitalism, too big to fail, unpaid internship, urban decay, WikiLeaks, working poor

They all saw these periods as opportunities to implement idealistic proposals for global governance only in the sense of new collective efforts to identify, understand, or address worldwide problems that go beyond the capacity of individual nation-states to solve. These proposals led to the creation of international organizations, such as the United Nations (UN) and the North Atlantic Treaty Organization (NATO), and international regimes, such as the Bretton Woods system and the General Agreement on Tariffs and Trade (GATT), which were calculated both to maintain a balance of power as well as regularize cooperation between nations, in order to achieve a peaceful phase of capitalism. The grouping together of nations into treaties like NATO creates the middle point between the sovereign and individual nations that made up the past couple hundred years, and the planned one-world government that is coming in the 21st century.


pages: 473 words: 140,480

Factory Man: How One Furniture Maker Battled Offshoring, Stayed Local - and Helped Save an American Town by Beth Macy

8-hour work day, affirmative action, AltaVista, Apollo 13, belly landing, Berlin Wall, Bretton Woods, call centre, company town, corporate governance, corporate raider, creative destruction, currency manipulation / currency intervention, desegregation, gentleman farmer, Great Leap Forward, interchangeable parts, Joseph Schumpeter, new economy, old-boy network, one-China policy, race to the bottom, reshoring, Saturday Night Live, Silicon Valley, Skype, special economic zone, supply-chain management, Thomas L Friedman, union organizing, value engineering, work culture

The rebels had long since won the Furniture War between the States: of the thirty largest manufacturers, twenty-three were now in the 150-mile furniture belt stretching from Bassett to Lenoir. Mr. J.D. had carved a multimillion-dollar empire out of cornfields and foothills, and the pressure was on his heirs to keep up the exponential growth. No one gave a thought to the Bretton Woods Agreements that had been negotiated among Allied nations in 1944, or the General Agreement on Tariffs and Trade (GATT) that followed in 1947, establishing the international trading system and setting up a sequence of global trade negotiations designed to lower trade barriers on a “mutually advantageous basis” between the countries involved.


pages: 1,123 words: 328,357

Post Wall: Rebuilding the World After 1989 by Kristina Spohr

"World Economic Forum" Davos, Alan Greenspan, American Legislative Exchange Council, Andrei Shleifer, anti-communist, banking crisis, Berlin Wall, Bonfire of the Vanities, bread and circuses, Bretton Woods, central bank independence, colonial exploitation, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Doomsday Clock, facts on the ground, failed state, Fall of the Berlin Wall, foreign exchange controls, Francis Fukuyama: the end of history, G4S, Japanese asset price bubble, Kickstarter, mass immigration, means of production, Mikhail Gorbachev, military-industrial complex, open economy, operational security, Prenzlauer Berg, price stability, public intellectual, rising living standards, Ronald Reagan, Ronald Reagan: Tear down this wall, software patent, South China Sea, special economic zone, Thomas L Friedman, Transnistria, uranium enrichment, zero-coupon bond

In 1995 German president Roman Herzog characterised his era as ‘a time that as yet has no name’.[24] Twenty-five years later, his aphorism has lost little of its poignancy, because the distinguishing features of the post-Cold War era remain difficult to discern or understand. Some may say, as 1989 recedes into the past, that the overarching narrative must be economic – taking us from the collapse of the Bretton Woods financial system in the 1970s to the financial crash of 2008.[25] But I argue that a deeper analysis of these crucial ‘hinge years’ of 1989–92 helps to make sense of the underlying geopolitical order in which the upheavals of global capitalism take their place. And it is this order that is now under threat.

III 3, 100, 254, 256, 288, 463; and aid to USSR 302–3, 410, 469; as White House chief of staff 479; at Helsinki superpower summit (1990) 346–7; attitude towards Japan 541–2, 544; and Balkan conflict 489, 490–1, 494, 499, 510, 515; and Bush 24–5, 26, 208; and crisis in the Baltic states 420; and FREEDOM Support Act 472–3; and Gorbachev-Yeltsin power struggle 446–9; and Mitterrand 209–11; and Helsinki II CSCE summit (1992) 486; and Kuwait crisis 325, 326–7, 332, 335, 338–41, 346, 354–9, 360–1, 366, 369, 372; meetings with: Aziz in Geneva 369, Genscher in Washington 217–18, King Fahd in Riyadh 338–9, Kohl in Ludwigshafen 338, Li Peng in New York 570; Shevardnadze in Vnukovo II airport 326–7; persuades colleagues to accept 2+4 framework 222–3; reflections on Gorbachev and Yeltsin 427–8; relationship with: PRC 562, 563–4, 565–8, Shevardnadze 219, 325–6, 346, Thatcher 44; speeches: ‘A New Atlanticism’ at the Berlin Press Club (1989) 207–8, 209, 215, 291, 448, ‘A New Pacific Partnership’ (1989) 544, at Princeton (1991) 446–7, 448, ‘From Revolution to Democracy’ (1991) 310, on leadership in Chicago (1992) 465–6; supports German unity 161; supports single European market 97; thoughts on blueprint for future US policy 203–5, 207; and US as leader of free-market democracies 543; visit to Potsdam (1989) 208–9; visit to Moscow (1990) 219–20; welcomes news of German-Soviet détente 246 Baker-Shevardnadze Declaration (1990) 347 Balkan states 5, 456, 462, 466–7, 487–505, 509–10, 511, 512, 513–15, 524, 527 Baltic Chain (Chain of Freedom) 106 Baltic Republics (SSRs) see Baltic States Baltics see Baltic States Baltic States 106, 211, 293-7, 317, 363, 369-70, 380, 390–2, 394-5, 400, 404, 408-12, 414–15, 417–21, 429-30, 437, 438-9, 444, 448, 473, 476-7, 483, 489, 494, 497, 500, 585, 589 Bandar, Prince 366 Basra 376 Beirut 518 Belarus xii, 444, 445, 447, 448, 462, 463, 467, 473, 497; see also Byelorussia Belgium 497, 500 Berlin 47, 70, 86, 133, 144–6, 148, 155, 161, 179, 181, 183, 188, 202, 207–10, 244, 249, 250, 291, 407, 448; see also East Berlin Berlin CSCE meeting (1992) 490, 493 Berlin Press Club 205, 207–8, 209, 215 Berlin Wall 39, 81, 111, 207; and the Brandenburg Gate 150–1, 185; fall of 3–9, 127, 128–35, 142, 144, 145–6, 148, 151, 153, 251, 394, 582–600; Gorbachev’s reaction to 127, 196, 581 Bermuda summit (1990) 285–7 Bessmertnykh, Alexander 374, 398, 410, 411, 419 Big Four see Four Powers Bisztyga, Jan 67 Black Sea Fleet 6, 444, 473 Blackwill, Robert 429 BMW 552 Bod, Peter 309 Bohley, Bäbel 143 Boldyrev, Yuri 398 Bolton, John 518 Bonior, David 473 Bonn Declaration (1989) 78–82 Bonn-Paris agenda 276–7, 281 Bosnia 456, 509–10, 511, 512, 513, 589 Bosnia-Herzegovina 489, 492, 496, 501–2, 502–3, 504, 509, 510 Boutros-Ghali, Boutros 459, 517, 520, 522–3 Brady Bonds 543 Brady, Nicholas 543 Braithwaite, Gillian 441 Braithwaite, Sir Rodric 606, 744 Brandenburg Gate 150–1, 185 Brandt, Willy 100n, 130, 131, 157, 161, 184, 213 Brazil 543 Bretton Woods 7–8 Brexit 8 Brezhnev Doctrine 17, 39, 58, 68, 196–7, 199, 483 Brezhnev, Leonid 14, 149 Brioni Accords (1991) 487 Britain 7, 54, 320, 459, 485, 493, 497, 498, 500, 503, 564–5, 584, 598 British Army of the Rhine 286 Brock, Bill 306 Broek, Hans van den 497 Brookings Institution 366 Brovikov, Vladimir 389 Brown, Archie 409 Brundtland, Gro Harlem 255 Brussels 306, 449, 509 Brzezinski, Zbigniew 26, 33 Buchanan, Pat 453–4, 464 Bucharest Warsaw Pact summit (1989) 84, 90 Budapest (1956) 72–3 Bulgaria 75, 108, 187, 192, 438, 449, 481 Burbulis, Gennady 426 Bush, Barbara 85, 554 Bush, George H.W. 3, 132, 384; Asia-Pacific tours 532, 533, 534, 540, 545, 549–56, 557; at Bermuda summit (1990) 285–6; at Paris G7 summit (1989) 91–9; at Paris CSCE summit (1990) 255, 318; at London G7 summit (1991) 433–4; at Helsinki superpower summit (1990) 341–8; at Moscow superpower summit (1991) 435–8; at London NATO summit (1990) 299–302; at UN summit in New York (1992) 458–9; attitude towards PRC 557–9, 561–2, 563–5, 574; and Balkan conflict 15–16, 490, 491, 503, 505, 512, 515–16; CFE-troop-reduction plan 214–15; changing narrative of 461–2; character and description 23, 24, 101–2, 532, 555, 582; and crisis in Baltic States 420–1; discussion with Mitterrand and Delors on NATO 288–93; domestic problems 323, 351–2, 365, 439, 453, 506; endorses European solution to German question 283–4, 587; and Europe 285–8, 533;forced to rethink approach to global and regional situation 505–6, 516; foreign policy 24–5, 26–7, 351, 456, 519–20, 524; four critical points for NATO summit (1990) 291–3, 299; Four Principles on German reunification 202–3; and the FREEDOM Support Act 471–3, 476–9; and Gorbachev’s peace offensive 84–5; and Gorbachev-Yeltsin power struggle 440–52; and Gulf War 319–21, 323–34, 348–9, 353–80, 490; health scare in Japan 554–5; inauguration of 23; key advisers 24–6; and Korean Peninsula 535–41; loses election to Clinton 455, 456–7, 520, 579; and maintaining US troops in Germany 295–6; and Malta summit 191–200, 485, 559; meetings with: European leaders 35, 585, Li Peng 570, Shevardnadze 379–80, Wałęsa 87, Yeltsin 432, 463–4; and military humanitarian mission in Somalia 516–23; move from peace president to war president 321–34; NATO concerns 39–40; and new world order 319–21, 388, 490, 506, 524, 529; nuclear disarmament initiative 536–7; and post-Cold War international relations 4–5; as president-elect 20, 24; provides aid to Soviet Union 302–5, 409–10, 436–7; and re-election campaign 464, 479, 516, 519; reaction to: Kohl’s Ten Point Plan 166–8, resignation of Shevardnadze 409, Tiananmen Square 59–60; as Reagan’s vice-president 23–4; reflections on European visit (1989) 100–3; reflections on Moscow and Kiev visits (1991) 439; relationship with Deng Xiaoping 25, 26, 28, 33, 35, 37–9, 60–3, 586; relationship with: Gorbachev 20–3, 39–40, 65, 82–3, 85, 102–3, 133, 190, 293–7, 318, 375, 380, 381, 383–4, 410–12, 414–15, 431, 434–40, 443, 450–2, 457, 585, 592, Kohl 46, 132–3, 585, Yeltsin 455, 464, 592; St Louis debate 515–16; sends troops into Panama 543; sets out American mission and vision 27–8, 40–2, 47; speeches at: Coast Guard (1989) 41–2; Hamtramck (1989) 40–1, 465; Mainz (1989) 46–7, Oval Office (Aug. 1990) 333–4, Joint Session of Congress (Sept. 1990) 349–50, 592, Oval Office (Jan. 1991) 370–1, Texas A&M University (1992) 524, 526, 581, 600; State of the Union addresses 214, 319, 320, 374, 459–61; style of diplomacy 585–6; talks with Havel in Prague 312–14; thoughts on NATO and European security 221–4, 226–8, 232–6; trade agreement with USSR and MFN status 293–7; unable to attend unification ceremonies 250; and US power based on alliances and economic interdependence 598; and US-Soviet relations 13, 41–2, 463–4, 529–30; vision for Europe and new international system 173, 349–51, 465–7, 529; visits to: Beijing (1989) 28, 557–8, Japan (1989 and 1992) 35, 549–50, 553–5, Middle East, Africa and Moscow 455–6, Poland and Hungary (1989) 84–91, 101, 151, 533, Ukraine (1991) 438–9; warning to future generations 600; welcomes Yeltsin to Camp David 462; Bush, George W. 596–7, 598 Byelorussia (SSR) 400, 437, 444 Cali 542 Cambodia 30, 33, 53, 341, 366, 457, 546, 560, 563 Cambridge, England 284–5 Camdessus, Michel 479 Camp David 46–7, 222, 223, 224, 226–8, 231, 239, 283, 290, 329, 331, 341, 398, 462, 463–4 Canada 97, 544 Caribbean 543 Carl Zeiss Jena 125 Carter, Jimmy 26, 30, 477, 495, 526 Castro, Fidel 195 Caucasus 20, 51, 239, 240, 244, 307, 363, 391, 394, 444 Caucasus summit (1990) 237, 246–7, 315, 400, 585 CCP see Chinese Communist Party CCP Politburo 32, 122, 123 CDU see Christian Democratic Union CDU-Ost 229 Ceauşescu, Elena 185, 186 Ceauşescu, Nicolae 80, 84, 185, 190 Central America 543 Central Asia 340, 398, 447, 467, 590 Central Europe 8, 99, 173, 228, 251, 263, 446, 448, 566 Central Intelligence Agency (CIA) 23, 26, 69, 341, 372, 387 CFE see Conventional Armed Forces in Europe CFSP see Common Foreign and Security Policy (of the EU) Charter for American-Russian Partnership and Friendship (1992) 476 Charter of Paris for a New Europe (1990) 256, 257, 315–16, 489, 501; see also CSCE Paris summit Checkpoint Charlie 148 Chen Yun 559 Cheney, Dick 328, 330, 352, 376, 445, 505, 521, 527 Chernenko, Konstantin 14 Chernomyrdin, Victor 484 Chernyaev, Anatoly 19, 116, 121, 161, 170, 200, 230, 303, 339, 375, 383, 391, 393, 396, 401, 404, 410, 412, 414, 417, 423 Chicago Tribune 421 China see People’s Republic of China Chinese Communist Party (CCP) 28, 29, 32–3, 50, 51, 57, 122, 558, 564, 567, 571, 572, 574 Chinese State Planning Commission 571 Christian Democratic Union (CDU) 112, 115, 162, 213, 253, 502 Christian Science Monitor 19–20 Chrysler 552 Churchill, Winston 208, 350 CIA see Central Intelligence Agency CIS see Commonwealth of Independent States Clinton, Bill 471, 479, 519, 520, 523, 526, 527, 528–9, 574, 596, 598 Clinton, Hillary 597–8 CNN 471 Cold War 26, 30, 39, 87, 119, 202, 205, 211, 349, 371, 379, 410, 436, 446; Asia’s exit from 533; bipolarity of 524; Bush’s speech on ending of 459–60; and Bush’s visit to Poland and Hungary 84–91, 101; defusing of 16–17; and emergence of unipolar world 592–4; exit and endgame 2–3, 185, 190, 459, 461–2, 482, 498, 542; fallout from 6, 8–9, 462, 581–600; and flight of East Germans to Hungary and the West 77, 108–22; and future East-West relationship 307–14; and G7 summit in Paris 91–9, 100; Genscher’s exit strategy for 215–18; and Gorbachev’s concept of a ‘Common European Home’ 83–4; Gorbachev and Honecker’s meeting 124–7; Gorbachev and Kohl’s discussion on Sino-German relations 78–82; and Gorbachev’s UN speech 16–20; Hungary-Austria fence-cutting ceremony 76–8; and Hungary’s extrication from dictatorship 72–6; and Korean Peninsula 534–41; and Krenz’s visit to Beijing 122–3; and Poland’s extrication from dictatorship 66–8, 70–2, 103–7; post-Cold War peace-keeping and humanitarian interventions 563, 589–90; post-Second World War situation 584; and process of ‘civilising’ international politics 594; and proposed meeting between Gorbachev and Bush 99–103; reasons for breakdown of 69–70; visions for post-Cold War Europe 255–65 Colombia 196, 542 Comecon 69, 95, 277, 310, 424, 461 Common European Home 82, 83–4, 157, 228, 256–8, 261, 356–8, 590 Common Foreign and Security Policy (CFSP) 275, 498 Commonwealth of Independent States (CIS) 445, 447 and note, 448, 452, 466, 476, 481, 483, 497, 500 communism 311, 316, 389, 446, 453, 584, 587, 588; breakdown in Hungary 72–6, 308, 313; in Bulgaria 187; Czechoslovakia’s exit from 187–90, 192–3, 313, 456, 486; and emergence of old resentments 507; in France 480; GDR’s transition from 148–51; Marxist-Leninist ideology 2; Poland’s exit from 40, 66–8, 313; in PRC 5, 28, 29, 32–3, 48, 50, 51, 57, 58, 63, 64–5, 122, 558, 564, 567, 571, 572, 574, 587; Russian reinvention of 11, 13, 14–15, 16–20, 33–4, 58–9, 60, 180, 245–6, 250, 262, 341, 363, 387–8, 391, 395–6, 404, 422, 423, 427, 431, 432, 444, 458, 459, 462–3, 470, 475, 481, 483; Thatcher’s view of 172–3; US attitude towards 16, 30, 42, 47, 48, 319, 453, 465–6, 476, 478; Yugoslavia’s exit from 487–505 Communist Party of China see Chinese Communist Party Communist Party of the Soviet Union (CPSU) 13, 14, 15, 29, 211, 230, 236, 387, 388, 390, 391, 396, 397, 399, 423, 425, 444, 458 Conference on Security and Cooperation in Europe (CSCE) 6–7, 83–4, 119, 164, 170, 177, 178, 179–80, 198, 215, 218, 227, 256, 257–8, 259 and note, 261, 264, 265, 287–8, 289, 290, 300, 342, 405, 424, 430, 431, 436, 485–6, 489, 490, 493, 509, 511, 527, 590, 595 Conventional Armed Forces in Europe (CFE) 195, 204, 214–15, 287, 316, 411 Conventional Armed Forces in Europe (CFE) Treaty (1990) 301, 314–15 Coordinating Conference on Assistance to the Newly Independent States (1992) 446, 466; see also Washington Conference Cooperation in Justice and Home Affairs 498 Costa Rica 543 Council of Europe 83–4 Council of Mutual Economic Assistance see Comecon CPSU see Communist Party of the Soviet Union Crimea 5, 437, 440, 444, 594 Croatia 486, 492, 493, 496, 497, 499, 500, 501–2, 503, 504, 509, 589 Crowe, William J.


pages: 535 words: 158,863

Superclass: The Global Power Elite and the World They Are Making by David Rothkopf

"World Economic Forum" Davos, airport security, Alan Greenspan, anti-communist, asset allocation, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, Big Tech, Bob Geldof, Branko Milanovic, Bretton Woods, BRICs, business cycle, carried interest, clean water, compensation consultant, corporate governance, creative destruction, crony capitalism, David Brooks, Doha Development Round, Donald Trump, fake news, financial innovation, fixed income, Francis Fukuyama: the end of history, Gini coefficient, global village, high net worth, income inequality, industrial cluster, informal economy, Internet Archive, Jeff Bezos, jimmy wales, John Elkington, joint-stock company, knowledge economy, Larry Ellison, liberal capitalism, Live Aid, Long Term Capital Management, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, mass immigration, means of production, Mexican peso crisis / tequila crisis, Michael Milken, Mikhail Gorbachev, military-industrial complex, Nelson Mandela, old-boy network, open borders, plutocrats, Ponzi scheme, price mechanism, proprietary trading, Savings and loan crisis, shareholder value, Skype, special economic zone, Steve Jobs, Thorstein Veblen, too big to fail, trade liberalization, trickle-down economics, upwardly mobile, vertical integration, Vilfredo Pareto, Washington Consensus, William Langewiesche

“Missing from Dollar and Kraay’s list of successes are the true globalizers of recent times,” he argues, “including Argentina, until just a few months ago the leading neoliberal poster child, or Russia, now attempting to recover from the collapse that followed shock globalization. So too are the erstwhile ‘Asian tigers,’ who liberalized in the early 1990s and failed before the end of the decade. Nor are these examples isolated. World growth rates were systematically higher under the structured international financial regime of Bretton Woods from 1945 to 1971 than they became in the era of deregulation after 1980.” Asserting that he works from a bigger, more accurate data set (UN vs. World Bank data), Galbraith claims that “rising inequality after 1980 is the rule in this data, with limited exceptions mainly in Scandinavia and Southeast Asia before 1997.


India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, book value, Bretton Woods, business climate, capital controls, carbon tax, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, Cornelius Vanderbilt, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, foreign exchange controls, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, low interest rates, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price elasticity of demand, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, transaction costs, universal basic income, urban sprawl, vertical integration, working-age population

.), The Oxford Companion to Politics in India, 443–​458, Oxford University Press, Delhi. Kapur, D. (2010c), ‘Indian Higher Education’, in C. Clotfelter (ed.), American Universities in the Global Market, 305–​334, University of Chicago Press, Chicago. Kapur, D. (2011), ‘Addressing the Trilemma of Indian Higher Education’, Seminar 617, January. Kapur, D. (2012), ‘Graduation Day at Bretton woods’, Business Standard, 12 March. Kapur, D. (2014), ‘Can India’s Higher Education Be Saved from the Rule of Babus?’, Business Standard, 22 June. Kapur, D., R. Khosla, and P. Mehta (2009), ‘Climate Change: India’s Options’, Economic and Political Weekly, Vol. 44(31), 34–​42. Kapur, D., and P. Mehta (2007), ‘Mortgaging the Future?


pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Anthropocene, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, biodiversity loss, bond market vigilante , Boris Johnson, Bretton Woods, British Empire, Bullingdon Club, business cycle, call centre, capital controls, carbon footprint, carbon tax, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, degrowth, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, green new deal, high net worth, high-speed rail, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Dyson, job automation, Julian Assange, junk bonds, Kickstarter, labour market flexibility, laissez-faire capitalism, land bank, land value tax, long term incentive plan, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, popular capitalism, predatory finance, price stability, proprietary trading, pushing on a string, quantitative easing, race to the bottom, rent-seeking, retail therapy, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, tacit knowledge, TED Talk, The Nature of the Firm, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

The gap between the top and bottom 10% of waged and salaried workers increased in 70% of countries in this survey.16 • Both UNCTAD and the ILO show that in most developed countries, especially English-speaking ones, income from capital gains (unearned income) has gone increasingly to the rich.17 • Reports from the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD) and Oxfam also show a widening of inequalities in most countries, with the rich pulling away from the rest.18 Underpinning the economic growth and stability of the post-war boom was the Bretton Woods agreement of 1944, which restricted international movements of capital, limited trade imbalances so that each country’s imports and exports did not diverge too much and fixed exchange rates between key national currencies and allowed governments to set interest rates. In effect, it replaced the previous rule by bankers over the movement of capital with rule by governments, so that national economies became more closed.


pages: 519 words: 155,332

Tailspin: The People and Forces Behind America's Fifty-Year Fall--And Those Fighting to Reverse It by Steven Brill

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, airport security, American Society of Civil Engineers: Report Card, asset allocation, behavioural economics, Bernie Madoff, Bernie Sanders, Blythe Masters, Bretton Woods, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carl Icahn, carried interest, clean water, collapse of Lehman Brothers, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, Credit Default Swap, currency manipulation / currency intervention, deal flow, Donald Trump, electricity market, ending welfare as we know it, failed state, fake news, financial deregulation, financial engineering, financial innovation, future of work, ghettoisation, Glass-Steagall Act, Gordon Gekko, hiring and firing, Home mortgage interest deduction, immigration reform, income inequality, invention of radio, job automation, junk bonds, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, low interest rates, Mahatma Gandhi, Mark Zuckerberg, Michael Milken, military-industrial complex, mortgage tax deduction, Neil Armstrong, new economy, Nixon triggered the end of the Bretton Woods system, obamacare, old-boy network, opioid epidemic / opioid crisis, paper trading, Paris climate accords, performance metric, post-work, Potemkin village, Powell Memorandum, proprietary trading, quantitative hedge fund, Ralph Nader, ride hailing / ride sharing, Robert Bork, Robert Gordon, Robert Mercer, Ronald Reagan, Rutger Bregman, Salesforce, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, stock buybacks, Tax Reform Act of 1986, tech worker, telemarketer, too big to fail, trade liberalization, union organizing, Unsafe at Any Speed, War on Poverty, women in the workforce, working poor

They would purchase options to buy, or sell, the stock of a takeover target based on whether they thought the deal would go through or even be bid up higher in the coming days, or be blocked by the other side’s lawyers or bankers or by government regulators on anti-trust grounds. Deal arbitrage was a pure—and purely vicarious—bet from the sidelines on the bets being made by the raiders. What the company in play actually produced did not matter. Money, itself, became the focus of another betting parlor. In 1971, the collapse of the Bretton Woods international accords—which had locked in the relative value of major currencies since 1944—accompanied by President Richard Nixon’s decision to let the value of the dollar float freely, created a new market for speculating in the fluctuation of exchange rates. With technology emerging to facilitate trades around the world instantaneously, knowledge workers had new pieces of paper (francs, dollars, pounds) to trade for other pieces of paper.


pages: 475 words: 156,046

When They Go Low, We Go High: Speeches That Shape the World – and Why We Need Them by Philip Collins

anti-communist, Berlin Wall, Bretton Woods, British Empire, classic study, collective bargaining, Copley Medal, Corn Laws, crony capitalism, cuban missile crisis, Deng Xiaoping, desegregation, Donald Trump, F. W. de Klerk, fear of failure, Fellow of the Royal Society, full employment, Great Leap Forward, invention of the printing press, Jeremy Corbyn, late capitalism, Mahatma Gandhi, meritocracy, Mikhail Gorbachev, Monroe Doctrine, Neil Armstrong, Neil Kinnock, Nelson Mandela, plutocrats, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Rosa Parks, stakhanovite, Ted Sorensen, Thomas Malthus, Torches of Freedom, World Values Survey

The Right concluded that even dictatorial stability is preferable to the chaos of change. The struggle to conclude a successful military adventure in the name of the people was one more apparent indication that the writ of the West would no longer run. The institutions created out of the ruins of the Second World War – the United Nations, the European Union and the Bretton Woods financial institutions, the World Bank and the International Monetary Fund – appear bereft of power and irrelevant to the crises engulfing the world. Successive problems, in Ukraine and in Syria, appear to have passed power from the hands of democrats to eager tyrants. Russia and China are devising their own rules for the world diplomatic order.


pages: 542 words: 145,022

In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest by Andrew W. Lo, Stephen R. Foerster

Alan Greenspan, Albert Einstein, AOL-Time Warner, asset allocation, backtesting, behavioural economics, Benoit Mandelbrot, Black Monday: stock market crash in 1987, Black-Scholes formula, Bretton Woods, Brownian motion, business cycle, buy and hold, capital asset pricing model, Charles Babbage, Charles Lindbergh, compound rate of return, corporate governance, COVID-19, credit crunch, currency risk, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, Donald Trump, Edward Glaeser, equity premium, equity risk premium, estate planning, Eugene Fama: efficient market hypothesis, fake news, family office, fear index, fiat currency, financial engineering, financial innovation, financial intermediation, fixed income, hiring and firing, Hyman Minsky, implied volatility, index fund, interest rate swap, Internet Archive, invention of the wheel, Isaac Newton, Jim Simons, John Bogle, John Meriwether, John von Neumann, joint-stock company, junk bonds, Kenneth Arrow, linear programming, Long Term Capital Management, loss aversion, Louis Bachelier, low interest rates, managed futures, mandelbrot fractal, margin call, market bubble, market clearing, mental accounting, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, new economy, New Journalism, Own Your Own Home, passive investing, Paul Samuelson, Performance of Mutual Funds in the Period, prediction markets, price stability, profit maximization, quantitative trading / quantitative finance, RAND corporation, random walk, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, selection bias, seminal paper, shareholder value, Sharpe ratio, short selling, South Sea Bubble, stochastic process, stocks for the long run, survivorship bias, tail risk, Thales and the olive presses, Thales of Miletus, The Myth of the Rational Market, The Wisdom of Crowds, Thomas Bayes, time value of money, transaction costs, transfer pricing, tulip mania, Vanguard fund, yield curve, zero-coupon bond, zero-sum game

The stock market fell by 50 percent in real terms between mid-1973 and the end of 1974. Treasury interest rates were in double digits, peaking at over 20 percent in 1981. Inflation rates achieved levels not seen since the Civil War, with some price controls introduced and then abandoned. Suddenly the Bretton Woods agreement fixing global currencies was abandoned and world currencies started fluctuating for the first time in nearly 30 years. The first oil crisis occurred, with the price of oil going from $2.50 a barrel to $13. And all of this was happening in an environment of high unemployment. There was an explosion of new risks flowing throughout the system from everywhere.”44 Today, the Black-Scholes/Merton formula is ubiquitous and used well beyond the pricing of call options.


pages: 499 words: 148,160

Market Wizards: Interviews With Top Traders by Jack D. Schwager

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Alan Greenspan, Albert Einstein, asset allocation, backtesting, beat the dealer, Bretton Woods, business cycle, buy and hold, commodity trading advisor, computerized trading, conceptual framework, delta neutral, Edward Thorp, Elliott wave, fixed income, implied volatility, index card, junk bonds, locking in a profit, margin call, market bubble, market fundamentalism, Market Wizards by Jack D. Schwager, Michael Milken, money market fund, Nixon triggered the end of the Bretton Woods system, pattern recognition, Paul Samuelson, Ralph Nelson Elliott, random walk, Reminiscences of a Stock Operator, short selling, Teledyne, transaction costs, uptick rule, yield curve, zero-sum game

Our analysis was that this was not the end of the world. America had simply taken a short-term step, and it was not going to solve our country’s long-term problems. Did that position actually turn out to be OK? It turned out fine. The Nixon announcement was just another step in the dissolution of the Bretton Woods Agreement [a 1944 international pact that, among other things, established guidelines for foreign exchange rate stabilization] and the decline of America. America was rallying in its own bear market. So, you saw it as a cosmetic move that wasn’t going to change the trend, and you stayed with your position.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

"Friedman doctrine" OR "shareholder theory", 4chan, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Alvin Roth, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, behavioural economics, benefit corporation, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, Blitzscaling, blockchain, book value, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Carl Icahn, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, congestion pricing, corporate governance, corporate raider, creative destruction, CRISPR, crowdsourcing, Danny Hillis, data acquisition, data science, deep learning, DeepMind, Demis Hassabis, Dennis Ritchie, deskilling, DevOps, Didi Chuxing, digital capitalism, disinformation, do well by doing good, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Firefox, Flash crash, Free Software Foundation, fulfillment center, full employment, future of work, George Akerlof, gig economy, glass ceiling, Glass-Steagall Act, Goodhart's law, Google Glasses, Gordon Gekko, gravity well, greed is good, Greyball, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, independent contractor, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Zimmer (Lyft cofounder), Kaizen: continuous improvement, Ken Thompson, Kevin Kelly, Khan Academy, Kickstarter, Kim Stanley Robinson, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Ellison, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, machine readable, machine translation, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, Network effects, new economy, Nicholas Carr, Nick Bostrom, obamacare, Oculus Rift, OpenAI, OSI model, Overton Window, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, post-truth, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Rutger Bregman, Salesforce, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, stock buybacks, strong AI, synthetic biology, TaskRabbit, telepresence, the built environment, the Cathedral and the Bazaar, The future is already here, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Fadell, Tragedy of the Commons, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, two-pizza team, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

That is, if everyone is employed, there is no barrier to moving from job to job, and the only way to hang on to employees is to pay them more, which employers necessarily compensated themselves for by raising prices, in a continuing spiral of higher wages and higher prices. As Blyth notes, every intervention is subject to Goodhart’s Law: “Targeting any variable long enough undermines the value of the variable.” Coupled with the end of the Bretton Woods system, a gold exchange standard anchored to the US dollar, the commitment to full employment led to skyrocketing inflation. Inflation is good for debtors—it makes goods such as housing much cheaper, because you repay a fixed dollar amount of debt with future dollars that are worth much less. Meanwhile, you have more of those dollars, as your salary keeps going up.


The China Mission: George Marshall's Unfinished War, 1945-1947 by Daniel Kurtz-Phelan

anti-communist, Bretton Woods, British Empire, Charles Lindbergh, classic study, clean water, Deng Xiaoping, disinformation, facts on the ground, failed state, Great Leap Forward, haute couture, Kwajalein Atoll, land reform, long peace, South China Sea

At the start, American policymakers still hoped that Allied unity in the war could be extended into the postwar. They pushed a series of “one-world” initiatives, as the historian John Lewis Gaddis has put it, aimed at sustaining great-power cooperation and collective problem-solving, with the Soviets (and the Chinese) at the table. There was the United Nations, joint humanitarian relief, the new Bretton Woods economic structure of the World Bank and International Monetary Fund—and also the common effort to avert breakdown in China. In time this changed, making early hopes for comity look naïve. The opportunists denied ever having shared them, and those one-world visions were refashioned for a divided Cold War world.


pages: 549 words: 170,495

Culture and Imperialism by Edward W. Said

Ayatollah Khomeini, Bartolomé de las Casas, Bretton Woods, British Empire, colonial rule, disinformation, European colonialism, Francis Fukuyama: the end of history, Herbert Marcuse, Howard Zinn, Joseph Schumpeter, Khartoum Gordon, lateral thinking, lone genius, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, Nelson Mandela, Panopticon Jeremy Bentham, public intellectual, sceptred isle, Scramble for Africa, Seymour Hersh, Suez canal 1869, Suez crisis 1956, traveling salesman, W. E. B. Du Bois, work culture

The technocrats, in contrast, as Lyotard says in Postmodern Condition,53 are principally competent to solve local problems, not to ask the big questions set by the grand narratives of emancipation and enlightenment, and there are also the carefully accredited policy experts who serve the security managers who have guided international affairs. With the virtual exhaustion of grand systems and total theories (the Cold War, the Bretton Woods entente, Soviet and Chinese collectivized economies, Third World anti-imperialist nationalism), we enter a new period of vast uncertainty. This is what Mikhail Gorbachev so powerfully represented until he was succeeded by the far less uncertain Boris Yeltsin. Perestroika and glasnost, the key words associated with Gorbachev’s reforms, expressed dissatisfaction with the past and, at most, vague hopes about the future, but they were neither theories nor visions.


pages: 564 words: 178,408

Citizens of London: The Americans Who Stood With Britain in Its Darkest, Finest Hour by Lynne Olson

Alistair Cooke, Bletchley Park, Bretton Woods, British Empire, Charles Lindbergh, colonial rule, European colonialism, financial independence, full employment, imperial preference, indoor plumbing, jobless men, old-boy network, Seymour Hersh, South China Sea, Suez crisis 1956

Eventually, after long and acrimonious negotiations, the United States agreed to help bail Britain out of its financial crisis with a $3.5 billion loan, to be paid off over fifty years, and generous repayment terms for the Lend-Lease aid already provided. Of the $21 billion in Lend-Lease debts owed the United States, the British were asked to give back only $650 million. But the bailout came with a steep—and, in Britain’s view, deeply unfair—price: British endorsement of a 1944 plan hammered out at Bretton Woods, New Hampshire, creating a new international economic order that would make the dollar the world’s leading currency, eliminate Britain’s imperial preference system, and greatly benefit U.S. trade in general. The British were indignant that the United States would demand interest payments for a new loan, no matter how lenient the terms, and otherwise take advantage of the extremely perilous economic situation in which the country now found itself.


pages: 782 words: 187,875

Big Debt Crises by Ray Dalio

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, break the buck, Bretton Woods, British Empire, business cycle, buy the rumour, sell the news, capital controls, central bank independence, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, declining real wages, equity risk premium, European colonialism, fiat currency, financial engineering, financial innovation, foreign exchange controls, German hyperinflation, global macro, housing crisis, implied volatility, intangible asset, it's over 9,000, junk bonds, Kickstarter, land bank, large denomination, low interest rates, manufacturing employment, margin call, market bubble, market fundamentalism, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Northern Rock, Ponzi scheme, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, refrigerator car, reserve currency, risk free rate, Savings and loan crisis, short selling, short squeeze, sovereign wealth fund, subprime mortgage crisis, too big to fail, transaction costs, universal basic income, uptick rule, value at risk, yield curve

I did that by studying historical cases chronologically and in great detail, experiencing them day by day and month by month. This gave me a much broader and deeper perspective than if I had limited my perspective to my own direct experiences. Through my own experience, I went through the erosion and eventual breakdown of the global monetary system (“Bretton Woods”) in 1966–1971, the inflation bubble of the 1970s and its bursting in 1978–82, the Latin American inflationary depression of the 1980s, the Japanese bubble of the late 1980s and its bursting in 1988–1991, the global debt bubbles that led to the “tech bubble” bursting in 2000, and the Great Deleveraging of 2008.


pages: 589 words: 197,971

A Fiery Peace in a Cold War: Bernard Schriever and the Ultimate Weapon by Neil Sheehan

Albert Einstein, anti-communist, Berlin Wall, Boeing 747, Bretton Woods, British Empire, Charles Lindbergh, cuban missile crisis, disinformation, double helix, Dr. Strangelove, European colonialism, it's over 9,000, John von Neumann, Menlo Park, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, Neil Armstrong, Norman Macrae, nuclear winter, operation paperclip, RAND corporation, Ronald Reagan, social contagion, undersea cable, uranium enrichment

Groton had held out an ideal to its boys, public service, an ideal that also happens to attract the kind of man who is drawn by power, who will forsake money and much else for the opportunity to wield authority and take satisfaction from the accomplishments that go with it. In 1941 Acheson had, at the instigation of Franklin Roosevelt, become assistant secretary of state for economic affairs, performing adroitly in helping to create the International Monetary Fund at the Bretton Woods monetary conference of 1944, and then accepted the undersecretaryship of the State Department at the behest of Truman and Byrnes on the death of Roosevelt. His influence had increased after George Marshall had taken over from Byrnes because Marshall, in an adaption of the military line of authority, had insisted that Acheson act as his combined chief of staff and deputy.


Ellul, Jacques-The Technological Society-Vintage Books (1964) by Unknown

Bretton Woods, conceptual framework, do-ocracy, double entry bookkeeping, flying shuttle, Frederick Winslow Taylor, full employment, James Hargreaves, James Watt: steam engine, John Maynard Keynes: technological unemployment, Lewis Mumford, liberal capitalism, Mars Society, means of production, Norbert Wiener, price mechanism, profit motive, rising living standards, road to serfdom, spinning jenny, technological determinism, Thorstein Veblen, urban planning, Vilfredo Pareto

But they do not represent planning any more than does dike construction in the Netherlands. If they did, the “planning” of a house b y an architect would have to fall under this category. As to international decisions (which might be cited as a proof of the separation of the plan from the state), these do not represent plans in the proper sense of the term (for instance, the Bretton Woods agreements). The sole hope of realization of international plans— for example, in Europe— rests, as we clearly see today, on the existence of a European state. This kind of plan­ ning acquires substance only to the degree that such a state is con­ stituted. This fact corroborates our thesis. Only a supranational state would be able to convince both the national states and the trusts to co-operate in a common economic operatioa The Dawes and Young plans ended in failure because they had no means for genu­ ine sanctions and no political power to support them.


pages: 650 words: 203,191

After Tamerlane: The Global History of Empire Since 1405 by John Darwin

agricultural Revolution, Atahualpa, Berlin Wall, Bretton Woods, British Empire, Cape to Cairo, classic study, colonial rule, Columbian Exchange, cuban missile crisis, deglobalization, deindustrialization, European colonialism, failed state, Francisco Pizarro, Great Leap Forward, invisible hand, Isaac Newton, joint-stock company, Khartoum Gordon, laissez-faire capitalism, land reform, Mahatma Gandhi, Malacca Straits, military-industrial complex, mutually assured destruction, new economy, New Urbanism, oil shock, open economy, price mechanism, reserve currency, Ronald Reagan, Scramble for Africa, South China Sea, South Sea Bubble, spice trade, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, trade route, transaction costs, transatlantic slave trade

In the first half-decade of peace, the signs were conflicting. Many smaller states invested high hopes in the United Nations Organization, set up in 1945 as a more potent successor to the League of Nations. But would it be a counterweight to the dominant powers, or merely the arena for their competition and conflict? The Bretton Woods agreements in 1944–5 set up newmachinery to prevent the return of catastrophic slump. The International Monetary Fund allowed states to meet a temporary crisis in their balance of payments without a resort to the controls on trade and exchange that had shrivelled the world economy in the 1930s.


pages: 2,323 words: 550,739

1,000 Places to See in the United States and Canada Before You Die, Updated Ed. by Patricia Schultz

Albert Einstein, Alfred Russel Wallace, American Society of Civil Engineers: Report Card, Apollo 11, Apollo 13, Boeing 747, Bretton Woods, Burning Man, California gold rush, car-free, Charles Lindbergh, Columbine, company town, Cornelius Vanderbilt, cotton gin, country house hotel, David Sedaris, Day of the Dead, Donald Trump, East Village, El Camino Real, estate planning, Ford Model T, Frank Gehry, gentrification, glass ceiling, Golden Gate Park, Guggenheim Bilbao, Haight Ashbury, haute cuisine, indoor plumbing, interchangeable parts, Mars Rover, Mason jar, Maui Hawaii, Mikhail Gorbachev, Murano, Venice glass, Neil Armstrong, Nelson Mandela, new economy, New Urbanism, Norman Mailer, out of africa, Pepto Bismol, place-making, Ralph Waldo Emerson, Ronald Reagan, Rosa Parks, Saturday Night Live, scientific management, sexual politics, South of Market, San Francisco, Suez canal 1869, The Chicago School, three-masted sailing ship, transcontinental railway, traveling salesman, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, wage slave, white picket fence, Works Progress Administration, Yogi Berra, éminence grise

In operation since 1869, the Mount Washington Cog Railway (the first such railway in the world) pushes cars up the mountain at a steep angle and in the winter transports skiers to trails that run parallel to the tracks. Another option, the Conway Scenic Railroad, operates beautiful restored vintage cars that run in a more horizontal fashion around the Mount Washington Valley and through the dramatic mountain gap, Crawford Notch. The magnificent Mt. Washington Resort at Bretton Woods charms guests with its classic beauty redolent of another era. A sprawling white 1902 building with a cherry red roof anchors the 1,500-acre complex, which offers golf, tennis, and horseback riding, but is probably best known for its downhill and cross-country skiing—it now boasts Olympic medalist Bode Miller as its director of skiing.

., 459 Brattleboro, Vt., 95 Brazilian Court, Fla., 324 BREAKERS, Fla., 324, 325–26 Breakers, N.J., 135 Breakers Mansion, R.I., 83, 356 Breakfast Club, Ga., 354 BREAUX BRIDGE, La., 434–35 BRECKENRIDGE, Colo., 705–6 Breckenridge Golf Club, Colo., 705 Breckenridge Ski Resort, Colo., 705, 724 Bretton Woods, N.H., 79 Brevard House, La., 426 Brew City Queen, Wis., 582 breweries and distilleries. See Culinary Experiences, 1082 BREWSTER’S KANANASKIS GUEST RANCH, Alta., 1032 Brick Pit, Ala., 290 Bridal Veil Falls, Colo., 715 Bridal Veil Falls, N.Y., 999 BRIDGE DAY FESTIVAL, W.Va., 277, 281 Bridgehampton, N.Y., 160 Bridgehampton Polo Club, N.Y., 161–62 BridgePort Brew Pub, Oreg., 878 BRIDGES OF MADISON COUNTY, Iowa, 511, 522–23 Bridgeton, Ind., 512 Briermere Farms, N.Y., 164 Bright Angel Trail, Ariz., 685 Bright House Networks Field, Fla., 329 Brightwood Inn, Ill., 503 BRIMFIELD, Mass., 66–67 Brimfield Outdoor Antiques Show, Mass., 66–67 British Columbia, Canada, 1036–64 BRITT FESTIVALS, Oreg., 873–74 BROADMOOR, Colo., 707–8 Broken Group Islands, B.C., 1054 Broken Kettle Grasslands, Iowa, 519 Broken Spoke, Tex., 757 Bronx, N.Y., 196–98 BRONX ZOO, N.Y., 196–97 Brookings, Oreg., 877 Brooklin, Maine, 22–23 Brooklyn, N.Y., 198–200 BROOKLYN BOTANIC GARDEN, N.Y., 199–200 BROOKLYN BRIDGE, N.Y., 198–99 Brooklyn Museum, N.Y., 200 Brooks Lodge, Alaska, 921 Brown County State Park, Ind., 509 Bruce Museum, Conn., 6 Brush Creek Guest Ranch, Wyo., 672 Bryant Park, N.Y., 168 Bryant’s Barbecue, Mo., 455 Bryce Canyon Lodge, Utah, 790 BRYCE CANYON NATIONAL PARK, Utah, 789–90, 793 Bubba’s, Ark., 392 Bubba’s Bar-B-Que, Wyo., 669 Buckeye Trail, Ohio, 564 Buckhead, Ga., 335 Buckhorn Exchange, Colo., 712 Buckingham’s, Ill., 486 Buckman Tavern, Mass., 58 BUCKS COUNTY, Pa., 215–16 Bucks County Playhouse, Pa., 215 Buckstaff Bathhouse, Ark., 394 Buddy Guy’s Legends, Ill., 492 Buena Vista café, Calif., 851 Buena Vista Winery, Calif., 861 Buenos Aires National Wildlife Refuge, Ariz., 699 Buffalo, N.Y., 141–42 Buffalo Bill Cody Scenic Byway, Wyo., 664 Buffalo Bill Historical Center, Wyo., 664 Buffalo Bill Museum and Grave, Colo., 715 Buffalo Chip, S.Dak., 660 BUFFALO NATIONAL RIVER, Ark., 391 Buffalo Outdoor Center, Ark., 391 Buffalo Roundup, S.Dak., 654 Buffalo Roundup Arts Festival, S.Dak., 654 BUFFALO WINGS, N.Y., 141–42 Buffy’s, Mass., 52 Buhl Planetarium, Pa., 229 Bullfrog Marina, Utah, 792 Bully’s Soul Food, Miss., 441 Burdick Handmade Chocolates, N.H., 77 BURLINGTON, Vt., 92–93 Burlington Bike Path, Vt., 93 BURNING MAN, Nev., 724–25 Burntside Lodge, Minn., 549 Busch Gardens Williamsburg, Va., 256 Bushnell Park, Conn., 13 BUTCHART GARDENS, B.C., 1059–60 Butcher and Singer, Pa., 225 Butcher Hollow, Ky., 404 Butler, Md., 125 Butler Wash Petroglyph Panel, Utah, 789 Butterfly Tours, B.C., 1047 Buttermilk, Colo., 703 Byron T’s Saloon, N.Mex., 742 C Cabbage Key, Fla., 326 Caboose Ice Cream, Ga., 331 CABOT TRAIL, Cape Breton Island, N.S., 986–87 CADDO LAKE, Tex., 774–75 CAESARS PALACE, Nev., 727–28 Caesars Tahoe, Nev., 726 Café Adelphi, N.Y., 203 CAFÉ ANNIE, Tex., 772 Café Beaujolais, Calif., 830 Café Boulard, Fla., 325 Café Campagne, Wash., 898 Café Cardoza, Fla., 318 Café des Amis, La., 435 Café Diablo, Utah, 792 Café du Monde, La., 425 Café Poca Cosa, Ariz., 700 Café Vermilionville, La., 422 Café Wha?


Growth: From Microorganisms to Megacities by Vaclav Smil

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, agricultural Revolution, air freight, Alan Greenspan, American Society of Civil Engineers: Report Card, Anthropocene, Apollo 11, Apollo Guidance Computer, autonomous vehicles, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Boeing 747, Bretton Woods, British Empire, business cycle, caloric restriction, caloric restriction, carbon tax, circular economy, colonial rule, complexity theory, coronavirus, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic dividend, demographic transition, Deng Xiaoping, disruptive innovation, Dissolution of the Soviet Union, Easter island, endogenous growth, energy transition, epigenetics, Fairchild Semiconductor, Ford Model T, general purpose technology, Gregor Mendel, happiness index / gross national happiness, Helicobacter pylori, high-speed rail, hydraulic fracturing, hydrogen economy, Hyperloop, illegal immigration, income inequality, income per capita, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of movable type, Isaac Newton, James Watt: steam engine, knowledge economy, Kondratiev cycle, labor-force participation, Law of Accelerating Returns, longitudinal study, low interest rates, mandelbrot fractal, market bubble, mass immigration, McMansion, megacity, megaproject, megastructure, meta-analysis, microbiome, microplastics / micro fibres, moral hazard, Network effects, new economy, New Urbanism, old age dependency ratio, optical character recognition, out of africa, peak oil, Pearl River Delta, phenotype, Pierre-Simon Laplace, planetary scale, Ponzi scheme, power law, Productivity paradox, profit motive, purchasing power parity, random walk, Ray Kurzweil, Report Card for America’s Infrastructure, Republic of Letters, rolodex, Silicon Valley, Simon Kuznets, social distancing, South China Sea, synthetic biology, techno-determinism, technoutopianism, the market place, The Rise and Fall of American Growth, three-masted sailing ship, total factor productivity, trade liberalization, trade route, urban sprawl, Vilfredo Pareto, yield curve

But measuring GDP growth, and hence ascertaining its disappointing or satisfactory rates, is an inherently difficult matter and one whose systematic practice is quite recent. Its origins go back to the 1930s when Simon Kuznets was asked by the US Congress to estimate the country’s national income (Kuznets 1934). Its scope was defined by John Maynard Keynes, the measure became a key tool for the international financial institutions set up by the Bretton Woods agreement in 1944, and it was widely applied for the first time to the growing post-WWII economies (Coyle 2014). Before too long it became obvious that, like every aggregate measure, GDP has many drawbacks—but despite suggested adjustments and proposals for alternative accounts, it has become only more entrenched as the dominant yardstick for appraising the achievements and assessing the growth of national economies.


Europe: A History by Norman Davies

agricultural Revolution, Albert Einstein, anti-communist, Berlin Wall, bread and circuses, Bretton Woods, British Empire, business climate, centre right, charter city, classic study, clean water, Columbian Exchange, conceptual framework, continuation of politics by other means, Corn Laws, cuban missile crisis, Defenestration of Prague, discovery of DNA, disinformation, double entry bookkeeping, Dr. Strangelove, Edmond Halley, Edward Lloyd's coffeehouse, equal pay for equal work, Eratosthenes, Etonian, European colonialism, experimental economics, financial independence, finite state, Francis Fukuyama: the end of history, Francisco Pizarro, full employment, gentleman farmer, global village, Gregor Mendel, Honoré de Balzac, Index librorum prohibitorum, interchangeable parts, invention of agriculture, invention of movable type, Isaac Newton, James Hargreaves, James Watt: steam engine, Johann Wolfgang von Goethe, Johannes Kepler, John Harrison: Longitude, joint-stock company, Joseph-Marie Jacquard, Korean Air Lines Flight 007, land reform, liberation theology, long peace, Louis Blériot, Louis Daguerre, Mahatma Gandhi, mass immigration, Mikhail Gorbachev, military-industrial complex, Monroe Doctrine, Murano, Venice glass, music of the spheres, New Urbanism, North Sea oil, offshore financial centre, Peace of Westphalia, Plato's cave, popular capitalism, Potemkin village, purchasing power parity, Ralph Waldo Emerson, road to serfdom, sceptred isle, Scramble for Africa, spinning jenny, Suez canal 1869, Suez crisis 1956, Thales of Miletus, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, Transnistria, urban planning, urban sprawl, W. E. B. Du Bois

The Keynesian revolution in macroeconomics had already established that government intervention had a vital role to play in nourishing the business climate, maintaining full employment, and managing recurrent crises through adjustments of money supply, interest rates, currency, and taxation. In due course the monetarist reaction against Keynes set in under the inspiration of Milton Friedman. Western Europe participated from the start in the international monetary system created in July 1944 under Anglo-American auspices at the Bretton Woods conference, where Keynes had led the British delegation. The resultant institutions, the International Monetary Fund (IMF) and the World Bank, both run by the United Nations, have strong European involvement, and to some extent compete with other purely European bodies. In Western Europe, as in the USA, it was taken for granted that democratic politics were a necessary adjunct to the effective management of a successful market economy.

S. 590, 660 Bacon, Francis 508–9 Bacon, Roger 433, 435–6 Bakhtin, Mikhail 541 Bakunin, Mikhail 840 Balance of Power 581–2, 661 Balbao, Vasco Núñez de 511 Balfour, Arthur 907 Balfour Declaration (1917) 907 Balkan League 874 Balkan Pact 977 Balkan Peninsula 61 society 390 Wars 834, 874 Ballet 472 Balliol, John 408 Baltic peoples 227 Baltic Sea 59–60, 1331 Baltic States 1331 (see also Estonia, Latvia, Lithuania) Balzac, Honoré de 788 Banking 401, 416, 518, 582, 682 Bannockburn, battle of (1314) 408, 409 Barcelona massacre (1939) 984–5 Baroque culture 504, 505–6 Barrès, Maurice 822 Basil I, Byzantine Emperor 318 Basques 220, 639 Battenberg family 808–10, 1300–1 Baudelaire, Charles 861–2 Bayezit, Ottoman Sultan 386 Bayle, Pierre 599, 603 Beauharnais, Josephine de 726, 756 Beauvoir, Simone de 1076 Beck, Józef 978 Bede, The Venerable 277–81 Beethoven, Ludwig van 590,667–8, 684–5, 688 Begin, Menahim 978 Belarus (Byelorussia) absorbed by Lithuania 392 Byelorussian National Republic 933 incorporated into the Russian Empire 661 nationalism 828 Belgium 626–7, 891–3, 904, 1033, 1060 de-colonization 1069 independence 804 (see also Austrian Netherlands) Belisarius 242 Bell, Bishop George 922–3 Bellegarrigue, Anselme 840, 841 Benda, Julien 952 Benedict XIV, Pope 593 Benelux Economic Union (1958) 1075 Beneš, Edvard 990, 1062, 1067 Bentham, Jeremy 598 Berg, Grand Duchy of 729 Beria, Lavrenti 1091 Bering, Vitus 580 Berkeley, George 597–8 Berlin Blockade (1948–9) 1067, 1071 Congress of (1878) 870–1, 1212 Crisis (1961) 1104–5, 1112–13 Wall 1105, 1112–13, 1123 (see also Brandenburg Gate) Bernadotte, Jean-Baptiste 737 Bernini, Gianlorenzo 569,571–5 Bernstein, Eduard 838 Bessarabia 739, 871 (see also Moldova) Bethmann Hollweg, Theobald von 879,888–92 Biancamano, Umberto 638 Bible 196 Bierut, Boleslaw 1061–2, 1100, 1102 Bigot de Préamenau, Jean 711 Biology 122, 433 (see also Botany, Evolution,Genetics) Bishopric of Rome 203, 212 (see also Papacy) Bismarck, Otto von 760, 824, 826, 841–2, 868, 870, 871, 1212 Black Death 409, 411–13 anti-semitism and 412 economic consequences 412 social consequences 412–13 Black Sea 60, 1290 Blake, William 8, 682, 688 Blanc, Louis 836–7 Blanqui, Louis-Auguste 836 Blarney Castle 550 Bloch, Marc 955–6 Blok, Alexander 11–12, 953 Blumenbach, Johann Friedrich 734–5 Bluntschli, Johann Kaspar 874, 875 Boccaccio 1208 Bodin, Jean 521 Bogumilism 322–3 Bohemia Calvinism 494 Christianity and 324 medieval 428–9 reversion to the Habsburgs 524–5, 526 Thirty Years War and 563–4 (see also Czechoslovakia) ‘Bolsheviks’ 11, 12, 836, 839–40, 914, 915, 916, 920, 921, 918, 929, 931, 932, 934–5, 937, 938 Bonaparte, Jerome, King of Westphalia 726, 733 Bonaparte, Joseph, King of Naples and Spain 726, 733 Bonaparte, Louis, King of Holland 726, 729 Bonaparte, Luden, Prince of Canino 726 Bonaparte, Napoleon 701, 711, 712, 722, 724, 725–6, 727, 728, 729, 737, 739, 742, 744, 746, 747, 1210 Army of Italy and 722 Concordat 703, 711 death of 99–100, 762 fall of 748–57 Hundred Days 761–2 Imperial Guard 748, 751 suicide bid 755 Bonaparte, Napoleon II, King of Rome 726 Bonchamps, Marquis de 704, 707 Boniface VIII, Pope 401 Bormann, Martin 1045, 1052 Borodino, battle of (1812) 742, 751 Bosnia 870, 871, 874, 875, 980–1, 1124, 1258 Bosnian Crisis 874, 875, 877 Bossuet, Jacques 602–3 Bosworth Field, battle of (1485) 426 Botany 122, 530, 599 Botticelli, Sandro 469, 481 Bouboulina, Laskarina 732 Bourbon, House of 494, 506, 539, 638, 639 Bouvines, battle of (1214) 354, 355, 376 Boxer Rebellion 852 Boyne, battle of the 631, 631 Brahe, Tycho 508 Brandenburg Gate 720 Brandt, Willy 1114, 1124 Branting, Hjalmar 940–4 Brecht, Berthold 952 Brest, Union of (1596) 505 Brest-Litovsk, Treaty of (1918) 914, 920 Bretton Woods Conference (1944) 1081 Brezhnev, Leonid 1090, 1092, 1106, 1108 Brezhnev Doctrine 1092, 1106 Briand, Aristide 950–1 Brie 299 Brienne, Lomenie de 688, 691 Brissot, Jacques Pierre 717, 719 Britain ancient 69, 231–2 local history 418–19 Bronze Age 76, 78, 81 Brooke, Rupert 892–3 Brothers Karamazov, The 496–9 Bruch, Max 788–9 Brunelleschi, Filippo 473 Brunswick, Charles, Duke of 695, 721 Brussels 926–7 Brussels Treaty of (1948) 1067, 1070 Buczacz 1034–5 Budapest 367–6 Budé, Guillaume 477 Bukovina, Austrian seizure (1774) 644, 1012, 1315 Bulgaria Balkan Wars 874 Christianity and 321, 323–4 Empire 320–1, 1245 fall of 388, 391 Bulgaria (cont.): independence 870, 871 medieval 1245 Patriarchate established 380–1 post-1945 1105, 1245 Second Empire 386, 388 under Ottomans 644 Bulgars 246 Bulge, battle of the (1944) 1042 Burckhardt, Jakob 473, 517 Burgundy, Duchy of 230–1, 426–7, 524, 1260 Burke, Edmund 699, 701, 713 Butler, Joseph 601 Byron, Lord George 97, 683 Byzantium 1206, 1237 civilization 246, 248, 250–1 decline of 332–5 defences 243 early development 238–40, 242, 244–6 economy 250 Macedonian Dynasty 318, 320, 1237 medieval 385–6 military 250 Papacy and 288 ritual 249–50 society 250–1 see also Constantinople Cabala 396–7 Cabet, Etienne 836 Cabot, John 511 Cadmus 116–17 Cadoudal, Georges 708 Caesar, Julius 155, 156, 158, 177 Calais 545 Calendar 152–3, 267–8, 698 Caligula, Roman Emperor 188 Caliphs 252–3 Calvin, Jean 490, 492, 493 Cambrai, Peace of (1529) 545 Camembert 299 Campbell, Neil 754, 755 Campo Formio, Peace of (1797) 724 Canals 303, 602, 681–2, 980, 1081 Canary Islands 451 Cannae, battle of (216 BC) 155 Canning, George 763 Canossa 342 Canute (Knut), King of Denmark and England 294, 308, 328 Capetian Dynasty 317, 318, 353, 354, 404, 406–8 Capitalism 422–3, 517–18 Caporetto, battle of (1917) 907 Carbonari 823 Carbon dating 68 Carlowitz, Peace of (1699) 643 Carlyle, Thomas 6, 677, 693–4 Carnot, Lazare 715 Carron, Antoine 1209 Carthage 104, 108, 139–47,1530, 155 Carthusian Order 345 Cartier, Jacques 513, 539 Casanova, Giovanni di Seingalt 672–3 Casimir the Great, King of Poland 429, 431, 1208 Cassiodorus, Flavius Senator 266 Cassius, Longinus 158 Castile 345, 380, 393, 451–5, 1241 Castile and Aragón, Union of 451, 453 Catastrophes 89–94, 640, 895 Cateau-Cambresis, Peace of (1559) 539, 545 Cathars 361–2, 410–11 Catherine I, Empress of Russia 652 Catherine II, Empress of Russia 610–11, 649, 652, 654, 658, 692, 719 Cato, Marcus Porcius, ‘The Censor’ 155, 156 Cato, Marcus Porcius, ‘Uticensis’ 156, 158 Caucasian peoples 219 Caucasus, geography 61, 1298 Caulaincourt, Armand de 752, 755 Cavalry 174, 215, 229, 311, 518–20, 585–4, 938 Cavour, Camillo 823 Ceausescu, Nicolae 1105 Celtic Language 79–80 Celts 84, 86–7, 88, 221–2, 308–9 Censorship 260–1, 445, 1274 (see also Index) Chamberlain, Austen 951 Chamberlain, Houston Stewart 817 Chamberlain, Neville 976, 987, 990, 995, 997 Channel Islands 1089 Chanson de Roland 255 Chaplin, Charles 958 Charity 778–9, 1029 Charlemagne, St 258, 298, 302–4, 305–6, 307, 326, 1207, 1239 Empire 298, 302, 1239 Charles I, Emperor of Austria 910, 921, 934 Charles le Téméraire, Duke of Burgundy 426, 427 Charles the Bald, Carolingian King 306, 308 Charles I, King of England 549, 550, 551, 552, 553, 572 Charles II, King of England 549, 553, 628–9 Charles II, King of Spain 625 Charles V, Holy Roman Emperor 485, 523–4, 525–6, 529 Charles VI, Holy Roman Emperor 646 Charles VII, Holy Roman Emperor 646 Charles X, King of France 803, 804 Charles X, King of Sweden 554 Charles XII, King of Sweden 640, 653 Charles XIV, King of Sweden 737 ‘Charter 77’ 1107, 1115 Chateaubriand, François-René 683 Chaucer, Geoffrey 423 Chechenia 816, 869, 1298 Chechens 743, 816, 869, 1298 Cheka 960, 962 Chemistry 530, 599, 642, 772–3, 791–2 Chernobyl 855–6, 1097 Chernyenko, Konstantin 1093 Childhood 514–15, 1210 Chillingworth, William 601 China 851 Chmielnicki, Bogdan (see Khmelnytsky) Cholera 776–7 Chopin, Fryderyk 788, 820 Christendom 7–10 Christian Democracy 1071–2 Christian IV of Denmark 564 Christianity Arianism 205, 209, 258, 259 belief 503 Bible and 196, 282–3 chastity 198–9 Christian internationalism 922–3 Deism 601 Dualism 322–3 Early Middle Ages 292–3 ecumenism 1078 European culture and 9 General Councils 205–6, 258, 259, 265–6, 273 Gnosticism 200 heresy 205 holy relics 274–5 hymns 486–8 Iconoclasm 245–6, 273 Jansenism 621 Judaism and 197, 199–200 magic and 405–6 medieval 403–4 Methodism 594–5, 797 Monasticism 266, 315, 319, 345 mystical tradition 436–7 nineteenth century 794–7, 799 origins and development 192–3, 195–7, 199–200, 203, 205–6 Pietism 594, 797 pilgrimage 278 post-1945 1078–9 Quietism 594, 620, 621 Schism (1054) 328, 330, 332 sin 264–5 spread of 275–7, 280–2, 321, 323–6, 328, 1236 theology 192–206, 258–66, 264–5, 403–4, 433, 482–96, 497–502, 601,793–4, 795–9, 952 toleration 794–5 Trinitarians 205–6, 259 (see also Atheism, Humanism, Islam, Judaism, Paganism, Protestant, Roman Catholic Uniate and Orthodox Churches Christina, Queen of Sweden 554, 573–4 Chrysoloras, Manuel 477 Churchill, Winston 883, 885–6, 907, 938, 990, 1008, 1027, 1028, 1036–7, 1042, 1047, 1051, 1065–6 Cicero, M.


pages: 1,590 words: 353,834

God's Bankers: A History of Money and Power at the Vatican by Gerald Posner

Albert Einstein, anti-communist, Ayatollah Khomeini, bank run, banking crisis, book value, Bretton Woods, central bank independence, centralized clearinghouse, centre right, credit crunch, disinformation, dividend-yielding stocks, European colonialism, forensic accounting, God and Mammon, Index librorum prohibitorum, Kevin Roose, Kickstarter, liberation theology, low interest rates, medical malpractice, Murano, Venice glass, offshore financial centre, oil shock, operation paperclip, power law, rent control, Ronald Reagan, Silicon Valley, WikiLeaks, Yom Kippur War

Higham, Trading with the Enemy, 32–33, citing Interrogation Statement of Heinrich Otto Abetz to U.S. military, June 21, 1946. See generally Paxton, Vichy France, 100, 108, 124; Ray, Annäherung an Frankreich; Aarons and Loftus, Unholy Trinity, 276–77. Statement of Heinrich Otto Abetz to U.S. military, June 21, 1946. 16 The United Nations Monetary and Financial Conference, known as the Bretton Woods Conference, recommended in 1944 that BIS be dissolved since it had operated as an Axis-dominated entity in outright violation of its neutral charter. But its solid business and government connections, chiefly through Allen Dulles, helped it successfully resist the dissolution order. Today, BIS thrives in a role that mirrors the International Monetary Fund.


pages: 1,351 words: 404,177

Nixonland: The Rise of a President and the Fracturing of America by Rick Perlstein

Aaron Swartz, affirmative action, Alistair Cooke, Alvin Toffler, American ideology, Apollo 11, Apollo 13, Bay Area Rapid Transit, Berlin Wall, Bretton Woods, cognitive dissonance, company town, cuban missile crisis, delayed gratification, desegregation, Dr. Strangelove, East Village, European colonialism, false flag, full employment, Future Shock, Golden Gate Park, guns versus butter model, Haight Ashbury, Herbert Marcuse, immigration reform, In Cold Blood by Truman Capote, index card, indoor plumbing, Joan Didion, Kitchen Debate, liberal capitalism, Mahatma Gandhi, Marshall McLuhan, military-industrial complex, Monroe Doctrine, moral panic, Neil Armstrong, New Urbanism, Norman Mailer, Own Your Own Home, Paul Samuelson, plutocrats, price mechanism, Ralph Nader, RAND corporation, rolodex, Ronald Reagan, sexual politics, Seymour Hersh, systematic bias, the medium is the message, traveling salesman, upwardly mobile, urban planning, urban renewal, W. E. B. Du Bois, walking around money, War on Poverty, white picket fence, Whole Earth Catalog

But his backstage maneuvering was based in a pragmatic understanding few others were wise enough to reach: that America was no longer the world’s eight-hundred-pound gorilla. He had read the economic tea leaves: America’s exports had grown by two-thirds over the past decade but Western Europe’s had more than doubled. Japan’s had more than quadrupled, and doubled with the United States from 1965 to 1967 alone. The world trading system agreed to at the Bretton Woods Conference in 1944 set a gold standard: $35 of U.S. currency could always be exchanged for an ounce of gold. That was swell when the United States was the free world’s unquestioned economic superpower. But this novelty—a trade deficit—was making it more worthwhile for a foreign country to exchange dollars for gold than to buy any U.S. goods, the ounce being worth more in real terms than the thirty-five bucks.