Tuesday, January 24, 2006

Review Part Six: The Lead Up to Funking Economic Blitkrieg (War and Reconstruction 1940-1950)

Review Part Six: Funking Economic Blitkrieg (War and Reconstruction 1940-1950) The European Economy 1914-2000 (Aldcroft, 4th Edition)
"Those who can make you believe absurdities can make you commit atrocities."

Nothing is so relevant to a basic, plodding, general understanding of the oversight of global economy as it stands today as a discussion of questionable economic principles in affairs concerning a build up to the Second World War and its effects on trade cycles and standards settings which remain in place today. I am talking about those chichevache and bycorn entities, which warrant the ire of the common man as of late, and measure only passing scrutiny in the world of economics research, these primarily World Bank, IMF, and Bretton Woods Agreements. European nations are no exception to influencing the creation of these last resort fail-safes and the paradox of their possible mismanagement.

The dynamics of the first global growth cycle from the 1880s to the First War were unparalleled growth and capital aggrandisements with run-away speculations, robber barons, non-accounted double-booking lendings and borrowings, currency flight, assimilation of limited liabilities trusts, gold hoardings, and corporate enterprises unleashed upon the biggest amassed debts services and interest payments all-you-could EAT buffet in history supported by the largest scale production and assembly lines creations in history.

The following reconstruction period was the shifting of capital and gold reserves out of debtor nations to their creditors and the ensnaring of entire national economies into a zero-sum game of pyramid debts financing arrangements and baked crooked schemes. The final push up to 1929 was a relentless business world myopia regarding the perceived views that there were no barriers to productivity and growth. Corporate consumers it seems had swelled to such overbearing sizes that one would have to push back the fat even to see their beady little eyes. Old cycles, precedence, the relevance of historical review in determining present and future economic states of affairs, overt analysis of real world causes and effects, all were considered party-poopingly gauche. Where the hell were the economists?

They were there. Or at least, their rise was as a result of global business plunges and an inability to manage effectively without at least a few dozens of them. So they were invited in, tasted and toasted, lauded and vetted, these resplendent shamans, visiers and merlins, all busily stirring away over crucibles and mixing bowls, muttering formulaic incantations and coven-like gatherings together in quarrellings and squealing frenzies over bubbling standard-setting and transnational governmental policies. But it took them clearly, forty or fifty years to align themselves into the greater muck of deep thinkers and adept variables calculators which they are today. There were a few high profile economist-type animals out there, the ones sticking their heads up and out into public view, ones that the public could readily rattle their shakers and wave their sticks at, but as Brockway notes (The End of Economic Man) these people are just not the best crowd gatherers as far as getting the word out on common sense terms.

People like Keynes (Not Keynes however) and White probably preferred the comfortable backroom scenes and settings they shared with the paneled offices set, those Cuban cigars chomping crusts of banking and business elites, only willing to endure government filters on their tabac when they had clearly and utterly ruined themselves in the global Las Vegas stakes games which had been going on for decades. Frames of eloquent reference and smokingly engaging writers of interest are hard to find among the business-mongering, one may exclude Lee Iaccoca from such a pronouncement, even merely for his chequered coats alone, to common readers. Although I willingly exclude Aldcroft from this assessment as well, he has written a good text for the rooting about of personal exploration in the area of dead men wearing plaid. Economics is too often colourless, fusty, which might explain why enrollments in the topic are dropping like flies in many developed nations. The role lacks the public pizazz and the juggling talents of carpet-baggers like Keynes. However by all accounts trained economists are paid well enough. Surprisingly then income is not the issue? Is it the absurdity that not enough people know what they do maybe? Perhaps economists have not thoroughly engaged the mighty marketing angles they could use to overwhelm their departments with willing applicants? It is obviously not a conspiracy. But quite possibly simply indicative, that once again, the great business scions are deeming their chances a little too highly again.

Without these bean counters, without Keynes-like manipulators and wrestling wheeler-dealers at the tables, it is very likely these business mavens will wreck themselves, again, possibly more forcibly, due to the absence of any variables settings which might encourage them to operate with a mite more concern for reasonable outcomes of operating without evolving econometrical pace setting or theoretical improvements which is clearly what defines public versus private benefit. Is there any coincidence that these organisations of global reknown effectively mitre-out public oversight even by seemingly embracing public input, but at the same time belittle it? All of those NGOs out there entering the fray, often just as unaccountable as the organisations they seek to engage.

That econometric metronomes are all often wound and clicked out to the same beats and seemingly goose-stepped measures is a worry for many. For one, economists are afforded some of the few ivory towers remaining in a business world of often ill-regarded repute. Maybe it is for the best that apparently too few people know or care about what they do. For example, my own postgraduate studies in International Business were undertaken from an economist's perspective (I think). Milling around the Middle East with the rest of the workers on days off, I often wondered what benefits salary could contribute to my understanding of the world. Or even a full suit of salwar khamis. But naturally, idleness breeds discontent. Unfortunately, discontent is not always assuaged by the pursuit of knowledge. Do not take my word for it. My solution, which appears to have become a full-time vocation was to start reading deeply in the domain of the foxes.

Shun idleness. It is a rust that attaches itself to the most brilliant metals. ~Voltaire
This Voltaire was a great consumer of coffee, apparently about fifty cups a day.

So even a desire to preclude idleness could foster instantaneous death in a man of intellectual intelligence and wit with a few more cups, merely by seeking to combat idleness, which means I shall be utterly lost and confounded due to my mere two or three cups a day perhaps living to a hundred as a result of an absence of fuller volumes of the human oils, intellect, or wit. What I have become I am afraid is the poor man's horse or hound of mixed varieties. I know this to be true, which I hope explains an idle interest in economics. Direct interest has yet to be a profit-making enterprise. But basically appears to be the point to a certain extent. Rogue economists are loathed as fusty, musty dust stirrers, likened to saboteurs or the odd types that like to round up the tumble weeds a bit, and bring some semblance of understanding of what these people actually appear to do at times, namely how they effect global trade mechanisms, how they lurch about evaluating trade based on metrics which often appear to intend to seperate human responsibilities from corporate actions and government induced policies. As Aldcroft notes, these have outlandish and outstanding effects on every facet of business. He also proves one can determine the states of economics history and the possible determinant factors required in the study of it as truly the greatest of parades in English Literature may attest.

But this was drawne of six vnequall beasts,
On which her six sage Counsellours did ryde,
Taught to obay their bestiall beheasts,
With like conditions to their kinds applyde:
Of which the first, that all the rest did guyde,
Was sluggish Idlenesse the nourse of sin;
Vpon a slouthfull Asse he chose to ryde,
Arayd in habit blacke, and amis thin,
Like to an holy Monck, the seruice to begin.
(Book IV, Canto I, The Fairie Queene)

Additional historical proof perhaps that too few of these brahmins have descended out of their ivory towers to account for whether or not corporation and capitalist powers have graciously coddled together for them to avoid really proving collectively that they are not just rubber stamp advocates of what often appears to amount to the capitalist outweighing of democratic principles at times. Apparently our times? That this dynamic of push and pull is in fact the provocation of these tinkerers and mechanics into the practice of their pseudo-sciences on the world stage to begin with, free at large, to sort out a real economic mess is a credit to their perceived colourlessness. But clearly, as Aldcroft indicates, and as a loquacious orchid among them, democratic nations were facing a formidable challenge in Europe following the 1929 crash, not just in terms of war, but in terms of aligning themselves in any orders built out of economic chaos through not only recovery, but another go at reconstruction due to their own circular parades.

Recovery is noted as early as 1932 by Aldcroft. But it was not really underway fully until the mid-1930s. An interruption in 1937-1938 is noted as the necessary recessionary effects of, to no surprise, renewed European build-ups for war, again. All of Europe had suffered especially in the areas of extremely high unemployment, and while Aldcroft states that the British mostly had a structural element to cause this, the most outstanding reconstructionist turned out to be Germany itself. He plainly informs that the methods of that success left much to be desired among most civilized nations then as today. But that Germany was able to eradicate unemployment was indicative to the extremes of which despotic government manipulations may achieve unhindered of moral or ethical concerns in the physical liquidating dissolution of minorities, or individuals holding significant although often unaccounted for wealth, property, industrial plant, and investments at home or abroad. Another great leader of growth in this period was Russia, evidence of the short-term successes to which Communist and Nazi economic models shared in their fascist manipulations of private capital in acheiving their desired economic outcomes. As for most of greater Europe prior to forced entry into wars, again, and alliances, again, there were no international attempts to rectify the issues remaining. Obviously, all players were pushing back from the table and it is logical that there should be no concensus building in terms of international trade solutions themselves, as factually, as well as perceptively, it had been international growth and trade issues which had perpetuated nationalism and bilateralism among the Europeans to start with.

Economists attempted however feebly to amend and abraid their collective ministrations through a failed World Economic Congress in 1933 and later US attempts met a similar fate. Doubtless, much salmon was consumed at these meetings, which probably helped Norway's current accounts and export volumes to a negligible extent. But Aldcroft notes the one fishy invitee who never made an appearance was the international lending community. There were to be no further feastings in or itinerant religious conversions made of this churlish international, global department. No international financing agencies crept out from their shadows to boost trade; global volumes continued to wallow far below previous peaks.

Thus the Age of Keynesian Economics was birthed. Business had failed to deliver itself from an inability at capitalist potty training. Thus government was obviously the only entity available to rouse debt ridden and dormant economies to restart on bare necessities like food, spare clothing, and mere shelter for throngs of homeless, unemployed and penniless production economy workers adding a socialist bent to the entire process. Those who had left their hayseeds at the door, were now threadbare, scraping the patent leathers of their shoes and the bones of last seasons bison together with their own tears to make it until tomorrow. Business dropped them as quickly as hot potatos. So taxations out of purse wrenchings and the dressings of sawdust sausages and snags led into full economic enticements based on domestic unilateral efforts alone which characterized much of the recovery of the period. Furthermore, despite all the wonderous technological leaps, these enlightened business-minded nations seemingly withdrew into themselves as the likes of hermit crabs never before seen, each peaking out and scrabbling about its affairs alone, each imposing currency devaluations, again concurrently, and the full iron-fists of state-mandated foreign trade factors which continually squelched and stymied their own collective recoveries. Withered domestic economies seemingly frozen to the marrow in fears of inflation. Thus state spending was pushed and prodded forward. Individual taxpayers brought forth to mend the ways of big bad business. The alternatives were a return to the guild and sheep farm states which had helped grow them. However none could afford even the thread to eye even that needle.

Singular tiny bright lights burned through the dark over Sweden and Finland, tiny industrial plants probably easily hopped over on a long jump compared to the dinosaurs of France and Austria. British industriousness included a desire to build sweat equity out of their own pitieous squires in a house construction and thus domestic demand enterprise which helped them afford their own bubble and continued squeak. However Germany remained a recovery leader, not only due to reparations debt forgiveness as granted by Hoover, obviously on that one, there appears startling coincidence that the most famous vacuum cleaner of the age bore the same name. Surprisingly France and Belgium took the bird-brained alternative to breaking the gold standard by sticking to it like stubborn fools, sinking up to their necks in home-markets determined turmoils demands curtailings. Aldcroft makes a good review of the efforts of Britain, France, Sweden, Germany, and Austria in proving that their inward, navel gazing attitudes to economic recovery mainly provoked their failures in this period. They all had much to learn about good government management of such a large international issue in an economic world that each was struggling to understand, but thought nothing of encouraging the kinds of economic nationalisms, from weakly effective to probably the most brutal ever recorded, which they ended up with as a result of their lack of collective economic cooperations. Economists are absurd if they attempt to contend that their discipline did not directly provoke the nationalist stances of Europe which helped ease the ways to power of not only the amoral, but economic Anti-Christ of Hitler in Germany as a result.

Collectively Aldcroft posits that industrial recovery was more about realignments, new products and technologies aimed at consumer domestic needs rather than export driven growth which fostered domestic recoveries, something Europeans really had little experience with concocting. Cheap money courtesy of government underwriting determined recovery, subsidizing and employing of entire industries in Britain and Germany , while in Sweden, Aldcroft notes good government policies prevailed including public works and relief efforts which actually inspired export growth. Such practices did not reach Austria which was like the sick man of Europe having little progressed due to expropriations of much of its industrial borderlands to Czechslovakia following the war; it was little better off than it had been in 1913. Which highlights the clear advantages to which the German economy might have availed itself even if it had not inflicted such a terrible cultural misalignment as Nazism upon itself and its weakly, economically gimpy agrarian neighbours.

Aldcroft makes no mention of possible significant expropriations in capital physical plant within Germany during the growth of the Nazi economy. However there are plenty of reasonable accounts out there which claim that most Swiss take-overs in Germany were the result of possible sweet-heart/shotgun wedding deals with leading industrialists which would guarantee their safe exit, and the safe exit of their investments to Swiss banks and beyond. There is no adequate accounting of allegations of looted gold and accounts in Swiss coffers through this period. Survivors of the holocaust would often arrive there with letters and bankbooks, unable to collect outstanding accounts through Swiss prescriptive efficency of demanding death certificates of vicitims of the gas chambers. True, German records-keeping efficency helped prosecute criminals at Nuremburg and the like, but redress of Swiss interlocuters has always been a difficult affair. Many would call this aspect of the economic mix unresolved.

That German economists may have played with significant stacks of stolen assets and capital is unaccounted for in Aldcroft's assessment of German recovery in the early to mid-1930s. But a similar review of Yugoslavian ethnic cleansings and motivations would indicate that sizeable transfers of agglomerations of investment capital must have occurred, just as those portions of territories in bordering Serbians, Croatians and Bosnia-Herzegovinans were always about clearing out prosperous tenants, mostly Muslims, from lands and the methods by which attained capital and assets were similar as well. The ends to which were assumptions of ownership at throw-away prices and control previously distributed among more diverse, more individually responsible minority groups, business leaders, and corporations amassed to atrocious ends .

Thus German influences in Eastern Europe at this time bore similar resemblance to its effects among its native Jewish populations in terms of economic power and influence. When the state itself sets upon its social minorities with the aim of absorbing and eradicating the powers and positions of those people, it is demonstrating the extremes to which corporate growth and control, as well as government sponsored policies can also exceed the will of individual independent nation states, if not in outright military conflict, then through pernicious exercise of economic incentives. Eastern Europe had little evolved from its unequal productivity and earnings comparatives with Western Europe since 1913. So Aldcroft notes that all Germany had to do was engage competitive advantages there, clearly, favourable exchange of industrial exports to an agrarian collective regional economy which had barely entered the industrial age. Imagine how easily the west was won with beads, pots, and pans to imagine how easily the German economy would expropriate its farmer cousins. Imagine how internally, the point of a gun was all that was necessary to expropriate the wealth and the rights, the millions of lives, but not the dignity of the Jewish people. So similarly treated were the Muslims of Yugoslavia.

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