Hi Arno,

Thanks for the link. I also found the transcripts of that 'secret'
conference of the Friedrich List Society of Sept. 16-17, 1931. They are
referenced in "Freedom with responsibility: the social market economy in
Germany, 1918-1963" By Anthony James Nicholls, p 45, note 49.
Lautenbach's plan (to spend 1.6 billion Mark in productive credit) was
rejected by those present, just as Reichsbank president Luther had hoped
when he called the meeting to have the plan discussed. He and Chancellor
Bruening were then still wedded to deflationary policies.

In the LaRouche pubs there is also an interesting note on Tokyo being
rebuilt aided by a gvt credit creation scheme after the 1923 earthquake
("They just issued unlimited credit, reconstructed Tokyo...") but other
sources write that "A massive reconstruction plan was drawn up, but was
too expensive to complete..."

Dirk

Mong Daastoel wrote:
>
>
> Dirk,
> This snippet by the signature klaatu in 2004 may be of some interest.
> Arno
>
> http://wc0.worldcrossing.com/WebX?14@@.1ddfd222/29
> <http://wc0.worldcrossing.com/WebX?14@@.1ddfd222/29>
>
>
--------------------------------------------------------------------------------
>
> *klaatu* <http://wc0.worldcrossing.com/WebX?224@@11f1df73@.1ddfd222/30> - Sep
2,
> 2004 5:47 pm (#31 <http://wc0.worldcrossing.com/WebX?14@@.1ddfd222/30> of 162)
> http://wc0.worldcrossing.com/Images/space.gifReply
> <http://wc0.worldcrossing.com/WebX?229@@.1ddfd222>
>
> I have been reading about *the 1931 Lautenbach Plan in Germany*. The situation
> then is very much like the situation now, the German economy was in shambles
and
> was being pressured to undertake an austerity program. Hyperinflation had
taken
> place after the printing of more than enough money to nominally pay off the
> reparations debt.
>
> Various plans were offered, the most documented one being the Lautenbach Plan,
> which proposed that steps similar to what FDR.
>
> ·  issue national credit for infrastructure projects
>
> ·  this would not be inflationary, because it would generate real wealth for
the
> country
>
> ·  this would slow and stop the economic decline
>
> ·  credit used for speculation is inflationary
>
> ·  the reparation agreement did not permit this creation of credit
>
> ·  The Bank Of England (Norman Montagu) and BIS (Hjalmar Schact) did not want
> Germany free of their financial system
>
> In response Montagu and Schacht provided the financing to install Hitler. It
is
> argued that had these plans been put into place, there would have been no
WWII.
>
> Each article covers the same ground, but I found very little overlap between
them.
>
> http://www.larouchepub.com/hzl/2003/3001berlin_eir_laut.html
> <http://www.larouchepub.com/hzl/2003/3001berlin_eir_laut.html>
>
> http://www.schillerinstitut.dk/hzlspeech.html
> <http://www.schillerinstitut.dk/hzlspeech.html>
>
> /Excerpts:/
>
> On November 24, 2003 of this year, Professor Herbert Giersch , formerly one of
> the "Five Wise Men," headed up the World Economic Institute in Kiel, wrote in
> /Welt am Sonntag./ on the current deteriorating economic situation:
>
> "Seventy years ago, when the worldwide economic crisis erupted, a group of
noted
> economists of various persuasions, including Wagemann, Woytinsky, Baade,
> Lautenbach, Lombard, Loewe, and Lederer, sought to build enthusiasm among the
> political class and in public opinion, for its policy of active government
> expenditures. Quite probably it could have cost the National Socialists their
> victory in the Summer of 1932."
>
> ... The economic debate, which raged from 1930 to 1932, is almost completely
> swept under the rug in Germany today. Instead we get the widespread myth that
it
> was the Nazis, and Hjalmar Schacht and Hitler, whose job-creation programs
> succeeded in eliminating unemployment. Nothing can be further from the truth.
>
> "The natural course for overcoming economic and financial emergency," is "not
to
> limit economic activity, but to increase it, because the market, in the
current
> conditions of simultaneous depression and world monetary crisis, no longer
> intervenes." -- Dr. Wilhelm Lautenbach, /Possibilities for Reviving Economic
> Activity, by Means of Investment and Expansion of Credit,/ at September 16-17,
> 1932 conference at the Friedrich List Society
>
> He was saying that we have two possibilities: Either we create credit right
now
> for investment, or else, in very short order we will have to do it anyway, but
> merely in order to finance unemployment—exactly the situation we have today.
>
> ... Many historians today have surmised that with his deflation policy,
Brüning
> wanted to intentionally ruin the economy in order to make the point that
Germany
> could not pay the reparations. At the time, there were indeed negotiations for
> debt relief, the so-called Hoover Moratorium. But that came too late for
> Brüning, and this terrified him; he had an image of himself as a marathon
> runner, who was only 100 meters away from the finish-line, but who couldn't
run
> the final stretch.
>
> ... If Woytinsky's proposals, and those of Lautenbach, had been implemented in
> 1931, the conditions would not have existed for two years as they did, making
it
> possible for the Nazis to seize power. And if von Schleicher had had even a
mere
> six months' time to implement his program, the same would have been true.
Which
> is to say that if, in Germany, people had been able to follow the same policy
as
> Franklin Delano Roosevelt in America, in all probability, World War II would
> never have happened.
>
>
>

http://wc0.worldcrossing.com/WebX?14@@.1ddfd222/29

klaatu - Sep 2, 2004 5:47 pm (#31 of 162)

I have been reading about the 1931 Lautenbach Plan in Germany. The situation then is very much like the situation now, the German economy was in shambles and was being pressured to undertake an austerity program. Hyperinflation had taken place after the printing of more than enough money to nominally pay off the reparations debt.

Various plans were offered, the most documented one being the Lautenbach Plan, which proposed that steps similar to what FDR.

·  issue national credit for infrastructure projects

·  this would not be inflationary, because it would generate real wealth for the country

·  this would slow and stop the economic decline

·  credit used for speculation is inflationary

·  the reparation agreement did not permit this creation of credit

·  The Bank Of England (Norman Montagu) and BIS (Hjalmar Schact) did not want Germany free of their financial system

In response Montagu and Schacht provided the financing to install Hitler. It is argued that had these plans been put into place, there would have been no WWII.

Each article covers the same ground, but I found very little overlap between them.

http://www.larouchepub.com/hzl/2003/3001berlin_eir_laut.html

http://www.schillerinstitut.dk/hzlspeech.html

Excerpts:

On November 24, 2003 of this year, Professor Herbert Giersch , formerly one of the "Five Wise Men," headed up the World Economic Institute in Kiel, wrote in Welt am Sonntag. on the current deteriorating economic situation:

"Seventy years ago, when the worldwide economic crisis erupted, a group of noted economists of various persuasions, including Wagemann, Woytinsky, Baade, Lautenbach, Lombard, Loewe, and Lederer, sought to build enthusiasm among the political class and in public opinion, for its policy of active government expenditures. Quite probably it could have cost the National Socialists their victory in the Summer of 1932."

... The economic debate, which raged from 1930 to 1932, is almost completely swept under the rug in Germany today. Instead we get the widespread myth that it was the Nazis, and Hjalmar Schacht and Hitler, whose job-creation programs succeeded in eliminating unemployment. Nothing can be further from the truth.

"The natural course for overcoming economic and financial emergency," is "not to limit economic activity, but to increase it, because the market, in the current conditions of simultaneous depression and world monetary crisis, no longer intervenes." -- Dr. Wilhelm Lautenbach, Possibilities for Reviving Economic Activity, by Means of Investment and Expansion of Credit, at September 16-17, 1932 conference at the Friedrich List Society

He was saying that we have two possibilities: Either we create credit right now for investment, or else, in very short order we will have to do it anyway, but merely in order to finance unemployment—exactly the situation we have today.

... Many historians today have surmised that with his deflation policy, Brüning wanted to intentionally ruin the economy in order to make the point that Germany could not pay the reparations. At the time, there were indeed negotiations for debt relief, the so-called Hoover Moratorium. But that came too late for Brüning, and this terrified him; he had an image of himself as a marathon runner, who was only 100 meters away from the finish-line, but who couldn't run the final stretch.

... If Woytinsky's proposals, and those of Lautenbach, had been implemented in 1931, the conditions would not have existed for two years as they did, making it possible for the Nazis to seize power. And if von Schleicher had had even a mere six months' time to implement his program, the same would have been true. Which is to say that if, in Germany, people had been able to follow the same policy as Franklin Delano Roosevelt in America, in all probability, World War II would never have happened.

http://wc0.worldcrossing.com/WebX?14@@.1ddfd222/29

klaatu - Sep 2, 2004 5:47 pm (#31 of 162)

I have been reading about the 1931 Lautenbach Plan in Germany. The situation then is very much like the situation now, the German economy was in shambles and was being pressured to undertake an austerity program. Hyperinflation had taken place after the printing of more than enough money to nominally pay off the reparations debt.

Various plans were offered, the most documented one being the Lautenbach Plan, which proposed that steps similar to what FDR.

·  issue national credit for infrastructure projects

·  this would not be inflationary, because it would generate real wealth for the country

·  this would slow and stop the economic decline

·  credit used for speculation is inflationary

·  the reparation agreement did not permit this creation of credit

·  The Bank Of England (Norman Montagu) and BIS (Hjalmar Schact) did not want Germany free of their financial system

In response Montagu and Schacht provided the financing to install Hitler. It is argued that had these plans been put into place, there would have been no WWII.

Each article covers the same ground, but I found very little overlap between them.

http://www.larouchepub.com/hzl/2003/3001berlin_eir_laut.html

http://www.schillerinstitut.dk/hzlspeech.html

Excerpts:

On November 24, 2003 of this year, Professor Herbert Giersch , formerly one of the "Five Wise Men," headed up the World Economic Institute in Kiel, wrote in Welt am Sonntag. on the current deteriorating economic situation:

"Seventy years ago, when the worldwide economic crisis erupted, a group of noted economists of various persuasions, including Wagemann, Woytinsky, Baade, Lautenbach, Lombard, Loewe, and Lederer, sought to build enthusiasm among the political class and in public opinion, for its policy of active government expenditures. Quite probably it could have cost the National Socialists their victory in the Summer of 1932."

... The economic debate, which raged from 1930 to 1932, is almost completely swept under the rug in Germany today. Instead we get the widespread myth that it was the Nazis, and Hjalmar Schacht and Hitler, whose job-creation programs succeeded in eliminating unemployment. Nothing can be further from the truth.

"The natural course for overcoming economic and financial emergency," is "not to limit economic activity, but to increase it, because the market, in the current conditions of simultaneous depression and world monetary crisis, no longer intervenes." -- Dr. Wilhelm Lautenbach, Possibilities for Reviving Economic Activity, by Means of Investment and Expansion of Credit, at September 16-17, 1932 conference at the Friedrich List Society

He was saying that we have two possibilities: Either we create credit right now for investment, or else, in very short order we will have to do it anyway, but merely in order to finance unemployment—exactly the situation we have today.

... Many historians today have surmised that with his deflation policy, Brüning wanted to intentionally ruin the economy in order to make the point that Germany could not pay the reparations. At the time, there were indeed negotiations for debt relief, the so-called Hoover Moratorium. But that came too late for Brüning, and this terrified him; he had an image of himself as a marathon runner, who was only 100 meters away from the finish-line, but who couldn't run the final stretch.

... If Woytinsky's proposals, and those of Lautenbach, had been implemented in 1931, the conditions would not have existed for two years as they did, making it possible for the Nazis to seize power. And if von Schleicher had had even a mere six months' time to implement his program, the same would have been true. Which is to say that if, in Germany, people had been able to follow the same policy as Franklin Delano Roosevelt in America, in all probability, World War II would never have happened.

Hudson multimedia goodies

Thanks to all those who attended Professor Hudson's talks - welcome to our new friends.

"Classical economists fought a 500 year battle to overcome the hangover of feudal influence over a genuine democracy. With the devolution of Neo-Classical and now Neo-Liberal economics, this period will be known as the Counter-Enlightenment" stated Hudson with prominence.

Enjoy these links (many are from our sister org Prosper's site):

Melbourne Town Hall - Lifting the Lid on the GFC presentation

Lifting the Lid on the GFC slideshow

Hudson on ABC International TV (broadcast to 41 countries and millions of people)

Press Release: Rising Interest Rates in Whose Interest?

Hudson on Sky New's Switzer TV

Federal Parliament's Vital Issues speech - Global Policy Trends in a Financialised Economy

Video of Sydney's "Forever Blowing Bubbles" speech (thanks to Sean Reynolds from Global House Price Crash for filming/ editing)

Other Hudson highlights including the Phillip Adams interview, the Renegade Economists interviews and his op-ed can be found by clicking on the Michael Hudson tag on any of his posts on our earthsharing or prosper websites. Don't forget to subscribe to the Renegade Economists to hear more from Hudson.

More video and audio to come soon.

Progress Progress

Get the most out of Professor Hudson's discussions by signing up as a Trial Subscriber to our flagship Progress magazine. You will receive 4 free copies of the 24 page magazine to trial before you hopefully become a member ($30).

For over 100 years we have been maintaining the knowledge-base that the earth will always get more valuable and that this increase can and should fund government.

Read the latest articles and reports from around the world on cane-based paper - the best way for this paradigm shift to sink in.

 
 
   

Pretty good description Michael!
;-)
No mention of your movie and musical carereer though.
Can you fill me in?
Arno

PS
When is your big birthday?
Am I too late to congratulate?



http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29
Michael Hudson (economist)
From Wikipedia, the free encyclopedia
Jump to: navigation <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#column-one> , search <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#searchInput>
Michael Hudson (born in 1939 <http://en.wikipedia.org/wiki/1939> , Chicago, Illinois, USA) is Distinguished Research Professor of Economics <http://en.wikipedia.org/wiki/Economics> at University of Missouri, Kansas City <http://en.wikipedia.org/wiki/University_of_Missouri,_Kansas_City> (UMKC). He is also a Wall Street <http://en.wikipedia.org/wiki/Wall_Street>  analyst <http://en.wikipedia.org/wiki/Financial_analyst> and consultant as well as president of The Institute for the Study of Long-term Economic Trends <http://en.wikipedia.org/w/index.php?title=Institute_for_the_Study_of_Long-term_Economic_Trends&amp;action=edit&amp;redlink=1>  (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies <http://en.wikipedia.org/w/index.php?title=International_Scholars_Conference_on_Ancient_Near_Eastern_Economies&amp;action=edit&amp;redlink=1>  (ISCANEE).
 
  Contents [hide]

• 1 Highlights <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#Highlights>
• 2 Influential writings <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#Influential_writings>
• 3 Books <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#Books>
• 4 ISCANEE <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#ISCANEE>
• 5 Education <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#Education>
• 6 External links <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#External_links>
• 7 References <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#References>
  

  
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=1> ] Highlights
The New School <http://en.wikipedia.org/wiki/New_School>  in New York City, where he taught previously, and UMKC, where he is currently a Distinguished Research Professor, are the main U.S. alternatives to Chicago School <http://en.wikipedia.org/wiki/Chicago_School_of_economics>  anti-government economics. He also lectures and publishes in association with UMKC at The Berlin School of Economics <http://en.wikipedia.org/wiki/Berlin_School_of_Economics> ,
Hudson served as Chief Economic Advisor for Dennis Kucinich <http://en.wikipedia.org/wiki/Dennis_Kucinich> ’s 2008 presidential campaign and holds the same position in Kucinich’s Congressional campaign. He has been economic advisor to the U.S., Canadian, Mexican and Latvian governments, to the United Nations Institute for Training and Research <http://en.wikipedia.org/wiki/United_Nations_Institute_for_Training_and_Research>  (UNITAR), and he is president of the Institute for the Study of Long-term Economic Trends <http://en.wikipedia.org/w/index.php?title=Institute_for_the_Study_of_Long-term_Economic_Trends&amp;action=edit&amp;redlink=1>  (ISLET).
Hudson is a former balance-of-payments economist for Chase Manhattan Bank <http://en.wikipedia.org/wiki/Chase_Manhattan_Bank>  and Arthur Andersen <http://en.wikipedia.org/wiki/Arthur_Andersen> , and economic futurist for the Hudson Institute <http://en.wikipedia.org/wiki/Hudson_Institute>  (no relation). For Scudder, Stevens & Clark <http://en.wikipedia.org/w/index.php?title=Scudder,_Stevens_%26_Clark&amp;action=edit&amp;redlink=1>  in 1990, he established the world’s first Third World sovereign debt <http://en.wikipedia.org/wiki/Developing_countries%27_debt> fund, which became the second best performing international fund in 1991[citation needed <http://en.wikipedia.org/wiki/Wikipedia:Citation_needed> ] (an Australian <http://en.wikipedia.org/wiki/Australian> real estate fund was number one[citation needed <http://en.wikipedia.org/wiki/Wikipedia:Citation_needed> ]).
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=2> ] Influential writings
Hudson has written cover stories for Harper's Magazine <http://en.wikipedia.org/wiki/Harper%27s_Magazine> and is on the editorial board of Lapham's Quarterly <http://en.wikipedia.org/wiki/Lapham%27s_Quarterly> . He is a regular on American Public Media <http://en.wikipedia.org/wiki/American_Public_Media> 's Marketplace <http://en.wikipedia.org/wiki/Marketplace_%28radio_program%29> , Bloomberg Radio <http://en.wikipedia.org/wiki/Bloomberg_Radio> , has been on numerous Pacifica Radio <http://en.wikipedia.org/wiki/Pacifica_Radio>  interview programs, and is a regular contributor to CounterPunch <http://en.wikipedia.org/wiki/CounterPunch> (http://counterpunch.com/). He has written for the Journal of International Affairs <http://en.wikipedia.org/wiki/Journal_of_International_Affairs> , Commonweal <http://en.wikipedia.org/wiki/Commonweal> , Bible Review <http://en.wikipedia.org/wiki/Bible_Review> , International Economy <http://en.wikipedia.org/w/index.php?title=International_Economy&amp;action=edit&amp;redlink=1> , New York Times <http://en.wikipedia.org/wiki/New_York_Times> op-eds, and has often contributed editorials in leading Latvian, Polish and Arabic business papers. His trade books are translated into Japanese, Chinese, Spanish and Russian.
Hudson's April 2006 Harper's cover story, “The $4.7 Trillion Pyramid: Why Social Security Won’t Be Enough to Save Wall Street,” helped defeat the Bush administration’s attempt to privatize Social Security <http://en.wikipedia.org/wiki/Social_Security_debate_%28United_States%29>  by showing its aim of steering wage withholding into the stock market <http://en.wikipedia.org/wiki/Stock_market>  to reflate stock market prices for the benefit of insiders <http://en.wikipedia.org/wiki/Insider> and speculators <http://en.wikipedia.org/wiki/Speculator> – and to sell to the pension funds <http://en.wikipedia.org/wiki/Pension_funds> . His May 2006 Harper's cover story, “The New Road to Serfdom: An illustrated guide to the coming real estate collapse,” was the first major national article forecasting - in precise chart form - the bursting of the real estate bubble <http://en.wikipedia.org/wiki/Real_estate_bubble>  and its consequences for homeowners and state and local government solvency <http://en.wikipedia.org/wiki/Solvency> .[1] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-0> The November 2008 “How to Save Capitalism” issue of Harper's includes an article by Hudson on the inevitability of a large write-off <http://en.wikipedia.org/wiki/Write-off> of debts and the savings they back.
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=3> ] Books
Professor Hudson is the author of several books.
Super Imperialism: The Economic Strategy of American Empire,[2] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-1> was the first book to describe the global free ride for America after it went off the gold standard in 1971, putting the world onto a paper U.S. Treasury-bill standard. Obliging foreign central banks to keep their monetary reserves in Treasury bonds forced them to finance U.S. military spending abroad, which was responsible for the U.S. balance-of-payments deficit at that time.
Global Fracture: The New International Economic order[3] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-2> , a sequel to Super Imperialism, forecast the division of the world into regional trade and currency blocs.
Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World Dominance[4] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-3> , a new and completely revised edition of "Super Imperialism", describes the genesis of America's political and financial domination.
Global Fracture: The New International Economic order, Second Edition[5] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-4> , a new and updated edition that explores how and why the US came to achieve world economic hegemony.
His forthcoming book, The Fictitious Economy, is among the first to explain to general readers how a corrosive bubble economy <http://en.wikipedia.org/wiki/Bubble_economy>  is replacing industrial capitalism <http://en.wikipedia.org/wiki/Industrial_capitalism>  via debt-financed <http://en.wikipedia.org/wiki/Debt_finance> , asset price inflation <http://en.wikipedia.org/wiki/Asset_price_inflation>  with the main purpose of increasing balance-sheet <http://en.wikipedia.org/wiki/Balance_sheet>  net worth <http://en.wikipedia.org/wiki/Net_worth> , benefiting a select few[6] <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_note-5> while spreading risk <http://en.wikipedia.org/wiki/Risk> among the general population.
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=4> ] ISCANEE
In 1984, Hudson joined Harvard’s archaeology <http://en.wikipedia.org/wiki/Archaeology> faculty at the Peabody Museum <http://en.wikipedia.org/wiki/Peabody_Museum>  as a research fellow in Babylonian <http://en.wikipedia.org/wiki/Babylon> economics. A decade later, he was a founding member of ISCANEE (International Scholars Conference on Ancient Near Eastern Economies), an international group of Assyriologists and archaeologists that has published a series of colloquia analyzing the economic origins of civilization. This group has become the successor to Karl Polanyi <http://en.wikipedia.org/wiki/Karl_Polanyi> ’s anthropological and historical group of a half-century ago. Four volumes co-edited by Hudson have appeared so far, dealing with privatization, urbanization and land use, the origins of money, accounting, debt, and clean slates in the Ancient Near East (a fifth volume, on the evolution of free labor, is in progress). This new direction in research is now known as the New Economic Archaeology.
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=5> ] Education
Prof. Hudson received his Ph.D. <http://en.wikipedia.org/wiki/Ph.D.>  from New York University <http://en.wikipedia.org/wiki/New_York_University>  in 1968 (economics <http://en.wikipedia.org/wiki/Economics> ). His dissertation was on American economic and technological thought in the nineteenth century. He received his M.A. <http://en.wikipedia.org/wiki/Master_of_Arts_%28postgraduate%29>  also from New York University in 1963 in economics, with a thesis on the World Bank <http://en.wikipedia.org/wiki/World_Bank> 's philosophy of development, with special reference to lending policies in the agricultural sector. He was a philology <http://en.wikipedia.org/wiki/Philology> major with a minor in history at the University of Chicago <http://en.wikipedia.org/wiki/University_of_Chicago> , where he received his B.A. <http://en.wikipedia.org/wiki/Bachelor_of_Arts> in 1959. He attended the University of Chicago's Laboratory School <http://en.wikipedia.org/wiki/University_of_Chicago_Laboratory_Schools>  for high school and grade school.
[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=6> ] External links
 
   <http://en.wikiquote.org/wiki/Special:Search/Michael_Hudson_%28economist%29>    Wikiquote <http://en.wikipedia.org/wiki/Wikiquote> has a collection of quotations related to: Michael Hudson (economist) <http://en.wikiquote.org/wiki/Special:Search/Michael_Hudson_%28economist%29>   

• Michael Hudson official website <http://Michael-Hudson.com>
  

[edit <http://en.wikipedia.org/w/index.php?title=Michael_Hudson_%28economist%29&amp;action=edit&amp;section=7> ] References

1. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-0> Michael Hudson. Harper's. May 2006. Available at: http://www.michael-hudson.com/articles/debt/Hudson,RoadToSerfdom.pdf
2. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-1> Hudson, Michael (1972). Super Imperialism: The Economic Strategy of American Empire. Holt, Rinehart and Winston <http://en.wikipedia.org/wiki/Holt,_Rinehart_and_Winston> . ISBN <http://en.wikipedia.org/wiki/International_Standard_Book_Number>  978-0030859960 <http://en.wikipedia.org/wiki/Special:BookSources/978-0030859960> .
3. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-2> Hudson, Michael (March 1979). Global Fracture: The New International Economic order. Harper & Row <http://en.wikipedia.org/wiki/Harper_%26_Row> . ISBN <http://en.wikipedia.org/wiki/International_Standard_Book_Number>  978-0745323954 <http://en.wikipedia.org/wiki/Special:BookSources/978-0745323954> .
4. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-3> Hudson, Michael (March 2003). Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World Dominance. Pluto Press <http://en.wikipedia.org/wiki/Pluto_Press> . ISBN <http://en.wikipedia.org/wiki/International_Standard_Book_Number>  978-0745319896 <http://en.wikipedia.org/wiki/Special:BookSources/978-0745319896> .
5. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-4> Hudson, Michael (April 2005). Global Fracture: The New International Economic order, Second Edition. Pluto Press <http://en.wikipedia.org/wiki/Pluto_Press> . ISBN <http://en.wikipedia.org/wiki/International_Standard_Book_Number>  978-0745323947 <http://en.wikipedia.org/wiki/Special:BookSources/978-0745323947> .
6. ^ <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29#cite_ref-5> See also FIRE economy <http://en.wikipedia.org/wiki/FIRE_economy> .
   

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Michael Hudson (economist)
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Michael Hudson <http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29> (born in 1939 <http://en.wikiquote.org/wiki/1939> ) is Distinguished Research Professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).
 
 
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• The one sure mark of a con, though, is the promise of free money.
  
  • "The $4.7 trillion pyramid: Why Social Security won't be enough to save Wall Street" in Harper's Magazine (April 2005) <http://www.harpers.org/archive/2005/04/0080499>
    
• If you look at the speeches he gave just before he left the Fed, it's pretty much “After me - the Deluge. I'm getting out while my reputation's intact”.
  
  • About Alan Greenspan <http://en.wikiquote.org/wiki/Alan_Greenspan>
  • "BBC World Service" <http://www.bbc.co.uk/worldservice>  - Sept. 17th 2007 "Quote of the Day"
    

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Thanks Chris,
;-)

I owe my info on the List conference in 1931 to Peter Spengler.
He refered me to several German economists who worked intensely with
productive credit creation in the 1930s
("produktive Kredit-schöpfung") They wrote several books on this.

It is not so easy to find material on this on the web.
Google give only 6 links:
http://www.google.no/search?hl=en-GB&q=%28%22produktive+Kredit-sch%C3%B6pfung%22\
&sourceid=navclient-ff&rlz=1B3GGGL_en-GBNO328NO328&ie=UTF-8

Prof. Jurgen Backhaus has alos worked on this, see e.g. his article on
the social-democratic Lautenbach.

The LaRouche people likewise.
See e.g. http://www.larouchepub.com/hzl/2003/3001berlin_eir_laut.html
And in the US, let us not forget their work on the Abe Lincoln experience.
http://american_almanac.tripod.com/ascher1.htm

It is also of interest to include the Japanse MITI eperience, and
similar stories in (pre-revolution) Russia, Taiwan, Korea and ... China.

The same goes for the French tradition that is older than perhaps any,
and stretches from before Colbert (Charlemagne & Louis XI) to after de
Gaulle.

Arno

Dirk,

The best figure I have been able to find as yet is the Gross Margin of Marks
and Spencer. It hovers around 38 per cent. In calculating the margin they
are probably valuing purchases 'c.i.f', that is including carriage,
insurance and freight. Imports are valued the same way, but exports are
valued 'f.o.b', which does not include carriage, insurance and freight. Any
of the diference which accrues to Britain will show up in 'invisibles'.

The margin will include profit, but profit is a ytue cost, the cost of
capital.

The margin on locally produced goods would not need to be so high as on on
imported goods, so 38 is an average, the margin on imports being slightly
higher. My estimate of a 100 per cent mark-up is on these figures a trifle
high, but not much. Perhaps we could safely say 80 per cent.

Geoff



----- Original Message -----
From: "D.J.Bezemer" <d.j.bezemer@...>
To: <gang8@yahoogroups.com>
Sent: Monday, October 26, 2009 9:55 PM
Subject: [gang8] I=S: 'pushing on a string'


> Geoffrey, this is very clear. As I wrote in connection to developing
> countries, the attempt to fill their 'savings gap' by aid so that they
> can reach the required investment levels is like 'pushing on a
> string'.
>
> The one thing I was wondering about is how we could substantiate the
> figure of import goods needing about as many people to distribute them
> as to produce them?
>
> I believe this because of circumstantial evidence - how else would the
> US run such low unemployment figures while neglecting its real
> investment (if indeed it did that - the investment figures are
> problematic)? How can financilazed economies living off capital ains,
> lending and imports have decent employment levels? This is the only
> answer I can think of. Also others - e.g. the Daily Reckoning people -
> make this argument. But I have never seen a solid study on it.
>
> If true, the implication is that the depression will truly change the
> economy fundamentally from what is was before, and there is no back to
> businessas as usual without the deficit.
>
> Dirk
>
> On Mon, 26 Oct 2009 18:43:32 -0000
>  "Geoffrey Gardiner" <geoffrey.gardiner@...> wrote:
>> Dirk,
>>
>> I have been in touch with Charles. I attach my addition to his
>>arguments
>> which I sent him today.
>>
>> Credit, as we all know, needs to be got into the IS/LM model.
>>
>> Geoff
>>
>> ----- Original Message -----
>>From: "Dirk Bezemer" <d.j.bezemer@...>
>> To: <gang8@yahoogroups.com>
>> Sent: Wednesday, October 07, 2009 9:05 AM
>> Subject: Re: [gang8] The Continuing Muddles of Monetary Theory
>>
>>
>>> dear Geoffrey,
>>>
>>> Is not ALL 'money' derivative of credit?
>>>
>>> I was thinking of the creditary dictum "All money is credit, but
>>>credit
>>> is not all money". Are there exceptions to this ?
>>>
>>> Dirk
>>>
>>> Gardiner wrote:
>>>> I have had a brief glance at the paper.
>>>>
>>>> My first impression is that all that Charles was taught in 1957, and
>>>>I
>>>> was
>>>> taught a little earlier, is based on the assumption that 'money' is
>>>>a
>>>> 'thing', whereas it is a relationship of debtor and creditor. Once
>>>>this
>>>> point is grasped one sees that the theory has to be changed
>>>>drastically.
>>>> We
>>>> study the quantity of credit, not the quantity of 'money', which is
>>>> derivative of some, but not all, of the former.
>>>>
>>>> We are concerned not with a commodity but the level of debt, and
>>>>that
>>>> means
>>>> the quantity of goods and services which are supplied but not paid
>>>>for.
>>>> The
>>>> old theory assumes that the commodity, called money, has an absolute
>>>> level,
>>>> set by the central bank. But credit can be increased in ways which
>>>>are
>>>> outside central bank control, even if central banks knew how to
>>>>control
>>>> it,
>>>> which they don't.
>>>>
>>>> The ultimate in the follies resulting from seeing 'money' as a
>>>>thing, not
>>>> a
>>>> debtor/creditor reationship, is the daft ideas of the American
>>>>Monetary
>>>> Institute.
>>>>
>>>> As money is not a 'thing', the increase in the supply of money does
>>>>not
>>>> necessarily lower its value. What can lower the value of money is a
>>>> shortage
>>>> of the goods and services which credit is used to buy. If there is
>>>>no
>>>> such
>>>> constraint an increase in credit need not cause inflation.
>>>>
>>>> I am finding that I can get the idea that money is not a thing
>>>>across to
>>>> intelligent people. On Friday night the candidate for Swindon South
>>>> Parliamentary Constituency, with whom I had some weeks earlier
>>>>talked at
>>>> length about it, explained my point very well to the future Justice
>>>> Minister, forestallin my intent to do so. It probably helps that the
>>>> candidate is a lawyer (and trainee judge), not an economist, and is
>>>> therefore used to using words carefully and accurately.
>>>>
>>>> Charles wants to talk again so we meet on 10th November. We have a
>>>>more
>>>> practical matter to discuss.
>>>>
>>>> Geoffrey
>>>>
>>>>
>>>> ----- Original Message -----
>>>> From: "Dirk Bezemer" <d.j.bezemer@...>
>>>> To: <gang8@yahoogroups.com>
>>>> Sent: Thursday, October 01, 2009 9:11 AM
>>>> Subject: [gang8] The Continuing Muddles of Monetary Theory [1
>>>>Attachment]
>>>>
>>>>
>>>>
>>>>> Dear All,
>>>>>
>>>>> Attached a paper by Goodhart wit an excellent title (still need to
>>>>>read
>>>>> it), which as been circulating for a while and is now published in
>>>>> Economica.
>>>>>
>>>>> It is based on a lecture on the occasion of the 2007 75th
>>>>>Anniversary
>>>>> Lionel Robbins Conference in Londo. In ' The Continuing Muddles of
>>>>> Monetary Theory: A Steadfast Refusal to Face Facts', Goodhart sets
>>>>>out
>>>>> why he believes monetary economics has "a long way yet to go", and
>>>>>few
>>>>> economists "have bothered much to relate theory to reality." Here's
>>>>>the
>>>>> abstract to his short paper:
>>>>>
>>>>> Lionel Robbins was much concerned about the methodology of economic
>>>>> science.
>>>>> When he discussed the desirable relationship between theory and
>>>>> ‘reality’, two of the
>>>>> three examples that he presented where the theoretical analysis was
>>>>>not
>>>>> sufficiently
>>>>> based on a knowledge of historical fact were taken from monetary
>>>>> economics.
>>>>> Indeed, monetary theory has remained prone to such shortcomings ever
>>>>> since.
>>>>>
>>>>> Amongst the worst are:-
>>>>> (1) IS/LM: the monetary authorities set the monetary base, and the
>>>>> interest rate is
>>>>> determined in the market;
>>>>> (2) The monetary base multiplier of bank deposits, and the role of
>>>>> reserve ratios;
>>>>> (3) The current three equation neo-classical consensus, which not
>>>>>only
>>>>> assumes
>>>>> perfect creditworthiness for all agents, but also an essentially
>>>>> non-monetary
>>>>> system, e.g. no need for banks;
>>>>> (4) The standard theory of the evolution of money.
>>>>>
>>>>> Monetary economics can only get better, but it has a long way yet to
>>>>>go.
>>>>>
>>>>>
>>>>> best,
>>>>>
>>>>> Dirk
>>>>>
>>>>>
>>>>>
>>>>>
>>>>> ------------------------------------
>>>>>
>>>>> The gang8 list is devoted to Creditary Economics.
>>>>> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>>>>>
>>>>> Yahoo! Groups Links
>>>>>
>>>>>
>>>>>
>>>>>
>>>>
>>>>
>>>>
>>>> ------------------------------------
>>>>
>>>> The gang8 list is devoted to Creditary Economics.
>>>> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>>>>
>>>> Yahoo! Groups Links
>>>>
>>>>
>>>>
>>>>
>>>
>>>
>>>
>>> ------------------------------------
>>>
>>> The gang8 list is devoted to Creditary Economics.
>>> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>>>
>>> Yahoo! Groups Links
>>>
>>>
>>>
>>
>>
>>
>>
>> ------------------------------------
>>
>> The gang8 list is devoted to Creditary Economics.
>> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>>
>> Yahoo! Groups Links
>>
>>
>>
>
>
>
> ------------------------------------
>
> The gang8 list is devoted to Creditary Economics.
> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>
> Yahoo! Groups Links
>
>
>

http://en.wikipedia.org/wiki/Michael_Hudson_%28economist%29

Michael Hudson (economist)

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Michael Hudson (born in 1939, Chicago, Illinois, USA) is Distinguished Research Professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).

[edit] Highlights

The New School in New York City, where he taught previously, and UMKC, where he is currently a Distinguished Research Professor, are the main U.S. alternatives to Chicago School anti-government economics. He also lectures and publishes in association with UMKC at The Berlin School of Economics,

Hudson served as Chief Economic Advisor for Dennis Kucinich’s 2008 presidential campaign and holds the same position in Kucinich’s Congressional campaign. He has been economic advisor to the U.S., Canadian, Mexican and Latvian governments, to the United Nations Institute for Training and Research (UNITAR), and he is president of the Institute for the Study of Long-term Economic Trends (ISLET).

Hudson is a former balance-of-payments economist for Chase Manhattan Bank and Arthur Andersen, and economic futurist for the Hudson Institute (no relation). For Scudder, Stevens & Clark in 1990, he established the world’s first Third World sovereign debt fund, which became the second best performing international fund in 1991^{[citation needed]} (an Australian real estate fund was number one^{[citation needed]}).

[edit] Influential writings

Hudson has written cover stories for Harper's Magazine and is on the editorial board of Lapham's Quarterly. He is a regular on American Public Media's Marketplace, Bloomberg Radio, has been on numerous Pacifica Radio interview programs, and is a regular contributor to CounterPunch (http://counterpunch.com/). He has written for the Journal of International Affairs, Commonweal, Bible Review, International Economy, New York Times op-eds, and has often contributed editorials in leading Latvian, Polish and Arabic business papers. His trade books are translated into Japanese, Chinese, Spanish and Russian.

Hudson's April 2006 Harper's cover story, “The $4.7 Trillion Pyramid: Why Social Security Won’t Be Enough to Save Wall Street,” helped defeat the Bush administration’s attempt to privatize Social Security by showing its aim of steering wage withholding into the stock market to reflate stock market prices for the benefit of insiders and speculators – and to sell to the pension funds. His May 2006 Harper's cover story, “The New Road to Serfdom: An illustrated guide to the coming real estate collapse,” was the first major national article forecasting - in precise chart form - the bursting of the real estate bubble and its consequences for homeowners and state and local government solvency.^[1] The November 2008 “How to Save Capitalism” issue of Harper's includes an article by Hudson on the inevitability of a large write-off of debts and the savings they back.

[edit] Books

Professor Hudson is the author of several books.

Super Imperialism: The Economic Strategy of American Empire,^[2] was the first book to describe the global free ride for America after it went off the gold standard in 1971, putting the world onto a paper U.S. Treasury-bill standard. Obliging foreign central banks to keep their monetary reserves in Treasury bonds forced them to finance U.S. military spending abroad, which was responsible for the U.S. balance-of-payments deficit at that time.

Global Fracture: The New International Economic order^[3], a sequel to Super Imperialism, forecast the division of the world into regional trade and currency blocs.

Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World Dominance^[4], a new and completely revised edition of "Super Imperialism", describes the genesis of America's political and financial domination.

Global Fracture: The New International Economic order, Second Edition^[5], a new and updated edition that explores how and why the US came to achieve world economic hegemony.

His forthcoming book, The Fictitious Economy, is among the first to explain to general readers how a corrosive bubble economy is replacing industrial capitalism via debt-financed, asset price inflation with the main purpose of increasing balance-sheet net worth, benefiting a select few^[6] while spreading risk among the general population.

[edit] ISCANEE

In 1984, Hudson joined Harvard’s archaeology faculty at the Peabody Museum as a research fellow in Babylonian economics. A decade later, he was a founding member of ISCANEE (International Scholars Conference on Ancient Near Eastern Economies), an international group of Assyriologists and archaeologists that has published a series of colloquia analyzing the economic origins of civilization. This group has become the successor to Karl Polanyi’s anthropological and historical group of a half-century ago. Four volumes co-edited by Hudson have appeared so far, dealing with privatization, urbanization and land use, the origins of money, accounting, debt, and clean slates in the Ancient Near East (a fifth volume, on the evolution of free labor, is in progress). This new direction in research is now known as the New Economic Archaeology.

[edit] Education

Prof. Hudson received his Ph.D. from New York University in 1968 (economics). His dissertation was on American economic and technological thought in the nineteenth century. He received his M.A. also from New York University in 1963 in economics, with a thesis on the World Bank's philosophy of development, with special reference to lending policies in the agricultural sector. He was a philology major with a minor in history at the University of Chicago, where he received his B.A. in 1959. He attended the University of Chicago's Laboratory School for high school and grade school.

[edit] External links

• Michael Hudson official website

[edit] References

1. ^ Michael Hudson. Harper's. May 2006. Available at: http://www.michael-hudson.com/articles/debt/Hudson,RoadToSerfdom.pdf
2. ^ Hudson, Michael (1972). Super Imperialism: The Economic Strategy of American Empire. Holt, Rinehart and Winston. ISBN 978-0030859960. 
3. ^ Hudson, Michael (March 1979). Global Fracture: The New International Economic order. Harper & Row. ISBN 978-0745323954. 
4. ^ Hudson, Michael (March 2003). Super Imperialism - New Edition: The Origin and Fundamentals of U.S. World Dominance. Pluto Press. ISBN 978-0745319896. 
5. ^ Hudson, Michael (April 2005). Global Fracture: The New International Economic order, Second Edition. Pluto Press. ISBN 978-0745323947. 
6. ^ See also FIRE economy.

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Categories: American economists | American economics writers | Economic historians | International finance economists | Macroeconomists | University of Missouri–Kansas City faculty | New York University alumni | 1939 births | Living people

http://en.wikiquote.org/wiki/Michael_Hudson_%28economist%29

Michael Hudson (economist)

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Jump to: navigation, search

Michael Hudson (born in 1939) is Distinguished Research Professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).

[edit] Sourced

• The one sure mark of a con, though, is the promise of free money.
• "The $4.7 trillion pyramid: Why Social Security won't be enough to save Wall Street" in Harper's Magazine (April 2005)

• If you look at the speeches he gave just before he left the Fed, it's pretty much “After me - the Deluge. I'm getting out while my reputation's intact”.
• About Alan Greenspan
• "BBC World Service" - Sept. 17th 2007 "Quote of the Day"

[edit] External links

Wikipedia has an article about:

Michael Hudson (economist)

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Categories: Businesspeople stubs | Economists | Educators | Americans | Living people

 
 
   

.
 
Good stuff Arno. The more of these historic references are assembled here on Gang 8, the more ridiculous it becomes that the concept we are all talking about - I call it the Quality Theory of Credit but there's no special magic in the name - has stayed outside the mainstream of economic wisdom.
 
A man from Mars might even think it was some kind of conspiracy!
 
Chris

   

----- Original Message ----- 

From: Dr. Richard Werner

To: gang8@yahoogroups.com

Sent: Wednesday, November 11, 2009 12:23 PM

Subject: RE: [gang8] The ins and outs of Quantitative Easing

 

Dear Chris,

Did you mean this bill, referring to Keynes’ 1946 bill on borrowing control?

http://www.statutelaw.gov.uk/content.aspx?LegType=All+Legislation&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&PageNumber=0&NavFrom=0&parentActiveTextDocId=1089924&ActiveTextDocId=1089927&filesize=5486

I must say, I don’t think this can be interpreted as fitting into the genealogy of credit creation based economics.

In fact, I think it bears repeating that for this exploration to be useful we have to distinguish between the broader ideas and a credit-based approach in general, and the specific disaggregated re-formulation of the quantity equation, which gives the precise relationships. I have not yet seen any antecedents to the latter.

Regards,

Richard

---

From: gang8@yahoogroups.com [mailto:gang8@yahoogroups.com] On Behalf Of Ercouncil@aol.com
Sent: Monday, November 09, 2009 5:51 AM
To: gang8@yahoogroups.com
Subject: RE: [gang8] The ins and outs of Quantitative Easing

 

Richard Werner writes:
"This sounds like my Quantity Theory of Disaggregated Credit. When did you formulate yours? Have you taken a look at my formulations and empirical support?"

Hi Richard:
I think it's safe to say it the Quality Theory of Credit mentioned by me yet again in Friday's post was originally labelled as such many years ago. It has been explained numerous times here on Gang 8, more or less since the Gang was originally founded in September 1998. 

Gunnar's very meticulous analysis of early economic theory would I am sure trace the basic concept back much earlier than that; what I call the Quality Theory of Credit (QTC) as a replacement for the standard Quantity Theory of Money (QTM) also goes back much earlier than the founding of Gang 8 by a number of years. It almost certainly dates back originally, even if not yet labelled QTC, to when I was working in banking, 1979 to 1986.

And I'm sure the basic concept goes back far earlier than that anyway. As I did mention in the posting on Friday, Geoffrey and I both reckon there are very clear hints of it in Keynes's "Control of Borrowing Act" which he arranged to put through Parliament way back in 1946. About ten years ago I went right through Keynes's private papers at the Public Records Office in Kew here in London - or such of them as have survived  - to try and find any further clues on his formulation of the original parliamentary bill. 

Either Keynes's private papers have been filleted or, as I suspect, Keynes was deliberately keeping quiet about his true intent until the legislation was safely on the Statute Book. Sadly he did not live to see that day. Had he done so I'm quite sure he would have wanted to indicate to the banks, and as much more recently I would wish to indicate to the banks, that the aim of his crafty legislation was to monitor how much of their credit goes into genuine expansion of the economy, how much of it goes into consumer spending, and how much of it goes into Asset Price Inflation. The 1946 Control of Borrowing Act makes very little sense otherwise.

Unlike the more dirigiste Keynes, my preference would be to go down the Accountancy Rules route, and simply require banks to publish that vital information as part of the public reporting of their results. As head of PR at two major banks I've done enough of the publishing of bank results myself in my time, before I spent the next five years (1986-1990) as the group's spokesman on all financial matters, inter alia writing the results at BAT Industries - then Britain's third largest industrial company. I always did the words while a young finance director, Martin Broughton, did the numbers. (Martin is nowadays Chairman of British Airways.)  That five years of quarterly reporting was a masterclass in the byzantine financial and corporate politics which lie behind seemingly innocent Quarterly Results.

Thus I am convinced much could be deduced from such declaration by the banks.  In a very similar vein, Geoffrey Gardiner would dearly like to see British banks publish retrospectively their true results during the critical years between the wars, by revealing all the internal transfers to and from inner reserves, which for many years Britain permitted them to do to mask their true activities.

When I arrived in Hong Kong  as (among other things)  HSBC's top spokesman in early 1984, I was intrigued to see just how much its undeclared transfers between undeclared gross profits and undeclared internal reserves, then still permissible under Hong Kong banking law if no longer under British banking law, enabled the bank to build a worldwide reputation of rock solid stability.

The existence of such transfers, if not their amount, was just quietly mentioned in HSBC's published accounts. In fact the bank was doing pretty well, not least because it had failed to move quickly enough to join in the frenzy for "sovereign lending" pursued among US money centre, and UK high street and commercial banks, a frenzy which landed them in it up to their necks in the early-mid 1980s.

Anyone who believes for one moment that excessive banking greed before tragic banking setback is an invention of just the past ten years is sadly mistaken.  There had been another such frenzy in the mid 1970s which practically brought down National Westminster Bank here in the UK, and certainly caused the demise of assorted secondary banks.

I'm rather inclined to the Tomassonian view in economics that there is very little which is truly new under the sun. Go digging hard enough and you can probably find layer upon layer of quasi-antecedents, with varying names, for just about anything.

Chris Meakin

London

Ah Yes - I have been trying to locate that Frisch book ever since.

Dirk

Arno Mong Daastoel wrote:
> Dear gang8sters,
>
> I will not bother you with repetitions, so I will only suggest to
> include in the historic account the first "Nobel" Laureate in economics,
> Ragnar Frisch and his "Oslo Channel" model regarding credit dirigism. He
> is clear and outspoken.. For references see:
> http://finance.groups.yahoo.com/group/gang8/message/13467
> (Much of "his" most original ideas were nicked from Bertram Dybvad
> Brochman, a deeply religious agronomist and parliamentarian.- such as
> the ideas on "eco-circ", economic circulation.)
>
> Secondly, I would suggest looking at Alexander Hamilton, 1791, regarding
> establishing a national bank in order to finance "internal improvements"
> meaning in particular infrastructure (read large).
>
> The secret Friedrich List seminar in 1931 Germany also stands out in
> then regard, with speeches by several economists.
>
> As a more personal comment, this difference between un/productive uses
> of credit, appeared to me as sound when I read Roscher in 1994, and
> later I realised the implications for inflation/deflation when I made a
> more detailed argument for using (Norw.) oil revenue for infrastructure
> (1997, the national business daily, "Dagens Næringsliv").
>
> What happened later here, was that the Norw. "populist" party, the
> Progress Party (still second largest) ordered the National Statistical
> Bureau to make new calculations, resulting from a differentiation of
> public expenditures, as to whether they were consumption or investment.
> The results were very interesting and supported.both the Progress
> Party's arguments (and implicitly our's)
>
> Yours,
> Arno
>
>
>
>
>
>

Dear gang8sters,

I will not bother you with repetitions, so I will only suggest to
include in the historic account the first "Nobel" Laureate in economics,
Ragnar Frisch and his "Oslo Channel" model regarding credit dirigism. He
is clear and outspoken.. For references see:
http://finance.groups.yahoo.com/group/gang8/message/13467
(Much of "his" most original ideas were nicked from Bertram Dybvad
Brochman, a deeply religious agronomist and parliamentarian.- such as
the ideas on "eco-circ", economic circulation.)

Secondly, I would suggest looking at Alexander Hamilton, 1791, regarding
establishing a national bank in order to finance "internal improvements"
meaning in particular infrastructure (read large).

The secret Friedrich List seminar in 1931 Germany also stands out in
then regard, with speeches by several economists.

As a more personal comment, this difference between un/productive uses
of credit, appeared to me as sound when I read Roscher in 1994, and
later I realised the implications for inflation/deflation when I made a
more detailed argument for using (Norw.) oil revenue for infrastructure
(1997, the national business daily, "Dagens Næringsliv").

What happened later here, was that the Norw. "populist" party, the
Progress Party (still second largest) ordered the National Statistical
Bureau to make new calculations, resulting from a differentiation of
public expenditures, as to whether they were consumption or investment.
The results were very interesting and supported.both the Progress
Party's arguments (and implicitly our's)

Yours,
Arno

In my advancing (declining?) years (I'm now 81) there are now very few
people with whom I can have face to face conversation on these issues. An
occasional phone chat with Ken Palmerton has been the only way to supplement
the valuable exchanges between Gang members, plus some excellent recent
books.
     Yet one "heresy" still comes to mind; that banks create money/credit out
of nothing.  There are refs to it in the Soddy archive @ wherever, and a
lingering recollection that in Mein Kampf Hitler referred to his "discovery"
of Gottfried Feder's work on the distinction between speculative and
productive capital.  These sources abound on the internet.  My searches ran
out around the names of  Oswald Mosley in his early days as an MP, Soddy of
course, Montagu Norman, Keynes, Schacht, and a curious interlude from the
"phony war" in early 1940, when questions were asked in the House of
Commons about the RAF leaflet raids over Germany, and why RAF bombers were
not attacking German aircraft and armament  factories.  The parliamentary
answer was that these facilities were private property not goverment
property, a distinction not shared by the Nazis in their destructive 500
bomber raid on Coventry in November 1940, the subject of a recent excellent
BBC radio documentary.  This is the same BBC that let A.R. Orage make a
broadcast on Poverty in Plenty on November 5th 1934, basically on Social
Credit, published in the Listener and still I think available on the web.
That Orage died in his sleep that night is merely another mystery.  I'll
follow the quality of credit discussion/mystery as long as I can.
             Kevin
----- Original Message -----
From: "Dirk Bezemer" <d.j.bezemer@...>
To: <gang8@yahoogroups.com>
Sent: Monday, November 09, 2009 10:37 AM
Subject: [gang8] On the intellectual history of the quality theory of credit
/ the Quantity Theory of Disaggregated Credit


> Hi All,
>
> Just to dig out another four of Chris' layers:
>
> In his Treatise on Money, Keynes had written on separate financial and
> industrial circulations of money. He dropped the notion, as most of his
> sound monetary ideas, in the General Theory, where they would have
> wrecked his attempts to attract orthodox economists to his effective
> demand theory.
>
> But Keynes probably fully understood the different effects of productive
> and financial credit (and would have understood consumer credit for what
> it is). In the 1920s he was in close contact with Reichsbank President
> Hjalmar Schacht who already in 1926 emphasized that credit was to go to
> productive ends, and fully implemented credit direction policies when he
> was again made Reichsbank Chairman in 1933.
>
> Where did Schacht pick up this idea? From his banker's experience, quite
> likely, but perhaps also from writings by Rudolf Hilferding who already
> in 1910 had written on the separate roles of speculation credit,
> circulation credit and production credit. Significantly, he argued that
> production ultimately supporting speculation, so that speculation
> without growth of productive power is doomed - as I argued in my
> Thursday's FT article.
>
> And Hilferding, in turn, learned much from Marx (Kapital, vol II, ch 17).
>
> And Marx certainly read Roscher (1854). Michael Hudson, in a 1995
> article, described how Roscher postulated an evolution of credit towards
> increasingly productive applications (and failed to anticipate the
> proliferation of war debt and other public debt, consumer debt,
> corporate takeover financing and other non-productive uses of credit).
>
> Neither was this original - Schumpeter (1954) considered Roscher as only
> a rehash of the ideas of others, such as Sismondi (1814/1824). Arno's
> bibliography notes that Roscher's Principles… book Sections CCXI and
> CCXII are devoted to the two types of consumption: productive and
> unproductive and that Roscher says that this classification originally
> is Plato's (in The Republic, VIII).
>
> So to my mind, separate analysis of credit for productive and
> unproductive purposes is age old and came into sharp focus (but in
> heterodox economics only) with Marx, Roscher, Hilferding, Schumpeter,
> Keynes. It lived on in heterodox writings but never entered the orthodox
> discourse. Richard's is the most explicit analysis of the issue I know of.
>
> Any additions?
>
> Dirk
>
>
> Ercouncil@... wrote:
>>
>> Richard Werner  writes:
>> "This sounds like my Quantity Theory of Disaggregated Credit. When  did
>> you
>> formulate yours? Have you taken a look at my formulations and empirical
>> support?"
>> Hi Richard:
>> I think it's safe to say it  the Quality Theory of Credit mentioned by me
>> yet  again in Friday's post was originally labelled as such many years
>> ago.
>> It has been explained numerous times here on Gang 8, more or less  since
>> the
>> Gang was originally founded in September  1998.
>>
>> Gunnar's very meticulous analysis of early  economic theory would I am
>> sure
>> trace the basic concept back much  earlier than that; what I call the
>> Quality Theory of Credit (QTC)  as a replacement for the standard
>> Quantity Theory
>> of Money (QTM) also goes  back much earlier than the founding of Gang 8
>> by
>> a number of years.  It almost certainly dates back originally, even if
>> not
>> yet labelled  QTC, to when I was working in banking, 1979 to 1986.
>>
>> And I'm sure the basic  concept goes back far earlier than that anyway.
>> As
>> I  did mention in the posting on  Friday, Geoffrey and I both reckon
>> there
>> are very clear hints of it in Keynes's  "Control of Borrowing Act" which
>> he
>> arranged to put through Parliament  way back in 1946. About ten years ago
>> I
>> went right through Keynes's private  papers at the Public Records Office
>> in
>> Kew here in London - or such of them  as have survived  - to try and find
>> any
>> further clues on his  formulation of the original parliamentary bill.
>>
>> Either Keynes's private papers  have been filleted or, as I suspect,
>> Keynes
>> was deliberately keeping quiet  about his true intent until the
>> legislation
>> was safely on the Statute Book.  Sadly he did not live to see that day.
>> Had
>> he done so I'm quite sure he would  have wanted to indicate to the banks,
>> and as much more recently I would  wish to indicate to the banks, that
>> the
>> aim of his crafty legislation was to  monitor how much of their credit
>> goes
>> into genuine expansion of the economy, how  much of it goes into consumer
>> spending, and how much of it goes into Asset Price  Inflation. The 1946
>> Control
>> of Borrowing Act makes very little sense  otherwise.
>>
>> Unlike the more dirigiste Keynes, my  preference would be to go down the
>> Accountancy Rules route, and simply require  banks to publish that vital
>> information as part of the public  reporting of their results. As head of
>> PR at
>> two major banks I've done enough of  the publishing of bank results
>> myself in
>> my time, before I spent the next five  years (1986-1990) as the group's
>> spokesman on all financial matters, inter  alia writing the results at
>> BAT
>> Industries - then Britain's third largest  industrial company. I always
>> did the
>> words while a young finance director,  Martin Broughton, did the numbers.
>> (Martin is nowadays Chairman of British  Airways.)  That five years of
>> quarterly reporting was a masterclass in the  byzantine financial and
>> corporate
>> politics which lie behind seemingly innocent  Quarterly Results.
>>
>> Thus I am convinced much could be deduced  from such declaration by the
>> banks.  In a very similar vein, Geoffrey  Gardiner would dearly like to
>> see
>> British banks publish retrospectively their  true results during the
>> critical
>> years between the wars, by revealing  all the internal transfers to and
>> from
>> inner reserves, which for many years  Britain permitted them to do to
>> mask
>> their true activities.
>>
>> When I arrived in Hong Kong  as (among other things)   HSBC's top
>> spokesman
>> in early 1984, I was intrigued to see just how much  its undeclared
>> transfers between undeclared gross profits and  undeclared internal
>> reserves, then
>> still permissible under Hong Kong banking law  if no longer under British
>> banking law, enabled the bank to build a worldwide  reputation of rock
>> solid
>> stability.
>>
>> The existence of such transfers, if not  their amount, was just quietly
>> mentioned in HSBC's published accounts. In  fact the bank was doing
>> pretty
>> well, not least because it had failed to  move quickly enough to join in
>> the
>> frenzy for "sovereign lending" pursued  among US money centre, and UK
>> high
>> street and commercial banks, a frenzy which  landed them in it up to
>> their necks
>> in the early-mid 1980s.
>>
>> Anyone who believes for one moment that  excessive banking greed before
>> tragic banking setback is an invention of just  the past ten years is
>> sadly
>> mistaken.  There had been another such  frenzy in the mid 1970s which
>> practically brought down National Westminster Bank  here in the UK, and
>> certainly
>> caused the demise of assorted secondary  banks.
>>
>> I'm rather inclined to the Tomassonian  view in economics that there is
>> very little which is truly new under the sun. Go  digging hard enough and
>> you
>> can probably find layer upon layer of  quasi-antecedents, with varying
>> names,
>> for just about anything.
>>
>> Chris Meakin
>> London
>>
>>
>>
>
>
>
> ------------------------------------
>
> The gang8 list is devoted to Creditary Economics.
> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>
> Yahoo! Groups Links
>
>
>

Thanks, Arthur. Yes of course, the Real Bills Doctrine is perhaps the
most widely known nomer for this view. Of course, since 1945, it has
been regarded as "thoroughly discredited" (Mishkin, 2000) among
mainstream economists! (as wikipedia told me).


Dirk

  Edwards wrote:
> In my research thesis I looked at this issue with reference to the
> idea of 'Due' and 'Undue' credit. I brought in Meakin's idea of a
> Quality Theory of Credit and also reviewed some of the discussion
> about Real Bills Doctine and Productive Credit Doctrine in the context
> of the distinction between the the notion of counterpart and
> counterparty. The main reference for my research is Rudolf Steiner's
> 1922 Economics Lectures that differentiate between Real and Personal
> Credit (summarised in the attached) - he also makes reference to
> Roscher and Hilferding. Earlier this year we published a piece by Arno
> Daastol on the subject entitled 'Nothing New Under the Sun?'
>
> Given the pedigree of the subject and its obviously crucial
> significance it remains something of a mystery why it gets very little
> air time. I would be interested to see the results of your
> 'intellectual history if you decide to compile additions.
> best,
> Arthur Edwards
>
>
> On 9 Nov 2009, at 10:37, Dirk Bezemer wrote:
>
>> Hi All,
>>
>> Just to dig out another four of Chris' layers:
>>
>> In his Treatise on Money, Keynes had written on separate financial and
>> industrial circulations of money. He dropped the notion, as most of his
>> sound monetary ideas, in the General Theory, where they would have
>> wrecked his attempts to attract orthodox economists to his effective
>> demand theory.
>>
>> But Keynes probably fully understood the different effects of productive
>> and financial credit (and would have understood consumer credit for what
>> it is). In the 1920s he was in close contact with Reichsbank President
>> Hjalmar Schacht who already in 1926 emphasized that credit was to go to
>> productive ends, and fully implemented credit direction policies when he
>> was again made Reichsbank Chairman in 1933.
>>
>> Where did Schacht pick up this idea? From his banker's experience, quite
>> likely, but perhaps also from writings by Rudolf Hilferding who already
>> in 1910 had written on the separate roles of speculation credit,
>> circulation credit and production credit. Significantly, he argued that
>> production ultimately supporting speculation, so that speculation
>> without growth of productive power is doomed - as I argued in my
>> Thursday's FT article.
>>
>> And Hilferding, in turn, learned much from Marx (Kapital, vol II, ch
>> 17).
>>
>> And Marx certainly read Roscher (1854). Michael Hudson, in a 1995
>> article, described how Roscher postulated an evolution of credit towards
>> increasingly productive applications (and failed to anticipate the
>> proliferation of war debt and other public debt, consumer debt,
>> corporate takeover financing and other non-productive uses of credit).
>>
>> Neither was this original - Schumpeter (1954) considered Roscher as only
>> a rehash of the ideas of others, such as Sismondi (1814/1824). Arno's
>> bibliography notes that Roscher's Principles… book Sections CCXI and
>> CCXII are devoted to the two types of consumption: productive and
>> unproductive and that Roscher says that this classification originally
>> is Plato's (in The Republic, VIII).
>>
>> So to my mind, separate analysis of credit for productive and
>> unproductive purposes is age old and came into sharp focus (but in
>> heterodox economics only) with Marx, Roscher, Hilferding, Schumpeter,
>> Keynes. It lived on in heterodox writings but never entered the orthodox
>> discourse. Richard's is the most explicit analysis of the issue I
>> know of.
>>
>> Any additions?
>>
>> Dirk
>>
>>
>> Ercouncil@... wrote:
>>>
>>> Richard Werner  writes:
>>> "This sounds like my Quantity Theory of Disaggregated Credit. When
>>> did you
>>> formulate yours? Have you taken a look at my formulations and empirical
>>> support?"
>>> Hi Richard:
>>> I think it's safe to say it  the Quality Theory of Credit mentioned
>>> by me
>>> yet  again in Friday's post was originally labelled as such many
>>> years ago.
>>> It has been explained numerous times here on Gang 8, more or less
>>> since the
>>> Gang was originally founded in September  1998.
>>>
>>> Gunnar's very meticulous analysis of early  economic theory would I
>>> am sure
>>> trace the basic concept back much  earlier than that; what I call the
>>> Quality Theory of Credit (QTC)  as a replacement for the standard
>>> Quantity Theory
>>> of Money (QTM) also goes  back much earlier than the founding of
>>> Gang 8 by
>>> a number of years.  It almost certainly dates back originally, even
>>> if not
>>> yet labelled  QTC, to when I was working in banking, 1979 to 1986.
>>>
>>> And I'm sure the basic  concept goes back far earlier than that
>>> anyway. As
>>> I  did mention in the posting on  Friday, Geoffrey and I both reckon
>>> there
>>> are very clear hints of it in Keynes's  "Control of Borrowing Act"
>>> which he
>>> arranged to put through Parliament  way back in 1946. About ten
>>> years ago I
>>> went right through Keynes's private  papers at the Public Records
>>> Office in
>>> Kew here in London - or such of them  as have survived  - to try and
>>> find any
>>> further clues on his  formulation of the original parliamentary bill.
>>>
>>> Either Keynes's private papers  have been filleted or, as I suspect,
>>> Keynes
>>> was deliberately keeping quiet  about his true intent until the
>>> legislation
>>> was safely on the Statute Book.  Sadly he did not live to see that
>>> day. Had
>>> he done so I'm quite sure he would  have wanted to indicate to the
>>> banks,
>>> and as much more recently I would  wish to indicate to the banks,
>>> that the
>>> aim of his crafty legislation was to  monitor how much of their
>>> credit goes
>>> into genuine expansion of the economy, how  much of it goes into
>>> consumer
>>> spending, and how much of it goes into Asset Price  Inflation. The
>>> 1946 Control
>>> of Borrowing Act makes very little sense  otherwise.
>>>
>>> Unlike the more dirigiste Keynes, my  preference would be to go down
>>> the
>>> Accountancy Rules route, and simply require  banks to publish that
>>> vital
>>> information as part of the public  reporting of their results. As
>>> head of PR at
>>> two major banks I've done enough of  the publishing of bank results
>>> myself in
>>> my time, before I spent the next five  years (1986-1990) as the group's
>>> spokesman on all financial matters, inter  alia writing the results
>>> at BAT
>>> Industries - then Britain's third largest  industrial company. I
>>> always did the
>>> words while a young finance director,  Martin Broughton, did the
>>> numbers.
>>> (Martin is nowadays Chairman of British  Airways.)  That five years of
>>> quarterly reporting was a masterclass in the  byzantine financial
>>> and corporate
>>> politics which lie behind seemingly innocent  Quarterly Results.
>>>
>>> Thus I am convinced much could be deduced  from such declaration by the
>>> banks.  In a very similar vein, Geoffrey  Gardiner would dearly like
>>> to see
>>> British banks publish retrospectively their  true results during the
>>> critical
>>> years between the wars, by revealing  all the internal transfers to
>>> and from
>>> inner reserves, which for many years  Britain permitted them to do
>>> to mask
>>> their true activities.
>>>
>>> When I arrived in Hong Kong  as (among other things)   HSBC's top
>>> spokesman
>>> in early 1984, I was intrigued to see just how much  its undeclared
>>> transfers between undeclared gross profits and  undeclared internal
>>> reserves, then
>>> still permissible under Hong Kong banking law  if no longer under
>>> British
>>> banking law, enabled the bank to build a worldwide  reputation of
>>> rock solid
>>> stability.
>>>
>>> The existence of such transfers, if not  their amount, was just quietly
>>> mentioned in HSBC's published accounts. In  fact the bank was doing
>>> pretty
>>> well, not least because it had failed to  move quickly enough to
>>> join in the
>>> frenzy for "sovereign lending" pursued  among US money centre, and
>>> UK high
>>> street and commercial banks, a frenzy which  landed them in it up to
>>> their necks
>>> in the early-mid 1980s.
>>>
>>> Anyone who believes for one moment that  excessive banking greed before
>>> tragic banking setback is an invention of just  the past ten years
>>> is sadly
>>> mistaken.  There had been another such  frenzy in the mid 1970s which
>>> practically brought down National Westminster Bank  here in the UK,
>>> and certainly
>>> caused the demise of assorted secondary  banks.
>>>
>>> I'm rather inclined to the Tomassonian  view in economics that there is
>>> very little which is truly new under the sun. Go  digging hard
>>> enough and you
>>> can probably find layer upon layer of  quasi-antecedents, with
>>> varying names,
>>> for just about anything.
>>>
>>> Chris Meakin
>>> London
>>>
>>>
>>>
>>
>>
>>
>> ------------------------------------
>>
>> The gang8 list is devoted to Creditary Economics.
>> To unsubscribe, email: gang8-unsubscribe@yahoogroups.com
>>
>> Yahoo! Groups Links
>>
>>
>>
>
>
> The Friends of Associative Economics Bulletin:
> http://www.cfae.biz/ae_bulletin/
>
>
>
>
>
>
>
>

hi All,

They are asking for full papers by nov 15.

Richard, would your monetisation paper fit in?

best,

Dirk


Interactions between Monetary and Fiscal Policies
Madrid, Spain
from February 26, 2010 to February 27, 2010
Deadline for paper submissions: November 15, 2009
JEL classification(s): E, F, H
Further information at: http://www.bde.es/doctrab/confere/confee_31.htm

Hi All,

Just to dig out another four of Chris' layers:

In his Treatise on Money, Keynes had written on separate financial and
industrial circulations of money. He dropped the notion, as most of his
sound monetary ideas, in the General Theory, where they would have
wrecked his attempts to attract orthodox economists to his effective
demand theory.

But Keynes probably fully understood the different effects of productive
and financial credit (and would have understood consumer credit for what
it is). In the 1920s he was in close contact with Reichsbank President
Hjalmar Schacht who already in 1926 emphasized that credit was to go to
productive ends, and fully implemented credit direction policies when he
was again made Reichsbank Chairman in 1933.

Where did Schacht pick up this idea? From his banker's experience, quite
likely, but perhaps also from writings by Rudolf Hilferding who already
in 1910 had written on the separate roles of speculation credit,
circulation credit and production credit. Significantly, he argued that
production ultimately supporting speculation, so that speculation
without growth of productive power is doomed - as I argued in my
Thursday's FT article.

And Hilferding, in turn, learned much from Marx (Kapital, vol II, ch 17).

And Marx certainly read Roscher (1854). Michael Hudson, in a 1995
article, described how Roscher postulated an evolution of credit towards
increasingly productive applications (and failed to anticipate the
proliferation of war debt and other public debt, consumer debt,
corporate takeover financing and other non-productive uses of credit).

Neither was this original - Schumpeter (1954) considered Roscher as only
a rehash of the ideas of others, such as Sismondi (1814/1824). Arno's
bibliography notes that Roscher's Principles… book Sections CCXI and
CCXII are devoted to the two types of consumption: productive and
unproductive and that Roscher says that this classification originally
is Plato's (in The Republic, VIII).

So to my mind, separate analysis of credit for productive and
unproductive purposes is age old and came into sharp focus (but in
heterodox economics only) with Marx, Roscher, Hilferding, Schumpeter,
Keynes. It lived on in heterodox writings but never entered the orthodox
discourse. Richard's is the most explicit analysis of the issue I know of.

Any additions?

Dirk


Ercouncil@... wrote:
>
> Richard Werner  writes:
> "This sounds like my Quantity Theory of Disaggregated Credit. When  did you
> formulate yours? Have you taken a look at my formulations and empirical
> support?"
> Hi Richard:
> I think it's safe to say it  the Quality Theory of Credit mentioned by me
> yet  again in Friday's post was originally labelled as such many years ago.
> It has been explained numerous times here on Gang 8, more or less  since the
> Gang was originally founded in September  1998.
>
> Gunnar's very meticulous analysis of early  economic theory would I am sure
> trace the basic concept back much  earlier than that; what I call the
> Quality Theory of Credit (QTC)  as a replacement for the standard Quantity
Theory
> of Money (QTM) also goes  back much earlier than the founding of Gang 8 by
> a number of years.  It almost certainly dates back originally, even if not
> yet labelled  QTC, to when I was working in banking, 1979 to 1986.
>
> And I'm sure the basic  concept goes back far earlier than that anyway. As
> I  did mention in the posting on  Friday, Geoffrey and I both reckon there
> are very clear hints of it in Keynes's  "Control of Borrowing Act" which he
> arranged to put through Parliament  way back in 1946. About ten years ago I
> went right through Keynes's private  papers at the Public Records Office in
> Kew here in London - or such of them  as have survived  - to try and find any
> further clues on his  formulation of the original parliamentary bill.
>
> Either Keynes's private papers  have been filleted or, as I suspect, Keynes
> was deliberately keeping quiet  about his true intent until the legislation
> was safely on the Statute Book.  Sadly he did not live to see that day. Had
> he done so I'm quite sure he would  have wanted to indicate to the banks,
> and as much more recently I would  wish to indicate to the banks, that the
> aim of his crafty legislation was to  monitor how much of their credit goes
> into genuine expansion of the economy, how  much of it goes into consumer
> spending, and how much of it goes into Asset Price  Inflation. The 1946
Control
> of Borrowing Act makes very little sense  otherwise.
>
> Unlike the more dirigiste Keynes, my  preference would be to go down the
> Accountancy Rules route, and simply require  banks to publish that vital
> information as part of the public  reporting of their results. As head of PR
at
> two major banks I've done enough of  the publishing of bank results myself in
> my time, before I spent the next five  years (1986-1990) as the group's
> spokesman on all financial matters, inter  alia writing the results at BAT
> Industries - then Britain's third largest  industrial company. I always did
the
> words while a young finance director,  Martin Broughton, did the numbers.
> (Martin is nowadays Chairman of British  Airways.)  That five years of
> quarterly reporting was a masterclass in the  byzantine financial and
corporate
> politics which lie behind seemingly innocent  Quarterly Results.
>
> Thus I am convinced much could be deduced  from such declaration by the
> banks.  In a very similar vein, Geoffrey  Gardiner would dearly like to see
> British banks publish retrospectively their  true results during the critical
> years between the wars, by revealing  all the internal transfers to and from
> inner reserves, which for many years  Britain permitted them to do to mask
> their true activities.
>
> When I arrived in Hong Kong  as (among other things)   HSBC's top spokesman
> in early 1984, I was intrigued to see just how much  its undeclared
> transfers between undeclared gross profits and  undeclared internal reserves,
then
> still permissible under Hong Kong banking law  if no longer under British
> banking law, enabled the bank to build a worldwide  reputation of rock solid
> stability.
>
> The existence of such transfers, if not  their amount, was just quietly
> mentioned in HSBC's published accounts. In  fact the bank was doing pretty
> well, not least because it had failed to  move quickly enough to join in the
> frenzy for "sovereign lending" pursued  among US money centre, and UK high
> street and commercial banks, a frenzy which  landed them in it up to their
necks
> in the early-mid 1980s.
>
> Anyone who believes for one moment that  excessive banking greed before
> tragic banking setback is an invention of just  the past ten years is sadly
> mistaken.  There had been another such  frenzy in the mid 1970s which
> practically brought down National Westminster Bank  here in the UK, and
certainly
> caused the demise of assorted secondary  banks.
>
> I'm rather inclined to the Tomassonian  view in economics that there is
> very little which is truly new under the sun. Go  digging hard enough and you
> can probably find layer upon layer of  quasi-antecedents, with varying names,
> for just about anything.
>
> Chris Meakin
> London
>
>
>