The Great Reckoning: Why the European ideal is under threat

The Wanderer(…..) By the time of the long run-up to the First World War, the growing importance of the banks and speculators was attracting wide attention, especially from radicals and peace activists. J A. Hobson was the first to make use of the term “imperialism” to account for the way profiteers such as Cecil Rhodes had grabbed control of British foreign policy and led the country into the Boer war. In his classic study “Finance Capital”, published in the year after the 1909 pamphlet that Angell turned into his book “The Great Illusion” and still worth reading today, Austrian-born Marxist economist Rudolf Hilferding described the growing power of the banks. He saw a new cause of war in this, and thus a further catalyst for world revolution. From today’s perspective, what is striking about such analyses is their confidence: fin­ance and the financiers might be setting private profit ahead of public welfare but there were collective responses to this, domestic and international, and they could not get away with it for ever. Hobson saw the internationalisation of colonial control as the best guarantee colonial peoples and their resources would be managed for their own and the general good, rather than for the sake of profiteers. Rudolf Hilferding, like Marx, saw capital’s international character as likely ultimately to prove self-defeating. He welcomed monopolistic position of finance because it was going to simplify the workers’ ultimate task and help them bring the entire economy under their control. First World War expanded criticism of banks because in many quarters it was customary to blame them for tensions that had presaged this war and seemed likely to fuel a new one. If Angell believed that wars broke out when influence of the capitalists was not heeded, others believed the exact opposite: the speculators revelled in creating conflicts and profiting from them, reaping the rewards while ordinary people paid the price. In the interwar thrillers of Eric Ambler, for instance, the ultimate puppet-masters are shadowy entities such as the Eurasian Credit Trust. “It was the power of Business, not the deliberations of statesmen, that shaped the destinies of nations,” one of his characters comments. From this perspective it is worth pondering whether our inability any longer to imagine a reason for a general war in Europe does not serve in its own right to soften public anger at the financiers, because it removes one of the main historic causes of suspicion of them. The Bankers may have an image problem today, but arguably what needs explaining is why this is not worse than it is, and why it has had so few repercussions for the way they run their businesses compared to the 1930s. One of the reasons, surely, is that old anxiety about profiteers, which ran through European history for much of 19th and the first half of 20th centuries, has vanished. Who even speaks of the profiteers today? It was the 1929 Wall Street crash that discredited finance for a generation and more. The ensuing collapse of gold standard around the world made globalisation go into reverse. Capital controls became an unremarkable fact of life. In one country after another, the state took over from the private sector in making major investment decisions and in regulating relations between workers and employers. At the same time, the rise of Soviet Union posed a grave new challenge. European politicians seeking to stabilise capitalism responded on some fronts, parcelling out landed estates in eastern Europe to peasantry, founding new central banks and formalising international co-operation through bodies such as Bank for International Settlements. It was threat of Bolshevism that brought managed capitalism to Europe, with it, new conceptions of the state as the guarantor of a collective welfare. Thus the “European model” combining liberty and social solidarity, which commentators such as Tony Judt and Jeremy Rifkin hailed a decade or so ago as a civilised alternative to American capitalism, originated in the fear of communism and the looming presence of USSR on Europe’s margins. Where avoiding communist revolution was the priority, the politicians were willing to give a growing share of national income to labour, curb potentially destabilising capital flows, use State as guarantor of social peace, equalise wealth and opportunities by expanding a tax base and bankrolling welfare. But what would happen when no one feared communism any longer and took the stability of parliamentary democracy for granted? (…..)



Acerca de ignaciocovelo
Consultor Internacional


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