Paper Promises: Money, Debt and the new World Order

Phillip Coggan:

The world is drowning in debt. Greece is on the verge of default. In Britain, the coalition government is pushing through an austerity programme in the face of economic weakness. The US government almost shut down in August because of a dispute over the size of government debt.

Our latest crisis may seem to have started in 2007, with the collapse of the American housing market. But as Philip Coggan shows in this new book, Paper Promises: Money, Debt and the new World Order which he will talk about in this lecture, the crisis is part of an age-old battle between creditors and borrowers. And that battle has been fought over the nature of money. Creditors always want sound money to ensure that they are paid back in full; borrowers want easy money to reduce the burden of repaying their debts. Money was once linked to gold, a commodity in limited supply; now central banks can create it with the click of a computer mouse.

Time and again, this cycle has resulted in financial and economic crises. In the 1930s, countries abandoned the gold standard in the face of the Great Depression. In the 1970s, they abandoned the system of fixed exchange rates and ushered in a period of paper money. The results have been a long series of asset bubbles, from dotcom stocks to housing, and the elevation of the financial sector to economic dominance.

Apple and the American economy

The Economist:

THE macroeconomic discussions that Apple’s success prompts tend to be very curious things. Here we have a company that’s been phenomenally successful, making products people love and directly creating nearly 50,000 American jobs in doing so, criticised for not locating its manufacturing operations in America, even as Americans complain to Apple about the working conditions of those doing the manufacture abroad: life in dormitories, 12-hour shifts 6 days a week, and low pay. It isn’t enough for Apple to have changed the world with its innovative consumer electronics. It must also rebuild American manufacturing, and not just any manufacturing: the manufacturing of decades ago when reasonable hours and high wages were the norm.



The utility of Apple, however, is that it does provide a framework within which we can discuss the significant changes that have occurred across the global economy in recent decades. Contributing to that effort is a very nice and much talked about piece from the New York Times, which asks simply why it is that Apple’s manufacturing is located in Asia.

Remembering Gordon Hirabayashi

Dorothy M. Ehrlich, Deputy Executive Director, ACLU:

Gordon Hirabayashi was an American-born student at the University of Washington in 1942, when he was ordered in his senior year to report to an internment camp in northern California. He refused.

Only a handful of remarkably courageous individuals defied the internment orders. Hirabayashi was not only the youngest; his decision was a clear act of civil disobedience based on his deeply held pacifist beliefs.



In every respect, Hirobayashi’s defiance made him a civil rights hero. He died last week in Edmonton, Alberta, at the age of 93.



Some 120,000 Japanese Americans were interned in America’s concentration camps — a shameful act of wartime hysteria based on racial prejudice. Hirabayashi challenged the curfew he was subject to and the internment order.

“If I were to register and cooperate… I would be giving helpless consent to the denial of practically all of the things which give me incentive to live,” he said then. “I must maintain the democratic standards for which this nation lives. I am objecting to the principle of this order which denies the right of human beings, including citizens.”

Lunch with the FT: Zbigniew Brzezinski

Edward Luce:

“Americans don’t learn about the world, they don’t study world history, other than American history in a very one-sided fashion, and they don’t study geography,” Brzezinski says. “In that context of widespread ignorance, the ongoing and deliberately fanned fear about the outside world, which is connected with this grandiose war on jihadi terrorism, makes the American public extremely susceptible to extremist appeals.” But surely most Americans are tired of overseas adventures, I say. “There is more scepticism,” Brzezinski concedes. “But the susceptibility to demagoguery is still there.”

Father Vincent Capodanno and the Meaning of “Sacrifice”

If you have never visited Semper Fidelis Memorial Chapel on the grounds of the National Museum of the Marine Corps, you have missed visiting a truly inspirational place. It is a breathtakingly beautiful building, an edifice of stone, rich wood and soaring glass that derives much of its beauty from the surrounding landscape. It is also breathtakingly simple. Nestled in the woods, it was designed to pay homage to the improvised chapels found in the field, attended by those who bear the burden of war.



Last Wednesday was nothing short of a glorious spring day in Virginia. The skies were crystal clear, without a cloud, and vibrant blue. A warm breeze stirred the air. Springtime had brought the grounds surrounding the chapel to life. I was struck by how green the trees were, and by the sound of birds singing. And on this glorious spring day, several people had gathered for a private ceremony to dedicate the “Sacrifice” window in memory of Navy chaplain, and Medal of Honor recipient, Father Vincent Capodanno.



As a former theology student, and a Marine Corps historian, I have long had an interest in those chaplains who have chosen to serve with the Fleet Marine Force. Of particular interest to me were those who served in Vietnam. It was many years ago that I first heard of the “Grunt Padre,” Father Capodanno.

Enduring lessons of Stalin’s little sparrow

Simon Sebag-Montefiore:

Svetlana Stalina, who died last week, always said that Stalin, her father, “broke my life”. Her troubled life illustrates how power coarsens, corrupts and corrodes family itself. Even in democracies, the relentless demands of power are wearying, then coarsening then corrupting. In the long reigns of despots, the more absolute, the more corrosive. The gentle ties of family are ground to dust by steel wheels of power. Men of power such as a Stalin or Hitler usually see themselves as selfless, lone knights riding with swords drawn into hostile territory. Even for those such as Colonel Gaddafi, Saddam Hussein or the Assads for whom politics is dynastic, power is paramount.

In the end, as we saw in Gaddafi’s downfall, the sons were expected to sacrifice themselves on the pyre of his narcissistic megalomania. Saddam struggled to hold the balance between the rivalries of his own diabolical princelings – his daughters were squeezed in this filial vice and in the ultimate poisoning of family life, he allowed his sons to murder his sons-in-law. The Assads have been cursed by familial rivalries. Gaddafi groomed several atrocious sons for power, even when they plotted against him – but all were sacrificed in his Bedouin hybrid of Saharan götterdämerung and Arabic King Lear.

Looking back on USMC thanksgivings, reminding us of things for which we should be grateful

“Fabius Maximus”:

Summary: a guest post by Beth Crumley, a Marine Corp retrospective about Thanksgivings past. This reminds of how much we have to be grateful before, and the price paid for our liberty and prosperity. Reposted with permission from the Marine Corps Association website.

I love this time of year. I love walking outside on a crisp, autumn morning and hearing the leaves crunch under my feet, and the smell of a wood fire in the air. It’s a reflective time…a time to take stock of what’s important in our lives. This weekend I was happily engaged in some pre-Thanksgiving tasks. I put a large pot of poultry stock on to cook, made pastry dough and even roasted off some pumpkins for pie. Later, while sitting at my desk, I looked at the calendar and realized that 68 years ago the battle for Tarawa raged. I started to think about those who have served, and those who serve today, and how difficult it must be to be separated from family and friends on the holidays we hold most dear.



The Marine Corps has long taken particular care to ensure that those who cannot be with their families still celebrate Thanksgiving. In times of war, that has proven challenging.



On 26 November 1942, Thanksgiving Day, Marines were battling the Japanese on Guadalcanal. The diary of one veteran noted, “Thanksgiving…air raid siren at 3:30 A.M….very little sleep.” A history of the 1st Battalion, 11th Marines noted:

Death of a currency as eurogeddon approaches

Jeremy Warner:

The defining moment was the fiasco over Wednesday’s bund auction, reinforced on Thursday by the spectacle of German sovereign bond yields rising above those of the UK.


If you are tempted to think this another vote of confidence by international investors in the UK, don’t. It’s actually got virtually nothing to do with us. Nor in truth does it have much to do with the idea that Germany will eventually get saddled with liability for periphery nation debts, thereby undermining its own creditworthiness.


No, what this is about is the markets starting to bet on what was previously a minority view – a complete collapse, or break-up, of the euro. Up until the past few days, it has remained just about possible to go along with the idea that ultimately Germany would bow to pressure and do whatever might be required to save the single currency.