Interesting and well written! Although, I would argue that this quote right here is not not true in all instances: "that although the benefits of trade restrictions are concentrated (in protected industries) and the costs are dispersed (in higher prices)". If their is broad based protectionism, and there are other polices in place that work with it as part of a paradigm (as there was in the USA for hundreds of years), then 1) the second order effects of all the protected industries (and their many sub parts) provide many broad-based benefits, and 2) if done well and for long enough -- in a bigger country, at least -- you dont get "higher prices", you get the opposite problem, you get deflation, just as China recently experienced and the USA had to deal with a bunch of times in its past
Also, question, Helleiner (whose book I've read before), as you noted, mentions the importance of the dynamics of the USA internal pc, but very broadly, especially given the topic of the book, never seems (unless I missed it?) to mention the elimination of the USA internal domestic capital controls which had been around for 150 years to 200 years and had been mostly done away with right around then (there must be links, right?), does Eichengreen (who I havent read) mention it?
I suppose Helleiner does not write about that because it is largely wrapped in in WW2 - as I understand it. Neither does Eichengreen much, because his story is strictly international. But you are right - the financial and monetary consolidation of the US between 1914 and 1945 is an important story!
Thanks! I'm actually talking about the post war financial and monetary consolidation which until a few years ago I never knew about!!!!! The advent of the so called Neoliberal Era didnt -- as I was falsely taught my whole life -- undo the New Deal's banking/finance paradigm, it undid things that had mostly been around since the time of the Jacksonians in the 1830s/1840s/1850s and to a lesser but still substantial extent since not only the first day of the country but in some cases even earlier since some of it predates our country right through our direct continuance predecessor thirteen colonies! Talk about radical change! It largely happened between ~1965 and ~1985 but it was very heavily loaded between the latter 1970s and early 1980s, examples: The *effective* and de facto ending of most of the interstate banking competition inhibitors (it didnt actually end with the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ((which actually didnt take full effect until 1998/1999)) as I was taught) through various things such as allowances -- which were used on mass -- for "brokered accounts" (amongst other things), as well as -- and this, I believe is F'd up -- the changing of laws to make credit union not really credit unions, as well as the elimination of S&Ls (and BTW, it turns out CUs and S&Ls were just the latest iteration of things that had been around for 150 years!), and the eliminations of pension fund geographic biases, and same with insurance funds, and, well, there were all these other things but that would require getting more lengthy than I got time fore here. Thanks for the reply and the interesting writing! I hope youve been having a nice day. -- Mike
IMHO the role of economists was important. You already mentioned Keynes aversion to capital openness. This was also the attitude of Ragnar Nurske's famous report for the League of Nations. Somehow the intellectual climate changed and by the 1960s you have Milton Friedman coming out in favour of flexible exchange rates and free fx markets. I am not sure why views changed, but I don't think it was just a question of State policies and power of various groups within those states, such as workers vs capitalists.
Absolutely! I agree they had a major role. The question is why those arguments became more salient — and Helleiner would argue that it was the US balance of payments and fiscal position that made Friedman et al more appealing.
The ideas-economic structure relationship is always a tricky one in history. There’s a nice essay by Perry Anderson on it in the NLR which came out yesterday!
The USA never had macroeconomists at the wheel until the advent of the so called Neoliberal Era and never had them even significantly influential until some point around 1960, at least from the 1830s on they would be forced to contest their ideas publicly, and they would be defeated. The 1930s USA was not a Keynesian state, we are taught incorrectly on that and I assure that can be said with certainty. Theres very, very strong basis for saying that it was due to the centralization of the USA's system and sub-system, for example, its information ecosystem (media, higher ed) were deeply centralized, its political parties (which were dominated the decision making structures of of its governmental strictures, oh and by the way were also a big part of its info ecosystem as well) were transformed into decentralized and publicly accessible ass member parties into centralized and publicly inaccessible exclusionary membership parties, its industry was centralized, its banking and finance sphere was centralized (it had started to get rid of the usa's internal domestic capital controls, etc.. and so there was no one left to debate the economists (BTW, the USA never had open capital accounts as he describes them in the early 20th century in effective terms because it had very strong internal interstate and inter sector effective capital controls)
The USA never had macroeconomists at the wheel until the advent of the so called Neoliberal Era and never had them even significantly influential until some point around 1960, at least from the 1830s on they would be forced to contest their ideas publicly, and they would be defeated. The 1930s USA was not a Keynesian state, we are taught incorrectly on that and I assure that can be said with certainty. Theres very, very strong basis for saying that it was due to the centralization of the USA's system and sub-system, for example, its information ecosystem (media, higher ed) were deeply centralized, its political parties (which were dominated the decision making structures of of its governmental strictures, oh and by the way were also a big part of its info ecosystem as well) were transformed into decentralized and publicly accessible ass member parties into centralized and publicly inaccessible exclusionary membership parties, its industry was centralized, its banking and finance sphere was centralized (it had started to get rid of the usa's internal domestic capital controls, etc.. and so there was no one left to debate the economists (BTW, the USA never had open capital accounts as he describes them in the early 20th century in effective terms because it had very strong internal interstate and inter sector effective capital controls)
Interesting and well written! Although, I would argue that this quote right here is not not true in all instances: "that although the benefits of trade restrictions are concentrated (in protected industries) and the costs are dispersed (in higher prices)". If their is broad based protectionism, and there are other polices in place that work with it as part of a paradigm (as there was in the USA for hundreds of years), then 1) the second order effects of all the protected industries (and their many sub parts) provide many broad-based benefits, and 2) if done well and for long enough -- in a bigger country, at least -- you dont get "higher prices", you get the opposite problem, you get deflation, just as China recently experienced and the USA had to deal with a bunch of times in its past
Also, question, Helleiner (whose book I've read before), as you noted, mentions the importance of the dynamics of the USA internal pc, but very broadly, especially given the topic of the book, never seems (unless I missed it?) to mention the elimination of the USA internal domestic capital controls which had been around for 150 years to 200 years and had been mostly done away with right around then (there must be links, right?), does Eichengreen (who I havent read) mention it?
I suppose Helleiner does not write about that because it is largely wrapped in in WW2 - as I understand it. Neither does Eichengreen much, because his story is strictly international. But you are right - the financial and monetary consolidation of the US between 1914 and 1945 is an important story!
Thanks! I'm actually talking about the post war financial and monetary consolidation which until a few years ago I never knew about!!!!! The advent of the so called Neoliberal Era didnt -- as I was falsely taught my whole life -- undo the New Deal's banking/finance paradigm, it undid things that had mostly been around since the time of the Jacksonians in the 1830s/1840s/1850s and to a lesser but still substantial extent since not only the first day of the country but in some cases even earlier since some of it predates our country right through our direct continuance predecessor thirteen colonies! Talk about radical change! It largely happened between ~1965 and ~1985 but it was very heavily loaded between the latter 1970s and early 1980s, examples: The *effective* and de facto ending of most of the interstate banking competition inhibitors (it didnt actually end with the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ((which actually didnt take full effect until 1998/1999)) as I was taught) through various things such as allowances -- which were used on mass -- for "brokered accounts" (amongst other things), as well as -- and this, I believe is F'd up -- the changing of laws to make credit union not really credit unions, as well as the elimination of S&Ls (and BTW, it turns out CUs and S&Ls were just the latest iteration of things that had been around for 150 years!), and the eliminations of pension fund geographic biases, and same with insurance funds, and, well, there were all these other things but that would require getting more lengthy than I got time fore here. Thanks for the reply and the interesting writing! I hope youve been having a nice day. -- Mike
IMHO the role of economists was important. You already mentioned Keynes aversion to capital openness. This was also the attitude of Ragnar Nurske's famous report for the League of Nations. Somehow the intellectual climate changed and by the 1960s you have Milton Friedman coming out in favour of flexible exchange rates and free fx markets. I am not sure why views changed, but I don't think it was just a question of State policies and power of various groups within those states, such as workers vs capitalists.
Absolutely! I agree they had a major role. The question is why those arguments became more salient — and Helleiner would argue that it was the US balance of payments and fiscal position that made Friedman et al more appealing.
The ideas-economic structure relationship is always a tricky one in history. There’s a nice essay by Perry Anderson on it in the NLR which came out yesterday!
The USA never had macroeconomists at the wheel until the advent of the so called Neoliberal Era and never had them even significantly influential until some point around 1960, at least from the 1830s on they would be forced to contest their ideas publicly, and they would be defeated. The 1930s USA was not a Keynesian state, we are taught incorrectly on that and I assure that can be said with certainty. Theres very, very strong basis for saying that it was due to the centralization of the USA's system and sub-system, for example, its information ecosystem (media, higher ed) were deeply centralized, its political parties (which were dominated the decision making structures of of its governmental strictures, oh and by the way were also a big part of its info ecosystem as well) were transformed into decentralized and publicly accessible ass member parties into centralized and publicly inaccessible exclusionary membership parties, its industry was centralized, its banking and finance sphere was centralized (it had started to get rid of the usa's internal domestic capital controls, etc.. and so there was no one left to debate the economists (BTW, the USA never had open capital accounts as he describes them in the early 20th century in effective terms because it had very strong internal interstate and inter sector effective capital controls)
The USA never had macroeconomists at the wheel until the advent of the so called Neoliberal Era and never had them even significantly influential until some point around 1960, at least from the 1830s on they would be forced to contest their ideas publicly, and they would be defeated. The 1930s USA was not a Keynesian state, we are taught incorrectly on that and I assure that can be said with certainty. Theres very, very strong basis for saying that it was due to the centralization of the USA's system and sub-system, for example, its information ecosystem (media, higher ed) were deeply centralized, its political parties (which were dominated the decision making structures of of its governmental strictures, oh and by the way were also a big part of its info ecosystem as well) were transformed into decentralized and publicly accessible ass member parties into centralized and publicly inaccessible exclusionary membership parties, its industry was centralized, its banking and finance sphere was centralized (it had started to get rid of the usa's internal domestic capital controls, etc.. and so there was no one left to debate the economists (BTW, the USA never had open capital accounts as he describes them in the early 20th century in effective terms because it had very strong internal interstate and inter sector effective capital controls)