Wat betekent dat toch, 'eigen verantwoordelijkheid' (zie video), het leidmotief van het kabinet Balkenende, dat met deze heilige kreet ons allerlei narigheid door de strot duwt?
Voor de slimme burger of maatschappijcriticus gemakkelijk te duiden: "Eigen verantwoordelijkheid" is een kapitalistisch eufemisme voor "Ikke, Ikke, Ikke en de Rest kan Stikken. Kijken we naar de wereld waar de "Eigen Verantwoordelijkheid" al tot volle wasdom is gekomen dan gaan we beseffen waar we in Nederland met de balk ellendige verantwoordelijkheid uitkomen. Tot welk resultaat de 'eigen verantwoordelijkheid' in Amerika heeft geleid ziet u in het hier volgende Amerikaanse welvaartsoverzicht:
- laagste jaarinkomen voor iemand uit de bovenste 4 procent van Amerikaanse werknemers is $ 100.000
- aantal Amerikaanse miljardairs 268
- percentage huishoudens met nihil of negatief eigen vermogen: 18
- deel van het totale financiële vermogen dat in het bezit is van de bovenste 20 % van Amerikaanse huishoudens: 91 %
- deel van Amerikaanse huishoudens dat een eigen huis bezit: 66,3 %
- netto eigen vermogen van bewoners van eigen woningen: 18,2 %
- jaarlijkse beloning van de 20 best betaalde topmanagers $ 2,024 miljard
- totaal consumentenkrediet in de Verenigde Staten $ 1,742 miljard
- stijgingspercentage tussen 1990 en 1999 van respectievelijk inflatie 27,5 % arbeiderslonen 32,3 % salarissen topmanagers 535,0 %
- kans dat een persoon die stierf in 1997 vermogend genoeg was om aangeslagen te worden voor de Federale Nalatenschaps Belasting: 1 op 50
- deel van de onderwijzers,politiemensen,gediplomeerde verpleegsters of concierges dat met een middeninkomen een middenklasse woning kan kopen: nihil
- deel van het totale netto gezinsvermogen dat in het bezit is van zwarte Amerikanen: 1 %
- deel van de kinderen beneden de armoedegrens die wonen bij iemand met een fulltime baan: 34 %
- deel van de daklozen populatie dat bestaat uit gezinnen met kinderen: 40%
- kans dat een stedelijk stuk grond in de VS braak ligt: 1 op 6,6
- aantal leegstaande gebouwen per 1000 inwoners in Bridgeport, Connecticut: 1
Uit: Ed Dodson's artikel "The Wealth of our Nation and our Cities".
Dat werd gepresenteerd op de Bridgeport Conferentie.
From Political Economy to Economics Notes on the Passing of Time
Edward J. Dodson
| 384-322 B.C.
|| Aristotle writes
Ethics, his two main works containing his economic
analyses and principles. He viewed economic issues as moral issues.
| Antiquity thru the late 17th
|| From the time of Plato and
Aristotle (reappearing in earnest after the
began in Eurasia), political philsophers examined the relationship
between individuals, between the individual and groups and between
the individual and society.
| 800 on
|| Eurasia, in whole or in parts,
organizes into small principalities (the Manoral system and, later,
|| Thomas Aquinas, canonized in
Summa contra gentiles and
attempting to synthesize Christian and Aristotelian philosophy.
| 1450 on
|| Beginning of the
Discovery and the extraction of gold and silver form the New
World. Between 1560-1630 the influx of precious metals contributed
to a four-fold incrase in the price of grian, cattle, timber, wood,
|| The first quantities of precious
metals arrive in Spain from the New World. Spanish nobility uses
this treasure to buy manufactures and luxury goods, as well as to
pay for Spain's religious wars against the Moors and Protestants.
Then, when drought hits Spain, they begin to purchase grain and
other foodstuffs. Prices throughout Europe rose in response to the
expanded coinage (500 percent in spain and Portugal, less elsewhere,
during the sixteenth century).
|| Niccolo Machiavelli's book,
Prince, is published, as a manual on how to obtain and hold
|| Thomas Gresham, founder of the
Royal Exchange in London, observes that "Bad money drives out
good." The becomes known as
|| Thomas Gresham, an English banker
and merchant, became financial adviser to Queen Elizabeth I. His
observation that "bad money drives out good" becomes known
as "Gresham's Law."
| 1600 - 1760
|| Dutch, French and British
merchants initiated the system of Mercantilism between domestic
producers of finished goods and New World settlements.
Britain's colonies, in particular, grew in population and wealth
production under what historian Charles Andrews later called a
century and a half of
|| Bank of Amsterdam established in
Holland. The bank was authorized to take in coinage from all over
and (after charging a fee) re-mint the coinage with a standard
weight of gold and silver content. The Bank then established a
credit for the depositor, which could be circulated as a fully
redeemable bank note.
During this early period of its history, the Bank became the first
international bank of deposit rather than a lending institution.
|| Antoine de Montchretien's book,
Treatise on Political Economy, is published in France. He
argues against trade with foreigners on the grounds that foreign
goods and foreign ideas will corrupt the French way of life.
|| Thomas Mun's book,
Treasure by Foreign Trade, is published. Mun, an official of the
East India Company, argues against the government's prohibition
against the export of bullion.
|| William Petty's book,
of Taxes and Contributions, is published in England. This was
one of the first attempts to use scientific investigation rather
than intuition (i.e., revealed truth) to support contentions about
the effects of taxes on production and commerce.
|| John Lock's book,
Treatises Of Government, is published. Locke states emphatically
that people are born free and come together into society in order to
improve their condition. Thus, government is a creation of society
and has as its primary responsibility the protection of individual
liberties against acts of license (e.g., criminal behavior and
|| The Bank of England is
|| England adopts silver as its
coinage of choice, establishing the so-called "sterling
standard" which lasts until 1816.
|| Hohn Law's tract,
Trade Considered, with a Proposal for Supplying the Nation with
Money, is published. Law advances a mercantilist view, with the
substitution of paper money for specie, secured by the value of the
|| John Law, a Scot of less than
impeccible credentials, convinced the French to establish a new
bank, the notes of which were ostensibly to be backed by conage with
a fixed content of gold and silver. Law then used the deposits to
fund a monopolistic trading company and engage in land speculation
in North America. Enormous quantities of stock were issued, the
proceeds of which went not to development but as loans to the French
government. In 1720 confidence disappeared, there was a run on the
bank, which closed, and Law escaped to Italy.
|| South Sea Company is organized in
England, which takes over the debt of the English crown in return for
monopoly privileges over trade with the Spanish colonies.
Speculation developed in the stock, which eventually crashed,
resulting in large losses for those last involved.
|| Benjamin Franklin's essay,
Modest Inquiry into the Nature and Necessity of Paper Currency,
|| Richard Cantillon's essay, "The
Nature of Commerce," is published in 1775 in French. Cantillon
sees land as the source of wealth and labor as the active agent in
the creation of wealth. Although a proponent of mercantilism,
Cantillon acknowledges the need to foster entrepreneurship and
|| Charles-Louis de Secondat's book,
The Spirit of the Laws, is published. Secondat, better known
by his title, the Baron de Montesquieu, was one of the first
political philosophers to expound the doctrine of separation of
powers. His view is, however, relativistic. He writes that: "Liberty
is a right of doing whatever the laws permit." He assumes that
if those in power adopt laws, those laws must inherently be just.
|| Richard Candillon's book,
on the Nature of Commerce, is published in England (although
written during the 1720s). Cantillon's contributions to the science
of political economy ncluded his call for writers to define their
terms. He was one of the first to distinguish
land as "the
source of material from which wealth is extracted" and not
Cantillon also introduced the idea of the
as a market clearing device, attempting to show that supply/demand
relationships were self-regulating.
He is arguably the more appropriate choice as the father of
political economy than is Adam Smith.
|| Francois Quesnay's book,
Economique, is published in France, advocating the renewal of
mercantilist restrictions over trade and the use of tax revenue
(collected only form the annual net profit attributable to land
ownership) for developing the nation's physical and societal
|| Victor Riquetti's book,
Philosophie rurale, is published. Riquetti, holding the title of
the Marquis de Mirabeau, is one of the leading physiocrats in
France. This book sets out in full detail the physiocratic doctrine.
|| William Pitt, Prime Minister of
England, on indirect taxation: "There is a method by which you
can tax the last rag from the back, and the last bite from the
mouth, without causing a murmur against high taxes, and that is, to
tax a great many articles of daily use and necessity so indirectly
that the people will pay them and not know it. Their grumbling will
then be of hard times, but they will not know that the hard times
are caused by taxation."
|| Anne Robert Jacques Turgot's
Reflections On The Formation And Distribution of Wealth,
is published in France. Turgot examines the proces by which land
comes to have an exchange value following the enclosure of the
commons and issuance of private titles to land.
In the 1770's, Turgot was instrumental as the French Minister of
Finance of stabilizing prices (by freeing trade). After proposing
radical reforms in aristocratic prvilege, tax relief to the
peasants, elimination of trade guilds and the creation of local and
regional assemblies, he was removed from office.
|| Pierre Samuel Du Pont de Nemours'
Physiocratie, is published in France. This essay
argued that agriculture was the most important economic activity.
The French school of political economists, known as Physiocrats,
had a material influence on the thinking of Benjamin Franklin,
Thomas Paine and Thomas Jefferson.
|| Pierre Samuel Dupont de Nemours
La Physiocratie, is published. Dupont de Nemours, who
was a close collaborator with Turgot and Quesnay, later fled to
North America to escape execution by the Jacobin leaders in France.
|| John Adams (in a response to the
English philosopher James Harrington), writes: "Harrington has
shown that power always follows property. This I believe to be as
infallible a maxim in politics, as that action and reaction are
equal, in mechanics." He goes on to suggest that liberty can be
preserved only by making "the acquisition of land easy to every
member of society."
|| Adam Smith's book,
of Nations, is published. Smith writes: "Civil government,
so far as it is instituted for the security of property, is in
reality instituted for the defence of the rich against the poor, or
of those who have some property against those who have none at all."
Smith's use of the French term, laissez-faire, is interpreted by
merchants, agribusiness owners and industrialists to mean that
government ought not interfere with private business relations. The
full French term was
laissez-faire, laissez-aller (roughly
translated as "a fair field with no favors").
Smith is considered the father of modern political economy.
|| Jeremy Bentham's book,
Fragment on Government, is published.
|| The Spanish milled dollar was the
stated money for which paper currency issued by the Continental
Congress could be redeemed. Overissuance and British counterfeiting
drove the exchange rate (i.e., the discount) to as high as 1,000
Continentals to the Spanish dollar.
|| Thomas Jefferson introduces a
bill in the Virginia legislature to eliminate the remnants of
aristocratic privilege in land ownership -- ential and
|| Benjamin Franklin writes of the
paper currency with great sarcasm: "This currency, as we manage
it, is a wonderful machine. It performs its Office when we issue it;
it pays and clothes Troops, and provides Victuals and Ammunition;
and when we are obliged to issue a Quantity excessive, it pays
itself off by Depreciation."
|| Edmund Burke's book,
Economic Reform, is published.
|| William Ogilvie's essay, "On
the Right of Property in Land" is published. He advocates
reform of the land tenure system then existing in Britain.
|| William Pitt, the younger,
becomes Prime Minister of Britain and begins to dismantle
mercantilism, incorporating the ideas of Adam Smith and lifting
restrictions on trade and investment.
War with France left Britain with a national debt of 40 million
pounds. Holders of Britain's paper currency lined up at the Bank of
England to turn in their paper for gold. Combined with new taxes,
the effect was to drive up prices and cause food shortages.
|| Thomas Paine's pamphlet, "Dissertation
on Government; the Affairs of the Bank; and Paper Money," is
published. At the end of the year, Paine leaves North America for
France, where he hoped to find investors for his new iron bridge
|| Jeremy Bentham's book,
Introduction to the Principles of Morals and Legislation, is
published. Bentham seeks to utilize utilitarian analysis to develop
public and private policies that result in the "the greatest
good for the greatest number."
|| Thomas Malthus's
Essay On The
Principle of Population is published in England. Mathus linked
the control of population growth to increasing poverty and called
for a new commitment to moral responsibility to curtail population
|| Jeremy Bentham's book,
of Morals and Legislation,, is published in England. Influenced
by David Hume, Bentham becomes the philosopher of
(i.e., human beings act consistently to maximize pleasure and
minimize pain). He also argued that forms of government ought to be
judged on performance and obedience to government was required only
if government was useful.
|| Thomas Jefferson develops a "Plan
for Establishing Uniformity in the Coinage, Weights, and Measures of
the United States."
|| Thomas Paine's book,
Rights Of Man, is published in England. Paine urged reformers in
the Old World to look to the American experiment for guidance in
achieving "government founded on a moral theory."
|| Thomas Jefferson warns George
Washington that the level of taxation required merely to maintain
the interest payments on the national debt threatened to cause "a
drain of coin" estimated at some "three millions of
|| Alexander Hamilton is
instrumental in getting the U.S. Congress to charter the first Bank
of the United States, with the power to issue notes redeemable in
coined money or bullion.
|| The U.S. dollar is established as
371.25 grains of pure silver (which was the average silver content
of coins circulating in the U.S. at the time. The new coins also had
a 15:1 ratio of silver to gold (the approximate market rate of
exchange between silver and gold).
|| Marie Jean Antoine Nicolas de
Caritat (the Marquis de Condorcet) writes his philosophical work,
Esquisse d'un tableau historique des progres de l'esprit humain.
He believes the natural evolution of humanity will bring about an
absolute equality of rights.
|| Thomas Robert Malthus' book,
on the Principle of Population as It Affects the Future Improvement
of Society, is published anonymously.
|| Geor Wilhelm Friedrich Hegal
calls for unification of the German states into one nation.
|| The Hartford Convention is held,
where disenchanted Federalists met to promote secession by the New
England states from the U.S. (and then seek a separate peace with
|| The U.S. Congress (at the urging
of James Madison) passes a general tariff against imports and grants
a charter to the second Bank of the United States.
|| The second Bank of the United
States is chartered. In 1823, Nicholas biddle comes in to head the
Bank and oversee its expansion. Biddle kept a close watch over the
state banks and their ability to redeem notes in gold and silver.
This brought him into conflict with state-chartered banks (and their
political friends) on the frontier, where specie was scarce. With
the election of Andrew Jackson as President, the Bank's charter was
not renewed in 1836.
|| David Ricardo's book,
Principles of Political Economy, is published in England.
Ricardo is credited with improving on Adam Smith's work by more
scientifically explaining the
law of rent and the
Ricardo, as with Smith, makes no firm moral argument regarding
wealth distribution. He merely describes the process by which this
occurs. He writes:
"Independently of ... improvements, in wich the community have
an immediate and the landlords a remote interest, the interest of
the landlord is always opposed to that of the consumer and
|| David Ricardo on money:
"Experience shows that neither a state nor a bank ever has had
the unrestricted power of issuing money without abusing that power;
in all states, therefore, the issue of paper money ought to be under
some check and control; and none seems so proper for that purpose as
that of subjecting the issuers of paper money to the obligation of
paying their notes either in gold coin or bullion."
|| The Bank of Amsterdam fails, due
to losses generated by loans to the Dutch government and commercial
|| British economist Alfred
Principles of Economics, is published.
|| William Godwin's book,
Population, is published as a response to Reverend Malthus.
|| James Mill's book,
of Political Economy, is published.
|| Frederick List, leader of German
nationalism, opens an attack on the free trade ideas of Adam Smith.
His lectures are published under the title
Outline of American
Political Economy. He champions what was becoming known as "the
American System," which protected domestic industries with
tariffs and limits on imports, used Federal power to develop the
nation's physical infrastructure, and instituted a national banking
system to provide credit to government. List also advocated the
creation of a European confederation that would permit free trade
within the member states.
|| The gold content of the U.S. "Eagle"
was decreased to 232 grains of gold, which increased the price of
silver in terms of gold and brought gold coins back to the U.s.
during the 1840s and 1850s.
|| Alexis de Tocqueville's
in America is published. A second volume appears several years
|| the U.S. Congress passes
legislation introduced by Henry Clay authorizing a revenue sharing
with the states based on a $35 million surplus generated from the
sale of public lands and tariff revenues collected.
Another law required that all purchases of public lands be paid for
with specie (i.e., gold or silver coinage) and not bank notes.
|| Charles Francis Adams' book,
Upon the Present State of the Currency in the U.S., is
|| Henry C. Carey's three-volume
Principles of Political Economy, is published in the
U.S. Carey argues that economic growth will overcome any problems of
wealth distribution by ensuring the demand for labor is always
greater than the supply.
|| Jerome Adolphe Blanqui's book,
The History of Political Economy, is published. Blanqui
argues the case that government power must be invoked to protect
workers from exploitation.
|| Pierre-Joseph Proudhon's book,
What Is Property?, is published in France. Proudhon is the
Mutualism, which would replace the system of
finance capitalism (i.e., what is more properly identified by the
industrial landlordism) with worker cooperatives.
|| Richard Cobden is elected to the
British Parliament as an advocate for
|| Frederick List's book,
System of Political Economy, is published in Germany.
List and others use their knowledge of political economy to assist
in building a modern military-industrial complex within the German
|| Thomas Caryle's book,
and Present, is published. Carlyle opposed Smith's advocacy of
laissez-faire and described politcal economy as the "dismal
|| Claude-Frederic Bastiat's book,
Sophismes economiques, is published. He argues against
protectionism and socialism, and also challenges Malthus' view on
the problems caused by population.
|| Karl Marx comes to England for a
meeting of the Communist League, where he teams with Frederick
Engels to write
The Communist Manifesto.
|| John Stuart Mill becomes one of
the first political economists to suggest paper currency could be an
efficient and appropriate substitute for coinage and certificates of
deposit, so long as the quantity in circulation corresponded to the
production of goods and services. This is roughly what economists
such as Milton Friedman later suggested be adopted as a so-called "monetary
In his book,
Principles of Political Economy, Mill writes: "The
value or purchasing power of money depends, in the first instance,
on demand and supply. ...The supply of money ... is all the money in
circulation at the time. ...The demand for money, again, consists of
all the goods offered for sale."
|| The book,
Political Science by Patrick Edwrad Dove, is published. Dove,
attacks the system of landlordism and calls for a single tax on land
to solve the economic problems created by landlordism.
|| Francis Bowen's book,
Principles of Political Economy, is published in the U.S. This
book expresses the view that the laws of political economy developed
by Ricardo, et al. did not apply to the U.S. because of its
expansive natural bounty.
|| Karl Marx completes his
of Political Economy, which is read by hardly anyone outside the
community movement during his lifetime.
|| Walter Bagehot is appointed
editor of the London newspaper, the
Economist. Bagehot is in
general agreement with Ricardo's perspectives. He writes with an
historical perspective and expresses conditional acceptance of the
|| Richard Cobden, a Member of the
British Parliament, supports a Treaty to reduce tariffs between
Britain and France. He had joined with John Bright to form the
Manchester Anti-Corn Law Association and to fight for free trade.
|| Henry James Sumner Maine's book,
ancient Law, is published. This book is a study of
comparative law that revealed how ancient ideas continued to
influence modern thought and were integral to the laws then in
|| John Stuart Mill's book,
is published. He has become one of the leaders of this school of
|| Karl Marx completes the
manuscript for the first volume of
Das Kapital. A small
edition of 1,000 copies is published in Germany.
|| Charles Franklin Dunbar becomes
professor of political economy at Harvard University. after two
years of study in Europe, Dunbar begins to train a new generation in
the science of economics. This is the beginning of the
|| William Stanley Jevons' book,
The Theory of Political Economy, is published in England.
Jevons is one of the pioneers of neo-classical economics and a
proponent of the
theory of marginal utility.
|| A Coinage Act passed by the U.S.
Congress contains no provision for the minting of the silver dollar.
Subsequent legislatoin gave to the U.S. Mint the sole authority to
issue coinage, bringing an end to "free coinage."
|| The German Reichsbank is
established as the central bank of a unified German state. This is
accomplished virtually without discussion after several years of
|| Frank W.
Taussig graduates from Harvard University, then goes on to study
economics at the University of Berlin. He specializes in the effects
of tariffs and protectionism on international
|| Henry George's
Progress and Poverty, is published
in the U.S. George identifies monopoly -- and land monopoly in
particular -- as the primary cause of industrial depressions. He
calls for the removal of all taxese on labor and capital, replacing
them with a tax that collects the annual rental value of land (as
| late 1800s
|| In 1937,
economist Wilhelm Roepke makes the following observation regarding
structural changes adopted in the last portion of the 19th
of the 19th century brought the beginnings of a real international
monetary homogeneity paralleling that existing on the national
level, thanks to the gold standard which united all countries within
the framework of one monetary system."
| late 1800s
A History of Interest Rates, written by
Sidney Homer and published in 1963, he writes:
Ministers of Finance or chancellors of th Exchequer thought of the
burden of their national debts in terms of the annual interest
charge against the revenues rather than in terms of a principal
amount which must be repaid. Principal repayment only occurred when
it was considered a benefit to the state. Refundings wre almost
always conversions at lower rates."
|| Henry George's
Social Problems, is published.
George argues that the issuance of money (i.e., coinage) is the
appropriate business of government. Banking, he argues, ought to be
private and limited to "the safekeeping and loaning of money, and
the making and exchange of credits."
Engels completes the second volume of Marx's
Das Kapital following Marx's death in
|| Eugen von
Capital and Interest,
is published in Germany and translated into English in 1890.
Bohm-Bawerk serves as finance minister in the Austrian government
and champions tax reform.
The Origin of the Family, of
Private Property and of the State, is
|| German reformer
Michael Flurscheim's book,
Wege is published. Flurscheim was a strong proponent of the
public collection of location rent as advanced by Henry George. He
advocated that government have the right to purchase land at a price
that would remain stable, and then lease the land in order to
collect its location rent.
|| John Bates
The Philosophy of Wealth,
is published. He stressed the relation between ethics and economics,
advocating cooperative institutions.
|| Simon Newcomb's
Principles of Political Economy,
is published. Newcomb, a professor of mathematics at the U.S. Naval
Academy, a strong proponent of free markets and sound
|| Richard Ely's
Problems Of To-Day, is published
in the U.S. Ely was by this time a tenured professor of political
economy at Johns Hopkins University. As was the case with many
others whose positions were privately funded (often by industrial,
banking or real estate interests) he attempted to justify
monopolistic arrangements on the basis that they were embedded in
the system as traditional practics.
|| John R.
The Distribution of
Wealth, is published. Early in his life he had joined Henry
George's campaign for a single tax on location rent. He became a
strong proponent of an ongoing role for government to mitgate
economic and social problems.
Engels completes editing of the third volume of Karl Marx's
Outlines of Economic
Theory, is published prior to earning a Ph.D. at the University
of Chicago. Davenport believed the study of economics should not
concern itself with ethical matters.
|| Henry George's
The Science of Political Economy,
is published in the U.S., posthumously.
|| John Bates
The Distribution of
Wealth, is pubished. Clark made use of marginal utility analysis
in this work. He also argued that workers should receive all or most
of the value they added to production.
|| Vladimir Ilyich
(Ulyanov) Lenin's book,
The Development of
Capitalism in Russia, is pubished. Lenin declares that
non-Marxist economists are unable to understand the basic problems
national debt stands at 639 million pounds. This figure represents a
decline from earlier in the century.
|| Max Hirsch's
Democracy Versus Socialism, is
published in England. Hirsch is a free trade proponent and leading
supporter of Henry George's campaign for the societal collection of
Mutual Aid, a Factor in
Evolution, is published. Kropotkin believes the state is the
enemy of the people and should be replaced by cooperative
|| William James
The Tariff Problem is
published. Ashley also authored an
Introduction to English Economic History and
Theory in two volumes, published in 1888 and
|| Panic and
depression spread across the United States. Nearly 250 banks fail.
This set the stage for creation of the Federal Reserve
| early 1900s
Carroll quigly writes in
Hope, published in 1966, that the world's dynastic bankers were
pursuing "nothing less than to create a world system of financial
control in private hands to dominate the political system of each
country and the economy of the world as a
| early 1900s
|| In Britain, the
Round Table groups were formed as first
step to, as described by Lord Milner (a British Secretary of State
for War), "seek to federate the English-speaking world along lilnes
laid down by Cecil Rhodes..." who funded the project. This effort
included Thomas W. Lamont, head of the House of Morgan in the
| early 1900s
|| The Council on
Foreign Relations is organized in the U.S. Edward Gay, an economic
historian and founding member, wrote: "When I think of the British
Empire as our inheritance I think simply of the natural right of
succession. That ultimate succession is
|| The book,
The Essential Reform: Land Values Taxation In
Theory & Practice, by British writers C.H. Chomley and R.L.
Outhwaite, is published in London. The book restates the extensive
moral and economic case for public collection of the rental value of
Socialism, is published in Germany and translated into English.
Bernstein points to mistakes made by Marx, particularly regarding
the collapse of capitalism. He is an advocate of the use of
political democracy to achieve constructive
|| Frank W.
Economics, is published in the U.S. Taussig accepts the limited
role of the economist, writing:
"Complex political and social questions present
themselves, quite beyond the scope of a book on economics." No
longer, in his view, is the role of the economist to challenge
socio-political arrangements and institutions based on their impact
on the just distribution of wealth. This, he argues, is a political
along with John Bates Clark and Herbert Davenport, are instrumental
in discarding the three factor model (land, labor and capital) of
political economy, substituting a two-factor model that treats land
as just another form of capital.
|| Irving Fisher's
The Rate of Interest: Its Nature,
Determination and Relation to Credit, Interest and Crises, is
published. This book is co-written with Harry Gunnison Brown.
|| Something like
70-80 percent of all money in circulation consisted of coinage with
specified gold and silver content.
|| The Federal
Reserve Act is passed in the U.S. This act creates a system of
privately-owned banks to act as lenders of last resort to banks in
neeed of cash to meet depositor demands. The Federal Reserve also
becomes a clearinghouse for checks issued against member banks.
Member banks deposit 6% of their capital with the Federal Reserve
and are required to maintain reserves against deposits (in gold or
gold certificates issued for gold deposited in the U.S. Treasury),
or currencies then in circulation.
The Federal Reserve was also authorized to
issue its own notes in return for deposits of gold, gold
certificates or other currencies. Only a 40 percent reserve
requirement was established (in gold or gold
|| Charles A.
An Economic Interpretation of
the Constitution of the United States, is published. Beard comes
under heavy criticism by challenging the motives of some of the
"founding fathers" and detailing the fact that those who made the
new government were perhaps more concerned with preserving their
economic positions than in creating a truly democratic republic and
conditions for equality of opportunity.
Die Akkumulation des
Kapitals, is published. She argued that the survival of
capitalism depended on a continuous expansion of
|| With the
outbreak of the First World War, Britain, France, Germany and
Austria suspend specie (i.e., gold) payments. Thereafter, gold coins
(consistent with Gresham's Law) were drawn out of circulation and
|| Oxford educated
economists John A. Hobson's book,
Wealth, is published. Hobson develops an underconsumption theory
of business cycles and a solution to poverty of taxing all surpluses
away (not merely the taxation of location rent as proposed by Henry
|| Louis Brandeis
wrote a series of articles for
Weekly attacking the U.S. nation's entrenched financiers as a
|| The gold stock
of the U.s. doubled as a result of sales of goods (and corporate
shares of stock) to European governments and investors. John Kenneth
Galbraith later wrote, in
U.S. faced an inflation caused by gold." Wholesale prices in the
U.S. doubled during the same period.
|| Harry Gunnison
Brown, who studied under Irving Fisher at Yale University, begins a
long career defending political economy against the rise of the more
resrictive theoretical framework of economics. He is a firm
supporter of the analysis presented by Henry
Veblen's essay, "The Preconceptions of hte Classical Economists" is
published in the U.S. Veblen attacks existing socio-political
arrangements and institutions as organized to preserve privilege and
|| John Maynard
The Economic Consequences of
the Peace is published. Keynes warns against trying to return to
the gold standard at pre-1914 parities becuase of gold's unstable
International Economic Conference is held at Genoa, Italy to discuss
reinstituting a system of fixed exchange rates between national
currencies and a reutnr to a gold exchange standard.
The U.s. dollar and
British pound are established as reserve currencies in lieu of
having to deliver gold bullion to settle
John Dewey's book,
Human Nature and
Conduct, is published. Among other influences on Dewey's
thinking, he largely accepts the system of political economy of
|| Germany returns
to a commodity-backed currency (the Rentenmark). This, along with
other fiscal reforms restore a balanced budget and tame inflation.
(See the study performed by economist Thomas Sargent of the National
Bureau of Economic Research.)
1890-1924 consolidation of English banking interests reduce the
number of joint-stock banks from 104 to 18 -- five of which held 84%
of all deposits.
|| Harry Gunnison
Economic Science and the
Common Welfare, is published in the U.S. Brown is now professor
of political economy at the University of
Churchill, as Britain's Chancellor of the Exchequer, restores
Britain to the gold standard, causing a rush by holders of sterling
to convert currency into gold at the artificially low exchange rate.
Britain finally ends convertibility in 1931.
|| The U.S. and
Britain agree to reset the price of gold at $20.67 an ounce and
restore the "gold standard."
Irving Fisher's book,
Illusion, is published. Fisher joins with other economists to
form the Stable Money League and calls for reformof the existing
gold standard system, which failed to stabilize the purchasing power
of component currencies.
Fisher's proposal is to define the dollar not
in terms of a weight of gold but to devalue or revalue the gold
weight of the dollar to offset movements in a broad price index that
included most basic commodities.
economist Gustav Cassel testifies before a U.s. House of
Representatives Committee on Banking and Currency, urging the U.S.
government to limit speculation on the New York Stock Exchange, but
without increasing the Federal Reserve's bank rate. If this does not
take place, he predicts, there will be a rapid increase in prices
followed by a serious depression.
|| At the end of
October, the U.S. stock market crashes.
economist Gunnar Myrdal's book,
Political Element in the Development of Economic Theory, is
|| The supply of
the U.S. currency in circulation falls by over a third, and
one-fifth of all all commercial banks (holding 10% of all deposits)
Hawley-Smoot Tariff Act is passed in the United
|| Country after
country erects stiff trade barriers. The contraction of trade
contributes to the deepening global depression.
Only France and
Belgium permit their currencies to fall against the British pound
during the 1920s. Thus, during the early stages of the depression,
their exports become cheap in terms of foreign currencies, which
keeps their economies going longer.
|| 3,700 banks
fail and close their doors in the United States.
|| the Federal
Home Bank System is created in the U.S. Its member banks are
chartered to make loans to savings institutions and others engaged
in residential mortgage lending.
economist Karl Gustav Cassel's book,
Crises in the World's Monetary System, is published. In 1928 he
had testified before the U.S. House of Representatives on the
monetary problems of the post-First World War era.
Roosevelt takes the U.S. off the gold exchange
|| In his book,
The Economic Basis of Tax Reform, economist
Harry Gunnison Brown argues that the most efficient and fair system
of taxation is that which captures unearned income and gains. He
classifies land rent for gains on the sale of natural resource-laden
and agricultural lands, aw well as building sites) as the major
sources of unearned income.
|| Harry Gunnison
Brown, in an article appearing in the
Gamma Sigma Exchange, urges abandonment of the gold exchange
"It would be better to stabilize the general
price level by open market purchases and sales of eligible
securities as well as goods and not be dependent upon any ned to
interfere with the importation and exportation of
|| the Banking Act
passed in the U.s. declares all coins and currency of the U.S. to be
the only forms of legal tender.
|| The U.S.
National Housing Act is passed in the U.S., creating the Federal
Savings and Loan Insurance Corporation to insure deposits at all
federally chartered savings banks.
Roosevelt orders devaluation of the U.S. dollar and reestablishes
the price of gold in terms of dollars at $35 an ounce.
The U.S. government
enforces a return of all gold coins and bullion to the U.S.
Treasury. In this way, virtually all the profits from devaluation
are captured by the governmnent.
The higher price of gold creates enormous
purchasing power in the U.S. for foreign holders of gold. Exports
flow out of the U.S. and gold is accumulated.
|| The Federal
Reserve System is reorganized to centralize power in the hands of
the Washington, D.C. Board of Governors.
|| John Maynard
The General Theory of
Employment, Interest, and Money, is published in England. He
advocates government intervention in markets, resorting to deficit
spending if necessary to pull a nation's economy out of a
|| The U.S.,
Britain and France enter into an agreement to keep the price of gold
stable and hold each other's currencies to minimize gold
|| Ludwig von
Econics Of The Free
Society, is published in Austria. Roepke argues that it was
"inflation ... especially the insidious inflation of credit money,
which constitutes the greatest and most imminent danger."
economic advisers, and others in Europe, are concerned with
declining prices -- with deflation -- and believe that by
stabilizing prices businesses will be encouraged to renew production
and begin to hire unemployed workers back.
|| Adolph Lowe's
The Price of Liberty, is published
in London. Lowe leaves Germany after dismissal from his teaching
position by the Nazi government and accepts a position at the
University of Manchester.
|| Richard T.
Land Economics, is
|| Simon Kuznets
develops the National Accounts system, out of which comes tools for
measuring economic growth, such as Gross National
|| alvin Hansen's
Fiscal Policy and Business Cycles,
is published. Hansen (at Harvard University) goes way beyond Keynes
in calling for government planning and sustained intervention in the
|| Harry Dexter
White and John Maynard Keynes contribute to a plan for the postwar
international monetary system. The decison is made to have the U.S.
dollar replace the British pound as the primary currency of
|| Harold J.
Reflections on the Revolution
of Our Time, is published. Laski, who taught economics at the
London School of Economics and the University of London, aksi served
at chair of the British Labour Party from
|| The Bretton
Woods Conference in New Hampshire is held. Here, Keynes proposes a
worldwide central bank charged with balancing pressures between
borrowers and creditors. He also proposes the introduction of a new
Harry Dexter White proposes the creation of the
International Monetary Fund, in which all members contribute
currency and would be able to obtain loans when necessary to settle
currency balances with other members.
|| The United
States emerges from the Second World War with its industrial plant
modernized and in possession of most of the world's gold
national debt stands at $250 billion.
|| President Harry
S. Truman signs the Employment Act of 1946, which commits the full
resources of the U.S. government to the maintenanceof full
Eccles, chairman of the Federal Reserve System, calls for the
Federal Reserve System's independence from the public debt
management decisions of the U.S. Treasury.
Preliminary Draft of a World Constitution
is prepared and signed by a group of intellectuals, including
Mortimer J. Adler, Robert M. Hutchins, Harold Innis and Rexford
|| the General
Agreement on Trade and Tariffs is negotiated and modified three more
establishes the principle of "Most Favored Nation" status for
multilateral adjustments in tariffs.
|| The U.S.
government holds gold worth $25 bilion (at the official price of $35
Robert Triffin (who had worked for the Federal Reserve and the IMF)
warned that meeting the world's need for currency reserves by
relying on U.S. payments deficits and dollar outflows was a sure
route to disaster.
|| John Kenneth
is published. Galbraith argues that both liberals and conservatives
operate under ideologically-based assumptions about how economies
funcation that have little to do with the real
|| British Labour
Party leader and historian, R.H. Tawney, writes on wealth
distribution in Britain:
"Where conditions are such that two-thirds of
the wealth is owned by approximately one percent of the population,
the ownership of the property is more properly regarded as the badge
of a class than as the attribute of a society."
|| Ludwig von
Theory and History is
published. In this work and elsewhere, he challenges the assertion
that the market system does not result in a win/win result for "all
members of society."
|| Louis Kelso and
Mortimer J. Adler introduce the idea of "universal capitalism"
(through the use of employee stock ownership plans) in their book,
1946-1958 the purchasing power of the U.S. dollar falls by
|| During the
year, 10 percent of the U.S. gold stock is claimed in return for
U.S. dollars held by foreign central banks.
|| Per capita
income in the top 22 developed countries rose by 50 percent. Martin
Mayer writes in
The Fate of the Dollar,
that "much of this improvement in the international standard of
living can be credited directly to the expansion of foreign trade,
which permit's each nation to specialize more efficiently in what it
| early 1960s
U.S. dollars are circulated in the Eurodollar Market, acting very
much like a common currency in Europe. This leads to establishment
by U.S. banks of overseas branches that operate outside U.S. banking
Milton Friedman, in testimony before the Joint Economic Committee,
calls for floating exchange rates to help solve the U.S. balance of
|| Douglas Dillan,
U.S. Secretary of the Treasury under Dwight D. Eisenhower and John
F. Kennedy, writes that moved to floating exchange rates has one
its own citizens lose confidence in its currency and start to try to
transfer funds abroad, ... it is perfectly obvious that any amount
of gold could be swamped very quickly."
economist Henry Hazlitt describes the steady growth in government
expenditures as "an open conspiracy not to pay the national
|| During the
administration of U.S. President Lyndon B. Johnson, the U.S. dollar
drops the statement: "Payable in silver to the bearer on
|| Despite the
buildup of U.S. military forces in Southeast Asia, the recorded
Federal deficit is just $2 billion. Lyndon Johnson declares is
commitment to keepin the U.S. dollar freely convertible into gold at
$35 an ounce.
|| U.S. President
Lyndon Johnson eliminates the Kennedy era investment tax credit on
the grounds that it had slowed the flow of investment reserves from
the U.S. to overseas markets.
|| The U.S. budget
deficit reaches $25 billion, the largest deficit since the Second
World War. Investment in foreign ventures by U.S.-based companies
reaches new heights.
Milton Friedman writes:
"The link between gold and the quantity of
money has become a rubber band. ...Whether desirable or not, it is
impossible to restore now the close link that prevailed before
|| Charles de
Gaulle, President of France, calls for return to a gold standard. In
the U.S., Brookings Institution economists lead the way in a call
for just the reverse -- a separation of gold from the U.S. dollar
and other currencies altogether.
|| The U.S.
Treasury announces it will no longer redeem the U.S. dollar for gold
at $35 an ounce, except for demands by official monetary
institutions in foreign nations.
|| A two-tiered
gold market is agreed to -- one between central banks at the office
price of $35 an ounce, and a second private market at whatever the
market will absorb.
The market price of gold temporarily falls, as
speculators liquidate their holdings. Contributing to the fall in
gold prices is the fact that France is forced to sell off half of
its gold stock to settle its accounts.
|| U.S. President
Richard Nixon, in order to close the budget deficit, introduces a 10
percent tax surcharge and removes certain exemptions from capital
|| Rising interest
rates in the U.S. initiates the creation of uninsured and
unregulated "money market accounts" that attract funds away from the
savings banks and commercial banks. This loss of low-cost deposits
reaches $500 million in 1966 and $1 billion in
Pompidou succeeds Charles de Gaulle as President of France. He
devalues the franc by 12 percent in order to stimulate the
economist Murray Rothbard calls for privatization of the minting of
coinage and reestablishment of the gold
|| The IMF begins
issuing "Special Drawing Rights" (from a basket of paper currencies
held) to expand liquidity, to replace gold that had disappeared from
the system through the private markets, and to accommodate a gradual
increase in the global price of gold.
|| U.S. President
Richard Nixon takes the U.S. off fixed exchange rates and suspends
convertibility of U.S. dollars for gold (closing the "gold window").
The official price (which becomes meaningless, since the government
refuses to redeem dollars for gold) is raised to $38 an ounce in
1972, and $42.22 in 1973.
|| U.S. dollars
held by foreign central banks increases from $3 billion in January
to $30 billion. The system of fixed exchange rates collapses. The
Germans shift to a floating exchange rate system. The British follow
early in 1972.
|| In August, the
U.S. devalues the dollar, imposing a 10 percent tax on all
inflation and low interest rates in the U.S. contribute to a renewed
outflow of financial reserves.
author and philosopher, Ralph Borsodi, designs a new money system
for introduction into societies left impoverished by modernization.
A model system of local currency (backed by basic commodities) is
established in Indian and then brought back to the U.S. to New
Hampshire (the "Exeter Experiment") with paper notes called
|| Janos Fekete of
the Hungarian National Bank, writes on the fate of gold:
"There are about 300
economists in the world who are against gold, and they think that
goldis a barbarous relic -- and they might be right. Unfortunately,
there are three billion inhabitants of the world who believe in
gold. Now the problem is how can we three hundred convince the other
three billion of the correctness of our ideas."
|| The U.S. again
devalues the U.S. dollar and raises the official price of an ounce
of gold to $42.22.
The beginnings of a new round of global
commodities inflation is unleashed. Russian gran purchases
contribute to an enormous rise in agricultural prices.
OPEC imposes an oil
embargo against the U.S. and the Netherlands for supporting Israel.
The price of oil increases from $3 to $5 per barrel (and reaches
$11.65 by the end of 1974). This trade takes place almost
exclusively in U.S. dollars, which are deposited at interest in U.S.
banks and invested in U.S. businesses, land, real estate, stocks,
etc. -- or, more often, deposited in Eurobanks to be lent to LDCs to
provide funds to pay for oil and other essential
Leondard Silk writes:
"The reconstructed world monetary system ws
founded on the strength of the American economy, ...the dollar and
on the deficits in the U.S. balance of payments. Therein lay a
serious contradiction: A strong dollar and chronic deficits in the
U.S. balance of payments would in time prove to be incompatible;
either the dollar would weaken or the American deficits would have
to be ended. There was a further contradiction: If the American
deficits ended, the flow of dollars that was providing the monetary
reserves for world economic expansion would also
Arthur Laffer, architect of the "supply side" resurgency among
economists, writes to U.S. Treasury Secretary William Simon:
"Marginal taxes of all
sorts stand as a wedge between what an employer pays his factors of
production and what they ultimately receive in after-tax income.
...Taxes of all sorts must be reduced. These reductions will be most
effective where they lower marginal tax rates the
|| Oil shortages
and the appearance of stagflation (i.e., high unemployment and high
inflation simultaneously) in the U.S. and elsewhere.
The value of
industrial output fell 13 percent in the U.S., 10 pecent in Germany,
somewhat more in the rest of Europe and 17 percent in
Wall Street Journal writer Jude Wanniski
introduces the supply-side ideas of economist Arthur Laffer to
Republican Party member and U.S. Representative Jack Kemp, and
eventually to Ronald Reagan.
|| The U.S.
deficit reaches $60 billion in each year.
|| Henry Wallich,
member of the Federal Reserve's Board of Governors, expresses his
optimism that Federal Reserve actions will steady the U.S.
|| Going from
virtually zero in 1973, by 1977 international banks had made loans
to LDCs and Eastern European governments of $250 billion. By 1980
this amount doubled to over $500 billion.
Anticipating that oil
prices woud go even higher, Mexico and Venezuela borrow heavily from
the world's banks to fund development projects.
of the nine Common Market nations meet in Bremen to establish their
own European currency (the "Ecu") to protect their economies from
U.S. monetary manipulations.
|| In October, the
U.S. dollar collapses on the international exchange market.
President Jimmy Carter
authorizes a program to defend the dollar, sellilng 1.5 million
ounces of gold per month, yielding roughly $400 million each month
in repatriated dollars.
Milton Friedman writes on taxation:
"In my opinion the least bad tax is the
proeprty tax on the unimproved value of land. The next least bad tax
is a flat-rate teax on income above an
|| The U.S.
National Debt reaches $1 trillion.
|| U.S. consumers
pay over $40 billion annually for imported oil.
|| The exchange
value of the U.S. dollar falls by four-fifths between
denominated debt owed by the LDCs to the international bankers
reaches $240 billion. The resulting demand for dollars keeps its
exchange value from falling even more than it
|| E. C. Riegel's
Flight From Inflation: The Monetary
Alternative is published. The manuscript was finished in the
late 1940s but not published until Riegel's papers were examined and
organized by Spencer Heath MacCallum. Riegel looks at the actions
and powers of the state as anathema to the survival of democracy,
including the state's control over the monetary system:
"We are neither
grounded in the philosophy of personal enterprise nor intelligently
opposed to socialism, if we do not realize that a socialized
monetary system must generate socialism."
|| The external
debt of developing countries as a whole (and of the 15 most heavily
indebted countries) exceeds the value of all goods and services
produced, by a favor of one and a half and
|| The price of
gold reaches $300 an ounce in mid-year.
Paul Volcker is appointed by President Jimmy
Carter as the new Chairman of the Federal Reserve. Volcker is
committed to a program of monetary restraint and high interest
rates. However, rising interest rates do not attract financial
reserves because the rate of inflation is still as high or
|| A 1981 study
issed by the Oversees Development Council in Washington, D.C.
reveals that between 1975-80 nine countries were forced to
renegotiate some $9 billion in payments.
|| In January, the
price of gold reaches $875 an ounce, but falls to $600 by year
|| In the U.S.,
the Depository Institutions Regulation and Monetary Control Act is
passed. This law effectively deregulates inerest rates and allows
the savings banks and savings associations to begin competing with
commercial banks and the money market funds.
The ability to
originate adjustable rate mortgage loans is approved in
Arthur Schlesinger, Jr., in testimony before the U.S. Congressional
Subcommittee on International Trade, links U.S. economic growth to
"inflation, wild-cat paper money and bonds sold to foreign investors
and subsequently repudiated. ...In preaching fiscal orthodoxy to
developing nations, we were somewhat in the position of the
prostitute who, having retired on her earnings, believes that public
virtue requires the closing down of the red-light
|| Based on
reports by the Federal Reserve, the total dollar claims outstanding
in the U.S. reaches $7.45 trillion. This did not include Eurodollars
held outside the U.S. Actual legal tender in circulation is said to
be around $117 billion.
Lester Thurow's book,
Society, is published in the U.S. Thurow is one of a group of
economists who argues that government, labor and industry must form
a partnership. He calls for "massive public investment, budget
surpluses to generate more savings, large compensation systems (to
pay to retain displaced workers), increases in income transfer
payments, tax cuts for the lower middle class" -- the funds for
which ought to come from a shift in taxation to the
|| The price of
gold reaches $500 an ounce.
Robert Mundell of Columbia University leads the drive for
reintroduction of the gold standard, writing:
"Since the breakdown
of the U.S. gold standard the U.S. monetary system has produced more
dollars than in the entire previous history of the republic. The
prices of gold, oil, silver and other commodities have risen more
than tenfold and, barring a drastic change in the monetary system,
prospects are for more of the same in the
|| Alan Greenspan,
on the feasibility of returning to a currency convertible into
conversion into gold, the ability [of government] to issue dollar
claims would be severely limited. Obviously, if you cannot finance
federal deficits, you cannot create them. Either taxes would then
have to be raised or expenditures lowered. The restrictions of gold
convertibilty would therefore profoundly alter the politics of
fiscal policy that have prevailed for half a century."
At the time, the U.S.
Treasury held 264 million ounces of gold. At $500 per ounce, the
gold supported (momentarily) $132 billion in paper currency. Alan
Greenspan proposes instituting the system gradualy by the issuance
of five-year Treasury notes redeemable -- with interest -- in
|| In this year
the U.S. dollar volume of mortgage backed securities for the first
time exceeds the dollar volume of loans savings banks and savings
associatons make for their own portfolios. These institutions lose
$25 billion in deposits in 1981 and $6 billion more in 1982.
Seventy-two financial institutions fail.
|| Mexican debt
payments coming due are over $29 billion, against oil revenues of
$14 billion. The flight of financial reserves from Mexico leaves the
Mexican government without dollars or gold. Mexico defaults on its
|| U.S. President
Ronald Reagan establishes a U.S. Gold Commission to evaluate the
idea of returning to the gold standard. The Commission rejects this
proposal in favor of some version of a monetary
|| The Cato
Institute holds a conference on money, where economist Friedrich
Hayek proposs that governments return control over currency issuance
to private banks. This is opposed to by Milton Friedman as
unworkable without a central bank as lender of last
|| The U.S. budget
deficit is reported to be $179 billion (not counting the billions of
expenditures in off-budget spending).
|| The U.S.
National Debt raches $1.3 trillion, with annual interest payments of
Lawrence H. White of New York University publishes his history of
Scottish "free banking" in the early nineteenth century. He
concludes this system operated with great stability without a
central bank and without heavy government
|| Lewis E.
Lehrman, chairman of an economic forecasting firm, offers a simple
set of changes to reform the international monetary system:
"Make the world's
major currencies directly convertible to gold, as they were ot under
Bretton Woods. Then, the U.S. must accept gold, self-liquidating
Treasury bills and secured commercial paper as the backing for the
U.S. currency. ...All governments would agree to rule out any
further accumulation in their central banks of any national currency
in the form of official reserves."
In response, economist Brian Horrigan (than at
the Federal Reserve) argues that Lehrman's proposals miss the point
made by Irving Fisher in 1928 about gold not solving the problem of
unstable prices for other goods.
|| Economist Henry
Hazlitt writes in the
Journal that the Bretton Woods agreement was a serious mistake
because it "deliberately encouraged inflation" by getting as far
away from a gold standard as possible. He calls for a return to
currency convertible into a fixed weight of gold on
Congressman Jack Kemp introduces legislation calling for a
Constitutional Amendment to require the U.S. Congress to balance the
budget annually, discard the progressive rate income tax in favor of
a lower, flat tax, require the Federal Reserve to follow an
automatic monetary rule and restore a gold-backed
Illinois Bank is rescued by a U.S. government bailout. All
depositors, even those with balances above the insured $100,000
limit are paid off in full.
|| The external
debt of the world's LDCs reaches $1 trillion. The top 15 debtors owe
1980-1986, over 300 federally insured savings banks and savings
|| The number of
U.S. commercial banks in financial trouble reach
|| Another 200
savings banks and savngs associations fail. Many are acquired by
"healthy" institutions, commercial banks and other
|| Another 350
savings banks and savings associations fail. By this time the total
cost to U.S. taxpayers is forecasted by the Bush administration to
be $50 billin. A year later, that number is revised to $150
|| The U.S.
national debt reaches $3 trillion (thus, more than doubling in less
than six years).
writer Thomas H. Greco's monograph,
and Debt: A Solution to the Global Crisis, states:
"The present situation
is not sustainable, neither morally, politically, economically nor
ecologically. Social justice, world peace and the very survival of
life on this planet depend upon a complete restructuring of monetary
practics and financial accounts."
Wall Street Journal writers, MiachaelSesit
and Marcus Brauchli report on Japanese financial markets:
support of the Japanese stock market during its heyday was land
prices. The property market in Japan has zoomed in recent years,
with prices in Tokyo doubling since 1986. Encouraged by these
increases, Japanese banks lent money against property. The money
often ended up in the stock market. And money made in the stock
market was used to buy property."
|| By February,
the price of gold reaches $425 an ounce, then falls during the year
until November, when an ounce is back to $400.
|| The number of
U.S. commercial banks in financial trouble reaches 1,000. Of these,
|| By June, the
Japanese banks report $30 billion in outstanding loans on U.S. real
estate. The total of all foreign bank loans on U.S. real estate
reaches nearly $40 billion.
|| Barclays Bank
of New York reports its portfolio of real estate loans reaches $1
billion, representing 40 percent of its lending. National
Westminster Bankcorp writes off $350 million in real estate loans.
Marine Midland Bank writes off $300 million in real estate
|| In August,
analysts estimate that Japanese banks would be forced to write off
$100 billion in loans, a greater per capita loss to Japanese
taxpayers than the U.S. savings and loan
|| Alan Greenspan,
Chairman of the Federal Reserve Board of Governors, testifies before
the U.S. Congress in July that gold is valued as an indicator of
inflationary expectations. Greenspan expresses his view that
directly linking the U.S. dollar to gold would result in lowering
interest rates in the U.s. to the lowest in the world.
At the time, the U.S.
national debt reached $4.5 trillion. If refinanced at 3% there would
be an annual savings of debt service in the area of $120
|| Economist Paul
The Age of Diminished
Expectations, is published. He writes:
now freely admit that something has gone wrong, there is still great
confusion about what the problem is, even among those who ry to
follow public affairs."
|| Economist Mason
Gaffney and economic journalist Fred Harrison write,
The Corruption of Economics, tracing the
history of the development of economics as a direct response to the
challenge of the moral principles of political economy as presented
by Henry George. Mason Gaffney writes:
"Neo-classical economics has dominated thinking
and policy now for half a century or so. The results are better than
those achieved in Eastern Europe, but NCEists cannot take credit for
our market economy, much as they boast of it. The North Atlantic
nations had a well-oiled market economy functioning long before NCE
drove out classical and Progressive economics."
|| The book,
The Losses of Nations, edited by Fred
Harrison, is published in London. In the introduction, Fred Harrison
presents the challenge to economic policymakers:
constraint on work and wealth is not to be found in the conventional
explanation: inflexible labor markets. Historically, the latter are
just one of the institutional responses to the changing character of
public finance. The straightjacket that distorts people's
motivations and work-related processes -- from factory-floor
organization of employees to the use of secret off-shore bank
accounts -- is the tax system. This straightjacket is the product of
an obsolete philosophy of property rights which is designed to
defeat the ambitions of people in a free
Robert M. Brockhus is stating: Civilized relations end where personal responsibilty begins. Meaning that when the individual is
thrown back on his or her own capabilties of economical survival a nation is splintered into selfish and greedy hunters for wealth. Labour is not the goal of living but a means of gathering economical safety and abundance. He puts his views on the internet, mostly in Dutch but a small English and German section is available too.