Category Archives: France

“Well… I guess that’s what you’d call ‘the conscious’.”

Posted on by
2

A warm welcome to guest poster Joanna Walsh.

I’m reading the guide notes on the walls of the Louise Bourgeois exhibition at the Centre Pompidou in Paris. They’re annoying me. I’m seeing the exhibition with a friend. It’s always good to have someone to complain to.

“Look, here it says about how miserable she is again: ‘depression, anxiety, the fear of abandonment, of loss of love.’ It says it’s all going on in the ‘depths of her unconscious’.”

Although Bourgeois’ material comes from the unconscious, and often from misery, she transforms it with tough, highly-articulate and playful conscious thought.

Ok – let’s look at the most immediately obvious things about an artist who is shown in the bank of photos outside her exhibition, unfailingly smiling. She smiles wisely, secretly, ironically, openly; she smiles from inside her sculptures; she smiles at Andy Warhol; she smiles wickedly and most famously holding under her arm a latex phallic sculpture entitled, ‘little girl’.

Let’s look at her early, isolated, stick-like, sculptured human figures whose fragile attempts to connect with each other are described by the artist with a nod and a wink – look at those two stick-people standing together, the ‘female’ inclining her head toward the ‘male’, ‘listening’ (as in the title of the piece) clearly not only with affection, but a definite touch ‘yes, dear, very nice, dear,’ in her attitude.

It’s so hard to ignore the hard hysterical, joke-y surrealism which inhabits her sketches and prints of ‘house-wives’ – women imprisoned by their domestic role. So – let’s not ignore it.

Her 1960s ‘body parts’ sculptures of penis-breasts, which she teasingly denies are sexual are not only ‘repellant, and unsettling’ but also meltingly and sensually textured: here is someone who enjoys sex and likes to play around with gender.

It’s good to see a room of pieces inspired by the artist’s mother whom Bourgeois had a deep need to rehabilitate from her role as silent witeness to a powerful and adulterous husband. Bourgeois transforms her into an enourmous spider – a huge, twisted being; the domestic become monstrous through a change of size – but also a friendly maternal force with her well-protected bundle of eggs. In the end, this spider scares me less than the ones I find in the bath. I’d like to have this spider on my side.

And let’s not shy away from the fact that Bourgeois’ work is and has always consciously followed fashion. As maxi-skirts followed minis, so Bourgeois’ early Giacommeti-like figures were superseded by her installation works in the 1980s then by her currently fashionable use of embroidery and textiles. If she’s ‘impossible to categorise’ it’s not through iconoclasm but her knowing and eclectic use of any art movement she finds lying around.

The slightly po-faced exhibition guide has concentrated on Bourgeois’ pain rather than the angry, intelligent, tough jouissance with which she transforms into a clearly-articulated visual language her hard, priviliged, trivial, serious life.

We get to the last of the noticeboards. My friend agrees:

“They keep on going on about the subconscious meaning. I don’t think it’s subconscious. It’s – what do they call that thing that’s above the subconscious.”

“Well… I guess that’s what you’d call ‘the conscious’.”

…

12_l_louise_bourgeois

“I am a scientific person. I believe in psychoanalysis, in philosophy. For me the only thing that matters is the tangible.” Louise Bourgeois

Sarko the Euro-populist

Posted on by
1

In what is no doubt part of his resurrection bid, French president Nicolas Sarkozy has proposed a  vague-sounding cap on VAT/TVA as applied to fuel.  He has a point.  VAT is an accelerator of underlying price increases, since the amount applies as a percentage of the net price and not is a fixed monetary amount (like fuel duty).  Thus any increase in the net fuel price gets 21% (in Ireland, for example) added on to it.    On the other hand, he’s also dragging in the EU, since the commission would have to approve a modification of VAT as applied to fuel.  So pending that, all he has is a proposal to “redistribute” the VAT windfall as selective subsidies or transfers.  One wonders to what extent such proposals will generate “me too” proposals in other countries — especially in the UK, where Gordon Brown will surely balk at yet another revenue drain as he deals with a summer of discontent. 

Eurabia Fans: Not just stupider than you think…

Posted on by
16

Stupider than you can imagine. Evidence, the map over at this fine post from Sadly, No!. Read the whole thing, but as well as introducing the best title for a blog post ever, they’ve caught “Gates Of Vienna” pretending that in the future, Europe will be divided into Islamic states (with incredibly silly names), Russian protectorates, and the Russian empire, due to teh demographic menace.

Yes, that’s right – they think Russia doesn’t have a demographics problem. They also think that although Iceland will become an Islamic state, Switzerland and, for some bizarre reason, the Czech Republic will remain “neutral”. And Germany will re-divide, with the old Federal Republic sliding into Islamic rule and the old DDR being a Russian protectorate.

Either that, or they’re using a map that’s still got East Germany on it. It feels a bit like mocking cripples to take the piss out of people who are obviously so ill-equipped to take part in any kind of debate, but, what the hell! Read the whole thing and don’t forget to bring your fisker.

But among the routine partisan knockabout, there’s a gem – this UPI article on demographics, which finally offers Randy McDonald some relief in his role as the NATO-standard debunker. Martin Walker notes the French demographic turn-around, but the especially interesting bit is that he actually has some numbers on the rate at which immigrant groups’ TFRs converge with the norm.

The birthrates of Muslim women in Europe have been falling significantly for some time. In the Netherlands, for example, the TFR among Dutch-born women rose between 1990 and 2005 from 1.6 to 1.7. In the same period for Moroccan-born women in Holland it fell from 4.9 to 2.9, and for Turkish-born women in Holland from 3.2 to 1.9.

In Austria, the TFR of Muslim women fell from 3.1 to 2.3 from 1981 to 2001. In 1970 Turkish-born women in Germany had on average two children more than German-born women. By 1996 the difference had fallen to one child and has now dropped to 0.5. These sharp falls reflect important cultural shifts, which include the impact of universal female education, rising living standards, the effect of local cultural norms and availability of contraception.

There is, as they say, no crisis. However, this doesn’t overturn something else we occasionally point out on AFOE, which is that whatever happens in Europe, the demographic transition is worldwide. Unlike my dear colleague, I personally think this is a damn good thing in the light of energy, environmental, and international security issues. I’d much rather be K-selected than r-selected.

The global trend is down, very sharply down. In all, 80 countries around the world, comprising almost half the Earth’s population, are now experiencing a birthrate that is below replacement….With a few exceptions like Afghanistan and the Palestinian territories, Haiti and Guatemala, the countries still experiencing strong population growth are all in sub-Saharan Africa. Depending on its birthrate, the current 750 million are likely to become between 1.5 billion and 3 billion by the end of this century. And if European, Latin American and Arab birthrates continue to decline, then Islam as well as Christianity will be a predominantly African religion, with some outposts in Europe.

Which raises the question, what kind of Islam will that be? The rise of African Christianity has been a force for conservatism and fundamentalism in the Anglican Communion and the Roman Catholic Church; but the rise of African Islam looks likely to be a phenomenon of the city, what the Lounsbury calls the “Pious Middle” class. In this context it’s interesting to note that several African countries already have political parties that have adopted the language of Turkey’s Justice and Development Party; it’s not impossible that this Islamic Christian Democracy might find its niche in African cities.

From Ushant to Scilly is 34 leagues

Posted on by
4

For me, the interesting bit in this Jean Quatremer story about the race to be the first EU president is right at the end.

On sait simplement qu’il y a des « négociations secrètes » sur le sujet avec Londres : elles porteraient sur la création d’une force aéronavale commune et la surveillance de l’espace européen par les aviations des États membres.

Secret negotiations with the UK regarding the creation of a common naval aviation? Well, the UK and France are cooperating uneasily on their aircraft carrier programmes; the UK is trying to build two 50,000 tonne carriers, and France would like to build another ship. The partnership goes so far as to use the same design, prepared by Thales (UK)’s naval architects in Bristol; but that’s about as far.

After all, the original Thales/DCN bid to build the British carriers foresaw using their design and splitting the workshare among British and French shipyards. However, BAE Systems successfully lobbied its way back in, even though any conceivable workshare plan would have seen its yards on the Clyde getting quite a lot of business; the result is a horrible compromise under which BAE is joint-prime contractor with Thales (as if the idea wasn’t a contradiction in terms), but has to use the Thales drawings and split the work among the UK shipyards (but no French ones. no, sir).

And the British government has spent a lot of time blowing hot and cold about the project; however, it has recently begun buying stuff for the ships, and the key industrial partner, Babcocks, have completed altering the huge drydock in Rosyth where the ships will be assembled from the superblocks the various yards will deliver. Surprisingly, though, these orders haven’t been coordinated with France in any way – part of the point was saving on things like steel purchases and expensive things like marine engines by pooled buying. So far, we’re up to the following shopping list:

* Eight diesel engines and electricity generators – four for each ship – at a cost of about £18.5 million. The contract for the diesel generators had been awarded to Wartsila Defence SAS, based in Nantes, France, with the engines to be manufactured in Trieste, Italy. The alternators, which transform the diesel’s power into electricity, are to be built at Converteam, in Rugby, Warwickshire.
* A contract worth in excess of £1 million for the detailed design of an integrated navigation and bridge system had been awarded to Northrop Grumman Sperry Marine, with the work to be carried out at New Malden in Surrey.
* A contract for the Flying Control Rooms (Flyco) for the carriers had been awarded to Tex Special projects of Ipswich, Suffolk at a cost of circa £1 million; and
* A contract for visual landing aids to guide fighters and helicopters on to the deck had been awarded to Aeronautical and General Instruments Ltd of Poole, Dorset at a cost of about £7.5 million.
* The supply of over 80,000 tonnes of steel from Corus for manufacture of the two ships to an estimated value of £65 million;
* The supply of Blown Fibre Optic Cable Plant (BFOCP) technology from Brand-Rex Limited for the installation of optical cables for data transfer within the ships at a cost in excess of £3 million;
* Reverse osmosis equipment from Salt Separation Services for production of fresh water onboard the ships at an initial contract value in excess of £1 million; and
* Aviation fuel systems equipment from Fluid Transfer International to allow the fuelling and de-fuelling of embarked aircraft at a contract value of approximately £4 million.

I honestly can’t see why it’s a dealbreaker to do the shipbuilding in the UK when doing the marine engineering in Italy is A-OK; but there you go. However, there are the feelings too; my heart melts at the thought of those alternators from Rugby and mirror sights from Poole. I can’t help it; as a lefty northern techie, I’m a confirmed manufacturing fetishist.

But you’ll notice that the UK does seem to be edging towards actually building the ships, without any noticeable joint procurement with France. So what is it that’s being secretly discussed? I reckon it’s that the French don’t want to go through with the PA-2 (their new carrier), but they are also conscious of the problems that having one aircraft carrier brings you. Whenever the Charles de Gaulle is in dock, her aviators soon cease to be current; so, the Aeronavale sends them for a trip with the Americans in order to maintain carrier qualification (currently, they are practising on the Theodore Roosevelt). I can well imagine the French would rather do this themselves, but anyway would prefer to do it in Europe. Also, a deal with Britain might provide a claim on the British carriers during French downtime; the question has to be, what’s in it for the UK? Are they considering making a contribution?

Meanwhile, Turkey is the latest contributor to Europe’s emerging amphibious fleet, wanting to buy a big LPH/light carrier. That makes 29.

Shifting Tectonic Plates

Posted on by
16

The American continent is about to get its first high-speed train. Where?

Argentina.

Argentina on Tuesday signed a contract with a consortium led by Alstom of France to build the first high-speed train in the Americas, linking Buenos Aires with the cities of Rosario and Córdoba in three hours, nearly a fifth of the current journey time.

Patrick Kron, Alstom’s chairman and chief executive, said construction would start before the end of the year and last for four years. Alstom, which designed and built France’s TGV, Spain’s AVE and South Korea’s KTX, is providing the rolling stock, signalling and maintenance to the Veloxia consortium, which also includes Iecsa and Emepa of Argentina and Spain’s Isolux Corsan.

The total project, financed by French bank Natixis, will cost some $3.7bn and Argentina will issue 30-year debt. Alstom’s share of the project is worth around $1.7bn. The project is five to eight times cheaper than similar ones in France or Spain, Alstom says.

How long before Sarko shows up to offer them a nuclear power station? Alstom and Areva: two great French quasi-state industries that taste great together. And Argentine railway bonds – now there’s Edwardian for you…

Against indefinite imprisonment

Posted on by
12

One of Nicolas Sarkozy’s worse ideas is the retention de securite, a change to the law that would allow for prisoners who complete their sentences to not be released if the government thought they were of “particular dangerousness” – this being an executive decision and hence very likely to be taken for reasons of low politics. There is a campaign about it that’s made a film, part of which is below:

More film is here. And there’s a petition to sign here.

France Changes its Nuclear Policy; Not Very Much

Posted on by
1

Nicolas Sarkozy was in Cherbourg to name the latest French SSBN, the appropriately named Le Terrible, this week; and he had a few things to say about the circumstances under which she might be called on to fire her M51 SLBMs. The headline grabber, which everyone picked up on, was that France is going to reduce the number of operational nuclear weapons it declares to the world; specifically, the airborne component of the French deterrent is being cut by one-third in terms of warheads.

France, until not long ago, operated a nuclear triad; as well as the first class of submarines, there were also four air force squadrons assigned to the nuclear mission, originally with the Mirage IV-A bomber and then with the Mirage 2000-N, and a force of intermediate-range ballistic missiles based in southern France. These weapons were withdrawn at the end of the cold war; they were always slightly odd with regard to France’s overall policy, as due to their range their only credible target was Russia. Officially, of course, the French nuclear force has always been “tous azimuts” or omni-directional (i.e. could point west, or maybe even north:-)).

The reduction, however, is entirely in keeping with the long-term principles of French nuclear strategy; France, like Israel and the UK (although the UK doesn’t have a published doctrine), has a traditional policy of minimal deterrence. This argues that nuclear weapons are subject to diminishing returns; the consequences of having all your cities nuked once are not noticeably better than twice, three times, or more, so the certainty of retaliation is much more important than its scale. “Superiority” is probably meaningless, and anyway uneconomic if not actively dangerous. This was also the doctrine associated with the US Navy in the 1950s, as opposed to the US Air Force; it was much more important to have a very secure retaliation force than a massive first-strike force, which was certain to be perceived as aggressive and threatening, and by happy accident this policy would involve heavy investment in the Navy’s submarines and carriers.

Despite this, Sarko is trying to frame the change in opposition to Jacques Chirac’s speech in 2006 in which he suggested that deterrence extended beyond a direct nuclear threat to the Republic; his press-cat describes this as a return to the fundamentals of deterrence. Beyond that, he also suggested a “dialogue” on the role of nuclear weapons in European security; well, I suppose he had to say something more, as this is an idea that gets taken out for a stroll every 20-30 years without effect. The speech is here; as far as detail goes, he sticks closely to tradition in refusing to define “vital interests” precisely (so not so much difference from Chirac, then) and stating that the force is targeted on a counter-value policy, i.e. against cities rather than against nuclear weapons systems.

As far as the practicals go, France has some 60 airborne nuclear weapons, of which 50 are ASMP(A) cruise missiles and 10 freefall bombs; this happens to match the number of Mirage 2000N aircraft on line precisely, mirroring the original and highly aggressive concept of operations from the 1960s, which foresaw launching the whole bomber force, if necessary on one-way missions to reach more distant targets. The mathematical geniuses this blog is known for will no doubt spot that this will fall to 40; the French Air Force and Naval Aviation have currently got 120 Rafales on order out of 294 planned, all of which are capable.

The reduction doesn’t go quite as far as the UK’s decision to withdraw all the WE177 nuclear bombs from the RAF in 1998, which accounted for all the UK’s airborne and tactical nuclear weapons. However, it’s worth pointing out that the British and French jointly developed an air-launched missile recently; in British service it’s called a Storm Shadow. Some voices in the UK have suggested acquiring a supply of these with nuclear warheads as a substitute for the Trident missile submarines that would be cheaper and less dependent on the US; the argument is based on experience since 1991 that surface-to-air missile defences are considerably less fearsome than was thought in the 1960s.

However, the UK government has been notably unwilling to engage with the idea. Its recent white paper on the deterrent cited only two alternatives to Trident (or disarmament), one of which was to independently develop an ICBM and find bases inside the UK, and one was to procure very long range nuclear cruise missiles (which would need developing) and base them on large airliner-type planes (the range because these could not go in reach of enemy air defences). This can only realistically be seen as an exercise in closing down the debate.

Finally, on page one:

Il a fallu des decennies d’apprentissage pour maitriser de tels savoir-faire, que certains de nos partenaires ont eu bien du mal a reconstituer apres les avoir negliges…

I wonder who he might possibly mean?

Swords Paperclips from the North

Posted on by
3

It looks like Nicolas Sarkozy’s pet foreign-policy idea has been sporked, good and proper; his idea of a “Mediterranean Union” is now officially an ex-parrot, after it failed to get German support. As we’ve been saying right back to 2005, the key fact of European politics at the moment is that Angela Merkel has achieved a degree of influence that no other chancellor since Willy Brandt could claim; whether it’s over the economy, the Middle East, Russia, the EU budget, or the EU’s internal organisation, all roads now pass through Berlin. Helmut Kohl and Konrad Adenauer both operated in a triumvirate with a very strong and universally respected French president and a very strong (and pretty respected, but far from universally so) European Commission President; there’s certainly an argument that the Barroso commission is the best for some time, but nobody could seriously describe Nicolas Sarkozy as a leading force in European politics. The UK is absorbed by its own self-inflicted crisis; Italy is coming over all Italian; problems go either to Brussels or Berlin for solution.

So what was this Mediterranean Union thing all about? Well, Sarko’s adviser Henri Guaino had this idea, see; it would be a bit like the EU, but would encompass states along the southern shore of the Mediterranean as well as Spain, Italy, France, and Greece – but no other EU members. This would have done a number of things; for a start, it would have created an undemarcated frontier between the EU’s various existing policy initiatives there and whatever the new organisation did. It would also have been potentially in conflict with the EU accession process. Certainly, the new entity would have been politically dominated by France; which, it’s fair to say, was probably why France wanted it.

This could have worked in a couple of ways; perhaps the EU could subcontract its policy in the Mediterranean to the new organisation (or to the French Foreign Ministry), or else the two would work out a division of labour. Alternatively, the freies Spiel der Krafte, the “free interplay of forces”, would have seen them compete until some sort of de facto arrangement emerged. But what would it actually have been doing?

There are two answers to this; one is that it would have been doing the good work of spreading European integration onto the potentially unstable southern rim (whilst also tactfully getting around the special significance of, say, Moroccan membership in the EU). Another is that it would have been a substitute for accession; rather than the real thing with its guarantees, open borders, trading privileges and development funds, warm words (and the special benefits of Francafrique), and probably highly restrictive agreements on nasty things like immigration. (Via Randy McDonald, check out this view from the other side of the table.) Certainly, the British government reckoned it was a way to put Turkish membership off the table.

Yet another unexplained angle was the relationship between the new organisation and NATO; despite the new organisation’s Frenchness, it’s worth pointing out that all its proposed European members would have been NATO member states. In fact, either three out of four or four out of five, depending on the inclusion or otherwise of Portugal, are home to a major NATO multinational HQ; Portugal, Spain, and Greece all have a Joint Subregional Task Force HQ, Portugal is also home to a NATO SACLANT naval headquarters, Italy is home to NATO headquarters for Southern Europe, SACEUR’s southern naval headquarters, the southern air forces’ headquarters, and the US 6th Fleet. NATO has relationships with most of the other potential members under the Partnership for Peace; the interworking between these and the MU was left for the imagination.

So, plenty of problems. Then there was the touchy subject of whether the MU (with a net-recipient membership) would have EU funds; no wonder Merkel wasn’t keen. As always, for EU funds read “net-contributions from the Northern Alliance of Germany, the UK, Sweden, Denmark, Holland, and Slovenia”. Yes, Slovenia – it’s northern, right? No? Well, it is, isn’t it – look at it, it’s parliamentary, it’s a net contributor, it’s got mountains (like Holland…), it’s sort of social-democratic, and vaguely German. Clearly. And so they kiboshed the MU.

But was it a good idea? I think not. The single most effective – almost the only effective – method of EU foreign policy is the enlargement process. So I’m opposed to anything that diverts from it. Our international-society-theory with balls/prototype world government is about the only grand political vision of the last 100 or so years that remains valid; with all its inconsistencies and bizarreries……hold it. The inconsistencies and bizarreries are precisely why it works. A curious combination of bureaucracy, anarchy and diplomacy, it’s not a prototype world government, it’s a world un-government in permanent beta test; we just haven’t invented the right buzzword yet to name it. (Which may be a problem. Successful projects usually breed their own tribe, and hence their own language; we don’t seem to be so good at that. But you’re welcome to try in comments.)

The version of the MU that was actually signed off is considerably more like the EU; it includes all the EU member states, it’s intended to do concrete and practical things, and it actually offers the ‘tothersiders something, namely ERASMUS student exchanges, money, and a higher priority for the extension of the EU free-trade area. I wouldn’t be surprised if Zapatero manages to snap up the headquarters.

Qatar: It’s Where the Money Comes From

Posted on by
1

Karl Marx said that ideology is part of the social superstructure, merely a decorative overlay on the brutal truth of the economic base. Millian liberalism was really just an expression of the pounding steam engines, Jacquard looms and downtrodden apprentices of 1840s Manchester, just as absolutism had been built on the assumption that society would always consist of peasants and landlords.

But what does it tell us about the chief proponents of “Eurabia” that a healthy chunk of their money comes from, well, Arabia? We don’t need to spend too much time flogging this sack of horseshit; Randy McDonald has already debunked it with rapier sharpness in this post at Demography Matters, following up on his classic 2004-vintage spanking of Mark Steyn. The short version is that there are not enough Muslims, the ones who are in Europe are progressively exhibiting more European demography, the countries whose demography is most worrying attract large numbers of non-Muslim immigrants, and not all European countries’ demography is anything like the same.

The Nation‘s Kathryn Joyce takes a look at the politics of Eurabia; nobody should be surprised that it’s pretty ugly. Essentially, there’s a gaggle of thinktanks/campaign groups/whatever closely connected to the Mormons and Senator Sam Brownback, and specifically to their extreme “quiverfull” wing, which advocates having absurdly (8+ kids) large families. It looks a lot like an effort both to find a new market for their politics in central Europe (Kazcynski’s Poland was Target One) and also to gin up a foreign-policy scare that would energise their base in support of Mitt Romney’s presidential campaign. Well, that went well.

It’s also amusing that Joyce describes their view of Poland as “the anti-Sweden”. I don’t know to what extent this is a true misrepresentation, but it’s worth pointing out that they’ve placed their strategic bridgehead on the wrong side of the Baltic. It’s as if the Normandy landings had taken place somewhere on the coast of Portugal or Ireland. In yet another cracking DM post, this time by “AFOE Principal Investigator” Edward Hugh, we learn that Sweden is the last place in Europe that needs to worry. Well, except for France. Poland, on the other hand, is solidly in their problem group of countries with very low total-fertility rates (the data is here (XLS)). France? Sweden? You can almost hear the authoritarian personalities creak and groan with the cognitive dissonance. Of course, there’s a very good reason why they didn’t go to either France or Sweden, which is that they would have been laughed out of town.

But what especially amuses me is this:

The result is the spread of US culture-war tactics across the globe, from the Czech Republic to Qatar–where right-wing Mormon activist and WCF co-founder Richard Wilkins has found enough common cause with Muslim fundamentalists to build the Doha International Institute for Family Studies and Development.

Doha? As in Qatar? Yes. Unless you’re in the oil or natural gas business, there’s one reason to locate a new institution – especially a profoundly subsidy-dependent one like a thinktank – in Qatar, which is that the sheikh is probably paying for it. Marx would have understood what’s going on here – nothing happens without the means of production, after all. Money, not Coke – it’s the real thing. But what would he have made of the World Council of Families?

Bad Parallels

Posted on by
1

John Quiggin writes about the banking crisis:

Suppose Bank A owes a trillion dollars to bank B which in turn owes a trillion to C which in turn owes a trillion to D which owes a trillion to A. Now suppose that A gets into liquidity trouble and can’t pay. Then B is similarly in trouble and so in turn are C and D. If D could cancel the debt to A and forgive C who would in turn forgive B and so on to A, all would be well. But in the normal course of business you can’t do that. The fact that it’s zero sum doesn’t help. You need either wholesale resort to bankruptcy, or outside intervention.

It has strong parallels with John Maynard Keynes’ description of the financial consequences of the first world war. Basically, he said, everyone had ended up by owing everyone else a lot of money. Rather than the UK running a trade deficit with the rest of the world (and a services surplus), and a trade surplus with the empire, it had been running a surplus with its allies and a deficit with the empire’s civilian economy and the rest of the world.

The financially weaker allies had all turned to the next one up the chain for funds; Greece and Romania turned to Russia and Italy and they turned to France, which turned to the UK, which eventually turned to the US. As Europe was running a massive trade deficit with the rest of the world, the dollar claims everyone else accumulated could only be spent with the US; the adjustment path was meant to be that the British empire would spend the accumulated sterling claims buying things from the UK, and that the other allies would pay up. Netting out the numbers, Keynes concluded that the remaining dollar debt was manageable.

But the Russian revolution kiboshed this; if the Russians didn’t pay (and neither did some others), the French couldn’t pay, which meant the British couldn’t pay either. The solution the government offered was to make the Germans pay; Keynes pointed out that as nobody had any forex, there was no-one in a position to buy German exports, so they couldn’t pay either. Further, holding US dollars meant that Australia, say, could go and buy capital goods from the US instead. In a sense, the eventual solution was that Germany didn’t pay, but borrowed a ton of money from the US to finance its imports, paying with exports to the US; a Marshall Plan in one country, at least until the credit crunch meant it couldn’t roll over short-term paper.

Short-term commercial paper? Where have we heard that recently? Oh yes, at companies like IKB, Northern Rock, Citigroup, Morgan Stanley…substitute subprime mortgages for Russian bonds, SIVs and CDOs for France and Italy, and the UK for the major investment banks, and it’s quite eerie. But who are the Americans in this scenario?