First a few things need saying to Mr Lawrence:
Please don't drag Brad DeLong into this -- you are no doubt perfectly capable of rubbishing other people's work in general (but never specific, helas) terms without needing to resort to these tactics. To accuse Brad of attempting to mislead his readers, when I told you prefectly clearly that what I posted was an excerpt out of context from a draft not for citation is pretty low.
Schacht was indeed responsible for policies that led to the expropriation of Jewish assets (his capital controls), but this has damn-all to do with the question of whether the Nazi boom was a monetary phenomenon or not (Malaysia reinflated under capital controls, without expropriation) . Schacht did not "flop as Weimar's central banker" in any meaningful sense, and this question also has damn-all to do with the matter at issue.
Your refutation of Fogel was no doubt a towering achievement, but, unless it included more material than you boast about, it didn't touch the question on which I referenced Fogel -- whether or not it was possible to get extraordinary levels of output from slaves by working them to death in seven years. Therefore (and given the previous pattern of offending) I tend to assume that this also has damn-all to do with the matter at issue, apart from being useful to insinuate that I too am an apologist for slavery.
If guilt by association is the best you can come up with (when asked semi-politely what your model was which allowed a boom of the magnitude of the 1933-36 one to be explained by changes in labour practices), then "kindergarten for socialists" would probably be a more congenial environment for you than you imagine. You might be pleased to know that your reference to Schacht's capital controls having facilitated the expropriation of Jewish assets puts you on the same side as Milton Friedman, who used this fact to help persuade the Israelis into a particularly ill-fated Chicago experiment.
grrrrrrr
On to other pastures:
Carrol wrote:
>if [dd is] correct in his prediction of such defaults, this
>point is relevant to the debate going on re strong states. In the 19th
>century England & the United States tended to send gunboats and/or
>marines to any nation which did not pay its debts.
and Michael P wrote:
>And doesn't this idea that
>"force matters" that hold true to some extent for the US in the 19th
>century? Wasn't there an implicit "come and get it" that Britain never
>took us up on - - but which she would have if we had been China? Is this
>really a strategy that a militarily weak, easily invadable and/or
>subvertible country can get away with?
which isn't really how I remember the 19th century. Susan Strange in her excellent book "Mad Money" makes reference to the Palmerston Doctrine. This comes from a quotation of Sir John Simon in 1934, who said that "my predecessor Lord Palmerston, who is not generally regarded as having been backward in the defence of British interests, laid down the doctrine that if investors choose to buy the bonds of a foreign country carrying a high rate of interest in preference to British Government Bonds carrying a low rate of interest, they cannot claim that the British government is bound to intervene in the event of default". We didn't send gunboats in a number of key 19th century defaults, such as to Argentina in the case of the First Baring Crisis. The "Corporation of Foreign Bondholders" was the main locus for interference, and it acted without direct government involvement.
FDR also used a version of the Palmerston doctrine in the 1930s when Wall Street wanted the American government to intervene overseas (not necessarily militarily) -- there are numerous reports of him laughing out loud, and regarding Morgan's losses on foreign debt as an occasion for glee. The only real exceptions to these rules were those when the government had got heavily involved in the marketing of foreign bonds (eg., the Strong/Norman "Hitler Bonds") and felt the obligation of a bookrunner.
When I was working on this stuff at the BoE, the terrible threat held over the heads of defaulters was "lack of access to international capital markets", which always struck me as a non-credible threat -- there's just too much competition for a once-again solvent borrower not to find lenders. I even prepared a "game-theoretic analysis" of the matter, but won't post it -- it's too embarrassing, like adolescent poetry.
I tend to think that Ecuador's current economic problems arise from the causes, not the effects of its default.
cheers
dd
Please respond to lbo-talk at lists.panix.com
To: lbo-talk at lists.panix.com cc: (bcc: DANIEL DAVIES) bcc: DANIEL DAVIES Subject: Re: The Nazi Economy
If the ex-Marxist faker Robert Fogel, and lbo-talk's house apologist for capitalism, Brad DeLong, are Daniel's comrades, he has thereby made my case for me. My refutation of Time on the Cross was contemporary with its notoriety, at a time when I myself was an award-winning historian of slavery despite being unlettered and lacking an academic home. Some of Fogel's faked data, attempting to demonstrate that masters were kind to their slaves and did not break up slave family units, were drawn from the material I published (ten volumes of WPA narratives of ex-slaves), which in fact demonstrates the opposite of Fogel's assertions. Judging by Daniel's excerpt, Brad evidently is unaware that Schacht flopped as Weimar's central banker, and that Schacht authored the Nazi policy of expropriating Jewish property. The alternative explanation is that Brad knows these things, but has deliberately misled his readers in order to prettify his heroic central banker.
Ken Lawrence
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