Here an account of my column in Le Monde on the concept of a new Bretton Woods.
Paul Jorion wrote a column in Le Monde a few days ago concerning the prospects of a new Bretton Woods (never mind that the original died at Richard Nixon’s hand in 1973). Starting from the fact that the crisis is extremely serious and half-measures won’t do anything, Jorion offers some suggestions:
A radical reconsideration of the role of Central Banks is in order. Within a capitalist framework, Jorion states, the capitalist provides capital to an entrepreneur whose activity will generate a surplus which will be shared by both. However, since the mid-1970s, investors (the capitalists) and business managers have pushed for the substitution of consumer credit for the declining share of the surplus that used to go to wager earners. We are experiencing now the price to pay for such greed.
Central banks played a special part in this scheme by becoming one of the favorite weapons (in the class war) beholden to investors only, through the manipulation of interest rates to force entrepreneurs into compliance through the threat of bankruptcy, and wage earners through the threat of unemployment.
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The original piece in French can be found here.