Penners
A few days cooling off, including dinner with the secretary of the Mont
Pelerin Society, leads me to cop a plea to Brad's charge of mendacity and
hope that we can get on with some serious and worthwhile discussion.
Brad queries how I can link Simon, Yeo and Burns with MI5. Well, strange as
it may sound to have to explain this to an economist of equilibrium, but
when an organisation like the IMF makes an _intervention_, especially one as
pronounced as UK 1976, it renders the status quo untenable. In fact, as
William Simon stated in a confidential spring 1976 memo, "The practice of
financing the status quo is coming to an end" (quoted in Harmon). When such
a heavy-handed intervention is made in a domestic context of turmoil and
dissension, the IMF cannot help but assist the agendas of some at the
expense of others'. Which is why, with a paranoid and out of control MI5
integral to a network spanning corporate (Aims of Industry, John Cuckney),
political (Conservative Party -- Airey Neave), military (Walker,
Mountbatten) and a "civil society" comprising other connected movers and
shakers like Alfred Sherman, Lord Harris of High Cross, the McWhirters,
etc., etc, the IMF was stepping into a situation in which it was impossible
for it not to push events in a direction favourable to certain key interests
that were hostile to _any_ Labour government, whether Croslandite or
Bennite.
It is possible that Simon, Yeo and Burns operated wholly separate from these
domestic elements. However, there are at least two reasons why this is less
likely than it might seem to those inclined to treat UK 1976 as a purely
economic matter. Firstly, the CIA's James Jesus Angleton is well known to
have considered Harold Wilson a communist spy, and had regular contacts with
MI5. Angleton is hardly unrepresentative of certain elements of
contemporaneous US elite opinion. There was a clear view within the
"intelligence"/foreign policy community of the US that the UK Labour Party
was home to very undesirable elements that threatened the "special
relationship" that anchored the North Atlantic Cold War alliance. Secondly,
related to this was the use of CIA funds to cultivate friendly British
opinion. Tony Crosland, like many others, had already been an unwitting
beneficiary of the CIA via the Congress for Cultural Freedom. But in the
1970s there existed a CIA-sponsored cultivation of right-wing Labour Party
MPs that subsequently evolved into the British American Project, one of
these Bilderberg/Davos/Trilateralist type organisations that organises
regular schmoozes for the "great and the good" as they attempt to shape
consensus opinion to suit some sort of overarching worldview. I forget the
name of this BAP predecessor -- perhaps Mark Jones could help here. As for
the BAP, its luminaries include the current General Secretary of NATO,
George Robertson, twice disgraced ex-Cabinet minister Peter Mandelson,
Culture Secretary Chris Smith, and other less prominent Labour MPs. Its web
site can be found at
http://www.baponline.org/
The idea that, in the ideological ferment of the times, and given the
"neanderthal conservative" predilections of Burns and company, who felt
wholly justified in imposing their economic vision upon another,
democratically-elected government, together with the close transatlantic
links working in parallel, the IMF's conditions were set in complete
independence of these other factors is stretching credibility somewhat.
As implied above, the IMF team itself appears to have been very aware of its
epoch-making potential. As Harmon (p. 130) recounts,
"Managing Director Witteveen (1987: 31) has recounted how the US Federal
Reserve Chairman Arthur Burns 'considered Fund conditionality a kind of
international rule of law. And I think that was quite right.' But the 'rule
of law' assertion of Fund conditionality in 1976 was not an inevitability,
but rather was a reflection of the policy preferences of the United States.
It occurred at the expense of alternative cooperative policy arrangements
and emphases that were articulated in 1974 and 1975 but were not sustained."
Meanwhile, in support of Mark Jones' claims of a realignment within the UK
ruling class, it's worth noting how marginalised have become the former
movers and shakers of the 1970s. The Neil Hamilton libel case was
instructive, given that it encapsulated the decline of the likes of Lord
Harris of High Cross, Norris McWhirter as Establishment wheelers and
dealers. See
http://www.guardianunlimited.co.uk/hamilton/article/0,2763,195573,00.html
Way back when, it was suggested in all seriousness that Andropov and
Gorbachev represented a modernising tendency within the KGB that saw the
writing was on the wall unless some changes were made sharpish. Given the
obvious implosion of the former bulwark of stability and continuity that was
the Conservative Party, it seems plausible to suggest that a new generation
of MI5 spooks reached a similar conclusion during the twilight of John
Major's administration. The departure of the ferociously anti-trade union
boss, Stella Rimington, at around this time, would offer circumstantial
evidence in support of this.
On a separate but related theme, there seems to be some sort of fracture
within the "serious" media regarding current events at the IMF. While the
Financial Times generally supports the efforts of Horst Köhler to rein in
mission creep and get back to basics, the Economist, in its 12 May edition,
is doing to Köhler what was previously done to Wolfensohn at the World Bank
-- undermining him via stories of brusque management style, inability to
cooperate, questionable appointment in the first place ("On merit alone,
[Stanley] Fischer was widely judged to be a better candidate than Mr Köhler,
a point not lost on the boss"). Much is also made of the "highly regarded"
Fischer's nomination to the post of IMF managing director by "several poor
countries" during the process which saw Köhler shoe-horned in. Does anyone
know whether these nominations were truly voluntary?
The best quote of all from the Economist piece runs: "After playing a key
role in every emerging-market financial crisis, from Mexico in 1994 to the
recent messes in Argentina and Turkey, Mr Fischer has an enviable reputation
for economic rigour and political deftness, both inside and outside the IMF.
His departure will leave a huge hole."
Apparently Michael Mussa's replacement as head of the research dept was
going to be Olivier Blanchard, until Fischer, a close friend, resigned. One
wonders how all of this would have played out under a Gore administration.
Leo Panitch quotes another star macroeconomist connected with Fischer,
Rudiger Dornbusch, applauding the IMF's most notable intervention (omitted
from the Economist paean to Fischer) in East Asia:
"On 8 January 1998, shortly after [Robert] Rubin's return from Seoul, the
economist Rudi Dornbusch was quipping on CNBC that the 'positive side' of
the financial crisis was that South Korea was 'now owned and operated by our
Treasury'. This elicited a knowing chuckle from the other pundits: after
all, it used to be the State Department or the Pentagon that ran the Korean
franchise -- not the Treasury."
-- Leo Panitch, "The New Imperial State", New Left Review 2, 2: 5-20 (p. 5)
The Bush administration seems to represent a swing back to the
military-industrial complex, away from the Wall Street credibility of the
Clintonistas. For now it is the Defense Department that appears to be
running the franchise, as it frantically constructs a "containment" of
China.
Just a few random thoughts.
Michael K.
Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland
[EMAIL PROTECTED]
