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Photo by paul jespers on Unsplash

A Review of the first part of Daniel Todman’s two-Part History of the Second World War

I’ve just finished reading the first of Daniel Todman’s magisterial two-part history of Britain’s experience of the Second World War. I found it informative, thought-provoking, thorough, and above all, an engaging read.


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Photo by Thomas Kelley on Unsplash

Recently, I read an article by the FT’s Alphaville that mentioned the amazing Millennium of Data published by the Bank of England. The Millennium of Data is a large dataset created, and curated by a number of academics that reaches back into the mists of time to collect data on England’s economic past, with some statistics even going to 1086 (the year of the Domesday Book). The article outlines the benefits of a thousand years of data, although it questions the accuracy and relevance.

I agree in principle with Claire Jones, the author of the article in the FT, who states that relevance does not always need to be the reason to know something, but I will take it further. …


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A portrait demonstrating how smugglers subverted European mercantilism with British goods being traded for French gold.

How the French Metropole failed to stop economics in the 18th Century

The French colonial empire in North America (1534–1763) is oft overlooked as it was quickly surpassed and ultimately acquired by the British. This does not do justice to the size, and importance that French North America had for the surrounding region with other colonies, nor back in the motherland, or Metropole. France, as other European nations, had a clear idea of what they were staking claim on this far-away land for. The mission had many dimensions to it, such as social, military, political, economic, and religious. I will focus on the economic aspect of this transnational state and more explicitly on contraband and the attempts of the French Metropole on controlling illegal trade abroad and closer to home. This stemmed from the antiquated economic ideology that was prevalent at the time, mercantilism, that dictated that countries should maximise their exports while minimising imports to prevent the outflow of gold. Regardless of the ideology, the French administration for all of their efforts were not extremely effective in preventing the rise of contraband trade between colonies in the Americas, nor in preventing those products from making its way back to Europe. …


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Photo by krisna iv on Unsplash

British Productivity post-GFC

Britain was the nation fortunate enough to be the starting point of the industrial revolution, which led to an incredible boost of productivity pushing Britain above the growth rates of its past to set it on the path to the modern economy we know today. This innovation, which on top of its world spanning empire, led to the rapid rise of Britain’s economy and living standards that culminated in the hegemonic economic and military status it enjoyed during the “Pax Britannica”. It was to be supersede by its former colony, turned independent state, the United States of America after the First World War due to faster productivity in the US, but the decline of its status was only truly evident after the Second World War. …


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Photo by Markus Spiske on Unsplash

From Silicon Valley to Wall Street missing out on Main Street

The world economy has been undergoing a seismic change in the very recent past, but this change has also brought to light the depth of interconnection the world has today. The world is evermore finding itself a smaller place, at the very least digitally, with news and media being able to be consumed across the globe in seconds. Unlike traditional goods which have to travel across land or sea or air, there is no travel time for consumers to enjoy digital product besides the speed of one’s internet connection. This simple fact highlights something stunning. The rise of intangibles in the world. No longer are some of the most exciting and crucial developments in modern life physical, they are increasingly becoming digital; an intangible thing that cannot be touched besides through a screen. …


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Source: Photo by Eric Prouzet on Unsplash

Can the US Dollar survive in its current role post-COVID and post-Trump?

Many have predicted that the United States will fall away from its role as the economic hegemon and hub for global finance, trade and more. There is little argument that the world is moving towards a more multipolar geopolitical stance with the economic rise of China, the European Union finding its footing as evidenced by the new “geopolitical” commission, and Russia re-engaging with international issues and players. However, this geopolitical shift is not finding itself represented in the currency markets and the implicit economic power that is associated with them as seen in a recent BIS paper. In the era of President Trump and rising nationalist forces across the world, the shift away from the USD is still not happening, the international anchor of the USD has held and strengthened as individuals, firms and governments rushed to relative safety of a market they know and understand. In fact, it will most likely not take place in the near future until there becomes a viable alternative with deep, liquid capital markets backed up by an internationally recognised court system that operates solely under the rule of law. The US is still the only market that fulfils all of these requirements, though the Euro has appeared to be a likely contender ever since its creation, especially if a liquid safe asset is developed. The USD is still the currency that the majority of the world finds itself anchored too, from countries like Mexico to places like Hong Kong (see Map 1). …


Bundles of notes waiting to be distributed by the Reichsbank during the hyperinflation period of Weimar Germany
Bundles of notes waiting to be distributed by the Reichsbank during the hyperinflation period of Weimar Germany
Source: Wikipedia

The Weimar Republic was a Republic of contradictions, great social change and challenges. It represented both a drastic break with the past, as well as a continuation. The legacy of economic policies from the First World War enacted by the Wilhelmina government laid the groundwork for the economic hardship that the Weimar Republic experienced in its early years culminating in hyperinflation. Most policymakers of the First World War continued to make policies in this new Republic and their ideas were prevalent throughout the economic and political elite in the Weimar Republic until the hyperinflation years of 1923–1924 where the Republic threw off some of the visages of wartime beliefs. Their ideology stemmed from heavy borrowing in debt, low taxation and a small tax base and the active fanning of inflationary flames. …


There is currently a debate raging amongst financial analysts, economists and other policymakers about whether or not the macroeconomic environment after COVID-19 will be a deflationary one, similar to the aftermath of the 2008 financial crisis, or if it will be inflationary given the new measures that have been taken. The basic premise of the deflationary argument is that all sectors of the economy are shut down and there is a massive debt load that will weigh heavily on all parts of the economy, increasing deflationary pressures. The basic premise of the inflationary argument is that the economy, while suffering and currently deflating due to confinement measures, has large areas of pent-up demand lurking as incomes have been more or less protected due to large fiscal policies and stimulus measures taken directly to the consumer. …


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Credit: Wikipedia

Since the Great Recession of 2008, the world has seen a dramatic change in the roles that central banks play in their respective economies and societies. They have undertaken easing actions that many people feared would bring back the issue that economies faced in the 1970s and 1980s, inflation. Indeed, some predicted that the central banks’ actions might trigger inflation, and not just at levels of the 1970s and 80s, but inflation at levels only seen in Weimar Germany, Venezuela, Hungary and others. This fear was unfounded as quantitative easing operations were found to not significantly increase broad money growth. In other words, the increased purchase of assets by central banks did not cause a greater supply of money, just financial market liquidity. The balance sheets of central banks, which represent a picture of what they own and what they owe, were turned into a powerful tool during the 2008 crisis, which saw their first usage, and are being used to a greater extent in the current crisis. They play a new role in the current monetary policy toolbox, which emphasises that central banks have more ability to influence and support markets than through solely interest rate manipulations. …


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Source: J J Ellison Wikipedia

Britain has had a unique economic history. As the first nation to industrialise, it became the leading world economic power and hub in which global trade and finance flowed through, but was slowly eclipsed in terms of political, military and economic power by its former colony, the United States. In this spirit, it led the charge into the modern welfare-state after the Second World War and implemented Keynesian economic planning principles in their fullest. It was smooth sailing economically speaking and the social contract was happily signed by most. This post-war consensus began to unravel by the 1970s, with an extreme rise in unemployment that changed the social contract and composition of the economy. The United Kingdom had three specific spikes in its unemployment rate that happened in the 1980s, the 1990s and 2010, in addition to a future one potentially resulting from COVID-19. They represented deep cuts into British jobs, with which came drastic changes. …

About

Maximilian Magnacca Sancho

An economist with musings on interesting parts of economic history/society from the past to the present. Book reviews | Economic History | Current Events

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