The following week Mary went to Brussels. The European Central Bank, a much younger institution than the Bank of England, founded in the late twentieth century as a financial instrument of the European Union, offered to her representatives who were if anything even worse than the English. The group Mary met with was formed for the most part of German and French men. These were very sophisticated, intelligent, polite, and arrogant people. Their attitude toward Mary was dismissive in the extreme. For one, she headed an agency with no financial power and little legal leverage; the ministry was some kind of idealistic gesture to make people think extraordinary efforts were being made when really they weren’t. And as an Irish woman she was doubly damned, more for being Irish than for being a woman; ever since Thatcher and Merkel and Lagarde, a few women had wedged their way into the top echelons of European and financial power; Mary admired all these women, despite her hatred for Thatcher’s politics, and of course none of them had managed to crack the top by way of being progressives. But Irish— no. A colony, a little country, one of the PIIGS, one of the many little piggie countries of Europe who had to pick up the crumbs of the big countries, and had no chance of achieving the gleaming polish of one of the big countries, which was really to say, Germany and France. These two old antagonists still fought for control of Europe, but it was a battle of two, the rest of the world was irrelevant, or at most instruments to be used. And somehow the little countries could never sort out their differences and band together to become a united front of their own. That kind of cooperation would be asking too much of nationalism and sovereignty. So the two big frenemies stood on the peak and regarded the rest with indulgent condescension at best, brusque command normally, and brutal arm-twisting at worst. Which of course was better than brutal military assaults, as in the past, but still not very satisfactory when sitting in a room with them. Thousand-euro suits: Mary did not fail to let her Irish disdain for such peacockery show. She could convey that disdain with a look while still being ostensibly polite, but of course it didn’t help in terms of getting her what she wanted. She saw very clearly that the European Central Bank was entirely focused on price stability and increasing its power in the world to carry out that task. If they were asked to adjust the interest rate half a point to save the world, they wouldn’t do it. Outside their purview.
The People’s Bank of China on the other hand was a state-owned operation that held the most assets of any central bank on Earth, approaching four trillion US dollars; and although they were independent compared to most Chinese divisions of government, they were still ruled by the State Council. There was no point in talking to the Chinese bank heads; she would need to speak to the finance minister directly, and even better would be the premier and president, of course. In fact they were the strongest hope for her plan; they were not doctrinaire, not fixed on ideas from neoliberalism or any other political economy; practice is the sole criterion of truth, they said. Cross the river by feeling the stones, they said. If she could convince them of the worth of the idea, they wouldn’t give a damn what the other banks thought.
But it would take a lot of central banks buying in to make this work.
Actually, thinking about that, she set Janus Athena to studying this. If the Chinese bank were to back it alone, could it work? No, J-A got back to her to say; no one bank could expose themselves to the market that way. Even China, even the US; these were just the biggest Lilliputians, in terms of any given entity trying to tie down the global economy. It would take a gang of them.
So, it wasn’t going to happen. The bankers were useless. They would look at each other and see the mutual lack of enthusiasm in their peers, and hide behind that. If the world cooked and civilization fell apart, it wouldn’t be their fault, even though they were funding the disaster every step of the way.
Something was going to have to make them do it.
The “structural adjustment programs” enforced by the World Bank on the developing countries caught in the debt crises at the end of the twentieth century set the conditions for what became the world order in the twenty-first century. These SAPs were instruments of the postwar American economic empire, which was unlike the older empires in that it did not insist on ownership of its economic colonies; it only owned their debts and their profits, no more than that. The best empire yet, in terms of efficiency, and the neoliberal order was all about efficiency, in its purest economic definition: the speed and frictionlessness with which money moved from the poor to the rich.
So there was a reason it was called the Washington Consensus. Its SAP requirements, made of any country that wanted a bail-out in the form of further loans, came only by adhering to the following conditions: a reduction in public spending; tax reforms, especially reducing taxes on corporations; privatization of state-owned enterprises; market-based interest and currency exchange rates, with no government controls on these; a set of strong investor rights, so investors could no longer be given haircuts (the long hair provisions, so-called); and the massive deregulation of everything: market activities, business practices, labor and environmental
