Even though these structural adjustment programs were widely criticized, and judged a failure by some analysts at the end of the twentieth century, they were the template for dealing with the EU crises in the small southern countries, and were inflicted on Greece in full to scare Portugal, Ireland, Spain, and Italy, not to mention the new EU countries from eastern Europe, at the prospect of what the EU (meaning in this case France and Germany) would do to them if they tried to create and hew to a line of their own. Join the EU, obey the European Central Bank; which meant, obey Germany and France. As Germany’s economy was about twice the size of France’s, what people around Europe took all this to mean was that Germany had finally conquered them all, no matter what it had looked like at the end of World War Two. Just as America had conquered the world by way of finance rather than arms, Germany had conquered Europe using the same methods— in some cases, using even the same capital. Because Germany had been very good at being a client state of America though the course of the Cold War. Now that the Cold War was over and Germany was in economic terms stronger than Russia, it could detach itself from the US a bit, cleverly pretending to be a client when it was convenient, but by and large pursuing its own course. This was obvious to everyone in Europe, but America’s narcissistic myopia regarding the rest of the world didn’t allow it to see that very well.
So a visit to Berlin was for Mary always a fraught venture. The bankers and finance ministers were a little less glossy and supercilious than in France and Brussels, but even more ominous in their burgher certainty that nothing could ever change. The Bundesbank, Germany’s central bank, had been formed in the postwar period precisely to stabilize West Germany’s status as a faithful and effective wingman for the American superstate, and given the incredible traumas of the two wars and the period between, it came as no surprise to Mary to learn that in the documents associated with the formation of the Bundesbank, the “preservation of the stability of the currency” was a “moral and legal necessity.” The independence of the state bank was given a constitutional status that included the suggestion that currency stability be included among the catalogue of basic human rights. Life, liberty, and low inflation rates! Well, this was the country that had seen its currency blown to smithereens. Lose a war that you started and the conditions imposed on your surrender could include reparations you were in no position to refuse, that would damn your population unto the seventh generation. No wonder the Germans who had lived through that had said never again. “The economy creates public law,” as the founding documents of the Bundesbank put it. That Mary saw this as exactly backwards was enough to give her pause; was it some kind of stealthy German acceptance of Marx over Hegel to say that first there is practice and then theory? She had no idea; she was not a philosopher, nor a historian. Just a working diplomat; but working diplomats tended to believe in cause and effect, in plan and execution. That’s what governance was, that was bureaucracy, even economy. The laws defined the behaviors that were legal. Possibly it was chicken and egg, but never was it effect causing cause— that would scramble the definitions of the words beyond comprehension.
Anyway she was in Berlin, feeling oppressed by these Germans who had won by losing and then adapting to that loss, and trying again by different means. Maybe now they didn’t want to rule the world; they only wanted to defend Germany by way of an active diplomacy, influencing Europe and the world as much as they could given their smallish population and economy. In which project they were doing a good job. So she, like them, tried to ignore their spectacularly awful history and focus on the moment at hand. Central banks, she urged them, quantitatively easing the world off carbon! Exertion of state sovereignty over the global market, by way of international cooperation of nation-states big enough to face down the market; even to alter the market. To fucking buy the market. She said this politely but urgently.
They stared at her. One of them wrinkled his forehead, a deep cleft appeared between his eyebrows. He spoke. China’s central bank, the richest of them all, had four trillion US dollars in assets. All the central banks combined held about fifteen trillion in assets. The world’s annual business, the GWP, was eighty trillion a year, and in the depths of the high-frequency dark pools, something like three trillion dollars got traded every day. Even admitting that these last were in some senses fictional dollars, it was still very clear: the market was bigger than all the nation-states put together.
Mary shook her head. Even if market and state were two parts of a single system, that single system was ruled by law; and the laws were made by the nation-states; they could therefore change the laws, that was sovereignty, that was where seigniorage and legitimacy and ultimately social trust and value resided. The market was constructed by, and parasitic on, that structure of laws.
The market can buy the laws, one of them suggested.
The market is impervious to law, another added. It is its own law, it is human nature, it is the way of the world.
Mary said, It’s just a legal system. We change laws every day.
Central banks only exist to stabilize currencies and prices, to curb inflation and keep interest rates a viable tool for that.
Mary said, Together the central banks often advise their legislatures to change tax levels as needed to stabilize money. That means changing the laws.
Legislatures do what they want.
Mary said, Legislatures pass financial laws that the central banks tell them to pass. They’re scared of
