Because, y\’know, we need and economic revolution n\’all.
And what this collection of dimbulb lefty economists don\’t realise is that their \”revolution\” describes the system we already fucking have.
but calls for something else: an international law on bankruptcy. Like the emphasis on employment, it\’s radical but obvious. \”I think that bankruptcy is one of the most extraordinary advances in civilisation. Because people used to be destroyed by debt, they went to Marshalsea prison and died. Capitalists finally realised, \’we\’ve lost him as a consumer and a producer. Let\’s put him back on the street\’.\” In individual bankruptcy, the creditor takes a hit as well as the debtor, and everybody moves on. We need to be able to do the same for nations, so that when Argentina, or for that matter, Cyprus or Greece or (as Osborne keeps threatening) the UK go bust, they are not simply penniless, on their knees before the people who still have money. It\’s unjust, but more to the point, it\’s crippling its own system.
But if Pettifor counsels a balance in interests between debtors and creditors, Molly Scott Cato, a green economist at the University of Roehampton, puts something else on the table, for which the international law already exists. The notion of \”odious debt\” was invented in the 19th century (formalised in 1927): it stipulates that when a regime incurs debt that is not in the national interest, the successor to that regime can treat the debt as a personal burden of the outgoing despot, and write it off. If it sounds archaic and unreasonable even to bring it up, bear in mind that America used this when it invaded Iraq, as a justification for taking over the oil rights and not honouring the debts left by Saddam Hussein.
Well, as you can tell, odious debt does indeed already exist in international law. Do note though that it requires a \”despotic regime\”. So you can\’t tell gilts holders to fuck off just because G. Brown sprayed the money around.
As to bankruptcy for countries. Ms. Pettifor doesn\’t understand what she is asking for. When you\’re bankrupt your assets, whatever they are, get sold to pay off the creditors. Maybe only pennies in the £ they get: but all assets are indeed up for grabs. So, if we applied this to Greece then we would hold an auction of all assets currently owned by the Greek State. The hospitals, the schools, the islands, the Presidential Palace, the lot.
Which isn\’t what Ms. Pettifor would stand for.
Which is why we do it rather differently with countries. If they can\’t pay their debts then we write them down. As we did for Greece. By roughly 90% for privately held debt.
This \”economic revolution\” is simply describing what we already do. And the reason it\’s described as a revolution is because Pettifor and the woman from Roehampton Further Education College don\’t actually understand the system they are supposedly analysing.