Keynes, Churchill, y el Patrón Oro. Las consecuencias económicas de mister Churchill

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Tenemos un relato perfecto del fracasado intento de restablecer el patrón oro en el periodo de entre guerras, intento que trajo la grave crisis de la Gran Depresión y sus consecuncias ulteriores. Lo reproduzco aquí para los que estén interesados. Muchos se preguntarán qué interés tengo en publicar trozos de historia que casi nadie lee. No tengo ninguna esperanza que hagan reflexionar a nadie. Lo hago por mí mismo, por la imperiosa necesidad de reproducir cosas que leo y me han ayudado a explicarme otras cosas. Lo hago también porque muchos de estos textos no serán traducidos. Sin embargo enseña más un trozo de historia económica que un manual de economía teórica -aunque la narrativa de la historia se basa en ideas previas que están en los manuales. Creo que no hay manera de explicar la Gran Depresión si no es mediante la historia. Y la Gran Depresión es el antecedente de lo que nos pasa ahora. Ain una perspectiva histórica es imposible explicar nuestra crisis, como en cada momento entran a jugar su papel las diferentes piezas clave. No veo un modelo matemático dando cuenta cabal de la crisis. Sin embargo, es lo que hacen los políticos: encargar un análisis ad hoc  estático, al que se quitan piezas que solo caben en un análisis histórico. Por eso los políticos y burócratas europeos están incapacitados para ver el papel que jugó el euro en la burbuja y luego en la imposibilidad de respuestas potentes a las sucesivas secuelas: crisis bancarias, economía plana, desempleo... Todo es historia, todo es devenir, vicisitud sin rectificación, y lo malo es que todo eso vigilado por incompetentes. Y n cabe imaginar que pudieran ser sustituidos por diligentes caballeros de blanca armadura. Simplemente la cabeza humana no está hecha para concebir con precisión el futuro. Además, los incentivos de un político no pasan por los intereses generales, que por otra parte nadie puede fijar científicamente. Bueno, empecemos por el relato de una de las épocas más tristes de Occidente, como si los hados se hubieran conjurado para que todos los políticos tomaran decisiones fatales.  

Estamos en los años veinte. Los primeros años posbélicos son tumultuosos y volátiles. Los paises europeos están arruinados, y los perdedores aplastados por unas reparaciones de guerra impuestas por lo vencedores dificiles o imposibles de cumplir. Lo que había predicho Keynes en su best seller "Las consecuencias económicas de La Paz" que le hizo rico y famoso. Al principio, no había  restricciones monetarias, la cantidad de dinero en circulación aumentó vertiginosamente, mientras las reservas de oro había disminuido en todos los paises de Europa, pues habían ido hacia EEUU para pagar las deudas que habían financiado la guerra. Uno de los deudores era Gran Bretaña, arruinada, por lo que a su vez exigía perentoriamente a Francia lo que ésta le debía. Francia, a su vez, apretaba las tuercas a Alemania, como gran pagadora de todos... Y niguno podía, como Keynes había previsto. A EEUU se le empezó a llamar "Shylock", en alusión al judio prestamista del Mercader de Venecia".

As the 1920s progressed, America’s economy continued to expand. With gold still pouring into the country as the rest of the world remained mired in various degrees of turmoil, a bubble in asset prices was slowly being inflated. But bubbles are not obvious to everyone until they burst, as this one would in dramatic circumstances in 1929. So, for the time being,.. The amount of money flowing around the economy had tripled in France and quadrupled in Germany; their gold stocks, meanwhile, had diminished. To add to France’s woes, America was demanding repayment of her war debt, if not in full, then at ninety cents in the dollar –a sum that would have bankrupted France overnight. Her cause was not helped when Britain agreed to pay back 80 per cent, and promptly put even more pressure on France and Germany to repay their own British war debts and reparations. As Keynes had predicted in 1919, Europe started to tear itself apart in its desperate scrabble for cash. Between 1924 and 1929 the Allies squeezed almost $ 2 billion in reparations out of Germany. About $ 1 billion of it passed straight to the United States to pay off war debts and interest. The irony was not lost on the residents of London, Paris and Berlin. Much as they might despise each other, there was a common scapegoat: ‘Shylock’, as the United States would find itself branded.

Esa afluencia de oro a Américana dio origen a las burbujas especulativas que acabarían en la gran crisis de 1919.. Mientras el descontrol en Europa desataba la inflación en Francia, y la hiperinflación en Alemania. 

The Americans, for their part, could hardly believe that the entire continent was determined to default, and resented them for merely trying to ensure the rightful repayment of their debts. It would take until 1926 for France to settle its war debts at a mere forty cents in the dollar –but by then there were bigger matters to worry about. Given the expansion of their money supplies during the war, both France and Germany faced a massive inflationary threat in the immediate aftermath of the conflict. France, perhaps informed by the institutional memory of the Assignat hyperinflation during the Revolution, immediately clamped down on the money supply, gradually bringing its double-digit inflation under control. Germany took the opposite course, continuing to expand the money supply in a desperate bid to keep up its reparations payments. The result was the most notorious case of hyperinflation in history. Between August and November 1923 the amount of marks a dollar could buy was catapulted from 620,000 to 630 billion (630,000,000,000). It triggered an economic collapse which was reversed only after economist Hjalmar Schacht, who was brought in to head the central bank, cancelled the currency and forcibly put the country back on the gold standard. 

Mientras Alemania se dejaba ir por la pendiente de la hiperinflación, Francia, antes de entrar en  el nuevo patrón oro que nació en la Conferencia de Génova, devaluó el franco hasta un nivel competitivo, lo que se convirtió en un saldo positivo de balqnza de pagos, y en grandes entradas de oro, que acumuló en el Banco de Francia, sin jugar las reglas del patrón oro: toda entrada se oro debería convertirse en una expansión monetaria. Eso no reafirmó la confianza de los especuladores, que seguían buscando vías de escape para su dinero... Lo cual endurecía aún más las barreras a salidas de capitales.

France, on the other hand, waited. Unlike Britain, which slashed wages and yoked itself to the gold standard once more, France devalued the franc until it reached a point where rejoining might give it a competitive advantage. From an economist’s perspective it was an intriguing case. In theory, at least, the country had given itself far more economic breathing space than any of its neighbours, while slashing its war debt repayments. The reality was messier. Throughout the early 1920s it repeatedly fell victim to onslaughts of speculation, as investors desperately attempted to pull money out of the country. 

Y es que había grandes contradicciones entre lo que demandaba la gente - más gastos sociales, en países sin recursos, lo que genera a déficits, incontrolables por la presión de nuevos grupos y partidos de izquierdas que ahora tenía acceso a las instituciones- y los recursos que había.

Successive governments fell –five of them between 1919 and 1923 –and none managed to bring the public finances under control. As was the case throughout Europe, a newly re-energised public was demanding not merely democracy but fresh systems of welfare as recompense for what they had suffered over the previous decade. That in turn increased the pressure on politicians to spend more –in spite of their debts. The easiest solution for the politicians was to turn back again on the familiar enemy. In 1923, new French Prime Minister Raymond Poincaré sent troops into the Ruhr, the industrial heartland of Germany. The Americans intervened, dispatching banker Charles Dawes to negotiate a compromise. He cut the value of reparations to around 1 per cent of Germany’s economy. Even so, France’s crisis persisted as speculators continued to take money out of the country. In early 1925 the dollar bought nineteen francs; by July the following year it could buy forty-one. The ordeal was held up by economists as a blunt reminder of the damage that could occur under floating exchange rates. 

El restablecimiento del patrón oro no ayudó a estabilizar las cosas. Por un aparte, el oro estaba mayormente en EEUU, en menor medida en Francia, y todos los paises necesitaban oro para impulsar sus economías. Esa enorme demanda, frente a una oferta congelada -EEUU y Francia se negaban a seguir la reglas y expandirse, por lo que el oro hubiera vuelto a circular por el mundo-, provocó una deflación mundial. 

During the war, gold had flooded into the country, pushing up prices nationwide. Watching the bars arriving in his vaults at the Federal Reserve Bank of New York, Governor Benjamin Strong decided to take action, contracting the amount of cash in the system, in spite of all that extra money. It was a flagrant abandonment of the gold standard, though in his case to protect against inflation, rather than the deflation that was being experienced everywhere else –equivalent, Keynes wrote, to ‘burying in the vaults of Washington what the miners of the Rand have laboriously brought to the surface’. 

By 1932 America’s boom had turned to deep depression. The investment bubble, fuelled in part by the flow of gold into the country throughout the 1920s, had ended with the Wall Street Crash of 1929. Everyone had assumed that the share price slump would soon be reversed –that employment levels would rebound. They were wrong: year after year the country’s economic condition deteriorated. It was unlike anything anyone had witnessed before. American industrial production fell by 48 per cent between 1929 and 1932; unemployment reached 25 per cent of the US workforce. A sequence of banks collapsed, but the strictures of the gold standard made rescuing them difficult. The attitude of the day, anyway, was more in tune with President Hoover’s Treasury Secretary Andew Mellon, who urged him to ‘liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate … it will purge the rottenness out of the system.’

Y Gran Bretaña, en 1925, cometió el error de querer volver al patrón oro con la paridad de antes de la guerra, pese a las advertencias de Keynes. 

... Keynes’s influence at the Treasury started to wane, too, as those with whom he had worked during the war moved on, though his interest in the way they were running the economy was as deep, and as critical, as ever. In the years that followed the war, the Treasury and Bank had presided over a brief economic boom, provoked in part to lessen the pain of demobilisation, as soldiers came home from war. Interest rates, which no longer needed to be set in accordance with the gold standard, were kept low, and soon enough inflation started to creep higher. 

In 1920, the Bank of England yanked up interest rates to 7 per cent. The objective was not merely to pierce the economic bubble: it was to bring down prices so that Britain could rejoin the gold standard –that was the cross-party political objective, as recommended by the former governor of the Bank, and Keynes’s adversary from Paris, Lord Cunliffe. 

It did not take long for Keynes to sense that this arrangement was perverse. In order to bring the pound back down to its former gold standard value of $ 4.86, the Bank of England had to suck money out of the economy, so that the amount of paper currency flowing around Britain would no longer be out of line with the amount of gold in its vaults. This in turn entailed wage cuts and economic austerity of a sort rarely before experienced in the country. The falls in salaries and living standards so fuelled public outrage that a newly unionised worker class soon took to the streets. A series of protests culminated eventually in the 1926 General Strike, where the army was called in to protect businesses from picketing workers. The notion that this misery was in any way linked to the gold standard took some time to sink in. 

Since it was assumed that the standard had collapsed because of the war, rather than due to its own inherent problems, it felt logical to reconstruct it after the fighting ceased. Indeed, many hoped not merely that it would be reconstituted but that it might now be extended to the more ‘primitive’ economies where it had never previously taken root. So-called ‘money doctors’, such as Edwin Kemmerer of Princeton University, were sent around the world proselytising for the gold standard –in much the same way that the International Monetary Fund would preach economic reform in the developing world during the 1980s and 1990s. 

But while the enthusiasm for gold was, if anything, greater after the war than before it, the standard that would emerge during the 1930s was unmistakably different from the one that preceded the war. Whereas the pre-war gold standard had been dominated by Britain, this new version had only one indisputable star –with unexpected consequences. Unlike everyone else, the United States had never left the standard in the first place. 

To Keynes, at least, the preposterousness of the system was plain to see: America subverting the gold standard in order to protect its economy; Britain slavishly slashing living standards in an effort to rejoin it; the rest of Europe in turmoil. What had happened was a perversion of what gold actually stood for: it was not a god, or something to be worshipped; it was merely a medium of exchange. After all, he said, ‘Money is only important for what it will procure.’ Over the course of 1922 and 1923 he wrote a series of essays in the Manchester Guardian, which would later be collected and published as A Tract on Monetary Reform. This was the book Virginia Woolf had read when she likened Keynes’s mind to Shakespeare’s. 

The problem with the gold standard, Keynes wrote, was that it meant central bankers were duty-bound to set domestic borrowing costs not in accordance with the state of their own economies but in order to obey its rules. To follow those rules would result in crippling deflation in the poorer, European economies and destabilising inflation in the United States. It was no wonder, he added, that Ben Strong had been forced to take action. But that could not disguise the hypocrisy of pretending to adhere to the gold standard while, in reality, doing anything but. The consequence, he wrote, was that ‘a dollar standard was set up on the pedestal of the Golden Calf … This is the way by which a rich country is able to combine new wisdom with old prejudice.’ 11 

Though the recent years of floating exchange rates had provided a profitable sideline for speculation, Keynes still could not conceive of currencies being unfixed permanently. The veil had not yet lifted on the early twentieth-century economic mind –it simply did not occur to Keynes, or indeed anyone else, that such a system might be feasible. However, if currencies were to be fixed, he said, they should not be fixed to a lump of metal. ‘In truth,’ he concluded, ‘the gold standard is already a barbarous relic.’ 

However, the Tract was more than a book about gold. In that work, for the first time, Keynes started to voice the kinds of economic opinions that would later become features of the movement known as ‘Keynesianism’. One precept was that a country should set its own economic policy first and foremost for domestic reasons, rather than because of how much gold was in its vaults. Another was that deflation was to be avoided at all costs. This was not to say that inflation was always a positive phenomenon; but, he said, deflation was, at that point in time, ‘more injurious’ than inflation. The other precepts that would become integral to Keynesianism –the need for government investment, for instance –would come later, but the fundamental principles of his economic policy were already forming, and were finding voice in the frequent articles he wrote for newspapers and magazines. (Indeed, during Keynes’s life, so much of his output appeared in the media, rather than in textbooks, that the term ‘Keynesian’ was already in parlance before the publication of the General Theory.) It was the Tract that first introduced the world to such notions –the most striking being that economic decisions should not ignore the immediate future: the pain and economic cost associated with wage cuts this year might not outweigh the benefits in the following years. ‘In the long run we are all dead,’ he wrote in the Tract –arguably his most famous aphorism. 14 However, the book could do little to prevent the ‘barbarous relic’ of which he had written once again becoming the dominant force in international economic policymaking. After a long period of economic depression and deflation, Britain eventually managed to cut domestic prices and strengthen the value of the pound. In 1925, Winston Churchill, then Chancellor, formally took Britain back into the gold standard at pre-war parity. At a private dinner shortly before his decision, Keynes urged him not to go ahead, but either there was a personality clash or his persuasiveness failed him. Keynes did not let Churchill forget it, dashing out a furious pamphlet (‘ The Economic Consequences of Mr Churchill’) and ribbing him for the decision repeatedly thereafter. Churchill would later admit it was the greatest mistake of his life.*