By A. Edward Gottesman
It’s only money, for heaven’s sake! The euro is a great convenience for trade and travel, and it is a powerful symbol of unified purpose for countries that have been at each other’s throats for 1000 years. But it doesn’t cure cancer or the common cold. In October, Angela Merkel, German chancellor, said: “If the euro collapses, then Europe collapses.” This hyperbole may have worked as scare politics, but it was bad economics. Keynes identified as long ago as 1923 what we can now call the Merkel mistake:
“Conservative bankers regard it as more consonant with their cloth, and also as economising thought, to shift public discussion of financial topics off the logical on to an alleged ‘moral’ plane, which means a realm of thought where vested interest can be triumphant over the common good without further debate.”
By Thomas I. Palley
In his novel, The Jungle, the American muckraking author Upton Sinclair wrote about the horrendous work and sanitary conditions in the Chicago meat packing industry of the early 20th century. It is sometimes said Sinclair aimed for the heart but hit the stomach. That is because he aimed for progressive social and economic change, but instead his work prompted the founding of the Food and Drug Administration.
The same problem of missing the target confounds current discussions of the eurozone’s problems. What the euro lacks is a government banker, not a lender of last resort as is widely claimed. Read more
By Xhanti Payi
One of the most difficult struggles being fought by those who wish to attract investment into Africa is to destroy the widely held belief that Africa is one big country. Africa in reality is a collection of widely diverse and exciting countries, with varying prospects and challenges.
So apart from the argument that an African Monetary Union (AMU) would be a bad idea if the example of the European Monetary Union is anything to go by, there is a case to be made that a monetary union may interrupt the fight against negative sentiment about Africa that is born out of this that arbitrary aggregate approach. With that said, the idea of an African Monetary Union is a product of history, and arguing against it requires understanding of its context. Read more