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The Christian Faith and the Financial Crisis
Part Two: The Financial Crisis (8)


That, then, was the revolution Brian Griffiths was advocating in the 1970s and when he spoke in Swansea last March, he was keen to persuade us that this revolution had been a success. I look at my notes and I see that this period, 1977 to 2007, the year when the financial crisis began to manifest itself, is characterised as thirty years of 'economic growth, high levels of employment, and the end of the pattern of boom and bust.' I think I've recorded that correctly since I remember the feeling of amazement I had when I wrote it. When I asked about the consequences of deregulation he reminded me of how dreadful things had been prior to 1986. The British banks had formed a cosy gentleman's cartel, agreeing the services they would provide and the interest rates they would charge among themselves and with the government, and keeping impossible opening hours. There was no real competition, no stimulus to innovation. The reader will remember this as the theme of the 1970 pamphlet Competition in Banking.

But in arguing that the financial crisis had to be put in the context of thirty years of success, his main point concerned what is called 'globalisation', and specifically certain events that were not at all envisaged in the 1970s and 1980s, notably the fall of the Soviet Union and the opening of China - and, to a much greater extent than previously, India - to the world market. Two billion new consumers. Who also, of course, happened to be producers, with the result, as he reminded us, that a flood of low priced goods and services from China and other far Eastern countries, helped to keep inflation under control. Which is interesting when we recall that in the 1970s his argument was that inflation was not primarily the result of an increased costs of production but through too much money being pumped into the economy.

Interestingly both in the Cardiff talk and elsewhere (8) Griffiths points out, rightly, that 'globalisation' is not a new phenomenon. The high point of globalisation was, he says, the twenty five years that preceded the First World War. I've not seen him develop this but the statement seems to me quite heavy with implications, notably that 'globalisation' is the same phenomenon as that characterised by Rosa Luxemburg and Lenin early in the twentieth century as 'Imperialism', which they regarded as primarily an economic not a political category; and in observing that this characterises the twenty five years prior to the First World War he is surely suggesting that it might have had something to do with the causes of the First World War. Perhaps the reader will begin to understand why I thought it relevant to mention Halford Mackinder, Director of the London School of Economics from 1903 to 1908, and the view of globalisation he was promoting in the years leading up to 1914.

(8) For example an interview given in 2006, accessible at : 'But globalization is not a new phenomenon. You saw a lot of globalization in the 19th century and probably the "belle époque" of globalization was 25 years before World War I.'