Monday, November 30, 2015

Hitchens versus Hitchens on Keynes and Currency Sovereignty

That is, Christopher Hitchens versus Peter Hitchens.

Christopher Hitchens never knew that much about economics, apart from a shallow Marxist perspective, and he shows this ignorance here very well. He asked whether Ireland lost its economic independence by adopting the Euro – only a few short years before Ireland’s membership of the Eurozone utterly destroyed that country’s economic sovereignty in the aftermath of the global recession of 2008–2009, which for Ireland turned into a full-blown and horrific depression.

Curiously, it is the idiosyncratic Peter Hitchens, citing Keynes, who gets it right: without currency sovereignty you have lost a fundamental foundation of economic independence. This is the major problem with the Eurozone today. The democracy of Greece, for example, has just this year been shown to be virtually worthless while Greece remains within the Eurozone.

I not quite sure where and when Keynes said the remark attributed to him (that is, “whoever controls the currency controls the government”). Maybe it is apocryphal, but it is consistent with his views.


  1. The closest remark I find is, "Give me control of a nation's money supply and I care not who makes its laws" by Amschel Rothschild.

  2. LK,I have read that there are some advantages of same currency ['There are, of course real costs to the use of multiple currencies,that can be avoided by the adoption of a common currency. Cross border business is motre expensive if currencies must be exchanged,multiple currencies kept on hand and/ or bank accounts in multiple currencies maintained.The possibility of exchange rate fluctuation introduces uncertainty;planning becomes difficult and accounting less clear when income and expenses aren't always in the same units. The more business a political unit does with the neighbours, the more problematic it would be to have an independent currency,which is why it wouldn't be a good idea for ,say,Brooklyn to have its own dollar the way Canada does". Ref -Paul Krugman -End This Depression Now !}. Although Krugman is Euro- septic he acknowledges that idea of common currency has some advantages. Wouldn't it be better if the idea of common currency be left on case by case basis ? What you think ?