CLASS & INEQUALITY
Polanyi, the Failed Prophet of Moral Economics

JEREMY ADELMAN

“I’m never happier,” Karl Polanyi wrote to his brother Michael, “than when I am exhausted from work, sitting in a train and, with a view of the southern English countryside outside the window, on my way home.” This was November 10, 1938, the day after Nazi paramilitaries tore through German cities smashing stores and synagogues, committing the destruction known as Kristallnacht. While racists ripped up the continent, Polanyi had taken refuge on the other side of the English Channel, eking out a living by lecturing to students of the Workers’ Educational Association. On the buses and trains of his commute to WEA sites, he puzzled over how his world darkened and sketched one of the century’s classics, The Great Transformation: The Political and Economic Origins of Our Times (1944).

Polanyi’s legacy—especially seen through that book—has been enjoying something of a comeback since 2008 thanks to the global-bashing distemper of our times. The Great Transformation is a sacred text for those who decry capitalism but shy away from the revolutionary implications of Marxism. Indeed, Polanyi—along with nineteenth-century Romantics and twentieth-century social critics such as E. P. Thompson or James C. Scott—belongs in the pantheon of thinkers that, since the dawn of capitalism, gave a vital, normative counterpoint to the hegemony of political economics, liberal or Marxist. It forged the tradition of moral economics behind a Naomi Klein, or a Bernie Sanders. But today’s Polanyi revival is not the first. The Great Transformation was also recovered in the global malaise of the 1970s. Perhaps its destiny is to be rekindled every time capitalism goes into crisis. It was, after all, conceived and written in the midst of the world’s worst cataclysm.

Polanyi’s moral economics did as much to obscure the nature of global interdependence as it did to reveal the perils of leaving the invisible hand to its own devices.

In an era of walls, visas, Eurofatigue, and slumping global trade, we turn again to moral economics for alternatives. How far can we go with them? Polanyi demanded that markets be “embedded” in wider social fabrics and serve communal purposes. The word “embedding” has since become a touchstone for market critics and sub-disciplines in the social sciences; it is a word with a career trajectory all its own. But what this actually means deserves some examination. Polanyi’s moral economics did as much to obscure the nature of global interdependence as it did to reveal the perils of leaving the invisible hand to its own devices.

Out of Hungary

Polanyi’s view of the world began in the epicenters of the Hapsburg Empire. It is one of the paradoxes of Polanyi’s life and work that he would decry the effects of nineteenth-century capitalism even as he was the heir of its sibling, cosmopolitan liberalism. Born in Vienna in 1886, he grew up in Budapest, the son of Jewish bourgeois parents who saw Judaism as a relic of shtetl or ghetto ways, a hangover from the East. The promise of the Jewish Enlightenment was this: citizenship in return for assimilation. His grandfather and father accepted the deal. Polanyi’s father, Mihály, a successful engineer, made sure that his children grew up in a capacious flat on one of Budapest’s toniest streets.

And yet the ties to Jewish circles were never completely untethered. Polanyi went to the Minta Gymnasium with a scholarship from Jewish philanthropists. His grandfather on his mother’s side was a rabbinic scholar who had translated the Talmud into Russian. Polanyi was therefore raised just outside the radius of Jewish tradition, a world he knew but could never belong to.

For the rest of his life, Polanyi searched for new communal bearings, new roots for an increasingly rootless life. As he fled Budapest for Vienna in 1919, he converted to Christianity, possibly sensing that a minority in the new national frenzy of post-1918 Central Europe was a dangerous thing to be, and that he should merge into the national Volk. Years later, in the freeze of the Cold War, he would claim that “it was the Jews that brought Christianity into the world, and this was a terrible burden. For, it brought into being the trepidation of conscience: the Jews had brought this burden into the world but then walked away from it!” They were guilty not for the death of Jesus but for “rejecting the teachings of Jesus, which are superior.”

Polanyi’s zeal to incriminate liberalism blinded him.

There is a certain parallel here between Jews in the ancient world and liberals in Polanyi’s world. One might say that he saw that in Christ’s time Jews had cleared the ground for the Christian gospel. Centuries later, liberalism had done likewise. It created the conditions for what Polanyi often called a “new Christian unity.” Just as the old Christian unity stood on the shoulders of Judaism, according to Polanyi the new Christian unity was climbing on the shoulders of liberalism. What that emerging unity lacked, however, was an understanding of itself, a narrative to replace what he regarded as a wasteland of market integration and individualism. Christianity gave him an ethical vocabulary that at once lambasted liberalism while adopting its universalism.

Meanwhile anti-Semitism destroyed the hearth of Central European assimilation dreams. It drove Polanyi into exile; it took away parts of his family. As Gareth Dale notes in his illuminating biography, Karl Polanyi: A Life on the Left (2016), the Jewish Question was a seam of unresolved issues. The moral economist hovered between his collapsing old worlds—the Jewish and the liberal—and his struggles to find a source of light for a new world.

Red Vienna

Marxism was a potential resort. It appealed to many who considered liberalism responsible for the bloodshed of World War I and, on its heels, the fascist blight. Polanyi would have an ambiguous relationship to Marxism, however. Its collectivism was a draw, but its underlying materialism was not. Polanyi never subscribed to the Second International’s orthodoxy. He helped found the Hungarian Radical Party before World War I sent him to the Russian front as a cavalry officer. Wounded, he convalesced in Budapest when Mihály Károlyi launched the First Hungarian People’s Republic. For a few furtive months in early 1919, Polanyi was close to power—as close as he would ever get. It ended with Béla Kun’s Soviet takeover; the republic turned a crimson shade of red.

The Hungarian Soviet Republic was a debacle. Appalled at what he regarded as the naïveté of the revolutionaries who thought they could create utopias out of abstract ideas, Polanyi left for Vienna to become a journalist, starting a life as the wandering un-Jewish Hungarian. The Austrian capital was home to a remarkable experiment in municipal socialism, with public housing, kindergartens, and public recreation for all. Here was a feasible model for solidarity, a secular heir to Christian unity. It failed. With some justification, Polanyi would accuse unrepentant “economic liberals” for having forced Red Vienna to its knees before the false altar of austerity. In a fascinating and little-remarked appendix to chapter seven of The Great Transformation, Polanyi likened the destruction of Red Vienna to the liberal reforms of the nineteenth century, which had destroyed the Christian charity of England’s poor laws. Neither the community of the squire’s village nor working-class Vienna could withstand “the iron broom of the classical economists.”

The experience was enough to poison for good his view of bankers. He spared choice words for the privileged role of haute finance in the spoils of the nineteenth century and the cynical way in which money men rebuilt the hollowed order after 1919 by spreading suffering among the have-nots. By the 1920s, Polanyi writes, “currency had become the pivot of national politics. Under a modern money economy nobody could fail to experience daily the shrinking or expanding of the financial yardstick; populations become currency-conscious.” The cult of stable money concealed a basic truth: it depended on forces outside national boundaries, beyond the reach of community regulators. There are times when one can almost feel Polanyi reaching for clichés about conspiracies of rootless cosmopolitans. Meanwhile, turmoil “shattered also the naïve concept of financial sovereignty in an interdependent economy.” The solution was to double down on the gold standard and all but ensure its eventual collapse.

His obsession with liberal failures and his blind spot for reactionary nationalism would only grow with time.

That crash came in 1929, and brought down the frail liberal consensus that filled the void after 1919. Eventually the reactionary tide that swept Hungary and Germany closed in on Austria. In late 1933, Polanyi, a socialist without a party, left for England. It is revealing that Polanyi blamed liberals for the collapse. The fact that Vienna was a cosmopolitan city surrounded by conservative resentment and clerical zeal to clamp down on urbane modernists did not figure into his story. This obsession with liberal failures and his blind spot for reactionary nationalism would only grow with time.

By now some of Polanyi’s traits had come clear. First, he would not embrace Marxism, Zionism, nationalism, liberalism, conservativism—all the traditional -isms that defined the ideological wars of the century. Second, as Dale notes perceptively, Polanyi was inclined to think in polar extremes. Only when it came to politics did he veer toward the reforming middle. He would spend his life searching for the near-impossible: a non-liberal middle ground.

Polanyi’s ethos finally took shape while in exile in England. There he brushed with Christian and guild socialism, which inherited English romantic notions of craftsman autonomy and artisanal disdain for wage labor and pushed them into schemes of state ownership and guild management of manufacturing. Their chief proponents, R. H. Tawney and G. D. H. Cole, left a deep imprint on The Great Transformation. Both were sworn to a non-materialist code. Along with Harold Laski, they were giants of the interwar British left. Like Polanyi, they were ethical stepchildren of nineteenth-century liberalism, quick to condemn its shortfalls and determined to create a new moral order without the odor of Marxist class conflict. Theirs was a generally optimistic view that saw the breakdowns of the 1930s as growing pains in the march toward communities of unselfish producers sharing their wealth as an alternative to market capitalism. Polanyi, who had met them during an earlier visit, admired their fusion of socialism with Anglo-Saxon liberty, religious tolerance, and “general humanitarian outlook.” Tawney and Cole were also believers in adult education and figures behind the WEA, which employed Polanyi as an itinerant lecturer.

Polanyi, however, was more bitter about liberalism than Cole or Tawney. Whereas their socialism claimed to grow out of reform liberalism, Polanyi’s search for a new Christian unity repudiated it. By the late 1930s, he was convinced of the corrosive effects of the nineteenth-century system that had severed the economy from other spheres of life and submitted human needs to the market. The consequences, as he wrote to his brother Michael, were “murderous,” for the dominance of the market prepared the world for fascism, “the most obvious failure of our civilization.” Any new humanist philosophy had to start with “freedom from economics.”

Hunger Games

The Great Transformation was originally called Origins of the Cataclysm, which then became Anatomy of the 19th Century. These would have been more vivid, and more accurate, titles. But they were bleak, and did not convey his ambition to create an epic about capitalism that would convince readers that the last thing the world needed in 1944 was a restoration of old liberal ways. This had been the mistake of 1919; instead of reforming a liberal civilization, the postwar’s architects tried “recasting the regimes that had succumbed on the battlefields” and built Europe’s tomb.

Those “regimes” were the products of the first modern globalization, which Polanyi describes in the astonishing opening chapter of The Great Transformation. The rise of the world economy rested on four “institutions”: a balance of power between states; the international gold standard; the liberal state; and the self-regulating market, which produced “unheard-of material welfare.” This great transformation was responsible for “the hundred years’ peace,” but it was also a “stark utopia”—stark because of its brutal physical and moral consequences, utopian because it depended on greats acts of will and denial of the reality of social and economic life. The commodification of land, labor, and capital was the result of an organized, wrenching dislocation from collective moorings in “the traditional unity of a Christian society.” Societies with markets ceded to market societies, bent to live and die in exchange.

The final drafting of The Great Transformation did not take place in England, though. Needing an income and wanting to focus on his master work, Polanyi received help from the Rockefeller Foundation to decamp to the United States, where he was a visiting scholar at Bennington, in Vermont. Polanyi’s wife, Ilona, stayed behind in England. At Bennington Polanyi turned his WEA classes into a series of public lectures, delivered between the fall of France in the summer of 1940 and the end of the Battle of Britain in October. The Polanyis’ marital correspondences from this time are frankly discomfiting, for while Ilona writes to Karl about bombings and scarcities, he writes to her about the pleasures of pastoral New England and the open stacks of the Columbia University library.

While Ilona wrote to Karl about bombings and scarcities, he wrote to her about the pleasures of pastoral New England.

The Great Transformation’s invective follows the ways in which old feudal collectives, guilds, corporations, and craft circles—the staples of Romantic attachments to a telluric past—became treated as commodities by the market, in Polanyi’s words, “commodity fictions.” His epic centered on the way the poor, severed from the land, got stripped of their access to charity. A rising middle class won the right to vote in 1832. In Polanyi’s reading, the poor lost their “right to live” two years later with the Poor Law reform. Unable to count on subsistence from parishes under the Speenhamland system, they lined up at the gates of the workhouse. “No government was needed to maintain this balance,” Polanyi noted of the cruel twist of the self-regulating market; “it was restored by the pangs of hunger on the one hand, the scarcity of food on the other.”

There was nothing natural about this process. “Free markets,” he wrote, “could never have come into being merely by allowing things to take their course.” But—and here’s the rub—political economists campaigned to tell a very different story, and invent an increasingly elaborate set of theories, about laissez faire. It became the new creed, a creed so powerful that all subsequent anti-laissez-faire legislation got treated as an interference with or perversion of the natural course of events. In his WEA lectures from the late 1930s, he indicted the founders of the dismal science, Robert Malthus and David Ricardo: “Misery was regarded as nature’s cure, and any act of humanitarianism as a crime against humanity since it must necessarily increase their sufferings.”

What started as an uprooting from communities of reciprocity and redistribution and the victory of individual gain came full circle with welfare systems, both democratic and authoritarian, in the 1930s. The market restoration of the 1920s had failed. Gold collapsed, the old balance of imperial powers fizzled, the self-regulating market produced mass unemployment, and the liberal state got swept away. Now, Polanyi argued, the marketplace was being restored to its rightful place at the service of society. “Undoubtedly,” he noted, “our age will be credited with having seen the end of the self-regulating market.” Managed currencies, protectionism, and make-work declared the arrival of moral economy.

Bare Society

Polanyi’s zeal to incriminate liberalism blinded him. Everything that was bad about the world could be traced to one single source. Lethal, industrial-scale racism? The fault of liberals. Internationalism? A connivance of old plutocrats. The result was a tangled understanding of nationalism, which he saw as a way to restore a sense of fraternal community in the face of the globalist shredder. This was an incongruous resting point for someone without a nation, Jewish, Hungarian, or English. Of Japan’s invasion of China in 1937 or Hitler’s parade into Austria in 1938? Of the cleansing of minorities from national communities in Central Europe? Polanyi was relatively silent, though he knew full well what the Nazi sweep of Vienna implied for old friends and family.

The Great Transformation is riddled with problems. Fred Block and Margaret Somers, who have done so much to chart the outlines of a Polanyian approach to sociology, have identified one particular tension at the core of the work. On the one hand, Polanyi argues that the liberal age had disembedded the economy from wider social systems. On the other, Polanyi implies that the market always rests on legal, intellectual, and political conditions—that supply and demand never operate freely. Polanyi wants it both ways. Close readers will find themselves chasing the tail of his argument.

There are also big gaps. Above all, while the narrative dwells on the rise of the Satanic Mill to the 1830s, Polanyi never follows the story beyond. Doing so would have exposed some uncomfortable evidence about how the gold standard, free trade, and haute finance yielded a bonanza of Victorian globalization. Polanyi prefers the gory days over the glory days of the liberal order.

And these are not the only serious flaws. While Polanyi indicts the transformation for physically dehumanizing workers and leaving owners “morally degraded,”he contends that the regimes of the 1930s addressed want and anxiety by domesticating markets and restoring national sovereignty. What kind of an improvement was this? How could a shrewd observer, exiled for his convictions, and following closely the news of the horrors, see redemption without falling prey to wishful thinking? Polanyi knew full well how the furies of nationalism were killing the families and neighbors he had left behind in Hungary and Austria. He and Ilona repeatedly helped straggling kin from the late 1930s. By 1942 there was knowledge of the fate of the Jews of the East. Polanyi’s sister Sophie was caught in Vienna, faced with a dilemma posed by Nazi gendarmes: sacrifice her husband in Dachau or relinquish her mentally-ill son to the police. Given the agonizing choice, she dithered until it was too late. Her last-known location was Kielce ghetto, created by the SS in Poland as a staging ground for the extermination camps. By then she was beyond her brothers’ desperation to save her. Polanyi would later mourn that “my dearest little sister was murdered by the madmen.”

Polanyi wanted it both ways. On the one hand, he argued that the liberal age had disembedded the economy from wider social systems. On the other, he implied that supply and demand never operate freely.

One of troubles with The Great Transformation is that Polanyi wanted to sound like a realist. But he had the voice of a moralist. Consider the adjectives he uses to describe liberals and political economists. They inhabit a world of illusions. “To the stupefaction of the vast majority of contemporaries,” he notes of economic liberals, “unsuspected forces of charismatic leadership and autarchist isolationism broke forth and fused societies in new forms.” Elsewhere Polanyi points at those who extolled the virtues of the Hundred Years’ Peace—A. J. Toynbee, Ludwig von Mises, and Norman Angell—singling out their “naïveté,” a word that recycles often in the text. “Awareness of the essential nature of the problems of politics sank to an unprecedented low point” on the eve of World War I.

But it would take effort to not notice Polanyi’s own naïveté on display in the book. Liberalism, he claims, now forked into two roads: one socialist and one fascist. “The difference between these two is not primarily economic. It is moral and religious.” What those differences were was never very clear. Nor was the option posed by the society at his doorstep, the United States. Later readers tend to pay less attention to the murkier final chapters about Polanyi’s global present. Perhaps it is just as well. They are a mess.

How Obsolete Is Our Market Mentality?

Spring of 1943 brought news of the final victory of the Red Army over the German Wehrmacht at Stalingrad. “My father was impatient to return from America to England” recalled his daughter, Kari Polanyi Levitt. Polanyi rushed to complete his manuscript in Bennington so it could influence the emerging system. He sent a draft to Cole for feedback. Cole replied with extensive comments. Reflecting on the key treatment of the labor market, Cole had this to say: “I think that all through [chapter seven] you treat Speenhamland as much more universal than it was, and also make much too light of country differences in wage policy.” The book, as Cole, Tawney, and his brother Michael warned Polanyi, had many errors and exaggerations. But Polanyi was in a rush to see it go to press. When it came out, critics gave it a rough ride for its “vagueness” and “distortions.”

It was also out of step with the times. For a man who claimed realism as a badge, he was unaware of the gathering force of Keynesian macroeconomics, the colossal effort to restore market economies by American businesses, and the delegations preparing to gather in nearby Bretton Woods, New Hampshire, to draft what would become the postwar financial architecture. He was, above all, oblivious of the underlying transformation in mass consumption and the importance of Fordism to re-railing capitalism. The market, for Polanyi, was a source of enrichment for plutocrats and oppression for workers, nothing more. The idea that the market could be a space for satisfying wants—and, even more, inventing them—was beyond conception. Polanyi had missed one great transformation altogether: the globalization of consumption.

If Polanyi wanted this to be his moment, and his book to provide the moral economics of a new era, he was, as Block and Somers note, a failed prophet. The idea of people submitting their individualisms to something larger—the “reality of society”—had just debased itself in horrid ways. It would take a while for the idea of group or collective rights to regain some traction.

Polanyi did not give up right away. Beyond the United States, “liberal capitalism can hardly be said to exist any more,” he would write with confidence in a 1947 essay published in Commentary. Called “Our Obsolete Market Mentality,” it outlines a “total view of man and society,” and not the splintered soul of Homo economicus. Phrases such as “the fullness of life to the person,” and the yearning for a “truly democratic society,” fill the pages, revealing a normative vision of a world emerging from catastrophe.

Polanyi’s influence on his present was almost nil. By 1947 he was ever more removed from prevailing understandings of liberal capitalism. Moral economics got paved over by a specialized, technocratic brand of economic thinking coupled to historically unprecedented growth and social safety nets. Sensing his discordance with his time, Polanyi turned away from the present, receding to focus on the economic history of ancient and tribal societies where Homo moralis played a larger role in the epic of humanity. In these areas, Polanyi’s influence was—and continues to be—profound. In his final years, he settled down outside Toronto, though even then it was not for want of a permanent home but rather because his wife Ilona, a former communist, was barred from the United States. For a moral man, Polanyi’s community ties remained strikingly thin. He shuffled to New York to give classes at Columbia, influenced the likes of Moses Finley, Marshall Sahlins, and Anne Chapman, and tapped into the largesse of the Ford Foundation to pursue his interests in ancient empires.

I first read “Our Obsolete Market Mentality” around 1980, when Polanyi was making a comeback. One of his Columbia students and close collaborators, Abraham Rotstein, gave me a photocopy of it when I was studying Canadian economic history. At the time Rotstein was embroiled in a debate over whether the colonial fur trade in North America had revealed Ojibwe people’s inner individualism as proto-NAFTA-makers. Rotstein was trying to hold the Polanyian line against a Friedmanite juggernaut. Neoclassical economics was storming to power in London and Washington, having seized it in Pinochet’s Chile. The sanctuary of economic history, even in Canada, was feeling the pressure to get with the times and to appreciate the universality of the economicus in the Homo. Margaret Thatcher, after all, gave us an epigram of the 1980s with her declaration that there was “no such thing as society,” just individuals and their families. Rotstein’s efforts went the way of so many other quests for alternatives to market fundamentalism. The case for Homo moralis got sidelined again, condemned to “critique” from the academic edges.

Maybe that is the best moral economists can hope for. But as we take stock of our long cycle of market fundamentalism and our globalization, old questions return. As it slumps, the world is scrambling to figure out what is next. Do we double down on more of the same, as post-1919 leaders did to their creaking order? There is almost no appetite for that, as Britain’s “Remainers” and Hillary Clinton’s fate showed. Having to choose between “patriots and globalists,” as Marine Le Pen and nativists worldwide argue, is no more appealing. Polanyi can help us consider the conditions that make market life work—and even endurable. But if moral economics does not want to get paved over again, it will have to find a way to get beyond the stark dichotomies that have fueled its passion, as if we must choose between ethical community or economic interdependence, morals or markets.

Polanyi, the Failed Prophet of Moral Economics | Boston Review

CLASS & INEQUALITY
The Keynesian Revolution


A new biography reveals the full scope of John Maynard Keynes’s critique of unfettered capitalism, emphasizing the economist’s larger philosophical vision of the good life.


John Maynard Keynes (center) with philosopher Bertrand Russell (left) and Bloomsbury Group member Lytton Strachey (right). Image: PBS


JONATHAN KIRSHNER

The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes
Zachary D. Carter
Random House, $35 (cloth)

On September 9, 1938, John Maynard Keynes, fifty-five years old and the most famous economist in the world, read his essay “My Early Beliefs” to the Memoir Club, a circle of Bloomsbury Group friends who gathered occasionally to discuss the private reflections of its members. Keynes took the opportunity to revisit the philosophical principles of his confidants in the youthful exuberance of their twenties, “our mental history in the dozen years before” World War I. The rich, dazzling memoir, published posthumously at Keynes’s request (and subsequently included in his Essays in Biography), is well described by biographer Robert Skidelsky as “a key document for understanding his life’s work.”

The Keynes of “My Early Beliefs” was no longer a young man; recovering from a major heart attack, he read to the group reclining on a sofa to conserve his energy. Moreover, 1938 was not 1910; the intervening decades, shattering a long period of peace and prosperity, were characterized by war, disorder, and depression. Armed with this melancholy hindsight, Keynes would chastise his youthful cohort: “as the years wore on towards 1914, the thinness and superficiality, as well as the falsity of our view of man’s heart became, it now seems to me, more obvious.” And as the Memoir Club assembled that evening, German troops were massed on the Czechoslovakian border, and Neville Chamberlain would soon climb aboard an airplane for the first time in his life, that he might reason with Adolph Hitler. This context surely informed Keynes’s retrospective lament, “we were not aware that civilisation was a thin and precarious crust” layered atop a cauldron of horrors simmering just below the surface.

Nevertheless, Keynes never wavered from the core principles of his early beliefs: “this religion of ours . . . remains nearer to the truth than any other that I know,” he wrote. His memoir articulated the central tenets of that shared philosophy: the commitment to a relentless interrogation of established norms and traditions, a rejection of shallow materialism, and a reverence for “love, the creation and enjoyment of aesthetic experience and the pursuit of knowledge.”

For Keynes, economics mattered because it would ensure people need not organize their lives around the empty chase of money. It would free them, instead, “to live wisely, agreeably and well.”

The Price of Peace, Zachary D. Carter’s new biography of Keynes, is insightfully grounded in three touchstones of Keynes’s life that are neatly encapsulated by “My Early Beliefs”: the horrors of World War I, his intimate association with the Bloomsbury community of iconoclastic writers and artists (including Virginia and Leonard Woolf, E. M. Forster, and Lytton Strachey), and the essential inseparability of economics from broader philosophical questions. The Great War shattered the illusion that civilization was secure—and much of Keynes’s efforts in the three decades that followed were designed to save society from dystopias looming in the wings, particularly in the varied forms of authoritarian collectivism. Bloomsbury, to which The Price of Peace returns unfailingly throughout its narrative, properly situates both profound friendship, and, especially, a veneration of the arts, at the center of Keynes’s worldview. As for philosophy, Carter’s Keynes is “the last of the enlightenment intellectuals who pursued political theory, economics, and ethics as a unified design.” To approach Keynes’s economics innocent of such an understanding is to miss much, if not everything.

Across the first two-thirds of its pages, The Price of Peace is a breathtaking triumph. A renaissance man with a dizzying array of interests, pursuits, and accomplishments, Keynes sat prominently at so many diverse, rarified tables that just keeping up with him is an achievement, to say nothing of situating his life—really his lives—in broader context. Yet Carter does just that, in this smartly written, swiftly moving, well-researched, clear-eyed treatment of one of the most remarkable figures of the first half of the twentieth century.

Carter also has a good eye for spotting key contributions from Keynes’s vast writings, calling attention to essential essays including, among others, “The End of Laissez-Faire,” “A Short View of Russia,” “Economic Possibilities for our Grandchildren,” “Can Lloyd George Do It?” (all of which are reprinted in Keynes’s Essays in Persuasion), and, less well known but not to be underestimated, “Art and the State” and the innovative “How to Pay for the War.” In “Economic Possibilities,” Keynes touched the core of his understanding for why economists mattered: by solving the “economic problem” (the imperative to provide for adequate physical comfort and satisfactory necessities), people would no longer need to organize their lives around the empty chase of money, and instead have the freedom to pursue their varied, idiosyncratic interests that would allow them “to live wisely, agreeably and well.”

Short of that utopia, “The End of Laissez-Faire” (1926) heralded Keynes’s dramatic break with economic orthodoxy, signaled by his (then) heretical declaration, “The world is not so governed from above that private and social interest always coincide.” This disenchantment would grow still more pointed in the depths of the Great Depression: laissez-faire capitalism, he declared, “is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods.” Along with “Am I a Liberal?” and “Poverty in Plenty: Is the Economic System Self Adjusting?” the essay “Laissez-Faire” marks the steps on the road to the Keynesian revolution that would culminate with the publication of his magnum opus, The General Theory of Employment, Interest and Money, in 1936. But that runs ahead of the story.

Keynes was raised in an environment of reasonable comfort, and, more important, implicit security. His father, Neville, was a successful professor and administrator at the University of Cambridge; his mother, Florence, was a remarkable figure, active in social causes and local politics (she would eventually serve as the mayor of Cambridge). Keynes flourished at the storied Eton prep school, winning rafts of academic prizes, and then again at King’s College, Cambridge. After graduation he entered the Civil Service, laboring briefly in the India Office before being lured back to Cambridge, where he would teach economics, serve as editor of the prestigious Economic Journal, and publish his first book, Indian Currency and Finance (1913). Yet at age thirty Keynes was still more promising than accomplished. Everything would change in 1914.

The mass slaughter of World War I was the defining trauma for a generation of Europeans; it was also, for Keynes, where abstract economic theory collided with reality. Rushing to contain the financial panic unleashed by the commencement of hostilities (and taken aback by the short-sighted behavior of the financial community), Keynes learned from this experience, Carter argues, that markets “were social, not mathematical phenomena.” The precariousness of financial sentiment, and the key role that psychology plays in shaping those instincts, would remain essential to Keynes’s writing throughout his career, a disposition likely honed by his principal responsibility serving in the Treasury Department during the war—finding ways to creatively scape the bottom of the barrel of British finance (and, increasingly, to manage its desperate economic dependence on the United States).

The mass slaughter of World War I was the defining trauma for a generation of Europeans; it was also, for Keynes, where abstract economic theory collided with reality.

After the war Keynes was attached to the British delegation in Paris, ultimately resigning in protest over the Treaty of Versailles, which he cogently argued would prove a disaster. His polemic against the treaty, The Economic Consequences of the Peace (1919), would unexpectedly bring him world fame; no one anticipated that a technocrat’s dissent would sell over 100,000 copies and find translation into a dozen languages. The book—described by Carter as “a landmark of political theory and one of the most emotionally compelling works of economic literature ever written”—is also, to this day, misunderstood. Moreover, for all its purportedly enormous (and in some circles, nefarious) influence, it was patently unsuccessful in bringing about the policies that its author was passionately advocating. Mostly remembered now for arguing that the reparations imposed on Germany were too high, Economic Consequences was primarily concerned with what the treaty failed to do: attend to the shattered economic heart of Europe. Without addressing the urgent problems wrought by years of total war, the inevitable economic chaos that would follow would in turn lead to political upheaval. “Men will not always die quietly,” Keynes warned, and “in their distress may overturn the remnants of organization, and submerge civilization itself.”

Keynes proposed, at the conference and in print, a “grand scheme” that included modest reparations, the cancellation of inter-allied debt, and large new U.S. loans to Europe. The plan was, from a political perspective, naïve at best. Yet, as Carter notes, after a half decade of economic and political disarray, the U.S.-sponsored Dawes plan of 1924 was “essentially a delayed, expensive caricature of the system Keynes had urged at Paris.”

In the 1920s Keynes held no official government positions (those bridges had been torched), but he was now a prominent figure active on many fronts, producing two important scholarly books, numerous political pamphlets, reams of journalism, and advocating for the positions of the Liberal Party. A Tract on Monetary Reform (1923) is distinguished by Keynes’s attack on the “barbarous relic” of the gold standard, which he argued was inherently deflationary. (Casual critics of Keynes often hand-wavingly label him an inflationist, but in fact Keynes was quite anxious about inflation, which he thought would undermine faith in the legitimacy of the capitalist order. His position was simply, and quite rightly, that in those circumstances when forced to choose, in practice deflation was typically the greater evil.)

Keynes’s concerns along these lines were more explicitly articulated in yet another polemic, “The Economic Consequences of Mr. Churchill,” written after Keynes had failed to personally dissuade the then chancellor of the exchequer from returning the pound to the gold standard in 1925 at its long-standing pre-war value. The decision was a triumph of the interests of finance over industry, but one that would, as “Economic Consequences” predicted, prove disastrous for the British economy. These struggles informed the central concern of Keynes’s massive, sprawling, two-volume Treatise on Money (1930), namely, how to balance the goals of domestic monetary policy autonomy and international monetary stability. Carter makes the case that the contributions (and intellectual influence) of the Treatise are generally underappreciated today. And there may be something to that—legend holds that when Joseph Schumpeter read the book, he literally burned the manuscript on monetary theory he had been laboring on, concluding that it had been rendered obsolete. But with the deepening of the Great Depression, Keynes was already racing ahead, developing what would emerge as The General Theory.

The Price of Peace is somewhat less sure-handed in its treatment of The General Theory, which, despite bringing about a fundamental transformation of our understanding of economics, is a difficult book. Keynes follows several strands of complex argumentation without pausing to guide the reader through the thicket, and his prose is uncharacteristically workmanlike. Nevertheless, The General Theory was a sensation, initially dividing the profession along ideological and especially generational lines. Within fifteen years its influence had reshaped the profession.

Laissez-faire capitalism, Keynes declared during the Great Depression, “is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods.”

Once again, Carter is spot on in emphasizing the essential role of psychology, and especially the role of the collective sentiment of investors, for Keynes’s thinking. (Entrepreneurs were not driven by cold calculation but by “animal spirits,” Keynes wrote, and investors were not rewarded for calculating the underlying value of an asset, but for their ability to divine what other market players would find attractive. This in turn meant that the financial sector, left to its own devices, was unstable and prone to crisis.) And Carter is exactly right to emphasize that Keynes’s urgent, underlying motives remained largely conservative: he wanted to save capitalism from itself. Unfettered capitalism—unfair, unjust, ugly, vacuous of social purpose, and ultimately inefficient—would bring about its own ruin. Worse still, left unreformed, it would likely unleash things that were much, much worse. Keynes, from the very start, was under no illusions about the horrors of fascism (unlike many of the British right, who were content to avert their eyes), and he had no taste, fashionable in many left-leaning Western circles of the day, for the Soviet experiment—the inherent brutality of which he saw through ten years before the show trials of the 1930s.

But to unpack the economics of the Keynesian Revolution readers should pay close attention to chapter twelve of The General Theory (“The State of Long Term Expectation”) and Keynes’s 1937 paper in the Quarterly Journal of Economics, “The General Theory of Employment,” his response to leading academic critics of the book. Especially in the latter it is unambiguously clear that Keynes’s breakthrough was founded on two fundamental departures from orthodoxy. First, an economy, once stuck in a rut, could remain in a rut. And second, actors in the economy made decisions in an environment characterized not by risk (where the underlying probabilities of future events are properly understood and generally shared), but uncertainty (a setting where the future is inherently unknowable). “The orthodox theory assumes that we have a knowledge of the future of a kind quite different from that which we actually possess,” Keynes explained. “This hypothesis of a calculable future leads to a wrong interpretation of the principles of behavior . . . and to an underestimation of the concealed factors of utter doubt, precariousness, hope and fear.”

Across the long arc of its narrative, The Price of Peace devotes considerable attention to events in the United States (and Keynes’s attempts to influence and encourage President Roosevelt and aspects of the New Deal), strands which tie together most naturally during the 1940s. Keynes would devote the final years of his short life—he suffered from serious heart disease—to once again representing his government on matters related to the financing of a world war and its aftermath. This required regular travel to the United States from 1941 (when Keynes led negotiations over the terms of lend-lease aid) through 1946 (with the culmination of a series of exhausting multilateral conferences that led to the creation of the Keynes-inflected International Monetary Fund and World Bank). Over these years Keynes essentially worked himself to death in the service of his country. A major heart attack on a train bound for Washington in March 1946 preceded the one that would take his life, at home, one month later.

Entrepreneurs were not driven by cold calculation but by “animal spirits,” Keynes wrote. This in turn meant that the financial sector, left to its own devices, was unstable and prone to crisis.

Across the decades, from the teens through the forties, Carter’s facility in bringing Keynes to life is impressive. The only false note struck in this rich, nuanced, multifaceted portrait is the eagerness of The Price of Peace to recast Keynes as a protectionist, a claim asserted repeatedly throughout the volume. It is certainly true that in the early 1930s, first in a reaction to the pressures on Britain’s balance of payments intensified by the asphyxiating gold standard and then with the complete collapse of international economic cooperation in the depths of the Great Depression, Keynes wrote in favor of some protectionist measures. That Keynes would dare even to sample such forbidden fruit testified, once again, to his relentless pragmatism and bracing unwillingness to be bound by thoughtless devotion to received doctrine. But such flirtations were always qualified and faded over time. Even in his strongest moment of advocacy for such measures, in 1932, Keynes still paused to observe, among other gestures at debunking protectionist myths, “Nine times out of ten [the free trader] is speaking forth the words of wisdom and simple truth.” And in 1944, when the prospects for the international economy were quite different, Keynes had this to say in the House of Lords: “The expansion of our export industries which is so vital to us would be much easier if obstacles to trade can be diminished or done away with all together.”

Still, despite the misstep on protectionism (and it is an occupational hazard for biographers of Keynes to see a version of the man through the lens of the author’s personal proclivities), it is hard to imagine improving on Carter’s final measure of his subject, which is worth quoting at length:

No European mind since Newton had impressed himself so profoundly on both the political and intellectual development of the world . . . In his economic work he fused psychology, history, political theory, and observed financial experience like no other economist before or since. Few lives have ever been lived in the same vibrant, eclectic excess as Keynes lived his. He was a philosopher who rivaled Wittgenstein, a diplomat who became the financial hero of two world wars, a historian who uncovered peculiarities of great Enlightenment figures and ancient currencies, a journalist who enraged and inspired the public, the patron of a famed artistic movement. He was as vain, petty, shortsighted and impolitic as he was generous, kindhearted, and persuasive. Few who encountered him in his element came away from the experience unchanged.

It is a disappointment that the last third of the book, which weaves it way through seven decades, does not meet the remarkable standard established in its preceding pages. It is hard to argue with the implicit subtext of these chapters: that the practice of postwar public policy in the United States, at times under the banner of “Keynesianism,” was in fact, from the start, a long, tragic retreat from the wisdom of Keynes. (Essentially, mainstream postwar Keynesianism was a tamed and housebroken interpretation of selected parts of the General Theory. For Keynes the free market was often dysfunctional, and the economy an unpredictable and occasionally dangerous beast, necessitating guidance by adroit improvisation. As domesticated by postwar economists, Keynesianism instead assumed highly functional markets that were more like automotive engines that benefited from occasional fine-tuning, which could be accomplished by a deploying a few standard, reliable tools.) But the execution of this agenda is idiosyncratic, uneven, and at times even clumsy, as if the book itself never recovers from the loss of Keynes.

Most unfortunate is the extent to which the balance of The Price of Peace is anchored in a peculiar fixation on the Canadian-American economist and paragon of American liberalism John Kenneth Galbraith—which is not a slight against Galbraith, a figure of uncommon achievement. But the justification for settling on a thinker whose “peculiar brand” of Keynesianism was a “sharp departure” from the master as the protagonist in the final chapters of this biography is never established. Yet he takes on Zelig-like quality, popping up constantly, often in the oddest of places. To take a minor example, did Nixon really harbor a “special hatred” for Galbraith? This seems unlikely. Nixon was a legendary hater, and a cursory glance at a half-dozen good books on the brooding, paranoid President yields little more than a few perfunctory mentions of Galbraith, and none with the seething vituperation reserved for assorted enemies like, say, talk show host Dick Cavett. This is a consequential diversion, because it muddies a key strand of argument Carter is pursuing: that Keynes’s legacy fell into the wrong hands.

For Keynes, unfettered capitalism—unfair, unjust, ugly, vacuous of social purpose, and ultimately inefficient—would bring about its own ruin. Worse still, left unreformed, it would likely unleash things much worse.

Paul Samuelson would emerge as perhaps the most influential (and representative) of a new generation of postwar “Keynesian” economists; he developed mathematical models of economics that derived directly from Newtonian physics. Keynes would likely have been aghast. “The pseudo-analogy with the physical sciences leads directly counter to the habit of mind which is most important for an economist to acquire,” he wrote to Roy Harrod in 1938. The young Americans were building on John Hicks’s earlier attempt to simplify the Keynesian revolution, and reconcile it with elements of the old orthodoxy. As Carter observes, however, Keynes had in fact “presented a conceptual framework totally incompatible with Hicks’ project.” Keynes’s student Joan Robinson labeled such efforts “bastard Keynesianism.” But the bastards won.

Following this line more purposefully could have disciplined the closing arguments of The Price of Peace, as there is a straight line to be drawn from the blunders of American “Keynesianism” in the 1960s to the rise of more conservatively oriented economic theories in the 1980s and subsequently a broad consensus in macroeconomic theory that was permissive of the catastrophic anti-Keynesian liberation of finance that followed. Instead, Carter reveals a preference for picking partisan fights that often obscure important subtleties, as seen in the strawmanning of Paul Volcker, and the conflating of New Classical Macroeconomics with Milton Friedman’s monetarism (though political bedfellows, their economic theories were miles apart). And the notion that “Vietnam underscored just how little Keynes had achieved at Bretton Woods” is simply not coherent.

Finally, The Price of Peace stumbles with its treatment of the crucial Clinton years, burying the Keynesian lede by focusing extensively on trade—the North American Free Trade Agreement and the World Trade Organization—before finally turning to the great sin against Keynes: financial deregulation. It is unlikely that Keynes would have been much moved by U.S. trade deals of the 1990s; his life’s work was that of a monetary economist and a macroeconomist, and he did not generally dissent from what we now call microeconomic theory (the allocation of goods through the price mechanism).

The trade deals of the 1990s were not the final, tragic destination of anti-Keynesianism. Keynes would have likely seen opportunities in the WTO and shrugged at NAFTA. (Though he surely would have sharply criticized the abject failure of U.S. public policy to compensate those who would inevitably lose from such agreements.) But he would have been apoplectic at the great American financial deregulation project. For Keynes, in The Treatise, The General Theory, and at Bretton Woods, the mortal threat to his economic vision came from finance, not trade. In 1941, looking back at the ruins of the depression and towards an imagined future, he wrote, “Nothing is more certain than that the movement of capital . . . must be regulated.” Unregulated finance was inefficient, and prone to crisis; additionally, the notion that the financial sector would metastasize into something other than a simple facilitator of real economic activity was, for Keynes, a caricature of the ugly, rapacious capitalism that would lead to its own ruin, as it nearly did in the 1930s. And perhaps will again.Robert Skidelsky’s magisterial three-volume biography thus remains essential, as are Keynes’s own writings (and here again Skidelsky is a welcome guide, with this invaluable collection). But set aside what amounts to a lengthy, eccentric coda, and The Price of Peace offers the finest single volume on Keynes that most readers will ever have the pleasure of encountering.

The Keynesian Revolution | Boston Review

CLASS & INEQUALITY
The World Henry Ford Made

A new history charts the global legacy of Fordist mass production, tracing its appeal to political formations on both the left and the right.

JUSTIN H. VASSALLO
Photo: Getty Images



Forging Global Fordism: Nazi Germany, Soviet Russia, and the Contest over the Industrial Order
Stefan J. Link
Princeton University Press, $39.95 (cloth)

The utopian ideal of globalization has imploded over the past decade. Rising demand in Western countries for greater state control over the economy reflects a range of grievances, from a chronic shortage of well-compensated work to a sense of national decline. In the United States, the dearth of domestic supply chains exposed by the COVID-19 pandemic has only heightened alarm over the acute infrastructural weaknesses decades of outsourced production have created. Post-industrial society, rather than an advanced stage of shared affluence, is not only more unequal but fundamentally insecure. Rich but increasingly oligarchic countries are experiencing what we might call, following scholars of democratization, a dramatic “de-consolidation” of development.

As the promises of globalization have imploded, political forces in many rich countries—on both left and right—are converging on the imperative to use industrial policy.

To reverse this decline, political forces on both the left and the right are converging on the imperative to use industrial policy—the strategic process by which governments, either through state support of industrialists or state-owned enterprises, build up and diversify domestic manufacturing. On the left, the Green New Deal represents a futuristic and ecologically sustainable industrial policy, one that undergirds a strong public sector, progressive distribution, a job guarantee, and efforts to correct historical injustices. On the right, policy ideas are more muddled due to the powerful grip of free market ideology, yet a vocal “communitarian” cohort across Europe and the United States is pivoting toward heterodox economics. “Globalism,” in the view of these populists, has eroded the economic sovereignty of nation-states, shrinking historically key sectors and unleashing new forms of anomie. Industrial policy thus looks to be an instrument for reaffirming national sovereignty and restoring the social bonds that producer-oriented economies ostensibly foster. While only the left addresses the climate crisis, both visions are concerned with the social value economic activity generates, in contrast to neoliberalism’s justification of unimpeded self-interest.

In their search for an alternative to neoliberal globalization, these competing visions reflect the enduring power of Fordism, the industrial system that launched mass production in the early twentieth century and shaped many of our expectations of modern life. Henry Ford would likely find his relevance to the current crisis of globalization a testament to his “producerist” philosophy. But as historian Stefan J. Link writes in his new book, Forging Global Fordism: Nazi Germany, Soviet Russia, and the Contest over the Industrial Order, Ford’s peculiar ideals “projected a political (and moral) economy that hardly anticipated the American consumer modernity that emerged after 1945.” Link gives a fresh analysis of an overlooked dimension of interwar history, tracing the singular influence of Ford’s innovations and ideas upon the final, cataclysmic stages of twentieth-century industrialization. Forging Global Fordism allows us to better explore the relationship between industrialism, political ideology, and global competition, while also shedding important light on our tumultuous present moment.

In their search for an alternative to neoliberal globalization, competing new visions reflect the enduring power of Fordism—the industrial system that launched mass production in the early twentieth century.

One of the key insights of Link’s book is that Fordism was as much a theory of social organization as a scientific system of productivity, and it was highly malleable within different political and economic contexts. To explore the varieties of Fordist experience, Link employs the framework of the developmental state—the stage of state history in which governments, seeking modernization, a more integrated domestic market, and faster economic growth, typically pursue capital formation and reinvestment in strategic industries that are shielded from global competition.

Situating the global spread of Fordism within Europe’s struggle to “catch up” to U.S. industrialization after World War I and prepare for the next conflict, Link shows how Fordist America, as well as Ford’s philosophy, animated what he terms European “postliberals” on the left and the right in their ambitions for autarky and dominion over “great spaces.” In doing so, Link explains how the “isolationist” 1930s set the course for modern globalization. “Rather than interrupt,” Link argues, “depression and war actually accelerated and intensified the global spread of Fordism,” due to the industrial policies of activist states such as Nazi Germany and the Soviet Union.

In their respective quests for machine tools, automotive material, and expert knowledge of mass production techniques—all of which informed the construction of “dual-use” factories—delegations from each country sought and obtained technology transfers from Ford’s famed River Rouge plant in Detroit throughout the 1930s. At the seeming apex of isolationism in the twentieth century, the Ford Motor Company provided critical blueprints and other forms of assistance that could be harnessed in equal measure for economic development and total war.

How did Ford become this seemingly improbable node in the industrial strategies of Nazi Germany and the Soviet Union? “To gain the forefront of industrial modernity,” Link writes, “all insurgents” against a faltering liberal international system “first had to turn for guidance to the most advanced nation. . . . Interim technological dependency on the United States—such was the wager of autarky—would be the price of long-term economic independence.”

Fordism was as much a theory of social organization as a scientific system of productivity. Link shows it was highly malleable in different political and economics contexts.

Detroit was the locus of America’s advancement, and thus “an antagonistic development competition” arose across the globe from the race to acquire its technology, engineering know-how, and organizational methods. Among the region’s firms, the Ford Motor Company was especially receptive to teams from both Nazi Germany and the Soviet Union; Ford’s own views may have aligned with the nationalist right, but business opportunities mixed with pride in the company’s reputation and state of the art facilities. Contracts with each country were complemented by a consultative, instructional approach, making Ford a target of reconnaissance beyond what the company might have intended. As Link details, several Ford workers—many of whom were European immigrants—migrated to Russia and Germany, and in some cases, particularly in the Nazi state, ascended to important positions within the war bureaucracy.

Ford’s pivotal role in the diffusion of technology stemmed from his distinction within U.S. industry. Ford was rightly regarded as a pioneer of mass production, which had generated unprecedented consumption in the U.S. economy while raising industry wages. Unlike Taylorist management, with its taxing fixation on individual employee performance, Fordism, Link explains, had “devised a system that turned lack of skill into a productive resource” that not only generated jobs but inculcated a collective sense of discipline within factory workers. Mass production, with its optimized flow methods that integrated repetitive, segmented tasks with scientific floor plans and automated machines, was not merely an achievement of Ford’s ingenuity. It manifested an economic philosophy that took on a special power for European postliberals seeking to emulate U.S. development precisely in order to undermine U.S. dominance.

At the center of Ford’s philosophy, according to Link, were particular, complementary notions of social progress and moral improvement with roots in Midwestern populism. Ford’s various press statements and publications during the 1910s and 1920s articulated a clear concept of social justice. Announcing the five-dollar day in 1914, his company stated that, “Social justice begins at home. We want those who have helped us to produce this great institution and are helping to maintain it, to share our prosperity.” Link notes that Ford tied this benefit to strict standards of personal conduct, and even for a time maintained an invasive “Sociological Department” to surveil workers. But this dynamic between rewards and responsibilities also reflected Ford’s view that the modern firm was a microcosm of society.

As an economic philosophy, Fordism took on a special power for European states seeking to emulate U.S. development precisely in order to undermine U.S. dominance.

The “emphasis on justice, economic cooperation, and the cultivation of virtues,” Link writes, strongly “reasserted labor-republican notions of the nineteenth century,” including “the moral economy of the Knights of Labor” which “sought not to overcome capitalism through class struggle but to harness corporate organization and financial accumulation for the benefit of the laboring producers.” Visionary leadership, in Ford’s mind, inspired a synergistic relationship with labor, as exemplified by the core technicians whose creativity enhanced the scale and tempo of production. While it was incumbent upon workers to internalize discipline, the firm was obligated to envelop them within a communitarian culture, one that would recognize individual progress through interesting, advanced work, but would, above all, define the firm’s value on the basis of collective achievement.

Ford’s ideals thus corresponded, Link explains, to the German right’s fixation on the supposedly organic “reciprocity” between volk and leadership that was required of industrial progress. As a model of leadership and social organization, Fordism resonated deeply with postliberals seeking to mold capitalism and the masses toward a unifying political economy. As formulated by German rightwing theorists of the Weimar period, Fordism embodied Dienst: “an ethos by which individuals cheerfully submitted to a larger purpose or directed their energies to the presumed benefit of the Volk.” Refracted through a lens that exalted racial-national struggle, Fordism augmented early Nazi claims that National Socialism represented a true “socialism of leadership” (in the words of the economist Friedrich von Gottl-Ottlilienfeld) and purposive “anti-capitalism,” as opposed to Marxism’s subversion of social order.

As a model of leadership and social organization, Fordism resonated deeply with a German right seeking to mold capitalism and the masses toward a unifying political economy.

Crucially, Ford’s conception of social justice also deepened the postliberal right’s moral distinction between “productive” enterprises that rooted communities and the corrupting influence of global finance. Ford contrasted his motives to reinvest in production with the shareholder capitalism that shaped other firms, including Ford’s chief rival General Motors. According to Link, Ford believed his accomplishments “demonstrated that industry, released from the yoke of financial capital, could channel productivity increases into lower prices and higher wages.” Producers that constantly refined economies of scale thus had a social function that served the masses that distinguished them from other forms of enterprise, and entanglement with financiers would only undermine their “wealth-generating efficiency.”

Fordism was thus especially appealing to National Socialists in search of a political economy that could extinguish Marxism and social democracy but arouse communitarian sentiments toward a project of national renewal linking industrial modernization with racial purification. It combined the “moral” and “economic” arguments used to further legitimate Nazi ideology. During the 1920s, Ford’s critique of finance capitalism in My Life and Work—his most popular book, discerningly ghostwritten by the journalist Samuel Crowther and published in 1922—“rationalized” the blatant anti-Semitism he expressed in other publications. Industrial progress, and the moral improvement ascribed to it, was juxtaposed with the rent-seeking of which he and European nationalists accused Jews. Postliberals of the Weimar right took notice, and their contempt for the war debts that were enervating domestic production fueled anti-Semitic discourses that seeded the German public’s growing association of Jews with economic insecurity and Germany’s post-Versailles “subjugation.” Alleging economic difficulties were the fault of a Jewish conspiracy, the Nazi party and its allies luridly differentiated a predatory, “foreign” capitalism from industrialism in proper service to the nation.

Ford’s own conception of social justice deepened the postliberal right’s moral distinction between “productive” enterprises that rooted communities and the corrupting influence of global finance.

Beyond its uses for propaganda, Fordism was critical to Nazi industrial policy once Hitler secured his dictatorship in spring 1933. In Germany the Depression manifested most acutely as a “Great Balance-of-Payments Crisis”—the burden of large U.S. loans and the absence of a resilient domestic market were amplifying Germany’s structural weaknesses. Link explains that for the early Nazi regime, the question of how to reinvigorate stagnant industry was the same that had beleaguered the Weimar Republic. Germany faced a declining share of export markets precisely because U.S. firms, particularly those of Detroit, were becoming globally dominant. The prospect of surrendering to U.S. dominance in automobiles was tantamount to permanent subordination in the global economy, threatening underdevelopment.

In a rich analysis of the regime’s various strategies to coerce industry, Link shows that by embedding Fordist mass production within a “steered market economy,” the Nazi state accelerated industrial growth, stimulated employment, and recovered badly needed foreign exchange. Hitler’s regime converted a “makeshift system of trade management and capital controls” into a strategy that “fortified export promotion,” “elbowed industry into developing import substitutes,” “systematically privilege[d] strategic sectors,” and diverted “resources from consumption to rearmament.” It also entailed a stealth manipulation of U.S.-owned multinationals that affixed them to the state’s burgeoning military-industrial complex. The state wielded tariffs against U.S. imports while imposing capital controls that forced Americans to reinvest in Germany and increasingly substitute German materials for U.S. exports. Oddly, Ford initially held out when it came to plant expansion, but by the start of World War II his company’s German division “was responsible for almost one-fifth of German truck production.”

By embedding Fordist mass production within a “steered market economy,” the Nazi state accelerated industrial growth, stimulated employment, and recovered badly needed foreign exchange.

Fordism thus underpinned Hitler’s grand strategy of acquiring Lebensraum. In Hitler’s vision, Link writes, “mass production had a precise double role: it was necessary to create and sustain the armaments complex that would allow the conquest and control of territory in which industry would supply a vast contiguous market with a standard of living to match America’s.” The obsession with control over a vast geopolitical space, inspired in part by America’s genocidal pursuit of continental dominion in the nineteenth century, reflected Hitler’s fervid security concerns. In the prospective postliberal world order, a Germanized Europe would be “self-sufficient” through a combination of advanced industry and the supply, through frontiersmen and slave labor, of essential raw materials and foodstuffs from Eurasia. Intellectuals aligned with National Socialism, such as the journalist Ferdinand Fried and the jurist Carl Schmitt, would elaborate upon this reconfiguration of world order, envisioning a future where landmass imperia would largely supplant the commerce of liberal internationalism and naval-based colonialism.

In the Soviet Union, meanwhile, the challenge of adapting a still largely agrarian society to Fordism was far more formidable than what Nazi Germany faced. The Great Depression had compounded the problems of industrialization: the price for grain exports—the Soviet Union’s main commodity—was falling at the same time that the state determined it was necessary to speed up the purchase of U.S. equipment As in Germany, the fascination with Fordist America had percolated Soviet thought during the 1920s. It was so influential, Link writes, that a “common trope in the NEP [New Economic Policy] ideological arsenal”—Vladimir Lenin’s economic proposal of 1921—“held that socialism equaled Soviet revolution plus American technology.” But the implementation of Fordism was not just a matter of acquiring the materials and techniques of mass production, pressing as that was. It also constantly entailed ideological pivots and smoothing. The imperative to convert largely unskilled masses, with little exposure to industrial machinery, into disciplined workers required expert management to accelerate development.

Soviet policy, for its part, attempted to distill Fordism to its scientific mechanisms, laying a foundation that would enable the country to obtain “economic independence” from the capitalist international system.

During the initial stages of this transformation, engineers who had trained during the late Tsarist period formed a substrata of tenuous factory leadership, subject both to threats and to penalties from party elites and antagonism from workers who rejected a hierarchy that cut against their notions of self-management. Soviet policymakers were determined to eradicate vestiges of craftsmanship and other forms of “backwardness” impeding the adoption of modern industrial organization, but they needed to maintain the loyalty of the workers. The overarching ideological premise of Soviet industrial policy, Link summarizes, was that “if capitalism was an anarchic system of jealous partitions, cross-purposes, and collective blindness, Soviet socialism would be a system of total and harmonic coordination,” and yet its implementation of Fordism fell far from that ideal.

Soviet policy, according to the party leadership, would distill Fordism to its scientific mechanisms, laying a foundation that would enable the country to obtain “economic independence” from the capitalist international system. This vision was consistent with Stalin’s pronouncement that socialism would be achieved first in one country. Beginning with the first Five-Year Plan in 1928, radical modernizers dominated Soviet industrial policy, leading to a punishing pursuit of Western technology transfers that resulted in horrific famine. Link insightfully argues that the decision to ramp up agricultural collectivization was not a tragic scheme born of ideological militancy and bureaucratic folly but instead a calculated risk to squeeze as much as grain export as possible out of the peasant population to pay for the machinery needed to build and bring online plants such as the Gorky Automobile Plant (GAZ). Like Hitler, Stalin understood the centrality of national auto works in a future war. National security, however it was framed, took precedence over the welfare of the Soviet—and especially Ukrainian—countryside.

Beginning with the first Five-Year Plan in 1928, radical modernizers dominated Soviet industrial policy, leading to a punishing pursuit of Western technology transfers.

For all the coercive strategies employed by Nazi Germany and the Soviet Union, Link meticulously notes that the assimilation of Fordism in both countries was incomplete through the beginning of World War II until the Nazi invasion of the Soviet Union in June 1941. The Soviet Union, in particular, had contended with a “hybrid industrial system” prone to frequent machine-based stoppages and enormous turnover. Continuing in the vein of the party-manipulated factory conflicts of the NEP era, the tendency of individual laborers to demonstrate “grassroots worker initiative” often further disrupted the mastery of flow methods. What ultimately ignited more rapid industrialization were the unprecedented demands of conducting total war.

Industrial policy in both countries thus took another radical turn. In Germany, Link writes, “high-profile production engineers, whose American credentials lent them authority vis-a-vis both the ministries and the firms, connected the state apparatus to the sphere of economic execution in the factories.” The rampant use of forced labor, which accounted for one third of the Nazi war economy, disposed of “reciprocity,” instead activating the most brutal and extreme authoritarian possibilities latent in Fordism. “Only where coercion and control was complete and the threat of violence was ever present could the assembly line achieve its disciplinary strength,” Link concludes.

By World War II, the simultaneous mobilization of the army to the battlefield and displaced peasants into the factories hastened the full implementation of a command economy in accord with Fordist methods.

The dramatic output of the Soviet Union after 1941, then, was all the more remarkable given the ferocity of Nazi military power. Despite the immense hardship and piecemeal progress of the 1930s, Link underscores that the Soviets had in fact laid the groundwork for the wartime conversion of facilities and production methods. “For the remainder of the war,” he writes, “the Soviet Union decisively outmatched Germany in the war of the factories in every weapons category except ships and submarines.” In a war of national survival, the simultaneous mobilization of the army to the battlefield and displaced peasants into the factories hastened the full implementation of a command economy in accord with Fordist methods. The range of armaments were restricted in favor of a relentless output of key weaponry that could wring maximum raw efficiency out of an unskilled, malnourished workforce. On this score, Link notes that although “the Soviet Union had less steel at its disposal than all the other belligerents, it built more tanks and aircraft per available unit of steel than all the other belligerents combined.” The book vividly captures how this rapid transformation of Soviet industry repelled Hitler’s exterminatory quest for Lebensraum.

While the world depicted in Forging Global Fordism seems at first blush far removed from our own, the book makes a convincing case that in all its various guises, it was Fordism—perhaps more than any other system of social organization—that shaped our present, and now deeply uncertain, world order. Reflecting on the postwar recovery in Western Europe, Link addresses a deeply unsettling legacy of National Socialist industrial policy: Volkswagen and other German automakers had been primed for mass production through the various forms of support and compulsion Hitler’s regime administered. Their energies no longer siphoned into a war economy, Fordist consumption in the American sense could finally take off in a democratic West Germany allied with the United States. Rather than consider the industrial strategies of the Nazi state in isolation—and therefore as merely reflecting the choices of a mercurial and fanatical chain of command—Link perceptively suggests that “historians might look to the many other authoritarian, activist, and development-oriented states of the twentieth century” for substantive comparison.

Taken together, these historical insights suggest that the resurgence of rightwing populism today may reflect a final, belated crisis of Fordism.

It is worth recalling that the rise of different activist states in the 1930s all had a common focus on public works and infrastructure. This structural feature fed back into the international race to grow economies of scale that centered on the innovations, supply chains, and value-added inputs of national auto industries. Once we step back from Link’s close reading of the factors that established Fordism in the central antagonists of World War II, we can more fully observe the developmental state in all its various incarnations, from liberal democratic to totalitarian. Its successes have depended not just on the implementation of Fordism, but on the particular ways the state oversees the Fordist relationship between industry and labor.

That contingency helps put the ascent and subsequent post-industrial underdevelopment of the United States in historical, comparative perspective. Among the activist states of the twentieth century the most successful was Roosevelt’s New Deal, and it benefited significantly from the fact that Fordism had already matured in the United States. Because America maintained its edge in technology and industrial capacity, the shift to a war economy enabled it to outgun Nazi Germany while sparing Americans the levels of sacrifice that the Nazi, Soviet, and other war economies inflicted on their populations. Fordist manufacturing, in turn, became inextricable from conceits about the American Century; for decades it defined U.S. growth and the postwar idea that growth would ensure shared prosperity. Although Ford himself was virulently anti-union, a more assertive regulatory state that supported union rights molded, rather than blotted out, his producer populism.

The paradox of the Fordist era for Western countries is that it symbolizes the historic conversion of oppressive factory work into an unequalled period of shared prosperity and economic democracy.

In retrospect, the historic labor-capital compromise of the postwar era transformed the “cooperation” that Ford extolled into technocratic, state-mediated industrial relations. When that system was abandoned, most abruptly in the United States, in pursuit of a flexible, high-tech “knowledge” economy, industrial policy was subject to the new political taboo against strong government. In turn, industrial policy became the domain of China—now the world’s largest car manufacturer—and a few other late twentieth-century developmental states, while the much heralded new American economy became concentrated in a handful of globalized U.S. cities, barely reaching de-industrialized regions.

The international and domestic political tensions this policy regime has produced give the lie to the midcentury promise of permanent, self-sustaining, and inclusive economic growth. In a tacit negation of Francis Fukuyama’s “end of history” thesis, Link concludes that “the type of development competition that spread Fordism . . . will continue to be with us, shaping a global economic order that is ever contested, never finished.” One might add that elites who ignore signs of underdevelopment in democratic societies overestimate the durability of institutions and norms in the absence of a collective stake in where the economic future lies.

Taken together, these historical insights suggest that the resurgence of rightwing populism today may reflect a final, belated crisis of Fordism. It thus poses a distinct philosophical and policy dilemma. The paradox of the Fordist era for Western countries is that it symbolizes the historic conversion of oppressive factory work into an unequalled period of shared prosperity and economic democracy. On the one hand, the manufacturing jobs of the past were hardly what we think of as good jobs today, and many disappeared through automation rather than trade deals. On the other hand, the zenith of manufacturing correlated with high rates of unionization, a stronger public sector, and levels of taxation that encouraged reinvestment.

An important inference to be drawn from Link’s book is that we must resist a too simple embrace of its industrial policy, for it can easily ramify in ideologically unfavorable directions.

In some quarters the left has developed a tendency toward nostalgia for this period of more broadly shared prosperity. An important inference to be drawn from Link’s book is that we must resist a too simple embrace of its industrial policy, for it can easily ramify in ideologically unfavorable directions. For the communitarian right—not so far removed ideologically from the postliberals of the interwar period—the Fordist era represents not social democracy but the cultural cohesion and natalist values that paternalistic corporations once encouraged. As much as most conservatives have assailed the welfare state, it is conceivable that some will embrace industrial policy—and thus some version of a steered economy—in response to the cumulative pressures of underdevelopment and a more unstable phase in global affairs.

History warns that this particular turn toward dirigisme can quickly cohere with illiberal and belligerent visions of national renewal. To militate against this outcome, progressives will have to redouble efforts to frame the Green New Deal as the surest way to create millions of new, decent jobs that revitalize the economy. By invoking U.S. mobilization during World War II, and the cooperation upon which victory depended, any left committed to an egalitarian future must ultimately reconcile the traces of Henry Ford’s world in the new one being born.

How might Alberta remember COVID-19? The forgotten 1918 Spanish Flu is a cautionary tale

© Provided by Edmonton Journal Health Historian Suzanna Wagner stands outside the University of Alberta's Pembina Hall, where a hospital ward was housed during the 1918 Spanish Flu. Despite the pandemic's death toll, the Spanish Flu has been largely forgotten.

Inside the University of Alberta’s Old Arts Building is a small plaque honouring a victim of the Spanish Flu.

William Muir Edwards — a civil engineering professor, athlete, and son of famed feminist Henrietta Muir Edwards — died Nov. 14, 1918, after contracting the flu while caring for victims at a makeshift hospital in Pembina Hall. He had just turned 39.

Over 600 Edmontonians were among the flu’s estimated 50 million victims. But outside the history books, the Edwards plaque is one of the only public reminders of the flu’s local toll.

This raises the question: will we forget the COVID-19 pandemic, too?

It is difficult to imagine such disruptive periods going unremembered. But in many history books, the Spanish Flu is a footnote to the First World War, even though it killed more people than what was then the deadliest conflict in human history.

Suzanna Wagner, a health historian and recent U of A masters of history graduate, said the Edwards plaque was placed in 1919 at an estimated cost of $300. The immediate aftermath of the flu, she said, “was replete with eloquent tributes to those who served others during the height of the crisis.”

After awhile, though, a kind of amnesia set in.

The Spanish influenza epidemic in 1918 forced Edmonton to close schools, churches and theatres.

There are many theories why people forgot the Spanish Flu. One is people were simply exhausted from the war. Another is that victims tended to be poor and marginalized, while care-workers were mostly women — groups for whom early 20th-century society rarely erected monuments.

“It could be argued there was less to be gained by remembering the flu for society as a whole,” Wagner said. “There always has to be a motivation to create public history objects and practices. And the flu in many ways was a defeat. This massive, overwhelming thing that medical science was unable to stop.”

COVID-19 has reignited interest in the 1918 flu and the dearth of memorials to its victims .

One of the few Canadian cities with such a memorial is Regina. It was erected only recently , ahead of the pandemic’s centennial.

Kenton de Jong, a 28-year-old Regina history buff, decided the city needed a flu memorial after reading about unmarked graves in the municipal cemetery containing at least seven Spanish Flu victims. Erected in 2017, the stone memorial reads: “To the victims of the Spanish Influenza: the citizens of Regina will always remember you.” A QR code at its zenith dispels any ambiguity about when it was placed.

When it comes to remembering COVID, Wagner sees reason for optimism. Historians are already collecting remembrances and ephemera. Wagner recently asked a group of museum professionals whether they knew of any efforts to “crowdsource” COVID memories. The response was “overwhelming.”

“Even 50 or 60 years in the future when a historian is trying to write a history of COVID they’ll have access to stories of everyday people,” Wagner said.

There’s also the sheer amount of pop culture generated during the pandemic, including TV shows, literature and pop music . Spanish Flu was rarely mentioned after the fact in popular media.

© TROY FLEECE Kenton de Jong with the Spanish flu memorial in the Regina Cemetery.

Ultimately, Wagner believes effective memorials must serve a purpose. First World War memorials conveyed a sense of nationhood and Canada’s distinctness from the rest of the British Empire. AIDS memorials focused on raising awareness about the disease and breaking down stigma.

She believes we’re more likely to see COVID memorials if longterm interventions such as seasonal immunizations are required to keep the virus at bay.

There’s also the question of who we memorialize. Health-care workers? Beloved community members lost to the virus? The hundreds lost in longterm care homes?

Which brings us back to the Edwards memorial. Members of the public hoping to glimpse the plaque are, for the time being, out of luck. As of this writing, the building was closed due to COVID-19.

UK
Tommy Robinson trends as study reveals most child sexual abuse gangs are made up of white men

"I don’t think many in the media profession realise how much hurt and pain was caused by singling out one community for grooming gangs" - Basit Mahmood.

 by Jack Peat
December 16, 2020
in News



Far right mouthpiece Tommy Robinson was trending on social media last night after an official Home Office report concluded that the majority of child sexual abuse gangs are made up of white men under the age of 30.

The former EDL (ENGLISH DEFENSE LEAGUE) leader, who frequently propagated myths that grooming was an “Asian problem”, was proved to have misled people by fuelling a perception that the issue is race-related.

The report concluded quite clearly that “research found that group-based child sexual exploitation offenders are most commonly white”, adding that “it is not possible to conclude” whether there is an overrepresentation of black and Asian offenders relative to the demographics of national populations, as is suggested by some people.

Commenting on the results Nazir Afzal, the former chief crown prosecutor in the north-west, who brought prosecutions over the Rochdale grooming gangs, said “it confirms that white men remain the most common offenders, which is something rarely mentioned by rightwing commentators.

“The danger is that by focusing entirely on the ethnicity of the offender, we miss the bigger picture, which is how the unheard, the left-behind women and girls, are invariably the victims. That’s where the government’s attention and action should be primarily focused.”

Robinson trended on social media shortly after, with Basit Mahmood saying many don’t realise how much “hurt and pain” was caused by him singling out one community for grooming gangs.

Elsewhere footage of the former EDL man being shut down during a debate made the rounds, as did reminders of his involvement in the Huddersfield grooming gang case, which almost led to the collapse of the trial.

Commenting at the time Afzal told how the Rochdale case was “nearly lost” over far-right activity, which caused defence lawyers to claim the jury had been prejudiced.

Robinson was given a nine-month jail sentence for contempt of court, but it largely mobilised his supporters who came out in large numbers during his time inside.

Cards from across Iraq bring Christmas cheer to Christians

It wasn't Santa on a sleigh, but it was close: just before dusk on Christmas Eve, a busload of volunteers pulled into the Iraqi Christian town of Qaraqosh to deliver holiday happiness.

© Hussein FALEH A fishmonger writes his Christmas message at his stall in Basra port

Under a pinkish sky, they disembarked from their charter bus with cardboard boxes full of Christmas cards, bearing hand-written messages from across Muslim-majority Iraq.

"A special greeting to our Christian brothers," read one card, signed in the overwhelmingly Muslim southern port city of Basra the previous day.

On foot, members of Iraq's Tahawer (Dialogue) initiative and other volunteers delivered some 1,400 cards across the northern town, which was ravaged by jihadist rule after the Islamic State group advanced east across the Nineveh Plains in 2014.

© Zaid AL-OBEIDI Christmas cards with hand-written greetings from across mainly Muslim Iraq bring joy to Christians in the northern town of Qaraqosh, where the minority community is still rebuilding after the ravages of jihadist rule

"It's a beautiful initiative," said Rand Khaled, after receiving a Christmas card outside the Syriac Catholic Church of the Immaculate Conception in Qaraqosh.

She was dressed in her Christmas Eve finest, with a chic chocolate-coloured coat shielding her from the cold.

"We need initiatives like this every once in a while, because people who don't know these areas absolutely should get to know them," Khaled told AFP.

© Hussein FALEH Medical students in Basra were among those who sent Christmas messages to Qaraqosh's Christians

Iraq's Christians number around 400,000 today, down from some 1.5 million before the US-led invasion toppled longtime dictator Saddam Hussein in 2003.

It is a tiny minority in a country of 40 million people, most of whom are Shiite Muslims.

The cards came from all over Iraq: from the capital Baghdad and the Shiite shrine city of Najaf, from mainly Sunni Arab Salahaddin province in the west and the Kurdish city of Dohuk in the far north.

They were packed into dozens of boxes and transported up to 950 kilometres (600 miles) through military checkpoints before reaching Qaraqosh.

"I don't know how to describe it," said Nishwan Mohammad, Tahawer's programme manager.

"People were ecstatic -- they never expected someone to come visit them, much less bring them letters from all over Iraq," he told AFP.

© Hussein FALEH A Shiite Muslim cleric also sent his greetings

In addition to the handwritten messages, each card bore a special hand-drawn symbol of the province from which it was sent.

Those from Basra -- signed by sheikhs, university students and even fishmongers -- featured the port city's emblematic new bridge across the Shatt al-Arab waterway with Santa and his reindeer flying overhead.

Those from Baghdad showed part of the capital's much loved Tahrir (Freedom) Monument.

And the cards from Salahaddin bore an image of the spiralled Great Mosque of Samarra, which was designed to look like the ancient Mesopotamian ziggurat -- but also roughly resembles a Christmas tree.

Pharmacists, tailors, a linen shop owner and a cellphone salesman were among the signatories there.

Since the jihadists of IS were pushed out of Qaraqosh in 2016, the town has slowly started to rebuild thanks to funding by international organisations and its residents' own savings.

© Hussein FALEH The cards bear images emblematic of the province from which they were sent -- this one from the port city of Basra shows Santa and his reindeers flying over the city's new bridge across the Shatt al-Arab waterway

It sees few visitors, however, which is why the Christmas Eve delivery was so special.

"After the war that took place in this province, there was a kind of estrangement among the different communities," said Imad al-Sayer, an activist from the nearby city of Mosul who helped distribute the cards.

"We're taking the initiative. God willing, these letters will be constructive messages that bring positive changes to the communities of this province."

str-mjg/kir

CSE warns companies to check IT systems following SolarWinds hack

Canada's cybersecurity unit is urging Canadian users of SolarWinds' Orion software to investigate whether their systems have been compromised in a "far reaching" hack revealed earlier this month.

© Sergio Flores/Reuters The SolarWinds logo is seen outside its headquarters in Austin, Texas on Dec. 18, 2020.

The Canadian Centre for Cyber Security said in an alert released Thursday "It is believed that government agencies and a variety of organizations in Canada and abroad may be affected" by the hack, which was "carried out by a highly sophisticated threat actor."

The centre, which is a unit of the Communications Security Establishment, one of Canada's key security and intelligence organizations, did not specify which organizations or government entities may have been affected by the hack.

Last week, Shared Services Canada, which manages much of the government's IT infrastructure, told CBC News it had no indication its infrastructure had been compromised. The Department of National Defence said it did not use the affected platform.

Shared Services did not respond to a request for comment Thursday. In a statement to CBC News, the Canadian Centre for Cyber Security said they continue to assess the situation and are working with government partners to make sure those systems were secure. The Centre said it did not have anything to add on potential victims of the hack.

In its alert, the Canadian Centre for Cyber Security said it "has been working within the community to identify affected systems and notified Canadian system owners where possible. The impact on these compromised systems remains unidentified, but analysis is ongoing."

U.S. authorities, including Secretary of State Mike Pompeo have blamed the attack, in which several U.S. government departments and agencies were breached, on Russian actors. The Russian government denies involvement, and President Donald Trump contradicted Pompeo late last week by suggesting China may be culpable.

The attack is believed to have started in the spring, and used a network monitoring software platform called Orion, created by the firm SolarWinds. By compromising that platform, the attackers were able to insert malware into the systems of SolarWinds' clients. SolarWinds has said approximately 18,000 clients may be affected globally.

"The SolarWinds Orion vulnerability and associated compromises are far reaching, and it is important that organizations perform thorough analysis of their networks," to ensure they are not compromised, the CSE said in its alert.

The alert goes on to outline technical details of how to identify and mitigate systems which may be compromised by the hack.

On Wednesday, Cybersecurity and Infrastructure Security Agency, the U.S. cybersecurity agency, said the hack was having an impact on state and local governments.

CRIMINAL CAPITALI$M
Cormark Securities Inc. and ITG Canada Corp. to pay $1 million to settle SEC charges

TORONTO — The U.S. Securities and Exchange Commission says Canadian broker-dealers Cormark Securities Inc. and ITG Canada Corp. have agreed to pay a total of US$1 million to settle charges of improper trading procedures.

© Provided by The Canadian Press

According to the regulator, the two firms provided incorrect order-marking information in a period from August 2016 through October 2017 that caused more than 200 sale orders from a single hedge fund, representing total sales of more than US$660 million, to be mismarked as "long" in violation of SEC regulations.


By definition, “long” means the seller actually owns the stock they are selling, as opposed to a “short” if the seller is borrowing stock to sell.

The SEC says that because the hedge fund's sale orders were, in fact, short sales, the incorrect order-marking caused the executing broker to violate regulations by failing to borrow or locate the shares prior to effecting those short sales.

It says that Cormark and ITG Canada, without admitting or denying the findings, have each agreed to stop current and future similar violations.

In addition, it says Cormark has agreed to pay a penalty of US$800,000, and ITG Canada has agreed to pay a penalty of US$200,000.

This report by The Canadian Press was first published Dec. 23, 2020.

The Canadian Press

Magna to form joint venture with LG Electronics to build electric car components

Shares of auto parts manufacturer Magna International Inc. hit an all-time high on Wednesday after the company announced a deal with LG Electronics to create a joint venture to build components for electric cars

.

© Provided by The Canadian Press

The new venture, which will manufacture electric motors, inverters and on-board chargers, signifies an ambitious expansion by Magna into the fast-growing electric vehicle market.

"This partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio," Magna president and incoming CEO Swamy Kotagiri said in a statement.

Shares in the Aurora, Ont.-based company closed up $7.29 or 8.51 per cent at $92.96 on the Toronto Stock Exchange.

Magna says the deal combines its strength in electric powertrain systems and manufacturing with LG’s expertise in component development for e-motors and inverters.

The joint venture tentatively has been called LG Magna e-Powertrain.

Magna and LG’s announcement follows other efforts to expand into the market for electric vehicle components by Magna. In 2018, the company announced two joint ventures with Chinese companies to engineer and build electric vehicles.

The joint venture's establishment comes as electric vehicles gain in popularity. Electric vehicle manufacturer Tesla Motors Inc.’s stock is up roughly 650 per cent since the start of this year, signalling exuberance from investors about the market.

Other large automakers such as General Motors have moved rapidly to develop electric vehicles. Both Ford Motor and Fiat Chrysler announced this fall that they are moving toward electric vehicle production at some of their Canadian plants.

That push led to increased investment in electric vehicle technology in recent years, including among Magna’s competitors. Canadian auto parts supplier Linamar Corp. said in 2018 that it would spend $500 million investing in new technologies for electric vehicles, such as artificial intelligence and next-generation transmission systems.

Martinrea International Inc., another Canadian automotive parts manufacturer, has also invested in producing components for electric vehicles. In an investor presentation this year, the company said it was projecting that in five years, nearly one quarter of the automobile market will be made up of electric vehicles or hybrids.

Magna and LG’s joint venture will include more than 1,000 employees located at LG locations in the United States, South Korea and China.

Michael Robinet, executive director of automotive advisory services at IHS Markit, said similar partnerships have become commonplace in the automotive industry as a way of keeping up with competition.

"Virtually every supplier has alignments, whether in software or in specialized innovations or technologies, because they know they can’t move as quickly on their own," Robinet said.

Electric vehicles have been part of Magna's business strategy for many years, Robinet said, adding that the partnership with LG will allow them to have greater access to Asian markets.

The agreement is expected to close in July and is subject to a number of conditions including LG shareholder approval.

Magna announced earlier this year that it would be helping to manufacture an electric SUV for startup Fisker Inc. in Europe.

This report by The Canadian Press was first published Dec. 23, 2020.

Companies in this story: (TSX:MG)

Jon Victor, The Canadian Press