Montagu Norman, Nazi Sympathizer?

2 08 2013

Montagu Norman

 

When Mark Carney took over as the Governor of the Bank of England, he ordered the removal of the portrait of Montagu Norman, the legendary Governor  of the Bank from 1920 to 1944. When I first heard about the removal of the portrait, I thought that Carney had done so to signal to markets that he was opposed to hard money policies and willing to accept a relatively high rate of inflation. Norman, after all, was a doctrinaire inflation fighter who,  in 1925, persuaded Chancellor of the Exchequer Winston Churchill to return to the gold standard at the pre-war parity. This decision is widely regarded as this worst single economic policy in interwar British economic history. Churchill later said that accepting Norman’s advice was the worst decision of his life.  Although the shibboleth of the gold standard is now ancient history, a modern equivalent is the Bank of England’s statutory inflation target of 2%. By law, the Bank of England is supposed to aim for this rate of inflation, which would normally mean involve tightening monetary policy by raising interest rates. For many months, actual inflation has been above this target. Not wishing to repeat the same mistakes of 1925, the British government has basically chosen to ignore the Bank of England’s decision to ignore the target,  likely on the grounds the UK economy is too weak to cope with an increase in interest rates.

 

It turns out that there may be another set of reasons for not wanting Norman’s portrait to hang alongside those of the other BofE Governors. He may have been a Nazi sympathizer. At the very least, his friendship with the head of the German central bank, Horace Greeley Hjalmar Schacht, appears to have persisted after the rise of Hitler to power in 1933 and even the outbreak of the Second World War in 1939. Norman went to Berlin to attend the christening of Schacht’s grandson.  A few months later, after the Czech capital of Prague had been occupied by Hitler’s army, Norman arranged for the gold Czechoslovakia’s central bank had deposited in London to be credited to the account of the German central bank. In other words, Norman helped the Nazis to loot Czechoslovakia and to fund their re-armament programme.  New information about the March 1939 transfers was published on the website of the Bank of England archives section on Tuesday.

United States officials expressed concern over the possibility that Norman harboured Nazi sympathies during the war.In 1942 FDR asked Winston Churchill, who in turn asked future Prime Minister Anthony Eden to investigate the allegations, particularly the charge that Norman had met Hjalmar Schacht in neutral Sweden  in May 1941. When pressed by Eden about his relationship with Schacht, Norman defended himself by saying  that he hadn’t seen Schacht in over a year. Churchill was somewhat dissatisfied with this defence, since the war had been underway for almost three years at that point!

You can read more here.

If you are interested in the relationships of the four great central bankers of the interwar world, you should read. Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World ( New York: Penguin Press, 2009). This magisterial work explores the complex personal relationships between four individuals whose decisions shaped the lives of millions:  Benjamin Strong of the Federal Reserve of New York, Montagu Norman of the Bank of England, Emile Morceau of the Banque de France, and Hjalmer Schacht of Germany’s Reichsbank. Liaquat Ahamed argues persuasively that it was the decisions made by central bankers that made a recession into the Great Depression of the early 1930s.  Each year, I deliver a lecture that is largely based on Lord of Finance to the students in my history of globalization class. I’m told its one of the most exciting lectures of the year.





The Sir John A. Macdonald Bicentennial Commission

2 08 2013

The Sir John A. Macdonald Bicentennial Commission, based in Kingston Ontario, is a non-profit and non-partisan group of citizens in the business of commemorating and discussing the life of Canada’s first Prime Minister. At this time, we are seeking to engage individuals and groups in several online discussions about the man and his times which will then be edited and made available in our online library. If you have suggestions for topics that would raise awareness about Confederation era Canada and Sir John A. in an interesting and informative way, please be in touch with Claire Grady-Smith, or visit their website.





Sanofi Pasteur Canada Centenary

1 08 2013

May 1, 1914, will mark the 100th anniversary of the founding of the Antitoxin Laboratory in the University of Toronto, later known as Connaught Laboratories, and today the Canadian component of the global Sanofi Pasteur vaccine company.

To celebrate and document the rich history of this unique Canadian organization and its contributions to the evolution of numerous vaccines and other essential biological health products, a new Facebook page has recently been launched called:

Each week at least 2 historical articles and related archival photo albums will be posted to this Facebook feed. They will focus on key events, milestones, and people from this company’s distinctive history. The postings will tap into the Connaught Campus’ extensive archive of documents, photographs and video that I have become quite familiar with through my historical consulting services there.

Connaught Laboratories was a self-supporting, public service focused, part of the University of Toronto from 1914 through 1972 and then it was sold and privatized. Since 1989, though a series of global purchases and mergers has evolved into the Canadian division of Sanofi Pasteur. Connaught Labs is most noted for its major contributions to the research, development and production of insulin, diphtheria toxoid, pertussis vaccine, heparin, smallpox vaccine, polio vaccines (esp. the Salk vaccine), and component pertussis vaccine.

More about the history of the lab can be found here.





Technopessimism

31 07 2013

In the last few days, we’ve seen a lot of discussion online about technopessimism (i.e., the theory that we have entered a period of slow technological progress). Technopessimism has been an important theme in debates about economic policy since 2011, when Tyler Cowen published The Great Stagnation. [ I blogged about the book at the time]. Cowen had some semi-hard numbers to back up his point that technological progress slowed down in the mid 1970s, but his main evidence was anecdotally.  Cowen noted that everyday life in the US changed profoundly during the lifespan of his grand mother,  who was born in a farmhouse lit by kerosene lamps and who died in an era of colour TV, heart transplants,  and microwave ovens. According to Cowen, the technologies of everyday life haven’t changed much since the 1970s with the exception of IT.

Technopessimism is popular for several reasons. First,  it seems to explain our current economic malaise: in the West and Japan, the growth has been,  at best anaemic since the 2008 GFC.

Second,   the US political context,  technopessimism is useful because it allows conservatives to change the national conversation away from income inequality and towards technology. There is a near-consenus that the living standard of the typical American family improved rapidly from the 1940s to the 1970s, it increased slowly,  if it all, since then. Progressives blame Reaganite policies,  particularly those that emasculated organized labour.  Conservatives say that a slow down in inventiveness is at fault.

Lastly,  the future hasn’t delivered the breathtaking technologies promised in the sci-fi produced during the long boom after 1945. It’s 2013 and I still can’t take Pan-Am to the moon. If this is the future,  where is my goddam flying car?

Joel Mokyr,  who is revered in economic history circles for his brilliant work on the history of technology during the Industrial Revolution,  recently appeared on the PBS Newshour to refute the technopessimists. He made some good points. I really liked the sentence in which Mokyr alludes to Digital Humanities: “Above all, no scientific research today, from English literature to economics to nanochemistry, is even thinkable without computers.” However, I found that the most powerful argument for refuting the technopessimists was missing from his remarks.

The best reason for techno optimism is that an increasing proportion of the human brains on the planet are being given the opportunity and the incentive to contribute to scientific and technological progress.  A few hundred years ago, only a tiny proportion of the world’s population lived in countries where technological innovation was legal, respected,  and financially worthwhile.  Moreover,  even in Westerns Europe and North America, the technical talents of  half the potential inventors,  the women,  were largely squandered, (although we know from patent records that there were an increasing number of female inventors , especially after the passage of Married Women’s Property Acts), Many of the men who could have grown up to be inventors died from childhood diseases or from dumb wars like the First World War. (I would imagine that there is some wonderful household gadget that is missing from my life because a brilliant potential inventor got killed off on the Western Front).

The worldwide diffusion of liberal democracy to progressively more countries has meant that a larger proportion of the human race now live under systems that reward innovation. That means more people can get to work on solutions that can be shared world wide. (I’m writing this on a device that was designed in South Korea). Gender and racial equality,  along with subsidized education,  have prevented brainpower from going to waste. Thanks to better nutrition and the Flynn Effect,  there is more brain power to go around. Today’s world is remarkably peaceful, which means that all relatively few of today’s high IQ brains get ruined by bullets.

Taking all of these broad structural factors into consideration,  I am cautiously optimistic about the future. Yes, there are problems with US patent law, as the Becker-Posner blog recently pointed out. Yes, excessive protection of Intellectual Property is probably slowing progress down a bit. However, as a civilization, we are getting the fundamentals right and we should expect technological progress to continue.





Webinar on The History of the ATM

31 07 2013

Japanese ATM with Palm Scanner

 

Bernardo Bátiz-Lazo and Tom Harper, co-authors of Cash Box: the Invention and Globalization of the ATM, will be talking about the history of the ATM, from its contested beginnings to its unlikely role in the world of mobile phone. The co-authors will summarize the highlights of their book and make you an instant expert on the history (and future) of this 50 year-old industry.

Any history of banking, business, or computers in the last half century would be incomplete without the story of the ATM. Though invented almost five decades ago, this simple machine has survived competing technologies, evolving consumer habits and cultural shifts.

You can watch the webinar here.

UPDATE: An earlier version of this post carried an incorrect link.





Rollwagen on Economic Nationalism in Canadian Retail

30 07 2013

Loblaws, a Canadian supermarket chain, recently announced that it was acquiring Canada’s largest chain of pharmacies. This move has been hailed by some observers as the creation of a sort of Canadian national champion in retail that will be able to fend of American firms. Katharine Rollwagen has published a post placing this discourse in its historical context. In particularly, she compares it to Canadians’ reactions to the acquisition of Simpson’s, a Canadian department store chain, by Sears, a US firm, in 1952. Rollwagen is an L. R. Wilson Assistant Professor at the Wilson Institute for Canadian History at McMaster University.

There might be a follow-up post by someone else on the role of Quebec nationalism in shaping the supermarket landscape in that province. For many years, Quebec’s government blocked the entry of Loblaws, an Ontario chain, into the province by frustrating Loblaws attempts to purchase Steinberg, a Quebec supermarket chain. See here.





“A real sleeping stick of dynamite.”

30 07 2013

That’s how distinguished Canadian historian Michael Bliss characterizes the constitutional issues raised by the deeply flawed royal succession bill passed by the Canadian parliament earlier this year.  See here.

I’m inclined to agree.

As most readers will know, Kate Middleton, the Duchess of Cambridge, recently had a child who will likely inherit the Crowns of the sixteen nations that have Queen Elizabeth as their head of state. Until now, the rules governing the royal succession have discriminated on the basis of gender: a monarch’s daughter can inherit the throne only if she has no brothers. For many years, feminists have suggested that the eldest child should, regardless of gender, inherit the throne. The marriage of Prince William and Kate Middleton in April 2011 moved the issue up the agenda, since William is second in line the throne, right after Prince Charles.

In October 2011, the leaders of the Commonwealth agreed to change the succession rules so as to eliminate the element of gender discrimination. They then had to tackle the issue of how to modify the rules. At one time, the British parliament could simply pass a law changing the rules of the royal succession that would bind the entire British Empire. That arrangement made sense in the days when Britain had the right to declare war on behalf of its colonies. Moreover, the British North America Act of 1867 said that Canada was “one dominion under the Crown of the United Kingdom of Great Britain and Ireland.”

In the early twentieth century, however, the Canadian and British Crowns became distinct. Moreover, the Canadian Crown is actually eleven Crowns– the Crown in right of Canada and the Crown in right of each province. This is a crucial point. Since the passage of the Statute of Westminster in 1931 any change to the rules of the royal succession has required the passage of legislation in the parliaments of Canada, Australia, and New Zealand as well as the United Kingdom. This procedure was followed in 1936-7, when the rules were changed after the abdication of King Edward VIII, who gave up the throne so he could marry Wallis Simpson, an American divorcée.

In early 2013, the Harper government rushed a bill on the subject of the royal succession through parliament. The issue was urgent because the Duchess of Cambridge had recently announced her pregnancy. The Harper government’s bill did not actually change Canada’s rules of succession and merely expressed approval of the British law changing the rules related to the British Crown. It appears that the authors of this poorly drafted bill overlooked both the 1931 Statute of Westminster and the patriation of the constitution in 1982.

In a recent op-ed in the Ottawa Citizen, University of Ottawa professor Philippe Lagassé  discussed some of the problems with the Harper government’s Succession to the Throne Act. Professor Lagassé complains, quite rightly, that the law symbolically reduces Canada to the status of a British colony. I agree that this move may have serious legal ramifications. When Canada sends diplomats and soldiers abroad, they do so as servants of the Canadian Crown, not the British Crown. The British Crown may be at war with a country that is at peace with the Canadian Crown: let’s remember the Falklands War of 1982. Britain is resented in parts of the world because of its history of imperialism. Canada, which lacks such baggage, is one of the most popular nations, at least according to global surveys. It is, therefore, important for the Canadian and British Crowns to be kept distinct in the eyes of the world.

The Succession to the Throne Act also has important implications for federal-provincial relations. Section 41(a) of the 1982 constitution clearly states that the consent of all ten provincial legislatures must be obtained before the “office of the Queen” is changed. Modifying the rules of succession constitutes a fundamental change to the office, so the federal government should have got the provincial legislatures to sign off on its royal succession law. Professor Lagassé notes that the constitutionality of the Succession to the Throne Act, 2013 is currently being challenged in the courts by two law professors in Quebec, although he implies that their court case will probably fail.

I feel more confident that the courts will side with the law professors, for they have an important precedent on their side: Australia, which is the Commonwealth’s other federal monarchy. Elizabeth is the Queen in Right of Canada, but she is also the Queen in Right of Ontario, Queen in Right of Manitoba, and so forth.  The Queen of Australia is also the head of state in Victoria, New South Wales, and all of the other Australian states. Australia has decided to include its state parliaments in the process for changing its royal succession law. All of Australia’s state governments have, of course, approved of the proposed changes. In Canada, the federal government adopted the view that consultation with the provinces was unnecessary.  Not involving the provinces was a gamble that risks creating a constitutional crisis for a future generation.  Law professors in Australia, who presumably have no hostility towards Stephen Harper and his government, have expressed concerns about Canada’s royal succession law.

Their worst case scenario is that this thoughtless law causes one individual to inherit the Canadian Crown, while another person acquires all of the other Crowns in the Commonwealth.  Moreover, the fact that each Canadian province and Australian state is a monarchy is an important symbol of their autonomy within their respective federations. Allowing the federal government to change the office of the Queen without the consent of the provinces sets a bad precedent that could threaten provincial autonomy, a principle the Harper government has invoked in the past.

 

Canada has an obligation to the other nations of the Commonwealth to ensure that the changes to the rules of the royal succession are constitutionally valid. The new Minister of Justice in Harper government should admit that his predecessor made an honest mistake in accepting some flawed advice about the constitution. It should then introduce a new royal succession bill, this time with the consent of the ten provincial legislatures.





What Do Silicon Valley and England’s Black Country Have in Common?

29 07 2013

Answer: They are both post-industrial landscapes. As a recent article in The Atlantic shows, Silicon Valley has de-industrialised in the last three decades as the manufacturing, as opposed to design, of chips has moved offshore.

The Black Country

This fascinating piece is a reminder of the overlap between business and environmental history.

Silicon Valley

Hat tip to Jan Oosthoek.

 





Open Access Week

28 07 2013

There has been a lot of discussion in the historical blogosphere in the past week about the benefits and drawbacks of Open Access publishing. A few days ago, I published a post about what the sensation sparked by Ian Mosby’s article says about Open Access publishing. [For background: Mosby published an article in an academic journal that showed that Canadian government scientists in the 1940s deliberately withheld food from Native children so they could study the effect of malnutrition.] Mosby’s article received massive attention in the Canadian media and even sparked protests, such as this one in Winnipeg.

Now that’s research with impact!

As I pointed out in my post, Mosby’s article was published in a password-protected journal to which vanishingly few people have access, unless they are university employees or students. This meant that much of the public and media discussion of Mosby’s research was based on second- and third-hand accounts of what’s in the article. This situation perfectly illustrates what’s wrong with the current system of academic publishing. Open Access would certainly help to diffuse academic research and improve the quality of public debate. So Open Access is great in principle, but the move to Open Access raises the question is how we fund academic journals if everyone can read them online for free.  I’ve posted on this issue before, as I feel strongly that the proposed Open Access regime here in the UK is deeply flawed.

Christopher Moore and Chris Dummitt have had some interesting things to say about copyright law and Open Access. See here and here.

The American Historical Association appears to be going against the trend towards Open Access. Rather than encouraging PhD students to put their dissertations online, it has called for a lengthy embargo on PhD theses. See here. Needless to say, advocates of Open Access have condemned this move.  See here, here, and here. Personally, I think the best criticism of the AHA policy was from Eric Rauchway a historian who, like me, is somewhat interdisciplinary and pays attention to what is going on in political science and economics. Rauchway points out that political scientists and economists were amazed when they heard of the AHA’s move. In economics, people put ungated working papers online all the time, with no visible impact on their ability to publish the stuff later in journals.  .  We should listen to what he has to say.  The President of the AHA, legendary historian William Cronon, has published a defence of the new AHA policy. Cronon is obviously a great scholar, but on this issue I think that he is making a mistake.

Meanwhile, here in the UK the government has softened its commitment to Open Access.  Under the refined proposals, monographs will be exempted from the Open Access mandate. Moreover, the government has reduced the compliance rate for Open Access publishing that universities would be required to achieve from 80 per cent of all articles published by their faculty, which had been proposed in February, to just 70 per cent. According to the Times Higher Education supplement, This would be the average for all disciplines, with a higher figure (75 per cent) required for the sciences and lower figures for the social sciences (70 per cent) and humanities (60 per cent).

I’m not certain whether I understand how the word “average” is being used here. Are we talking about weighted averages for each university? I’m not certain how the government can know what the ratio of publications in each discipline area at each university is going to be in advance.

I was somewhat disturbed that the government is considering as an alternative to these targets a more capricious whim-based flexible regime whereby a  university could argue for exceptions to the open access requirement on a case-by-case basis. For instance, if a British academic  co-authors a paper with researchers in a country where universities are not subject to an open access mandate, the regulator could grant that academic an exemption allowing him or her to publish the research in an non-OA journal. That sounds like a recipe for confusion and a make work project for administrators both within universities and the government. In fact, I can imagine a whole new profession emerging out of this proposal—there would be people in each university tasked with liaising with their counterparts in Whitehall to discuss each article someone want to publish in a non-OA journal. .

The Higher Education Funding Council for England, which is the regulator for most of the UK’s universities, has just opened its consultation period for the discussion of its plans for an Open Access regime. No doubt the discussion of this important issue will continue.

Update: if you are a historian and wish to participate in a quick survey about Open Access publishing, click here.





Radio Series: A History of Office Life

27 07 2013

BBC Radio 4 has been broadcasting a series on the history of office life. It sounds like essential listening for all business historians. The current episode mentions the evolving use of technology at HSBC, which is actually something I’ve been researching recently.

Here is a blurb about the episode:

New technology including the telephone, telegraph, typewriters, adding machines, and even filing cabinets revolutionized office work in the late 19th century. In particular the telephone was looked on suspiciously in the UK. Britain’s chief post office engineer, Sir William Preece, told a House of Commons committee : ‘I have one in my office, but more for show. If I want to send a message, I employ a boy to take it.’. Lucy visits the stores of the museum of London to see early examples of office technology, including an early private telephone belonging to the Rothschilds.

Readings by Richard Katz, Sasha Pick, Adam Rojko and Kerry Shale
Historical Consultant: Michael Heller

Producer: Russell Finch
A Somethin’ Else production for Radio 4.