Not on the money

Unrealistic global monetary solutions aside, Howard Davies is astounded by a sloppy translation

August 1, 2013

The political scene in France is both hair-raising and refreshing at the same time. The spectrum of views on offer in the most recent presidential election campaign was far wider than you find in the UK. Here, Nigel Farage could be a Tory, and George Galloway was once a member of the Labour Party. It is increasingly difficult to identify many differences between David Cameron and Ed Miliband, certainly on economic policy, and where there is a small gap, Nick Clegg splits the difference. On the future of finance, both sides say that “never again” must big banks hold the country to ransom, but immediately afterwards they declare their undying support for the City of London as a global financial centre.

In France, they do things differently. In his presidential campaign François Hollande declared that finance was his true enemy, and in this respect he was a moderate. The left wing of the Socialist party, represented in government by Arnaud Montebourg, would nationalise the banks in a second, while the Parti de Gauche led by Jean-Luc Mélenchon, who gained 11 per cent of the popular vote, would close them down.

Mélenchon is listed as one of those who has influenced François Morin, and it shows. The title of this book, A World without Wall Street?, is not just a rhetorical flourish. He presents a positive programme that would indeed abolish Wall Street, the City of London and much else besides, including the Paris Stock Exchange.

Morin was a member of the Bank of France’s General Council, and is an emeritus professor at the University of Toulouse, so he can hardly be classed as a Trotskyist agitator. Some of his analysis of the financial crisis could have been written by Martin Wolf of the Financial Times. He inveighs against the evils of complex derivatives and the venality of the ratings agencies. So far, so familiar. But he quickly moves on to attack the stock market, not usually seen as one of the villains of the piece.

The stock market no longer performs its traditional function of providing new finance for companies (that has been broadly true for some time). And shareholders, or their representatives, are ultimately responsible for the slavish pursuit of high returns to capital. That, in turn, has depressed wages and accentuated inequality. For reasons I genuinely could not follow, Morin thinks the switch from defined benefit to defined contribution pension schemes is at the heart of the problem.

What to do about this unhappy state of affairs? No mere tinkering will suffice. We must “ban derivatives”. The banks should be nationalised, and the stock exchanges can go, too, while we are at it. Banks might become cooperatives instead. (The UK does not provide much reassurance in that area.) But the essential point is that there should be a total recasting of property rights and companies need a completely new form of governance, with equal representation of capital and labour in an “alternative partnership business”.

And that is not all. The nation state is part of the problem, so a “world government needs to be formed as soon as possible to tackle the monetary question as a matter of priority”. Countries may have separate currencies, for historical reasons (a big concession), but their rates must be fixed against each other and against a new global reserve currency, to prevent competition. World government will help with other issues, too. “The worldwide level can equally be the level appropriated to treat the question of international taxation in liaison with the financing of the great energy questions that await our planetary environment.”

This entirely representative sentence shows that the English translation offered here is scandalously bad. Google Translate would do a better job. The prose is often incomprehensible. I long to set as an exam question: “The reactivity of an organization in step with the immediate economic conjuncture, as measured by the quarterly results by ‘shareholder mood’, is not all a guarantee of financial health” – discuss. Every false friend is embraced with enthusiasm. The French call non‑executive directors “administrateurs”. To translate them as “administrators” displays a lack of first-base understanding of the subject matter.

Seagull Books, and the translators, should be thoroughly ashamed of themselves. Morin’s prospectus may be illiberal, incoherent and wholly unrealistic – at least I find it so – but it still deserves competent presentation, which it does not get here.

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