Bank of England reclaimed monetary control to evade accountability for austerity’s unemployment costs

Evidence

On February 17, 1929, now in his role as director of the Bank of England, Blackett proudly testifi ed his past eff orts: “I arranged with the Chancellor of the Exchequer soon aft er April 1920 to revert to the prewar practice of either not informing the Chancellor of the Exchequer in advance of an intended change in the bankrate or letting him know only at about 10:30 or 11 of the Th ursday” (T 176/13, fol. 25). As a government representative, the chancellor did not have, and ought not to have, any offi cial role with respect to the bank rate. Setting the bank rate, Niemeyer commented, was to be the decision of a “private corporation” (T 176/13, fol. 26). … As a private corporation, the Bank could put economic priorities over all social concerns; in the meantime, the Treasury could happily escape all accountability for the social sacrifi ce, especially in the form of unemployment, that austerity measures were infl icting on the British population. — Clara E. Mattei, The Capital Order, 1018

Categorization

• XREF: The ‘private corporation escapes democratic accountability’ structure is the template for modern central bank independence — direct parallel to current arrangements. — connects to: Britain’s gold-standard austerity doubled unemployment from 10.4 to 22.1 percent — Mark Blyth, Austerity: The History of a Dangerous…, 514; The Treasury and Bank of England used monetary austerity to block the miners’ movement