Are you being serious? - John Consiglio

Are you being serious? - John Consiglio

If Sir Andrew Cook’s article (March 18) was intended as merely an exercise in personal nostalgia, then all is forgiven and forgotten. If then, however, he is serious about “bringing back the Sterling Area”, then his article is all so outright hilarious, and the basic advice to him would be to go back and read even the most basic of books about the history of money.

There he will quickly realise that “old money never comes back anywhere”. 

The essence of new rulers, new economic situations, and, much more so, new political situations anywhere in the world (into or exiting blocs) is that “what’s past is just that”. 

Early on in his article he declares that the British Remainers are all bracing themselves for an uncertain, catastrophic, new (i.e. post-EU) situation. 

To nostalgically assert that all that is factually positive with Britain today (history, position in Nato, language, rule of law, etc) all this will bring the country back to the status it previously enjoyed as an important EU member state, well that’s all pie in the sky, sir.  

And the list – of passes’ are passes’ – includes dreaming about resurrecting the now factually dead Sterling Area. Yes, it lasted for 30 years and worked while it lasted, mainly on the basis of what basically underpinned it – an empire, colonialism, or the just post-of periods of these. 

Those are now all pages in monetary history, and, as said above, no such pages ever come back, simply because the replacing realities are the outcome of so many new factors. (A historic truth may be invoked here in that in many ex-parts of the Sterling Area, sterling was factually imposed: former colleague bankers of mine who worked during imposed sterlingisation in various former British colonies attest to that. 

In Malta, too, sterling was imposed.

Along the line Sir Andrew makes other mistakes. He holds that the “dollar works for the Americans but not worldwide”. He only has to consult some compendium of international trade statistics to see how much trade and other operations are still carried out in the US dollar without any US parties (individuals or corporations or even nations) being involved at all. The dollar is still the world’s major reserve and trading currency, and so is still very powerful and important worldwide.

Sir Andrew asserts that the pound sterling offers “the perfect compromise” (between what and what he never says) to the “less prosperous” EU member states, and he mentions Greece, Malta, Cyprus, Italy, Portugal and Ireland as examples. He describes the European Central Bank as dirigiste (more or less than the Bank of England? Or the Federal Reserve of the US?). 

He writes in terms of some countries being, and others not so, “natural” allies of Germany. 

And then in the same breath he speaks of “a confident Britain”. I wonder with what measurement tools he gets to making these categorizing, or grouping, descriptions, whilst simultaneously holding the current Brexit shenanigans in Britain as indicators of that country being more or less “confident” than the countries he mentions.

I must share Sir Andrew’s position on his view that Germany (or was it just dear old Angela, erratically, for once, working totally on her own?) made a very big mistake in uncontrollably welcoming one million immigrants. And hopefully all EU member states will have learnt lessons from that. But all of that factor has nothing to do with dreaming that if the Sterling Area were to be brought back (pie in the sky!), along with the southern EU members exiting the euro and returning to their old “resurrected” (hence outrightly dead!) currencies (or was it Nigel Farrage who sold him this charade?) most of Britain’s current problems would vanish.

Was it Freudian reality slipping that, towards the end of his article, pushed Sir Andrew towards asking whether his idea of bringing back the Sterling Area was “unworkable, ridiculous, or even a spoof”? Do I hear a loud “yes!”. The “gutter” through which he says that the crowns (plural!) of global leadership are presently flowing, is really the same gutter where the waters of change are flowing so fast that there simply is no time for looking back, and/or stopping to try to pick out whatever of the past may be flowing through.  

No, sorry, Sir Andrew, nostalgia is not the answer. It is strong leadership that is needed, even on monetary affairs. Of course, dreaming is still permitted in Malta, and still comes out as totally free of charge! 

As my old man used to tell me Giochiamo la fantasia Giovanni, che non costa niente (Let’s play fantasy John, it’s free of charge).

John Consiglio teaches in the Faculty of Economics, Management and Accountancy at the University of Malta.

This is a Times of Malta print opinion piece

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