At first I thought the previous post contradicted my other articles on monetary policy in which I emphasized the connection between the value of a currency and capital flight, with deindustrialization resulting from differences in foreign exchange rates. However, I don’t think it’s a contradiction. It answers some questions that I had about those other articles.
Analyses of the disintegration of Bretton Woods mention briefly that at some point it became impossible to control the flow of capital. My question was, how did this happen? The mystery is solved when the City of London is included in the analysis. Basically, the Eurodollar market, or offshore banking, provided a way for capital to escape the limits of regulation.
Another part of this seeming contradiction has to do with the relationship between financialization and deregulation. Do policymakers choose between the two, or does one naturally follow the other? Is it a response to the market or is it a conspiracy? Since posting the first article about this documentary I have found that these questions are still under debate. The most extreme interpretation, and in my view the least interesting, is the assumption that economic crises are the result of class warfare. However, this documentary illustrates that without an awareness of the class interests represented by the City of London it would be impossible to understand current economics.
In this interview about The Spider’s Web more detail is provided on the underlying theories and debates.