Central Asia has been a strategic concern to India ever since the colonial era. The region rose to an immense significance in the 19th Century due to the Great Game when it was feared that the Russians would invade British India through Central Asia. On the top of this, the unmapped territory of the region added to British fears regarding the extent of Russian inroads into Central Asia. Thus, began the scramble for the Central Asian landmass. By late 19th Century, the Russians had occupied vast swathes of the region and the southern reaches of their conquered territories reached to southern Tajikistan, touching the Wakhan corridor (which borders the present northern borders of Pakistan Occupied Kashmir). However, the looming threat of World War I united these hitherto archenemies and the tense situation was defused. Post-World War I, the Central Asian region was well absorbed into the Soviet Union. Nevertheless, the collapse of the Soviet Union in 1991 did not only mark an end to the Cold War, but it was also a defining moment for Central Asia, whose constituent regions obtained new identities as independent republics. These were namely, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan. Their frontiers touching the northern areas of Iran and Afghanistan also make their borders very much a part of Central Asia.
For them to have equilibrium, more than a million must die. That’s the equilibrium of the neoliberals today. I mean, I’ve read Ricardo’s principles, obviously. And where did you find – because what I see in Ricardo, when I read Ricardo is the arguments about reducing the money going to the landlords. You must have read much more to get the background on the banker history and so on than I’ve managed to read. Where would they have been in Ricardo? Collected works, you read the collected works? Yes. Ricardo – there were two schools of monetary theory in England. After the Napoleonic Wars, what happened, they had a post-war deflation. They tried to return the price of gold to the original price. This is the same idea of deflation that wrecked the American economy from the Civil War through about 1890, crucifying the price of gold. There were two schools of thought. There was the banking school that Ricardo headed, the lobbyist for the banks.
And there was the currency school with Thornton and all sorts of other great people. The currency school said debt matters. Ricardo said debt doesn’t matter. So the arguments you’re having today all found their predecessor in the 1830s in the bank arguments. Now this is not taught in any of the history of economic thought. The history of economic thought isn’t taught anymore either. That’s the problem. They take mathematics. And mathematics it’s all about taking the existing status quo for granted. But now when you have the Austrian School and Hayek’s talk about the free market, they mean free for the parasite. Free for the predatory. They don’t they mean that half the time. They’re so caught up in their own ideology. But that is a huge part of it. And to them, it’s – in that classic sense, people think Smith is a free market person as they define free market today. But when looking at Smith’s writing, he was in favor of limits on the rate of interest.
His logic was that if you have – people who are willing to pay well above the rate set by the King are likely to be profligates. Projectors and profligates he called them, and if you give money to them, they’re almost certain to have wasted it. If they want to pay that much for it, they must want it for nefarious purposes. Having the legal rate set slightly below a maximum rate set by the King, means that banks would have to give their money to people who would make productive investment of it. So he was in favor of control of interest. Jeremy Bentham. Bentham coming out saying, he sees – you probably remember how he expressed it about the crying shame of – he was trying to show – to save people from being accused of the crying shame of usury. It’s all free market. And the rate of interest I noticed on British credit cards of where I’m staying is 19%. In America, it’s 29% penalty rate. And banks make more money in penalties than they do in interest.
After the interest rates hit 20% in 1980, all the usury laws were abolished in the United States. Adam Smith also said something else about money. He said that wars should not be financed by borrowing from bonds. That was called Dutch finance, because the Dutch investors were the main bond buyers. And every war that England went in – and Book V of Adam Smith’s Wealth of Nations lists every single tax on every single – that was added with every new bond issue, pricing England out of the market. And Adam Smith said, look, interest is a cost of doing business. And if you’re going to have all of these taxes and all of these interests, you’re not going to be able to be a competitive industrial market. Which is the situation that we’re in again today. By falling for – the financial sector. One thing that I’ve just written in – wrote my new book is called Can We Avoid Another Financial Crisis? So my little promo here. And as part of that I focus on the level of private debt to GDP as I know you do too.