Paul Krugman, 24 February:
What we want to do is clean up the bank’s balance sheet, so that it no longer has to be a ward of the state.
There’s a great reluctance to use the term nationalization, the shibboleth policy of old-style socialists, who of course envisaged it as a permanent form of industrial organization. Krugman’s proposed framing could sugar the pill of the inevitable public ownership of crippled American and British banks.
It’s fair play and not a mere euphemism. The proposal is for a temporary bank workout, and the analogy to the charge of personal guardianship is sound. For this is:
• designed to protect the interests of those deemed incapable of looking after themselves, such as children, the mentally diminished, and on occasion the recklessly spendthrift;
• normally limited in time;
• of public interest, because of the danger of abuse, and subject to the supervision of the courts.
This all fits the banks perfectly.
The function is not the invention of modern do-gooders but a very ancient and variegated institution, giving us plenty of fine old terminology to recycle. Fatherless Roman children had tutors; after puberty, the boys then had curators up to age 25 – distinct offices with different powers. Feudal Europe placed fatherless children of the seigneurial class as wards under guardians. Such wardships, a common incident in a violent time, were a valuable right of lords over vassals. They were so important that wardship is dealt with in articles 3 to 6 of Magna Carta, well ahead of the great declaration of due process buried in article 29.
Article 5 has a nice statement of the duties of a guardian:
The keeper, so long as he hath the custody of the land of such an heir, shall keep up the houses, parks, warrens, ponds, mills, and other things pertaining to the same land, with the issues of the said land; and he shall deliver to the Heir, when he cometh to his full age, all his land stored with ploughs, and all other things, at the least as he received it….
That is, if the Warden Curators of the Tutelage Banks can find anything half as useful as a plough or a windmill in their books.
I suggested the term of wardship two days before Krugman in a comment at Crooked Timber (here, comment 46).