Monday, 29 September 2008
What is clear though is that there have been several important developments in how capitalism in the US and UK is being administered. First, it is now difficult to deny the conclusions of John Gray and others who say that free markets require strong, interventionist states to keep them artificially afloat. Second, a precedent has been set by the 700 billion dollars about to be spent to that purpose: when companies "too big to fail" gamble at long odds or cook the books to maximise their short-term profit and are discovered, it has now become the state's responsibility to bail them out. Third, and perhaps most importantly, the wave of nationalisations and state investment into finance gives the state a renewed corporatist aspect. If these companies were too big to fail when it was only workers' jobs and management salaries at risk, imagine the future profits to be made from investing in a company partially owned by the state, with an almost infinite stack of chips to cover its lost bets.
This aside, look at how this bubble has worked: at ground level, assets were significantly overvalued, ridiculously high and undersecured loans issued and a fat margin was taken by all the participants, as when Lehman Brothers paid their executives 70 million dollar salaries. Ultimately, when it turned out that the emperor was wearing no clothes, the prices of these assets plummeted and suddenly none of the banks found that they had money to lend each other. Short-termism paid off, however, because taxpayers are going to be paying for it.
Of course, there is no possibility of UK or US taxpayers actually paying anything in the short term, because it is unserviceable: any significant increase in taxation on the rich or their companies would be uncompetitive and would lead to capital flight. So the cycle continues.
Thursday, 18 September 2008
The Death of Capitalism?
The writing was on the wall for so long!
The current economic crisis has been predicted by some of us for several years now, and the only real surprise is that it has come as quickly as it has.It is the product of a failed experiment in giving the gamblers who play the global betting shop - sorry I mean the global markets - increasingly free reign over the past 15-20 years to speculate and gamble without proper regulation or control.New Labour endorsed this approach when Blair took over, and have failed to protect the British Public from the inevitable consequences of handing over financial control to a small group of money-drunk gamblers.And as usual, when the rich get it wrong they rely on the state to bail them out, and whilst they protect themselves, it is the working and middle classes that feel the pain.Free reign capitalism has constantly promised next week today, encouraged reckless spending and debt so that the rich get their hands on our money before we even earn it, and has manipulated the media and advertising to the extent that noone who follows the trends can ever feel happy with their lot, but are constantly bombarded with new 'must-haves', upgrades, and other ways to spend the money they do not have.At the same time, they have managed to mangle the worlds resources, exploit ever new Labour markets, and cause untold damage through climate change.The capitalist experiment has failed - just like the state-capitalism of the Soviet Block.It's time for true Socialist policies to be given a chance!
Sunday, 14 September 2008
Why not? Either he won't be Prime Minister, and it will be somebody else's job to win or lose; or he will be a bloodied, beaten Prime Minister, waiting for an election defeat so he can shuffle off stage. I've never been a Gordon Brown supporter, but his career doesn't deserve that sort of conclusion. Indeed, his career shouldn't be coming to an end at all. We need to find a Labour way out of this, and I think - earlier in the summer - John McDonnell spelt out what that way should be.
What can't happen now is for everything to go back to normal, the leadership issue to quietly go back in its box, Gordon to have an effective relaunch, and maybe - with a following political and economic wind - win in 2010. We might get that following political and economic wind, but the leadership issue won't go back in its box, therefore things won't go back to normal, therefore the relaunch will be anything but effective.
Without something happening very quickly, there will just be a steady drip-drip of opposition to Brown all Autumn. It has already been enough to ensure any 'relaunch' at conference will be drowned out by shouting about nomination forms, legal challenges, resigning junior figures.
So something has to happen. What can that something be?
John's compromise proposal early in the summer seems like the best bet, and it has to be said that Siobhan McDonagh used very similar language in her television interviews on the subject, despite coming at this from a completely different direction:
Let's have an election. An open election: anyone who thinks they could be the next leader should stand and put forward a manifesto. We have an honest, open debate, and our preferential electoral system comes up with the leader. I was going to say new leader, but of course, it might be that Brown is re-elected. I can't pretend that I don't think it would be better if somebody else won. Indeed I will be enthusiastically supporting John McDonnell. But this is not an attack on Brown, or a challenge to Brown - he should see this as an opportunity and play a full part in the process. There is no reason why he shouldn't remain a key player under a new leader.
This won't be easy. It will raise any number of questions: is it a distraction from running the country? Will we have to go straight to a general election? Will it hand ammunition to the Tories?
But answers present themselves: no, it won't be a distraction from running the country. A campaign can be short (and we managed to carry on running the country a year ago) - and the policy debate will be essential for ensuring we run the country BETTER. No, there won't have to be an immediate general election; but if a new leader gets a bit of a bounce we may not have to leave it to the last possible moment. And - it might hand ammunition to the Tories, but they don't really need any more. Not doing this - and having these stories appearing slowly day-by-day - will provide them with much more deadly ammo.
In conclusion - while the left should have no truck with some 'uber-Blairite coup' - it probably is the case that we've reached last chance saloon. As such, I think we should back the McDonnell plan - a plan that, in words at least, seems to have been embraced by McDonagh - and call for an open, comradely, friendly leadership election with a wide range of candidates from across the party's political spectrum.
Let's see it done.