Posts Tagged ‘2008 Crash’

TYT’s Nomiki Konst Talks to Radical Journos about Rise of Socialist Ideas in Britain and America

October 21, 2017

I’m really delighted that the American progressive news service, The Young Turks, sent their girl Nomiki Konst over here to cover the Labour party conference. In this clip Konst talks to the Guardian journalist, Abi Wilkinson, and Bhaskar Sunkara, the founder and editor of the Jacobin magazine. With the election of Jeremy Corbyn, membership of the Labour part has exploded. In America there’s been a similar rise in people joining the DSA – the Democratic Socialists of America.

The programme explains how the DSA only dates from the 1970s, while the Labour party over here in Britain dates from the beginning of the last century. However, as Wilkinson explains, the party drifted to the right under Tony Blair’s New Labour, which made it much less Socialist, dropping Clause 4, the part of the Constitution which demanded the nationalisation of the means of production. She states that membership of the Labour party started to grow again after Jeremy Corbyn was elected leader, despite no-one expecting him to win. Corbyn followed ‘Red’ Ed Miliband, who she says was personally more left-wing than his policy platform. But he was told that you couldn’t win on a left-wing platform. In America, Socialist ideas have become far more popular thanks to Bernie Sanders in the Democrat party, just like Corbyn over here has popularised them in Labour.

Konst raises the issue of whether left-wing policies, like the NHS and a welfare safety net, are more acceptable here than in America. She feels they are, but Wilkinson states that if the NHS was set up now, there’d be much more opposition to it, with demands for means testing and debates about whether it was affordable. She states that it was in the 1940s that the great ideas for massive reform and big programmes became acceptable.

Konst then turns to Sunkara. Sunkara states that when he founded Jacobin, after the French revolutionary party, the number of socialists he knew were only about a thousand. Now their readership is up to 40,000. He and his friends founded the magazine, despite the small size of its prospective readership, because they found socialist ideas so powerful. He also says that, as far as the writing style for the magazine went, he wanted it to be written in an accessible style like Conservative mags like the Economist. He states that you can read the Economist without knowing or having read anything by Adam Smith. So he wants ordinary working people to be able to read Jacobin without having read anything by Marx. He feels that this is important, as many left-wing magazines and publications he feels talk down to their less educated readers from the working class.

He states that he is somewhat concerned about whether or not the growth of his readership represents a genuine increase in the number of people turning to socialism in America, or whether it just means that they’re reaching more of that niche, in a market that is heavily personalised.

The three talk briefly about the relationship between left-wing parties and the trade unions. Wilkinson states that the Labour party has always had strong links with the unions, and asks if it isn’t true that the Democrats have also had trade union funding, to get a negative or non-committal answer from Konst. She also states how the Scum and the other right-wing papers have tried to break the power of the unions by working up resentment and jealousy against them through publishing the salaries of trade union officials and commenting on how much larger they are than ordinary salaries.

As for the reasons for the growth in Labour party membership and the turn to the Left, Wilkinson states that it’s because of the poverty generated by the past decades of free market policies. This is not only affecting the working class, but also other parts of the population, so that 75 per cent of young people vote or support Labour.

The three also discuss the problems in magazine publishing caused by the decline of the press. Within three years of the crash in America, 800 newspapers had folded, and even the big national newspapers were feeling the pinch. The result of this has been a press that is aimed at the lowest common reader, and entire news networks have been built on this, like Fox News. Thus, Americans were deprived of news at the local level, which would have informed them how bad the political situation really was. Like the Democrats had lost 1,000 seats, and the Koch brothers were engaged in a massive funding campaign at the local level to push through extreme right-wing policies.

In Britain the majority of the press is right-wing, including the Scum, whose readers regard themselves as working class. Konst asks Sunkara whether he has any politicos reading his magazine. He says they’ve a few local senators, and one or two at a national level. Wilkinson states that the Morning Star, a Socialist paper well to the left of the Guardian or Independent, held a fringe event at the Labour conference. Speakers at this event included Diane Abbott, Richard Burgon and another member of the Shadow Cabinet.

This is a very optimistic interview, and I hope this optimism is born out by a Labour victory over here, and the takeover of the Democrat party by progressives and their victory over the Republicans at the next presidential election.

Go Bernie!
Go Jeremy!
And go the working men and women of America and Britain!

Philip Hammond Wants to Turn Britain into Neoliberal Tax Haven for the Rich

January 19, 2017

This is more evidence of the Tories’ obsession with turning Britain into ‘America junior’. On Sunday Mike over at Vox Political put up a piece about the current chancellor, Philip Hammond’s interview with the German newspaper, Welt am Sonntag, in which he said that if Britain could not gain access to European markets after Brexit, it would allow the country to turn away from the European political and economic model. Instead of following the ‘European-style’ social model, with high taxation and regulation, Britain would become ‘something different’.

Mike called this Tory stupidity and arrogance at its worst, and he’s right. Britain cannot win a trade war with Europe. Europe constitutes more than half of the market for Britain’s exports. And every time Theresa May opens her trap about Brexit, investors take fright and the pound plummets to a new level. Mike’s article quotes Jeremy Corbyn as saying that he expected the majority of MPs to be worried about Hammond’s ideas. And he’s right. Mike predicts that Hammond’s idea would result in massive unemployment, as exclusion from the European market means that demands for our products would fall. Furthermore, the low taxation Hammond so glowingly looks forward to would mean that the state would receive less. Mike doesn’t point out what that means, but it’s fairly obvious: state expenditure would immediately slashed, meaning even more welfare cuts, the further rationing and privatisation of the NHS and the education system.

http://voxpoliticalonline.com/2017/01/15/seriously-philip-hammond-youd-cripple-our-economy-for-some-anti-eu-sabre-rattling/

Of course, this is precisely what the Tories have wanted ever since Thatcher. They want to make Britain more like the USA, with its private healthcare system and minimal welfare provision. It’s an economy which has traditionally been based on low taxes, although under Bush the people of America actually started paying nearly the same amount in tax as the people in this country because of the vast military expenditure. At least, that’s what I was told by American friends. However, Bush made a series of tax cuts, followed by Obama with more promised by Trump, which will deprive the poor of even further employment protection and welfare benefits in favour of massive tax cuts for the rich. Just like Cameron and May have done and are doing for the Tories.

Hammond’s moronic idea is not original either. It’s just a continuation of Cameron’s attempts to stop the EU extending its financial regulations over Britain, so that London could become the centre of the global fraud that constitutes offshore banking.

It also shows the absolute ignorance and contempt of Thatcherite economists for the manufacturing industry. Thatcher’s cabinet was dominated by people from the financial sector, as was Blair’s, Broon’s, and, I assume, Cameron’s and May’s. There was one cabinet member, whose background was in manufacturing, who tried to point out to Thatcher that her pursuit of a strong pound would harm British manufacturing industry, as it would make our products more expensive than our foreign competitors. But she couldn’t understand this basic economic fact. As for Tony Blair, he rejected the manufacturing sector, as it was economic dogma during his tenure of No. 10 that the financial sector would become the major industry in the UK. We were supposed to be a ‘post-industrial economy’. Deanne Julius, one of the experts at the Bank of England, and a former officer with one of the big American banks, actually said that we should give up manufacturing and concentrate on the service sector. Manufacturing industry, she believed, should be left to the Americans.

Ha-Joon Chang has pointed out in his books how wrong this attitude is. Britain is still very dependent on its manufacturing industries. These are less significant than they were, because they have not grown as much as the financial and service sectors, but are still very important parts of our economy. If this part of our economy contracts even further, it will be disastrous for the British economy as a whole.

Not that you will hear that from the Blairites or the Tories. New Labour was very keen not to be seen as the party of high state regulation. During the ‘prawn cocktail offensive’ in the late ’80s, Broon and Mo Mowlam went round the City reassuring the bankers that New Labour would adopt a ‘light touch’ attitude to regulating the financial sector.

And we can all see how well that paid off, with the great financial crash of 2008. We’re still paying for that. Not the bankers, not the big industrialists, but the ordinary people of Britain, who are seeing are tax bills go up, our welfare benefits and employment rights taken away, and the NHS sold off to private contractors, all to give the 1 per cent even more tax breaks.

And last Sunday, Philip Hammond told the German press he wanted more of the same, but much worse.

This shows his and May’s attitude to Britain’s working people. They are to be forced into even more precarity, with fewer opportunities for employment and massive poverty. Because Hammond wants to make his bankster friends in the City even richer.

And defend the NHS. May and Hunt should resign. Now.

G.D.H. Cole on the Need to Nationalise the Banks

March 22, 2016

I found this very interesting passage in Cole’s Great Britain in the Post-War World. Much of the book is dated, but I think this is possibly more relevant now, post 2008, than it has been previously.

In a properly organised economy, it will be for the central bank-the Bank of England-to follow a financial policy which will provide the monetary supplies needed in conjunction with ‘full employment’-of which more anon-and for the deposit banks to ensure the distribution of credits in proper relation to the requirements of the national plan of production.

With this end in view, it is plainly necessary to socialise the deposit banks, whose existing directors will be apt to be visited by a ‘loss of confidence’ when any progressive Government sets about a policy of social control and economic planning, or threatens in any way the dominance of monopoly capitalism. the deposit banks are largely directed by men closely connected with the big industrial interests, and, with some exceptions, ten to favour big business as against small. They are for the most part bigoted opponents of Socialism, and entirely convinced that capitalism is the best of all possible systems. They are therefore likely to look with special disfavour and lack of confidence on State-promoted industrial plans, and to do all they can to aid and comfort any industrialist who is endeavouring to stand out against a socialistic Government. But fortunately the war has already put them largely into the State’s power. There are very large holders of the public debt, and have become accustomed under war conditions to doing the State’s bidding in the supply of accommodation. They will doubtless strive to escape from this position of dependence on the return of peace; but no quick escape it like to be possible. The time for taking them over is now, while they are acting in effect as the State’s agents in pursuance of war-time economic plan.

The bankers and their allies try to scare the public into opposing socialisation chiefly by two arguments-that private person’s deposits will be less secure when the banks are publicly owned, and that the tax-gather will then be in a position to know all about the private man’s affairs. As for the safety, this argument is mere nonsense. Bank deposits cannot be made less secure by having the formal guarantee of the State behind them; indeed, the truth is quite the reverse. As for the tax gatherer, he knows a great deal already, and it is entirely in the interest of the vast majority of people that the few who now successfully evade taxation should be prevented from getting away with it. Finally, there is the fear among business men that it will not be so easy to get credit from a State Bank as from a private banker. This is doubtless true, where credit is wanted for speculation or for other anti-social purposes; but a State which is deliberately following a policy of ‘full employment’ will surely be eager to grant credits to anyone who is prepared to produce in accordance with the requirements of the public economic plan. If the State decides, as I have urged that it should, to leave private enterprise in being over a considerable part of the industrial field, a State Bank is most unlikely to stint the businesses which are left in private hands of the credit needed for carrying out their part of the production plan. Indeed, the small business is likely to find State credit a great deal easier to come by than it has found private bank credit in the recent past.

There remain the ‘financial houses’-discount and acceptance houses which discount or accept bills chiefly in connection with overseas trade, issuing houses which handle new issues of capital, again, until recently, mainly for overseas, and a few private banks which conduct certain highly specialised forms of financial business for big clients, including both foreign Governments and overseas banks and financial concerns. The deposit banks are already in direct competition with the financial houses over a considerable part of this range of business, and tend to compete more and more. Socialisation of the deposit banks will bring the State right into discount and acceptance, if such transactions are to survive at all. Issuing of new capital is a rather different matter; but there is no reason why a State banking system should not make its own provision for all the issuing that is likely to be required, either directly through the State Bank or Banks, or, as has been often suggested, through some sort of National Investment Board empowered both to underwrite and issue approved loans and investments, or itself to make public investments in concerns which call for development in accordance with the provision of the national economic plan.

It’s now seventy-four years after this was written, and it’s still highly relevant. The banks have opposed any kind of socialisation of the economy. They supported Broon and Bliar only when they promised to continue regulating them lightly. And the result was the financial mess that exploded in 2008. And like the banks in the War, which became heavily indebted to the state, the banks then had to be bailed out by the state, and in the case of the Royal Bank of Scotland, nationalised. And the investment banks are still geared mainly to providing credit for overseas, not for domestic industry.